Financial Freedom with Real Estate Investing (Commercial Real Estate)

Technology has succeeded in disrupting several industries. Think about what Uber has done to the taxi business. Or how Airbnb has changed hotels. These innovations work because they create a frictionless experience for consumers. So, how might #proptech disrupt multifamily? And how can apartment investors leverage technology to better the resident experience and compete in the market of the future?

Patrick Antrim is the Founder and CEO of Multifamily Leadership, a thought leadership platform that researches the best in innovation and leadership in the multifamily space. He has 18 years of experience managing the portfolios of some of America’s most influential real estate entrepreneurs and business titans, including Forbes billionaire George Argyros. Patrick is also the host of the Multifamily Leadership Podcast and the creator of the Multifamily Leadership Summit.

On this episode, Patrick joins me to share his take on shifting renter expectations and explain why investors of the future need to understand technology. He describes how we can use tech to improve the tenant experience and why class B and C operators shouldn’t dismiss tech as a luxury amenity. Listen in for Patrick’s insight around current trends in multifamily and learn how his organization is exploring the intersection among technology, leadership and resident journey.

 

Key Takeaways

How Patrick got into the asset management space

  • Retire from playing for New York Yankees
  • Apprentice to former Mariners owner (5K multifamily units)
  • Grew relationships with HNWI to manage $1.2B portfolio

Patrick’s take on shifting renter expectations

  • Look at multifamily as consumer category
  • Unique opportunity for operators to add value

Why investors of the future need to understand technology

  • Lift on revenue (e.g.: $55/month for smart home)
  • Compete with luxury developments
  • Future valuations based on tech in buildings
  • Save up to $100K/year on expenses

How we can use tech to improve the tenant experience

  • AI voice assistant to answer calls
  • Upgrade leasing journey (i.e.: digital applications)
  • Smart appliances, IoT devices in units

Patrick’s insight on tech in class B and C properties

  • Consumers quick to adopt tech (e.g.: Wi-Fi)
  • Impact operational inefficiencies like keys, work orders
  • Eliminate need for leasing agent at small properties

Why property management companies are slow to adopt tech

  • Investors already winning, don’t have to think ahead

Patrick’s thoughts on current trends in multifamily

  • Talent as last competitive advantage
  • Resident experience drives returns
  • Discussion around affordable housing

Patrick’s mission with Multifamily Leadership

  • Collision of tech, leadership and resident journey
  • Design co. to attract talent, residents + investors

Patrick’s advice for aspiring multifamily operators

  • Focus on creating value long term
  • Make sure incentives aligned

Connect with Patrick Antrim

Multifamily Leadership

Multifamily Leadership Podcast

Patrick on LinkedIn

Resources

Michael’s Mentorship Program

George Argyros

John Saunders

LeaseHawk

SmartRent

PointCentral

Vivint Smart Home

Urbandoor

STRATIS IoT

BIM Technology

Shadow Summit

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

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

Direct download: ABI_185.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

So, you’re getting into the business of multifamily real estate. Like it or not, you’re also getting into the business of marketing and promotions. But how do you build a platform online and attract the capital you need to grow?

Kyle Wilson is a marketing icon in the personal development space, promoting the likes of Og Mandino, Les Brown, and Robin Sharma, just to name a few. For 18 years, he served as Jim Rohn’s business partner, taking Jim from 20 speaking events per year at $4K each to 110 events at $25K—and creating Jim Rohn International along the way. Today, Kyle does high-end coaching and consulting and hosts the Kyle Wilson Inner Circle Mastermind. He has helped more than 200 thought leaders become published authors with multiple bestselling books.

On this episode, Kyle joins me to explain how he got into the personal development space and reflect on the top lessons he learned from working with legends like Jim Rohn, Zig Ziglar and Brian Tracy. He shares his best marketing principles for building a brand, discussing how tactics have changed over time but principles haven’t. Kyle walks us through an exercise for finding your secret sauce and describes the 4 things that he looks for on a website. Listen in for Kyle’s insight around building a platform and learn how to promote yourself as a multifamily real estate investor!

Key Takeaways

How Kyle got into the personal development space

  • Moved to Dallas at age 26, attended seminar
  • Offered job making cold calls + selling tickets
  • Started own venture and partnered with Jim Rohn

The top takeaways Kyle learned from Jim Rohn

  1. Key to better future is YOU
  2. Success is predictable
  3. Be a student, not a follower
  4. How can I bring value?

Kyle’s marketing principles for building a brand

  • Connect the dots
  • Tactics change but principles don’t
  • Great product
  • Customer service
  • Consistent
  • Relational
  • Be strategic (one thing knocks down ALL dominoes)
  • Leverage ‘the wheel’

How marketing tactics have changed over time

  • From commodity products to free content
  • Start with social media + build email list

What Kyle wants to see on a website

  1. Mystique
  2. Taglines
  3. Social proof
  4. Creative opt in

Kyle’s favorite lessons from his newsletter

  • It takes time to build something great
  • Pay the price now
  • Never do good deal with bad guy
  • Prime time is big time

Why Kyle came out of retirement

  • Unhappy, open to personal development
  • Connect talented people with right audience

How to find your own secret sauce

  • What am I good at?
  • What do I enjoy?
  • What are my successes?
  • How do others see me?
  • What am I FOR?
  • What am I AGAINST?

The challenge around putting yourself out there

  • Tendency to diminish own story
  • How much influence do you want to have?

Connect with Kyle Wilson

Kyle’s Website

Inner Circle Mastermind

Kyle’s Book Program

Resources

Michael’s Free Webinar: How to Do Your First Apartment Deal (Without Experience or Using Your Own Money)

Uganda Counseling and Support Services

Jim Rohn

Zig Ziglar

Brian Tracy

Mark Victor Hansen

Darren Hardy

Og Mandino

John Maxwell

SUCCESS Store

Chris Widener

Ron White

Earl Nightingale

Tony Robbins

Les Brown

Passionistas: Tips, Tales and Tweetables from Women Pursuing Their Dreams by Erika De La Cruz et al.

The Real Estate Guys

Seth Mosley

Phil Collen

John Assaraf

Resilience: Turning Your Setback into a Comeback by Kyle Wilson, Lisa Haisha, Keith Elias, Ron White, Nick Bradley, Chris Widener, Steve Fitzhugh, Nathan Ogden & Michael Blank

Chicken Soup for the Entrepreneur’s Soul: Advice & Inspiration for Fulfilling Dreams by Jack Canfield, Mark Victor Hansen & Dahlynn McKowen

Newy Scruggs

Hal Elrod

Deal Maker Live

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

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

Direct download: ABI_184.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

Most of us would really like to live a life of purpose. Problem is, working a traditional W-2 job can take all the good out of you. We come home exhausted and have little bandwidth left for our families, so the idea of serving others seems totally out of reach. But what kind of impact could you make if your living expenses were covered? What if you had the time freedom to pursue a meaningful life? What if multifamily real estate investing could get you there in three years?

Drew Whitson is a full-time real estate investor with a portfolio of 1,000-plus units in five states. He also happens to run The Michael Blank Investor Incubator, serving as a mentor and coach to help aspiring multifamily investors do their first apartment building deal. Drew spent 16 years working in corporate finance before leaving his W-2 job at a boutique investment banking firm in early 2018 to focus exclusively on his real estate career.

On this episode, Drew joins me to explain how achieving financial freedom has given him the opportunity to pursue a meaningful life.  He describes how getting laid off twice in a single year inspired him to control his own destiny by way of multifamily syndication. Drew walks us through his first few apartment building deals and discusses why buying a 32-unit property was so much easier than a fourplex! Listen in for Drew’s insight around raising money BEFORE you have a deal under contract, getting brokers to take you seriously as a newbie, and joint venturing with partners who share your vision for the future.

Key Takeaways

How financial freedom changed Drew’s life

  • Opportunity to pursue meaningful things
  • Impact world through service to others

The capacity to live a meaningful life AND work full-time

  • Must be extraordinarily intentional
  • Options open up once expenses covered

What inspired Drew to build an identity beyond his W-2

  • Laid off twice in single year
  • Sense of determination to control own destiny

Drew’s real estate experience prior to quitting his job

  • Bought multiple SFH when market down
  • Built portfolio of 400 multifamily units

What drew Drew to multifamily investing

  • Only asset can buy with other people’s money
  • Appreciation, resilience, tax benefits and scale

Drew’s first multifamily real estate deals

  • Bought fourplex with partner through Wells Fargo
  • 32-unit with small commercial lender much easier

Drew’s experience of raising money for the first time

  • Terrified of losing friends/family money
  • Learned that money follows good deals

How to raise money WITHOUT a deal under contract

  • Put together sample deal package
  • Soft commitments from potential investors

How to get brokers and investors to take you seriously

  • Build great team to help execute
  • Be specific about what you want
  • Use right language
  • No substitute for action

How long it takes Drew’s students to get competent

  • 30 days to get comfortable with language
  • 90 days for market analysis, team and tools

The power of joint venturing in multifamily

  • Engaged community keeps you motivated
  • Play to strengths + scale portfolio together

Drew’s advice for aspiring multifamily syndicators

  • Find likeminded people at Meetup groups
  • Get educated through books and podcasts
  • Commit to vision and take ACTION

Connect with Drew Whitson

The Michael Blank Investor Incubator

Resources

Dave Ramsey’s Financial Peace University

Drew Kniffin

Nighthawk Equity

David Kamara on ABI EP182

Meetup.com

Deal Maker Live

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

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

Direct download: ABI_183.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

Real estate investors come in many different shapes and sizes. Some young, some older. Some with financial resources, others without. But the one thing they ALL have in common is hustle. They balance learning with DOING, taking action to achieve their dreams of financial freedom through multifamily.

David Kamara was working a demanding job in management consulting, traveling as much as 48 weeks a year. In an effort to spend more time with his family, David enlisted the help of a mentor to fast-track his real estate career and closed on his first 40-unit multifamily deal in October of 2018. Within a year, David had replaced his income, and today, he has a portfolio of 247 units. He runs his own management consulting business as well as Cape Sierra Capital, an apartment building investing firm that focuses on undervalued multifamily properties in the Midwest and Southeast US.

On this episode, David joins me to explain how his daughters inspired him to make time for multifamily and what he did to get started.  He walks us through his first 40-unit deal, discussing how having a mentor helped get brokers to take him seriously. David also shares his experience with the Law of the First Deal, explaining how he had two more deals under contract within two months of closing! Listen in for David’s advice to aspiring multifamily investors and learn his action-oriented approach to achieving financial freedom—with or without financial resources of your own!

Key Takeaways

David’s initial real estate goals

  • Buy one house per year
  • Scale up to build wealth

What made David’s plan change

  • Demanding new job as management consultant
  • Moved to Michigan with growing family (4 kids)

What inspired David’s shift to multifamily

  • Work-life balance suffering
  • Replace time spent training for marathons

What David did to get started

What David liked about his first 40-unit deal

  • Nearby complex rents $100 more (wait list)
  • Major employer in area

How David got brokers to take him seriously

  • Introductions from mentor
  • Use right language to avoid proof of funds

David’s experience with the Law of the First Deal

  • Found 18-unit in Chicago within 2 months
  • First broker proposed partnership on 37-unit

David’s first multifamily syndication deal

  • Fully rented 94-unit in MI college town
  • Investors from professional network

How David found time to do real estate with a full-time job

  • Wake up early, stay up late
  • DECIDE to make time for what’s important

David’s advice for aspiring multifamily investors

  • Balance learning with DOING
  • Go out and buy multifamily property

What David would have done without financial resources

  • Create sample deal package
  • Educate potential investors, address objections

Connect with David Kamara

Cape Sierra Capital

Email david@capesierracapital.com

Call (773) 263-2657

Resources

Syndicated Deal Analyzer

The Ultimate Guide to Buying Apartment Buildings with Private Money

LoopNet

Josh Sterling on ABI EP091

Josh Sterling Mentor Bio

Deal Maker Live

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

Michael’s Mentoring Program

Financial Freedom Summit

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

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

Direct download: ABI_182.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

What kind of returns can a passive multifamily real estate investor expect? What if you could double your money in just five or six years? And pay little or nothing in the way of taxes?

Jan Larson spent 25 years in the high-stress world of semiconductor development, most recently working for Amazon. He had always been interested in real estate investing but did not want to deal with 3AM phone calls about clogged toilets. Five years ago, a colleague introduced him to a passive investing opportunity, and Jan was hooked. Today, he has invested in 28 multifamily deals involving 34 properties, and in January, Jan had enough passive income to quit his job.

On this episode, Jan joins me to discuss how his life has changed since he quit his job through passive investing in multifamily. He explains how living through the stock market meltdowns in 2000 and 2008 inspired him to diversify with apartment buildings, describing what he loves most about multifamily and sharing the returns passive investors can expect. Listen in for Jan’s advice on how to get started with passive investing and learn how he evaluates deals based on the sponsor and the submarket!

Key Takeaways

How Jan’s life has changed since he quit his job

  • High-pressure work in tech industry
  • Much less stress now

How Jan got started with passive investing

  • Introduced to multifamily by colleague
  • Steady deal flow snowball from there

Why Jan chose real estate over the stock market

  • Lived through meltdown of 2000 + 2008
  • Diversify to reduce exposure to market

What Jan loves about passive investing in multifamily

  • Not binary
  • ‘Set it and forget it’

What allowed Jan to invest in 28 deals in 5 years

  • Liquidated stock investments and Roth IRA
  • Rolled proceeds of sales into other deals

How refinancing a property benefits passive investors

  • % of investment returned (redeploy in new deal)
  • Cash-on-cash return of remaining = 25-30%/year

The returns a passive investor can reasonably expect

  • 8-10% cash-on-cash returns
  • Double money in 5 or 6 years

Jan’s insight around the tax benefits of multifamily

  • Depreciate faster with cost segregation
  • Haven’t paid any taxes on CoC returns

What Jan looks for in a multifamily deal

  • Trustworthy sponsor with track record
  • Submarket in particular + overall market

Jan’s advice for aspiring passive investors

  • Find Meetups to meet sponsors
  • Vet by talking to other investors

Jan’s top takeaway for potential passive investors

  • Multifamily investing gives options

Connect with Jan

Email jan.a.larson@gmail.com  

Resources

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

Nighthawk Equity

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

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

Direct download: ABI_181.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

As multifamily investors, we’re all looking to build wealth and achieve financial freedom. The scary part is, we don’t have control over how much our money is worth. And as our government continues to print money with wild abandon and accumulate massive debt, the value of the US dollar declines. Yes, we’re smart to invest in physical assets like real estate to hedge against this kind of currency devaluation. But is there something else we could be putting our money in as an insurance policy of sorts? Something that increases in value as paper assets decline?

Dana Samuelson is the President of American Gold Exchange, a leading precious metals and rare coin company. A professional numismatist since 1980, Dana has been involved in a billion dollars’ worth of precious metals transactions. Brien Lundin serves as host of the New Orleans Investment Conference and Executive Editor of the Gold Newsletter, the oldest precious metals advisory in the world. With 40 years of experience, Brien is an expert in precious metals and mining share markets as well as the economic and geopolitical issues that impact them.

On this episode, Dana and Brien join me to explain why the average real estate investor should consider adding precious metals to their portfolio. They describe how gold serves as a counterbalance to paper assets and warn us about the accelerating devaluation of US currency. Dana and Brien also discuss the outlook for gold in the current economic climate, offering insight around the relationship between interest rates and the value of precious metals. Listen in to understand the process of buying gold and find out why it should be a part of your overall investment strategy!

Key Takeaways

Dana’s extensive background and experience

  • President of American Gold Exchange
  • 40 years in precious metals

Brien’s extensive background and experience

  • Executive editor of Gold Newsletter
  • Host of New Orleans Investment Conference

Why real estate investors should care about gold

  • Natural counterbalance to paper assets
  • Gold goes up when stocks, real estate go down
  • Global economy weakening in last 6 months
  • Took off in 2008 during crash (liquid asset)

Brien’s insight around currency devaluation

  • Central bankers print money with wild abandon
  • US $22.5T in debt, interest rates at global all-time lows
  • Forgiving debt = accelerates decline in value
  • Will need to borrow to pay interest in next few years

The outlook for gold in the current economy

  • ‘Gold loves cheaper money’
  • Bond yields plummeted in last 6 months
  • Fed forced to cut interest rates further

How interest rates impact the value of gold

  • Gold has no interest, must pay carrying cost
  • No burden to buy when interest rates low

The 3 ways to buy gold and other precious metals

  1. Paper trade via ETFs or GLD
  2. Invest in gold mining stock
  3. Physical gold dealer (sovereign minted)

When to invest in paper vs. physical gold

  • Paper good when confident in uptrend
  • Need physical as foundation (economic uncertainty)

The process of buying and selling physical gold

  • Call or visit reputable dealer to discuss
  • Pay current price + minting premium and dealer fee
  • Gold shipped and insured through FedEx or USPS
  • Store in safe, accessible place
  • Sell to any reputable dealer

Brien’s top takeaway around investing in gold

  • Precious metals are form of freedom
  • Insulate you from mismanagement of currency

Dana’s top takeaway around investing in gold

  • At least 5% to 10% of portfolio in gold or silver
  • Serves as insurance policy for rest of money

Connect with Dana

American Gold Exchange

Email info@amergold.com

Connect with Brien

Gold Newsletter

New Orleans Investment Conference

Resources

Real Estate Guys

Professional Numismatists Guild

Jim Blanchard

Investor’s Guide to Gold & Silver

Robert Kiyosaki

Peter Schiff

Michael’s Free Webinar

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

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

Direct download: ABI_180.mp3
Category:Commercial Real Estate -- posted at: 1:00am EDT

Too many aspiring real estate investors never take action because they’re waiting for the right time, or they’re holding off until they know EVERYTHING about multifamily. Spoiler alert: That’s never going to happen! So, what if you simply got prepared for the next few steps and moved forward?

Mauricio Ramos is Managing Member at de Medici Group, a multifamily investment firm based in San Antonio. He specializes in acquiring underperforming assets that can be repositioned to improve the quality of life for tenants and build wealth for investors. Mauricio spent ten years as a Project Manager in the commercial construction industry before leaving to pursue real estate full-time in 2016. To date, he controls $2M in assets and has a portfolio of 234 units across Texas.

On this episode of the podcast, Mauricio joins me to discuss how his life is different now that he’s a full-time real estate investor. He describes how a desire to travel inspired him to pursue passive income and explains how he got his start in mobile homes and single-family wholesaling. Mauricio also shares the impetus behind his transition to multifamily, offering advice around raising money for syndications. Listen in for creative strategies to find off-market deals and get Mauricio’s insight on taking the first step—and THEN figuring out your next move!

Key Takeaways

How Mauricio’s life is different now

  • Time freedom (work out during day, walk dogs)
  • Travel and go to seminars like Deal Maker Live

Mauricio’s background and experience

  • Grew up in Mexico, came to US on student visa
  • 10 years as civil engineer/construction manager

What inspired Mauricio to pursue passive income

  • Quit job for 40-day backpacking trip
  • Desire for freedom to pursue travel

Mauricio’s introduction to real estate

  • Colleague introduced to single-family rentals
  • Paid cash for mobile homes, wholesaled SFH

Mauricio’s first 10-unit multifamily deal

  • Sourced through direct mail campaign in 2017
  • Sold 18 months later for 159% ROI

Why Mauricio transitioned to multifamily

  • Scalability (10 SFH vs. 10-unit)
  • Able to analyze own deals with SDA

Mauricio’s second and third multifamily deals

  • Wholesaled 8-unit for 5-figure profit
  • Wholesaled 24-unit for 2X annual W-2 income
  • Used money for mentor, passive investment

Mauricio’s transition to multifamily syndications

  • Sponsored 16- and 32-unit deals in McAllen
  • Raise money from friends, family and coworkers

Mauricio’s advice to aspiring syndicators

  • Get educated on SEC compliance
  • Provide opportunity vs. ask for money

What’s next for Mauricio

  • Expand network with seminars, partnerships
  • Goal to grow 600-unit portfolio in 2020

Mauricio’s insight on off-market opportunities

  • Lack of creativity rather than deals
  • Rach out to brokers and take first step

How to proceed without a clear plan

  • Be prepared for next 3 steps
  • Confidence in resourcefulness

Connect with Mauricio

de Medici Group

Email mauricio@demedicigroup.com

Mauricio on Instagram

Multifamily: Invest Differently on Meetup

Resources

Grant Cardone

Deal Maker Live

Rich Dad Poor Dad by Robert T. Kiyosaki

The 4-Hour Workweek by Timothy Ferriss

National Real Estate Investor Association

Driving for Dollars on the App Store

Driving for Dollars on Google Play

Syndicated Deal Analyzer

The Ultimate Guide to Buying Apartment Buildings with Private Money

Michael’s Mentorship Program

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

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

Direct download: ABI_179.mp3
Category:Commercial Real Estate -- posted at: 11:55am EDT

Advancements in technology allow us to access and analyze an incredible amount of data. But what does this mean for multifamily investors? Can we make use of tech tools to find off-market deals, for example? What if we could automate the underwriting process? How might machine learning facilitate market analysis?

Raj Tekchandani is the Founder and Managing Principal at Smart Capital Management, a real estate investment firm that focuses on the acquisition and management of value-add multifamily properties. Raj brings his significant experience in tech startups to his work as a full-time investor, leveraging data analytics, machine learning and artificial intelligence to identify strategic assets in emerging markets that provide high-yield returns.

Today, Raj joins me to explain how he got started in real estate, buying condos in Orlando to supplement his uncertain W-2 income. He discusses what inspired his transition to multifamily and shares his diverse experience as an active investor, passive investor, and capital raiser for syndication deals. Listen in for Raj’s assessment of the available tech tools for real estate and learn how he quit his job in startups to become a data-driven multifamily investor! 

Key Takeaways

What inspired Raj’s interest in real estate

  • Uncertainty of work in tech startups
  • Create second income stream

How Raj got started in real estate

  • Friend buying condos in Orlando (2012)
  • Purchased 9 of own for cashflow

Raj’s transition to multifamily

  • Reading about economies of scale
  • Decision to get more involved

Raj’s first multifamily investment

  • 15-unit in up-and-coming neighborhood nearby
  • Unexpected expenses, fired property manager

How Raj got into passive investing in multifamily

  • Continuing education in syndications
  • LP for 151-unit in Georgia

Why Raj decided to quit his job and do real estate full-time

  • Control own destiny, control own time
  • Bring passion for data analytics to real estate

What Raj is working on now

  • Partner with syndicator as capital raiser
  • ‘Full-time evangelist for multifamily’

The tech tools for real estate Raj is exploring

  • Reonomy for apartment ownership data
  • Enodo for underwriting multifamily deals
  • Building market analysis tools with Bay Area company

How Raj educates new real estate investors

  • Build trust through meetups and content
  • Walk through recent transaction
  • Serve as concierge through first deal

What Raj looks for in a multifamily operator

  • Trusted partners from mastermind network
  • Responsive to communication

Connect with Raj

Smart Capital Management

Email raj@smartcapitalmgmt.com

Data Driven Multifamily Investing Facebook Group

Resources

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

Syndicated Deal Analyzer

Meetup

Reonomy

Enodo

Nighthawk Equity

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

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

Direct download: ABI_177.mp3
Category:Commercial Real Estate -- posted at: 12:16pm EDT

Are you settling for good enough? It’s easy to get comfortable with the way life is going and let complacency set in. But if you really want to achieve greatness, you’ve got to get comfortable being uncomfortable. Whether it’s your personal development OR your multifamily portfolio, meaningful growth happens OUTSIDE your comfort zone.

Andrew Kuhn is the founder and CEO of Kuhn Real Estate, a multifamily investment firm and property management company based in the Greater Detroit Area. He spent the last 14 years in a highly compensated medical device sales role before quitting his job just one month ago to pursue investing full-time! Andrew has been involved in real estate since 2006, building a robust single-family portfolio of 76 rentals. He transitioned to multifamily two years ago and has already closed six deals totaling 281 units. Andrew also serves as a mentor with us through the Michael Blank Investor Incubator.

Today, Andrew joins me to discuss his decision to quit a lucrative W-2 job and explain how he’s becoming a servant leader now that he’s achieved financial freedom. He describes what lights him up about mentoring new investors and shares some of his most influential teachers in the personal development and real estate space. Listen in for Andrew’s methodology around learning something new and find out what’s inspiring him to scale his multifamily portfolio to 20K units!

Key Takeaways

Andrew’s path to full-time investing

  • 13 years in SFH to grow portfolio of 76
  • Shift to multifamily 2 years ago (6 deals, 281 units)

Why Andrew struggled with the decision to quit his W-2 job

  • Highly compensated work in medical device sales
  • Need to define specific exit strategy

Andrew’s last day at his 9-to-5 job

  • Conducted training course
  • Many colleagues jealous, curious about investing

How Andrew’s life has changed since he quit his W-2

  • Working harder than ever to achieve 20K+ units
  • Involved in local organizations (servant leader)

What lights Andrew up about teaching others

  • Realize impact of prominent teachers in own life
  • Reinforce own learning + give back

Some of Andrew’s most influential mentors

How Rich Dad Poor Dad influenced Andrew

  • Light bulb moment re: passive income
  • Inspired move to Detroit for investing opportunities

Andrew’s methodology for mastering something new

  • Get educated and start networking
  • Get clear on goals, then follow up with ACTION

Andrew’s key takeaways from Deal Maker Live

  • Master online marketing to compete in space
  • Bookending day with productive habits (Hal Elrod)

What Andrew would do differently if he could go back

  • Transition to multifamily much sooner
  • Growth happens outside comfort zone

How Andrew is working to grow right now

  • Syndicating larger multifamily deals
  • Building out property management company

Andrew’s top AHA moments

  • Remove active and build passive income
  • Leave legacy of compassion, service and integrity

Connect with Andrew

Kuhn Real Estate

Email andrew.kuhn@kuhnrealestate.com

Andrew on LinkedIn

Resources

Seven Years to Seven Figures: The Fast-Track Plan to Becoming a Millionaire by Michael Masterson

Jim Rohn

Entrepreneurs’ Organization

Kyle Wilson

Zig Ziglar

Dale Carnegie

Robert Kiyosaki

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

Rich Dad’s CASHFLOW Quadrant: Guide to Financial Freedom by Robert T. Kiyosaki

Syndicated Deal Analyzer

Schon|Tepler

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

The E-Myth Real Estate Investor: Why Most Real Estate Investment Businesses Don’t Work and What to Do About It by Michael E. Gerber, Than Merrill and Paul Esajian

Books by Gino Wickman

Books by Verne Harnish

Strategic Coach

Building Wealth One House at a Time: Making it Big on Little Deals by John W. Schaub

Hal Elrod

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

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

Ed Mylett

The Second Mountain: The Quest for a Moral Life by David Brooks

The Richest Man in Babylon by George S. Clason

Michael’s Mentorship Program

Nighthawk Equity

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_176.mp3
Category:Commercial Real Estate -- posted at: 1:57pm EDT

Good deals are so hard to find right now! That’s become a common complaint among real estate investors in recent months, but I’m not convinced it’s true. In fact, if you’re willing to hustle and approach brokers with a service-first mindset, it’s fairly easy to find off-market multifamily deals.

Logan Freeman is a commercial real estate agent, investor, developer and capital raiser. He is also the founder of LiveFree Investments, a Kansas City firm specializing in joint ventures and equity partnerships that provides strong returns on capital from secure investments. Logan got his start in real estate doing a live-in flip back in 2013, and since then, he has completed 80-plus transactions and earns $13M for his investors annually.

Today, Logan joins me to explain why he was dreaming about real estate—even as he was being drafted for the NFL! He discusses the niche he has developed representing buyers and building his own portfolio, describing how he builds credibility with brokers by solving problems and adding value. Listen in for Logan’s What if? approach to real estate networking and learn how he is hustling to find off-market deals for his clients—and himself!

