Slide 1: Jared Vidales Slide 2: Danielle Crowell
Jared Vidales & Danielle Crowell
With over 15 years of combined experience in real estate investing and property management—and more than $800 million in transactions—Jared Vidales and Danielle Crowell are the co-founders of Equity Connect Holdings. Founded in 2015 in Phoenix, Arizona, the firm focuses on the acquisition of single-family homes in the Phoenix and Las Vegas areas with a growth strategy to acquire and stabilize a rental portfolio of dependable homes in prospering neighborhoods. With demand for real estate skyrocketing across the area, investors are clamoring to take advantage of Equity Connect’s unique acquisition and owner-direct strategies that allow them to increase the return for the clients significantly above the competition.
With a growing portfolio of 50 single-family rental properties, and 50 more in the pipeline, Equity Connect has diversified into building and managing single-family communities for rent through profit sharing with capital partners. Danielle is the former owner of a successful property management company, with an impressive career that includes over 1,500 flips valued at half-a-billion dollars. She handles the financial side of Equity Connect, as well as project and property management. As the company’s CEO/COO with a keen analytic mind that has resulted in 1,000 transactions totaling $325 million in volume, Jared is responsible for the acquisition and disposition strategy of assets and development site analysis. We sat down with these two innovative entrepreneurs to find out more about Equity Connect, their current projects, and what’s in store for investors during a bull market that shows no signs of slowing.
Equity Connect has seen astounding growth since its inception. Why do investors invest with your group over large institutions?
Jared: Investors like investing with our group due to the natural agility that comes with being a small group. Decisions can be made much quicker, and returns are greater due to our smaller management team.
What is different about your company’s acquisition strategy?
Jared: We acquire existing assets and development parcels 100% off-market through a direct-to-owner acquisition strategy. By deploying highly niche marketing strategies, combined with highly skilled acquisition analysts, we’re able to successfully purchase these assets significantly below market value, in desirable locations, without being limited to what’s available on the open market.
Tell me about your development projects.
Danielle: Current market and demographic research suggest there’s high demand in the single-family asset class over traditional urban apartment units. The product that we’ve designed combines both assets classes—high-tech, high-density single-family homes with apartment amenities. This allows us to capture the single-family demand, which is also capturing the efficiencies that comes with apartment communities. Unlike the single-family REITs, this new hybrid asset class is able to be capitalized with Freddie Mac financing, the best financing available, further increasing yield.
We’ve been in the longest bull market recorded. Do you think real estate has more room to continue that trajectory?
Jared: There are a few macro trends that allow us to believe we still have further growth. First, the Fed has committed to keeping interest rates low for the next few years, which is making housing more affordable than ever. Second, home builders were late to re-start building after the last recession, creating lack of delivery of new units, creating extreme inventory issues. Third, the millennials, which is now the largest generational cohort, are now reaching their peak home-buying years, creating further demand. From a micro perspective (market specific), Phoenix is ranked in the top three for new people moving to the state, and new job creation, creating further fuel towards demand.
What led you to a career in real estate, Jared?
I’m an investor/entrepreneur first, and I only invest into assets that are tangible, that I can touch or feel. The advantage of real estate is it does not fluctuate the way stocks, bonds, equities do. I have 100% control of how I purchase that asset and how I operate it to ensure that it performs. The number one advantage of investing in real estate is that I can buy an asset for under market value and create immediate equity, and then take advantage of tax laws so that I’ll never pay taxes on that property.
Jared, how does your previous experience of managing $40 million in construction projects with Johnson Controls help your investors?
I got direct experience with material sourcing, project management, and seamless delivery of projects. However, the most valuable experience came from understanding how a Fortune 50 company built and managed teams, how we reported earnings and forecasts to shareholders, and how to make an overall division profitable.
Danielle, you owned a property management company at 25 years old—just five years into your real estate career. Tell us about your background and how you and Jared joined forces.
I graduated with a degree in finance from WP Carey School of Business at Arizona State University, and then, in 2010, I met an investor from Los Angeles who was in Phoenix buying homes at the foreclosure auction. He was only here three times a year, and he needed someone to run his Phoenix office, so he hired me. I was 20. My first role was on the property management side and dealing with homeowners to work out rental agreements with them after he’d purchase their property at auction. That developed into the finance and office management side. We would sell turnkey properties to investors, and then manage them in house. Then I started my own property management company with him. We sold the company in 2015, and then Jared and I met. At the time, I was looking to branch off and do my own thing, and I wanted to flip properties, and it was becoming more difficult to find deals because we were buying off the MLS. Jared and I started this company with our unique acquisition and marketing strategy to source off-market properties.
How does your combined experience help Equity Connect’s investors?
Danielle: Property management is a key component in the performance of a rental portfolio. By keeping the property management of our properties in-house, we have the advantage of building systems and processes as well as structuring the reporting and gathering data to optimize the performance of the portfolio. When working with a third-party management company, a monthly report for the previous month’s financials is all the visibility that we have. We believe that to optimize the performance of the properties, only rearview mirror reporting is not sufficient, but rather real-time financial visibility and operational data is needed. We’re able to have that through self-management. This allows us to make adjustments and corrections throughout the month. In addition, we have a more hands-on approach to pushing lease rates while aggressively maintaining vacancy rates below market standard.
This question is for both of you. What drives you?
Jared: First, at the end of the day, I’m an analyst. I’m always after the best risk-adjusted ROI, and real estate fits within my comfort level because I have control. Two, I love providing beautiful houses, beautiful properties with great architecture that the tenants or homeowners can enjoy while also providing a great return for us and our investors.
Danielle: What drives me is the flexibility to design a life how I want it, whether that means I want to spend this year working extra hard and next year taking some time off. In general, just building something is what drives me, whether that means building a company or renovating and flipping a property that we put work in up front and then reap the benefits in the long run because we’ve built something strong.
Jared Vidales, Co-founder, CEO, COO
Danielle Crowell, Co-founder
Equity Connect Holdings