How James Hayden Secured a Real Estate Deal After Approaching 17 Lenders

James Hayden (00:00)

I believe it’s one of the biggest opportunities in commercial real estate because of the fear people are operating in today. and what I find in residential and in commercial real estate is the same thing. There are a lot of buyers that are they’re waiting for the interest rates to get back to two and a half percent. they’re waiting for their for more demand in the marketplace.

Scott Bursey (00:55)

Welcome back to the Real Estate Pros Podcast, powered by Investor Fuel. I’m your host, Scott Bursey. Glad you’re with us. Today we are delighted to be joined by real estate veteran and sales leader James Hayden. James grew up in a real estate family and completed his first investment back in 1985. Over his career, he’s executed 34 transactions. Spanning personal properties to apartment buildings, generating over one billion dollars in sales revenue. As an author and sales leader, James brings decades of high stakes deal making, multifamily scaling, and sales leadership experience to the show. Listeners, you can expect a detailed conversation on scaling property portfolios, leading high performance sales teams. and navigating changing apartment markets. James, welcome to the show.

James Hayden (01:49)

Good to be here, Scott. Good to see you.

Scott Bursey (01:51)

Good to see you and it’s awesome having you here, my friend. To help our listeners get up to speed, please give us the 90 second highlight reel of how your career ignited and where you’re pouring your fuel now.

James Hayden (02:03)

bad where my career started was I was I was involved in technology consulting early in my career I had super I had some wonderful mentors and one of the one of the best was my mom and who raised me and when Starting about the time I was seven, we were doing daily affirmation. She was taking me to Jim Rohn and Zig Ziglar and Tom Hopkins if you remember. and so I grew up and I had two paper routes, da da da da. You selling butter toffee peanuts door to door to earn my way to camp and do those things. So for a lot of different reasons we could go into detail about, but I was I loved the process of engaging people and getting people to buy. And so early on, that’s what I was about. And so I went through school, got ended up getting an MBA and was going to come out and rule the world in two years and we hit a tough job market. I was laid off and after being laid off I took a commission only job as a manufacturer’s rep, which I it was a bit of an unsophisticated product, but I really had to roll up my sleeves and learn kind of a boot camp of engaging people, finding the right buyers, going through qualification and that. So anyway, my career took took off from there. I got involved in some services business. Then in 1985, three things occurred. We bought our first residence. my wife was pregnant with our first child, and we bought our first rental property. So as you mentioned, I’ve had 34 properties since I’ve worked in a number of technology positions, taken a couple companies to exits, and I had a have had a great career writing tech. And still still I’m working in a lot of doing a lot of AI work and advising especially founders. I work primarily with emerging companies and founders on getting their companies off the ground. And about 140 companies I’ve worked with. What was core to building our net worth was was real estate. And I when we were talking offline a little while ago, I was the biggest nerd in eighth grade. I came back and told my friends the secret to wealth is OPM, other people’s money. I’d come out of one of the one of the big real estate seminars. So even though I’ve worked in tech and on my own advising companies my entire career and I’ve had some fabulous experiences, the core or the backbone to building our net worth has been has been real estate. And getting out investing in properties, really finding the right the right type of property. And so that’s how I ended up where I am. I had I I did there there were some things in my life that I had some insecurities I felt needed to be I needed to overcome. So I outworked everybody. I had really tremendous success in the in the business world as an individual performer and then leading sales teams and now coming in and pretty quickly advising companies on how they need to generate income. So I’ve been very fortunate. I’ve been very fortunate to have the curiosity I’ve had, to have the tenacity and ability to take risks at certain times and a supportive spouse that I that stood with me and allowed allowed me to do it. So yeah, my career’s taken a lot of twists and turns and it’s been amazing. I’m writing about it right now. And I did publish a book on building markets for companies in 2013, revised it in 2023. The world had changed a bit in those 10 years. So yeah, that’s that’s been it.

Scott Bursey (06:10)

Wow, James, what a journey. And what really caught my attention about you was the way you’ve been able to take decades of corporate sales leadership and translate that into building a diverse long-term property portfolio. I guess building off that, curious to know, what is working best right now when acquiring and scaling multifamily assets?

