Real Estate Underground

Building Communities and Changing Lives with Heart and Purpose - Andrew Reichert

• Ed Mathews • Season 4 • Episode 135

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What if you could transform overlooked properties into thriving communities while also transforming your own life? Join us as we chat with Andrew Reichert from Burgo Capital, who shares his journey from a rebellious young man to a trailblazer in real estate inspired by "Rich Dad, Poor Dad." Learn how Andrew acquired his first duplex with no cash, experience, or credit, marking the beginning of his mission to enhance lives through real estate. Discover Burgo Capital's unique strategy of focusing on America's heartland to find and nurture overlooked assets, putting people before properties.

Andrew's story goes beyond business as he opens up about life-altering challenges, including an early cancer diagnosis that reshaped his priorities. He emphasizes the significance of self-care and the unexpected lessons learned from life's curveballs, like a surprising bout of appendicitis. Find out how these experiences reinforced the importance of trusting his team and taking regular mini sabbaticals to maintain clarity and resilience. Andrew celebrates over a decade of being cancer-free, underlining the importance of empowering teams to thrive independently.

In a world driven by financial gain, Andrew stands out with his purpose-driven approach to both life and business. Discover his innovative model of combining equity funds and syndications to give investors personalized opportunities. Dive into his personal development journey, inspired by Michael Hyatt's "Living Forward," and learn why taking risks and seeking mentorship are crucial in new ventures. Andrew leaves us with insights into leaving a legacy beyond wealth, highlighting the joy he finds in fatherhood and quality time with his daughters.

You can find Andrew's new book, Priorities on Purpose: A Blueprint for Living with Clarity and Focus, on Amazon.

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Ed Mathews:

Greetings and salutations. Real Estate Undergrounders. It is Ed Matthews with the Real Estate Underground. Thank you so much for joining us today. Today is a very special episode. Somebody that I have admired from afar for a long time and Andrew Reichert with Birgo Capital, Welcome to the show. Thank you so much for joining us and I'm really excited to have this conversation today.

Andrew Reichert:

Ed, thank you so much for having me on. I'm really looking forward to having the conversation as well.

Ed Mathews:

Yeah. So for those folks that aren't necessarily aware of you, why don't you tell us a little bit about yourself and who you are and what you do for a living?

Andrew Reichert:

Absolutely. If you don't mind, I'll just unpack a little bit of my story, please do. I grew up as a bit of a rebellious child, ultimately ended up getting expelled from high school due to some bad decisions I was making along the way. I tell folks I got my starts in entrepreneurship, unfortunately selling and doing things that were not legal. Everybody else was mowing grass. In high school, I was selling grass.

Andrew Reichert:

Lo and behold, I ended up getting accepted into a great college in Pittsburgh and that was really where I started to read books about mindset and about real estate. And so I read this book called Rich Dad, poor Dad, and I was like, wow, he talks about buying real estate in there and being an entrepreneur. And I was like, oh, these are the kinds of things that I really want to do. And so I started really applying myself to school and I bought my first duplex the year I graduated from college and I bought it with no cash, no experience, no credit, and I actually walked away from closing with a check for 20 grand. So that's how I got started in real estate.

Andrew Reichert:

I bought this duplex and I had a great job for five years right out of college, but it always really felt like I was called to real estate, and so I resigned from that job in 2012 to start what is now called Birgo. As you mentioned, Birgo Capital is our business and we've raised over $100 million from investors. We purchased over $300 million of real estate. We primarily own and operate multifamily real estate. We've got over 100 employees and we focus on multifamily workforce housing in the heartland of America, so that's really our business today.

Ed Mathews:

Excellent, so you had mentioned that you were drawn to real estate and obviously Rich Dad, poor Dad, the Purple Bible is something that somebody handed. So that's really our business today. Excellent, so you had mentioned that you were drawn to real estate and obviously Rich Dad, poor Dad, the Purple Bible is something that somebody handed me in 2000, I want to say 2008. And same thing. You and I have been on a similar trajectory. I started in 2011 and recognized that real estate was the vehicle for me for a lot of reasons, but I'm curious what specifically drew you to real estate? I mean, you went to a good school. You're obviously very intelligent, you're a leader of people. Having grown a business to over 100 employees, you could probably do anything right. You could have started a software company. So why real estate specifically?