Key Takeaways

Logan’s path to real estate

  • Drafted for NFL but didn’t make team
  • Work to earn master’s degree (265 calls/day)
  • Learn self-worth not tied to outcomes

Logan’s introduction to real estate

  • Friends’ dads as mentors, owned rentals
  • Find way ‘to make money while you sleep’

How Logan got started in real estate

  • Live-in flips while working as consultant
  • Acquisitions for boutique investment firm

What inspired Logan’s transition to multifamily

  • Spreads starting to shrink in KC market
  • Decision to work smarter, not harder

Logan’s status as the go-to guy when people need to sell

  • Need in market to match buyers with properties
  • Source off-market deals via broker relationships

How Logan gets brokers to take him seriously

  • Build trust by solving problems
  • Don’t ask for fee (earn through buyers)
  • Underwrite properties + send feedback
  • Partner as necessary for track record
  • ‘Network your tail off’

What Logan’s excited about moving forward

  1. Creative strategies to buy off-market properties
  2. Marketing tactics to build personal brand
  3. Co-GP on self-storage, mobile home parks

Connect with Logan

LiveFree Investments

LiveFree on Facebook

LiveFree on Twitter

LiveFree on Instagram

Logan on YouTube

Logan on LinkedIn

Resources

Nighthawk Equity

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

TalentSmart

StrengthsFinder

Syndicated Deal Analyzer

Berkadia

Block Real Estate Services

CBRE Kansas City

David Goggins

CCIM

Stephen Covey

Mauricio Rauld

Be in the Top 1%: A Real Estate Agent’s Guide to Getting Rich in the Investment Property Niche by Bob Helms

Michael Becker

Loom

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_175.mp3
Category:Commercial Real Estate -- posted at: 1:42pm EDT

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 EDT

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 EDT

Don’t think you have the time to start investing in multifamily? Anna Kelley is a wife and mother of 4 who worked a demanding full-time job AND built a real estate portfolio on the side, working 82 hours a week for nearly 5 years. She argues that sacrificing your time for a couple of years to buy yourself decades of financial freedom is well worth it. But you’ve got to be willing to take consistent action—even when it’s hard.

Anna is a seasoned real estate investor with a rental portfolio valued at $12.5M. She is also an Amazon bestselling author and sought-after speaker in the realm of buy-and-hold investing, creative financing, vacation rentals, women in real estate, and multifamily investing. Anna has coached several new investors through their first deal, and she is dedicated to educating others on the benefits of multifamily real estate investing.

Today, Anna joins me to discuss how she executed on a 5-year plan to quit her job with real estate investing. She shares her new emphasis on work-life balance, explaining how she is still working hard but making time to focus on her health and family. Anna also offers insight on why she struggled with the decision to quit her job and how that uncertainty inspired her to joint venture and scale up. Listen in for Anna’s advice around finding partners with complementary skills and learn how to MAKE the time to achieve financial freedom!

Key Takeaways

How Anna’s life has changed since quitting her job

  • No less busy (12-hour days to close on 2 properties)
  • 2-week vacation for first time in years

Anna’s new emphasis on work-life balance

  • Consistent time for self-care + focus on health
  • Slow, methodical growth of multifamily business

Why Anna questioned the decision to quit her job

  • Background as financial advisor, predict recession
  • Job at AIG ‘sole lifeboat’ for family through crash

How Anna got started investing in real estate

  • Clients with most money = real estate investors
  • Protectionary investments to cover expenses (2007)
  • Bought small multifamily in 2008 with rest of 401(k)

Anna’s five-year plan to replace her income

  • Refinance 12-units in 3 buildings already owned
  • Line of credit + equity loan to buy foreclosures
  • Research seller financing, buy 4-unit buildings

Anna’s decision to scale up to larger multifamily properties

  • Reached goal to replace income ($5M in assets)
  • Wanted 6 months of expenses for buildings + year of salary
  • Met partners at event, found 73-unit off-market property

Anna’s investing advice for her younger self

  • Still buy small properties for long-term stability
  • Invest with others sooner, focus on finding deals

Anna’s strategic approach to syndicating deals

  • Target properties in 2-hour radius where know market
  • Expand to other markets once comfortable with process

Anna’s advice around joint venturing

  • Find experienced investor with aligned goals
  • Look for someone with complementary skill set

Anna’s insight for aspiring multifamily investors

  • Be prepared for initial investment of time
  • Got for it but be wise in who partner with

Anna’s response to the lack of time argument

  • You make time for what’s really important
  • 82 hours/week for 4 years with few breaks

How Anna got through the difficult times

  • Change way you get there or timeline, not goal itself
  • Develop resilience and do whatever it takes

Connect with Anna

Rei Mom

Anna on Facebook

Creating Wealth Facebook Group

Resources

Deal Maker Live

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

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

Kyle Wilson’s Inner Circle Mastermind

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

Turn Your Setbacks into Comebacks by Rick McDaniel

Grant Cardone on School of Greatness EP802

Alan Schnur on Apartment Building Investing EP116

Elite Investors Club

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_168.mp3
Category:Commercial Real Estate -- posted at: 3:59pm EDT

The beautiful thing about achieving financial freedom is that it gives you the means to give back. Of all the investors I know, the majority who quit their jobs with multifamily go on to pursue a greater purpose, using real estate as a vehicle to make other’s lives better.

Reed Goossens is a real estate entrepreneur and Managing Partner of Wildhorn Capital. He moved to the New York from his native Australia in 2012, and since then, Reed has grown a portfolio of 1,100 multifamily units. He has been involved with $500M-worth of large-scale commercial construction and development projects in Australia, the UK and the US. Reed is also the host of the Investing in the US podcast and author of Investing in the US: The Ultimate Guide to US Real Estate.

Today, Reed joins me to discuss how his life is different now that he’s financially free and why he’s using the platform he created through real estate to raise cancer awareness. He also weighs in on the difference between productivity and activity, offering insight around the best use of your time as a syndicator and the value in firing yourself from repetitive or administrative tasks. Listen in to understand how Reed’s definition of success has changed to focus on his evolution as an entrepreneur and learn the #1 factor that helped him build a substantial multifamily portfolio!

Key Takeaways

Reed’s mom’s inspiring advice

  • We’re not here to muck around
  • Live life without regrets

Reed’s journey to financial freedom

  • Pulling hair out in cubicle
  • One-way ticket to NYC in 2012
  • Required hard work + hustle

Reed’s insight on productivity vs. activity

  • Being busy ≠ effective work
  • Define black, blue and red zone

The best use of your time as a syndicator

  • Find partner with complementary skill set
  • Build systems and expand business

Reed’s first hires as a multifamily investor

  • Underwriting interns to analyze deals
  • VAs for bookkeeping and admin tasks

The activities that Reed categorizes as ‘black time’

  • Thought leadership (e.g.: speaking, masterminds)
  • Get in front of investors as face of business

How Reed’s definition of success has changed over the years

  • Commit to doing things well without goal in mind
  • Focus on evolution as entrepreneur

Reed’s mission now that he’s achieved financial freedom

The #1 factor in building Reed’s 1,100-unit portfolio

  • ‘Fool and their money easily parted’
  • Always continue to learn

Reed’s advice for building a successful brand

  • Lean in to what makes you different
  • Credible reputation = recession-proof

How Reed is building a multifamily business ecosystem

  • Bulk order supplies for renovations
  • Bring construction management in-house

Connect with Reed

Reed’s Website

Wildhorn Capital

Investing in the US Podcast

Investing in the US: The Ultimate Guide to US Real Estate by Reed Goossens

Resources

Reed on Apartment Building Investing EP033

Upwork

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

UN Global Goals

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

Deal Maker Live

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

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

Direct download: ABI_167.mp3
Category:Commercial Real Estate -- posted at: 8:41pm EDT

The 1031 Exchange is the best-known way to defer capital gains on the sale of a property. The problem for syndicators is getting ALL of your limited partners on board—which is next to impossible. So, what do you do if several LPs want to cash out but the rest are looking for an option to defer? The Deferred Sales Trust may just be the perfect solution.

Brett Swarts is the CEO of Capital Gains Tax Solutions, a firm dedicated to helping clients leverage the Deferred Sales Trust as a tool to overcome capital gains tax deferral limitations. He is also an experienced commercial real estate broker and investor, boasting $85M in closed transactions and a portfolio of multifamily, senior housing, retail, medical office and mixed-use properties. With more than 12 years of experience in the brokerage industry, Brett is committed to helping people create and preserve wealth and educating HNWI around capital gains tax deferral via the Deferred Sales Trust.

Today, Brett joins me to discuss the options we have for deferring taxes on the sale of a property, the 1031 Exchange and the Deferred Sales Trust. He shares the problems associated with the 1031, including the 180-day deadline, the pressure to buy a new property, and the challenge of getting all the investors in a syndication to agree. Brett goes on to explain the fundamentals of the Deferred Sales Trust as an alternative, describing how the process works and its benefits in terms of timelines and customizability. Listen in to understand the costs associated with the DST versus the 1031 Exchange and learn how to choose between the two—and avoid paying capital gains taxes!

Key Takeaways

Brett’s path to founding Capital Gains Tax Solutions

  • Commercial broker for Marcus & Millichap
  • Understanding of 1031 Exchange (tax efficient, preserve wealth)

The mechanics of the 1031 Exchange

  • Send money from sale to QI company
  • New property must close within 180 days

The penalty for not meeting 1031 deadlines

  • QI company sends funds on Day 181
  • Hit with tax on money received

The downside of the 1031 Exchange

  • Pressure to buy, tendency to overpay
  • Lower cap + higher interest rates
  • Rapid rental appreciation
  • Traveling depreciation schedule

The fundamentals of the Deferred Sales Trust

  • Trust itself buys property and immediately sells
  • Investors pay NO tax on funds in deferred state

How you use the funds in a Deferred Sales Trust

  • Work with third-party trustee + financial advisor
  • Put money into portfolio of liquid investments
  • Up to 80% can be directed to syndication deals

The advantages of utilizing a Deferred Sales Trust

  • Diversity across several deals, product types
  • 10-year DST can be renewed (no fixed time frame)
  • Starts new depreciation schedule
  • 23-year track record, survived 14 IRS audits

What to do if your investors are divided re: a 1031 Exchange

  • Defer part of entity with DST (cash out other LPs)
  • Money in trust can be directed to next syndication

When to choose a 1031 Exchange vs. the DST

  • 1031 maintains stepped-up basis (heirs sell tax free)
  • DST better for ultra-HNWI to avoid 40% death tax

The costs associated with the 1031 and the DST

  • 1031 = one-time fee of $750 to $1K
  • DST = recurring fees for trustee + financial advisor

Connect with Brett

Capital Gains Tax Solutions

CGTS on YouTube

CGTS on Facebook

Brett on LinkedIn

Brett on BiggerPockets

Resources

Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek

IRS Tax Code on Installment Sales

Damion Lupo on ABI EP158

Michael’s Mentoring Program

Deal Maker Live

Hal Elrod

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

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_166.mp3
Category:Commercial Real Estate -- posted at: 2:18pm EDT

We all want to be the best version of ourselves for the people we love and lead. But most of us don’t think we can BE happy or fulfilled until we HAVE the things we want. What if we’ve got it backwards? What if we start with daily dedication to BEING a Level 10 person? What if self-development is the prerequisite for DOING what it takes to achieve our big dreams and HAVING the success we’ve always wanted?

Hal Elrod is the world-renowned author of The Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8AM), one of the highest-rated bestsellers in the world. The book has been translated into 27 languages, and Hal’s method is practiced daily by 500,000-plus people in more than 70 countries. He is also one of the top keynote speakers in the US and the creator of one of the most engaged online communities on the web. In April, Hal released his new book, The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable.

Today, Hal joins me to share his 2 near-death experiences and explain how he learned to accept the circumstances—and then commit to doing whatever it took to get the results he wanted. He walks us through the 6 elements of the Miracle Morning, discussing how the daily practice lays the foundation for becoming a Level 10 person. Hal also offers insight around the true purpose of setting goals and reveals how unwavering faith and extraordinary effort are key in reaching our big dreams. Listen in to understand Hal’s 4-step process for creating affirmations and learn how to apply the BE-DO-HAVE model to achieving financial freedom!

Key Takeaways

Hal’s first near-death experience

  • Hit head-on by drunk driver, broke 11 bones
  • Dead for 6 minutes and in coma for 6 days

Hal’s response to the prediction he would never walk again

  • Accept circumstances (emotional pain caused by resistance)
  • Chose to be happiest, most grateful person in wheelchair
  • Visualized walking every day + took first step 3 weeks later

The 5-Minute Rule

  • Set timer for 5 minutes to rant and rave
  • Say, ‘Can’t change it’
  • Focus all energy on what CAN change moving forward

Hal’s mission to elevate the consciousness of humanity

  • Dedicate time each day to becoming better version of selves
  • Must become Level 10 person to achieve Level 10 success

The 6 elements of the Miracle Morning

  1. Silence (meditation, prayer)
  2. Affirmations
  3. Visualization
  4. Exercise
  5. Reading
  6. Scribing

Why Hal wrote The Miracle Equation

  • Daily practice of Miracle Morning lays foundation
  • Miracle Equation = process for goal achievement

Hal’s insight around the real purpose of setting goals

  • Develop qualities + characteristics of goal-achiever
  • Value of growth on journey more important than hitting target

Hal’s mantra for developing unwavering faith

  • Commit to giving everything you’ve got to reach goal
  • Regardless of results along way, no matter what

How Hal defines extraordinary effort

  • Hard work AND consistency
  • Doesn’t matter how long it takes

The 4 steps to creating effective affirmations

  1. WHAT you’re committed to
  2. WHY it’s deeply meaningful
  3. WHAT actions necessary to reach goal
  4. WHEN committed to taking actions

Connect with Hal

Hal’s Website

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

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

Resources

Jim Rohn

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

The Miracle Morning Documentary

Hal on Rich Dad Radio

Think and Grow Rich by Napoleon Hill

Deal Maker Live

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

Apartment Investor Network Facebook Group

Direct download: ABI_165.mp3
Category:Commercial Real Estate -- posted at: 2:11pm EDT

‘Don’t be afraid. This is totally doable.’

Of all the people who are exposed to real estate on a regular basis, very few take action to become investors themselves. If awareness is not the problem, then what is? Why do so few real estate agents, for example, seek out opportunities to work with investors or partner to buy properties of their own? Why do so many of us attend REIA meetings month after month—without taking the next step?

Known as The Godfather of Real Estate, Bob Helms has been investing since 1957. He became a practicing broker in 1980 and spent 18 years working as a father-son team with his son, Robert, of Real Estate Guys fame. In his long and storied career, Bob has owned, managed, bought and sold hundreds of properties. He has been a top-producing agent, respected managing broker, and mentor to hundreds of leading agents and investors. Bob is a regular contributor to Real Estate Guys Radio and a featured speaker at the annual Summit at Sea. He is also the author of Be in the Top 1%: A Real Estate Agent’s Guide to Getting Rich in the Investment Property Niche.

Today, Bob joins me to discuss why agents don’t invest in real estate themselves, explaining how the lack of role models for realtors inspired him to write Be in the Top 1%. He describes how he became an accidental real estate investor and shares the story of Bob’s Big Boo-Boo, a 50-unit deal that he failed to optimize. Listen in for Bob’s insight around becoming an investment property specialist and learn how you can easily become an investor yourself—with the right education and a little self-belief!

Key Takeaways

How Bob became The Godfather of Real Estate

  • Nicknamed by The Real Estate Guys
  • Practicing broker for 40 years

Why agents don’t invest in real estate themselves

  • Lack of successful role models
  • Commercial agents < 7% of total

How Bob got into real estate investing

  • Bought cabin in mountains as engineering student
  • Worked as agent specializing in serving investors

What it was like to work with Robert as a father-son team

  • Gave each other space to operate
  • Both made significant contributions

What inspired Bob to write Be in the Top 1%

  • Average agent makes $35K to $40K/year
  • ‘Separated from opportunity’

The key to becoming an investment property specialist

  • Understand language of investors, how they think
  • Offer opportunity superior to what already doing

Bob’s top takeaways from Be in the Top 1%

  • Investing easy to do with education
  • Find coach to guide through process

How agents can best serve real estate investors

  • Learn investment goals, help develop plan
  • Proactively look for properties than align

Connect with Bob

The Real Estate Godfather

Bob on The Real Estate Guys

Be in the Top 1%: A Real Estate Agent’s Guide to Getting Rich in the Investment Property Niche by Bob Helms

Resources

The Real Estate Guys

Summit at Sea

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss

Equity Happens: Building Lifelong Wealth with Real Estate by Robert Helms and Russell Gray

New Orleans Investment Conference

Hal Elrod

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

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

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_164.mp3
Category:Commercial Real Estate -- posted at: 1:12pm EDT

Most of us don’t see ourselves as salespeople. We believe you have to be an attack dog to do well in sales, and that’s just not us. But according to Blair Singer, we can make a lot of money just being ourselves. In fact, there are several different kinds of Sales Dogs, and we can all learn to sell—and do it well—by managing that little voice in our heads and playing to our strengths. And frankly, sales is a fundamental part of any business, including real estate investing.

Blair is the Rich Dad Sales Advisor and Chief Leadership Engineer at Blair Singer Companies. An expert in sales and leadership mastery, Blair has helped tens of thousands of people significantly increase their sales and income in just six weeks. He is a sought-after keynote speaker, presenting to corporate and public audiences in 35 countries on the topics of personal and professional development. Blair is also the bestselling author of Sales Dogs: You Don’t Have to Be an Attack Dog to Be Successful in Sales and Little Voice Mastery: How to Win the War Between Your Ears in 30 Seconds or Less and Have an Extraordinary Life!

Today, Blair joins me to explain why sales is necessary in any business and discuss the value of cultivating sales skills as a real estate investor. He shares the five types of Sales Dogs, describing how we can overcome the fear of rejection and make money just being ourselves. Blair also offers insight on managing the little voice in your head, learning to be authentic, and playing to your strengths—rather than trying to overcome your weaknesses. Listen in to understand how to win the ‘war between your ears’ and learn why the most important sale is YOU selling YOU to YOU!

Key Takeaways

Why Robert Kiyosaki needs a sales advisor

  • #1 skill in any business
  • Sales = income

Blair’s 5 types of Sales Dogs

  1. Pit bull—stereotypical salesperson
  2. Poodle—charming networker
  3. Chihuahua—detail-oriented
  4. Golden retriever—serve first
  5. Basset hound—instant rapport

Why real estate investors need sales skills

  • Craft pitch to specific investor
  • Sell trust in you

How to overcome the fear of rejection

  • Practice, perfect technique
  • Good coaching

Blair’s insight around personal development

  • ‘Win war between your ears’
  • Key to success in sales

Why it’s crucial to manage your little voice

  • Sabotage best efforts
  • Move aside to control life again

Why people have a hard time being authentic

  • Put on façade to make people like us
  • Addicted to approval

Blair’s advice on playing to your strengths

  • Find what good at, do more of that
  • Avoid comparison with others

Blair’s take on the path to success

  • Not as far as we think
  • ‘Distance from right to left ear’

Blair’s steps to cultivating confidence

  1. Develop awareness of little voice
  2. Study personal growth
  3. Leverage good coaching

Connect with Blair

Blair’s Website

Sales Dogs: You Don’t Have to Be an Attack Dog to Be Successful in Sales by Blair Singer

Little Voice Mastery: How to Win the War Between Your Ears in 30 Seconds or Less and Have an Extraordinary Life! by Blair Singer

Team Code of Honor: The Secrets of Champions in Business and in Life by Blair Singer

Resources

Deal Maker Live

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

Rich Dad

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_163.mp3
Category:Commercial Real Estate -- posted at: 1:06pm EDT

Close your eyes and imagine for a moment how it would feel to quit your W-2 job. Imagine having the freedom to control your own time—and financial destiny. Imagine having the passive income to cover your expenses and provide for your family long-term, without being stuck in those golden handcuffs. If you’re dreaming of handing in a letter of resignation, then multifamily real estate investing may offer the ideal solution.

Danny Randazzo is an author, entrepreneur and full-time real estate investor. He has a background as a financial consultant, advising multibillion-dollar companies in improving revenue performance, but Danny’s ambition to achieve financial freedom led him to move from the Bay Area to Charleston, South Carolina, and build an impressive real estate portfolio with his wife, Caitlin. Now, Danny and his team control $130M in multifamily properties across the country, and he is focused on helping others invest passively in apartment buildings.

Today, Danny joins me to discuss his transition from W-2 employee to full-time real estate investor. He reflects on his decision to move to a market ripe for growth and the impetus behind his pivot to focus fully on multifamily. Danny also offers advice around raising money for syndications, ensuring alignment of interests with potential partners, and leveraging joint ventures to scale your business. Listen in for insight on making the decision to quit your job and pursue real estate full-time and learn why multifamily is the most direct route to financial freedom!

Key Takeaways

How Danny feels about quitting his job

  • Corporate job no longer providing what family needs
  • Joy in controlling own time and financial destiny

Danny’s transition from employee to full-time investor

  • Good personal financial position
  • 100% focus to take real estate business next level

How Danny got into real estate

  • House hack with extra money from working in UAE
  • Decision to move to Charleston, SC (ripe for growth)

Danny’s pivot to focus on apartment buildings

  • Benefits in terms of scalability, occupancy protection
  • Grew portfolio to control $130M in multifamily

Danny’s guidance around raising money for deals

  • Use own equity nest egg for proof of concept
  • Educate + share opportunities to invest in real estate

The benefits of passive investing in multifamily

  1. Cashflow
  2. Future equity appreciation
  3. Tax advantages

The role of joint ventures in scaling your business

  • Allows for creativity in how do deals
  • Work together to achieve greater results

Danny’s top real estate lessons learned

  • Alignment of interests with partner’s wants + needs
  • Find solutions with help from network

Danny’s advice for aspiring investors on quitting your job

  • Get clear on financial needs + goals
  • Do math on # of properties to cover expenses

What Danny is excited about moving forward

  • Several multifamily deals in pipeline
  • Vacation to South Africa with wife

Connect with Danny

Passive Investing

Randazzo Capital

Danny’s Blog

The Boy Who Lost His Wallet (Wealth Lessons for Kids) by Danny Randazzo

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

Commercial Investing Books by Dolf de Roos

Tom Wheelwright on ABI EP127

Grant Cardone

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

Deal Maker Live

Michael’s Products

Michael’s Mentoring Program

Invest with Michael

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_162.mp3
Category:Commercial Real Estate -- posted at: 12:39pm EDT

There are a number of different ways to get your multifamily investing career off the ground. You might choose to buy a small property with your own money or learn the business as a passive investor in a syndication. You could take on the role of syndicator and partner with an experienced team or get in the game as a capital raiser. So, what are the benefits to each of these strategies? Which approach provides the quickest route to financial freedom? And how can you leverage the power of joint ventures to invest in bigger deals early on?

Jens Nielsen is the principal at Open Doors Capital, a private equity firm out of Durango, Colorado, that helps people passively invest in real estate. In just three years, he has raised nearly $1M for multifamily deals and invested in 800-plus apartment units. Jens has a talent for assessing risk and assembling the right team to renovate and operate multifamily properties, and he has utilized a variety of strategies to build an impressive portfolio—while working a full-time job in IT.

Today, Jens joins me to explain how his lack of faith in the stock market led him to develop an entrepreneurial mindset and become a multifamily investor. He walks us through his journey and each of the strategies he utilized, from buying a fourplex on his own to a seller financing deal to raising capital for syndications. Listen in for Jens’ insight around the benefits of getting started through passive investing and learn his unique approach to raising money by way of a joint venture!

Key Takeaways

Jens’ path to multifamily investing

  • Successful career in IT but afraid to count on 401(k)
  • Build passive income streams to secure financial future

How to develop an entrepreneurial mindset

  • Realize idea of job security = myth
  • Get educated and grow risk muscle

Jens’ first real estate deal

  • Bought fourplex in Albuquerque, NM with own money
  • Rehab units + new roof for cashflow of $800/month

How everyone wins in a seller financing deal

  • Lower taxes and interest rate benefits seller
  • Small down payment + monthly payments

Jens’ 38-unit joint venture deal

  • Negotiated price down from $1.6M to $1.2M
  • Sellers came in undercapitalized, losing money
  • Jens halfway through $10K/door renovation

The roles and responsibilities of Jens’ team

  • Jens does underwriting, due diligence and budget
  • Partner focuses on renovations and management

How to shift into the role of raising money for deals

  • Position self as investor and nurture relationships
  • Present deals in logical way and discuss benefits

The advantages of investing in a multifamily syndication

  • Much easier to scale + more reliable return
  • Opportunity to expand influence, network

Jens’ advice for aspiring real estate investors

  • Consider passive investments in bigger deals
  • Be careful about self-managing properties

How to prepare for the role of raising capital for multifamily

  • Surround self with peer group just ahead of you
  • Use team approach to raise money for syndicator

Connect with Jens

Open Doors Capital

Email jens@opendoorscapital.com

Resources

Deal Maker Live

Michael’s Mentoring Program

Invest with Michael

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

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_161.mp3
Category:Commercial Real Estate -- posted at: 8:53pm EDT

Three years ago, I met the legend Robert Kiyosaki on The Real Estate Guys Summit at Sea. Of course, I knew him from his bestselling books about investing and personal finance, so I was taken aback by the spiritual language he used in his presentation. When I asked him about it, Robert said, “Of course. I’m a Marine.” Why does Robert credit the military for his spiritual discipline? And how has spirituality become a priority in his life and work?

Robert Kiyosaki is an entrepreneur, investor, educator and bestselling author of the #1 finance book of all time, Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not. His perspectives around money and investing run contrary to conventional wisdom, earning Robert a reputation for straight talk as a passionate advocate for financial education. A prolific writer, Robert’s latest release is called FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle Class Poorer.

Today, Robert joins me to explain how he learned spiritual discipline in the Marine Corps and contrast that with the business world where the only mission seems to be money. He discusses the importance of spirituality in his life and work, describing his calling to teach financial literacy where the corrupt education system has failed. Listen in for insight around the themes in Robert’s new book and learn to identify fake assets, fake educators and fake currency!

Key Takeaways

How Robert learned spiritual discipline in the US Marine Corps

  • Focus on mission to bring fellow man home
  • Business world only mission to make money
  • Boundary of life + death gets in touch with God

Why spirituality is important to Robert

  • Calling to do what God wants done
  • Take on corrupt systems (e.g.: education)

The themes included in Robert’s new book Fake

  1. Fake assets (i.e.: 401(k), mutual funds)
  2. Fake teachers, lack of financial literacy
  3. Fake money (fiat currency vs. gold)

Connect with Robert

Rich Dad

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

Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom by Robert T. Kiyosaki

FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle Class Poorer by Robert T. Kiyosaki

Resources

Deal Maker Live

The Real Estate Guys

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

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_160.mp3
Category:Commercial Real Estate -- posted at: 2:40pm EDT

The real world is not HGTV. If you are a high-earner looking to get into the real estate game, it is important to understand just how much work is involved in being an active investor. There is a lot of competition in the space, and good deals are hard to find. Add to that the complexities of managing a rental portfolio, for example, and the headache may seem like more than it’s worth. But why work harder than necessary to make less than you could? You can take advantage of all the benefits of commercial real estate investing as a passive investor, letting an expert handle the minutiae while you reap the rewards.

Paul Moore is the Founder and Managing Director at Wellings Capital, a commercial real estate investment firm that focuses on self-storage, mobile home parks, and multifamily property. Paul has 18 years of experience in real estate: He has flipped 50-plus homes and 25 high-end waterfront lots, appeared on HGTB’s House Hunters, rehabbed and managed rental properties, built new homes, and developed a subdivision. Paul is also the author of The Perfect Investment: Create Enduring Wealth from the Historic Shift to Multifamily Housing and cohost of the wealth-building podcast How to Lose Money.

Today, Paul joins me to discuss the advantages of commercial real estate over stocks, bonds and mutual funds. He shares the challenges of being an active investor, explaining why high-earning professionals might be happier as passive investors in commercial assets like apartment buildings, self-storage facilities, or mobile home parks. Paul also offers insight around the commercial value formula, describing how operators can force appreciation with simple strategies to increase a property’s income or compress its cap rate. Listen in to understand the extraordinary tax advantages of multifamily real estate and learn what makes commercial investing an attractive option for high-net-worth individuals looking for a consistent return and minimal risk profile.

