Financial Freedom with Real Estate Investing

If you make good money, and you want to make it work for you, passive investing in multifamily syndications may be a perfect fit. But what are the benefits of apartment investing compared to the stock market? How do you choose an operator you can trust? What happens if there’s an economic downturn? Can you really achieve financial freedom with passive investing?

Ryan McKenna is the founder of McKenna Capital, a private equity firm that helps investors build long-term wealth through value-add multifamily, self-storage and manufactured home park investments. Ryan has invested in 30-plus real estate and business syndications worth more than $600M, and his current portfolio includes 7,800 units in markets across the country. Ryan’s role at McKenna Capital involves overseeing acquisitions, capital raising efforts, investor relations and asset management.

Today, Ryan joins me to explain why he chose the path of passive investing and discuss what drew him to multifamily over other investment options. He shares the generous tax benefits of multifamily syndications, offering a high-level overview of how to leverage the cost segregation analysis to accelerate depreciation. Listen in for Ryan’s insight on how to vet an operator and learn how to put your money in motion and achieve financial freedom as a passive investor!

Key Takeaways

How Ryan got started in real estate

  • Learned about multifamily syndications in college
  • Used Rich Dad… as blueprint for financial freedom

Why Ryan chose passive over active investing

  • Enjoyed work in corporate world
  • Found good operating partners with track record

Why Ryan chose multifamily over other investment options

  • 16-20% annual return, 8-9% cash-on-cash return
  • Generous tax benefits, predictable in downturn

The beauty of the multifamily cash out refinance

  • Get back 100% of money plus cashflow
  • Redeploy in another deal for additional income

A high-level overview of the cost segregation study

  • Accelerates depreciation on parts of property
  • Big tax advantages up front (huge taxable loss)

Ryan’s advice for aspiring passive investors

  • Reach out to people already doing it, ask Q’s
  • Diversify in multiple markets, operating partners

How Ryan vets a multifamily operator

  • Look for character, integrity and trust
  • Communication style + transparency
  • Track record (execute on business plan)

Ryan’s insight on waiting until after a downturn

  • Money in bank losing value with inflation
  • ‘Bad deal’ still returns 8 to 12% + tax benefits

Ryan’s timeline to financial freedom for passive investors

  • Invest $100K per year for 5 years
  • Passive income stream of $140K

How Ryan’s life has changed now that he’s financially free

  • More time with family, lifestyle by design
  • Passionate about real estate (full-time syndications)

Ryan’s transition from passive to active investing

  • Co-syndicating deals as part of general partnership
  • Raise capital, introduce investors into multifamily

Connect with Ryan

McKenna Capital

Resources

Deferred Sales Trust on ABI EP166

What’s the Best Investment: The Stock Market or Real Estate?

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not by Robert T. Kiyosaki

Nighthawk Equity

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

Direct download: ABI_174.mp3
Category:general -- posted at: 12:07pm EST

A jack of all trades is the master of none, right? We’ve been taught that it’s best to drill down on investment strategy and beware of shiny objects. But Adam the Brit has a slightly different philosophy. He believes that it’s important to establish multiple income streams across several different asset classes, taking advantage of opportunities to trade real estate and generate lump sums of cash quickly—that he can then use to expand his buy-and-hold portfolio and increase his flow of passive income.

Adam the Brit is a season real estate investor with experience in nearly every asset class, including single- and multifamily flips, value-add multifamily syndications, multifamily buy-and-holds, ground-up construction, and triple net lease retail deals. He has invested all over the world, from Asia to Europe to the US, and his current focus in on syndicating shopping centers and doing multifamily flips in low cap markets.

Today, Adam the Brit joins me to discuss why he got into (and out of!) multifamily buy-and-holds. He explains why he transitioned to retail and weighs in on the benefits of the triple net lease option. Adam the Brit also shares how he fared in the recession, describing how he came upon the buy in bulk, short-term hold and flip strategy he leveraged between 2009 and 2014. Listen in for insight around what differentiates the US real estate market and learn how Adam the Brit complements his primary investment strategy with a variety of opportunities!