James Hayden (06:35)

Right right now, I believe it’s one of the biggest opportunities in commercial real estate because of the fear people are operating in today. and what I find in residential and in commercial real estate is the same thing. There there are a lot of buyers that are they’re waiting for the interest rates to get back to two and a half percent. they’re waiting for their for more demand in the marketplace. and the other thing is the technology you have at your fingertips today, with AI and other other resources, you can gather so much data and sort so much information quickly. So if you’re if you’re acquiring real estate, wow, plug it plug into AI and work with it to find find that formula, find that criteria, and you can you can find properties faster than you’ve ever been able to in history. So there’s there’s a tremendous opportunity. And I would just say don’t let fear, don’t let fear guide you. think about that and think about the opportunity. And we we’re all operating in a bit of a fog bank. We’d like to see a mile down the road. It it’s a little bit foggy, but just just keep Keep going through it and you’ll find a way and commit to commit to learning your craft as well as look look at those what are we called macroeconomic factors that can impact your particular market. one of one of the things I I do a little bit of investing in mortgages and a little bit in hard money and that is I want to know for investors when they’re investing in a market. I don’t know what are the macroeconomic factors in that area that will drive what what’s going to drive the value of your asset? Why are people moving there or not moving? what is the advantage? So take a look at take a look at the big picture. if you’re if you’re into research like I am, that can be a major, major asset. and a differentiator between you and the uneducated investor. Do your homework.

Scott Bursey (08:34)

James, great perspective on keeping your edge sharp right there. Help us understand. What is your biggest challenge when managing large-scale transactions in your view?

James Hayden (08:45)

large scale transactions It’s there’s there’s a lot of lot of moving parts in the large transactions. And often oftentimes when you when you start hitting a road bump, understanding the pushback you’re getting and what’s what’s involved in that. Like there there was a property 2013 that I bought and the location was terrific. I knew that area to know that all the all the assets of the property, it was just had to happen. But I couldn’t I couldn’t get financing it was larger property. Couldn’t get financing through commercial lenders and it was too big for residential lenders. So it was in that Netherland of what the heck do I do? I know this is a great opportunity. I know where it’s going to go. And so I went to 17 financial organizations. I didn’t go hard money, but I was about to go there. And 17 organizations because I knew that I had to make this happen. It just everything had lined up the 40 years or so of investment experience I had. It just had the location. It had the upside and the value was there. So we did quite a bit of negotiating with the owner who was going through a divorce, needed to sell the property and that. We were twelve thousand dollars apart and I bought it in 2013 for what he paid for it in 2008, and he’d put 250K in upgrades. So it was just everything everything was green light. except the financing. And then we hit we hit the point of I was getting the financing lined up and the owner wouldn’t budge on the price. I dug in and the two brokers we were working with went, look, we’re each giving up we’re each gonna give up half of that. You’re done. You two are done. So it’s it’s when you’ve got the right opportunity, it’s I think it’s just digging in and finding a way to make it happen. And but it could be it could be the city, the county, regulations, when you can see what the what the potential investment is or potential return, and then be patient with it. the one thing, early in my career is I was looking at I need cash flow, I need cash flow, I need cash flow. And that’s true. But some of the some of the properties that have an upside, if once you deal with things like deferred maintenance, getting the right tenants in, it’s I know it’s difficult for people because you’ve you’ve got to kind of borrow from Peter to pay Paul, if you will, to make things happen. But it’s just I I believe it’s really attitude. and when you find the right property, getting in getting in your first places, it’s a matter of just not giving up, finding a way. And there’s there’s always a way to make it happen.

Scott Bursey (11:21)

Shifting gears here, James, what’s the one risk that you’re most concerned about across your portfolio in this current landscape?

James Hayden (11:30)

Hmm. the property in Southern California would be tidal wave. Tsunami. With what’s going on down there was it was close the other week, but not that close. biggest risk. Why? I really I I’ve got my risk pretty well covered. I guess it would be, the risk I had early on was because a lot of my properties have been just purely rental properties, is what if what if the properties go vacant? And if you if you understand a market, if you really know a market, you’ll know where the demand is and where it’s going. And that’s That knowledge or that homework that I spoke about a few minutes ago is super important to have. it’s one of the reasons, like for me, buying an apartment building and I’m not picking on Memphis or another market where I don’t have that deep understanding is it if you have a large real estate investment portfolio, you have somebody who has that kind of understanding. I think it’s really understanding the market you’re in. Because that’s really where the upside can be. If you see, in certain certain areas, you can see that gentrification that’s occurring or people are moving into a certain area. You can you can see it coming in a market if you’re there long enough. If you’re not in that market, you need to have somebody who is and who understands that.

Scott Bursey (12:39)

Are you operating exclusively in the Pacific Northwest?

James Hayden (12:42)

Southern California one property and then other properties are all in the northwest.

Scott Bursey (12:47)

What’s your playbook for protecting your assets against market shifts?

James Hayden (12:52)

Against market shifts. real estate assets or stock assets? Both.

Scott Bursey (12:57)

The let’s slant it more towards the real estate in in your area.