Andrew Reichert:

Oh, ed, that is such a great question, and I think my answer may be a bit atypical for most real estate operators. The thing that actually drew me to real estate was not the real estate itself. I actually tell people that, and I tell my employees this too. Real estate, for me, is just a means to an end. It's not an end in and of itself, and for me, the end is actually people, and so our mission as a company is improving lives through real estate, and so it's through real estate that we do the improving lives, but it's really about improving lives, and so, for me, real estate is just the widget that I fell in love with, because it's the roof over people's heads when they go to sleep at night, and it's the buildings where people go to work every day, and so real estate is this fabric where you get been impacting people's lives. That's what I wake up every single morning excited about, and real estate is just the widget that I'm using and leveraging to get there.

Ed Mathews:

It's amazing how much where someone lives and the fact that they can feel they live in a clean and safe environment that's well cared for, that they're well served. It's amazing what that'll do for a person in a family in terms of they're thinking around the rest of their life right If where they live isn't a stressor, and it's admirable that you're so focused on taking good care of the folks that live in your buildings. I'm curious about your process when you go to acquire a property. Can you walk me through what your box looks like and how you approach a property? Can you walk me through what your buy box looks like and how you approach a new property that you're onboarding?

Andrew Reichert:

Yeah, absolutely, and it ties directly to our mission. So first of all, our buy box is we love to buy stuff that's a little bit big for a typical mom and pop investor but a little bit small or institutional that's really like our sweet spot. And similarly we love class B housing because there's a lot of attention in class A, a lot of capital in class A. There's also a lot of attention in affordable housing and class C stuff. But what we love doing is focusing on the often overlooked. So both properties and people, particularly here in the heartland of America, we find are getting often overlooked. They're getting overlooked by the large capital and we actually believe it is an incredible opportunity for generating a return on investment. And so we are focused on the often overlooked assets and people here in the heartland of America. And part of why that ties to our mission is because we love to buy from particularly generational owners who just haven't kept up with the asset.

Andrew Reichert:

And when we come in we provide professional property management 24-7 at maintenance hotline 24-7. They can submit a work order on their online portal. We answer the phone and our residents just cannot believe it, like when we buy the asset. And I don't mean to discredit the other owners I'm not calling them slumlords by any means but just when we buy the asset and we do what I think is just basic property management, most of our residents just cannot believe it. So that's really what gets me excited and that's where my heart is, for that's why that's our buy box, and that's also where my heart is for the work that we do yeah, and it's interesting when we so we have traditionally focused on here at Clark Street, we focused on c-class buildings, but the same thing, right?

Ed Mathews:

I met with Gino Barbaro the gentleman Jake and Gino and he had talked about his partner Jake had talked about on on a YouTube video that I saw before I interviewed Gino that they wanted to be the Chick-fil-A of multifamily, and what that meant was obviously bringing a professionalism to their property management. That is lacking, frankly, and it's not that, like you said, it's not that these folks are slumlords, they're just they're overwhelmed, right. And so in a lot of cases, these folks have generational asset holders, have inherited the property, they don't know what dad knew, and so they find themselves in over their head fairly quickly, and if they're not well capitalized, they fall behind very quickly as well, and so it's a natural, normal thing to happen with these types of assets. But to have somebody come in and repair the relationship with the residents is resident retention, at least the ones that want to stay, and you want them to stay is a huge win for the families that live there as well as your investors, right? Because turnover is one of our most expensive costs, right?

Andrew Reichert:

Yeah, you got it, and that's why we talk a lot about the double bottom line or the triple bottom line. But the reality is we totally believe that by being good landlords and good stewards of the buildings and the people that we manage, that we are actually generating a disproportionate return to our investors because turnover is lower, they're taking better care of their properties, less cost of maintenance and renovating the units.

Ed Mathews:

And we've just seen that financially in the performance of our assets. Couldn't agree more. Yeah, when somebody's proud of where they live, they take better care of it. When you serve them, when you actually pick up the phone when they call and ask for help, they tend to stay longer, and that's one of the key metrics we manage by.