Key Takeaways

The pros and cons of stocks, bonds + mutual funds

  • Long track record of growth, great liquidity
  • Highly unpredictable

The pros and cons of commercial real estate

  • Not at all liquid
  • Stability, predictability for long term

The challenges of being an active investor

  • Hard to find good deals + be profitable
  • Time consuming to run large SFH portfolio

The commercial value formula

  • Value = net operating income/cap rate
  • Increase income or compress cap rate to force appreciation

Simple things operators can do to increase income

  • Rental space for trailers, RVs + boats in mobile home park
  • Professional property management in apartment building

Simple things operators can do to compress the cap rate

  • Franchise group of self-storage facilities, find right buyer
  • Multifamily value-add from C+ to B and refinance

The tax advantages of commercial real estate investing

  • Accelerate depreciation via cost segregation study
  • Bonus depreciation (up to $1M) + QREP write-offs

Wellings Capital’s strategy moving forward

  • Expand to self-storage, mobile home parks via partnerships
  • Wellings brings equity and partner-operator finds deal

Connect with Paul

Wellings Capital

How to Lose Money Podcast

Paul on BiggerPockets

The Perfect Investment: Create Enduring Wealth from the Historic Shift to Multifamily Housing by Paul Moore

Resources

Deal Maker Live

The Real Estate Guys

Paul Moore on ABI EP058

10 AMAZING Tax Benefits for Real Estate Investors

Michael on HTLM EP019

Michael on HTLM EP132

Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes by Tom Wheelwright

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

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_159_v2.mp3
Category:Commercial Real Estate -- posted at: 2:28pm EDT

Are you using your IRA to invest in a multifamily syndication? Then brace yourself for an unexpected tax bill when the asset sells. If, on the other hand, you’d prefer not to owe the IRS for Unrelated Business Income Tax (or UBIT), it’s time to consider a Qualified Retirement Plan (or QRP) that gives you more control over your money and makes it much easier to invest in real estate!

Damion Lupo is a real estate investor, serial entrepreneur, and high-profile financial consultant. He founded Total Control Financial in 2010 to help people achieve financial freedom. He is committed disrupting Wall Street and empowering Main Street with the tools and teachings of financial transformation. In the last 25 years, Damion has launched and owned 40-plus companies, including a venture capital firm, an insurance agency, and more than a dozen real estate investment and development operations. He is also the author of QRP Book: How to Get Checkbook Control of Your 401(k) & IRA Money Now.

Today, Damion joins me to explain why the current retirement system is broken and discuss the problem with using your IRA to invest in multifamily real estate. He walks us through the fundamentals of UBIT, describing how you can be blindsided by a BIG tax bill when an asset sells.  Damion also offers insight around the alternative to the IRA that is exempt from UBIT, the QRP. Listen in to understand the multiple benefits of the QRP as a retirement vehicle—and learn how to regain control of your retirement savings AND maximize your profits as a multifamily investor.

Key Takeaways

Why the retirement system is broken

  • Hand $ to someone else + hope for best
  • Better to create own wealth

The shortcomings of the 401(k)

  • No control over money, high fees
  • Limits around what invest in

The problems with the IRA

  • Hit with taxes if invest in syndications
  • Pay unlimited fees to custodians

The fundamentals of UBIT

  • 35% tax on profit from debt
  • Hit with UBIT when asset sells

How to avoid UBIT

  • Move asset into QRP (in-kind rollover)

The benefits of the QRP

  • Ability to control own money
  • Higher contribution limits (up to $50K)
  • Borrow up to $50K to invest in self
  • No custodian = much lower fees
  • No third party for paperwork

Short- vs. long-term real estate investments

  • Short-term investments need tax shelter like QRP
  • Don’t put long-term investments in retirement account

When it’s worth it to get a QRP

  • Cost between $1500—$6K (depends on # of employees, companies)
  • Makes sense even for $50K investment

Connect with Damion

Damion’s Website

QRP Book: How to Get Checkbook Control of Your 401(k) & IRA Money Now by Damion S. Lupo

Resources

The Real Estate Guys

Deal Maker Live

Hal Elrod

Damion Lupo on ABI EP079

Tom Wheelwright

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

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_158.mp3
Category:Commercial Real Estate -- posted at: 1:50pm EDT

The vast majority of real estate investors were blindsided by the crash in 2008. And with many economists warning that we’re headed toward another downturn, it is prudent to take off our rose-colored glasses and move forward with an eye to the broader economic picture. It is crucial for multifamily investors to study the markets, identify trends and consider the economy’s impact on our investments—and the people who rent from us.

Robert Helms is the founder and host of Real Estate Guys Radio, a media platform dedicated to helping investors stay focused, motivated and informed. He has a wealth of experience teaching Landlord Boot Camp for newbie residential investors as well as college-level real estate courses. Robert also spent 18 years working in a real estate brokerage where he became a top producer and refined his skills in marketing, negotiating and relationship management. Now, Robert is a professional real estate investor and developer with a portfolio that spans eight states and five countries.

Today, Robert joins me to share a high-level overview of The Real Estate Guys’ recent Summit at Sea. He explains why it’s critical for investors to keep an eye on the economy and offers insight into what market trends we should be looking out for.  Robert also discusses what he learned from the crash in 2008 and outlines his current concerns around sources of capital for multifamily investors. Listen in for a summary of the key takeaways from the Summit at Sea and find out how you can learn more from the expert faculty through The Future of Wealth and Money video series.

Key Takeaways

 

An overview of The Real Estate Guys’ Summit at Sea

  • Focus beyond real estate to broader scope economics
  • Bring together smart people to interact without agenda

Why it’s crucial for investors to keep an eye on the economy

  • Study markets to identify opportunity, trends
  • Examine how tenants might be affected

Robert’s insight on the current economic climate

  • Anticipate general slow down
  • Pay attention to interest rates, demographic shifts

What Robert learned from the crash in 2008

  • Surround self with people who understand economy
  • Investments float in sea of larger economic picture

The aspects of the economy investors should watch

  • Jobs, durability of income + housing demand
  • Major shifts in markets, technology, etc.

Robert’s insight around interest rates

  • Not expecting huge increase in interest rates
  • Concerned about sources of capital (government agencies)

The Real Estate Guys’ mission

  • Put education to work via effective action
  • Create community + collapse time frames

What you can learn from The Future of Money and Wealth

  • Sense of what future looks like around money
  • Continue to acquire wealth in uncertain age

Robert’s top advice for real estate investors

  • Recognize larger economic realities
  • Be aware of other investing opportunities

Connect with Robert

The Real Estate Guys

The Real Estate Guys’ Events

Future of Money and Wealth Video

Resources

The Real Estate Guys’ Summit at Sea

2019 Summit at Sea Faculty

Peter Schiff

Dr. Doug Duncan’s Market Predictions

Crash Proof: How to Profit from the Coming Economic Collapse by Peter Schiff and John Downes

The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin

The Real Estate Guys’ Goal-Setting Retreat

Hal Elrod

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

Joe Quirk at The Seasteading Institute

Tom Hopkins

The Real Crash: America’s Coming Bankruptcy—How to Save Yourself and Your Country by Peter Schiff

Peak Prosperity

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

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_156.mp3
Category:Commercial Real Estate -- posted at: 12:41pm EDT

Real estate investors have a tendency to look down on paper assets, arguing that the stock market is an ill-advised place to keep your money. We talk about the volatility of stocks and avoid paper assets like the plague, assuming that there is no way to mitigate the associated risk. But what if investing in the stock market is not so different after all? What if we could apply real estate investing strategies to stocks and generate additional cashflow? What if we could leverage paper assets to complement a multifamily portfolio and even hedge against a decline in the real estate market?

Andy Tanner is the founder of The Cash Flow Academy, a platform designed to empower and inspire investors and entrepreneurs to generate their own income. An expert in the realm of paper assets, Andy has served as a Rich Dad Advisor for the last 11 years, and he is passionate about teaching in a way that is fun, simple and real. He is also the author of two must-have books, Stock Market Cash Flow and 401(k)aos.

Today, Andy joins me to share the parallels between real estate investing and the stock market, explaining how to achieve cashflow in stocks via puts and calls. He discusses the best way to manage risk as an investor on the exchange and describes how the rich are able to ‘predict the future’ and make decisions that make money. Andy also offers his predictions for the short- and long-term future of the stock market and walks us through the benefits of investing in buy-and-hold real estate. Listen in for Andy’s insight on leveraging paper assets to hedge against a decline in the real estate market and learn to apply multifamily investing strategies to stocks and generate even more passive income!

Key Takeaways

Why real estate investors should appreciate paper assets

  • ‘It’s not the asset class, it’s whether you’re educated’
  • Take real estate approach and apply to stock market

The parallels between the stock market and real estate

  • Fundamental analysis (cap rate = P/E ratio)
  • Look for undervalued property or stock

How to achieve cashflow through the stock market

  • Get paid to promise to buy if price declines (puts/calls)

The best way to manage risk in the stock market

  • Purchase contracts (insurance) that lock in ability to sell high

How to hedge against a decline in the real estate market

  • Buy puts on IYR (real estate fund) for pennies on dollar

How the rich go about predicting the future

  • Policy + demographics (i.e.: Medicare + baby boomers)
  • Pay attention to balance sheet and identify trends

Andy’s predictions around the future of the stock market

  • Okay for little while longer but Fed ‘out of bullets’
  • Pay more for stock than ever before from earnings standpoint

Why Andy recommends investing in real estate

  • 100% chance value of US dollar will continue to decline
  • Borrow, trade, trade back + return to short USD
  • Make money with natural inflation as rents go up

The multiple profit centers available in real estate

  • Cashflow and tax advantages
  • Appreciation of property + rent (via inflation)
  • Principle paid down, refi for stronger short position

Connect with Andy

The Cashflow Academy

Resources

Stock Market Cash Flow: Four Pillars of Investing for Thriving in Today’s Markets by Andy Tanner

401(k)aos by Andy Tanner

401(k)aos Free Download

Warren Buffet on Kraft Heinz

US Real Estate ETF (IYR)

S&P/Case-Shiller Price Index

Cash Covered Puts on YouTube

Michael’s Mentoring Program

Deal Maker Live

Invest with Michael

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

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_155.mp3
Category:Commercial Real Estate -- posted at: 6:03pm EDT

Raising capital is crucial in making a real estate syndication happen. But how do you connect with high-net-worth individuals who are interested in multifamily? And then, how do you build trust with those prospective investors? One strategy is to create quality content and design a platform around those resources, attracting passive investors by giving them access to the information they need.

Annie Dickerson is the Cofounder and Managing Partner at Goodegg Investments, a firm dedicated to helping clients achieve financial freedom through passive investing in multifamily real estate. Goodegg has built a reputation for helping its investors gain access to great deals, connecting them with cashflowing real estate syndications. Annie’s strength lies in content creation, and the Goodegg platform features educational resources and a course for new investors, Passive Real Estate Investor Academy.

Today, Annie joins me to describe the freedom of being a full-time multifamily investor, explaining how she overcame her fears and gained the confidence to quit her 9-to-5. She discusses how she came to realize her strengths in raising capital and educating passive investors and offers insight into how she met her cofounder and established a partnership with Goodegg. Listen in to understand why Annie chose to focus on content creation and learn how developing educational resources has helped her connect with potential investors and accelerate her business!

Key Takeaways

Annie’s transition from full-time employee to full-time investor

  • Miserable at job but terrified to quit
  • Created chart (dangers, opportunities, strengths)

How Annie overcame her fear to become an entrepreneur

  • Act of writing down and organizing thoughts
  • Address + game plan for each ‘danger’

How Annie’s life is different now that she’s investing full-time

  • Freedom to pursue own mission + vision
  • Wake up every day and add value

What gave Annie the confidence to quit her job

  • Experience with house hacking and rentals on side
  • Completed Ultimate Guide program + potential deal

How Annie found her strength in raising capital

  • Agreed to raise $200K for partner met through networking
  • Fell in love with educating passive investors about deals

How Annie came to start Goodegg Investments with a partner

  • Connected with fellow working mom at conferences
  • Julie likes phone calls + meetings, Annie at content creation

Why Annie focused on building an educational platform

  • Strategy to reach target audience
  • Build trust with potential investors

How Annie’s content has served to accelerate her business

  • Afford investors independence to research on own
  • Address questions shared by many new investors

What’s next for Annie and Goodegg Investments

Annie’s advice for aspiring multifamily investors

  • Get crystal clear on target audience, create avatar
  • Attract more people to platform with unique POV

Connect with Annie

Goodegg Investments

Email annie@goodegginvestments.com

Resources

BiggerPockets

Annie’s Passive Investing Course

Paul Nagaoka on ABI EP153

Michael’s Course

Deal Maker Live

Invest with Michael

Michael’s Mentoring Program

Partner with Michael

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 on Facebook

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_154.mp3
Category:Commercial Real Estate -- posted at: 11:11am EDT

In a climate where good deals are hard to find, off-market opportunities are key for multifamily investors. But how do you find property owners who might be willing to sell? And once you’ve tracked them down, how do you leverage marketing strategies to get their attention—and inspire them to pick up the phone and call YOU?

Cory Boatright and Sean Terry are experienced single-family wholesalers in the Oklahoma City and Phoenix markets, respectively. Together, the pair stumbled into a multifamily flip that proved challenging. And though they would never do it again, Cory and Sean earned a multiple six-figure profit on the deal. Now, they are pursuing multifamily buy-and-hold as a strategy through Investing Capital Group, a firm focused on finding off-market properties for its capital partners.

Today, Cory and Sean join me to explain how they got involved in a multifamily wholesale deal, discussing what they did right as well as the extreme adversity they faced in route to closing. They share their process for finding off-market deals, offering insight around the resources available for pulling lists of potential sellers and collecting their contact information. Listen in for advice on handling an influx of incoming calls and learn how Cory and Sean leverage unique marketing strategies to earn a 100% direct mail open rate!

Key Takeaways

Cory & Sean’s real estate resumes

  • Cory = wholesaler in OKC since 2013
  • Sean = 15 years as wholesaler in Phoenix

How Cory & Sean stumbled into a multifamily deal

  • Lead on property in AZ, tracked down owner
  • Property under contract direct to seller

What Cory & Sean did right in their multifamily flip

  • Built in extra time (60-day due diligence)
  • Built in extension for $50K

Cory & Sean’s approach to finding a buyer

  • Use ListSource to find potential buyers
  • Send marketing packet via FedEx (delivery notification)

The challenges Cory & Sean faced in route to closing

  • Buyer stalled to postpone nonrefundable date
  • Ramifications of failing to disclose reduction in price

Why the multifamily flip was successful despite the challenges

  • Multiple six-figure profit
  • Learned do’s and don’ts

Cory & Sean’s process for finding off-market deals

  • Pull data from ListSource to find sellers
  • Use Skip Trace Lists for contact info (20¢/record)
  • Cold call, direct mail and target on Facebook

How to handle the influx of incoming calls

  • Hire answering service like PATLive
  • Hire in-house or local staff (build relationships)

Why you can spend more on direct mail for multifamily

  • Fewer leads in particular area
  • Critical to get attention of decision-maker
  • FedEx with signature request = 100% open rate

Connect with Cory & Sean

Investing Capital Group

Real Estate Investing Profits Podcast

Resources

ListSource

Skip Trace Lists

PATLive

CoStar

Dan Kennedy

John Carlton

Michael’s Mentoring Program

Partner with Michael

Invest with Michael

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 on Facebook

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_151.mp3
Category:Commercial Real Estate -- posted at: 9:27pm EDT

Imagine having the financial security to do what you love, to pursue work that brings you joy—even if that work happens to be in an unpredictable industry. Mark Hentemann began his career in entertainment as a starving artist in New York City, often wondering how he would cover rent. Now, he leverages the cashflow from real estate investments to spend his days coming up with jokes in the writer’s room, without the stress of financial instability should his show get cancelled.

Mark Hentemann is a writer, voice actor and producer, working on shows like Family Guy, Bordertown and The Late Show with David Letterman. He is a two-time Primetime Emmy award-nominee for Outstanding Animated Program and Outstanding Comedy Series. In addition, Mark is an avid real estate investor, cofounding the multifamily investment company Quantum Capital, a firm focused on value-add assets in centrally located, growing neighborhoods of major metropolitan areas. To date, he has a portfolio of 185 units and earns $1M in passive income.

Today, Mark joins me to explain how a desire for financial security led him to invest in a duplex soon after his move to LA. He describes the moment when he finally understood the power of real estate and speaks to the advantages of house hacking as strategy to get started. Mark also shares his belief in economies of scale, discussing how he finds deals that make sense in Los Angeles. Listen in to understand why Mark is getting into syndication and learn how you can follow in his footsteps, leveraging multifamily real estate investment to pursue the work you love!

Key Takeaways

How Mark got involved in real estate

  • Starving artist in NYC, needed financial security
  • Move to LA, invest Family Guy income in duplex

Mark’s first real estate deal

  • Duplex ‘rough around edges’ in improving area
  • Listed at $380, won bidding war for $435K
  • Sold in 2005 after remodel for $1.27M

When Mark realized the power of real estate

  • Refi on duplex reduced interest from 7½% to 4¾%
  • Rent covered mortgage, insurance, taxes + utilities

The advantages of house hacking

  • Provides hedge against economic volatility
  • Add value to force appreciation

Mark’s belief in economies of scale

  • Realized benefit of larger multifamily properties
  • Found and purchased 6- and 14-unit buildings

How real estate impacts Mark’s quality of life

  • Takes financial strain out of equation
  • Write for fun (without stress of economic instability)

Mark’s perfect day

  • Write jokes and laugh during day
  • Network and look for properties

How Mark finds deals in the LA market

  • Chronic undersupply of B-class multifamily
  • Look for 40-year-old buildings in up-and-coming areas
  • Focus on low cost per ft2 (price comparable to land)

Mark’s experience with syndication

  • Motivated seller with 3 buildings ($10M deal)
  • Committed, then scrambled to find investors

Mark’s advice to aspiring multifamily investors

  • Take advantage of house hacking
  • Find 2- to 4-unit value-add in area on rise

Connect with Mark

Email markhentemann@me.com

Quantum Capital

Resources

Keith Weinhold on ABI EP034

Tyler Sheff on ABI EP072

Michael’s Mentoring Program

Invest with Michael

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_150.mp3
Category:Commercial Real Estate -- posted at: 8:38pm EDT

“I want to see the world. I want to experience life because I almost lost mine.”

What if something happened and you could no longer work? How would you and your family survive? AJ Osborne found himself in that precarious position 18 months ago, but because he had sustainable passive income from real estate investing, he was able to focus on healing and continue to support his family as he recovered. Real estate saved his financial life.

AJ had been leading a busy life, running his state’s largest brokerage firm as well as a real estate company when he fell ill with a disease called Guillain-Barré. It left AJ completely paralyzed and comatose, and he spent several months on life support. Since then, he has had to relearn how to walk, use his arms and communicate. Fortunately, his 1M ft2 self-storage portfolio allowed AJ to focus on healing while his passive income continued to grow. The experience inspired him to create Cash Flow 2 Freedom, a platform where AJ teaches others how to generate cashflow and achieve financial freedom.

Today, AJ joins me to share the story of his battle with Guillon-Barré, explaining how the experience changed his priorities and how the passive income from his real estate portfolio sustained his family through the ordeal. He discusses what motivated him to pursue real estate investing in the first place and shares his approach to buying and managing self-storage facilities. Listen in for AJ’s insight on the difference between being rich and wealthy—and learn how to leverage real estate investing to achieve the kind of financial freedom that can save your life!

Key Takeaways

AJ’s devastating health crisis

  • Paralyzed and comatose, months on life support
  • Guillain-Barré syndrome rendered helpless

How the experience changed AJ

  • Changes outlook on what’s important
  • Reprioritize life (family moves to top)

What became most important to AJ

  • Time with children
  • Basic functions (e.g.: walk on own)

How AJ’s real estate portfolio facilitated his recovery

  • Bought family time and freedom
  • Paid bills while he focused on getting better

What might have happened without real estate

  • Disability income was 25% of previous salary
  • Would have had to downsize, wife take job

How AJ got into commercial real estate

  • Frustrated by fluctuation in consulting business
  • Needed strategy to compound returns

AJ’s distinction between rich and wealthy

  • Wealthy own assets and revenue coming in
  • Rich have high income but owned by source

AJ’s approach to investing in self-storage

  • Business rather than real estate asset
  • Turn around by dialing up value and income

How AJ turned around a state-owned facility

  • Bought at auction for $3.8M
  • Eliminated 30% of tenants by doubling price
  • Sold products, focused on customer service
  • Doubled income in 6 months, worth $9M

How AJ manages his self-storage facilities

  • Hire and train rock star management team
  • Built out policies and procedures over time

The differences among small, medium and large facilities

  • Expenses similar regardless of size
  • Sweet spot between 60K and 150K ft2

What inspired AJ to start Cash Flow 2 Freedom

  • Real estate saved family’s financial life
  • Help others gain freedom with passive income

AJ’s advice for aspiring real estate investors

  • Learn from mistakes
  • Get to state of financial freedom on own

Connect with AJ

Cash Flow 2 Freedom

Resources

Michael’s Mentoring Program

Invest with Michael

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_149.mp3
Category:Commercial Real Estate -- posted at: 12:05pm EDT

As a multifamily syndicator, one of your most important responsibilities lies in building long-term trust with investors. And when you are dealing with a handful of high-net-worth individuals, it is fairly easy to keep track of who has committed to a deal, signed the appropriate documents and wired their money. As you scale your real estate business, however, it becomes increasingly challenging to communicate consistently and manage larger and larger numbers of investors. But it can be done by automating your workflow process.

Josiah Mann is the founder and CEO of Investor Deal Room, a modern, white-label investor management platform that supports real estate syndicators in raising capital and streamlining their back office through automation. Businesses using the Investor Deal Room software have raised over $40M in private capital and represent nearly $500M in assets under management.

Today, Josiah joins me to walk us through the process of onboarding multifamily investors. He explains how to build your database by way of content marketing and create a lead magnet that addresses investor pain points. Josiah describes the step-by-step process of tracking leads through closing and shares best practices for communicating with investors via quarterly reports and individual statements. Listen in to understand the value of automating investor relations as you scale your business and learn how Investor Deal Room can help you build long-term trust with investors!

Key Takeaways

Josiah’s insight on marketing to investors

  • Contact form on website + email newsletter
  • Content marketing w/ CTA to build database

How to design free resources for investors

  • Think from their perspective
  • Poll to find out pain points

The process of tracking investors through closing

  1. Investor marketing packet (e.g.: webinar, email)
  2. Create spreadsheet to track leads, commitments
  3. Subscription documents + wiring instructions
  4. Send confirmation letter once money in escrow

The best practices for syndicators AFTER closing

  • Processes in place for consistent communication
  • Quarterly reports with property updates
  • Statements for individual investors

How Investor Deal Room automates investor relations

  • Investor management solution to update basic info
  • Raise capital through portal for each new offering
  • One-click branded welcome letters + statements

How Investor Deal Room addresses joint venture partners

  • Dashboard for money raiser to manage their investors
  • Cobranding on site (investor sees both logos)

Connect with Josiah

Investor Deal Room

Resources

MailChimp

Investment Tracker Spreadsheet

DocuSign

Michael’s Mentoring Program

Invest with Michael

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_148.mp3
Category:Commercial Real Estate -- posted at: 12:12am EDT

As a financial planner, Jason Harris helped clients prepare for retirement. At the same time, he was building a real estate portfolio to replace his W-2 income. And last Thursday, he retired from financial planning (in his early 30’s!) to pursue investing full-time. What did that journey look like? What strategies did Jason and his wife, Carrie, use to generate passive income with multifamily?

Jason and Carrie started investing in real estate in 2010. Nine years later, they have a portfolio of 75-plus units and the couple is building a consulting business known as Creative Gains. With his background in financial planning, Jason offers clients a unique perspective on diversifying their portfolio with real estate. Jason and Carrie also run a successful property management company.

Today, Jason joins me to discuss his last day of work as a financial planner and explain how his friends and family reacted to his decision to pursue real estate full-time. Jason walks us through his journey to financial independence, from the FHA loan he used to buy his first fourplex to the creative strategies he and his wife leveraged to build their portfolio. Listen in for Jason’s unique insight on making real estate investing a part of your retirement plan and get his advice around making the leap from a W-2 job to full-time investor!

Key Takeaways

Jason’s last day of work as a financial planner

  • Surreal, scary and exciting
  • Confusion around what to do with time

What’s next for Jason

  • Sharing ideas with others (consulting, book)
  • Maintain property management company

How Jason’s friends and family reacted to his transition

  • Mixed reactions (e.g.: ‘too young to leave good career’)
  • Few colleagues understand assets outside securities

Jason’s journey to financial freedom

  • Started exploring real estate in 2010
  • Bought fourplex with FHA loan
  • Cashflow for down payment on next property

Why Jason and his wife chose not to expand their lifestyle

  • Dad laid off twice in teen years
  • ‘Sacrifice today for better tomorrow’

The fundamentals of FHA loans

  • Must own/occupy property to get financing
  • 4% down to live there, 28% otherwise

The creative strategies Jason used to build his portfolio

  • Wife got license, use commission as down payment
  • Hard money loan for value-add opportunity (BRRRR)
  • Partner on larger deals
  • Seller financing
  • Portfolio loans

Jason’s advice for transitioning from W-2 to full-time investor

  • Know your numbers (passive income net of all expenses)
  • Consider ability to qualify for loans without W-2 income

How Jason might have accelerated his timeline

  • Think bigger (stayed within 20-unit range)
  • Restricted from syndication by license as financial planner

Jason’s insights for passive investors

  • Diversify with ROTH IRA, 401(k) + real estate portfolio
  • Considerable tax benefits associated with multifamily

Connect with Jason

Creative Gains

Email creativegainsllc@gmail.com

Call (801) 362-0784

Resources

Keith Weinhold on ABI EP034

Tyler Sheff on ABI EP072

Invest with Michael

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_147.mp3
Category:Commercial Real Estate -- posted at: 12:05am EDT

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

Is 2019 the year you finally get on the road to financial freedom with multifamily real estate? If that’s your goal, there are a few simple things you can do to totally crush it this year.

Today on the podcast, I’m sharing my top 3 tips for achieving success in 2019. I start with goal-setting, explaining how to get clear on what you want to achieve and narrow down your objectives to no more than 5 measurable aims with specified time frames.

I go on to discuss making time to work toward your goals, describing the strategies I use to batch like activities and schedule intentional blocks to advance my top priorities for that week. Listen in for insight on taking tiny action and learn how to track, recognize and celebrate the small WINS that put you on the road to financial freedom with multifamily real estate!

Key Takeaways

Tip #1—Get clear on your goals

  • Identify 1 to 3 things that make others easier
  • Define daily, weekly, 90-day and yearly goals
  • State in present tense with time frame

Tip #2—Make time

  • Schedule intentional blocks to work on goals
  • Batch similar activities
  • Establish morning routine
  • Focus on WHY = prioritize time

Tip #3—Take tiny action

  • Focus on next 3 things, track progress
  • Recognize and celebrate small WINS
  • Activity over outcome in beginning

The value of a strong support system

  • Accountability partners
  • Accelerate timeline

Resources

Michael’s Mentorship Program

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

Google Keep

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

Apartment Investors Network Facebook Group

Michael on Facebook

Michael on Instagram

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_142.mp3
Category:Commercial Real Estate -- posted at: 8:49pm EDT

If you follow the advice of a traditional financial planner, you are likely counting on a 401(k) and investments in the stock market to sustain you through retirement. Yet those vehicles are both subject to market volatility and assume that the tax rate will remain the same for the foreseeable future. Rebecca Walser is NOT your traditional financial advisor, and she has designed a better strategy for building long-term wealth—a strategy that includes investing in multifamily real estate.

Rebecca is a tax attorney, wealth strategist, Certified Financial Planner, and one of Investopedia’s 2018 Top 100 Most Influential Financial Advisors. She has combined her expertise in law and finance to design a unique approach to building and sustaining wealth that conventional advisors won’t consider. Rebecca has been featured in Bloomberg Business, The Boston Globe, and The Miami Herald, among many other media outlets, and she is the author of the groundbreaking book, Wealth Unbroken: Growing Wealth Uninterrupted by Market Crashes, Taxes, and Even Death.

Today, Rebecca joins me to explain why the 401(k) is a big mistake (unless your employer matches funds) and share her insight around deferring taxes until retirement. She covers the best alternatives to the 401(k), the greatest threats to building wealth, and the non-traditional asset classes that aren’t subject to market volatility. Listen in for Rebecca’s take on why traditional financial advisors don’t recommend real estate investments and learn the three key takeaways from her bestseller, Wealth Unbroken.

