Andrew & Michaella Ramler started investing in 2012, and in the last nine years, alongside two additional partners, have acquired a diverse portfolio including 221 residential units, 45,000 square feet of self-storage, 7,000 square feet of office space and 10,000 square feet of retail. In addition to owning their portfolio, they also own Proxy Properties, LLC, the management company responsible for maintaining all aspects of the properties. Proxy utilizes a mixture of inhouse maintenance staff and 3rd party maintenance consultants to ensure that the assets are well monitored and maintained. They are “boots on the ground” investors who add value to each acquisition with creativity, time, and dedication to the success of each project. Andrew holds a Bachelor’s in Real Estate and Finance, Michaella a Bachelor’s in Education, and they work together in the daily operation of Proxy.
Grayson: What was the first building that you get involved with in real estate investing?
Mikayla: Oak Cliff has been largely my husband and I’s bread and butter of our investments and the providential reason why we’ve had success. I was born here and then my parents left because it was dangerous. So, we’re in a little niche neighborhood of Dallas. Long story short, we have had a grassroots artist community for a very long time and so AJ and I grew up together, got married, went to college and we wanted to own real estate. He studied real estate and finance in college, and I just grew up with entrepreneurial parents. My grandmother was the most epic gangster landlord of Oklahoma City. She’d be very mad if she heard that I called her gangster, but she was cutthroat and had a lot of great success. We graduated college and my dad said, “y’all need to move to Oak Cliff.” We started shopping around and found this fourplex and it had a fully functioning basement with windows and everything, which is super uncommon in our area if you know anything about Dallas. It’s five units and we’re straight out of college and we go for it, we buy it and we’re scrappy. We’re like, “We’re not going to live in the units, we’re going to live in the basement, like the leafy, stinky, not renovated basement.” Also, we’re both just new in our careers and just slowly renovated that by ourselves and then fully rented up the top and collected rent from that way. So back to why we chose Oak Cliff, my dad was largely part of it and just giving us the push and we’re so grateful we did cause we kind of got in at just the right time in 2012 and saw an explosion of appreciation that followed later and that building in particular had another kind of crazy slash miraculous accident that happened, financially miraculous for us. And that’s another topic we can talk about later if you want to but helped us get a lot of cash to keep growing the business. So that’s how we started in Oak Cliff.
Grayson: When you’re in the basement of the fourplex and you have all those roommates, how long were you guys in that situation before you were using the money to purchase up more properties?
Mikayla: I loved it so much by the end. When we first got to the basement, it was already fully occupied. We had to technically kick one person out because it was an owner-occupied federally backed loan. So, but yeah, mostly it was fully occupied with people we didn’t know and that wasn’t too weird at first, everyone was nice. We just had good boundaries, like, Hey, you need maintenance, shoot us an email, we’re here to be adults and here to serve you and that went well. Kind of funny too, being so intimately seen and known and around strangers essentially; hearing fights above us and just watching weird habits and schedules and wait, she’s had three men over this week, that was kind of the fun part of having these random roommates. And then as they kind of started to move out– well, the accident is what kind of kicked everyone out of the house and then after we renovated, we moved back in and two of our best friends. One of my husband’s best friend and one of my best friends moved in. So we actually got to have real precious friend community roommates there and it had this kind of creepy back stairwell that went from the bottom all the way to the technically third story. And so we could just, like in the middle of winter storms, whatever, just sneak up and say hi to each other and it was a really fun time.
Grayson: What’s the portfolio made up of in Proxy Properties?
Mikayla: We have 221 residential units and residential has been totally our focus and really got us to where we were just financially and because we really started in Oak Cliff. We got a lot of the appreciated capital because of it just exploded essentially. So then that gave us capital power to go buy our first multi-family property, which was also our first property that we partnered with somebody and that was 63 units in East Dallas, and it’s partnered with Metro Care Nonprofit. And the purpose of that through the Lihtc tax credit is to serve those who are mentally ill and unable to support themselves financially. And then from there we bought another 38 units in South Dallas and then another 16 units that we strictly partnered with at MetroCare again. Then from there we acquired storage, I think about 40,000 square feet.
