Episode 26: How to Buy a Hotel with Epiq Collective

Davonne Reaves 0:00

You know, you can be doing the same thing in commercial just on a larger scale and we can make some more money. And it took her a minute. And then finally we came together. And then we formed, Epiq Collective. And so now we're doing, you know, large scale projects, collectively, and we want to get more people who look like us into the commercial real estate space, specifically hotels, as well as multifamily as well.

Acquania Escarne 0:32

You are listening to The Purpose of Money Podcast, a podcast where we talk about ways to build wealth and create more freedom in your life today. I am your host, Acquania Escarne.

Hey, guys, I hope you're enjoying this podcast episode. I just wanted to take a break and share a story about an amazing woman who has created freedom and wealth in her life. I promised I'd share these kinds of stories on the podcast, and this week I'm highlighting Teri Ijeoma of Trade and Travel. Teri has an amazing story about how she went from being an assistant principal making $40,000 a year to a swing trader making $100,000 a day in quarantine. Check out my website ThePurposeofMoney.com/Invest to learn more about how Teri accomplished financial freedom through investing. Remember, check out ThePurposeofmoney.com/Invest to learn more about Teri Ijeoma and her course Trade and Travel.

I want to welcome everybody back to The Purpose of Money, where we talk about all things money, real estate, how to get your money right and build real generational wealth. Today I am so excited we have two amazing special guest Davonne Reaves and Jessica Myers from Epiq Collective. They are serial entrepreneurs who invest in hotel acquisitions and we're going to get into how you can become a hotel investor too. Davonne Reaves is a hospitality industry professional with over 14 years of experience in hotel operations, asset management, hotel development and feasibility studies. As a serial entrepreneur, Davonne founded a hotel consulting firm, commercial real estate investment fund, and published a book. In 2017, Davonne founded the Vaughn Group, a consulting firm that specializes in premier hotel consulting, cutting edge market research and innovative brand positioning. In 2018, Davonne co authored the book Tidbits for the Emerging Pineapple Professional, a guide for the emerging hospitality professional and most recently, she founded Epiq Collective, a commercial real estate investment fund that specializes in hotels and multifamily real estate. Davonne has managed a portfolio totaling over $1 billion in assets. Jessica has over 10 years of training and industry experience in sales. She renovated over $6.5 million in real estate, and now helps others to get their start in real estate investing through collaboration and group economics. She teaches others how to start their journey from the lessons she learned transacting dozens of properties through three real estate ventures-Jack Holdings Group LLC, Epiq Collective LLC and JMP Start Development Partners. She's an advocate of group economics and wants to actualize financial freedom. Thank you ladies for being on the Purpose of Money. I'm so glad to have you.

Jessica Myers 3:42

It's such an honor to be here today. Um, you know, just connecting with, you know, more people that look like me that I can access that is doing it and killing it and give me hope that it's possible. And this is a beautiful thing.

Acquania Escarne 3:57

Yes, I love it. And hi Davonne, nice to see you again.

Davonne Reaves 4:01

Nice to see you again. Hello. Hello, thank you for having this.

Acquania Escarne 4:04

Of course, I love to talk about real estate investing, and especially with other women. You guys are rocking it in a field that doesn't have many women. And I want to showcase that on my platform because I am a platform for women who want to build generational wealth. So let's dive into our conversation today because you both have been very successful on your own in the real estate field. What made you to decide to come together and create Epiq Collective?

Davonne Reaves 4:33

uh, I guess my tenacity. Jessica, her background is mostly in residential. And, um, you know, we we actually went to school together, went to Georgia State University, and, you know, she was, you know, got into residential and I was like, "Jess, you know, you can be doing the same thing in commercial just on a larger scale and we can make some more money." And it took her a minute. And then finally we came together. And then we formed, Epiq Collective. And so now we're doing, you know, large scale projects, collectively. And we want to get more people who look like us into the commercial real estate space, specifically hotels, as well as multifamily as well.

Acquania Escarne 5:21

So Jessica, what's your version of that story?