Ed Mathews:

As well is retention right here in Connecticut last I looked it's been a while, but it was somewhere around 18 or 19 months was the average tenancy of the state of Connecticut. Our tenancy is four years plus, and that's two and a half three years of not having to turn it over and not having to do a lot of the things that remarket it do a lot of things that cost a lot of money to be able to keep a property operating well, things that cost a lot of money to be able to keep a property operating well. And when you don't have to spend that money, it goes right to the bottom line. You can either reinvest it into the property, which we do sometimes, or return it to investors, which we do sometimes as well, and in both cases that's a win.

Andrew Reichert:

It's a win, exactly.

Ed Mathews:

Yeah.

Andrew Reichert:

Yeah, it's a great perspective.

Ed Mathews:

So one of the things that I'm always interested in we talked about this offline perspective. So one of the things that I'm always interested in we talked about this offline is how leaders, business leaders take care of themselves. And I think I told you the story right before we hit record about one of my mentors when I left corporate America said take some time off, man, just take a break. I'm unplugged. And one of the things that I noticed when I was getting ready for our interview today is you took a sabbatical, which is rather rare, especially in the real estate world, and so I was wondering if you could tell me a little bit about if I'm not being too intrusive you could tell me a little bit about your thinking around that sabbatical and the value that it brought to both you personally and to your business.

Andrew Reichert:

Yeah, absolutely Happy to share, First of all, the why behind the sabbatical, and I want to go back to actually my story and unpack a couple other details. I was actually a year into my marriage, so I had just gotten married to actually a lady her name's Shannon, who knew me from high school. So somehow she knew that rebellious Andrew and still decided she wanted to get married to me. We're within one year of our marriage and I get diagnosed with cancer, and so we're there in the hospital room and they say, hey, you guys might not be able to have kids. Andrew's chances of survival are good. People do die from cancer. And so here's the reality. And boy was that an awakening for us. That put me on a path of wanting to both discover my purpose and live into my purpose, but also to make sure that I'm taking care of myself physically, mentally, emotionally, spiritually, like all the things. And I just realized that there is so much that you can do to take care of yourself. So back to your question. You like to ask leaders what they do to take care of themselves.

Andrew Reichert:

It was the year after getting diagnosed with cancer that my wife actually came on board to work with me, and she's our first employee, and so we had just been running at a really fast pace for a really long time. So we get all the way to 2022 and it's the 10 year anniversary since I started this company and I am just burned out. So I had already been doing a lot to focus on myself physically, mentally, emotionally, spiritually but I just felt like something was still missing, and so I started to have these physical manifestations of stress and panic, like my shoulders were tense and my eye was twitching and my hands were sweaty, and I'm like this is not normal. Hands were sweaty and I'm like this is not normal, and so I just knew something had to give or else I was going to give, and so I made the decision right then to take one month off work, and at the time I felt like, wow, this is an impossible thing. How in the heck can I take a month off work?

Andrew Reichert:

But then I started asking myself the question what would have to be true for me to take a month off work? And that took my limiting belief and transformed it into a liberating truth. It's oh, I can take a month off work, and here's how I can do it. And so that was really the beginning of the process. I took a month off that August and I've actually made a habit of doing that every year. Now I actually take a little bit of a mini sabbatical, but I a habit of doing that every year. Now I actually take a little bit of a mini sabbatical, but I take a sabbatical every year.

Ed Mathews:

Good for you. Yeah, it's amazing what you can accomplish when you're clear headed, and, being somebody that is prone to stress and anxiety myself, being able to unplug, if only for a few days, but 30 days, is a dream. I would love to do that. It's a great idea. It's interesting.

Ed Mathews:

So I looked at that process of taking time off in a different way, in that about a year and a half ago, I was diagnosed with appendicitis, and boy I missed the better. It was a fairly complex issue, and I ended up missing about 10, 12 days of work, and so I didn't have the luxury of being able to have that conversation about what needs to be true in order for this to happen. It was just happening. There was no negotiation. There was no negotiation, but one of the things I discovered is that the systems we had put in place, the team that we had built part of what it helped me do is let go a little bit and trust the team that we have in place, which I did At least I thought I did until I really needed to and didn't have a choice, and I disappeared for the better part of I was.

Ed Mathews:

My wife, took my phone away.