Grayson: Was there any huge shockers when it came from leaving your original territory of Oak Cliff?
Mikayla: If you haven’t grown up in South Dallas, it’s not the norm for you. So, I think we just expected that and we knew it had its own challenges. We had a great property manager who’s still with us for five years now and he has really borne the brunt of kind of the harder parts of working in those areas. But no, I’d say we made that move just financially because it’s a double-sided sword, right. We had a lot of great appreciation on our Oak Cliff stuff, but then by that point, it’s harder to buy in Oak Cliff. So you kind of have to– the kind of flow is you buy somewhere where you have the appreciation on the bone, and once you capture that, then you kind of have to strategize and find another area and just– does that make sense? You kind of just flow it that way. The only thing we knew was we’d like to try to stay in the Dallas area because we’re local here and investing can be very street to street and you know that man, this street has potential because X and so we wanted to stay local for that reason.
Grayson: What qualities do you look for when looking for areas that have higher appreciation potential?
Mikayla: We really don’t chase appreciation. That’s the hope, but that’s not our metric. A basic one you can learn is the 1% rule. That’ll just tell you quickly, like this deal at the 1% rule will function and pay for itself. So pretty much, especially in the residential world, if it’s a one percenter and we think there’s some appreciation to be had eventually, and the population’s growing, then we’re into it. We do not chase appreciation, but we do always hope it’s there and probably our biggest way to pursue that would just be watching the population growth of an area which we believe in Dallas. So that’s why we’re kind of buying anything we can around here.
Grayson: Does your business have a strategy towards vintage households and is there a unique marketing challenge for it?
Mikayla: Yeah. The strategy was simply put just like an affordability access reason on our end, as investors. We don’t have any investors and we started just our own salaries. We’ve not had any financial help outside of our handful two to three partners that we bring in on the bigger stuff. So especially in the beginning, yeah, we couldn’t buy– any newer, modern home wasn’t really going to work as a rental, if you think about that 1% rule. So we kind of just found this little flow where we are finding– and we love old houses anyways. My grandmother that I referred to earlier, just grew up in her beautiful home in the heritage Hills area of Oklahoma and I grew up in an older home and AJ not, but you know, he’s into it now. He loves older homes now. So we just found this weird niche where we would find one, and we would say, this is like– man, this has good bones, this is like a Virgin house, no one’s touched it. We would just re-bring it back to life and that was really fun. But then kind of by accident, we realized we’re adding a lot of value and that’s what was really making our cash out refinances along with the appreciation really work for us. As far as marketing it, compared with the modern home, you’d be super surprised there is a very large following of historic character, warm. People want it and if you think just like at an inventory level, just basic supply and demand, new and modern, look at the apartments, look at all of the big squares, the big gray squares everyone’s putting up on every street in Dallas. So, we have the supply, we have a corner on the market right now of a great supply of vintage, charming, historical homes and there’s just not a lot compared to the inventory of the newer, modern stuff. So we’ve never had trouble marketing that. In fact, we’ve found this little niche following and now that we’ve grown that Instagram page a little bit, oftentimes our products will lease before they even go to market.
Grayson: Is there any key advantages to not having outside investors?
Mikayla: I mean, I’m like I can sleep at night. I can’t imagine taking someone’s retirement and being like, I got your back. I just can’t even imagine. You know what I mean? Like that is a whole new level and that’s not my expertise. I’m not trained in that level of financial responsibility. So yeah, I enjoy that there’s no external pressure from other people; it’s just between, pretty much, me and my husband and what we can do. And then, yeah, I think part of how we got there is frugality and living for not the moment, but the bigger picture and the bigger picture of wealth growth and both having our W2 jobs living in that basement. I mean the whole time we never moved to the upstairs renovated unit, we stayed in the basement the whole time, even though we had both our kids, we stayed there, we saved a bunch of money.