Jessica Myers 5:24

Well, I was just going on about my business, like Davon said, um, you know, we were good friends from college. And so we stayed in touch. And, you know, she was just like, "Aye, you know, everything that you're doing is toyour point," you know, she was that that person on the shoulder, and I'm like, "I'm good, I'm fine."Finally getting my footing in the single family space. And honestly, to her point, I had a corporate background in sales. So she was like, you know, the same thing you're raising capital for, on the single family side, raise capital, you can own a hotel? And what do you mean, own a hotel? Like, you know, I'm trying to own a house, like, you know, hotel was the furthest thing from my mind, or, or a plaza, or, you know, something more than four units. But I was like, if it requires the same amount of work, to do, you know, x, and then you just raise capital for these harder product, what does it hurt? And to our point, you know, we played around with the 2018 2019 is when we really start to get serious. 2020 really impacting others, and helping them get their start in million dollar projects. And the goal was that you don't have to be a millionaire to invest in million dollar projects, because I thought, even in my single family work, I'm going to work my way up, you know, my first house is $15,000. now working on $200,000-$300,000 homes, but it's just like, I never thought that it would come so quickly be able to work on million dollar projects, until I saw the power of group economics, and how working together makes it feel like nothing.

Acquania Escarne 7:01

I love that. And let's talk more about your first deal. Either one of you can take the lead, please help others understand what does it take to get started, and what were some of the challenges you faced and overcame?

Davonne Reaves 7:14

I'll say one thing I will recommend, to anyone who's just getting started, Jessica and I, we both have the like, you know, we'll just do it. And we'll figure it out, you know? Let's because if you don't start now, you never get started. So if you constantly planning and planning and planning and planning, you'll never get started. Because you always want to wait for the perfect time. So there's a good side and bad side to that. Because the good side is you just go ahead and do it. The bad side is you didn't really put a plan. And so you don't have any processes in place. So one thing we we put together, sorry, we learned from our first deal is having processes in place, and having more of a checklist having more of a system. And so now we're getting a lot of people who are submitting deals because they want to work with us, and they want to partner with us. And so from learning from our first deal, we were able to put processes in place. So that way, that way, we can streamline more deals, and not every deal works for us. Not every deal works for our criteria that we have. And so now since we have systems in place, I you know, we're able to expand our team. And now we have a project manager, we didn't, we wouldn't have been able to do that. It would have just been constantly just Jessica and I just constantly weren't, you know, run around in circles, trying to figure something just never never occurred, we would have just been running around in circles not accomplishing anything. But by us putting processes in place and putting systems and putting criteria, you know, we're able to expand and we're able to scale our business so that way, you know, we can bring more of a team, we can bring in more deals and so that we can be more efficient. And that way, um, you know, we'll just have a better system in place. Jessica, do you have anything to add?

Jessica Myers 8:57

I mean, she hit the nail on the head, definitely about setting up systems. And a lot of people get caught up in the analysis paralysis. Sometimes you just have to take a leap and do it. And that's one of the things that helped us with our point, take the leap and you grow. It's almost like the path unveils itself, as you're going along versus trying to sit down and I need to clear paths before I even start. And that's one of the things you're fortunate as our team continues to grow is that those systems in place. And that's the benefit of working with a team. Because a key element that I learned when I first got into real estate investing was the difference between an active and a passive investor. Because a lot of times you just hear about all the investment and you save up your money. But you need to have an active investor on site that is has interest in your investment. So it's not just something like cool, I set it and forget it. But I actually have an active investor on something so that I can be a passive investor. Because my mistake when I first got started, it was thinking that I could be a passive investor with no active investor. And so the project went awry, it went left. And it was like,"Whoa, what just happened?" Contractor selling drugs out of the house. It's like, what is going on. But, um, I had to learn the difference between an active and a passive. And that's where they've gone. And I have created resources with the, with the systems that we've set up with the team that we have together, that we are your active investors, so that you can passively go on about your business and do what you want to do. But we'll be looking after your project, and making sure that it goes to plan. So that was a tough lesson to learn, but, but to her point we got it together. And we will create a system that works.

Acquania Escarne 10:43

That's crazy. And I get it. Like, sometimes we just want to get involved. We want we like I have the money. I'm ready, let's go. And there's so much more to it than that. So I appreciate you guys sharing those tips. But I want to know more like where do you find hotel deals? Is there a Zillow equivalent for hotel acquisitions? Like how do you even find? Who's selling hotels? And how can you potentially be one who buys it?

Jessica Myers 11:09

I was like, anytime I get involved in any industry, I always say go to networking events, network network network. You want to find out who are the key players in the field like you want to understand where it's almost like looking at a football game. And you want to know who are the players on the team. Who-you're putting together your team of winners, and you want to observe for a second, not getting to the point where it's analysis paralysis, but understand the scope of the industry and where you want to fit in and get your footing. As you start to do that, you'll network with the right team and Davonne you can speak more to who those people are. But be sure that you're going to networking events.

