Jonathan Twombly is a real estate investor and a Managing Member at Two Bridges Asset Management. A former Wall Street lawyer turned entrepreneur, Jonathan leverages his many years of experience in multi-family real estate to help successful individuals, families, and trusts diversify their asset portfolios. For over a decade, his company has worked with pre-qualified investors to obtain income and achieve capital growth through investments in multi-family residential real estate in the fast-growing southeastern US.
Jonathan is a Harvard University and Columbia Law School graduate and has lived in various places, including London, New York, and Japan. He is also the creator of Apartment Investors Club (AIC), a membership-based community exclusively for multifamily real estate investors.
In this episode of the Smart Business Revolution Podcast, John Corcoran interviews Jonathan Twombly, a real estate investor and managing member at Two Bridges Asset Management, about how to invest in multi-family real estate. They also discuss entrepreneurs’ challenges in building their businesses, Jonathan’s criteria for finding and evaluating property in different markets, and why he bought a small rundown motel in upstate New York.
Here’s a Glimpse of What You’ll Hear:
- [02:02] Why Jonathan Twombly started an in-person events business — and the challenges he faced
- [08:58] What made Jonathan detest practicing law?
- [12:45] Jonathan’s journey to working in Japan
- [16:14] How Jonathan entered the real estate industry and his struggles to find good deals
- [25:14] What drove Jonathan to sell his whole investment portfolio?
- [28:46] How to find and evaluate property in different markets
- [34:40] The difference between buying and running a motel and apartment building
- [41:26] Why Jonathan created The Apartment Investors Club
- [42:38] The peers Jonathan acknowledges for their support
Resources Mentioned In This Episode
- Two Bridges Asset Management
- Jonathan Twombly on LinkedIn
- Apartment Investors Club
- The Hotel Laurel At Seneca
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John Corcoran 0:00
Today we’re talking about how to invest in real estate, especially multi-family real estate in today’s challenging economic environment that we live in. Today my guest today is Jonathan Twombly. I’ll tell you about him in a second. So stay tuned.
Welcome to the Smart Business Revolution Podcast where we feature top entrepreneurs, business leaders, and thought leaders and ask them how they built the relationships to get where they are today. Now, let’s get started with the show.
John Corcoran 0:32
All right, welcome everyone. John Corcoran here. I am the host of this show. And you know, I’m so privileged every week I get to talk to smart CEOs, founders, and entrepreneurs of all kinds of companies. We’ve had Netflix, Kinkos, YPO, EO, and Activision Blizzard. You can check out the archives to check those out. And of course, this episode is brought to you by Rise25, my company, where we help B2B businesses get clients, referrals, and strategic partnerships with done-for-you podcasts and content marketing. And you can learn all about what we do by going to rise25.com.
And my guest here today is an old friend who I’ve known for many years now, so long that can’t even remember how exactly we met. But we’ve crossed paths in multiple different ways. His name is Jonathan Twombly. He’s a former Wall Street lawyer and has many years of experience in investing in real estate, especially multifamily. And now more recently, some motels. Have you ever watched that Netflix show motel makeover? This is like the real-life version of it. But without all that Catty, a little infighting, hopefully anyway, but we’ll find out if he does have some of that. But he’s had a really impressive legal career graduate of Harvard and Columbia. He’s lived all over the globe, including in London, New York, and Japan, and has an interesting startup story. So we’re gonna dive into that.
But Jonathan, such a pleasure to have you here. I love having former lawyers turned entrepreneurs on this show, because we are a rare sort of people who can go from the Uber cautiousness of being a lawyer to the Wild West of being an entrepreneur, and you actually started a side hustle on the side while you were practicing law. So you’re a practicing attorney. And you decide to start a matchmaking business kind of a dating business, which I can imagine was super popular with your classmates from Harvard and super popular with other lawyers who tend to be kind of conservative and in question why people would do something like that. But take us through that. What was that like for you when you’re practicing law? And then you and your brother actually started this side business that was kind of a matchmaking business?
Jonathan Twombly 2:35
Yeah, it wasn’t exactly a matchmaking business. It was actually, the idea was, you know, people in their 20s and 30s, young professionals just had a hard time meeting each other. And it wasn’t sort of like matching up men and women precisely, but what we would do is put on in-person events, at Fun venues and try to, and it was like a membership-based thing where if you remember, you could come to the events. And if you weren’t, you can comment you had to pay more. And it was basically something that we stole from a group in New York City that was doing the same thing. rather successfully. The business after much back and forth was called Boston in common and didn’t last that long. It’s sort of like a year or so that I think we kept on pushing the rock up the hill. But it was a lot of fun. And it was the first time I ever actually scratched that, that entrepreneurial itch that I had.
John Corcoran 3:30
And those are some of the hardest types of businesses to start because no one wants to go to an event like that, where there’s three or four people, right, like it has to be a certain amount of people in order to make it interesting. What were the early events like and how did you actually get Did you beg, borrow and steal? Get your friends to come out? How do you get people to come to those early events?
