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Outrunning Failures
Outrunning Failures: Your guide through the highs and lows of commercial real estate investing.
Join us as we delve into real stories of setbacks turned stepping stones, sharing invaluable lessons and strategies to navigate the market's unpredictability and turn failures into the foundation of your success.
Outrunning Failures
Forensic Accounting to Real Estate Investing with Cyndee Harding
Today's guest is Cyndee Harding.
Cyndee is a former owner of her own accounting practice, specializing in small business consultation.
Cyndee has over 25 years expertise in understanding profit and loss, asset retention and management as well as helping guide clients to improved business practices, performance, and management.
Using forensic accounting practices, Cyndee is well equipped to determine the financial stability of organizations as well as having the ability to use profit and loss statements to predict future earnings.
Cyndee currently works as Asset Manager on multiple Multifamily properties.
She and her husband own H2 Funding, LLC and currently reside in Surprise, AZ.
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Creator/Main Host: Vish Muni
Show Advisor/Editing: DBT Marketing
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Well, today we have another awesome guest on Outrunning Failures that is none other than Cindy Harding. So Cindy and me belong to a couple of mastermind groups, and that is how I met, Cindy. And I also met, family and a few other friends while I visited Phoenix a few a couple of years back. But apart from that, we do have a couple of investments together. And Cindy's background is, pretty interesting. She has over 25 years of working experience, of which, she has a strong accounting background. She also had a practice of her own, and now she, her main role in any multifamily syndications is asset management. And she wants to bring the numbers to the deals and real estate. And she is actively involved in over 500 or, more than that, units in multifamily syndications. With that, Cindy, welcome to Outrunning Failures. Could you please tell a little more in detail to our audience about you?
>> Cindy Harding:Yes, thank you so much for having me. I love talking about asset management, any opportunity I get. so I do have, an accounting background. I had my own practice for 25 years, and I specialized in small businesses. And if you think about it, an apartment complex is its own small business. It has its own income that it derives from rents and other income. It has its own expenses. It has its own debt service. And so it was a very easy segue for me from, no longer doing accounting for small businesses, but to do asset management, for multifamily. And I've been doing it for five years. I absolutely love it. I love the challenge of, looking at a business plan and seeing what's the potential. Can we create money, for our investors and then executing that plan? I love seeing it come to fruition. So, part of what I love doing is forensic accounting. So I really like to dig into those financials and, you know, ask the questions. I always say, if there's a variance, it just means I have a question. So I'm the queen of questions.
>> Vish:Wow, Cindy, that is fantastic. So did the accounting, prompted you to get into real estate or real estate prompted you to blend your accounting background?
>> Cindy Harding:Yeah, I decided that real estate was really the way to go. Quite honestly, in my accounting practice, I went up against the IRS 13 times, on behalf of clients. I never lost. I'm really big on paper trails. And so whenever the IRS would call something into question, I was able to prove it. And so I saved my clients hundreds of thousands of dollars. but I was ready to get out of that. I just didn't like dealing with the irs, continually. And so when I was introduced to this opportunity with real estate doing multifamily, I thought this is perfect. I can use my skill set and I'll be able to help investors and make sure that they make money.
>> Vish:Well that's pretty impressive, Cindy. One is you take on the IRS on behalf of your clients and you figured out a way how to work around them whenever there is a request for further evidence or any missing documents. And you also mentioned exciting word which is called forensic accounting. Now looking at all these, your fancy background and the challenges, what you've taken on on behalf of your clients, I'm sure managing any asset, people they should, they have another asset on the management that is having you. You're not just an asset manager and with a strong background, I'm sure you're going to be doing a fantastic job on the deals. So with that, so are ah, you. I see that you're also an investor on the deals, not just being an asset, ah, manager. Now with that being said, have you had any challenges or setbacks in any of your deals which has made you a better investor?
>> Cindy Harding:Yes, I call them learning opportunities.
>> Vish:That's fantastic. Yeah, we all like to do that.