Key Takeaways

What sets Rebecca apart from other financial advisors

  • Ten years of experience in finance industry
  • Advanced degree in tax law

Why Rebecca considers the 401(k) a big mistake

  • Hasn’t changed since inception in 1981
  • Boomers retiring + likely tax increase

The danger in deferring taxes until retirement

  • Assumes you will earn less, tax rate stays same
  • Taxes currently at lowest rate since 1930’s

Rebecca’s top alternatives to the 401(k)

  • Roth IRA
  • Cash value life insurance

The greatest threats to building wealth

  • Market volatility (correction coming)
  • Reported returns don’t account for lows

Rebecca’s best strategies to avoid market volatility

  • Real estate
  • Short-term CDs
  • Bonds (held to maturity)

Why traditional financial advisors avoid real estate

  • Don’t have control or feel equipped
  • Don’t bother with strategies outside norm

The key takeaways from Wealth Unbroken

  1. Can’t afford lows of 100% market-based portfolio
  2. Convert 401(k) to Roth NOW while taxes ‘on sale’
  3. Leverage non-traditional asset classes (non-negotiable #)

Connect with Rebecca

Walser Wealth

Resources

Wealth Unbroken: Growing Wealth Uninterrupted by Market Crashes, Taxes, and Even Death by Rebecca Walser

Patrick Donohoe on ABI EP128

Heads I Win, Tails You Lose: A Financial Strategy to Reignite the American Dream by Patrick H. Donohoe

Invest with Michael

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

Michael’s Live Training Webinars

Michael’s Coaching Program

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_140.mp3
Category:Commercial Real Estate -- posted at: 6:40pm EDT

While syndication is the most popular way to raise money to fund a multifamily deal, it is not the only option. A resourceful real estate investor can leverage a number of other creative possibilities. Jake Stenziano and Gino Barbaro have built an impressive portfolio without syndicating a single deal, but now they are adding the strategy to their repertoire. What drove them to add ‘investor relations’ to their skill set? In what situation might a different approach, like owner financing, be appropriate? What are the pros and cons of syndication?

Jake and Gino are the co-founders of Jake & Gino, LLC, an educational platform that leverages their expertise in multifamily real estate to help others attain financial freedom by way of apartment building investing. A few short years ago, Jake and Gino were a pizza guy and a drug rep; today, they own 900-plus multifamily units. They share their creative approach on the Wheelbarrow Profits Podcast, and they are the co-authors of the Amazon bestseller, Wheelbarrow Profits: How to Create Passive Income, Build Wealth, and Take Control of Your Destiny Through Multifamily Real Estate Investing.

Today, Jake and Gino join me to explain how they were able to build a portfolio without syndication, discussing the benefits of using community bankers and partnering with high-net-worth individuals. They share the case study of a 281-unit owner-financing deal and describe how good broker relationships can reveal creative financing opportunities. Jake and Gino also address the differences between community bank and agency debt and the value in understanding the story behind every deal. Listen in for insight around why Jake and Gino are adding syndication to their list of options and learn the advantages—and the drawbacks—of syndicating a multifamily deal!

Key Takeaways

The advantage of using community bankers

  • Build in rehab budget
  • Much less cash down (15-20%)

How to address the down payment

  • Partner with high-net-worth individual
  • Do day-to-day operations for equity

Jake & Gino’s owner-financed 281-unit deal

  • No money in, walk away with $150K
  • Facilitated by track record

The right conditions for owner financing

  • Understand seller’s motivation
  • Every deal has own story

Why Jake & Gino are syndicating now

  • Vision to scale requires capital injection
  • Comfortable speaking to investors

The disadvantages of syndication

  • Less equity (10% vs. 30%)
  • More work on front-end
  • Meet projections vs. ‘do right thing’
  • Investors expect liquidity event in year five

The difference between community bank and agency debt

  • ‘Ease of doing business’ with community bank
  • Community bank requires personal guarantee
  • Agency debt = nonrecourse, low interest rates

What surprised Jake & Gino about syndication

  • Timeline once LOI signed
  • Can’t accept $ until docs in place

How Jake & Gino raised money so quickly

  • Position as experts in space
  • Live events (e.g.: investor dinner, meetup)

What’s next for Jake & Gino

  • Continue to look for big deals
  • Grow education platform (book in 2019)

Connect with Jake & Gino

Jake & Gino’s Website

Wheelbarrow Profits Podcast

Jake & Gino on Facebook

Jake & Gino on Instagram

Email gino@jakeandgino.com

Resources

Wheelbarrow Profits: How to Create Passive Income, Build Wealth, and Take Control of Your Destiny Through Multifamily Real Estate Investing by Jake Stenziano and Gino Barbaro

Gino on Apartment Building Investing EP052

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

Michael’s Live Training Webinars

Podcast Show Notes

Review the Podcast on iTunes

Partner with Michael

Direct download: ABI_138.mp3
Category:Commercial Real Estate -- posted at: 4:35pm EDT

“When you chase money, money runs. When you’re focused on mission, you attract money.”

To reach the highest levels of success in real estate, it’s important to have your mind—and heart—in the right place. If your WHY is about more than just you, if your mission has meaning, business will come to you. So, what’s driving you?

Kent Clothier is the founder and CEO of Real Estate Worldwide, a real estate software and education platform that offers aspiring investors a curriculum of proven systems and technology as well as national data on real estate cash buyers and private lenders. A serial entrepreneur and digital marketing expert, he also owns and operates the multimillion-dollar brands Real Market Experts, 1-800-SELL-NOW FREE, Find Cash Buyers NOW and Find Private Lenders NOW.

Today, Kent joins me to explain how his definition of success has shifted from a focus on money to a focus on impact. He offers insight on designing a meaningful mission and going all-in to reach your goals—without sacrificing your quality of life. Kent describes how he has created a life of balance, sharing the massive lessons learned from losing everything after 13 years of running his first business. Listen in for Kent’s advice on becoming a student of scale and learn the value of people, processes and technology in building a fulfilling real estate business that complements your personal life!

Key Takeaways

Kent’s background in real estate

  • Started as wholesaler in 2002
  • Turnkey operation (completed 5K flips to date)
  • Runs software, education business (50K students)

How Kent’s definition of success has changed

  • Money was driving factor 10 years ago
  • Massive windfall as shift in focus to mission

What inspired Kent to focus on mission

  • Uncle/mentor passed away at 61
  • Standing for something attracts people

Kent’s insight on the necessity of going all-in

  • Capable of much when back against wall
  • Success connected to meaningful mission

Kent’s take on the difference between failure and success

  • NEVER about how much you know
  • Failing is inevitable but doesn’t define you
  • ‘I will simply never quit’

How Kent connects with his WHY every day

  • Will somebody say I mattered?
  • ‘This is where my competition will quit’

How Kent creates a life of balance

  • High quality of life (e.g.: dream house on ocean)
  • Monthly vacation, walk daughters to school
  • In business of ‘creating moments’

Kent’s massive lesson around balance

  • Sacrificed family, personal life in first business
  • Walked away from company out of arrogance
  • Tried to pirate employees, customers
  • Got sued and lost everything
  • Got serious about systems with new business

Kent’s advice around scaling your business

  • Good people, systems around you
  • Document processes as build team
  • ‘Elegance in simplicity’

Kent’s Big Hairy Audacious Goal

  • Launch new business (Cribs)
  • Go toe-to-toe with Opendoor

Connect with Kent

Kent’s Website

Kent on Facebook

Kent on Instagram

Resources

Scaling Up: How a Few Companies Make It … and Why the Rest Don’t by Verne Harnish

Damion Lupo on Apartment Building Investing EP079

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 Live Training Webinars

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_137_v2.mp3
Category:Commercial Real Estate -- posted at: 5:11pm EDT

So, you want to scale your multifamily business. What are your options? One strategy involves leading your own real estate investing meetup. But how do you get a significant number of people to attend that first meeting? Are there hacks to help you become popular FAST? And how do you follow up with the group when the time comes to raise money for a new opportunity?

Adam Adams is a syndicator with BlueSpruce Holdings, a multifamily real estate investment firm focused on purchasing apartment buildings in emerging markets. He repositioned his first apartment community as a property manager in 2007 and went on to purchase his first multifamily property the same year. Adam has managed a number of single-family fix and flips, and today, he holds 100-plus multifamily rental doors. He is also the host of the Creative Real Estate Podcast and the organizer of Colorado’s most active real estate meetup group.

Today, Adam joins me to discuss the recession’s impact on his multifamily career and his return to real estate in 2015. Adam walks us through his transition from single family remote fix and flips to apartment buildings, offering advice to aspiring multifamily investors around aligning with an experienced operator and ‘wearing one hat.’ Listen in for insight on the benefits of leading your own real estate meetup group and learn how Adam has leveraged meetups to raise $4.4M and become a community leader in the space!

Key Takeaways

Adam’s background in real estate

  • Dad multifamily, storage unit investor
  • Worked as property manager in college
  • Bought triplex in 2008 but hit by crash
  • Return to real estate investing in 2015

The recession’s impact on Adam

  • Less and less work for handyman company
  • Tenant-employees couldn’t pay rent
  • Deed in lieu on triplex property

Adam’s return to real estate investing

  • Live online auction (tax deeds)
  • Fix and flip remotely

Why Adam transitioned to multifamily

  • Competition at tax deed auctions
  • Single family ‘like a paycheck’

Adam’s path to multifamily

  • Bought five-plex (owner financing)
  • Two-, four- and five-plex first
  • Syndication of larger properties

The major surprises of syndication

  • Utility deposit, pre-paid insurance
  • $40-$100K in cost up front

Adam’s approach to building credibility

  • Start with smaller property (16-plex)
  • Qualify for loan on own, raise $300K

Adam’s advice for aspiring multifamily investors

  • ‘Wear one hat’ (e.g.: find deals, raise money)
  • Go in passively yourself

Why Adam created a real estate meetup

  • New to city, desire to build network
  • Lunch group to draw active investors
  • Opportunity to position as leader

How Adam has benefitted from the meetup

  • $4.4M raised through group
  • Put on map as community leader

Adam’s hacks for creating a successful meetup

  • Ask other popular group leaders to speak
  • Message active followers with invitation

The format of Adam’s meetup

  • Network and guest speaker
  • Attendees purchase lunch

Adam’s follow-up mechanism for raising money

  • Constant Contact email with new deal
  • Call those who watch webinar
  • PPM and deal package if interested

Adam’s insight on scaling your business

  • Offer more value in space
  • Podcast, meetup or share on social

Connect with Adam

Real Blue Spruce

The Creative Real Estate Podcast

Denver Apartment Network

Real Estate Lunch Club

Text MEETUP to 555 888

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

Constant Contact

Trello

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

The Michael Blank Coaching Program

The Ultimate Guide to Buying Apartment Buildings with Private Money

The Michael Blank Deal Desk

Invest with Michael

Podcast Show Notes

Direct download: ABI_135.mp3
Category:Commercial Real Estate -- posted at: 9:27pm EDT

Do you struggle to remember names at networking events? Do you rely on notes when introducing a speaker or giving a presentation? Do you invest in conferences—and promptly forget what you learned? It’s not that you have a ‘bad memory.’ You simply haven’t learned the simple techniques that would allow you to improve your recall, enhance your relationships, and ultimately grow your business!

Ron White is one of the top authorities on memory in the world. He won the USA Memory Championship in 2009 and 2010, and his YouTube Channel, Brain Athlete Ron White, is number 1 among memory experts. Ron speaks to audiences of all sizes all over the world, from Singapore to Ireland to Zimbabwe. He has appeared on Good Morning America, Martha Stewart Living Radio, and the Dr. Oz Show, among many other media outlets.

Today, Ron joins me to explain how he became the two-time National Memory Champion, memorizing a deck of cards and a 167-digit number in record time! He describes the Afghanistan Memory Wall event in which he honors the 2,300 service men and women who died in the war and offers insight around the benefits of a good memory in improving your business and your life. Listen in for Ron’s advice on improving your recall and learn his system of visualization to quickly memorize a list of words!

Key Takeaways

How Ron became the two-time National Memory Champion

  • Compete in series of 7 events
  • Memorize deck of cards in 1:27
  • 167-digit number in 5 minutes

Ron’s Afghanistan Memory Wall event

  • Honors 2,300 who died in war
  • Write out rank, name from memory
  • 10-hour process

The benefits of a good memory

  • Impacts work, relationships
  • Improve business/life
  • Give speech without notes
  • Remember what read, learn

Ron’s advice around improving your memory

  • Focus = most important
  • Nutrition and exercise

Ron’s system for memorization

  • Think in pictures (visualize)
  • Store in place to retrieve later

Connect with Ron

Ron’s Free PDF

Ron’s Website

Ron on YouTube

Resources

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

Deal Maker LIVE

Review the Podcast on iTunes

Direct download: ABI_131_v3.mp3
Category:Commercial Real Estate -- posted at: 3:17pm EDT

When you know, you know.

Once Kyle Collins fell in love with multifamily as an asset class, he didn’t waste any time. In 9 months, he went from zero to 112 units and quit his job to pursue real estate investing full time.

Kyle is the Principal at Beechwood Holdings, a multifamily acquisition firm focused on stabilized, income-producing properties. Prior to founding Beechwood, he served as a sales rep for Martech Medical and the Director of Business Development for his family’s business, Five Rivers Conservation Group. Kyle earned a bachelor’s in finance from Georgia Southern and an MBA from Emory University.

Today, Kyle sits down with me to discuss his transition to full-time real estate investor, sharing the challenges he faced finding deals early on. He explains how to build a network of brokers and potential investors as well as what questions to ask to be taken seriously. Kyle also offers advice on leveraging an experienced property manager, raising capital and investing in your own deal. Listen in for insight around setting realistic expectations and learn how to divide your time among raising money, prospecting deals and running the operations of your portfolio!

Key Takeaways

Kyle’s background and education

  • Medical device sales
  • MBA from Emory
  • Raise capital for family business

Kyle’s transition to real estate

  • Familiar with network of potential investors
  • Experience with syndicated land transactions

The challenges Kyle faced early on

  • Finding deals, getting in front of brokers
  • Courage and trust in ability to underwrite

Kyle’s advice around building a network

  • Leverage personal network for introductions
  • Call brokers to look at deals

Kyle’s advice on being taken seriously

  • Educate self before pursuing leads
  • Build multifamily skill set (50+ deals)
  • Learn to speak the language

The questions to ask when you see a property

  • Realistic rent bump on planned renovations
  • Why rents lower than rest of market

How Kyle leveraged his property management firm

  • Brought on early in negotiations, underwriting
  • Objective opinion of realistic cost projections

Kyle’s guidance around raising capital

  • Ask potential investors to lunch, coffee
  • Explain what you’re doing but don’t push
  • Put in substantial amount of own money

The importance of being excited about a deal

  • Approach each deal with skeptical lens
  • Confident in pitch, personal investment
  • Under-promise and overdeliver

How to reconcile desire with prudence

  • Invest in own deal
  • Err on conservative side

Kyle’s first 112-unit deal

  • Broker introduced to off-market deal
  • Unnamed property, rents $150 below market
  • $3K per door on renovations
  • Already hit year-two rent assumptions

The value of a quality property manager

  • Help set realistic expectations
  • Handle renovations

What’s next for Kyle

  • Another deal by end of year (1K units by 2020)
  • Raise capital, prospect deals + run operations

Kyle’s insight on the level of effort necessary

  • Look at deals daily, practice underwriting
  • Network to meet brokers and investors
  • Put together marketing materials

Kyle’s top tips for aspiring multifamily investors

  • Need to believe in self through highs and lows
  • Do one thing each day to further your cause

Connect with Kyle

Beechwood Holdings

Email kcollins@beechwoodholdings.com

Kyle on LinkedIn

Resources

LoopNet

Syndicated Deal Analyzer

Apartments.com

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

The Michael Blank Coaching Program

Review the Podcast on iTunes

Direct download: ABI_134.mp3
Category:Commercial Real Estate -- posted at: 1:12pm EDT

“When you pay somebody that’s been where you want to go, you’re buying WISDOM without the WAIT.”

If you want to succeed as a multifamily real estate investor, your best bet is to take advantage of free resources for a basic education and then find someone you know, like and trust who is willing to mentor you—even if you have to pay for their time.

Larry Goins is a veteran real estate investor with 20-plus years of experience in the space. He travels the US speaking at conventions and expos, sharing his strategies for buying a dozen properties every month—without leaving his office! Larry is also the president of both Investors Rehab and The Goins Group, and he hosts the popular real estate podcasts BRAG Radio and Brain Pick-A-Pro. Larry is committed to holding true to his moral integrity in his business and personal life.

Today, Larry sits down with me to offer advice for aspiring investors around finding a mentor and ‘accelerating the splat’ when necessary. He shares his favorite real estate strategies and explains how he has systematized his business around seller financing and lease option models. Listen in to understand what motivates Larry to continued success in real estate and learn how he pays it forward by putting people and principles BEFORE profits!

Key Takeaways

How Larry got his start in real estate

  • Always wanted own business
  • Tom Vu real estate seminar
  • Bought first house in 1986

Larry’s favorite real estate strategies

  • Seller financing
  • Lease option

How Larry has systematized his business

  • Buy house ‘fit and safe’
  • Landlord/tenant relationship
  • Lease option model

Larry’s advice for aspiring investors

  • Get education (podcasts, blogs and YouTube)
  • Find coach or mentor
  • ‘Education is not application’

Larry’s concept of accelerating the splat

  • Pleasure vs. pain motivation
  • Recognize time to move on

What motivates Larry to success in real estate

  • Dad passed in 1984, wanted to help mom
  • Be Rich and Generous

How Larry puts people and principles before profit

  • Advise against lending for bad fix and flip
  • Relationship driven (vs. transaction driven)

What gets Larry out of bed in the morning

  • Loves the chase, thrill of negotiating deals
  • Impart expertise to students

Connect with Larry

Larry’s Website

BRAG Radio Show

Brain Pick-A-Pro Podcast

Resources

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

Deal Maker LIVE

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_132.mp3
Category:Commercial Real Estate -- posted at: 1:52pm EDT

If you’re early in your career as a multifamily syndicator, a qualified team is essential in overcoming your lack of experience to go after larger, more lucrative deals. But how do you attract and align your interests with those prospective team members? And once you’ve established a track record of your own, how do you stay in front of your investors and continue to scale your money raising efforts?

Joe Fairless is Managing Partner with Ashcroft Capital, a national multifamily investment firm focused on major metropolitan areas. Joe has been investing in real estate since 2008, and to date, he controls more than $400M of real estate in the Houston and DFW regions. Joe is also the host of the popular daily podcast, Best Real Estate Investing Advice Ever, and the author of several books on real estate investing, including the newly released Best Ever Apartment Syndication Book.

Today, Joe joins me to discuss his impetus for writing the Best Ever Apartment Syndication Book and explain his belief in the Law of Reciprocity. He shares several of the advanced aspects of syndication outlined in the new book, including 4 ways to align interests with team members and pursue larger deals early on—in a safe way. Listen in for Joe’s insight on multifamily as a partnership business and learn his intentional system for staying top-of-mind with investors, adding value in a variety of ways on a regular basis!

Key Takeaways

Why Joe wrote the Best Ever Apartment Syndication Book

  • Help investors understand how operations work
  • Not beginner’s guide, need fundamentals first
  • Get message out to help others (Law of Reciprocity)

Joe’s 4 ways to gain credibility through aligned interests

  1. Attract qualified team member (i.e.: property manager)
  2. Give team member equity stake of 5-30%
  3. Team members bring equity to deal
  4. Team members bring own money + investors

Joe’s insight on real estate as a partnership business

  • Maximum return on time and money
  • Align with experienced team early on
  • Leverage track record of partners
  • Larger deals in fast, safe way

Joe’s approach to staying top-of-mind with investors

  • Daily podcast/blog (audio)
  • Weekly email recap of content (visual)
  • Monthly report mailed to accredited investors
  • Quarterly happy hour, dinners (in-person)
  • Annual Best Ever Conference

Connect with Joe

Joe’s Website

Best Ever Show

Ashcroft Capital

Email info@joefairless.com

Resources

Best Ever Apartment Syndication Book by Joe Fairless and Theo Hicks

The Tim Ferriss Show

The 4-Hour Workweek: Escape the 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss

Carlos Vaz at CONTI

Best Ever Conference

Kathy Fettke at Real Wealth Network

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

Deal Maker LIVE

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_126-Joe_Fairless.mp3
Category:Commercial Real Estate -- posted at: 12:52pm EDT

Are you still skeptical of the idea that you can build a real estate business using other people’s money? Or, maybe you don’t think that your network has access to the kind of capital you would need for a multifamily investment. Matt Faircloth argues that you simply don’t know where to look, and he is living proof that with the right approach, you can develop a robust real estate portfolio by raising private capital.

Matt is the co-founder of The DeRosa Group, a real estate investment firm headquartered in Trenton, New Jersey. Matt and his wife, Liz, have been investing in real estate since 2004, and they have vast experience with single family, multifamily, office and retail properties. Matt’s firm has completed more than $30M in real estate transactions involving private capital, and he is the author of Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money.

Today, Matt joins me to share his journey from house hacker to full-time real estate investor. He offers insight around taking capital from friends and family, educating your network on where to find the money to invest, and aligning with a seasoned partner. Listen in to understand the three different investment opportunities Matt offers through DeRosa Group and learn his transparent, jargon-free approach to raising capital.

Key Takeaways

Matt’s introduction to real estate

  • Rich Dad Poor Dad, CASHFLOW Board Game
  • House hack to pay off student loans

Matt’s transition to full-time real estate investor

  • Reduce expenses to live below means
  • Strategic decision to delay having kids

Why it took Matt several years to find his niche

  • No solid set of attainable goals
  • Distracted by shiny objects

Matt’s shift to raising money from investors

  • Refinanced portfolio to get cash for next deal
  • ‘Carousel stopped’ after crash

Matt’s insight on taking money from friends and family

  • Offer value, confident in returns
  • Allow people care about to benefit

How to overcome a lack of track record

  • Align with seasoned partner
  • Start small, work up to bigger projects

Matt’s advice for aspiring investors looking to partner

  • Don’t solicit free advice
  • Put other person first and CONTRIBUTE

The three investment options Matt offers

  1. Single family fix and flips (short-term capital)
  2. Turnkeys (100% ownership)
  3. Multifamily syndication for passive investors

The argument for real estate investment over other asset classes

  • Leverage tax deferment through IRA for fix and flips
  • 8 to 10% yields, compound over and over
  • Tax benefits of owning via syndication or turnkey

Matt’s approach to raising capital

  • Avoid speaking in jargon, keep it simple
  • Explain how money protected
  • Discuss if, thens (worst case scenarios)

Where to find money in your own network

  • Homeowners that qualify for HELOC
  • Leverage retirement accounts

Matt’s three tiers of raising capital

  1. Local contacts
  2. Referrals, networking groups
  3. National voice as thought leader

Connect with Matt

DeRosa Group

DeRosa Group on Facebook

DeRosa Group on YouTube

Matt on Bigger Pockets

Resources

Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money by Matt Faircloth

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

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

CASHFLOW Board Game

Deal Maker LIVE

Review the Podcast on iTunes

Direct download: ABI_130_v2.mp3
Category:Commercial Real Estate -- posted at: 11:54am EDT

What could possibly go wrong? If you are the proud owner of a multifamily property, the answers range from minor falls to catastrophic weather events. How can you mitigate the risk and reduce your total number of claims? And what kind of multifamily insurance coverage do you need to manage the circumstances outside your control?

Bryan Shimeall is the Vice President of Multifamily Risk Advisors, a division of Tanner, Ballew and Maloof formed to leverage the firm’s 20-plus years of experience handling insurance for the multifamily industry. Bryan is dedicated to delivering customized solutions that mitigate risk for apartment building investors, and he is an expert in the realm of risk assessment and exposure to loss.

Today, Bryan sits down with me to share his definition of and approach to risk assessment. He discusses the most common gaps in multifamily coverage, the most common property and liability claims, and the best strategies for mitigating risk. Bryan also explains when to pursue a master policy and the fundamentals of catastrophic coverage. Listen in for insight on the benefits of working with a risk management consultant and learn what to look for in a multifamily insurance policy!

Key Takeaways

The role of Multifamily Risk Advisors

  • Insurance services for multifamily industry
  • Boutique shop in business 20 years

Bryan’s definition of risk assessment

  • Process of identifying inherent risk of property
  • Includes property and liability

Bryan’s approach to risk assessment

  • Age and condition of property
  • Construction type and location
  • Look at seller’s historic losses

The most common gaps in coverage

  • Catastrophic hurricane deductibles
  • Denial that managing risk will mitigate claim

How operators can manage risk

  • Routinely walk property
  • Keep up with deferred maintenance
  • Update AC units

The most common claims

  • Liability—wet conditions, loose handrails cause falls
  • Property—small oven fires

The disadvantages of the ‘trailing 12 premium’

  • No reason to look at number for guidance
  • Don’t know how owner has insured property

The benefits of working with a risk management consultant

  • Knowledge, experience and relationships
  • Specialize in multifamily, understand mechanics

How Multifamily Risk Advisors can assist during the acquisition phase

  • Ask for OM on property (square footage, construction type)
  • Respond quickly with real insurance costs for property
  • Identify other issues (i.e.: budget money for roof replacement)

When to pursue a master policy

  • No raw number (≈1K units)
  • Geography is most important factor
  • Uniform deductible, renewal date
  • Allows for predictability

The fundamentals of catastrophic coverage

  • Windstorm deductible in coastal areas
  • Hailstorms in Midwest reflected in rates

The most common mistake among investors

  • Pay attention to premium but not deductibles

Connect with Bryan

Multifamily Risk Advisors

Email bshimeall@multifamilyra.com

Resources

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

Deal Maker LIVE

Michael’s Website

Review the Podcast on iTunes

Direct download: ABI_129_v2.mp3
Category:Commercial Real Estate -- posted at: 9:12pm EDT

As an aspiring real estate investor, you possess a spirit of independence as well as a desire for financial freedom. What if you could take that self-determination to the next level and essentially become your own bank? Patrick Donohoe is on a mission to teach you how to take control of your money with the Perpetual Wealth Strategy, taking advantage of a particular kind of life insurance policy to facilitate real estate investment, secure retirement funds, and build a legacy that you can pass on to your children.

Patrick is the president and CEO of Paradigm Life, a financial services firm committed to changing the way their clients look at life and wealth. The Paradigm team supports thousands of individuals and businesses in creating income for life and leaving a meaningful legacy. Patrick is a sought-after speaker in the realm of wealth management and investment, and he serves as the host of The Wealth Standard podcast. He is also the author of Heads I Win, Tails You Lose: A Financial Strategy to Reignite the American Dream.

Today, Patrick joins me to share the benefits of the Perpetual Wealth Strategy and explain how it serves as the foundation for fulfilling the true American Dream. He offers insight around how a specifically-designed whole life insurance policy works, why its interest rate is so much higher than a savings account, and how the policy gives you a line of credit to borrow against for investment purposes. Listen in for Patrick’s advice around leveraging the Perpetual Wealth Strategy to generate passive income, pass on a legacy, and take control of your wealth—the way the rich do!

Key Takeaways

How Patrick came to start his business

  • Mentored by Rich Dad advisor Kim Butler
  • Stuck it out after partnership wiped out in 2008

Patrick’s definition of the American Dream

  • Independence and freedom
  • Greatest wealth built within person

The benefits of the Perpetual Wealth Strategy

  • Whole life insurance policy with mutual company
  • Designed for cash value accumulation
  • Provision for insurance to give line of credit
  • Grow without taxes, comes with coverage

The concept of liquid wealth

  • Borrow against account (i.e.: real estate investment)
  • Enables family to pass on liquid legacy

Who this type of policy is for

  • Rich understand, know how to use
  • Mindset only barrier to entry

The interest associated with a Perpetual Wealth policy

  • Account holders own company, receive profit share
  • Typically 4 to 6%

The power of the Perpetual Wealth policy credit line

  • Can borrow entire amount (interest rate of 4 to 5%)
  • Don’t have to qualify, loan not on credit report

How Patrick uses his own policy

  • Hold cash reserves for personal and business life
  • Rest used as opportunity fund to invest
  • Use not dictated by anyone BUT you
  • Make better decisions with access to alternatives

How a Perpetual Wealth policy serves as a passive income generator

  • Longer you pay in, less risk to insurance company
  • Interest earned in later years is compounded
  • Consistency of income (not connected to volatility)

Connect with Patrick

Paradigm Life

Resources

Heads I Win, Tails You Lose: A Financial Strategy to Reignite the American Dream by Patrick H. Donohoe

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

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

Deal Maker LIVE

Michael’s Website

Review the Podcast on iTunes

Direct download: ABI_128_v2.mp3
Category:Commercial Real Estate -- posted at: 10:56pm EDT

Real estate was a big winner in the tax reform bill passed in December 2017. So, how exactly do the new laws impact us as passive multifamily investors and syndicators? And how can we take advantage of the new regulations and use the available incentives to reduce the amount of money we owe the government?

Tom Wheelwright, CPA is the CEO of WealthAbility, a community of CPAs dedicated to reducing taxes and creating wealth for their clients. As a Rich Dad Advisor for Robert Kiyosaki, Tom is a well-known keynote speaker in the realm of wealth building and tax strategy. He is a regular contributor to publications including Forbes, The Huffington Post, Entrepreneur Magazine and Inman News, and Tom is the author of Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes.

