Apartment Building Investing with Michael Blank Podcast

As multifamily syndicators, we are focused on finding quality deals and raising money. But securing the financing you need can make or break a real estate deal and reaching out to your lender early in the process will save you a great deal of time—and keep you on track to close as planned. So, what do you need to know about multifamily financing?

John Brickson serves as Director at Old Capital, a Dallas firm that specializes in arranging financing for commercial real estate investors across the country. John’s team focuses on $1M to $30M loans on multifamily properties, and in 2017, Old Capital closed more than $750M in loans. John’s market insight and established lender and equity relationships afford his clients a tailored, best-in-class financing solution.

Today, John joins me to offer insight on interest rates in 2019. He explains the difference between working with directly with a lender versus using an intermediary and describes why it’s safer to invest in properties that qualify for Fannie Mae or Freddie Mac. John also shares advice around financing smaller deals and covers the pros and cons of taking out a bridge loan. Listen in to understand the most common mistakes investors make when it comes to financing multifamily deals and learn why you should get your lender involved early in the process!

Key Takeaways

John’s insight on interest rates

  • Movement in last quarter of 2018
  • Lock in long-term, fixed rate financing

The difference between direct lenders and intermediaries

  • Direct lender = work with bank to arrange loan on own
  • Intermediary = broker (save time, keep closing on track)

John’s take on the best properties for multifamily investors

  • 5-units and above
  • Stabilized and cashflowing (qualify for Fannie/Freddie)
  • Target loan size $1.5M

John’s advice around financing smaller deals

  • Finance acquisition + rehab with bank loan
  • Increase value of property to >$1M
  • Do cash-out refi within 12 to 24 months

The purpose of a bridge loan

  • Finance acquisition when property not stabilized
  • Sell or cash-out refi with Fannie/Freddie once stabilized

The current terms for bridge loans

  1. Banks: <$5M = 75% LTV, 5.5% (full personal guarantee)
  2. Debt funds: $5-$10M + 80%, 5.5%

The risk associated with bridge loans

  • Shorter term, reach maturity in 2 to 3 years
  • Could be in recession, few lending options for refinancing

The best candidates for bridge loans

  • Investors with significant experience
  • Investors with significant net worth or cash

How lenders handle loan proceeds earmarked for rehab

  • Submit draw request (proof of work complete)
  • Lender pays contractors directly

The most common multifamily financing mistakes

  • Choose yield-maintenance prepay over step-down
  • Fail to think about exit
  • Overlook agency financing options
  • Wait until LOI accepted before reach out to lender

Connect with John

Old Capital

Call (913) 638-8871

Email jbrickson@oldcapitallending.com

Resources

Michael Becker on ABI EP064

Old Capital Podcast

Michael’s Mentoring Program

Real Estate Guys Goal Setting Retreat

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even Without Experience or Cash by Michael Blank

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_146.mp3
Category:Commercial Real Estate -- posted at: 7:42pm EDT

When you hunt, the prey runs away. But when you fish, you simply put a lure in the water and let the fish come to you. Tim Bratz likens raising private money to fishing: You provide value through education and intentional conversation—and then wait for the investors to come to you.

Tim is the owner of CLE Turnkey, a real estate investment firm focused on apartment buildings, vacation rentals and other commercial properties in Ohio, South Carolina, Georgia, Florida and Texas. His current portfolio consists of 2K units with a value of over $100M. Tim also offers coaching and mentoring through Commercial Empire.

Today, Tim joins me to explain how working as a commercial broker sparked his interest in investing and share the story of buying his first property—with a credit card! He discusses his transition from flipping, wholesaling and single-family rentals to multifamily buy-and-holds as well as his mindset shift around hiring a team. Listen in to understand the current opportunity around raising capital for multifamily and learn Tim’s approach to luring passive investors rather than chasing them.

Key Takeaways

How Tim got interested in real estate investing

  • Worked as commercial agent in NYC
  • Ran numbers on landlord’s profit

How Tim bought his first duplex on a credit card

  • Asked for $100K credit limit, received $15K
  • Flipped property in 75 days for $13K profit

Tim’s transition to multifamily buy-and-hold

  • Connected with investors ($1M to work with)
  • Found 8-unit building in C-class area
  • Apartments scalable, financing easier
  • Portfolio of 2,000 units in 42 months

Why raising capital is the best use of your time

  • Finance commands all other industries
  • ‘Control the money, control the deal’

Tim’s mindset shift around building a team

  • Hesitant to hire assistant for $35K/year
  • Revenue increase from $100K to $400K/year

The activities Tim outsourced first

  • Dry cleaning, car wash, post office, etc.
  • Marketing and inspections

Tim’s first six-figure hires

  • COO, CLO = engines that run business
  • $48K salary + profit share based on role