>> Cindy Harding:So yes, I have had some learning opportunities. one of the things that, especially with asset management, even though you know, I am an investor, I am on the GP and you know, I am the asset manager, you still have to be willing to learn. And one of the things that I did, on a particular property is they wanted to do a resident referral so that if someone was living there and they referred a friend that they would get a fee for that. And the property management said, we typically do 300. And I said, no way, that is way too expensive. We can't do that. We can do 100. And so they said okay. So we printed door hangers, we put them on, you know, on the apartments, told them you can get a hundred dollars if you refer a friend. Guess what, how many referrals did we get? 0. 0. So I went back to the property management and they're like, well you know, our experience has taught us that we need about $300. That's what people really will respond to. So I had to say, okay, let's do it your way. So we reprinted door hangers at $300 a referral. Guess what? Referrals started flowing in. And so I think that anytime you're on a property, whether you're an lp, a gp, whatever your role is, just be willing to learn to listen. you know, I didn't listen to the pm. They're the experts. But I thought, no, that's just too much money. That was just me. That was my accounting side going, that's too much money. But I had to learn.
>> Vish:Well, that is how, what I figured out is, like you, I thought I knew everything. And I went against the PMs on a few of my property managements. And, I had to accept my fault and defeat. I told them, well, I think I made a mistake, but I think you guys are right. Just get, straight to the point. Instead of complicating things, I had to accept my mistake and learn from them and lick my wounds, put a band aid and move on. And then what I've also figured out is that my property manager fired me. either, I could, take it as a failure and go back home, or I need to learn from that what really happened. Why did he fire me? He's in search of business and I'm the landlord out here and how can you fire me? But, looking back at it is if I were as inner shoes, I would have fired, the owner. Also because I was such a pain, right? Because in one duplex I had put in a lot of money and I thought, man, I need to pay closer attention to the deal. And, that's what happened. I mean, that was just one of the many setbacks I've had. And over a period, they were just compounding. They never seemed to go away. They keep coming back and in different forms, right? Like you getting late to wherever you're supposed to go. You leave home early, you make sure you have enough gas, you make sure you have enough phone charge, you make sure you have enough snacks. You take all this and in spite of it, you're going to be late.
>> Cindy Harding:Yeah, right. absolutely.
>> Vish:Or, no fault of yours. So there is always something new. Always something new. And looking at so many setbacks on an ongoing basis, I mean, that is what prompted me to start, this podcast. So real, we are all real people doing real deals and m getting out real information to real people. And, there's nothing fake about this. Not everybody want to share. Right? So with that being said, so how do you get onto the deals as an asset manager? Do you talk to syndicators and tell them you can manage their asset, or do you invest in their deals and you take on the role as an asset manager?
>> Cindy Harding:So it's a little Bit of both. Some, are deals that we have found and you know, just, that's. My role is asset management. I think everyone should stick to what their wheelhouse is. And you know, my wheelhouse isn't capital raising or underwriting or, you know, I love asset management. So, I'll come in, I'll invest in the deal and then I will take on the role as asset manager. I think in the past properties, have been purchased and you know, five years ago you could buy one, kind of let the PM run it, sell it and make some good money. But that's changed. That's just not the way it is anymore. And we really have to, You need to have an asset manager and you don't want that person to be like, well, I don't know what I'm going to do, so I guess I'll asset manage. Asset managing is way more than just attending like property management meetings. It's really digging into the financials, understanding where the money's going and is it, are we getting a return on our money? you know, we have KPIs that we track to make sure that the choices that we're making are benefiting the property and the investors. One of the things that I personally is like, what I like to do when I have a property is I like to change it from a, complex to a community. So when we purchase one, it is a complex and through time, which is effort on our part as owners, our part with the property management company, we want it to become a community because if people love where they live, they're going to stay and we want them to have a safe, beautiful place to live. Everyone deserves that. And so I have lots of, you know, types of properties, all different and, but the objective for all of them is to go from complex to community where they know their neighbor. We do monthly events so they get to know their neighbor. we do a promotion every month. If they pay on time, there's some sort of little, treat for them that's available. So they come into the leasing office and it's a positive thing. We don't want them to view the on site as the principal or it's a bad thing to go to the leasing office. It's okay, it's a great place to go. So we try to create that in all of the properties. So we go from complex to community.
