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Richard Coyne is a full-time Real Estate Syndicator and Real Estate Investor. Richard formed JCLange and Company in 2016 to invest in Real Estate and later teamed up with Bill Zahler to form Park Capital Partners. Park Capital Partners helps busy professionals achieve passive income by gaining access to the private real estate market through shares of syndicated Multifamily real estate investments. Richard’s journey began when he realized ways to accelerate and build wealth by creating a disciplined plan for the long term. He discovered ways of how the wealthy are really investing and followed the path of the secrets of the ultra wealthy.
Richard walks us through the fundamentals of his foundation and how it is modeled to give back to the community. He shares with us not only what it means for a foundation to be successful but also some tactics that have been key in increasing value within investments.
With a voice full of determination, Richard stresses the importance of education and action. He believes these two points will help you reach your destination. Don’t miss out on this episode – it’s one that needs to be shared!
In This Episode
- How Richard got into real estate and how it all started.
- How are the ultra wealthy really investing?
- The fundamentals of Park Capital Partners
- What are some tactics Richard has employed to increase value?
- Mr. Coyne’s accelerating wealth strategy advice.
Hey everyone, and welcome to today’s show on Wealth Strategy Secrets. Today, we are joined by Richard Coyne. Richard is a full-time real estate syndicator and investor. He formed his first company in 2016 to invest in real estate and then partnered with Bill Zoller to form Park Capital Partners. Park Capital helps busy professionals achieve passive income by gaining access to the private real estate market through shares of syndicated multi-family real estate investments.
Richard completed post-graduate real estate analysis and investment course work at MIT’s School of Architecture and Planning and is a retired software executive with more than 30 years of experience. He held a PMP and leverages that discipline in apartment analysis, investing, and operations. Richard is also the co-host of the Asheville Multifamily Investor Club, co-hosts the Road Less Travel podcast, and serves in a variety of volunteer roles, including co-founding the Park Capital Partners Foundation. Richard, my friend, welcome to the show.
Well, thank you, Dave. It’s an honor to be here. I really appreciate you having me.
Yeah, great to have you on. We’ve had the experience to partner before, which has been fantastic. I know some of our community is familiar with you, but for those who are not, can you talk to us a little bit about your background? What was that moment in 2016 that got you into real estate and started making things happen?
Yeah, glad to. Again, appreciate you having me on. Glad to tell my story and, obviously, wish all your listeners continued success in what they do. For me, it was very much a story of being the busy professional. I talk about how we bring investment opportunities to the busy professional, and that’s who I was. I have three kids. Dave, you have triplets; I have twins. With boy-girl twins and an older sister, we made a decision when the kids were little that my wife would be a stay-at-home mom to really spend time with the kids and help mold them. Part of the reason for that is because I was on the road all the time as a traveling consultant. My role changed over the years, but I was gone all the time. We wanted to have a stable parent influence with the kids, and that was the right decision for us.
As the kids got older, we chose to send them to private school. That’s a luxury that some can’t afford, so we recognize we were very blessed to be able to send our kids to private school and ultimately to college. Being the busy professional meant I was gone, heads down working hard, and when I was home on the weekends, that was family time. We made the decision to do the right thing for our family, sending our kids to private school, which meant it had to be paid for. My older daughter started private school in sixth grade, graduated, then went on to college. The positive change in her during those first six weeks, with smaller classroom sizes and more individual attention from teachers, led us to put the twins in private school as well. They started in third grade and graduated all the way through.
We had a lot of private school bills, which took away from putting money aside for retirement early on and meant we made sacrifices. We didn’t go on big vacations or have a mega house. We had a very nice house where we lived for over 20 years in Atlanta. It was a great house, neighborhood, and neighbors. We chose not to go for the big house, and in a way, I feel like a genius because when 2008-2009 happened, we were living within our means instead of being stretched too far.
In 2015, with the kids in college, I realized I needed to do something for my wife and I for our retirement. It was time to focus on accelerating our wealth-building and creating the future life we wanted. I looked at different options and decided to go into real estate, something I had always been interested in. I didn’t know much about it, but I chose to build my knowledge and learn. I’m a huge believer in education—learning about what you’re getting into before jumping in. My wife and I purchased a single-family house on a short sale, but I quickly realized it wouldn’t cut it for replacing my income. I needed to go bigger, faster. That’s when I shifted my knowledge gaining to learning about apartments and how to acquire them.