Today, Tom joins me to explain how to shift the way you think about taxes, viewing the law as a roadmap to reducing how much you pay. He discusses the new laws around bonus depreciation, describing how both passive investors and syndicators benefit from the revised guidelines. Tom also shares the regulations around the 20% deduction and the changes in Section 179 that impact residential and commercial real estate investors. Listen in for insight around qualifying for the status of real estate professional and learn how to significantly reduce your taxes as a multifamily investor!

Key Takeaways

How Tom came to start his own network of CPA firms

  • Experience creating courses on reducing taxes
  • Worked for Fortune 500 company, as ASU professor
  • Founded own firm (goal to expand to 1K in 5 years)

How to shift the way you think about taxes

  • Incentive for doing what government wants
  • Professional investor can get to zero in few years

The new laws around bonus depreciation

  • Real estate now qualifies with new/used equipment
  • Cost segregation of contents, land improvements
  • Example—30% of $1M investment = $300K

How the new tax laws affect passive investors

  • Leverage 70% or more = no taxable cashflow
  • Convert ordinary income to capital gains by investing in syndication

How the new tax laws may impact syndicators

  • Hold carried interest for 3 years to get capital gains rates
  • Consider 1031 exchange to plan for potential 3-year issue

The changes around the 20% deduction

  • Applies to positive taxable income from real estate
  • Example—earn $100K, only taxed on $80K

The changes to Section 179

  • Deduction for new/used equipment applies to residential real estate
  • HVAC units, fire/security alarms and roofs in commercial properties

How to qualify for the status of real estate professional

  • Spend more than 750 hours during given year (15 hours/week)
  • Spend more time than other business, investment activities combined
  • Must meet qualifications every year and keep good documentation

The tax benefits of being a real estate professional

  • No passive losses from real estate (active can offset any income)
  • 8% Medicare tax doesn’t apply when sell property
  • 20% rule only applies to real estate that is trade or business

Connect with Tom

WealthAbility

The WealthAbility Show

Resources

Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes, Second Edition by Tom Wheelwright, CPA

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

Direct download: ABI_127-v2.mp3
Category:Commercial Real Estate -- posted at: 3:18pm EDT

If the extent of your financial education involved learning how to be a good employee, trading your time for money, then you’re probably beginning to realize that you simply can’t save yourself into wealth. But how do the multimillionaires and billionaires among us grow their assets? What strategies do they implement to generate passive income—from multiple sources? Brian Fouts has identified the shared patterns among high-net-worth individuals, what he calls the 5 Pillars of Elevated Wealth, and he is on a mission to share this information with you and me.

Brian is the co-owner and CEO of The Elevation Group, an online membership platform that seeks to teach the world how to invest like the rich. Brian and his brother Jake are passionate about empowering people to create and grow wealth by way of financial literacy, and The Elevation Group affords access to a network of true expert advisors who can support you in implementing the investment strategies of the wealthiest among us.

Today, Brian sits down with me to share the 5 Pillars of Elevated Wealth. He explains how to generate supplemental income through a side hustle and put that money to work for you. Brian addresses the importance of safeguarding the money you have through entity protections and tax incentives. Finally, he describes how to acquire assets that generate passive income and why it’s smart to pursue multiple sources of revenue. Listen in for Brian’s advice around keeping your money in a life insurance vehicle and learn how The Elevation Group can help you build wealth by way of portfolio and passive income!

Key Takeaways

How Brian got involved with EVG

  • Started as member, blown away by vision
  • Platform brings together expert advisors
  • Financial education and empowerment

The 1st Pillar of Elevated Wealth: Do something different

  • Create impact in world
  • Generate income through side hustle
  • Shift mindset away from trading time for money

The 2nd Pillar of Elevated Wealth: Take the money off the table

  • Become own bank and put money to work
  • Can take advantage of opportunities when presented

The 3rd Pillar of Elevated Wealth: Protect what you have

  • Safeguard money through entity protections
  • Pay less taxes (i.e.: rent home to business)

The 4th Pillar of Elevated Wealth: Acquire assets to earn passive income

  • Build net worth and create cashflow
  • Real estate, oil and gas, private lender, etc.

The 5th Pillar of Elevated Wealth: Pursue multiple sources of income

  • Wealthy individuals have 7 on average
  • No crisis if 1 decreases or goes away

The benefits of The Elevation Group platform

  • 30-plus lessons in all 5 categories
  • Expert advisors to help implement
  • Monthly live events

The advantages of keeping your money in a life insurance vehicle

  • Guaranteed returns of 4-6%
  • Loan money to self for investments

Brian’s insight around the 3 sources of income

  • Active, portfolio and passive
  • Focus on portfolio and passive to build wealth

Connect with Brian

The Elevation Group

Email brian@theelevationgroup.com

Resources

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_125.mp3
Category:Commercial Real Estate -- posted at: 4:45pm EDT

What is the quickest route to financial freedom through real estate? Do not pass Go. Do not collect $200. Go directly to… Multifamily. But how do you overcome a lack of experience and capital to accelerate the timeline and jump straight into apartment building investing?

Josh Eitingon is the founder and manager of JAE Property Group, a real estate investment company specializing in 50- to 150-unit value-add multifamily properties outside the New York metro area. With the guidance of a coach, Josh made his first multifamily investment in 2012, and now he is up to eight deals. He began his real estate career while working as a software developer, eventually joining a Long Island investment group where he led the acquisitions team in securing $100M in real estate. Today, Josh is a full-time investor in his own right.

Josh joins me to discuss the early investment in a coach that facilitated his shortcut to multifamily. He addresses how he overcame a lack of experience to do his first 20-unit deal and the personal guarantee he made investors to raise $200K for the renovation. Josh explains what he loves most about multifamily investing, describing the challenge of finding a formula to optimize each new property. Listen in for Josh’s advice around investing in your own deals, choosing the right location, and scaling up a multifamily business.

Key Takeaways

How Josh got started in real estate

  • Hired coach to force action
  • Multifamily made sense as asset class

Why Josh invested in a coach

  • Working 9-5 for software company
  • Long-term time, financial freedom

Why Josh went straight to multifamily

  • Dumb luck + mentor’s help
  • Ability to scale

How Josh overcame a lack of experience and money

  • Partnered on distressed 20-unit in Cincinnati
  • Raised $200K from family, friends and co-workers

How Josh overcame his reluctance to do the first deal

  • Poor condition, no background in renovation
  • Concerns around taking on debt
  • Believed in deal, commitment to go all-in

The factors for success on Josh’s first deal

  • Coach reinforced right path
  • Good location, visibility
  • Less than $10K/unit

How Josh raised $200K for the deal

  • Talking up real estate for 6 months prior
  • Personal guarantee at 9% interest
  • $10K chunks

The additional risk of raising money in debt

  • Bank loan for 80% + promissory notes
  • ‘I carry burden, not investors’

How Josh’s first multifamily deal played out

  • 20% occupancy, 0% economic occupancy
  • Spent $5K/unit on interior renovations
  • $50-70K on exterior, mechanical improvements

Josh’s subsequent multifamily investments

  • One or two deals per year ever since
  • 44- and 62-unit in same market
  • 70-unit in Florida

What’s next for Josh

  • 90-unit in Minneapolis under contract
  • Continue on same path, 2-3 deals/year

What Josh loves about the business

  • Creativity (partner, invest and find deals)
  • Find formula to optimize each property

The challenges of scaling a multifamily business

  • Source of equity
  • Right partner for any given deal

Josh’s advice for aspiring multifamily investors

  • Start saving money to invest in own deals
  • Commit to ongoing education
  • Right people around you (accountability)

Josh’s AHA moment around location

  • Good schools, retail in area
  • Allows for operational consistency

Josh’s top mistakes

  • Could have done more deals
  • Checks and balances on construction management

Connect with Josh

JAE Property Group

Resources

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

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

The Ultimate Guide to Buying Apartment Buildings with Private Money

The Michael Blank Coaching Program

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

  • Download
  • Text “secretbook” to 44222

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_124.mp3
Category:Commercial Real Estate -- posted at: 5:29pm EDT

‘The cost of my self-education was six figures in mistakes and seven [or] eight figures in lost opportunity.’

If you have a poverty mindset, investing money in a mentor or spending more for a qualified contractor seems like a burden. But if you have an abundance mentality, it becomes obvious that spending a little more up front for coaching and devoting your time to the activities that will grow your multifamily business result in higher revenue long-term.

Jack Petrick is the owner of Petrick Property Group, a real estate firm that specializes in multifamily acquisitions and improvements. He spent 15 years working as a firefighter in the Cleveland suburb of Strongsville, Ohio, before leaving to pursue real estate full-time.  Jack’s team focuses on on- and off-market multifamily assets, and to date, he has 100-plus rental units in Ohio and Florida.

Today, Jack joins me to discuss his initial experience as a self-taught custom home builder. He shares the major shift that took him from a poverty mindset to an abundance mentality and describes how he would use his time differently if he could go back to those early days. Jack explains the importance of mentoring and masterminds, the concept of forced appreciation, and the decision to hire an assistant that doubled his revenue. Listen in to understand what inspired Jack’s shift to multifamily investing and learn how to follow in his footsteps—by way of a laser focus on raising capital, finding deals and improving processes.

Key Takeaways

Jack’s introduction to real estate

  • Rich Dad Poor Dad changed thinking
  • Self-taught custom home builder
  • Single family rental properties

Jack’s major mindset shift

  • Poverty mindset (e.g.: hire cheap contractor)
  • Abundance mentality to save money long-term

How Jack would use his time differently

  • Invest in mentoring, masterminds
  • Raise capital, deal flow and operations

What stopped Jack from leaving his job sooner

  • Fear, thinking too small
  • Listen to ‘free advice’

How Jack got clear on what’s important

  • Time freedom to focus on family
  • Change lives for investors

Jack’s insight around mindset

  • Take action with right guidance
  • Get beyond comfort zone

Jack’s transition to multifamily

  • Walk-in medical clinic failed
  • Buy and holds continued to cashflow
  • Focus on pursuit of multifamily as option

The concept of forced appreciation

  • Buy value-add property at discount
  • Do renovation, tighten operations
  • Increase occupancy and rent
  • Value not contingent on market

Jack’s first multifamily deal

  • Came across on Facebook
  • 27-unit at 50% occupancy
  • Financed through hard money lender
  • Private investor to fund rehab
  • Repair sewer line, renovate units
  • Up to 100% occupancy

The value of hiring an assistant

  • Fastest way to double revenue
  • Focus on high-producing activities

What’s next for Jack

  • Expand multifamily portfolio (100K units)
  • Develop new multifamily properties

Connect with Jack

Petrick Property Group

Jack on Facebook

Resources

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

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

Go for No! Yes is the Destination, No is How You Get There by Richard Fenton and Andrea Waltz

Syndicated Deal Analyzer

The Ultimate Guide to Buying Apartment Buildings with Private Money

The Michael Blank Coaching Program

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

  • Download
  • Text “secretbook” to 44222

Michael’s Website

Michael on YouTube

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_123.mp3
Category:Commercial Real Estate -- posted at: 8:23pm EDT

The vast majority of us get into multifamily investing because we are hungry for time freedom. We want the flexibility to spend time with our families or travel or go to the gym in the middle of the day if we so choose. But many of us lose sight of that original goal in the pursuit of financial freedom. Our focus on earning money translates to doing ALL of the work ourselves, and before long, we are caught in an unsustainable cycle—doing tasks like bookkeeping and writing investor reports that undervalue our time and pull us away from the work only we can do: finding deals and raising money. So, how do we calculate the value of our time and make informed decisions about what to delegate? How do we hit the reset button and return our focus to the time wealth that inspired us to pursue apartment building investing in the first place?

Mark Dolfini is the founder of Landlord Coach, a mentoring program and business course for landlords and property managers. He is also the author of The Time-Wealthy Investor, Your Real Estate Roadmap to Owning More, Working Less, and Creating the Life You Want. Mark is on a mission to help multifamily investors realize the value of their time and design an intentional business that affords them both financial freedom and time wealth.

Today, Mark joins me to discuss his early interest in the idea of owning real estate and his gradual accumulation of 92 rental properties. He shares the mistakes he made in trying to do all the work himself that led to his Jerry Maguire moment in 2008 when he lost $4.5M overnight and ended up in the hospital with double pneumonia. Mark describes the mindset shift that helped him transition from self-employed to business owner and the VIP System he designed to create a sustainable real estate venture. Listen in for Mark’s insight on the concepts of life output and time wealth—and learn how to determine what your time is worth and delegate accordingly!

Key Takeaways

Marks’s early interest in real estate

  • Asked for real estate for Christmas as boy
  • Bought 40 acres in AZ while in Marines

How Mark accumulated 92 rental properties

  • Bought 12 while attending Purdue
  • 30 when quit working as accountant ($6M)
  • Made every mistake, no systems in place
  • Doing all work ‘life was definition of hell’

Mark’s Jerry Maguire moment in 2008

  • Drop from $65K in rent revenue to $30K
  • Lost $4.5M in real estate overnight
  • Worked more, developed double-pneumonia

How Mark transitioned from self-employed to business owner

  • Intentional about setting up sustainable business
  • Only do tasks that demo highest, best use of time

Mark’s VIP system

  • Vision beyond making money
  • Infrastructure = framework
  • Process = rules of operation

The concept of life output

  • Ability to control calendar
  • Financial wealth as means to end

How to determine the value of your time

  • Calculate current hourly wage (including travel)
  • View as loss of $ when performing lesser tasks

Connect with Mark

Landlord Coach

Landlord Coach on Facebook

Mark on LinkedIn

Resources

The Time-Wealthy Investor: Your Real Estate Roadmap to Owning More, Working Less, and Creating the Life You Want by Mark B. Dolfini

The Judge: A Landlord’s Tale by Mark Dolfini

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

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

  • Download
  • Text “secretbook” to 44222

Michael’s Website

Michael on YouTube

Podcast Show Notes


There are five key phases in the multifamily investing process, and the property manager you hire plays a key role in nearly every stage. So, what should you look for in a property management company? And what KPIs can you use to assess the property manager’s performance?

Bryan Chavis is a thought-leader in the realm of multifamily property management and the bestselling author of Buy It, Rent It, Profit and The Landlord Entrepreneur. He is also the founder of The Landlord Property Management Academy, an online platform for real estate professionals and property management certification. Bryan was named one of the top 40 up-and-coming entrepreneurs under 40 by the Gulf Coast Business Review, and he is a sought-after speaker and consultant for some of the largest housing authorities in the US.

Today, Bryan sits down with me to share his journey, discussing the obstacles he has overcome and his unique approach to ‘embracing adversity.’ He walks us through the five phases of multifamily investment, discussing the current challenges around the acquisitions process and the fundamentals of the implementation stage. Bryan explains what to look for in a property management company and the Key Performance Indicators he reviews on a monthly basis. Listen in for Bryan’s insight on finding a property manager who is proactive and learn to relish the journey as a multifamily investor!

Key Takeaways

Bryan’s introduction to real estate

  • Job as leasing agent for free apartment
  • Learned from private, institutional investors

Bryan’s key takeaways as a property manager

  • Understanding of asset management, acquisitions
  • Real-life experience as operator

What inspired Bryan to branch out on his own

  • ‘Why not me?’
  • Experience in all facets of multifamily
  • Speaking career to develop business

The adversity Bryan had to overcome

  • High school diploma, lack of capital
  • Devastating brain tumor (no insurance)

Bryan’s approach to ‘embracing adversity’

  • Character-building opportunity
  • Share story to inspire others

Bryan’s 5 phases of a multifamily investment

  1. Acquisitions
  2. Implementation
  3. Stabilization
  4. Growth
  5. Exit strategy

The current challenges around acquisitions

  • Standoff between buyers and sellers
  • Wade through deals to find one that works

Bryan’s view of the implementation phase

  • Establish procedures, consistency
  • Software (e.g.: Buildium)

How to avoid mistakes during the acquisitions process

  • Build margin of error into underwriting
  • Focus on low cash multiple but high efficiency

What to look for in a property management company

  • User-friendly, intuitive software platform
  • Ability to manage every asset class
  • Management plan specific to property

The difference between a proactive and reactive property manager

  • Control income, expenses during stabilization
  • Software, training allows to manage as business

Bryan’s approach to overseeing a property manager

  • ‘Inspect what you expect’
  • Walk property on regular basis
  • Scrutinize KPIs monthly

Bryan’s Key Performance Indicators (KPIs)

  • Rent rolls, maintenance tickets/budget
  • P&Ls, delinquencies and turnover
  • Traffic and closings

Bryan’s current mission

  • Wake up and be appreciative
  • Relish journey, relationships

Connect with Bryan

Buy It Rent It Profit

Landlord Academy

Multifamily Facebook Group

Bryan on Facebook

Bryan on Twitter

Call 1-800-535-2476

Resources

Buy It, Rent It, Profit: Make Money as a Landlord in ANY Real Estate Market by Bryan M. Chavis

The Landlord Entrepreneur: Double Your Profits with Real Estate Property Management by Bryan M. Chavis

Buildium

Michael’s Products

The Ultimate Guide to Apartment Building Investing

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Deal Desk

Deal Maker LIVE

Michael’s Coaching Program

Partner with Michael

Invest with Michael

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

Review the Podcast on iTunes


You don’t necessarily need an enormous multifamily portfolio to achieve financial freedom. It is possible to start small and replace your income with modest holdings of just 20 units!

Aaron Howell is a small multifamily investor with Black Lick Holdings, a real estate firm based in Crozet, Virginia. With a portfolio of 22 rental units, Aaron has replaced his income as a pharmacist and now works part-time because he WANTS to, not because he HAS to.

Today, Aaron joins me to share his accidental introduction to real estate and when he was finally inspired to develop a strategic plan. He describes the light bulb moment when he realized the income potential of a duplex versus a single-family property and how he fostered the confidence to pursue multifamily despite a lack of experience. Aaron walks us through his first several deals, explaining how he financed the most recent 6-unit through a partnership. Listen in for Aaron’s insight around building in daily habits to stay motivated and learn how he achieved financial freedom with a small portfolio!

Key Takeaways

Aaron’s introduction to real estate

  • Bought townhouse in 2006
  • Rented to cover mortgage after move

Aaron’s start in single family

  • Opportunities in Las Vegas
  • Desire to create passive income

What inspired Aaron to develop a strategic plan

  • Got married in 2015 and closed on first duplex
  • Realized upstairs rent covered mortgage
  • Heard Michael on podcast and took course

Why Aaron was confident in small multifamily investments

  • Same process with bank as single family
  • Did well in Vegas despite lack of experience
  • Solid team in place to support

How Aaron financed his first multifamily deals

  • Home equity line of credit
  • Relationship with local bank
  • Sold Vegas properties (1031)

Aaron’s take on partnerships vs. syndication

  • Pittsburgh property partnership among 4 investors
  • Syndication in future to control deal

Aaron’s transition to working part-time

  • Wants to work but doesn’t have to
  • Weekends, evenings free

Aaron’s real estate plans for the future

  • Scale up to larger properties
  • Raise money through conversations

Aaron’s insight around financial freedom

  • Shawshank Redemption moment
  • Sense of confusion

Aaron’s advice for aspiring multifamily investors

  • Do SOMETHING
  • Build network
  • Get familiar with market

How Aaron stays motivated

  • Habit List app (e.g.: read 20 minutes, look at 15 listings)
  • ‘20 units’ on chalkboard in kitchen

Connect with Aaron

Aaron on BiggerPockets

Email ahowell7@hotmail.com

Resources

Michael on the Joe Fairless Podcast

BiggerPockets

Redfin

Zillow

Habit List

Michael’s Products

The Ultimate Guide to Apartment Building Investing

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Deal Desk

Deal Maker LIVE

Michael’s Coaching Program

Partner with Michael

Invest with Michael

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

Review the Podcast on iTunes


Whether you are looking to become a multifamily syndicator or money raiser, it is difficult to get your foot in the door if you’ve never been involved in a deal. So, how do you build a resume without any experience or capital to speak of? The answer lies in partnerships with someone who’s done it before!

Danny Woodford is a Managing Partner at Mission Bay Investments, a multifamily investment firm with properties in the Mid-Atlantic, Southeast and Texas markets. Mission Bay is focused on value-add opportunities of 100-plus units, and the firm has closed on five deals of nearly 1K units to date. Prior to real estate, Danny served in the military, working to develop the space capabilities of the United States. He holds a master’s in real estate development from George Mason University.

Today, Danny joins me to explain what inspired him to retire from the military and pursue real estate. He walks us through his initial single family business model and the AHA moment that motivated his transition to multifamily. Danny offers the details of his first two multifamily deals in Richmond, Virginia, sharing the reasons why he continues to source deals despite the challenging market. Listen in for Danny’s insight around bringing a deal to a potential partner and learn how to build your multifamily resume by teaming up with someone who’s been there!

Key Takeaways

What inspired Danny’s shift from the military to real estate

  • No control over time
  • Long commute, missed family events

How Danny found the time to get educated in real estate

  • Designed plan with wife to replace income
  • Research during commute, nights and weekends

Danny’s initial business model

  • Build portfolio of single family rentals
  • Fix and flips to finance renovations

Why Danny made the transition to multifamily

  • Conversation with colleague at single family seminar
  • Multifamily offers more in terms of efficiency, scale
  • Financing more attractive (nonrecourse lending)

Danny’s first multifamily deal

  • 40-unit apartment building in Richmond
  • Found through broker relationship
  • Purchased for $1.1M (one investor)
  • Completed exterior, electrical work
  • Sold for $1.5M in 1031 exchange

Danny’s second multifamily deal

  • 98-unit purchased for $5.8M
  • Syndication raise of $10M
  • Rents $100 below market

Why Danny is finding deals despite a challenging market

  • Resume of five multifamily deals (two under contract)
  • Relationships with brokers, investors and lenders

The value of partnering as a money raiser

  • Brought into management team
  • Compensation for efforts, builds resume

Danny’s advice for aspiring multifamily investors

  • Bring capital or deal to table
  • Partner with experienced investor
  • Go straight to multifamily

How to bring a deal to a potential partner

  • Do homework on project (analysis, underwriting)
  • Establish relationship with seller/broker

What Danny is looking for in money-raising partners

  • Education and drive
  • Experience raising money

Connect with Danny

Mission Bay Investments

Call (661) 816-0335

Email daniel@missionbayinvestments.com

Resources

LoopNet

Michael’s Products

The Ultimate Guide to Apartment Building Investing

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Deal Desk

Deal Maker LIVE

Michael’s Coaching Program

Partner with Michael

Invest with Michael

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

Review the Podcast on iTunes


The attitude toward cannabis has shifted: 64% of Americans support the legalization of marijuana, 93% support medical consumption, and the drug is legal in nine states plus Washington, DC. By 2028, the cannabis space is projected to be a $60B industry. So, what does that mean for us as real estate investors? How can we take advantage of the need for property to grow, manufacture and sell cannabis products?

Leslie Plettner is the director of BaseCanna, a team of cannabis, legal, finance and real estate experts who provide the funding, infrastructure and property for cannabis entrepreneurs. Leslie is a long-time entrepreneur with extensive experience in real estate. She has developed and managed more than 500 units, including a mix of warehouse, multifamily and retail properties. Three years ago, Leslie anticipated the emergence of the cannabis industry and recognized its need for cannabis-friendly landlords, and the idea for BaseCanna was born.

Today, Leslie joins me to describe BaseCanna’s work in developing an ecosystem of cannabis operators and the market opportunity in the space for real estate developers. She shares the risks of cannabis real estate, both perceived and real, and explains how BaseCanna makes decisions around who to work with. Listen in for Leslie’s insight on the appreciation of a property once it’s licensed for cannabis and learn why now is the right time to get into cannabis real estate!

Key Takeaways

The mission of BaseCanna

  • Anchor development of cannabis ecosystem with real estate
  • Support operator-members with compliance, legal issues, accounting & insurance

Leslie’s background as an entrepreneur

  • Designed, transformed underperforming schools
  • Shift to real estate when started family

BaseCanna’s current work

  • Creating vertically integrated ecosystem (seed to sale)
  • Vet municipalities, real estate and operators

The market opportunity in cannabis real estate

  • Fastest growing since broadband internet
  • Huge expansion in therapeutic consumption
  • Shift in attitude (93% support medical use)

The myths around owning cannabis real estate

  • Pothead tenants, criminal activity
  • Civil asset forfeiture (landlords protected)

The real risks around owning cannabis real estate

  • Must be in municipality regulated for cannabis
  • Ensure tenant has license, pays taxes
  • Property must be zoned for cannabis
  • Be careful of green rush illusion
  • OSHA fines, federal prohibition

How BaseCanna makes decisions around who to work with

  • Right license for right product in right market
  • Pay attention to overall market trends (i.e.: demand for manufactured products)

The appreciation on a property once it’s licensed for cannabis

  • BaseCanna paid $1.8M for two warehouses
  • Offers for $4.5M once repositioned

The permitting process for cannabis real estate

  • Very involved, 200-page applications (SOP, demo capacity)
  • Lawyers charge $40K to $75K to guide through process

Leslie’s advice on having an exit strategy

  • First opportunity = create operational campus
  • Immediate exit available once licensing in place

Leslie’s insight on getting in the cannabis game now

  • Institutional money will come in with end of federal prohibition
  • Real estate premiums will fall as more municipalities regulate

Connect with Leslie

BaseCanna

Resources

UCLA Study on Crime & Dispensaries

MAUCRSA

The Rohrabacher-Blumenauer Amendment

Michael’s Products

The Ultimate Guide to Apartment Building Investing

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Deal Desk

Deal Maker LIVE

Michael’s Coaching Program

Partner with Michael

Invest with Michael

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

Review the Podcast on iTunes


Anna Simpson’s philosophy is that you don’t make money in your comfort zone. Once she has achieved a goal, Anna finds a way to push her limits and look forward to the next. And when things start to get difficult, that’s when Ana knows she needs to keep digging: She’s getting closer to the gold.

Anna is a full-time accredited multifamily investor and deal sponsor with experience in property valuation, acquisition, rehabilitation, leasing and asset management. She got her start investing in single family buy and holds before making the decision to transition to multifamily as a passive investor. Anna personally invested in 1,300 multifamily units as an equity partner and key principal before she was ready for the next challenge of becoming a managing partner. Today, Anna has completed two multifamily deals: a 70-unit syndication and a 76-unit 1031 exchange.

Today, Anna sits down with me to share her decision to work ON the business rather than IN it by making the shift to multifamily. She explains how she leveraged her role as a passive investor to learn the fundamentals of syndication and the key challenge she faced in landing her first deal as managing partner. Anna offers insight around the value of persistence and breaking big goals down into smaller chunks. Listen in for Anna’s advice on pushing beyond your perceived limits and learn why she believes that while knowledge is important, true power lies in consistent ACTION.

Key Takeaways

How Anna got involved with real estate

  • Friends active in single family group
  • ‘Success breeds success’

Anna’s initial investment strategy

  • Single family buy and hold rentals
  • Successful but difficult to scale

Anna’s shift to multifamily

  • Working on New Year’s Eve
  • Made decision to work ON vs. IN
  • Got involved as passive investor

What Ana learned as a passive investor

  • How to communicate with vendors, investors
  • How to supervise rehab
  • How to design, implement plan

Anna’s first multifamily deal

  • Found off-market through relationships
  • Syndicated 70-unit deal (23 passive investors)
  • $4M purchase price, $1.4M raise in one day

Anna’s approach to goal-setting

  • Identify where you are and where you want to be
  • Break down into smaller goals (e.g.: one LOI/week)
  • Work backwards and assess regularly

Anna’s key challenge in landing her first multifamily deal

  • Overcame lack of track record with team
  • Experience as investor in 1,300 doors

How the Law of the First Deal impacted Anna

  • Second deal under contract 2 months after first
  • Off-market deal through broker

Anna’s insight on the value of persistence

  • Difficult times mean you’re getting closer
  • Accept setbacks as part of journey
  • Move forward to build reputation, respect

What Anna would do differently given the opportunity

  • Start earlier with apartments
  • ‘You don’t know what you don’t know’

Anna’s advice for aspiring real estate investors

  • Learn through podcasts, groups, etc.
  • Treat as business not hobby
  • Consistent ACTION = POWER
  • Work on mindset constantly
  • Leverage passion on down days

How Anna navigates the down days

  • Surround with supportive, optimistic people

Connect with Anna

Anna’s Website

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

Michael’s Deal Maker Mastermind

Deal Desk

Deal Maker LIVE

Michael’s Coaching Program

Michael’s Products

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes

Podcast Show Notes

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Alan Schnur was away on a business trip when a plane struck his office building, killing 40 of his 44 team members. In the aftermath of 9/11, Alan spent a lot of time questioning what he wanted out of life and the experience informed his drive for continuous growth. Because you never know when another plane is coming, Alan doesn’t believe in complacency. In fact, he makes it a point to reinvent himself every few years and take on new challenges in residential and commercial real estate.