Davonne Reaves 11:47

Yeah, I mean, absolutely. Definitely agree with Jess on that as far as going to networking events. But to your point, looking for hotels, and networking events is good, you know, industry related, you know, just building those relationships. Relationships are key. See there's not necessarily an MLS like residential for hotels. But there are websites such as Loopnet is more of a commercial real estate website for properties, property listings, but they do have hotels as well, a 10X is more of an auction website. And that's a good website to look for hotels. Acquire is another good website. And then also building relationships with brokers, you know, working with hotel brokers, let me preface. Hotel brokers because there are a lot of brokers who have experienced, you know, in real estate and even in commercial real estate, but they may not have experienced in hotel real estate or hotel transaction. So work with a hotel broker who has experience. One of my good friends, I'm going to give a shout out to him Omari Head, I he's the he's on Instagram, hip hop hotel broker, and he is hotels all day. So if you are looking for a place or looking for hotels reach out to him, he's on Instagram, @hiphophotelbrokers wanted to own one of the very few black hotel brokers in the industry. And so he sold over 140 hotels. So that's actually one of my go twos. For wholesale brokers, when someone's looking for a hotel, when I'm looking for a hotel, when I have a client that's looking for a hotel, I'm gonna try to keep it in the family, and also send them over to a different website as well.

Acquania Escarne 13:29

That is so dope. And I'm going to check that out. Don't worry, guys, I'm going to include links to everything we mentioned in the show notes. So don't feel like you need to google it right now. Keep paying attention, keep listening and watching. So I have another question for you. Because I know for some investments, you have to have this accredited investor title. And then for others, you can just have money. Do you have to have a particular status to invest in a hotel acquisition? Who qualifies?

Davonne Reaves 13:57

Well, it depends on how you invest depending on the fund. I know most recent-well I wouldn't say most recently, so probably in our past administration. with Obama. He President Obama, he passed that the JOBS Act in 2015. And it made it more accessible for non-accredited investors to actually invest in large scale properties where they typically would not have access to and for those who are unfamiliar or they don't know the difference between accredited and non accredited investo, accredited investors, someone who makes over $200,000 in a year and or they have a net worth of a million dollars excluding their...

Jessica Myers 14:39

No and they have a net worth

Davonne Reaves 14:40

Oh and they have a net worth of a million dollars excluding their primary residence. And a couple they make over #300,000 but their net worth is $2 million, excluding excluding their primary residence. And non accredited investors is just anybody outside that. And so it depends on how you invest your funds meaning depending on which vehicle. Some vehicles, they only accept accredited investors, you can invest depending on the type of fund. There are crowdfunding platforms or regulation CF platforms that you can invest being a non accredited investor, there are some stipulations, but you can invest. And so now that opened it up for people who are not non who are who are non accredited investors, and now they can invest in vehicles such as hotels and other forms of commercial real estate, meaning that they don't have to have millions and millions of dollars in the bank, or particularly net worth, and they're able to invest.

Acquania Escarne 15:40

I love that. And I think it's fair that we want to provide these opportunities to more people of color. And like Jess said, we don't feel like you need to have a million dollars in the bank to do million dollar deals. So I think that's really important. And thanks for defining that. I'll put more resources on accredited versus non accredited investors so you can dig deeper, and figure out if you qualify. So the next question I have for you guys is the most common reason women and people of color are not in this commercial real estate space. What do you think? This is personal opinion, you don't have to be experts. But I want to know, like, why do you think we are not investing in these deals?

Jessica Myers 16:23

For one, I feel like it's the long term play. This is not a get rich quick, and a lot of people that we reached out to I feel like want popcorn success, and, "hey, we're just ready to invest, and we're ready to cash out within the next few months. Can you tell me my ROI, um, next year?" And honestly, this is the long game hotels and a cash flow. It's about, you know, "hey, this is what I invested today, understanding the economic cycle." Because a lot of people were like," Oh, my God, the economy's gonna crash? should we really be investing? Or, you know, do we wait for the fire sales?" But it was like, you know, what, the economy is going to crash and it crashes all the time. And it rebounds all the time. So that's why an asset or hard asset, like a hotel, or you know, Commercial Plaza, or anything like that, that is able to collect rent, in the meantime, it may be a 10 year stretch, where you purchase a property for one amount, and obviously, it'll appreciate, but you can also get monthly residual income off of it as well. Um, but some people don't see that. A lot of people don't see the long game, they only want to see the short term, what can I flip it, and that's been a huge thing. So it's more so their mindset, more than anything, I mean, people have the money. People want to flip it so fast, they don't give it time to develop and mature. Now we're talking about legacy building, you got something that you can eat off of for 10 years, and sell it for 2-300% the capital you initially put in.