>> Vish:Well, now isn't that the role of a, property manager? So what exactly is the main difference between a property management and asset management?
>> Cindy Harding:Well, the property management, they're the ones that, fulfill the business plan, but the asset manager is the one to make sure that it's being done that way. So if you kind of look at it from the beginning, you have an underwriter and the underwriter says, this is the plan and if we do X, Y and Z, we're going to make a certain amount of money. And then, when the deal is done, when we buy the property, the underwriter begins looking for another property. The asset manager stays with the asset, typically five to seven years. And it's our job to make sure that the business plan that the underwriter created is actually being executed. And what we do is we work with the property management company. They're the ones that are there on site, but we work with them, rather than kind of instructing them and telling them what to do, we want to have a lot of give and take. We want a partnership with them. So we want to make sure that they know we want to have these events. They're the ones putting it on. But we want to make sure that we budget for it. we want to make sure that they have whatever resources they need. so we want to, with marketing, whether it's apartments.com or, you know, however we're going to market, Facebook Marketplace, that we support them in that and that they know that the ownership and in particular the asset management is their advocate because we want them to succeed, we want them to be able to fulfill the business plan. So that's where we come in.
>> Vish:So as an asset manager, are you, do you work more with property management or work with more with the management?
>> Cindy Harding:So what I do is I am the liaison between the property management and the gps, the ownership.
>> Vish:Right.
>> Cindy Harding:rather than having all of the different GPs and ownership talking to the property management, it goes through me. So they have one person that they have to answer to, but then I get to answer to the gps. And so I take, you know, whatever is going on with the property, I report it to the gps. I do offer them some solutions. I like to have an asset management team on properties that. I'm an asset manager. So that usually, is a couple of the GPS, maybe some LPs that are new to the industry and they're kind of wanting to learn like behind the scenes. How does it work? It's, it's a volunteer. So asset management team is a volunteer position. but I do meet with them every week. They attend the property management calls and then we meet as A team, and we come up with solutions. Because I don't have the answers for everything. I have like maybe one, but if I have a team of five to seven people that have all different backgrounds, all different kinds of experience, that allows me to gather information from them to present to the gps, to make a decision. So I love doing that. And the asset management team, we do research, we do market surveys, we do the newsletter. So we do those things, that really have the pulse of what's going on at the property and then that gets translated to the gps.
>> Vish:Oh boy, that's a lot of work you'd be putting in. Now are you excited to do this? Because this is, ah, looking at your background where you, all day long all you did was looking at numbers. And now you're not only looking at numbers, you're dealing with more people, more challenges, and you're answerable to a lot of, a lot of things.
>> Cindy Harding:Yeah.
>> Vish:And you're in a way an event planner also because you're building communities.
>> Cindy Harding:Yes.
>> Vish:I love it now all these things. do you do it by yourself or do you have a company which is set up?
>> Cindy Harding:No, I have a company. I have high caliber asset management. So I have, I have people that work with me, that are in my company that help me. There's no way I can do all of that by myself. according to my husband, I work way too much, but I love it. It's just something that's very fulfilling for me to see the plan come to fruition, to be able to make distributions to investors and to know that they are happy, that they're getting the, that they want and that they feel comfortable, you know, how the property is performing. So it's, for me it's very fulfilling and I really love it.
>> Vish:Well, that's interesting when, your husband tells, you that you work way too much. So there are only two things. Okay. I'm sure you also know a lot of people who say, Monday morning they're telling I'm tired even before the work starts. Okay. And there are some people who say by lunchtime they say, I'm tired, I'm good to go. Okay.
But on the other, other end, a lot of people at 6:00
or 7:00, they're still going strong. So, so what is the difference between the people doing the same job? And some are excited, some are not excited. So why, why do you think your husband tells you you're working way too much?
>> Cindy Harding:Because he wants to spend time with me.
>> Vish:That's not just your husband. I'm sure every one of our family members, feel the same. That is not just them. Because why we, why we've worked so much is because what I realized is when we like what we are doing, when you are extremely passionate, we are not tired, we are more excited. Right. And, and we only stop when we feel like stopping.