Ed Mathews:

I was literally on the hospital bed in the emergency room texting, and she and I put it down for a second and she grabbed it and put it away and I didn't see that phone for the better part of 10 days and I fully expected man to come back to a pile of emails, unpaid bills and upset people and what I came back to was a clean inbox All the bills have been paid, all the contractors have been paid, projects were on time, residents were taken care of, normal stuff. Nothing was on fire and I thought, okay, we have a company, this is okay now, and so it's. But it's amazing what you learn when you take that beat and whether it's planned or unplanned to be able to make sure that the systems you have in place, the people you have in place, allow you to operate at your most efficient, at your best, you know, in your best headspace, and it's pretty amazing that you were able to do that, the fact that you're sitting here on this interview. I hopefully assume that you've beaten cancer and that you're feeling much better. You look great. Congratulations on that as well.

Ed Mathews:

Ringing that bell.

Andrew Reichert:

Thank you so much. I feel great. It is, yeah, over 10 years cancer-free at this point. Year 11 just came around the corner and, just to go back to something you said, I just want to reiterate and really underscore one of your points, which is the sabbatical is not just good for me as a leader, it's good for the company. The company needs that opportunity to do things without me there, and so I have a blog article, which I'm sure you saw, but I talk about the science and the purpose behind my sabbatical, and the science just does show that it's not just good for the individual, it's good for the organization as well, and that was a realization that me and the organization needed to have, which I think is huge which I think is huge.

Ed Mathews:

Yeah, when I first started hiring people, people would not make decisions without checking with me first, and that wasn't their fault, that was my fault, and so it was something that I had to learn how to do and got to a place where we got pretty good at it and I was letting go a little bit. But you can let go and still manage, right? And but until I was forced to be away from the business for an extended period of time, I think, frankly, the business has thrived ever since, for the exact reason, the point you just made.

Andrew Reichert:

Yeah, exactly, and I think it strengthens the business and and and empowers our people. That's the key you want to empower people so that the business isn't relying on us Cause. Hey, by the way, yeah, I'm doing great from a cancer perspective, but everybody talks about getting hit by a bus. I don't actually know if people get hit by a bus anymore.

Ed Mathews:

Who knows? Maybe you eat a bad taco or something you just knock on wood, right? Yeah, you never know.

Andrew Reichert:

Life's not guaranteed. We're not promised tomorrow. It's good to just have those plans anyway.

Ed Mathews:

Guaranteed. We're not promised tomorrow. It's good to just have those plans anyway, indeed, indeed. So, in terms of your business and how you operate, I noted that you have a handful of funds that you have created. Are you primarily investing out of an equity fund or do you also do syndications or any other types of ventures?

Andrew Reichert:

no-transcript. We ended up raising $45. And so we started with funds. But then last year early last year 2023, we decided to try syndications, because there was just some investors that said hey, I'd love to invest with you, but I'd love to invest in a particular deal. I like to sink my teeth into the underwriting of a deal, and so we're like all right, let's try some syndications. So today we do both, but we did it in a little bit of the opposite order of most real estate investing operators.

Ed Mathews:

So how do you decide you come across a property that fits your buying criteria? How do you decide this one's a syndicate versus this one should be funded by our equity fund.

Andrew Reichert:

Yeah, great question, and fortunately we actually don't have to make that decision. So what we do is we always buy it with our fund and then we syndicate out of the fund, so the fund always retains some ownership and is basically the general partner of the syndication, and then the syndication will also allow individual investors to come into the individual syndication. So we've landed on a both end, as opposed to an either or.

Ed Mathews:

Wow, that's really clever. I had come contemplating that before. Usually with us, we look at it from a deal size perspective, so that's interesting. Um, we're pretty deep into our 30 minutes here. I'm a little tight on time, but if you'll indulge me, I'd love to buy you a cup of coffee at some point. Pick your brain on that anytime, head. All right, cool, all right with that. Let's get into the final five, our lightning round, and let's dig into how your brain works even further. So let's talk about purpose. I want you to finish the sentence.