Davonne Reaves 17:56

Oh, man, definitely agree with Jessica. She's actually over Investor Relations. So she, she hears that a lot, you know, when she's talking to people as far as with our capital raise for our projects, but definitely agree, I also want to add a lot of it is education. And a lot of people they don't realize that they can actually diversify their investment portfolio by investing in hotels or other commercial estate, commercial real estate vehicles. I've come across people as well, who, like Jessica just mentioned, they want more of a quick flip, you know, it's something that they want to get their return in about a year or so, you know, two years, maybe too much, you know, especially three to five years is definitely too much. And, you know, when you're investing in a hotel, you know, you want to we definitely preface and educate, you know, the return is at least three years, you know?

Jessica Myers 18:48

Yeah..

Davonne Reaves 18:49

You get dividends along the way, but as far as your your full return, it could be up to even 10 years, depending on the investment or the type of project. But it's most so just more so was just education, and we really believe in education, we hold a weekly conversation called Epiq Collective Conversations where we actually-we need to bring you on there actually Acquania!

Acquania Escarne 19:11

Let's do it!

Davonne Reaves 19:12

It's where we talk to real estate professionals, specifically in commercial real estate, but we also talk to people who are in a, you know, who are definitely experts. We even had a wealth strategist because a lot of people didn't realize before you get into investing, that you need to have your personal finances in order, you know, do you have your your business in order, before you can even invest. And you know, so we have those different conversations because we want to change your mindset. A lot of it is a mindset, you know, they don't feel they're comfortable in their residential, you know, investing, they're comfortable in their, their investment diversification portfolio, they're comfortable. And, you know, we I've noticed people who want to want to invest more they're like a light ball hit lightbulb hit. They're like, "wait a minute, you mean to tell me I own a hotel? You mean to tell me that I can invest in a hotel? As Jessica mentioned before, it'd be a passive investor? So if that's what you are, y'all handle it, y'all give me updates, really? And I'm and I get the benefits of being okay, where can I sign up because this is what I want to do." So it was just more of changing the mindset education, we're actually having a book coming out in September, September 30. So save the date. Launch date, where we are actually putting together all of those different conversations to educate people about, you know, commercial real estate, you know, Jessica talks about building a solid team. So we'll have information on that how you can build your team, you know, people who want to get into multifamily, not everybody wants to do hotels, that's fine. It's okay. Hotels aren't for everyone. But we have people who want to who want to get into multifamily. So we have a multifamily real estate expert, this is all she does. She speak lives dream it right, this is her all day. And so she's able to actually share those tips. You know, she's been in the phases first, from the pre development to actually the property management stage. A lot of people who are on Instagram, now, I see it, they get you ready for, but they don't, they don't educate you on how to retain it, and how to actually operate it. And that's what we specialize in. We want to educate you on not only investing in it, but we Jess and I, we both share a passion where we like to take care of our investors, I guess this the hospitality me, I don't treat you know, as an investor treat you as a guest, you know, we're welcoming you into our home, we're walking into Epiq Collective. And so we're treating you as a guest. So you're not just you know, a regular investor, where you're just the number to us, you're actually a person, and you're trusting us with your investment, with your hard earned own money that you want to leave a legacy for your family. So you're so that is, I mean, that's a lot on us. But we want to take care of you all and both of us, we have a passion. So that's what makes us unique, to compare it to other investment vehicles, you know? People are like what makes you different? That right there makes you different. We don't treat you as an investor, we treat you as a guest.

Acquania Escarne 22:12

I love that. And I want to totally share that with more of my listeners. But I have a question to dive into the hard earned money. I know that every deal is different. But can you give a range of approximately how much money you may need to get in one of these deals? Whether it's multifamily syndication or hotel?

Davonne Reaves 22:30

Can our investor relations handle that?