We’ve been able to do a lot of successful things for our investors. Our goals are: 1) make our investors money, 2) give them a return on their investment, and 3) improve the apartments, leaving them better than we found them. I hope that gives some background.
Yeah, that’s great, Richard. Appreciate you sharing that story. It sure does hit home for me because we’re definitely on zone defense with multiple kids. For those listeners out there struggling to raise one child, just be lucky you’re not doing multiple at the same time.
For me, that was also really the same light bulb moment. I kept going to the financial planner, and he kept saying, “It’s about a million dollars each to raise a kid. I now have four of them.” Then there’s this other thing called retirement, and he would suggest putting all my money in a 401k. The market would go up and down, and I was told I would make seven percent in the long haul. But I just could not figure out how to move the needle with that. Every time you make more money with a W-2 job, half of it gets taxed, so you need to be earning double.
That was the big transformational moment for me as well, to really get serious about learning how the ultra-wealthy really invest. It’s no mistake why so many ultra-wealthy millionaires and billionaires have created their wealth through real estate.
There’s a little nugget from a James Rickards book. He talked about an event in Italy where he was having dinner with an ultra-wealthy group of people. One of them was a family that has been a dynasty lasting over 800 years in Italy. Think about all the world wars, political changes, and religious turmoil that happened in those years, and that family has stayed. He asked a particular lady from that family, “What’s your secret? How have you maintained wealth?” She said three things: real estate, gold, and art. When the hordes are coming to invade, you take the canvases off the frame, roll them up, take the gold, travel with it, and take the deeds to the property. Then you leave town. When things settle down, you come back, your claim to the property is still valid because you’re the true owner, and you still have your gold and art. It’s interesting to think about, but the point is to invest in real estate.
Yeah, that’s a really great story. I also want to go back and unpack a theme in your whole story, which is about delayed gratification. It’s tempting to buy that mega house or the next biggest car—all these things that are in front of us all the time. But you had the financial discipline to do that in a measured way, being the CEO of your own personal economy.
When you have a wealth strategy and a plan, it’s not about getting rich overnight. People think about the lottery or some big liquidity event, but this is more about creating a disciplined plan over the long term.
Yeah, absolutely. I forget who it was that talked about delayed gratification as a sign of maturity, but it really is. They ran tests where they gave three-year-olds a choice: do you want one marshmallow now or two marshmallows later? They left a marshmallow on the table and watched the kids when the adult went out of the room. Many kids would grab the marshmallow, but a few would wait and get two marshmallows. It’s a sign of maturity. I don’t say that disrespectfully, but it’s a factor of education. Had I known then what I know now, I would have started investing much earlier. Even if I was a busy professional, I would have found a way to take a little time, even 10 minutes a day, to learn about different investment opportunities. It could be gold, real estate, or something else. Personal development is important to improve your life, your family’s life, and your future. It’s been a huge journey for me, leveraging delayed gratification to educate myself and learn how to do things differently. It’s been well worth it, and we’re on a really good path now.
Yeah, absolutely. That’s such a great lesson we can teach our kids. They’re growing up in an age of social media and constant flashes, becoming desensitized to everything. The concept of delayed gratification is so valuable if you can instill it in them at an early age. It will pay big dividends.
Yeah, and Dave, just to go on a little further, one thing we’ve really tried to help our kids learn and apply is the concept of delayed gratification. Dave Ramsey says, “Live today like no one else so tomorrow you can live like no one else.” Make sacrifices now to have a better life down the road. We also apply that concept to our giving philosophy. We try to help others and instill in our kids that there are people less fortunate than them. My kids went to private school, but there were still people much more fortunate and less fortunate than them. We instill the concept of giving and helping others because people were gracious with their time to us. That’s why we created our foundation as well.
Yeah, that’s great. Do you want to tell us a little bit about your foundation?
Oh, yeah, absolutely. Thank you. It’s a 501(c)(3) nonprofit we created last year, the Park Capital Partners Foundation. We wanted to take an approach that would accelerate how we give back. Bill’s and my company, Park Capital Partners, funds the foundation, so all the money given to the foundation goes to its best work to help others. We donate a portion of our profits from our company to the foundation, and we personally give to the foundation as well.
The thing we’re most excited about is that when investors invest with us, we make a donation to honor that investor to a charity of their choice. They can pick from a list of 15 different pre-existing charities. We curated a list of charities known for good causes with reasonable overhead. We help investors feel good about their investment, knowing they’re also doing some good for the world. We’ve had a very good reception from our investor community about this.
