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SHOW NOTES FOR EPISODE 004 – FROM WALL STREET ATTORNEY TO MULTIFAMILY REAL ESTATE INVESTOR WITH JONATHAN TWOMBLY
In this episode, hear how a brilliant Harvard educated attorney left a plush New York law firm to pursue real estate investing full-time.
About Jonathan
Jonathan Twombly is a graduate of Harvard College and Columbia Law School. Since 2013, he has run Two Bridges Asset Management LLC, a multifamily investment platform based in Brooklyn, New York, focusing on long-term buy and hold acquisitions in the southeastern United States. Two Bridges currently operates more than 400 apartments in the Carolinas. Before forming Two Bridges, Jonathan was a partner in the multifamily investment firm, TRB Investment Group LLC. Prior to entering real estate, Jonathan practiced commercial and real estate litigation for more than ten years at large law firms in New York, Boston, and London. He lives in Brooklyn, New York, with his wife and two children
Additional information on his background
- Practiced law for 12 years on & off
- Did not enjoy being part of a large firm
- Wanted to be able to be an “owner” over a “service provider”
- Recession in 2007-08 left him with little work to do. Began researching real estate deals online in his slow period
- At first thought REI would be something on the side
- Had some real estate litigation experience but not much
His Light Bulb Moment
He didn’t really have a single “lightbulb moment” that said “real estate is it!” but gradually, through various circumstances and events began to realize that real estate investing was his best option.
His earliest interest in real estate
- Disenchanted with life in corporate law.
- Grew up around real estate. His father taught architectural history and would take Jonathan to look at interesting buildings in New York area. He looked at lots of buildings.
- As a kid he used to like to look at the New York Times Sunday Magazine real estate listings and dream of owning one of those homes one day.
Looking for different career options
- Considered management consulting.
- Looked at finance and equities investing but saw big challenges – when the recession hit it was very bad.
- Real estate investing seemed most viable and intriguing. Would look at properties online but it he thought, “How could I buy enough of the 2-4 unit buildings to replace my income and survive.” Thought multifamily was the way to go.
Making Contacts
- Started networking to see what other opportunities were out there.
- Commercial broker in New York said, the only way he’d make it in New York Real Estate is if someone with more experience asked to partner.
- A few weeks later, he met that person at a networking event who said they were forming a real estate investing firm and wanted him to partner.
- He started his first real estate investment firm with that partner.
Forming Companies
Forms First Company But Short Lived
- First couple deals did not go well – one the lender terminated. Another they terminated.
- Partner had different approach and philosophy. Not so much a mistake but just different approach
Formed Second Company – Two Bridges
- He knew if he formed his own company he could grow at his pace
- More control of the deals
- Able to leverage early experience
Types of Deals He Targeted
- Off-Market
- Only B&C class properties
- Already stabilized
- Already cash flowing well but can be improved
- Close to other properties they own so they can share expenses with same PM firm
- Can hold for 10 years
Where His Deals Come From
- Established network of brokers in his target area that provide steady deal flow
- Professional rehabbers
Investing Out of Town
- Targeted southeast
- Upstate South Carolina
- Used 2010 Census info to determine the area was right for him
- Population was growing
- Had friends in Charleston to help build the team
- Key investor contact in the area
- Had to be fairly close to NY
- Area had to be growing faster than the country as a whole
Goals for Current Business
- Double size of portfolio in the next few years
- Establish an investment fund and more later on
- 5 years from now have first
- Wants to get to the point where he can finance his deals with his own money
Advice for Those Getting Started
- Whether you look at deals through syndication by sponsoring a deal or doing your own deals. Minimize risk. Look at good cash flowing deal.
- Avoid high risk, high reward
- Buy the biggest property you can afford – economies of scale are better
- Multifamily is preferred
Rap-Up-Session
- Favorite Real Estate Book: Wall Street Journal’s Guide to Real Estate Investing
- Favorite Business Book: The War of Art by Steven Pressfield
- Most Valuable Website for Success: com
- Favorite App: Anti-Social (block websites so you can focus on work)
- If you had to start over: Research crowdfunding sites. Invest in a property and learn how it works.
How Can People Reach Jonathan
- The Mortar Real Estate Blog – themortarblog.com
- His Company: Two Bridges Asset Management LLC
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