Alan is a wildly successful real estate investor based in Houston, Texas. He began his real estate career rehabbing single family homes, owning a portfolio of 120 before making the transition to apartment buildings. Alan’s go-big-or-go-home mindset translated to multifamily, and he invested in 2K units across 18 complexes—AND founded a property management company that handled 7K units across 40 properties. Now he is taking on a new challenge in commercial real estate, investing in shopping centers along with medical, office and warehouse buildings. Alan is the author of three books on real estate investing, including The Cashflow Mindset: Millionaire, Billionaire & Zillionaire Designs for Financial Freedom & a Fulfilled Life.

Today, Alan joins me to share the story of his reawakening in the aftermath of 9/11 and explain how his skill set as a commodities broker translated to real estate investing. He speaks to the single family formula that dominated the first ten years of his career and his subsequent shift to apartment buildings during a trip to Japan that may or may not have involved saké. Alan describes his apartment addiction, discussing his best and worst multifamily deals as well as his reasons for pursuing syndication. Listen in for Alan’s insight on being flexible with geography and asset classes, taking on new challenges in commercial real estate, and stepping out of your comfort zone to take ACTION!

Key Takeaways

Alan’s AHA moment

  • Job as commodities broker on 101st floor of World Trade Center
  • On business trip during 9/11, lost 40 of 44 team members
  • Week in hotel room led to reflection, reawakening
  • Move to Houston with company, rented condo in NYC

Alan’s experience with single family homes

  • First purchase for $23K, profit of $100/month
  • Bought one/month for 10 years (120 houses)
  • Formula: Rehab, Rent, Refi, Repeat

Why Alan made the transition to multifamily

  • Accumulated enough assets to quit job
  • Bought 25 houses during trip to Japan
  • Realized potential of apartment buildings

Alan’s first multifamily acquisition

  • $40K down on 76-door building (owner financing)
  • Generated more income than 100 houses

Alan’s ‘addiction’ to apartments

  • Buy one every 90 days
  • 18 complexes with 2K units

When Alan got involved with syndication

  • Running out of money, wanted to share risk
  • Started raising money on second or third complex
  • Began with general partner at 30%, 70% for sale
  • Work up to 40-50% for general partner

Alan’s best multifamily deal: The Bangkok Close

  • 1031 buyer wanted 300-unit deal
  • Invested $7M, sold for $14M

Alan’s worst multifamily deal

  • Paid $5K/unit for 160-door complex
  • School across street closed and knocked down
  • Money from bank robbery hidden in sewer line
  • Inspired shift to higher quality assets

Alan’s shift to commercial properties

  • Apartments have variable costs (unpredictable)
  • Triple net lease makes commercial predictable
  • Business renting covers repairs, insurance/taxes

Alan’s shopping center deal in Boise, ID

  • Bought six storefronts for $1M
  • 50% discount (three vacancies)
  • Closed at $2.4M

Alan’s outlook on asset classes

  • Be flexible with geography, asset classes
  • Try more things = better chance of success

Alan’s advice for aspiring real estate investors

  • Put book down and get out to property
  • Join networking group or pay for mentor
  • Watch and learn by joining syndication

What Alan is excited about moving forward

  • Retail syndication
  • Education, helping others

Connect with Alan

Alan’s Website

Resources

The Cashflow Mindset: Millionaire, Billionaire, Zillionaire Designs for Financial Freedom & a Fulfilled Life by Alan Schnur

Books by Alan Schnur

LoopNet

International Council of Shopping Centers

National Apartment Association

National Real Estate Investors Association

Michael’s Coaching Program

Michael’s Products

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


If you are new to the idea of raising money to invest in apartment buildings, the particulars of complying with SEC regulations may have you spooked. No one wants to inadvertently break the law and face restitution, sanctions, or worse—fines and jail time! The good news is, with an assist from an SEC attorney, it is not as difficult to comply with securities laws as you might think.

Mauricio Rauld is the founder and CEO of Premier Law Group, a boutique securities firm specializing in asset protection and SEC compliance. Mauricio has 18-plus years of experience helping multifamily investors increase and safeguard their wealth through syndications. He is a regular contributor to The Real Estate Guys Radio show and a faculty member of the Summit at Sea, a week-long conference for elite real estate entrepreneurs. In addition, Mauricio serves as legal advisor to The Real Estate Guys and asset protection advisor for The Elevation Group.

Today, Mauricio sits down with me to explain his role as a syndication lawyer. He discusses the two legal routes to SEC compliance, the idea of a ‘preexisting substantive relationship,’ and the consequences of breaking the law. Mauricio shares the difference between 506(b) and 506(c), describing the right way to use social media to connect with investors under each exemption. Listen in as Mauricio walks us through the process of working with an SEC attorney, including the general timeline and approximate cost for ensuring compliance with securities law.

Key Takeaways

Mauricio’s role as a syndication lawyer

  • Helps real estate investors scale business
  • Raise money legally for bigger deals

What qualifies as a security

  • Returns generated from your efforts
  • Must comply with federal, state laws

The two legal routes to compliance

  1. Register with SEC (two-year process)
  2. Find exemption, follow rules

The consequences of not following the law

  • Restitution—return money to investors
  • Sanctions—prohibited from raising money
  • Fines, jail time

Mauricio’s advice around disclosures

  • Full disclosure required for non-accredited investors
  • Not required for accredited investors ($1M net worth)

The benefit of using an exemption

  • Creates safe harbor, certainty
  • Preempts state law

The features of the 506(b) exemption

  • Raise unlimited amount of money
  • Up to 35 non-accredited investors
  • Prohibited from advertising

The features of the 506(c) exemption

  • Lifts prohibition against advertising
  • Accredited investors only, reasonable steps to verify

The idea of a preexisting substantive relationship

  • Citizen VC outlines nine points
  • Deep conversation, questionnaire, credit report, etc.

How to use social media to connect with investors under 506(b)

  • Talk about business in general terms
  • Don’t discuss specific offer or prior deals

The process of working with an SEC attorney

  • Work together on business plan, structure
  • Lawyer drafts offering documentation
  • Includes PPM, operating/subscription agreements
  • 506(b) = investor questionnaire
  • 506(c) = CPA letter or third-party verification
  • Accept money only after documents returned

Mauricio’s insight around the timeline and general cost of compliance

  • One week to draft docs once business plan complete
  • Include $15K ‘legal and compliance’ line item in budget

Connect with Mauricio

Premier Law Group

Email cs@premierlawgroup.net

Resources

Citizen VC Letter

Verify Investor

Michael’s Coaching Program

Michael’s Products

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

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Every human interaction is a negotiation. Whether you are communicating with employees, investors, friends or family, the language of give-and-take is at play. And the fact of the matter is, if you don’t ask, you don’t get. So, how can we leverage the ten commandments of negotiation to get more of what we want in the realm of multifamily real estate—and life in general?

Stefan Aarnio is an award-winning real estate investor, entrepreneur and author. He was named one of the Top 10 Real Estate Influencers to Follow by Entrepreneur magazine in 2017 and inducted into the Rich Dad International Hall of Fame in 2014. Stefan is the author of four books on real estate investment and negotiation, including X: The Ten Commandments of Negotiation.

Today, Stefan joins me to share the story of how he went from poor musician to millionaire real estate investor by becoming a student of negotiation. He walks us through his ten commandments of negotiation, explaining the importance of gathering information before you make an offer as well as having clearly written goals going into a negotiation. Stefan speaks to the idea of presenting an ‘offer of greater value’ and making people work for concessions. Listen in for Stefan’s insight around emotional decision-making and the key commandment of negotiation: Get what you want and get out!

Key Takeaways

Stefan’s journey from poor musician to millionaire real estate investor

  • Teaching guitar and playing gigs, not good life
  • Predictable way to get rich in Rich Dad Poor Dad
  • Author, Rich Dad International Hall of Fame

The importance of negotiation in real estate and life in general

  • Part of every human interaction
  • If you don’t ask, you don’t get

The cultural differences around negotiation

  • Every culture has own style, boundaries
  • Deconditioned in name of commerce in west

Commandment #1: Get what you want and get out

  • Pushing for more can kill negotiation

Commandment #2: Adopt a pleasing personality

  • Student with no egos, rivalries came out on top

Commandment #3: Prepare diligently and collect information

  • Know facts in advance to make offer on-the-spot

Commandment #4: Know what you want and have clearly written goals

  • Outline one major, three minor points (i.e.: price, terms)

Commandment #5: Gather information before making an offer

  • Newbies tend to make offers too quickly

Commandment #6: Always present an offer of greater value

  • People will pay premium for service that solves problem

Commandment #7: Do not give concessions freely

  • Make people work for concessions, get something in return

Commandment #8: Take what they WANT, but give what they NEED

  • Manage wants, recognize double standard in transactional negotiation

Commandment #9: Obey non-linear time in the negotiation process

  • Time can move forward, backward or break (manipulate for advantage)

Commandment #10: Become a student of human nature and irrationality

  • Reptilian brain makes emotional decisions based on fear and greed

How the dynamics of negotiation change when a broker is involved

  • Don’t usually make things easier
  • Deal with seller directly if possible

Connect with Stefan

Stefan’s Website

X: The Ten Commandments of Negotiation

Resources

Self Made: Confessions of a Twenty Something Self Made Millionaire by Stefan Aarnio

X: The Ten Commandments of Negotiation by Stefan Aarnio

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

Blackbook Journal by Stefan Aarnio

Michael’s Coaching Program

Michael’s Products

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

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Courage isn’t about being fearless. Courage is about feeling the fear but ‘saddling up anyway.’ When Peter Conti bought his first duplex, he admits that he was shaking. But Peter knew that he had to make a change to life the life he wanted, to be free from the humiliation of a boss who reprimanded him for drinking coffee meant for ‘customers only.’ Peter was highly motivated to leave his job as a mechanic and become a multifamily real estate investor, and that deep desire for financial freedom propelled him to take action.

Peter went from auto mechanic to self-made millionaire in just over three years, using creative financing to invest in both residential and commercial real estate. He started small, buying a duplex, a couple of 4-units, and a 12- and 24-unit before working his way up to shopping centers and 300-unit complexes. He has mentored thousands of investors all over the world and supported many more through his books on multifamily and commercial real estate investing.

Today, Peter sits down with me to describe the moment he decided to take charge of his own financial destiny. He walks us through that first investment in a duplex and the meeting at Chucky E. Cheese that inspired him to invest in a mentor. Peter offers advice around mitigating risk via exit clauses and acquiring property through seller financing or the use of a master lease. Listen in to understand Peter’s unique approach to recovering from a serious motorcycle accident and what he learned in the process that applies to multifamily investing specifically—and life in general!

Key Takeaways

The turning point that propelled Peter into action

  • Working as auto mechanic in Denver
  • Fingers numb from cold, reprimanded for coffee
  • Made decision to be in charge of own financial destiny

Peter’s first investment in a duplex

  • Found real estate agent
  • Took advantage of 5% down for investors through HUD

How Peter got over the hump to make his next investment

  • Meeting with life insurance agent, realized ‘spinning wheels’
  • Invested $5K in training with mentor

Peter’s advice around mitigating risk

  • Attach ‘Addendum A’ to contract (fully assignable)
  • Ask for 10 business days once documents provided
  • Allows to make offer first, then do due diligence

Peter’s guidance around seller financing

  • Target motivated sellers, C class properties
  • Ask seller if willing to carry some of financing
  • Set meeting to build rapport, share track record

Peter’s approach to getting started in commercial real estate

  • Start with apartment buildings (4-, 6- or 10-unit)
  • Consider using master lease to acquire property

What Peter learned in recovering from his motorcycle accident

  • Hiking Appalachian Trail gave time to reflect
  • Enjoy every moment to fullest, appreciate process
  • Break big projects into chunks

What’s next for Peter

  • Learning to play piano
  • Support wife in startup
  • Limited one-on-one coaching

Peter’s top advice for aspiring real estate investors

  • It’s not about wealth, it’s about freedom
  • Find way to enjoy journey

How Peter wants to be remembered

  • Fully present for friends and family
  • Playful, fun and encouraging

Connect with Peter

Peter’s Website

Free Copy of Peter’s Book

Resources

Making Big Money Investing in Foreclosures Without Cash or Credit by Peter Conti

Making Big Money Investing in Real Estate: Without Tenants, Banks, or Rehab Projects by Peter Conti and David Finkel

Commercial Real Estate Investing for Dummies by Peter Conti and Peter Harris

Wild: From Lost to Found on the Pacific Crest Trail by Cheryl Strayed

1 Simple Strategy to Escape the 9 to 5 by Peter Conti

Michael’s Coaching Program

Michael’s Products

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

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“It’s these little things that we do every day that get us closer. I remember climbing a mountain in high school, and the guide told us, ‘Don’t look at the summit. Focus on putting one foot in front of the other, and the summit will take care of itself.’ That’s exactly how I treat business. As long as I know I’m on the right mountain—which I firmly believe is multifamily—I come in here every day and focus on putting one foot in front of the other.”

Ivan Barratt is the founder and CEO of Barratt Asset Management, a real estate investment and management company out of Indianapolis that specializes in the acquisition, redevelopment and management of multifamily apartment communities. Since forming the firm in 2010, Ivan has raised tens of millions in equity, acquired 2,700 units, and grown BAM to a best-in-class management company, boasting $100M in assets under management.

Ivan joins me to explain how he started small with a duplex and 6-unit property, financing deals with hard money loans. He discusses his gradual transition to larger deals, describing his approach to raising capital by building trust with potential investors in the business and medical communities. Ivan shares his ‘mortal sins of multifamily’ as well as the game changers that have allowed him to scale up to 2,700 units. Listen in for Ivan’s advice around doing little things every day to prepare for your career as a multifamily investor!

Key Takeaways

How Ivan got his start with a duplex

  • Put down as little as possible
  • Lived in one side, rented other
  • ‘Journey of $10K units starts with first deal’

What Ivan would do differently given the opportunity

  • Go straight to 20-, 30- or 40-unit deals
  • Takes same effort to close small deal as large one
  • Track record and momentum are most important

How Ivan got started with hard money loans

  • Small multifamily opportunities in market
  • Great lender put up cash for acquisition, renovation

Ivan’s early 6-unit deal

  • Evaluated using simple flipper equation
  • Bought for $150K, $100K in renovations
  • Refi nine months in to put high-interest debt to rest
  • Sold for $350K

How Ivan transitioned from hard money to raising capital

  • Built large pipeline of contacts, ask for referrals
  • Conversations with people in business and medicine

Ivan’s approach to building relationships with investors

  • Get to know people through common interests
  • Explain what you do and treat people well
  • Deliver value, educate on what good deal looks like
  • Network multiplies on its own over time

Ivan’s ‘mortal sins’ of multifamily

  • Tried to renovate project out of cashflow
  • Viewed property management co as profit center

Ivan’s AHA moment after the crash

  • Rereading Rich Dad… reinforced cashflow as king
  • Realized need to build model and scale
  • Reduced risk for WHEN market changes, not IF

The game changers that have allowed Ivan to scale

  • View property management arm as a necessary machine (not a profit center)
  • Bring in a partner for sweat equity, combined forces greater than the sum of parts

Ivan’s advice for aspiring multifamily investors

  • Get educated through podcasts
  • Underwrite 100 deals on LoopNet
  • Set networking goals (investors, brokers and team)
  • Do little things every day to prepare

Why Ivan continues to grow and scale his business

  • Driven by possibilities, freedom

Ivan’s perfect day on Gulf Shores

  • Up before sun to workout
  • Mission-critical emails/calls, check in with partner
  • Day on beach or at pool with family

Connect with Ivan

Barratt Asset Management

Call (317) 762-2625

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

LoopNet

Ivan on BiggerPockets

Michael’s Products

Michael’s Syndicated Deal Analyzer

Michael’s Course

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


Before Tim Hubbard purchased and renovated his small multifamily property in Memphis, Tennessee, the long-term rents ranged from $350/month for the studios to $700/month for the two-bedroom unit. After the renovations, complete with furnishings and Airbnb-ready locks and amenities, Tim began earning revenue of $2,500/month—PER UNIT! How did he do it? What made this particular property perfect for the short-term rental market? Is the Airbnb model right for you?

Tim Hubbard began his career in the hospitality industry before making the transition to real estate. He is passionate about travel, and the Airbnb model allows Tim to visit dozens of countries around the world—while providing the opportunity for others to do the same. Tim serves as the Director of Operations for Midtown Stays, a vacation rental company with properties in both Memphis and Sacramento, California.

Tim sits down with me to explain how he got involved in the worlds of real estate and Airbnb. He describes his experience purchasing and renovating an 8-unit in Memphis for short-term rental, discussing how much he invested in the property, what it took to make the apartments Airbnb-ready, and how he financed the deal through a local bank. Listen in for Tim’s insight around managing Airbnb properties remotely and learn what factors to consider in choosing vacation rental property!

Key Takeaways

Tim’s experience with Airbnb

  • User since 2012, began hosting in 2015

Tim’s background in real estate

  • Wanted to pursue travel, started investing in 2010

Tim’s 8-unit property in Memphis

  • Staying in Airbnb on same street
  • Found large colonial in Midtown
  • Vacated entire building to renovate

How Tim financed the venture

  • Commercial loan from local bank

Tim’s backup plan should new regulations restrict Airbnb

  • Go back to long-term rental

The extent of the renovations on Tim’s property

  • Built in 1912, needed top-to-bottom overhaul
  • Updated plumbing/electrical, structural work
  • Seller replaced roof as part of deal

How much Tim invested in the property

  • Bought for $270K
  • $200K in renovations, furniture

The revenue from rent before and after

  • Long-term rents ranged from $350 to $700/month
  • Airbnb income per unit after was $2,500/month

How Tim made the units Airbnb-ready

  • Installed digital locks
  • Provide guest essentials (i.e.: iron, kitchen appliances)

How Tim manages the units

  • Software, reservation system in place
  • Housekeeping and maintenance staff
  • Full-time manager local to Memphis

How Tim can market the units on multiple sites

  • Use ChannelManager to syndicate
  • Sync calendars to prevent double-bookings

What’s next for Tim

  • Explore other markets, purchase more in Memphis
  • Pursue master lease model to scale faster

Tim’s insight around considerations for short-term rentals

  • Airbnb guests looking for unique experience
  • Walking distance from local attractions
  • Landlord-friendly, turnkey markets (e.g.: Memphis, Indianapolis)

Connect with Tim

Midtown Stays

Email tim@midtownstays.com

Resources

Tim’s Before & After Photos

Nav Athwal on Apartment Building Investing

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

Guesty

Airbnb

VRBO

HomeAway

ChannelManager

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

  • Download
  • Text “secretbook” to 44222

Review the Podcast on iTunes

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes

Direct download: MB_111-_AirBnB_for_Apartments-Tim_Hubbard.mp3
Category:Commercial Real Estate -- posted at: 8:07pm EDT

No one wants to lose their shirt—or anything else for that matter—in multifamily investing. But it’s easy for inexperienced syndicators develop an emotional bias and conflate the numbers in order to make a deal look good to potential investors. And passive investors new to the game typically focus on returns, when their first question ought to be about the risks involved. Conservative underwriting is the key to risk management for syndicators and investors alike… But how do you ensure that the numbers are reasonable? What questions should investors be asking? And how can you tell when a syndicator is too aggressive?

Omar Khan is a Chartered Financial Analyst with Boardwalk Wealth, a private equity firm based in Dallas, Texas, that connects international investors with multifamily opportunities in the southern US. Omar is responsible for raising capital, strategic planning, the development of underwriting models, and investor relations. He has 10-plus years of global investment experience, and Omar has participated in capital financing and M&A transactions valued at $3.7B.

Omar joins me to explain how to identify aggressive underwriting and ensure the accuracy of the numbers used in a particular model. We cover conservative guidelines for reserves and loan terms as well as the importance of planning for worst-case scenarios. Listen in for Omar’s insight around what to look for in a syndicator, how to leverage a sensitivity analysis, and the exit strategy questions an investor should ask—and a syndicator should be prepared to answer!

Key Takeaways

Omar’s background in finance

  • Ten years investing experience
  • Raise capital, develop underwriting models (large syndication deals)

How to identify aggressive underwriting numbers

  • Unreasonable rent growth projections (4% max)
  • Overly ambitious rehab plans

How to ensure accuracy of numbers used in model

  • Ranges rather than specific numbers
  • Sponsor solicits several data sources

What Omar looks for in the cap rate at exit

  • 50-200 basis points higher (3-5 year term)

The internal systems questions passive investors should be asking

  • Frequency of communication with sponsor
  • Auditing of financial statements (who, how often)
  • Systems, resources to resolve problems

The qualities Omar is looking for in a syndicator

  • Admit to mistakes rather than blaming others
  • Plan for solving potential problems

Omar’s insight around communicating with investors

  • Monthly email to relate progress
  • Quarterly, annual in-depth reports
  • Open and honest when mistakes made

Omar’s advice around conservative loan terms

  • Avoid 12-24 month refi
  • As long term as possible (even if slightly higher interest rate)
  • First question should address risk rather than returns

Omar’s approach to bridge loans

  • Don’t touch unless very experienced
  • Get out as quickly as possible (12 months)
  • Shouldn’t worry about running out of cash

The most conservative underwriting guidelines for reserves

  • $1K per unit, one month operating reserves
  • Take reserves out of cashflow ($250/unit/year)
  • Ensure syndicator has access to financing

The importance of planning for worst-case scenarios

  • Use modeling to develop Plan B, C & D

How the passive investor can leverage a sensitivity analysis

  • Analyze variables (i.e.: holding period, interest rates)
  • See where IRR, exit cap lies in different scenarios

Omar’s advice on the exit strategy questions to ask syndicators

  • When/to whom might we sell?
  • Do you have relationships with lenders for refi?

Connect with Omar

Boardwalk Wealth

Email omar@boardwalkweath.com

Call (214) 727-8643

Resources

Rentometer

CoStar

Invest with Michael

Partner with Michael

Michael’s Course

Financial Freedom Summit

Podcast Show Notes

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

  • Download
  • Text “secretbook” to 44222

Review the Podcast on iTunes

Michael’s Products

Syndicated Deal Analyzer

Contact Michael

Michael on LinkedIn

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


‘It is in your moments of decision that your destiny is shaped.’

--Tony Robbins

In my experience, once you truly decide to pursue multifamily investing, it will take 3 to 18 months to do your first deal. In 3 to 5 years, you will have replaced your income and quit your job. And the entire process is set in motion via the Law of the First Deal.

Today, I’m unpacking the powerful Law of the First Deal. I start with its basic principles, offering case studies of podcast guests who were able to replace their income within 3 years and quit their jobs via multifamily investing. I explain why the Law of the First Deal works, describing how investors become deal (and money!) magnets soon after their first closing.

Finally, I walk you through the steps necessary to develop a concrete plan, calculating how long it will take to quit your job—based on your individual Rat Race Number. Listen in for insight on how to leverage the Law of the First Deal to replace your income with multifamily!

Key Takeaways

The principles of the Law of the First Deal

  • First deal is smallest, most difficult
  • Second and third follow in rapid succession
  • Replace income within 2 to 3 years

Case studies of the Law of the First Deal

Why the Law of the First Deal works

  • Magnet for deals, brokers approach with pocket listings
  • Magnet for money, investors who missed out want in
  • Deals get bigger as comfort zone expands

How long it takes to quit your job

  1. Determine average income per unit
  2. Establish how many units you need to cover living expenses
  3. Determine how long it will take
  4. Determine size of first deal

The typical Law of the First Deal timeline

  • First deal in 3 to 18 months
  • Second deal within 6 months
  • Third deal within 6 months
  • Total of 1 to 3 years

The value of establishing a concrete plan

  • Focus on first deal, avoid overwhelm

Resources

ABI EP027 Drew Kniffin

ABI EP 073 Brad Tacia

ABI EP072 Tyler Sheff

ABI EP078 Joseph Gozlan

Michael’s Products

Syndicated Deal Analyzer

Contact Michael

Michael on LinkedIn

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes

Direct download: MB_109-_The_Law_of_the__First_Deal_-_with_Michael_Blank.mp3
Category:Commercial Real Estate -- posted at: 2:02pm EDT

Would you be willing to make 4,500 agonizing phone calls to land your first property? How about going to the trouble of analyzing 100 deals to find one good one? It goes without saying that we have unparalleled opportunities here in the US, but success is unlikely to fall into your lap. So, if you are looking to become a successful multifamily investor, you have to START: Learn to analyze deals properly and get one done.

Andrew Cushman is the principal of Vantage Point Acquisitions, a multifamily investment firm out of Southern California. Andrew has a BS in Chemical Engineering from Texas A&M University, and he worked for a Cargill Foods for seven years before leaving the corporate world for real estate investment. He completed 24 profitable single family flips before making the transition to apartment building acquisitions in 2010. Since then, Andrew has successfully syndicated 1,800 units that continue to provide investors with strong returns.

Today, Andrew joins me to share his story, explaining how an article in the Wall Street Journal inspired his real estate career and why he made the transition from pre-foreclosure flips to multifamily. He walks us through his first deal, a 92-unit property in Macon, Georgia, discussing his mistakes around failing to vet investors and underestimating renovation costs. Andrew offers advice for aspiring investors on beginning with the end in mind, building a network of investors, and partnering for instant legitimacy. Listen in for Andrew’s insight into the benefits of B properties and learn why finding a good deal in the current climate is challenging—but not impossible!

Key Takeaways

How Andrew got into real estate

  • Chemical engineering degree
  • Tried other businesses
  • Article in WSJ re: flipping houses
  • Four years in single family (pre-foreclosures)

Andrew’s shift to multifamily

  • ‘Only as good as last flip’
  • Looking for true financial freedom

Andrew’s first multifamily deal

  • Hired mentor as guide
  • 92-unit deal in Macon, GA
  • 75% vacant, built in 1960’s
  • All-cash syndication ($1.2M raise)

How Andrew financed his first deal

  • Failed to vet investors, lost ¾ of $800K
  • Reached out to entire network
  • Extended closing three times
  • Seller agreed to carry $200K note
  • Raised just enough to close
  • Continued to raise for renovation

What Andrew learned from his first deal

  • Properly screen neighborhood
  • Better estimate rehab costs
  • Better track rehab spending
  • Hire right contractors

Andrew’s advice around doing your first deal

  • Choose deal just outside comfort zone
  • Begin with end in mind, work backwards
  • ‘Don’t buy in the hood’
  • Don’t underestimate rehab costs
  • Learn to analyze deals and get one done

Andrew’s take on the challenge of finding a great deal

  • Must be willing to analyze 100 to find one
  • Don’t look for home run on first deal

Andrew’s insight for aspiring investors who lack capital

  • Start analyzing deals
  • Build network of potential investors (sample deal)

The value in partnering

  • Saves from mistakes
  • Creates legitimacy
  • Go farther, faster

Andrew’s advice to his 22-year-old self

  • Go straight into multifamily
  • B properties = highest return with least effort

Andrew’s perfect day

  • Surf in morning
  • Work at home office
  • Meet wife for lunch
  • Family dinner
  • Work in evening

What Andrew is looking forward to

  • Deal with colleague met at conference
  • Climb, ski Mount Shasta

Connect with Andrew

Vantage Point Acquisitions

Andrew on LinkedIn

Andrew on BiggerPockets

Resources

LoopNet

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

Michael’s Ultimate Guide to Apartment Building Investing

Syndicated Deal Analyzer

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


At the heart of every successful entrepreneur is a deep sense of spirituality. There is strength in developing a relationship with the higher power, and you must get your ‘being’ right before you can do something truly meaningful.

I recently saw Robert Kiyosaki speak on The Real Estate Guys cruise, and his talk reminded me of the connection between my success as an entrepreneur and my faith. Today, I’m sharing the three spiritual lessons that changed my life and brought me to the work I do now, teaching others to raise money and achieve financial freedom through apartment building investing.

I start by sharing my early success with the software startup webMETHODS, explaining how that experience created the illusion that I was in control of my own destiny. Then I describe the challenges I have faced as an entrepreneur and the three lessons I learned around giving up control, finding peace regardless of the circumstances, and shifting to a mindset of giving. Listen in for insight on the relationship between success and spirituality and learn to step out in faith—and realize an incredibly fulfilling life!