Grayson: Did you guys buy the oldest house in West Dallas?
Mikayla: Yeah, that’s actually kind of cool. We do have the oldest house in West Dallas. She’s lovely. She’s about– 1880s is roughly her date. She was built by Henry Struck. His initials are still stamped in our front sidewalk. It actually had never really been touched but also was kind of a humble farm home at the time. Like literally we were the first house and so the house is poised. All the windows are in the front mostly, and the front is facing directly east to the light sun and the back is facing directly west to the heat of the day. Like we were the anchor, we set the directions of where the other houses went up here. We were the original and all the houses used to belong to this piece of property as farmland. We have some really special historical pictures too, which is kind of a miracle. The story behind that, let’s see. So we’re living in the basement, we’re buying lots of property at that point and on that note this is our dream home, but we had, I mean, probably a hundred units before we dared venture out and have our dream home. And so later on, when we talk about renting versus buying and what’s kind of your lifestyle, for us we wanted to wait as long as possible to get our dream home so that we could be using those funds to grow the bigger picture.
Grayson: If someone had $10,000 lying around for renovations, what’s the room that they should invest the money in?
Mikayla: If you are buying a house roughly pre 1960, you got to swap that sewer line out cause it’ll go out on you like a thief in the night and you’re screwed and you got to drop cash like right then to move back into your house. And if you don’t know what I’m talking about in the fifties, later fifties, PVC piping became more commonly used, but before then it was literally just a clay pipe that ran from your toilet essentially. I mean, not just your toilet, like all your drainage, right? And so it was a clay pipe that ran from your house to the street and it is super rare for those to hold up. I mean, we have them go out all the time if we have– even if it’s been stable for the past five years, I’m afraid that the ones that we still have, they’re just going to blow up, I know. I had one go out at the basement after I had moved out. So, I had five people there or five households there and that sewer line, because the basement was like– oh my gosh, it was like 10 feet underground. So, I had to put everyone in hotels for three nights. We had to get an excavator thing and it was just a total nightmare.
Grayson: Can you expand on Collectivo?
Mikayla: Our opening date was March 1st of 2020. Oh. Literally, that’s not a joke and we lost three contracts immediately and so that put us down to like 50% occupied. You basically always miss budget and you’re always cash pouring and you’re always like crying for rent to start. And so being dying for the rent to kick in and then losing three contracts and then COVID, and no one was leasing office at that time, at the beginning at least, later we kind of got this weird flux of like, “Hey, I’m working at home. I can’t do it anymore. Screw my corporate job. I’m going to pay rent for myself and just go rent from you guys. So later we had some like benefit of COVID and now we have a wait list practically. So we’re good now. But yeah, we realized people, at least how we were set up, people really wanted our offices and they’re just small, like two-tier offices.
Grayson: Is there any key trends you’ve noticed due to covid-19 like with remote working?
Mikayla: I think the trend that’s happening in the offices is to stay for all the good reasons. I think there are select individuals in all industries who do require office space. If there’s any type of cl client relationship at all, that’s when I have found you just can’t give up the office. So like in our office just to make it practical, the three general contractors, they have to meet with their clients and they have to present the plans and the PowerPoints and where they’re at and have budget meetings. I kind of realized, man, where were they going to do that, at home? Like a lot of people have families and especially with COVID, if you’ve got your four or five-year-old doing virtual, who knows what? I mean, it’s a nightmare. We have a three-and-a-half-year-old and a four-year-old and we don’t even try working at home with them. It’s just a nightmare. So I think there’ll always be this remnant group of people who have client facing requirements and then just the few who just can’t work from home because they’re homeschooling 12 kids or whatever, like it’s just not going to work. I’m not sure if this answers your question, but yeah, I think this small office space, there is a need but they’re going to have to really address this issue with the millions of square footage of office and how are they going to repurpose it cause it’s just not needed anymore at that level.
