Executive Interview - Billy Liss
June 4th, 2009 | 
Author: Billy Liss
President
Liss Property Group
Liss Property Group is an innovative multifamily real estate investment and management firm that combines the stability of proven performance with the dexterity and hustle of a young start-up.
Q: As a company, tell me about the niche you have carved out for yourself and how you feel you are different from the competition. Why do you find this product type more appealing than alternative real estate asset classes?
A: We have carved out a niche in multifamily, currently in Northeast Philadelphia but we are open to other regional areas in a 100 mile radius. We differ in that our infrastructure is highly sophisticated for a small company. We have built a technology based system that could manage 20,000 units right now, yet we own 1,265. Every time we buy a property, we talk to the owners, examine the leases, and learn new techniques for managing and reducing costs of operating expenses and the utilities. We like multifamily because it isn’t dependent on a couple of leases, as we have many tenants; if someone leaves, we can easily replace them. We like the favorable financing options and long term debt as well as being able to pull a second, once our value add plan has been implemented. There is also no recourse on the loans. There is little development of multifamily in the Northeast because the rents don’t support new construction pricing and land availability is scarce.
Q: How has your strategy changed as a result of the credit crisis? Have you expanded/narrowed your acquisition criteria? If so, to what, and why?
A: We typically buy 2 to 4 properties a year and we haven’t been able to buy in ‘09. There is a disconnect between buyer and seller. Hopefully, that will soon change. Money and favorable financing is still available in multifamily, but seconds are not. Bank lines are contracting which makes it harder to grow our company. Our acquisition criteria has changed. We buy value add with a 2 year plan to get our equity out, but we can’t do this now, so we probably will do 5 year deals with equity partners or high net worth investors and buy out the property at the end of the term. Our purchasing cap rate is now in the 7.5 range instead of the 6 cap range, where many of our properties were bought.
Q: How did you get your start in the business?
A: I owned Liss Brothers for 26 years, a wholesale distribution and importing company, which I left in 2000 to start in the real estate business with my sons. We were fortunate to have started in 2000 as the market was low and we were able to make money quickly on our purchases because of rapid appreciation.
Q: What is your favorite part of your job? Least favorite?
A: My favorite part of my job is purchasing and implementing our plan to add value and re-tenant the property. The worst part of my job is firing or letting employees go, especially the ones that try hard but don’t have the ability or the passion.
Q: Real estate is cyclical. In terms of the specific asset classes you look to acquire, where in the cycle do you think we are right now? How long do you think it will take before we are at par again?
A: Real estate is on a clock. The upswing started in 1992 and topped out in 2006. I think the bottom for multifamily is near and there will be many terrific buying opportunities in the very near future. I think the 2006 pricing for multifamily when it was at its peak will be reached again by 2015.
Q: What three adjectives would you use to best describe yourself as a business person?
A: Passionate, aggressive, demanding.
Q: What is the hardest challenge you have faced in your career? How did you overcome it?
A: Starting a new real estate career at the age of 51 with little capital and little knowledge. I overcame it with hard work and a relentless desire to succeed.
Q: What keeps you up at night?
A: Worrying about getting money to buy deals.
Q: What organizations, charities etc are you a member of?
A: I support the Jewish Federation and many smaller charities. I am a member of the AAGP and attend many of the local real estate conferences.
Q: If you won the $300M mega million jackpot tomorrow, what would you do with your life? The money?
A: I would stop worrying at night about the equity I am trying to attain to acquire more property.
Q: Assuming you are able to get time off this year, what vacation destination would you like to visit in 2009? What about this vacation destination is so appealing to you?
A: I went to Las Ventanas in Cabo in February and made reservations to go back in early 2010. It is quiet, discrete, beautiful weather, and there is plenty to do. It’s a perfect place for me to relax.
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The growth of this company in such a short period of time is very impressive. Not only are they ahead of the competition with their firm grasp of the local market, their property management system is far more advanced than many in place.
From the renter’s perspective, they provide a quality product rather than the “Mr. Fix it special”. Happy prospects make Happy residents.
WOW! It’s shocking to read that interview but his lust for money is not surprising: Q: What keeps you up at night? A: Worrying about getting money to buy deals.
You know what kept me up at night when I lived there at one of Liss Properties? Being bitten by bed bugs all night long. How about worrying about your properties? Your tenants? No matter how much property you get your infrastructure will surely fail the way he does business.