That’s outstanding, Richard. I really applaud what you’re doing. It’s a super great model. I love the whole idea of giving back and your mission of improving the lives of the tenants and communities we invest in, as well as helping build wealth for our community.
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Tell us a little bit about Park Capital right now. What are you guys focused on in terms of asset classes, markets, and positioning?
Absolutely. We set an initial goal to buy properties within about a four-hour drive radius of Asheville, North Carolina. Bill lives a little west of Asheville in a small town called Maggie Valley. We want to be able to get to our properties. We’re the asset managers of those properties. Yes, we have third-party property management for day-to-day operations, but our job is to manage the manager and make sure things are going well. We have weekly calls with our managers, but we also want to be able to get on-site.
So, we set a four-hour drive radius. From Asheville, we’ve owned properties in the past in the Atlanta metro area, and we currently own in Greenville, South Carolina. We love Charlotte, Raleigh-Durham. We haven’t bought in Tennessee, but Nashville is kind of stretching that four-hour mark. We’re now looking at other markets with great fundamentals in terms of population growth and job growth—those drivers you look for: population, jobs, rent path of progress, landlord-friendly environments with reasonable eviction laws.
When we buy assets, we’re buying existing profitable businesses. An apartment complex is a business. We’re buying existing businesses with above 90% occupancy that are making money today, and we improve the operations through a value-add strategy, adding new things to the complex. We might renovate units that haven’t been renovated in five or ten years. We add additional services to improve residents’ quality of life and make the units nicer.
We try to stay in the 90s and newer properties. Our first property was from the 70s, which was a great experience as our first property, and we achieved great returns for the investors. But we’re happy we don’t deal with the headaches of C properties. We prefer to stay in B properties or better.
We do sensitivity analysis and break-even analysis to understand if we can handle a drop in occupancy. Even if the economy goes into recession and people start losing their jobs, there’s still going to be apartment demand. That kind of analysis helps us feel better about our projections and ensures we’re able to make our investors money through the sensitivity analysis, break-even, and all the details we talked about.
Right, that’s helpful. On the break-even, where do you typically see apartments in terms of occupancy percentage before you would actually start to lose money? Is it around 60-65%?
So, there are kind of two answers to that question. One point I want to make is that during your renovation, you’re creating vacancy and spending a lot of money, so your break-even occupancy is actually higher at that point. When you finish your renovations, your post-renovation break-even occupancy can drop. It might not go down to 60%, but it can drop from below 80% to maybe in the 70s. Keep in mind that it will be higher during the renovation process and only drop after you complete the renovations. Why? Because after the renovations, you’re generating an additional $250 a month per unit. With more income coming in from those renovated units, you can afford to have lower occupancy and still pay your banknote and investor returns more easily.
Right. From a multi-family perspective, a lot of people think about single-family rentals when getting into real estate. But in my view, single-family actually has a lot of risk. If you don’t have a renter, you go to zero percent occupancy. You only have one chance. In multi-family, you can go down to 65% before losing money on an asset. That creates a lot of flexibility, and you have a lot of things you can do with the asset. I find it very risk-averse.
Yeah, let me elaborate on that point as well. A lot of people have done very well with single-family, and I applaud them. But it’s a lot of hard work. As you said, if you have one house and the resident moves out, you go from 100% occupancy to zero. With ten houses, one resident moves out, and you go from 100% occupancy to 90%. But with a hundred units, one resident moves out, and we just drop from 95% to 94% occupancy. Also, contracts are hard enough, so I’d rather do one contract than 100. That’s a big advantage we see for apartments.
Yeah, nice. Richard, tell us a little bit about asset management. I’ve seen you guys implement some really awesome things that support your mission, from supporting the community to increasing property value and net operating income. From an asset management perspective, what are some of the tactics you’ve employed to increase revenue and value?
Sure. First of all, we leverage third-party property management. We always have a professional property manager as part of our properties. Someday, when we’re bigger, we might consider taking that in-house, but that’s down the road. We work with a particular company we’ve managed multiple properties with in the past, and they do a great job for us. The point is, we have a full-time person in the leasing office, maybe two depending on the size of the property, and a full-time maintenance person on-site, maybe two, again depending on the property’s size. They are our on-the-ground team, and our job as asset managers is to manage the manager.