James Hayden (13:02)

Yeah, it’s looking at having a view of what you see in the market for the next five years and then staying staying focused on what’s there right now, what’s what’s immediate. So it’s kind of it it’s like having bifocals that are sharp at a distance, but you also have to keep an eye on what’s what’s right in front of you. I I really believe it’s important to take a look at the macroeconomic factors in a marketplace. So, in the Seattle market, there have been some some tech layoffs. People freak out, 2,000 people laid off in the Seattle area. in the whole scheme of things, it’s not a tremendous amount of people, but but it, it’s dropping housing values. So what are what are the markets that are going to be in demand? what are the demographics of people that are potentially buying? when I when I’ve looked at buying a property, this is how my formula is tightened up, I look at who’s going to buy 20 years from now. Because eventually I’m gonna liquidate a property or I’m gonna put it in a trust for my family, right? one one or the other. Either either way, I’m looking at that longer term value. So what would be the drivers in a market? that are going to sustain or actually increase the value of that property.

Scott Bursey (14:12)

James, if you could fill us in, where do most real estate sales organizations drop the ball when closing high stakes deals in your view?

James Hayden (14:21)

Real estate organization, where do they drop the ball on the high stakes opportunities? I think it’s not knowing your homework, not knowing your details. and that could be your buyer, understanding what your buyer’s motivations are. They may get cold feet, drop out. Maybe they’re not qualified. they’ll come in and something looks great. Like somebody could have looked at that opportunity I talked about where I had to go to 17 banks and it’s like, This guy’s having trouble getting financing right. But I had I had a track record and I would say it’s looking for people that have a successful track record. And where, where I’ve had things go upside down is when I didn’t do my homework. I had I had a short sale in 2009 that I took working with a mortgage broker that I worked with who made quite a few promises on the on the property. It and I trusted that person rather than doing my homework on the particular property and that because I was told, I’d get my money back with a fat return in eight months. Well, I ended up putting it in a short sale four years later. you learn those things. So it’s really I would say find find your find your formula. And don’t deviate. that was a property that was supposed to flip. For me, it’s been properties that have a rental income and an upside. and now it’s properties that are tend to be higher income properties. For 10 years, I was working with a mentor who’d accumulated seven over seven hundred doors. And I built it over thirty years and his formula was blue collar working class neighborhoods and there’ll always d be demand the economy goes up and there’s still people that live there economy goes down people move down a notch and move in. That just didn’t work for me for a lot of different reasons and mine’s mine is great right now. We’ve Got a nice nice return on the property we’ve we’ve got here and we’re sitting here with a nice passive income.

Scott Bursey (16:20)

James, you’re a high level sales leader. Tell us, what’s one high leverage move that turns a struggling sales rep into a top performer?

James Hayden (16:29)

I’ve been involved with so many different companies in terms of what makes a good salesperson. I companies I’ve been in engaged with, I would say we’ve we’ve invested over seven figures on assessments, psychological assessments as an introvert or extrovert. Is it somebody with type A blood or type O positive blood? All of those things. And it was actually a Minneapolis space company where you are that we did quite a few of those tests and determined that the interesting thing was, and I just did another one of these studies, is introverts actually do a little bit better than extroverts in sales because they will follow a process, one. And two is they don’t want to talk, they want to ask a lot of questions. And really what it comes down to is people buy for their own reasons. It’s and the more questions you ask, the more you’re going to discover about what the real motivations are for people. So I I do I work with a group out of MIT where we assess if somebody will actually sell or not sell. There’s some behavioral tells in that. but it’s a lot of it is that motivation, people call it the fire in the belly, that you won’t be denied. you’re you’re going to find a way to make it happen. You’re going to find a way to get there. And what that does is you prepare better if you have that kind of passion and motivation. And that comes across to the buyers, to the people. People you’re working with that you’re going to make this happen. You’re going to find a way. And if you increase your energy and your motivation, sometimes you can move people off that are wavering on buying or selling because your energy has raised their level to the point where they trust you. And that, that’s one of the things AI is not going to replace, is especially in high volume transactions like commercial is that level of trust, that handshake that you make, you’re doing business with people and you buy from someone because you trust them. And some some businesses are being, they’re having AI run through the transactions. I don’t see that happening in real estate and especially on the commercial side at all. But use it my god it can it can it can work miracles in terms of how you research and the data you can pull before you have your first discussion with a potential buyer or seller.

Scott Bursey (18:47)

Thank you for breaking that down. James, if you could describe for our listeners, what does your professional network look like right now?