>> Cindy Harding:Yes.
>> Vish:Right. So we shut down the system because, the people on the other side are not there or we feel we are done for the day, right?
>> Cindy Harding:Yes.
>> Vish:But we are not done.
>> Cindy Harding:It is still in the brain even if I turn off my computer. But I am, you know, I do feel like there is a balance that we have to maintain. And obviously, I mean, I could do this. I do it every day, Monday, through Friday. I do not work on Sundays, I try super hard not to work on Saturday, and I try to stop at
5:00 because, you know, we do have to have a life.
>> Vish:And that's trying to stop at 5 o'clock is on paper and mentally. But it really, really don't try, don't stop there. But on the other front, most of the, properties, what you manage, there are a lot of parallels because it is the same, different property management and every property manager would have the same problems or similar problems. And now, how do you delegate or how do you focus on any given day? Do you time block or, how do you manage your time?
>> Cindy Harding:I do time block. that is one way that helps me really get focused. on Mondays, I have all of my reports sent to me on Monday. And then all of my meetings are agenda driven. So I meet with my property management every week. once we hit stabilization, which is usually about a year, then we go to every other week. So I review the Monday morning reports on the weeks that I don't meet with them. Sometimes I do send them an email if I have a question or two. but then those meetings are agenda driven, so they're very specific. You know, we're looking at particular things and I keep track. I have a task manager at the bottom so that I know, like, this is what we talked about. This was the date that we agreed on. Have we met that deadline? If we haven't, how can I collaborate with you to help you? Do you need more information? Is there someone on the asset management team that can help the property management? You know, one of the things that we did, is we wanted to put in a playground at one of our properties and we wanted to do A big one. It was a, it was a big capex. It was an expensive playground, but it needed to be put in. I didn't want the property management to focus on that. Their job is to lease and to take care of the property. And I felt because this was an external thing, I just talked to the property management and said, you know, we're going to do the research on it, we're going to find who's going to be the best fit for it and then we will coordinate with you so that you know when it's going to happen. And so on a certain level that does remove it from their plate. although we wanted to make sure it was within their timeline, but we wanted it done before Christmas break. So once the kids were out of school, they had a, playground to go to. And I'm going to tell you, those kids sat up on a hill and watched every day as, the playground was being installed. They could not wait. And we met the deadline. It was done before Christmas break. And so can you imagine how happy our residents were, the parents, because now their kids had a big brand new playground to spend Christmas break on instead of being stuck in the house.
>> Vish:So that's, that's interesting. That isn't that part of, your plan or the property management in terms of working with retention and also when it comes to renewals because you work, hand in hand with the property management.
>> Cindy Harding:Yeah, it was both. I mean, it helps us with our retention. That is the complex to community. So we talked with them and said, we want to put in this playground, but we know that you're focusing on leases and so we're going to take this off your plate. And it worked out beautiful. But it's all about communication and it's, you know, letting us know that we're working with them and it's a partnership.
>> Vish:That's good. Now, do you have any, do you have your own property management or you work with other property managements?
>> Cindy Harding:No, I don't know. I'm not vertical. I'm just an asset manager. I work with, about five different property management companies. which is interesting because they all do it just a little bit different. But that's okay. I actually learned from them. If I did, if I only worked with one property management, I'd only be getting the way they do it. So because I have five that I work with, I'm able to learn from them as well. And I do use it across my other properties.
>> Vish:Oh, that's good. So I know you live in Surprise. Phoenix, right? Arizona. Sorry. And do you travel a lot or on properties or when you guys take over the properties, do you visit with property management company?
>> Cindy Harding:So I will go on due diligence because I like to actually look at the property myself and see what the units look like. I like to look at the leases. I do a lease audit that I have, you know, because when we buy the property, we're buying those leases and we have to keep them until they expire. So I like to look and see what those are. Then at takeover, I'll go back to the property and be there for the takeover when we actually purchase it. And then, I go at least once a year, an unannounced visit where I just go, I'll have a list of things I want to take a look at. But I also am open to going if the GPS are like, you know, we have an issue, then I'm happy to jump on a plane and, go to a property and do whatever I need to do to address the issues there.