Andrew Reichert:

My purpose is. I literally just wrote a book on purpose. It's called Priorities on Purpose and I have thought about purpose more and written about purpose more than probably the typical guest, and so I have a what's called a life plan. That is, pages and pages of me talking about my purpose, and I talk about it in each life priority. So what's my purpose with my wife? What's my purpose with my wife? What's my purpose with my children? What's my purpose with my finances? So I'm going to boil that down into one sentence, which is I see it every morning in front of my vanity I have this kind of vision board and it says my purpose is to love, to serve and to give, and that's ultimately my entire purpose boils down into Okay.

Ed Mathews:

So when you break down your life plan, you have actually gone through the process of thinking about your, how you want to to come to the table as a husband, as a father, as a business leader, as a friend, and so what does that look like? What's that exercise look like? Is that? I would imagine it's a pretty long process, right?

Andrew Reichert:

It is and I talk about it in my book Priorities on Purpose, and I can't take credit for that process. I actually got the process from. I was going through some coaching with a guy by the name of Michael Hyatt and he co-authored a book called Living Forward. Living Forward is the process that I follow, which is basically begin with the end in mind, so you actually write your own eulogy how do I want to be remembered when I'm no longer here? Then you develop your life accounts. So I have 10 life accounts life accounts of being like physical, mental, emotional, spiritual life accounts of relating, like marital, parental, social and life accounts of doing like vocation, avocation, financial, and in each of those life accounts I have a purpose, I have an envisioned future, I have my current reality, I have obstacles, and then I say what am? I have my current reality, I have obstacles, and then I say what am I actually going to do this year? What are my commitments or my goals for this year in that life account?

Ed Mathews:

Wow, talk about living with intention. So when does the book come out? I'm just curious. We're recording this first week of December in 2024. So when does the book come out?

Andrew Reichert:

Yeah, it comes out on Tuesday, actually December 10th. I'll be doing a global live stream to officially go through the book launch and then Wednesday, the 11th, we have a big party 300 people are going to be there. I'll be doing some book signing and really excited to get the book into people's hands.

Ed Mathews:

Wow. So we're catching you at the right time. So congratulations on publishing. It's a heck of an accomplishment. So we're going to talk about this a little bit later, but let's get back to the lightning round. So I'm always curious about leaders and their mentors what is the best advice you ever got from somebody that was important to you and gave it to you?

Andrew Reichert:

Yeah, Boy, I'll tell you what. I have gotten so much good advice from so many mentors that it's really hard to pick just one. I think you and I are wired similarly that way, Edward. I've just had so many people that have poured into my life through the years that I'm just incredibly grateful for, so I'll just pick one. It's specific to my business. I could probably pick one in every single life account, like who was the best piece of advice as a father or as a husband, but I'll just pick one for my business.

Andrew Reichert:

Which is when I was thinking about starting this business. I sat down, I had coffee with a mentor and he said look, Andrew, you should just do it, because if it doesn't work out, you can always go back to your corporate job Maybe not the same company, but you'll be able to get that same job or even a better job. But you won't always have the opportunity to start a real estate business that really follows your purpose and follows your passions. And so it was that conversation that led me to resign and really grateful for that mentor who gave me that advice and ended up leaving and never looked back.

Ed Mathews:

And it's worked out nicely.

Andrew Reichert:

It has worked out nicely.

Ed Mathews:

So I also am a big believer. Here at Clark Street, we don't believe in mistakes as a negative. The fact is, I think you learn more from your mistakes than you do from your success, and so I'm curious about, from your perspective on a business level, what's a mistake that you made that you'd love to have back and, frankly, how did you recover from it?

Andrew Reichert:

Oh, that's another one. I could give you a thousand mistakes in the 12 years that I've been running this business. Now I make mistakes daily, like literally still make mistakes daily, where I, at the end of the day, I do a, an exercise that's called the examine, where I look back at my day and I say what happened today and, and I just every day I'm like, oh, I really blew it there. I actually got it right there. So again, I could go on for hours and hours on this particular topic. I'll just pick one again. Just because this is a real estate podcast, I'll pick one that's business related.

Andrew Reichert:

I make mistakes as a father and as a husband all the time and in fact, what I found and you didn't ask this question, actually, you did say how do you recover? What I found is that it's just important to apologize, like with my girls. I have three daughters. When I blow it, I just say, hey, girls, daddy blew it, I'm so sorry and they forgive me and it's such a beautiful thing. So I'll give you the, I'll give you the business answer real quick. But it's certainly not. It's not the only mistake I've made, but and I don't even know that I would call it a mistake because I learned from it. So to your point, nelson Mandela said I never lose. I either win or I learn.