Key Takeaways

The concept of Be Do Have

  • Must get ‘being’ right before accomplish something of meaning
  • Involves character, relationship with God

My early success in tech

  • Joined webMETHODS software startup in 1997
  • Company had most successful IPO in history

Spiritual Lesson #1: You are not in control

  • Left job in 2005 to pursue passive income
  • Bought three restaurants, losing money
  • Realized couldn’t control outcome despite best efforts
  • Surrendered control and sales increased by $4K in four weeks

Spiritual Lesson #2: Find peace regardless of the circumstances

  • First apartment deal in 2011
  • ‘Professional tenant’ sued in housing court every six weeks
  • Attorney fees, fines and no rent coming in
  • Found sense of peace and tenant dropped all charges

Spiritual Lesson #3: Shift to a mindset of giving

  • Profit margins on restaurants shrinking in 2013
  • Had to let VP go, running pizzerias myself
  • Losing $10K/week, all money deployed
  • Spent time reflecting on when felt most alive
  • Idea to start online business teaching multifamily
  • Motivation to help others brought success

The relationship between success and spirituality

  • Relationship with God provides strength
  • Great things happen when step out in faith

Resources

The Real Estate Guys Events

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

Damion Lupo on Apartment Building Investing

The Untethered Soul: The Journey Beyond Yourself by Michael A. Singer

Uganda Counseling and Support Services

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


Mario Ortiz’s first multifamily deal wasn’t a homerun. Would he do things differently, knowing what he knows now? Maybe wait for a better deal to come along? Mario says no, arguing that ‘getting in the game’ is more important than the size or quality of the first deal. In fact, he lives by the adage that the ‘opportunity of a lifetime’ comes about once a month. The thing is, you have to be looking for it.

Mario is a mechanical engineer from El Paso, Texas. He has managed to build a thriving real estate business while working full-time in the oil industry—without employing syndication. A self-made, resourceful entrepreneur, Mario finds a creative way to finance each new multifamily property, and he made a cool $4M on the refi of his most recent investment!

Mario sits down with me to explain how the unpredictable nature of the oil and gas industry inspired him to pursue real estate. He shares his initial plan to invest in single-family properties and the overwhelm he experienced self-managing 10 homes on top of his full-time job. Mario walks us through his first multifamily deal, describing his luck in establishing rapport with a local bank and what he learned by self-managing the 17-unit property. He discusses the creative ways he financed his second and third multifamily deals, a 90-unit in Houston and a 180-unit in Fort Worth. Listen in for Mario’s insight around ‘getting in the game’ and learn how the refinance of his 180-unit is allowing him to quit his engineering job and travel with his family 

Key Takeaways

Mario’s background

  • Mechanical engineer in oil industry
  • Concerns about stability of job
  • Started with single-family homes
  • ‘Graduated’ to multifamily

Mario’s initial real estate plan

  • 25-30 single-family rentals
  • Replace income in case of layoff

Why Mario’s plan changed

  • Overwhelmed by management of 10
  • Comfortable in full-time job

Mario’s first multifamily deal

  • Found 17-unit in La Marque on Loopnet
  • Established relationship with local bank
  • Hired part-time onsite office manager

Why Mario chose to self-manage

  • ‘Hands-on guy’
  • Cognizant of bottom line
  • Learned leases, eviction processes
  • Gained understanding of multifamily law

Mario’s second multifamily deal

  • 90-unit deal in receivership in Texas City for $1.2M
  • Put 17-unit on Loopnet as owner finance
  • Borrowed from 401(k)
  • Hired manager to help get rid of bad element
  • Sold 18 months later for $2.4M

Mario’s third multifamily deal

  • 180-unit deal in Fort Worth for $3.65
  • Enamored by deal, ignored warning signs
  • Lost $20K/month for first eight months
  • Economic occupancy 65%, physical occupancy 85%

How Mario made the 180-unit profitable

  • $400K in cash reserves
  • Got rid of tenants not paying (65%)
  • Rehab took three years

The refinance of Mario’s 180-unit property

  • Valuation at $10.9M (75% LTV)

Mario’s plan moving forward

  • Actively looking for properties in $10-15M range
  • Invest proceeds from refi in another property

Mario’s plans to leave his full-time job

  • Challenge to give up perceived benefits
  • Looking forward to running real estate business
  • Opportunity to travel with family

Mario’s parting advice

  • Starting more important than size/quality of deal
  • ‘Get in the game’

Connect with Mario

Email mortiz9991@yahoo.com

Resources

Loopnet

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


What’s differentiates a successful multifamily real estate investor from someone who dreams of financial freedom but doesn’t take action? Todd Fox contends that a willingness to fail is what sets him apart and that his failures have helped him learn, grow and gain the confidence to go out and create the next big opportunity.

Todd is the CEO of Visum Development Group. In the last 15 years, Todd has developed $35M in projects in the Ithaca metro area, and he oversees all aspects of the firm’s projects from concept formation to long-term stabilization. Visum specializes in new construction and the redevelopment of residential properties, working to maximize returns while mitigating risk for investors. The company offers a range of luxury student housing, residential and commercial investments, and they are currently working on a 207-bedroom student housing project for Cornell University worth $37M.

Todd joins me share his journey from bankruptcy to successful developer, discussing how that dark time inspired him to pursue real estate full-time. He explains how he got his start with duplexes, purchasing his first property at auction and doing an incredible amount of legwork to find the second property—three years later. Todd describes his original intention to scale up to ten duplexes and how his dreams got bigger as he gained confidence and secured a network of investors. Listen in for Todd’s insight on following your heart, learning from failure, and setting small goals to build momentum.

Key Takeaways

Todd’s path to real estate development

  • Quiznos franchise for three years
  • Bought property at auction, redevelop as duplex
  • Internet startup in NYC
  • Eight years of full-time real estate

What inspired Todd to pursue real estate full-time

  • Making $20K/year on duplex
  • ‘What if I owned 10?’

Todd’s painful experience with bankruptcy

  • Personal guarantee on Quiznos lease
  • Next owner stopped paying rent
  • Sued for $482K
  • Questioned path of entrepreneurship

How Todd overcame the inability to secure a bank loan

  • Confident in ability to build product, find deals
  • Promised partner double usual return in exchange for financing

How Todd found his next deal

  • Looked through tax maps for parcels
  • Letters, door-knocking
  • Found house and double-lot worth $500K for under $300K
  • Rented house, built two new duplexes on lots

Todd’s decision to scale beyond ten duplexes

  • Mastered renovations, duplexes
  • Opportunity to build six-unit
  • Raised $750K, on-time and on-budget
  • Now working on $37M building

The organic way Todd built a network of investors

  • Father of tenant in first duplex in student housing business
  • Reached out with interest in investing, hit it off
  • Brought in friends as deals grew

Todd’s approach to raising money

  • Properties under contract before money raised
  • Ability to flip contract in worst-case scenario
  • Trust investors to support (calculated risk)

Todd’s advice for aspiring real estate investors

  • Learn from failure, gain confidence
  • Follow your heart, do what you love
  • Don’t be afraid to fail

Todd’s insight on what sets successful entrepreneurs apart

  • Understanding that it’s okay to fail
  • Willingness to do things that are uncomfortable
  • Set small goals and build momentum
  • Don’t wait for big opportunity, go out and create

Connect with Todd

Visum Development

Visum on Facebook

Visum on Instagram

Resources

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


The two biggest issues multifamily owners face are turnover and resident satisfaction. If a property is not at full occupancy, your bottom line takes a significant hit. How can you address both of these issues and create a community in your apartments that makes residents want to stay, even if the rents go up?

Pete Kelly is the CEO of Apartment Life, a faith-based nonprofit motivated by a commitment to building relationships and community. Apartment Life serves the multifamily industry, redefining the resident experience in order to increase retention, improve tenant satisfaction, and enhance the community’s online reputation.

Pete sits down with me to share his background in the nonprofit world, explaining the basics of Apartment Life as an organization. He discusses the research around loneliness and public health, customer engagement and brand loyalty, and the economic impact of the CARES Program. Pete offers the specifics of what the CARES and Workforce Housing teams do to engage residents and how the faith-based roots of the organization impact their mission. Listen in for Pete’s insight on building a community that is good for the human soul AND the bottom line.

Key Takeaways

Pete’s background in the nonprofit world

  • 24 years with organization serving young people
  • Two years as CEO of Apartment Life

The fundamentals of Apartment Life

  • Relationships good for soul AND bottom line
  • Friendships increase chances of staying
  • Team hosts events, creates ‘sticky community’

The research around loneliness and public health

  • 26% more likely to die if feel lonely
  • As bad as smoking, obesity

The business research around connection and engagement

  • Emotionally connected customer 52% more valuable
  • Spend more money more often, loyal to brand

How friendships affect a resident’s willingness to stay

  • Seven friends in complex = twice as likely to renew
  • Neighbors themselves are amenity

The financial benefits of the CARES Program

  • $138K annual value to owner
  • 3 renewals/month

What the Apartment Life teams do

  • Usually husband/wife team that lives on-site
  • Events to connect residents
  • Opportunities to care (e.g.: baby gift, ride to airport)
  • Visit tenants 90 days before lease renewal
  • Build positive online presence for community

The cost of the CARES Program for owners

  • Provide 2BR/2BA unit for CARES Team
  • Management fee of $650 to Apartment Life
  • Budget for events ($2/door)
  • Best for A/B Class properties, at least 250-units

The alternative Workforce Housing Program

  • Class C properties in lower income communities
  • Team lives off-site, paid hourly
  • Manages requirements for LIHTC

The faith-based element of Apartment Life

  • ‘Love thy neighbor’
  • Recruit teams from local churches
  • Follow Fair Housing Act guidelines

The mission of Apartment Life

  • Dramatic impact on residents’ lives

Connect with Pete

Apartment Life

Email petekelly@apartmentlife.org

Resources

‘Why Loneliness May Be the Next Big Public-Health Issue’ in Time

‘Loneliness and Social Isolation as Risk Factors for Mortality’ in Perspectives on Psychological Science

‘The New Science of Customer Emotions’ in Harvard Business Review

CARES Program Financial Impact Analysis

Low-Income Housing Tax Credit Guidelines

Fair Housing Act

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


When Mike Hambright first got into real estate investing ten years ago, he was hesitant to meet his competition. But Mike is an extrovert by nature, and after having coffee with a fellow investor, his perspective shifted. Now he advocates an abundance mentality, and Mike firmly believes that meaningful conversations with high-level players can take your game to the next level. So how do you build a network of investors you respect who can help you learn and grow?

Mike is the Chief Nerd at FlipNerd, a leading resource and social platform for real estate investors with more than 100K subscribers and 1500-plus video shows published to date. He is also the Owner and President of Evolution Properties, a multimillion-dollar firm focused on residential real estate in the Dallas market. Mike has an abundance mentality and a knack for networking, serving as a mentor to aspiring investors and founding the Investor Fuel mastermind.

Mike joins me to discuss his shift from the corporate world to full-time real estate investing, explaining how his wife inspired him to quit dabbling and go all-in in the summer of 2008. He shares his pursuits beyond investing, including his talent for connecting people through the FlipNerd platform. Mike gets granular on the value of a thriving network, describing the opportunities to do deals together and how connections can take your game to the next level. Listen in for Mike’s advice around expanding your real estate network and building meaningful relationships to accelerate your success. 

Key Takeaways

Mike’s shift from corporate to real estate

  • Entire team fired from large retail company
  • Moved to DC, company filed for bankruptcy
  • All-in on real estate summer of 2008

Mike’s ‘go big or go home’ mentality

  • Burning through capital, COBRA insurance
  • Wife said ‘you need to fix this’
  • Treat like business, laser focus
  • Bought 65 homes in first year

How Mike has expanded beyond investing

  • Still active, maintains rental portfolio
  • Ran HomeVestors franchise
  • Added coaching, FlipNerd

The benefits of the FlipNerd platform

  • Created to learn, provide resource
  • Added benefit of establishing network

The value of a thriving network

  • Opportunity to do deals together
  • Relationships accelerate progress
  • Meaningful conversations at events

Mike’s insight on masterminds

  • High-level people take to next level
  • Apply tips, tricks to your business
  • Expand limits of what’s possible

How to expand your network

  • Real estate clubs, podcasts
  • Local Facebook groups
  • Find people and ask questions

What Mike is looking forward to

  • Continued success of Investor Fuel
  • Freedom of virtual team
  • Building relationships

Connect with Mike

FlipNerd

FlipNerd on Facebook

Mike on Facebook

Resources

Investor Fuel

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

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

Review the Podcast on iTunes


Ben Risser had a bad case of entrepreneurial ADD. He knew that the corporate environment was not a good fit for his personality, and he knew that real estate was the route he wanted to take. But Ben couldn’t get focused on a single strategy. He looked into several different single-family alternatives and even pursued lease options for awhile, but he couldn’t seem to stick with one strategy long enough to see it through… And then he landed on multifamily.

Ben enrolled in the Ultimate Guide to Buying Apartment Buildings with Private Money course and started networking at local REIA meetings. Through a random series of events, he ran into his partner, Matt Faircloth, and started underwriting deals. Matt’s broker connections led the team to a 198-unit deal in Fayetteville, NC—a D property in a B neighborhood with big value-add potential. It took six months and lot of legwork, but Ben and Matt closed in January of 2018, and they are actively pursuing other multifamily opportunities in the southeast US.

Ben sits down with me to explain how he came to realize that he is an entrepreneur at heart, despite his background as an aerospace engineer. He discusses his lack of focus early on and how he finally made the commitment to multifamily. Ben shares the story of his unintentional leap into full-time investing and the value of his wife’s support in pursuing the real estate business. Listen in for Ben’s insight around perseverance, focus, and finding a partner with a complementary skill set.

Key Takeaways

Ben’s introduction to real estate

  • Worked at Boeing as aerospace engineer
  • Creativity not valued, stumbled into Kiyosaki
  • Real estate to build pipeline vs. carry buckets

Ben’s initial real estate strategy

  • Liked idea of rentals, passive income
  • Zoomed in on single-family (analysis paralysis)
  • Pursued lease options, burned by partner

Ben’s shift to multifamily

How Ben found his partner

  • Matt presented at credit/investor meeting
  • Follow up, persistence led to partnership

Ben and Matt’s partnership

  • Matt raises equity, focus on big picture
  • Ben does underwriting, loan process
  • Complementary personalities

Ben’s first multifamily deal

  • 192-unit in Fayetteville, NC
  • D property in B neighborhood
  • $6.65M purchase, $1.7M CapEx
  • 24% rent increase

Why it took 12 months to close on the property

  • Offered $6.59M in July
  • Seller initially accepted higher offer
  • Renegotiated for $6.65M
  • Runway to raise equity, get financing

The complications Ben encountered in his first deal

  • Laundromat next door necessitated Phase II ESA
  • Changed lenders twice

How Ben and Matt raised money for the deal

  • Established network in Trenton, NJ
  • $3.2M equity raise

Ben’s transition to full-time syndicator

  • Laid off from small engineering company
  • ‘At peace’ about pursuing real estate

What’s next for Ben and his partner

  • Value-add on property, 20 units available
  • Actively seeking opportunities in southeast
  • Property manager instrumental in due diligence

Ben’s advice for aspiring real estate investors

  • Perseverance is key
  • Focus on one strategy

Connect with Ben

Email b.risser@providencecapital.org

Resources

Rich Dad Poor Dad by Robert Kiyosaki

REIA

Strategic Management Partners

Financial Freedom Summit

Partner with Michael

Invest with Michael

Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


Would you like to save ten years or so and get right to the financial freedom part of real estate investing? Corey Peterson is finally living what he calls the ‘Sunsets and Palm Trees’ lifestyle, but his path was not an easy one. Like many a real estate investor before him, Corey got into the fix and flip business, and while he looked successful on the outside, he was a wreck on the inside. Running rehabs was running him ragged, and he was spending his Saturdays with contractors—instead of his family. Corey knew he had to do something differently, and that’s when he made the transition from single- to multifamily real estate.

Today, Corey is the owner of Kahuna Investments, a multifamily firm that provides its investors with stable cashflow and long-term capital appreciation. Since 2011, Corey has been involved in the ownership and management of commercial properties worth a total of $31M, and he is a sought-after speaker in the multifamily investing space. Corey is the also the host of the Multi-Family Legacy Podcast, and he has been featured on FOX, CBS, ABC and NBC affiliates.

Corey joins me to share his story, explaining how ‘Bruce Wayne’ introduced him to real estate and how being fired from his job as a financial advisor inspired his commitment to full-time investing. He walks us through the ‘hustle and grind’ of his years in the fix and flip business, describing the Saturday he missed his son’s game and how that feeling of failure motivated Corey’s transition to multifamily. He addresses how he developed a talent for raising private money and how that translated to a partnership and his first multifamily deal. Listen in for Corey’s advice around skipping the single-family step and shaving ten years off your journey to financial freedom!

Key Takeaways

Corey’s introduction to real estate

Why Corey got caught in the fix and flip trap

  • TV portrayals
  • Quick money

How Corey made the commitment to full-time real estate

  • Fired from job as financial advisor
  • Learned to raise private money
  • Went back to fix and flips

Corey’s shift to multifamily

  • Missed son’s Saturday game
  • Spent year establishing framework
  • Informed investors of change
  • Announcement at multifamily event

Corey’s first multifamily deal in 2011

  • Partners had deal, needed $1.4M
  • Sold for $8.8M in 2017
  • 1031 exchange for $12.7M deal
  • $400K for rest of life

Why Corey encourages investors to do multifamily

  • Focus on raising money, underwriting deals
  • Easier to get loans, can hire third-party manager

Corey’s advice for aspiring real estate investors

  • Avoid fix and flips (require hustle and grind)
  • Work toward multifamily cashflow
  • Look for working man’s complex
  • Provide world-class service (maintenance, management)

Corey’s tips around raising money

  • Ask, ‘Who do you know?’
  • Right people will self-select

Corey’s insight on mentoring and partnerships

  • Seek out partners at events
  • Look for complementary skill set

What Corey’s excited about

  • Opportunities in marketplace as interest rates rise

Connect with Corey

Kahuna Wealth Builders

The Multi-Family Legacy Podcast

Resources

Rich Dad Poor Dad by Robert Kiyosaki

Financial Freedom Summit

Partner with Michael

Invest with Michael

Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


If you take the time to sit down and get clear on the direction of your life, you may find that growing a business for yourself and your family will afford you the flexibility and time to pursue hobbies, to travel, to spend time with the people you love—and build wealth in the process. More often than not, time invested in reflection is what ultimately inspires action among aspiring multifamily investors.

Scott Price and his wife Karen run Bonvolo Real Estate Investments. They have been investors since 2003, owning and managing multifamily, office, retail and land properties across multiple markets in Washington state. From 2003 through 2007, Scott worked as a broker and earned Seattle Magazine’s Best in Client Satisfaction Award three times before returning to his career in project management. He has steadily grown his real estate portfolio while working full-time at Microsoft, but now he is quitting his W-2 job to focus on Bonvolo full time!

Scott sits down with me to share the experience that distracted him from pursing real estate after college and how the desire for flexibility ultimately brought him back. He explains why he went straight to multifamily as an investment strategy, how he was able to overcome his inexperience, and the business plan for his first 29-unit property. Listen in as Scott reflects on how a lack of awareness about syndication led to slow growth and addresses his plans to give back to the community now that he does real estate full time.

Key Takeaways

Scott’s introduction to real estate

  • Research around creating wealth
  • Real estate tangible source of income

When Scott first took action in real estate

  • Rented condo, had bad tenant
  • Distracted by day-trading, stocks

Why Scott returned to real estate

  • Desire for flexibility, work for self
  • Build considerable net worth
  • Time to travel with family
  • Sense of satisfaction

Scott’s initial real estate strategy

  • Focus on multifamily
  • Conservative approach

Why Scott went straight to multifamily

  • Confident in education, team
  • Sold home and downsized
  • Used cash for down payment on 29-unit

The initial challenges Scott faced in multifamily

  • Tried to do everything alone early on
  • Growing portfolio with own funds

How Scott overcame his inexperience

  • Point to experience of team
  • Technical understanding through education

Scott’s first 29-unit deal

  • Found on MLS, matched available down payment
  • Aware of capital requirement after purchase

Scott’s business plan for creating value

  • Rebrand to change community perception
  • Responsive to tenants, take care of property

What’s next for Scott

  • Actively looking to buy
  • Pursue syndication

Scott’s advice for his younger self

  • Start early, start big and jump in
  • One bad tenant not representative of business

Why Scott was too conservative early on

  • Lack of awareness re: syndication

Scott’s challenges around syndication

  • Concern as steward of other people’s money
  • New world of larger properties

Scott’s guidance for aspiring investors

  • Give a little, downsize if possible
  • Consider living in property to start
  • Redeploy equity in own house
  • Use yours AND other people’s money

What Scott is looking forward to

  • Working full-time in real estate
  • Time for family, hobbies
  • Financing sculpture park project in community

Connect with Scott

Bonvolo Real Estate Investments

Email scott@bonvolo.com

Resources

The Miracle Morning by Hal Elrod

Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


As multifamily investors, it is easy to get caught up in making as much money as possible. Problem is, we sometimes forget that real people live in those apartment buildings. And regardless of their socioeconomic level, our tenants deserve to be treated with dignity and respect.

Eddie Lorin is a multifamily real estate investor with 20 years of value-add experience and 40K units under his belt. Eddie’s company, Impact Housing, is on a mission to breathe new life into neglected multifamily properties, generating positive returns for investors and improving the quality of life for residents and surrounding communities.

Eddie sits down with me today to share his vision for Impact Housing and the critical need for clean, affordable housing for the working class. He explains the concept of impact investing, discussing how he takes care of people ‘where they live’ by way of Class A amenities and on-site programming. Eddie speaks to his expectations for third-party property managers, describing the art and science of building a community. Listen in as Eddie offers the business argument for his model and learn how to do well by doing good.

Key Takeaways

Eddie’s vision for Impact Housing

  • Changing people’s lives where they live
  • Safe, affordable housing for working class
  • Tenants stay, pay and refer friends

The concept of impact investing

  • Doing business for a purpose
  • Millennials leading paradigm shift
  • Working poor in distressed areas

What’s different about Impact Housing

  • Focus on resident rather than deal
  • Treat tenants with dignity, respect
  • Provide Class A amenities

How Eddie takes care of his residents

  • Signage, pool and fitness center
  • Health, wellness classes
  • Create sense of community

What Eddie requires of third-party property managers

  • Budget set aside for activities, amenities
  • Respond to work orders within 48 hours
  • Build relationships with tenants

The business argument for Eddie’s model

  • Big demand for affordable housing
  • Safe, defensive investment

What Eddie’s looking forward to

  • Deal in Maryland (townhomes)
  • Environmental, social and financial return

Connect with Eddie

Impact Housing

Email info@impacthousing.com

Resources

The Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes

Direct download: MB_098_-_Do_Well_By_Doing_Good_-_With_Eddie_Lorin.mp3
Category:Commercial Real Estate -- posted at: 7:07pm EDT

‘The guy or the gal that wants to quit their job and doesn’t is quitting themselves.’

What is the secret sauce that makes a person successful? Michael Quarles says that it’s not about hoping, wanting or even needing to reach your goals. You have to REQUIRE yourself to take action every day in order to achieve. And even that’s not enough if you don’t have self-respect.

Michael is a serial entrepreneur and accomplished real estate broker and investor who purchased his first property at the tender age of 18. He has completed thousands of real estate deals, and Michael has vast experience with fix and flips, assignments, and wholesale deals. In addition, he designed a systematized business model that his team uses to purchase houses across the country through 1800Sell4Cash. Michael also developed Yellow Letters, the largest marketing company for real estate investors, as well as the Alex & Ryan Call Center, a service that turns marketing responses into deals.

Today, Michael joins me to discuss his high-level strategy for lead generation. He explains the value of cluster marketing, his strategies for converting leads over the phone, and the process of locating leads without the help of a broker. Michael walks us through his criteria for choosing a market and how he handles due diligence without the luxury of seeing a property in person. Listen in for Michael’s insight on why self-respect is the key to success and his ‘taste the caviar’ challenge for aspiring investors.

Key Takeaways

Michael’s high-level strategy for lead generation

  • Sweat marketing (i.e.: new, sports, purses and shoes)
  • Paid marketing (e.g.: signage, billboards and direct mail)

The value of cluster marketing

  • Send six different letters, postcards
  • Increased probability of call back

Michael’s techniques for converting leads on the phone

  • Imbedded commands
  • Positive, negative reinforcement
  • Pacing
  • Neural linguistics

Michael’s take on the art of negotiation

  • Teach what you want them to say
  • Legal, moral and ethical conduct

Michael’s best suggestions for lead sources

Michael’s criteria for choosing a market

  • 2/3 median
  • High percentage of cash investor buyers
  • Stable number of single-families per zip code
  • High foreclosure rate

Michael’s call center personas

  • Alex—answers phone
  • Ryan—negotiators
  • Angel—negotiates terms

How Michael does due diligence without seeing a property

  • Broker’s price opinion
  • Ensure dealing with owner
  • Appraisal
  • Home inspection
  • Request pictures

Michael’s insight on what it takes to be successful

  • Want, need and hope are not enough
  • Must REQUIRE yourself to achieve
  • Self-respect to push through pain

Michael’s ‘taste the caviar’ challenge

  • See what it feels like to experience success

The value in surrounding yourself with the right people

  • Choose people where you want to be

Connect with Michael

Michael’s Website

Email michael@michaelquarles.com

Yellow Letters

1800Sell4Cash

Call Center

Resources

ListSource

Fidelity National Title

The Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


‘The guy or the gal that wants to quit their job and doesn’t is quitting themselves.’

What is the secret sauce that makes a person successful? Michael Quarles says that it’s not about hoping, wanting or even needing to reach your goals. You have to REQUIRE yourself to take action every day in order to achieve. And even that’s not enough if you don’t have self-respect.

Michael is a serial entrepreneur and accomplished real estate broker and investor who purchased his first property at the tender age of 18. He has completed thousands of real estate deals, and Michael has vast experience with fix and flips, assignments, and wholesale deals. In addition, he designed a systematized business model that his team uses to purchase houses across the country through 1800Sell4Cash. Michael also developed Yellow Letters, the largest marketing company for real estate investors, as well as the Alex & Ryan Call Center, a service that turns marketing responses into deals.

Today, Michael joins me to discuss his high-level strategy for lead generation. He explains the value of cluster marketing, his strategies for converting leads over the phone, and the process of locating leads without the help of a broker. Michael walks us through his criteria for choosing a market and how he handles due diligence without the luxury of seeing a property in person. Listen in for Michael’s insight on why self-respect is the key to success and his ‘taste the caviar’ challenge for aspiring investors.

Key Takeaways

Michael’s high-level strategy for lead generation

  • Sweat marketing (i.e.: new, sports, purses and shoes)
  • Paid marketing (e.g.: signage, billboards and direct mail)

The value of cluster marketing

  • Send six different letters, postcards
  • Increased probability of call back

Michael’s techniques for converting leads on the phone

  • Imbedded commands
  • Positive, negative reinforcement
  • Pacing
  • Neural linguistics

Michael’s take on the art of negotiation

  • Teach what you want them to say
  • Legal, moral and ethical conduct

Michael’s best suggestions for lead sources

Michael’s criteria for choosing a market

  • 2/3 median
  • High percentage of cash investor buyers
  • Stable number of single-families per zip code
  • High foreclosure rate

Michael’s call center personas

  • Alex—answers phone
  • Ryan—negotiators
  • Angel—negotiates terms

How Michael does due diligence without seeing a property

  • Broker’s price opinion
  • Ensure dealing with owner
  • Appraisal
  • Home inspection
  • Request pictures

Michael’s insight on what it takes to be successful

  • Want, need and hope are not enough
  • Must REQUIRE yourself to achieve
  • Self-respect to push through pain

Michael’s ‘taste the caviar’ challenge

  • See what it feels like to experience success

The value in surrounding yourself with the right people

  • Choose people where you want to be

Connect with Michael

Michael’s Website

Email michael@michaelquarles.com

Yellow Letters

1800Sell4Cash

Call Center

Resources

ListSource

Fidelity National Title

The Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


With 3,600 members, Neal Bawa’s multifamily meetup is the largest in the US.

Would you believe that when he started the group, Neal had zero multifamily experience?

