Apartment Building Investing with Michael Blank Podcast

In the previous episode titled, "How to Expand Your Mind To Go BIG with Multifamily Investing," I make the argument that Bigger is Better. I stand by that, so please listen to that episode before you listen to this one!  However, if you go through the exercises laid out in that episode and still don’t feel comfortable with going big, I have a Plan B: duplexes


In this episode, I will lay out a plan for you to do a deal on a duplex in 90 days. And if that's what it takes for you to get into multifamily investing, then DO IT. Buy that duplex. Will you retire from it? No, but at least you're in the game.

Key Takeaways:

Why Duplexes Are the Perfect Way To Get Started With Multifamily Investing

[3:22] Reason # 1: There's more of them and they're easier to find

[4:39] Reason # 2: You need less money

  • Even if you need to raise the money you won’t need near as much

[5:01] Reason # 3: They're easier to analyze
[5:19] Reason # 4: You don't need to build a huge team
[6:06] Reason # 5: Cash flow per unit tends to be better than for larger MF properties

  • Easier to see $200-300 per month, per unit in positive cash flow

[7:05] Vision setting is important but don’t let your vision stop you from achieving your goals

  • Set achievable 90-day goals
  • 90 day goals are long enough to achieve something meaningful but short enough for you to see it happening
  • Set goals that you can achieve if you hustle.

[8:08] 90 day plan to buying your first duplex

[8:51] Week 1: Educate yourself

  • Read books
  • Take courses - Find mine HERE: http://www.ultimateapartmentinvestingguide.com/
  • Attend a seminar

[9:35] Week 2: Determine investing area

  • Less important than in larger multifamily investing

[10:27] Week 3: Analyze 5 deals

[15:33] Criteria:

  • What are the comps?
  • Rent analysis by location
    • Rentometer.com
  • What’s the cash on cash return?

[17:58] Week 4: Start raising money

[19:04] The Last two months

  • 1 investor meeting per week
  • Make 5 offers per week
  • Your goal is to get ONE accepted

 


It’s just me on this episode and I want to talk with you guys about mindset. Expanding your mind is something help you achieve your goals in the fastest way possible. Staying within your comfort zone can do the opposite.

In this podcast I outline 5 Reasons why bigger is better with apartment building investing and then give you 3 practical ways to expand your comfort zone, so you can do more/bigger deals.

Key Takeaways:

[0:30] We limit ourselves based on what we believe is possible.

[3:14] Buying an apartment building twice as big really doesn’t add that much work.

5 Reasons Why Bigger is Better with Apartment Building Investing

[4:18] Reason # 1: A Much Better Buying Experience

  • The smaller you go the more of a pain it will be.
  • Less sophisticated sellers

[4:55] Reason # 2: Economies of Scale.

  • You can spread out the cost of management/maintenance over more units.

[5:25] Reason # 3: Less closing costs as a percentage of the deal

  • Many flat rate fees

 [5:55] Reason # 4: Better financing

  • Non-recourse loans. The larger the loan the less likely you will have to personally guarantee it.
  • Larger loans are cheaper. Interest rates go down and terms get better.

[6:40] Reason # 5: Bigger Profits for less work

  • Would you rather buy 30 houses or one 30 unit building?

 

3 Practical Ways to Expand Your Comfort Zone (So You Can Do More Deals!)

[10:31] Tip # 1: It all starts with visualization

 [12:01] Tip # 2: Create a sample deal package.

  • Look at deals that are outside of your comfort zone. (More units).

[13:43] Tip # 3: Visit properties that are outside of your comfort zone

  • Visit 3-4 properties over the period of 1 week

Mentioned in this Podcast:

Book: The Miracle Morning

eBook: The Secret to Raising Money To Buy Your First Apartment Building

Movie: The Secret


I’m doing something a bit different with this episode and I think you are going to really enjoy it. While I realize that the name of this podcast is “Apartment Building Investing” it’s good for us to expand our minds and see what else is out there.

Today I’m joined by Jefferson Lilly to talk about mobile home park investing!

Jefferson Lilly is a self-made millionaire mobile home park investment expert, educator, and industry consultant. Prior to co-founding Park Street Partners in 2013, Mr. Lilly spent seven years investing his own capital acquiring and operating his own mobile home parks. Before becoming an investor full-time, Jefferson spent nine years in sales leadership roles with several venture-backed startups in Silicon Valley. Jefferson has been featured in The New York Times, Bloomberg Magazine, and on the 'Real Money' television show. He holds a B.A. from the University of Pennsylvania and an MBA from the Wharton School of Business.

 

Key Takeaways:

[6:58] In the mobile home business, you want to own the land, not the homes. “Be in the real estate business. Not the wheelestate business.”

[8:08] Owning the land only, cuts out the vast majority of repair and maintenance that you are responsible for.

[8:53] What to look for when investing in mobile home parks.

  1. Look for properties that have no website and are undermanaged.
  2. Buy a park that is on municipal water/sewer.
  3. Make sure rents are going to remain relatively consistent.
  4. Look at parks within 5-10 miles of a Super Walmart.

[13:19] What to look for in an onsite mobile home park manager:

  1. Someone that has lived in the community for a while
  2. Someone who owns their own home
  3. Someone that keeps their home looking sharp.

[20:22] People tend to treat the park and their homes with more respect the father north you go (in the U.S.).

[22:16] When starting out, be hands on for the first 6 months. After that, think about outsourcing tasks.

[25:05] Income streams from Mobile home parks:

  1. Leasing the grounds.
  2. Selling mobile homes, via rent to own agreements.

[26:13] Common financing options for mobile home parks:

  1. Region banks (most common)
  2. Seller financing (preferred option)

[30:44] Primary ways to find deals:

  1. Brokers
  2. Direct outreach

[34:09] Why mobile home parks can offer great upside:

  1. Less competition in certain areas of the country.
  2. Not a “sexy” investing option.

 [38:38] Ways to invest in mobile home parks:

  1. Do it yourself.
  2. Invest through a fund like Park Street Partners.

 

How to Connect with Jefferson

www.parkstreetpartners.net

Podcast: Mobile Home Park Investors

MobileHomeParkInvestors.net

 

http://www.lillyandcompany.net/


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