>> Vish:So, so do you. So when do you actually get involved in the deal? When they go for the due diligence or when they do the underwriting or present an loi? Because when they're presenting an loi, if you are the numbers person, you know, what is the value of most of the properties? You might be able to contribute something to the underwriting also, which might have an effect on what is the offer going to be. Now do you get involved at that stage or you don't know the operators until they go for the due diligence.
>> Cindy Harding:So in a perfect world, I love to be involved with the loi, to work with the underwriter, because really I, you know, I know some of the things that may or may not work. And so I want to help that underwriter so that we can, we can submit the very best LOI that we can. So I like to be involved in the beginning. I have been hired as a third party. So I'm just a vendor. So maybe it's a property that's already established, but they want asset management. I have one that I'm doing right now. I'm a third party vendor. So I, they've hired me, they pay me every, you know, every quarter of, the asset management fee. And I am a vendor to them. So some of it, I like to be involved in the loi. That's my preference because then, I can be part of the gp, I can put my own money in as an investor. but I also do third party vendor, so.
>> Vish:So you're not. So most of your deals, you're an investor in the deals, and some of them you're just exclusively managing just the asset. Correct. All right, so which, which one do you like? You like to have skin in the game with. On the properties you manage or you. Oh, yeah, you don't want to be. Right. So. So that's good. So do you have any other family member working with you or is it just you?
>> Cindy Harding:Oh, my goodness. yes, I have three family members that work with me, actually, if you include my husband, 4, because he's an underwriter. I love to. I love to underwrite with him. So if someone brings me a deal, I love to underwrite with him because he comes at it. He's in construction. He's all about the foundation and the roofs and, you know, the bones. And I'm all about, where is it located? You know, are we going to be able. What's the demographics? Who are we going to. Who's going to be our avatar resident? So we come at it differently. but my husband does underwriting. My oldest son is actually the, director of operations for High Caliber. So he is behind the scenes on everything. I'd be lost without him. He is very good. And he's done asset management before. not with multifamily, but with transportation. So, he actually worked for a really large trucking company. And so he was in charge of their assets, where they were and, you know, anyway, so he's got some great experience. And then, my second son, he, is an underwriter as well, and he does acquisitions. So he talks with brokers and, you know, helps try and find. Find deals for us.
>> Vish:Man, this. This gets really complicated. When do you guys, say, I'm done for the day? I don't think it's difficult. Even if you're done, your husband might talk about underwriting. Your husband says, I'm done with underwriting. Your son might talk about some conversation he had.
>> Cindy Harding:Actually, we have a system. So we use WhatsApp for anything business. So anything that we have to talk about this business is WhatsApp. And then we text as a family. We use texting. So if you get a text, it's a family issue. If you get a, WhatsApp, it is business. But we have really good relationships. And, it's actually fun. Like, we can't even help. I don't always do it. Like, sometimes we'll go to dinner. And you know, in the middle of dinner, someone would be like, hey, I was thinking about. It's not just me. Entrepreneurship runs in our blood.
>> Vish:That's good. That's, that's, that's good. So it's never a dull moment. There's always some challenges, there's always some excitements. But there's. In between all this, there are opportunities, right?
>> Cindy Harding:Yes. Lots of learning opportunities.
>> Vish:But, uh, we all need to get over that bump or get over that, uh, accident site and to get to the other side. And we, as entrepreneurs, I don't think we'll turn around and go back. We might slow down, we might pause, but we keep moving because, uh, well.
>> Cindy Harding:Four months ago, I became a grandmother for the first time.
>> Vish:Oh, congratulations.
>> Cindy Harding:Thank you. And he is darling. Oh, he is just the sweetest baby ever. So that has helped me with my own personal balance.
Like, at 5:00, I'm ready because I'm like, okay, I'll babysit. I'll take the child.
>> Vish:So I'm sure there's a lot of excitements, a lot of weekends, and now that is a big motivation for you to stop, pause and go spend time with family. So. And on the other front is, what is a, what is it for your management company? What is High Caliber management? What is the goal for that next one year?