Andrew Reichert:

The biggest mistake that I would point to is just doing way too many things. When I first started this business, so I was doing ground up development build a 36 unit property right next to our office. We built three townhomes, we did historic renovations, so total gut rehabs. I'm flipping houses, I'm doing commercial property management. I'm doing third party property management or buying multifamily, buying single family. We're doing Airbnbs. I had 20 Airbnbs at one point, just so unfocused, and so that was, I believe, part of the beginning of the end for me in terms of the burnout.

Andrew Reichert:

And that's why I think it was a big mistake. And so how'd we recover? Really, just saying hey look, and I lost a ton of money on a bunch of those deals Cause I was all over the place, you can't be good at all of that stuff is how do we recover? We just cut our losses and focus on what we can do best Smart.

Ed Mathews:

And smart that you recognize that, because it's something that I'm prone to as well. Entrepreneurial ADD is what I refer to it as. So leaders almost universally tend to be readers, and so I'm curious about the book virtual or otherwise, that's on your nightstand, and who are you paying attention to these days.

Andrew Reichert:

Oh yeah, again, I could talk for a long time about all of the stuff that I read. I tend to read in different categories. I read a ton of business books. I read a ton of health and fitness books, just because of my battle with cancer and my desire for longevity. I read a lot of spiritual stuff. I read a lot of psychology, mental, emotional kind of understanding, understand. So I'll just answer your question and pick one book this year. Probably the most impactful book that I read this year and it is on my nightstand but it's in my Kindle is Outlive by Peter Attia. He just really breaks down the components to longevity, living a long life, and how so much of it is within our grasp and we just need to focus on the right things.

Ed Mathews:

Okay, all right, we'll be certain to list that in the show notes. Last question on the lightning round. So I want you to finish this sentence. Success means.

Andrew Reichert:

Yeah, I'm going to go with. Success means legacy, and some people think of legacy as financial, but for me it's just not. In fact, from a financial perspective, I'm at the place where I'm not even thinking about that personally, because I actually this is a bit of a contrarian perspective, but I found that the data shows that's maybe counterproductive and for me it's what am I teaching them? What are the principles I'm giving them? And not just my daughters, but like the world. So I think of success as just like leaving the world a better place than I found it, and that's really how I think of success.

Ed Mathews:

I love that. Yeah, I think people thought most people thought that way we would be living in a very different world. Yeah, okay, so when not talking about real estate, and although we diverge from the real estate being a little bit here, but with purpose, what else do you like to do?

Andrew Reichert:

Yeah, I love to mention, I read a lot. As a result of that, I write a lot. I've got this book coming out and honestly, I just I love read a lot. As a result of that, I write a lot. I've got this book coming out and honestly, I just I love being a dad. I'm raising three girls. I take them on a daddy-daughter date once a month. I get one-on-one time with them every day. I love, as you mentioned, we're recording this in December. It's the holiday time. Santa's coming pretty soon. I love just enjoying life and celebrating, celebrating with them.

Ed Mathews:

It's yeah, it's the best thing you'll ever do is being a dad, especially a dad of girls who I have to myself. They're older, they're 22 and 17. But it's yeah, it's the best thing you'll ever do. So, andrew, if people want to get in touch with you or learn more about Virgo Capital, what is the best way to do that? Get in touch with you or learn more about?

Andrew Reichert:

Virgo Capital. What is the best way to do that? Yeah, absolutely. You can check me out on LinkedIn. I'm pretty active on LinkedIn, andrew Reichert. Feel free to follow me or connect. And our website is virgocapitalcom. So Virgo with a B-B-I-R-G-O capitalcom. And then I did mention I've got this book coming out next week. The book is at rosjourneycom, so that's journeycom, rosjourneycom.

Ed Mathews:

All right, andrew Reichard, thank you so much for joining us today. It's a pleasure to meet you, and continued good fortune.

Andrew Reichert:

Thank you so much, Ed. Thanks for having me on the show.

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