James Hayden (18:55)

I only have thirty thousand first degree LinkedIn contacts. one of the things I believe that’s been something that I’ve been diligent about in my career is keeping keeping a strong network and building building that network. So I when I meet somebody, we link in or I stay, communicating with that person. the organizations I advise and I tell them I can I can get to with the network I have, especially through LinkedIn and other sources, I can get to any organization and I can get to any any potential buyer. And so having that kind of connectivity, it doesn’t happen overnight. and the other thing is don’t burn bridges. there’ll be situations that are negative or potentially negative and not you’re not gonna get along with everybody. But I if there’s a shortcut that could be unethical, don’t take it. I’ve seen that so many times in my career is it it’ll come back through that community you’re involved in. And the community you build is as much your gold as anything else. And when you need to tap into that, then then you’ve got that resource. You don’t have to worry about somebody going, well, Scott, he got an extra, 15,000 in commission that should have gone my way. that’s I that’s super, super important. the money that you may get if you take that shortcut that’s a bit unethical, it’ll come back multiple times to people in terms of reputation or I believe it’s just something people have to live with too. if you’ve taken advantage of somebody in a in a bad way like that, it it’s going to come back and bite you in the butt.

Scott Bursey (20:28)

That is some excellent, excellent advice. That’s pure gold. James, let’s dig into the high octane fuel for a moment. What’s the best piece of advice you can give an investor wanting to scale up to multifamily properties?

James Hayden (20:44)

The just get going. I’ll give you one story. There’s there’s an investor, he had the largest buildings in Seattle. When I first got out of school, I knew that real estate, I just knew in my heart, my soul that real estate investing had to be part of what I was involved in. So I’ll I’ll tell you his name. His name is Martin Selig, S E L I G He still has some of the biggest buildings in Seattle, but he’s older now. He had the tallest building in Seattle and was developing all all of his investments were just smoking when when I got out of college. And so I called him up. I’m two days out of out of college. I I call him up. It’s like, Mr. Selig, it’s it’s Jim Hayden. Like, I’d love to buy you Coffee and you know, find out what it really takes to be a successful real estate investor. And he said, you know, kid, you don’t need to buy me a coffee. I’ll tell you right now, you want to be a successful real estate investor? Just get out and start doing it. And at the time I thought, what a jerk. You know, I’m sure he has some secrets he could tell me. And I’ve reflected on that since. And He was right. It’s just getting that momentum or that inertia to do it. and for some people, a real estate investment’s like bungee jumping with a grade cord. am I gonna be okay if I do this? And fortunately in my life, I had parents who were active real estate investors. And it carried the assets they made in the real estate investments. My dad lived to be 101. He still had a little bit of money, which is which is fabulous, right? And it was the real estate that carried them. So I knew the difference it would make. I knew about OPM. life is full of risks. And I see real estate investing as much less risky than the stock market. Stock markets controlled by, big big brokers, big buyers and that kind of thing. Real estate, you can get in, you can go like I I’ve targeted to be underneath that the radar screen of the big the big investors. and there’s tremendous opportunity there. You have to be you have to be gritty and work hard. And sometimes you throw on your jeans and your work shirt and you’re getting out and you’re under the under the sink fixing a leaking leaky sink for your your tenants just like I was a couple couple weeks ago. I think it’s also putting your ego in check and realizing I’m building something great. And this is this is part of what I need to do. I I would not have not be in the position I am today. the advisory works great and it’s paid well. But I haven’t received the leverage. I am on stock like I have in the real estate market.

Scott Bursey (23:24)

Well said James. For those of our listeners that want to keep this conversation moving, stay in your lane, collaborate with you on future deals, perhaps. What’s the best way for them to plug into your pipeline and reach you directly?

James Hayden (24:14)

Sure. My website is jamesbhayden.com. You can contact me that way. My contact information you can best way is probably to text me and my phone number is on the on the website as well. But you it investing, in my opinion, takes a few different turns. Like there’s, what are you investing for ultimately? What are your objectives? Like one of the properties we have is a vacation home where we when we traveled there, it’s tax deductible. It generates an income. So, you could you could almost put what are the objectives? Why am I investing in this property? Like really take a look at yourself first. what am I looking to get out of it? And that’s a way to build, to build your formula, understanding what your motivations are before you get into it. most of our properties have been appreciation and cash flow. is what we’ve looked at. but hey, if you can find one where you can get a little vacation too and part of it and it’s paying for itself, it’s a beautiful thing. So real estate can real estate can do some great things. It’s still the greatest opportunity and largest asset class we have in our country.

Scott Bursey (25:18)

James, thank you for joining us today on the Real Estate Pros Podcast.

James Hayden (25:22)

Pleasure to be here, Scott. This is wonderful.

Scott Bursey (25:24)

This has been an absolute master class. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be fueling your tanks with a lineup of elite guests, just like James Hayden, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.