>> Cindy Harding:Well, for High Caliber Asset management, we are still acquiring properties. you know, there's so many out there right now that are in distress and they are complexes. And so I see a great opportunity to create communities. the other is I do teach asset management. So I have a 12 week course, for people that want to know how to asset manage. There's not a lot of education out there. There. I do that under. It's called Ying Yang Asset Management. I do it with Andrew Suarez and he teaches leadership and I teach asset management. And so for 12 weeks, we dive in and teach everything you would need to know to be successful your first year. Because we, we already know all the benchmarks. We want to help them avoid some of the mistakes that we have made or learning opportunities that we've had. and so, you know, we're just trying to, what. We are considering leveling up asset managers. So we have really Good asset managers who can look at the properties and really work with the property management, work with the gps and create those returns for the investors.
>> Vish:Well, I love. Oh, that name. How did you come up with that name? Ying Yang?
>> Cindy Harding:it's actually Andrew and I, because we're Ying Yang. Like, he does leadership, I do asset management. And we just. It's very. We met, honestly, at Chick Fil A. Wow. It was. You never know, like, where your network's gonna grow. We were at an event, and, I was at a table, and there wasn't any room. And he said, do you mind if we sit? If I sit with you? And I'm like, sure, go ahead. I was there with my husband, and we started talking, and we talked for about six months, and then I just realized that he has great leadership skills. He's certified in a lot of leadership programs. And he has a property management company in California. And so we have property management, asset management, and just together, it creates that perfect yin yang.
>> Vish:So is he from the same city or. He's, from a different location.
>> Cindy Harding:He's in California.
>> Vish:Right. Okay. That's not too far from, where you live, right?
>> Cindy Harding:Yeah.
>> Vish:That's good. So do you have asset, management roles in properties across the states or just, one location?
>> Cindy Harding:Oh, no, all over the U.S. all.
>> Vish:Over the U.S. okay. That's good. So I have one question. this is outside of real estate. What would you do if you had the financial freedom to pursue your passion and give back? let me repeat the question again. What would you do if you had the financial freedom to pursue your passion and give back to the community?
>> Cindy Harding:I think I would still do what I'm doing because we are creating communities. I feel like that does give back to the community, that we are trying our very best to create safe, beautiful places for people to live. Everyone has to have a place to live, and they deserve to love where they live.
>> Vish:So that's fantastic. Yeah, thank you for that.
>> Cindy Harding:Sorry I don't have a more exciting answer. I'll keep doing it.
>> Vish:No, Someone asked me on another podcast, how would my life look and what would I do if I had the financial freedom? If I get my financial freedom tomorrow? I told them, well, I look and feel the same, and I would do what I'm doing because, I'm. I'm passionate about what I'm doing, so. And I'll continue doing what I'm doing. I might take a step back and spend more time traveling and spend more time with my family. But other than That I would just, continue to do what I'm doing because, like, as we spoke, I'm not tired after working for two hours.
>> Cindy Harding:No, I'm just getting started. And the fact that my family's involved, it does allow me to spend time with my family. And we can. We just traveled right. Together two weeks ago, and, it was a personal travel, but, you know, we can't help it. We still have to talk about what's going on in the business.
>> Vish:You. You'll have to pause to stop talking about business because all your business partners are right there at home. Right, Right. So. So that's interesting. That's, good. Cindy, I really appreciate you taking time from your busy schedule. I know you. You're on schedule. You're at somebody else's schedule because all the faucet management calls are at, You need to be on their schedule because of, there's a lot more people involved in the deals, property managers and the management and the GPS LPs, and, you have a lot of moving parts right there.
>> Cindy Harding:Yeah.
>> Vish:But what I always feel is, in our journey of investing and life failures, or we call it setbacks, are just another stepping stones. Right. So we should not stop chasing our dreams. We should have to continue with, what we started, and it's just a momentum. One step at a time, Right?
>> Cindy Harding:Yep. Absolutely.
>> Vish:With that, once again, thanks for joining us, and have a fantastic day.
>> Cindy Harding:All right. Thank you so much. I appreciate it.