Key Takeaways

How Adam the Brit got into real estate

  • Excess capital from business in Netherlands
  • House flipping, invest in office warehouse

When Adam the Brit got into multifamily

  • Move to US in 2001, love idea of passive income
  • Self-funded 8 multifamily buildings in Houston

Why Adam the Brit chose to invest in multifamily

  • Looking for scalability
  • Small, affordable deals available

How the US market differs from others around the world

  • Find real estate to suit any budget
  • Low barriers to entry, favorable tax treatment

Why Adam the Brit got out of multifamily

  • Focus on more passive investments (travel)
  • Retail more reliable than class C market

The benefit of the triple net lease option

  • Pass taxes, insurance and maintenance to tenant

How Adam the Brit fared during the recession

  • Retail located in strong market, performed well
  • Ground up construction went dark
  • Bought 50 houses in AZ for 10¢ on dollar (turn $1M into $3M in 3 mo.)
  • Buy in bulk, short-term hold + flip from 2009 to 2014

What Adam the Brit would do differently

  • Set goals higher (didn’t push hard enough)
  • More aggressive + take more risks

Adam the Brit’s primary strategy today

  • Return to triple net lease retail long-term holds
  • Focus on syndicating Hispanic shopping centers

Adam the Brit’s multifamily flip strategy

  • 4% cap rate doesn’t work for long-term holds
  • Create $40K of value to earn $1M profit

Adam the Brit’s advice for aspiring real estate investors

  • Look for opportunities to trade real estate
  • Use quick money to build passive portfolio
  • Go where you know

Connect with Adam the Brit

Email adam@adamthebrit.com

Resources

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not by Robert T. Kiyosaki

Odell Barnes

The Art of the Deal by Donald J. Trump with Tony Schwartz

Michael’s Ultimate Guide Course

Michael’s Mentorship Program

Nighthawk Equity

Deal Maker Live

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

Direct download: ABI_173.mp3
Category:Commercial Real Estate -- posted at: 2:02pm EST

Once you get a multifamily deal under contract, the clock starts ticking. You have limited time to raise capital, so it’s super-important that you’ve already built relationships with potential investors and have a database to call on. But how do you transition from simply talking to people about the opportunity to invest with you to building a formal pipeline of truly interested investors?

Kyle Mitchell is Managing Partner at Limitless Estates, a multifamily firm investing in the Phoenix and Tucson markets. He started investing in single-family in 2015, building a $1M portfolio of nine properties in Illinois, Ohio and Arkansas, before quitting his W-2 job to pursue multifamily in 2018. Within two months of going all-in on apartment buildings, Kyle landed a 42-unit deal, and he is currently negotiating a $15M 128-unit deal. Kyle is also the host of the Passive Income Through Multifamily Real Estate Investing Podcast.

Today, Kyle joins me to explain his decision to quit his 9-to-5 before he had a multifamily deal, discussing the benefits of going full-time and the way he got brokers to take him seriously. He shares the details of his first multifamily syndication, describing how he raised $1M in 60 days and why he had to switch lenders late in the process. Listen in for Kyle’s advice around finding a mentor and building your team—and get his blueprint for building an investor database for multifamily syndications!

Key Takeaways

Why Kyle quit his job before he had a multifamily deal

  • Savings and wife’s income made possible to go all-in
  • Accelerate progress after 10 months building pipeline

How Kyle and his wife’s goals were in alignment

  • Already investing in SFH, did SDA course together
  • Goal to become entrepreneurs + control time

Kyle’s insight on the benefits of going full-time

  • Ability to visit markets more often
  • Brokers take more seriously

How Kyle got brokers to take him seriously

  • Build relationships over 6 months (persistence)
  • Meetup, newsletter and podcast
  • Mentorship and coaching

Kyle’s first multifamily deal

  • 42-unit property near U of A in Tuscon
  • Mismanaged by SFH property manager

When Kyle started raising money

  • Building investor list for 10 months before
  • Webinar after signed, $1M raise in 60 days

How Kyle built his investor database

  • Leads from podcast, newsletter + meetup
  • One-on-one meetings to determine interest

How Kyle overcame objections re: lack of track record

  • Professional experience in management
  • Real estate license and SFH portfolio
  • Coaches, education, mentors + partners

Kyle’s insight on the Law of the First Deal

  • LOI for second property within 3 weeks
  • $15M 128-unit deal with same partners