Our mission is to protect our investors’ money, make money, and improve the properties. Improving the properties is how we’re able to increase the net operating income. We renovate old units that have been sitting there. For example, when I walk into a B-class apartment complex that’s maybe 25-30 years old and still has older countertops, I evaluate whether the market demands stone surfaces. If it does, we do that renovation, improving the unit’s value to the resident and increasing the rent, which in turn increases the net operating income.
We also look for other ways to increase the net operating income by providing additional services to our residents. For example, valet trash service might cost a little money for the resident each month, but many are happy to put their garbage at the door and let someone else pick it up. This service is typically offered several days a week, including one weekend day. We explore different arrangements and service levels to add value.
We look at ways to add value similar to improving a house. For instance, if a unit doesn’t have washer/dryer connections, we evaluate whether it’s feasible to add them. It involves construction costs, plumbing, and electrical work, but it can significantly improve the resident’s quality of life. Instead of going to an on-site laundry facility or a laundromat down the street, they can do laundry in their own unit. In cases where washer/dryer connections are already present, we install washers and dryers as part of the rent, making it convenient for new residents.
By adding such amenities and services, we improve the living experience for residents and boost the property’s bottom line.
Sure. I saw you guys implement a small service to help residents build a credit rating. Do you want to talk about that a little bit?
Yeah, sure, absolutely. There are folks who may not realize that when you’re paying rent, it’s not necessarily reported to the credit agencies. It doesn’t necessarily add to or improve your credit history. Those of us who are responsible with our credits want to have good reporting. Good reporting is better than bad reporting, and no reporting is not beneficial. Rent payments are not typically reported like credit card or car loan payments.
We found a service that charges a monthly fee to the residents to help improve their credit score by reporting their monthly payments. This service is for individuals trying to build their credit, perhaps to buy a house or to make sure their credit history shows them as responsible. Instead of just reporting negative history when someone doesn’t pay their bills, this service reports positive history each month to the credit bureaus, which helps boost their score. Many people chose to be part of this service because they wanted that positive reporting.
Additionally, it incentivizes residents to pay their rent on time, as they now have skin in the game. This increases revenue and improves the lives of the tenants, accomplishing multiple goals at once. We look for ways to add value to our residents and investors. Running a business is about making a profit, but we also want to deliver value along the way, not just make money at the expense of all value. We deliver value to the resident and the investor.
Yeah, that’s great, Richard. If you could give just one piece of advice to our listeners about accelerating their wealth trajectory, what would it be?
I would say it’s kind of two parts, so I’m going to cheat a little bit. It’s to educate and take action. You have to learn and be willing to spend time educating yourself about what’s out there, learning about the possibilities, and exploring alternative investments like gold or real estate. You don’t need six figures in the bank to invest in real estate; there are many ways to get smart about it.
Spend time learning. There’s a Jim Rohn quote that I often butcher, but it says something to the effect that people will rarely exceed the level of their capability, except for the level at which they invest in themselves through education. Take ownership of where you’re going and your future by educating yourself.
But then, you have to do something about it. There are many folks who are professional students—they love learning, and I am a lifelong learner too. I seek opportunities to learn new things all the time, but at some point, you have to take action. It’s not just about accumulating book knowledge; you have to apply it. So, educate yourself and then take action to move forward.
That’s definitely the advice I would give. The old adage isn’t just that knowledge is power, but that knowledge plus action really equals some massive results.
Absolutely.
Taking action is key. Excellent, Richard. Thank you so much for coming on the show. I think folks will really enjoy this and learn a lot. I appreciate you sharing your expertise. If folks want to learn more about yourself or Park Capital, what’s the best place they can follow you and get in touch with you?
Absolutely. Our website is parkcapitalpartnersllc.com. I’ll go ahead and give you my mobile number as well. It’s 404-245-9732. I welcome anyone interested in learning about investing to reach out. Partly why my business partner Bill and I host two monthly meetings and have a podcast of our own, called The Road Less Traveled Show, is to give back. A lot of people were gracious with their time when we were getting started, giving us ideas, nudges, pushes, and insights. We want to do the same for others. Of course, we welcome people to invest with us, but we’re also happy to have conversations with those trying to figure it out and get started. Please check out our podcast as well.
Awesome. Thanks so much for sharing, Richard. Thanks for coming on the show today. I really appreciate it.
Dave, thank you for having me. I certainly appreciate it. Good luck to all your listeners out there, and thanks again, Dave, for having me on.
Absolutely.