Jonathan Twombly 3:54
Yeah, I mean, we did invite a lot of friends just to fill them out at first. We did some advertising I mean, actually this is funny because such with was so long ago that we did ads like on the Boston subway, right? And, you know, which it’s kind of funny when I think about it, like we really thought like, wow, we put an ad on the subway like we were gonna get like people were just gonna flood in, right? And we had like, a funny, I think our DeAndre simple that just said, got friends. And, you know, we thought like, this is so clever and cute, and like everyone’s gonna find us and really, nobody did. But we did have some really fun events. And you know, we did it. We did have some paid members. So it actually, you know, we didn’t make money, but we actually people did pay us to attend these things. Yeah. And yeah, it was fun. I mean, it’s so long ago now that I can’t you know, just sort of don’t really remember it. But we had started it I think because my brother had just been laid off from his job. Yeah, this is like 2001 is right after the.com Boom. Little crashed, he was in tech. And not on the tech side. He was in, like, worked in sales for a tech company and got laid off. And as did, the person who became our third partner, they worked at the same company. And so my brother Dave, was like, I want to start a business, I’ve always wanted to start going business. And I’d always had this itch too and I was like, Okay, well, I’ve got money, I can fund part of it. You know, we actually went to like, our family, and we got more funding from our family. We had no idea about how you like that. We were selling securities, stuff like that, we had no idea that this was supposed to be a private offering, which is like, ironically enough, like what I do now. The, the, you know, when we got money, and kind of like Dave ran the business, and he put on events, and we got in lots of fights as siblings trying to run a business together. And you know, just kind of look back and laugh.
John Corcoran 5:53
You said it lasted about a year, and this was in 2001. Did 911 happen in that time period?
Jonathan Twombly 6:00
I think it actually happened in 2000. I think this was actually 2002.
John Corcoran 6:04
It was after 911 than you think so
Jonathan Twombly 6:07
John Corcoran 6:09
So also a tough time just to get people out and about.
Jonathan Twombly 6:13
Yeah, potentially. But I mean, like I said, we did actually have decent turnout at the events, okay, it just, it just wasn’t like us, we couldn’t get enough kind of members. And we didn’t really know how to didn’t really have any much money for marketing. And we spent a lot of money on the subway ads, it didn’t work. And, you know, so we kind of ran out of money fairly quickly. But yeah.
John Corcoran 6:36
And ironically, now, you had said that you created this, in part, like a reaction to online dating. And one of the people that you hired as an Events Coordinator actually ended up getting hired away by match.com, which, of course, is like, the behemoth became the behemoth in online dating and, and they kind of took some of the stuff was that really, like debilitating? When that happen to lose a key person like that?
Jonathan Twombly 7:05
Well, no, because it was kind of like, we were on our last legs, it made me put the nail in the coffin. But I mean, it was pretty clear that that this wasn’t going anywhere, or, or that like, we needed more money. And I guess we never thought at the time, like, oh, you could go raise money from someone else, like match or whoever, right? So but when she got hired away by match, and basically took our whole business model to them, and and was was like, you know, if you have enough money to fund something like this, you can make something of it, which turned out not to be true. They very quickly, I don’t think that lasted very long, even with matches, funding a match wasn’t as big then as it is now. But it was already kind of like the player in online dating and even match was having trouble in those days, kind of convincing people that online dating is something that they should do, which is why they were doing these in-person events.
John Corcoran 7:56
An interesting anecdote, you had a web developer who kind of saw an insight and made a recommendation to you, which ultimately didn’t take, but could have taken you down a much different path, becoming kind of like a Facebook. So what was that suggestion?
Jonathan Twombly 8:11
Yeah, so, our web developer said to us, like, you know, you guys really should allow people to put up their own online profile, right? That this is like, what this is what people want, they want to have, like a place where they can like, put up their own stuff, and like, you know, communicate with other people. And I don’t remember exactly in those days, sort of what the technology allowed people to do, but at least you know, to have their own sort of online space where other people could see them. My brother and I like, no, that’s not what we want to do. We’re trying to get offline. We don’t want to be online. But I mean, we, you know, we could have been Facebook or something or MySpace or something like that. If we had gone down that that route, but we just didn’t, we didn’t see the vision. So we missed out on that.
John Corcoran 8:59
Right, right, yeah, yeah, your experience kind of reminds me of my own because I had a couple of false start businesses that didn’t gain traction. And then I would kind of like, take a little time back and and practice law for a little bit and lick my wounds, and then trying to figure out my next thing was, and that’s what happened for you. Right, you went back to practicing law. Tell us a little about what things were like for you after that.
Jonathan Twombly 9:23
Well, I mean, I was still practicing law the whole time. Right. So I hadn’t, I guess at the point at that point, I felt well, if the business ever takes off, it’d be great that I could, like, leave law and go do this full time. But I wasn’t in that position. At that point. I kind of made many stabs at getting out of law. It was something I you know, unusually most people literally kind of detest their first few years of legal practice and then they then it gets a little better. I was the other way around and actually loved my first few years of legal practice, and then it all came to a grinding halt. And after that, point I just became very disillusioned and really wanted to get out of it.
John Corcoran 10:03
But the thing was was there something that was the straw that broke the camel’s back or something that made you hate it?