Kyle’s advice for aspiring multifamily investors

  1. Double number of investors
  2. Always be raising money
  3. Be transparent with lender
  4. Set up team in advance

Kyle’s blueprint for following in his footsteps

  • Find mentor that fits goals
  • Define goals + take action
  • Build partnerships

Connect with Kyle

Limitless Estates

Passive Income Through Multifamily Real Estate Investing Podcast

Email kmitchell@limitless-estates.com

Resources

Uganda Counseling and Support Services

MailChimp

Michael’s Ultimate Guide Course

Michael’s Mentorship Program

Syndicated Deal Analyzer and Sample Deal Package

Nighthawk Equity

Deal Maker Live

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

Direct download: ABI_172.mp3
Category:Commercial Real Estate -- posted at: 2:21pm EST

If you’ve got money to invest, you’ve got a lot of options. So, what are the pros and cons of the stock market? Single family homes? Multifamily syndications? What’s the difference between active and passive investing? And how will the predicted market correction impact each of these opportunities?

Bronson Hill is the Director of Investor Relations at Nighthawk Equity, the investing arm of the Michael Blank organization. Bronson started investing in real estate 13 years ago, building a strong single-family portfolio before he transitioned to multifamily. Now, Bronson is the General Partner for 225 units, and he is passionate about sharing the benefits of passive investing in multifamily syndications.

Today, we switch things up and Bronson interviews me about the options available to passive investors. I weigh in on the downside of investing in the stock market, explaining why the actual return is much lower than what your financial advisor tells you! We also cover the advantages of investing in multifamily syndications, including the below-average risk and extraordinary tax benefits. Listen in for insight around the potential market correction everyone is talking about and learn what we do at Nighthawk Equity to protect our investors from the possibility of a downturn.

 

Key Takeaways

The disadvantages of investing in the stock market

  • Actual return much lower than published #s
  • Influenced by volatility, fees, taxes + inflation

The downside of investing in single-family homes

  • Susceptible to market cycles
  • Issues around property management

The advantages of multifamily syndications

  1. Below-average risk
  2. Cashflow
  3. Build wealth
  4. Tax benefits
  5. Hedge against inflation

Active vs. passive investing in multifamily

  • Active = find deals and/or raise capital
  • Passive = limited involvement in day-to-day

The market outlook for multifamily

  • Cognizant of possible correction
  • Taking steps to protect investors

How to protect yourself from a market correction

  1. Take on long-term debt
  2. Look for cashflow from Day 1
  3. Set aside and build reserves
  4. Conservative underwriting

Connect with Bronson

Nighthawk Equity

Email bronson@nighthawkequity.com

Resources

Deal Maker Live

What’s the Best Investment? The Stock Market or Real Estate

Doug Duncan on CNBC

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

Direct download: ABI_171.mp3
Category:general -- posted at: 12:06pm EST

Adding value to a multifamily property is what allows us to raise rents and earn a solid ROI. But how do we choose a contractor? As owners, how active should we be in managing the construction itself? What is the property manager’s role in a construction project? How do we know what amenities work in a particular market—and what they’re worth to renters?

Ira Singer is the Principal at Mosaic Construction, a design-build industry leader based in Northbrook, Illinois. Mosaic provides best-in-class renovation, remodeling and building services for multifamily, residential and commercial property owners and managers. Marc Rutzen is the CEO of Enodo, a machine learning platform that analyzes multifamily investments and calculates the ROI on value-add amenities.

Today, Ira and Marc join me to discuss the ins and outs of doing a value-add multifamily deal. Ira explains how the owner, property manager and contractor work together on a large-scale construction project, sharing the integral role communication plays in the process. Marc describes how amenity pricing varies by market and weighs in on the trend to offer services like pet daycare and credit card payments. Listen in for insight around making value-add choices that will allow you to increase rents, decrease operating costs, and boost your ROI overall!