Jessica Myers 22:32

Yeah, I would say more so look to have about 10%. If you're going into the deal yourself about 10% of the entire deal, cash, while you can leverage, you know, obviously your assets with the bank. But part of working with us, we generally like to work with groups that have, you know, you can create an investment club or deal with individual investors that start out with the $30 and $50,000 range. And we say that because we want it to make sense. Honestly, yes, you can, you know, invest less than that. But really, are you looking for return on $1,000 or $2,000? In we're talking years time, so you just want to make sure it makes sense. So we've had a lot of investors that pull their funds together. So we're only dealing with one group or club or things like that. Because you know, sometimes people are different investing levels. They have some investors no problem, you know, Hey, I'll invest $100,000, I'll invest $125. Then they have other investors that want to be a little bit more conservative, and only want to do $20. And so they partner with another investor that may only do $20. And they may be somebody that does $10,000. So that way, they collectively gotten their $50,000. And now we can really look at a long term strategy. So so we definitely look at the $50,000 number, which is reaching a different type of clientele. But it helps us now to really help your funds grow, versus you know, someone who's looking just to grow $5,000 real quick.

Acquania Escarne 24:04

Exactly. I like that.And I think it's okay to be clear and transparent that you are aiming for the higher investor who's willing to learn who's willing to get in it for the long haul, because like we said, this is a long game strategy.

Jessica Myers 24:18

Yeah.

Acquania Escarne 24:18

So guys, the name of the show was called the purpose of money. So I asked my guests all this question, what is your purpose for money? And what are you trying to achieve? So Jess, why don't we start with you?

Jessica Myers 24:29

Purpose of money is to provide resources, to provide access to ownership. The purpose of money is to help build, build a community and build a trail for others. Like, I feel with us having the most unemployment levels that we've ever had, I feel it's the most opportunity that we've ever been in, to really invest in yourself. And that's what we're helping other people to how to build the bridge through the systems that we put together. So the purpose of money to me is about building ownership access, and really getting a flow. When I look at it, when you call it currency, anything about an electrical current, you always want to make sure that it's staying in motion, and it's in constant movement. And that's what we've gotten into the flow of how to make your money grow.

Acquania Escarne 25:21

Davonne, how do you top that?

Davonne Reaves 25:23

I do, I don't try. As you can see, Jessica is the the inspiration, you know, motivational speaker, I don't. I don't, I don't even try. But, um, the purpose of money is definitely creating a legacy, you know, making sure that you live the life that you want to live, you know, you shouldn't let money control you. But you should have a passion. Of course, you can't live with that money. But you definitely should have a passion. And once you find your passion, then the money will come. So the purpose of money for me has changed throughout time, especially since I have a son now. So I look at money differently. And so I want to pass generational wealth to him and build upon generations and so that is my purpose of money. I have a different purpose in life is more of for family, to create a legacy, you know, I want generations to come, you know, to instill in him the things that I didn't learn but now that I'm learning along the way. So that way my generations can be better than me, better than my grandmother better than my grandmother's grandmother. So the purpose of money is bigger than me now.

Acquania Escarne 26:40

I love that and shout out to boy moms. I have two sons.

Davonne Reaves 26:45

Aren't they the best?

Acquania Escarne 26:46

They are. They keep you on your toes. I tell you my energy level- I try to keep up.

Davonne Reaves 26:52

I know right.

Jessica Myers 26:54

Now before we say goodbye, I want you to tell my listeners Where can we find you on all things social media and on your website so they can connect and possibly do deals?

Davonne Reaves 27:04

They can reach out to reach us at we're on Instagram. So Epiq Collective, same thing for our website. I'm on Instagram at @DavonneReaves. And then Jessica you're @it'sJessicaMyers.

Jessica Myers 27:24

Yeah, it's Jessica Myers on instagram.

And to her point, just make sure you put that q in epiq as we do epic projects collectively. So you can always find us on anything Epiq Collective, LinkedIn, Instagram, our website, make sure you put the Q.

Davonne Reaves 27:42

Yep. and sign up for our mailing list. We send petition deals that you can invest in, as well as different events that we're involved in. And also stay tuned. We're having our book launch on September 30.

Acquania Escarne 27:57

I can't wait. I'll make sure to promote it on social media. Just remind me, share it. I want to promote all things that women are putting out there to help us build wealth and to really succeed. Thank you, ladies for being on the show. This has been awesome, and I look forward to working together and continuing the conversation.

Jessica Myers 28:16

Thank you for having us. And thank you for giving us a piece of the platforming but using your voice more importantly to help impact others. That is so beautiful for now. And that's what we're here for.

Acquania Escarne 28:27

Thank you.

Davonne Reaves 28:28

I love what you're doing. Keep doing it.

Acquania Escarne 28:30

Yes!

Thank you for listening to the Purpose of Money Podcast. For more resources and information, check out my website, thePurposeofMoney.com. And while you're there, please sign up for our newsletter, so you have the latest information on new episodes and blog posts. Until next time, keep creating freedom in your life today.

Transcribed by https://otter.ai