The current opportunity around raising money

  • Uncertainty in market, volatility
  • Shift from stocks to hard assets

Why multifamily is the safest investment

  • More control than stock market
  • Limited risk in B, C+ properties
  • Invest for cashflow vs. speculation

Tim’s approach to potential passive investors

  • Educate around opportunities (e.g.: self-directed IRA)
  • Fish rather than hunt, intentional conversations

What investors are looking for

  • Collateral and ROI
  • Credibility, fortitude

Connect with Tim

Tim on Facebook

CLE Turnkey

Commercial Empire

Resources

Invest with Michael

The Ultimate Guide to Buying Apartment Buildings with Private Money

Michael’s Mentoring Program

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even Without Experience or Cash by Michael Blank

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_145.mp3
Category:Commercial Real Estate -- posted at: 3:25pm EDT

So, you’re on the phone with a real estate broker or a potential investor. Chances are, they’re Googling you to see if you’re the real deal. If they don’t find a website, it’s unlikely they’ll take you seriously. And if they find a poorly designed site, that’s even worse! A quality website affords you instant credibility as a syndicator. But is there an easy way to build a good one without investing a lot of time or money in the process?

Todd Heitner is the founder of Apartment Investor Pro and Done Deal Websites. He supports real estate investors in building professional-quality websites. Todd’s service includes beautiful design, well-written content and quick setup, giving you the credibility and systems you need to connect with brokers and investors at a fraction of the cost.

Today, Todd joins me to explain how a professional website affords syndicators instant credibility. He walks us through the features of a quality website, from domain name to design to content to maintenance. Listen in for Todd’s insight on the value of automation in building relationships with investors and learn how Apartment Investor Pro can help you set up a website in just one day!

Key Takeaways

How a website provides credibility

  • Expectation for all businesses
  • Professional site builds trust

The elements of a quality website

  • Domain name to match business
  • Good web hosting service
  • Design (overall look and feel of site)
  • Appropriate plugins
  • Consistent content
  • Up-to-date maintenance

The value of website automation

  • Saves time (e.g.: connection to CRM)
  • Consistency of experience (i.e.: email sequence)
  • Stay top-of-mind with investors

The features of Apartment Investor Pro

  • Professional look and feel
  • Allows for customization
  • Includes all but domain name
  • Forms to capture investor info

Connect with Todd

Apartment Investor Pro

Resources

WordPress

WP Engine

Fiverr

The Divi Builder

MailChimp

Constant Contact

AWeber

ActiveCampaign

Michael’s Mentoring Program

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even Without Experience or Cash by Michael Blank

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_144.mp3
Category:Commercial Real Estate -- posted at: 5:08pm EDT

Who are you? Is your identity tied up in money? Another person? What you do for a living? If so, you are treading on dangerous ground, as these externalities can go away at any time. So, how do you define your WHY and create a culture in alignment with your core values? How do you awaken to your true purpose and potential? How do you live a life of significance and build a legacy you can be proud of?

Keith Elias is a former NFL running back who played for the New York Giants and Indianapolis Colts from 1994 through 1999. He earned All-American honors playing college ball at Princeton, where he established school, conference, and national records. Today, he supports NFL players in making the transition to retirement, helping them awaken to their purpose and navigate life after football.

Keith joins me on the podcast today to share his experience as an NFL player and his realization that there was more to life than football. He discusses why people struggle with life transitions, describing the risk in tying your identity to external things and the significance of defining your WHY. Keith offers advice around defining your core values and then using them as a guide in the decision-making process. Listen in for Keith’s insight on building a legacy and learn how to live a life of significance—starting right now!

Key Takeaways

Keith’s experience as an NFL player

  • ‘Accelerated life’
  • Popularity, money

Keith’s realization around life beyond football

  • Lack of spiritual purpose
  • Began search for something deeper

Why people struggle with life transitions

  • Identity tied to external things (i.e.: money, other person)
  • Don’t know purpose beyond job title

The importance of defining your WHY

  • No one immune from storm
  • Purpose provides foundation

Keith’s advice around defining your identity

  • Ask why you were created
  • Align culture with core values

Keith’s mission to awaken people to their truth

  • Ask big questions (spirituality)
  • Realize ‘life is bigger than me’

How to incorporate your values in everyday life

  • Define priorities, values (e.g.: truth, compassion)
  • Use to inform decision-making

Keith’s insight on building a legacy

  • Springs from identity, significance
  • Ask ‘Who can I help right now?’

Connect with Keith

Email keithelias@verizon.net

Resources

The Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8AM) by Hal Elrod

The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results by Gary Keller and Jay Papasan

Real Estate Guys Create Your Future 2019 Goal Setting Retreat

The Financial Freedom Summit

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even Without Experience or Cash by Michael Blank

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_143.mp3
Category:general -- posted at: 7:55pm EDT

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