Key Takeaways

The role a construction company plays in acquiring property

  • Site visit, bring architect if necessary
  • Discuss scope of work + lend eye as ‘building inspector’

The owner’s role in overseeing a construction project

  • Review daily updates (photos + written explanation)
  • Make important decisions

The property manager’s role in a construction project

  • Provide access and notify residents
  • Communicate with onsite project manager

How to approach large-scale value-add projects

  1. Empty building for full unit makeovers
  2. Two-day refresh of occupied units

Ira’s advice on hiring and managing a contractor

  • Develop relationship with construction partner
  • Monitor progress with strong communication

What construction gone wrong looks like

  • Failed inspections
  • Poor communication, execution

Ira’s insight around how to increase ROI

  • Pay attention to building envelope
  • Solid roof, gutters, windows and doors

Ira’s tips for reducing expenses on a property

  • Maintenance-free siding and windows
  • Efficient HVAC system, insulation in attics

How amenity pricing varies by market

  • Rooftop deck $32 nationally, $45 in Miami
  • Pool $30 in Miami, $50 in Chicago

The trend toward offering services

  • Pet daycare and dog walking
  • Storage (e.g.: package lockers, bikes)
  • Accepting credit card payments

Connect with Ira

Mosaic Construction

ira@mosaicconstruction.net

Connect with Marc

Enodo

marc@enodoinc.com

Resources

Deal Maker Live

Save Water Co

National Apartment Association

CoStar

Partner with Michael

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

Direct download: ABI_170.mp3
Category:general -- posted at: 7:34pm EST

A lot of aspiring investors hesitate to leave the security of a high-paying job to pursue real estate. And very few are brave enough to quit their 9-to-5 and go all-in on multifamily investing without a few deals to their credit and the cashflow to cover their living expenses. Burning the boats is not for everyone, but Jerome Myers had a financial runway, and he’d had it with corporate America. So, he walked away from a six-figure engineering position to make his dreams real.

Jerome is the Managing Director of The Myers Development Group, a real estate investment firm on a mission to build a portfolio of 1,000 units and free 100 people from work they aren’t passionate about. Jerome quit his corporate job to pursue real estate in 2017, and since then, he has joint ventured on several multifamily deals and is in the process of syndicating a 112-unit development deal in Greensboro, North Carolina, known as Technology Row. He is also the Chief Inspiration Officer for Dreamcatchers, a podcast featuring ordinary people doing extraordinary things.

Today, Jerome joins me to explain what motivated him to quit his corporate job and go all-in on multifamily—before he’d done a single deal! He shares his struggle to land that first property with no track record and offers insight into his experience with the phenomenon I call The Law of the First Deal. Jerome also describes the differences between joint venturing and syndicating, discussing why he prefers partnering but understands the need to engage LPs as you scale. Listen in for Jerome’s advice around leveraging a coach to fast-track your success and get inspired by his ‘dreams should be real’ philosophy for pursuing what you love.

Key Takeaways

Why Jerome quit his job before he had a deal

  • Never right time, tired of golden handcuffs excuse
  • Frustrated with inhumanity of corporate America

Jerome’s struggle to land his first multifamily deal

  • Banks wouldn’t lend without experience
  • Fix and flips to build reputation

How Jerome finally landed his first apartment deal

  • Joint venture with team of four
  • Added experienced property manager

Jerome’s experience with The Law of the First Deal

  • Opened doors, bankers + brokers lined up
  • Viewed as expert and treated differently

Jerome’s second multifamily deal

  • Closed on 28-unit in Greensboro within 6 months
  • Blowing revenue projections out of water

Jerome’s advice around partnering

  • Know who you’re teaming up with
  • Vet property manager carefully

The difference between partnering and syndicating

  • Joint venture partners bet on YOU
  • Syndicators interested in track record + returns

Jerome’s ‘dreams should be real’ philosophy

  • Society encourages mediocrity, fitting in
  • Leverage real estate to pursue passions
  • Do good in community + do well for investors

Jerome’s advice for aspiring multifamily investors

  • Get a coach to fast-track success
  • Joint venture + add value to team

Jerome’s insight on ‘burning the boats’

  • Get financially fit before quit job
  • If you’re going to do it, do it

Connect with Jerome

Myers Development Group

Dreamcatchers Podcast

Resources

CASHFLOW Game

Deal Maker Live

Nighthawk Equity

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

Direct download: ABI_169.mp3
Category:general -- posted at: 3:07pm EST

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