Neal’s background is in technology education. He spent 15 years running a traditional company—and paying massive taxes—when his boss turned him on to the tax benefits of multifamily. Neal invested in a handful of single family homes, triplexes and fourplexes to learn the game, and he was ready to take the next step when he learned about a 12-plex deal that he couldn’t afford on his own.

By then, Neal had established his multifamily meetup, where he was candid about the fact that he didn’t have experience. Rather, he shared what he DID know—his research and knowledge of the numbers. And on the night that Neal shared the story of the 12-plex deal, he discovered that he had a knack for raising money as well.

Today, Neal and his partner have 1,000 units, with plans to hit 1,700 by the end of the year. Neal joins me to discuss how he was able to position himself as a leader despite a lack of track record and why his ability to tell the story of a project led to success with raising money. He talks numbers, sharing the importance of understanding the economics of an area before you invest and his take on the top two markets for 2018. Listen in for Neal’s insight around stock market corrections, partnering with experts and diversifying your real estate portfolio.

Key Takeaways

Neal’s transition from single- to multifamily

  • Multifamily scales much better, always the goal
  • Bought single family, tri-/quadplexes to learn
  • Found 12-plex deal, told story in meetup
  • Discovered knack for raising money

Why Neal established a multifamily meetup without a track record

  • Desire to share knowledge, network
  • Honesty re: lack of experience resonated

How Neal’s meetup group supported his growth

  • Encouraged meetup members to form groups (e.g.: underwriting)
  • Learned from each other through open share
  • Experienced future partner joined group

Neal’s advice around avoiding the mistakes he made early on

  • Don’t assume taxes will stay the same
  • Gain understanding of tenant quality

How demographics can impact returns

  • Delinquency levels of African American tenants
  • Marginal difference on western seaboard
  • Three to four times higher in Midwest
  • Vegas as transitional area, high turnover
  • Work numbers into underwriting

Neal’s top market picks with growth and value potential

  1. Sacramento
  2. Orlando

Why multifamily investors should adjust their expectations

  • 23% cash-on-cash returns no longer realistic
  • Interest rates increasing, cap rates decreasing
  • Rent growth slowing down (still above trend)
  • Red flag if syndicator promising same returns

Neal’s take on whether it’s a good time to get into multifamily

  • Anticipate massive housing shortage
  • Gap in supply/demand in Class B, C
  • Once in a lifetime opportunity

Neal’s insight on market corrections

  • Assume will happen, plan for it
  • Returns will drop, but good properties will survive

How multifamily performed in the last recession

  • Better than most asset classes
  • Still had cashflow (down to 4%)
  • Deep crash = opportunity
  • 4% default rate

What’s next for Neal

  • Expand network and diversify
  • Acquire student, senior housing
  • Partner with expert in industrial

Connect with Neal

Multifamily U

Financial Attunement

Email neal@finatt.com

Resources

We Are Apartments

The Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


Wouldn’t it be great if your first multifamily deal just fell into your lap? If someone would just walk into your office and offer you an 18-unit property? If a bank would provide you with 100% financing and 100% renovation?

Sounds great, right?

But the problem with things being too easy is that you don’t learn. Just ask Nathan Tabor. He got lucky on his first multifamily deal—and that led to a lot of misery, stress, and unanticipated setbacks with his second and third investments.

Nathan is an entrepreneur, business consultant, executive coach and speaker. In the last 18 years, he has successfully founded and operated dozens of businesses, grossing over $150M in sales. His experience spans the areas of real estate, auto sales, web-based marketing and direct product sales. Nathan has been a featured guest on Fox News, Laura Ingraham and C-Span, among others, and his parent company was ranked as one of the fastest-growing small businesses in the US by Inc. magazine in 2012, 2013 and 2014.

Nathan has done 26 multifamily deals in the last 11 years, and his current portfolio includes three apartment buildings with a total of 168 units. Today he joins me to share his story, discussing how that easy first deal led to big mistakes with his second and third investments. Nathan walks us through the lessons he learned around financials and zoning and explains why aspiring investors should focus on the first deal. Listen in to understand how his multifamily strategy has changed over time, and get Nathan’s insight on serving others first to achieve lasting happiness.

Key Takeaways

Nathan’s stress-free first deal

  • Opportunity to buy 18-unit complex
  • 100% financing from small community bank
  • Added 12-unit complex nearby
  • Flipped after eight months, made $250K

Nathan’s disaster of a second deal

  • Purchased 24 units for $225K
  • Couldn’t get building permits
  • Lost grandfathering, had to bring up to code
  • Cost $150K more than budgeted
  • 18 months of misery and stress
  • Good investment in long run

Nathan’s multifamily strategy

  • Class C, value-add opportunities
  • Flip OR refinance into nonrecourse debt
  • Current portfolio of three complexes, 168 units

Nathan’s third multifamily deal

  • Rent-roll advertised $28K, only $7K coming in
  • Forced to rework numbers, renegotiate with bank
  • Learned to verify financial via bank statements
  • Eventually sold property, made $800K

The lessons Nathan learned from his mistakes

  • Don’t wait to resolve problems
  • Follow instincts if something feels wrong
  • Seek the advice of mentor/coach
  • Do foundational work to get educated

How Nathan’s multifamily strategy changed over time

  • Started out flipping properties
  • Learned about nonrecourse debt
  • Look for properties that meet nonrecourse criteria
  • Banks started asking for more money down
  • Uses income from flips to finance next deal

Why multifamily appeals to Nathan

  • Monthly income not dependent on working 40 hours/week
  • Opportunity to help people in difficult situation (C class buildings)
  • 90% of tenants just want safe, well-maintained place to live

Nathan’s advice for aspiring multifamily investors

  • Define your niche
  • Develop business plan
  • Start somewhere, build up
  • Work with partner if necessary
  • Focus on the first deal

Nathan’s insight on work-life balance

  • Moments of joy based on money don’t last
  • Take care of health, relationships and faith first

Connect with Nathan

Nathan’s Website

Resources

The Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


Andrew Campbell was 27-years-old, working a good corporate job when he got the call that his father had suffered a massive brain hemorrhage. So he moved back home to Austin and reconsidered what he wanted out of life.

Flexibility and freedom became priorities for Andrew, and when an experienced friend invited him to partner up on the purchase of a duplex, he agreed. Very quickly, Andrew was ‘addicted to real estate,’ and he began to envision a long-term plan that would allow him to quit his job and pursue real estate full-time.

Now Andrew is a managing partner with Wildhorn Capital, a real estate investment firm focused on multifamily properties in major Texas markets. Today he joins me to share how he made the transition from duplexes and fourplexes to his first multifamily deal, a 192-unit building in San Antonio. Andrew walks us through his first experience with raising money, explaining how being a real estate junkie helped him build a network organically. Listen in for Andrew’s insight on redefining success, taking risks, and leveraging an addiction to real estate to live the life YOU design.

Key Takeaways

How Andrew got into real estate

  • Corporate job out of state
  • Moved home after dad’s massive brain hemorrhage
  • Changed notion of what success looks like
  • Bought duplex with experienced mentor

Andrew’s initial investment strategy

  • Goal to create passive income
  • Envisioned 15- to 20-year plan
  • Add duplexes, fourplexes to portfolio
  • Managed himself to learn business

Why Andrew limited himself to four units or less

  • Qualified for residential loans (up to ten)
  • Model was familiar

 Why Andrew transitioned to multifamily

  • Reaching maximum # of residential loans
  • Realized could realize dreams sooner
  • Wife encouraged him to ‘go for it’

Andrew’s first experience with raising money

  • Client through consulting work offered $100K
  • Gained confidence, snowball effect

Andrew’s first multifamily deal

  • 11 months from decision to close
  • Relationships with brokers in San Antonio
  • Purchased 192-units for $16M ($6.5M raised)

What inspired Andrew to ‘go big’ on his first multifamily deal

  • Property management companies look for 125-plus
  • More efficient to go bigger

How Andrew was able to raise $6.5M

  • ‘We networked our asses off’
  • Five meetings/week with new people

Why Andrew chose to work with a partner

  • Sees real estate as ‘team sport’
  • Met at conference, same business model/markets
  • Complementary skill sets (both intense hustlers)

 What’s next for Wildhorn Capital

  • Strategic, disciplined to find deals that work
  • Goal to expand to 1K units in 2018

How Andrew’s life is different as a full-time investor

  • ‘Life by design’
  • Flexibility, freedom
  • Feels he can do/achieve anything
  • Full-time job no longer in way

Andrew’s advice to aspiring multifamily investors

  • Start buying property now
  • Don’t be afraid of value-add
  • Don’t be afraid to use other people’s money
  • Take ownership, risks

Connect with Andrew

Wildhorn Capital

Email andrew@wildhorncap.com

Resources

The Millionaire Real Estate Investor by Gary Keller, Dave Jenks and Jay Papasan

Rich Dad Poor Dad by Robert T. Kiyosaki

Michael’s Course

Michael’s Contact Form

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

Review the Podcast on iTunes

Direct download: MB_094_-_Life_by_Design_with_Andrew_Campbell.mp3
Category:Commercial Real Estate -- posted at: 3:10pm EDT

You’ve been served.

Those are scary words for a real estate investor, but the truth is that you are likely to face a lawsuit at some point in your career—take it from me. So how do you keep your assets safe and protect yourself from frivolous litigation?

Scott Smith is an attorney as well as a real estate investor. His firm, Royal Legal Solutions, provides business, tax and legal solutions geared exclusively for real estate investors. Scott has eight years of experience deconstructing the industry, and asset protection is his specialty.

Today Scott covers the statistics around lawsuits in the real estate investing space, explaining his ‘if, not when’ approach to protecting yourself as a real estate investor. He shares case studies of investors who were not protected and walks us through the benefits of hiding and isolating your assets. Scott offers his best strategies, including separating operations from ownership, removing equity from your properties, and doing your due diligence—every single time. Listen in and learn how to leverage a series LLC structure in combination with a land trust to remain anonymous and compartmentalize your assets, making you less susceptible to litigation.

Key Takeaways

The focus of Royal Legal Solutions

  • Help real estate investors protect, hide assets
  • Keep retirement, assets safe

The likelihood you will be sued as a real estate investor

  • Most litigated industry in US
  • 3-8% sued every year
  • Almost guaranteed lawsuit during lifetime

The potential outcomes of a lawsuit

  • Prevent by hiding, isolating so client looks unattractive
  • Let insurance company’s lawyers bully into low settlement
  • Insurance only covers negligence (nothing else)

 Scott’s strategies for protecting real estate investors

  • Transfer properties into asset holding company
  • Separate operations from ownership

The level of effort required to open and maintain multiple LLCs

  • Only need one operating company, one asset company
  • Asset holding company can employ series LLC structure
  • Infinite scalability
  • Compartmentalization of every asset
  • Cost to expand goes to zero
  • Move property into land trust (can’t be traced back to you)
  • Creates doubt in mind whether you still own property

Scott’s best advice for real estate investors

  • Separate assets from operations
  • Remove equity from property

Scott’s call-to-action for protecting your assets

  • Remove your name from assets
  • Be sure you’re well-insured
  • Do your due diligence every time

Connect with Scott

Royal Legal Solutions

Email scott@royallegalsolutions.com

Call 512-757-3994

10 Ways to Protect Your Real Estate Investments

Resources

Michael’s Course

Michael’s Coaching Programs

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

Review the Podcast on iTunes


‘Don’t worry about everything you don’t know today.’

Josh Sterling’s advice for aspiring real estate investors? Jump in head first and take massive action. In fact, if Josh could go back and offer some advice to his 17-year-old self, he would recommend skipping college and getting on the fast track to multifamily as soon as possible!

But Josh didn’t know that then, and he pursued a degree in aeronautical science from Embry-Riddle University. He got a job as a commercial airline pilot and had worked his way up to captain when the recession hit, and his hard work was rewarded with a demotion and a pay cut. Josh decided then and there that he needed a side hustle that he could control, and he landed on real estate. Josh was eventually able to quit his job and pursue real estate full-time, growing his portfolio to a cool 250 units.

Josh has also grown his business, building out his own property management team. Today he walks us through his first deals in the single-family space, discussing the challenges of managing 25 properties and how that struggle inspired his shift to multifamily. Josh offers his insight around building relationships with a few good brokers, describing how he has scaled to 250 units with the help of just two realtors. He explains his approach to multifamily syndication, sharing how multifamily allowed him to quit his job, go to work on his own terms, and have lunch with his 18-month old daughter any time he wants. Listen in for Josh’s advice about establishing credibility—with or without a track record—and getting on the fast track to multifamily.

Key Takeaways

What inspired Josh to pursue real estate

  • Working as airline pilot
  • Demotion with pay cut in 2008
  • Looking for something could control

Josh’s first deal in September 2009

  • $40K single-family in southeast Michigan
  • Buy and hold strategy

Why Josh made the shift to multi-family

  • Owned 25 single-family rentals by 2012
  • Needed help with management
  • Multifamily necessary to scale business

Josh’s first multifamily deal

  • Colleague introduced to commercial broker
  • Approached with 24-unit off-market deal
  • Couldn’t get numbers to work, deal fell apart
  • Seller reached out twelve months later
  • Bought under land contract for $515K at 6%
  • Upgraded units, occupancy rose from 42% to 100%
  • Cash out refi after 14 months (valuation at $800K)

Josh’s next multifamily deal

  • Same broker approached with 53-unit deal
  • Used capital from refi of 24-unit property

Josh’s approach to raising money

  • Share enthusiasm for real estate with family, friends
  • Leverage portfolio for credibility

Josh’s first experience with syndication

  • $1.3M building under contract
  • Needed to raise $300K to close
  • Put out sample deal package
  • Fully subscribed in 24 hours

How quitting his day job changed Josh’s life

  • Left in May of 2016 (owned 140 units)
  • Work on own terms to grow business
  • Aggressively looking for deals
  • Fly to play golf, see concerts

What Josh would tell his 17-year-old self

  • Skip college, buying first home
  • Pursue multifamily right away
  • View regular job as means to end

How to fast track a career as a real estate investor

  • Get educated quickly
  • Build relationships with brokers
  • Don’t worry about bank financing
  • Demonstrate credibility to raise equity

What Josh is excited about right now

  • Building own property management team
  • Building self out of day-to-day operations
  • Focus on networking, maintaining broker relationships

Josh’s advice for aspiring real estate investors

  • Take massive action
  • Build reputation, relationships

Connect with Josh

Email: josh@epicpropertymanagement.com

Epic Property Management

Resources

LoopNet

Freddie Mac Small Balance Loan

Entrepreneurs’ Organization

Michael’s Coaching Programs

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

Review the Podcast on iTunes

Direct download: MB_091-The_Fast_Track_to_Multifamily__With_Josh_Sterling.mp3
Category:Commercial Real Estate -- posted at: 12:20pm EDT

When I went along on my real estate journey and—all of a sudden—apartments became the thing that I wanted, there was a level of excitement that I had not experienced before... I imagine myself owning many apartment buildings, and that’s the vision I’ve set for myself.’

In December of 2016, veteran Seattle police officer David Sweeney turned 53. After a 30-year career, he had reached the minimum retirement age, but David knew he could not stop working if he wanted his family to have a comfortable life. Looking for new options for himself and his family, he started exploring real estate. David liked the ring of ‘multi-family investor,’ so he started looking for duplexes, triplexes and fourplexes. By April, he had secured his real estate license to gain access to the MLS, and he spent the next five months evaluating 400-plus deals.

Though a few deals fell through, David was motivated by his goal. He refinanced his own home and pulled $380K—and waited for the right opportunity. By August, David had started thinking bigger, and when he came across a 24-unit property in Centralia, he made an offer that was accepted. Now David is looking for his next deal and looking to help other aspiring investors find deals of their own. Today he shares his process for analyzing deals and how he made the mindset shift from pursuing duplexes, triplexes and fourplexes to apartment buildings. He discusses the challenges he faced in getting a loan and how he leverages his commercial lender as a ‘second set of eyes.’ Listen in for David’s bold 2018 goals and his advice for aspiring investors around increasing your productivity through purpose!

Key Takeaways

 [0:40] The trigger that moved David to pursue real estate

  • Turned 53 last December (minimum retirement age)
  • Wanted new options for self, family

[2:15] David’s initial strategy

  • Consumed much info, liked idea of multi-family
  • Initial goal to purchase duplex, triplex or fourplex in western Washington

[4:32] How David moved forward toward his goals

  • Started shopping on real estate sites
  • Couldn’t find information he wanted
  • Secured real estate license in April
  • Evaluated 400 deals via access to MLS
  • Narrowed down to properties with potential cashflow
  • Used syndicated deal analyzer to determine offer

 [8:16] David’s mindset from April through August

  • Motivated by goal
  • Not too frustrated by deals that fell through
  • Refinanced house, pulled $380K
  • Waiting for right opportunity

[10:28] David’s shift to thinking big

  • Came across larger deal
  • Four duplexes vs. one apartment building
  • Benefit of dealing with one roof, contractor
  • Ventured into commercial financing
  • Experience expanded comfort zone

[15:58] David’s first deal

  • 24-units (16 1BR, 8 studio) in Centralia, WA
  • Came with 15-unit storage facility, single-family home
  • Listed at $1.325M, looked at cap rate in area
  • Offered $1.1M, took for $1.14M
  • Received real estate commission as well

[19:08] David’s goals for 2018

  • Buy 100-unit property
  • Learn more about raising money
  • Help other people find deals
  • Eventually become passive investor

[22:16] The challenges David faced in doing his first deal

  • Acquiring commercial loan
  • Getting insurance
  • Roof inspection

[24:28] How David’s first deal is performing

  • $3,700-$4,000/month in pocket (after expenses)
  • Increase property value

[26:57] David’s advice for aspiring real estate investors

  • Do more tomorrow that you did today
  • List your goals, take steps daily
  • Move from education to action
  • Productivity increases with purpose

Connect with David Sweeney

David’s Website

Resources

Syndicated Deal Analyzer

Think and Grow Rich by Napoleon Hill

Podcast Show Notes

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

Review the Podcast on iTunes


It’s important for each of us to find our niche in the real estate investing space. Maybe you’re confident that commercial real estate is where you want to be, but multi-family just doesn’t feel like the right fit. There are other asset classes to consider, and one of the most recession-resistant is that of self-storage.

Hunter Thompson is the Managing Principal of Cash Flow Connections, a private equity group out of Los Angeles that connects passive real estate investors with opportunities in the commercial space, with a specific focus on mobile home parks and self-storage properties. Hunter has done 100-plus deals valued in excess of $350M.

Hunter got his start investing in stocks, but the lack of predictability in the market led him to focus on simpler investments with mitigated risk. After connecting with a network of like-minded individuals, he began investing in mortgage notes before branching out into other real estate asset classes. Today he shares what inspired him to invest in self-storage, explaining what makes the opportunity truly recession-proof. Hunter discusses self-storage value-add strategies, the benefits of self-storage as an investment, and how to find the best markets in the space. Listen in to understand what Hunter looks for in a sponsor, his approach to management, and his advice around next steps for aspiring self-storage investors.

Key Takeaways

[1:45] Hunter’s shift to real estate investing

  • Grandfather was successful businessman
  • Initial interest in stocks, too much volatility
  • European debt crisis inspired shift
  • Real estate more predictable, simple

[4:20] Hunter’s first real estate deal

  • Attended 3-5 networking events/week
  • Found small group of likeminded individuals
  • Invested in mortgage note

[5:43] How Hunter got into self-storage

  • By 2013, good deals hard to find in traditional asset classes
  • Data analysis inspired focus on recession-resistant assets
  • Self-storage used during times of economic change

[7:28] The benefits of investing in self-storage

  • Many ways to add value to property without taking on additional risk
  • Can add $1M of value with U-Haul, tenant insurance and merch
  • Sticky tenant base allows for 6% rental increase annually

[10:13] The best markets for self-storage investment

  • Identify undersupplied markets (i.e.: southeast US)
  • Utilize data from CoStarLoopNet or Yelp

[12:06] What Hunter looks for in terms of underwriting

  • Expense ratio of 40% (or even below)
  • Price per unit of $12-14K
  • Price per ft2 of $65-110
  • Climate-control as upsell

[13:26] Hunter’s approach to management

  • Onsite management important component of A-class property
  • Sponsor hires either entrepreneurial property manager or retired couple

[15:28] What Hunter looks for in a sponsor

  • Done $100M-worth of deals
  • 10 years of experience
  • Look at pro forma
  • Background check, references

[17:06] A case study of Hunter’s ideal investment

  • A-class property in Woodstock, GA
  • No value-add strategies in place
  • Previous owner just expanded by 222 climate-controlled units
  • Market 90% occupied, property 60% occupied
  • Adding ancillary income items = additional $4K/month

[19:44] Hunter’s take on trends in self-storage

  • On-demand services
  • Automation
  • Increase in demand as affluent baby boomers downsize

[21:36] Hunter’s advice around next steps for aspiring investors

  • Leverage experience of someone in game for 10+ years
  • Passive investing affords freedom to do what you love

[23:03] What Hunter is excited about

  • Construction boom
  • Unique opportunities to buy from sophisticated groups

Connect with Hunter Thompson

Cash Flow Connections

Cash Flow Connections Real Estate Podcast

Free eBook: Little Boxes, Big Profits

Resources

CoStar

LoopNet

Invest with Michael

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

Review the Podcast on iTunes

Direct download: MB_087_-_Self_Storage_-_With_Hunter_Thompson.mp3
Category:Commercial Real Estate -- posted at: 1:44pm EDT

‘At the end, you’re trying to find your highest and best use. How can you effectively create value based on your limited time?’

Perhaps you’re interested in getting into multifamily, but syndication is not for you. If your strengths lie in networking and raising money, you can get into apartment building investing as a general partner who specializes in soliciting capital.

Based in Hawaii, Lane Kawaoka still works his day job as an engineer, but he is quickly growing passive income streams via multi-family investing. After graduating from college with a degree in engineering, he got a job in construction management that required a lot of travel. In 2009, Lane bought a primary residence in Seattle—but he was never there. He decided to rent out his A-class property, and the cashflow generated from that enterprise inspired him to purchase more.

From there, Lane expanded his single-family portfolio, eventually discovering turnkey rentals. Today he is pursuing multi-family, recently landing his first 190-unit deal. But Lane is working deals from a different angle, coming in as the general partner who specializes in raising capital. On this episode, he shares his unique multi-family strategy, explaining how his Simple Passive Cashflow blog and podcast position him as a thought-leader in the space and afford the opportunity to network. Listen in to learn how Lane is compensated as the money-raiser, and hear his advice for aspiring entrepreneurs about building a platform that establishes your credibility as a multi-family investor!

Key Takeaways

[2:30] How Lane got into real estate

  • Engineer in construction management
  • Rarely at primary residence, traveling for work
  • Decided to rent, then purchase more
  • Stumbled on turnkey rentals
  • Working to build passive income streams

[6:11] Why Lane made the shift to multifamily

  • Tired of ‘managing the managers’
  • Realized single-family not scalable

[7:33] Why Lane was slow to get started in multi-family

  • No substantial net worth, experience
  • Thought had to be lead
  • Finally paid mentor to help

[8:33] The four parts necessary to do a multi-family deal

  • Net worth
  • Raising money
  • Experience
  • Finding deal

[9:24] How Lane leverages his blog and podcast

  • Tired of answering same questions about single-family
  • Started blog/podcast to address those questions
  • Good avenue for building relationships with like-minded people
  • Platform adds to credibility

[10:20] Lane’s approach to finding deals

  • Slow start (18 months)
  • Contact junior associates on brokerage websites

[11:58] Lane’s first multi-family deal

  • Came together in last six months
  • 190-unit in Texas
  • Came in as passive investor

[13:36] Lane’s multi-family strategy

  • Not interested in being syndicator
  • Multi-family game so big, specialization is necessary
  • Talent lies in raising money

[15:09] How Lane is compensated as the money-raiser

  • Receives promo raise rate
  • Get in as general partner (passive income stream)

[15:55] Lane’s strength in accessing capital

  • High net-worth network
  • Would rather spend time on podcast than analyzing deals

[17:36] Lane’s multi-family strategy moving forward

  • Build syndication business, portfolio
  • Get people out of ‘Wall Street roller coaster’
  • Raise capital, invest alongside

[19:37] Lane’s advice for aspiring entrepreneurs

  • Build track record
  • Create platform as thought-leader (video, audio, blog, meetups)
  • Find your strengths and double down

Connect with Lane Kawaoka

Simple Passive Cashflow

Email lane@simplepassivecashflow.com

Resources

Bigger Pockets

LoopNet

Invest with Michael

Podcast Show Notes

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

  • Download
  • Text “secretbook” to 44222

Review the Podcast on iTunes

 


“I had this moment where I realized, ‘No, I’m not going to be the CEO of somebody else’s dreams. I’m going to be the CEO of my own dreams.’ I declared that day that I was never going to be an employee again.”

Tamar Mar is an adventurer at heart. She spent 20 years in the startup and small business arena, working as COO for prominent companies in the FinTech and real estate brokerage space. After making that decision to be the CEO of her own dreams, Tamar became what she calls a ‘business opportunist,’ building out her real estate portfolio and investing in small businesses like The Fitness Shop, a high-end specialty fitness equipment retailer.

Tamar invested in her first property at the age of 19, and she has owned rental properties for 15-plus years. From purchasing homes on auction to fix-and-flips to large-scale renovations projects, she has a keen eye for evaluating deals. This year, Tamar has shifted her focus to the acquisition of underperforming commercial and multi-family.  Today she shares how she made the shift from single- tomulti-family real estate, her approach to landing the first deal, and how she has become a ‘capital magnet.’  Listen in and get inspired to dream big and ‘take massive stinking action every day.’

Key Takeaways

[3:06] How Tamar got involved with real estate

[5:52] Tamar’s first real estate strategy

  • Got real estate license for access to properties
  • Purchased homes on auction, sight unseen

 [6:40] Tamar’s shift from single- to multi-family

  • Pursued single-family for three years
  • Learned about syndication
  • Could use operations expertise from startup world

[7:24] Why people are intimidated by multi-family

  • SEC regulations, working with attorneys
  • Raising capital

[8:04] What inspired Tamar’s shift to multi-family

  • Ambitious goal of $250K in annual passive net income
  • Couldn’t scale up quickly enough with single-family (100-250 doors)

[9:03] Tamar’s approach to landing her first multi-family deal

  • Studied multi-family forums on BiggerPockets, Michael’s Syndicated Deal Analyzer
  • Practiced analyzing deals on LoopNet
  • Began networking, building out team
  • Found great deal, put in offer
  • Landed 15-unit complex but didn’t have capital

[12:05] How Tamar raised the capital to fund her first multi-family deal

  • Needed $325K ($825K purchase price)
  • Additional capital for maintenance
  • Reach out to friends/family, networking groups
  • 6 investors (4 existing relationships, 2 new)

[14:51] How the project is performing so far

  • Secured property manager in Spokane
  • Rents above $300/door when purchased
  • Renovating all units, increasing price to market rate

[16:15] Tamar’s exit strategy

  • Ten-year hold with refinance in year two or three
  • Return 70-80% of investors’ original capital with refi (if not more)

[16:57] How the Law of the First Deal is impacting Tamar

  • Broker approached with off-market deal on 23-unit
  • Tamar walked away during due diligence
  • Broker contacted with 16-unit just hitting market
  • Landed 16-unit, walk-through tomorrow

[21:23] How Tamar’s multi-family success has shifted her perspective

  • Reevaluating goals, plans to secure 100 units by 2018 (with additional 50/year moving forward)
  • Went from three to 33 units in six months

[22:15] Tamar’s AHA moment

  • Christmas week of last year, in talks to become CEO of company back East
  • Declared independence, not willing to be ‘CEO of someone else’s dreams’

[24:06] Tamar’s advice to her younger self

  • Dream way bigger, earlier

[25:03] Tamar’s advice to aspiring multi-family investors

  • Pursue new knowledge
  • Follow in footsteps of people on path you want to take
  • ‘Take massive stinking action every day’

[26:22] What Tamar is excited about moving forward

Connect with Tamar Mar

Marota Group

Email tamar.mar@marotagroup.com

Investing for Life Podcast

Resources

The Millionaire Real Estate Investor by Gary Keller, Dave Jenks and Jay Papasan

BiggerPockets

Syndicated Deal Analyzer

LoopNet

Podcast Show Notes

Coaching with Michael

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

Review the Podcast on iTunes

Direct download: MB_084__Be_The_CEO_of_Your_Own_Dreams__with_Tamar_Mar.mp3
Category:Commercial Real Estate -- posted at: 11:15am EDT

What is your Stupid Human Trick?

We all have a unique ability that seems incredible to others. The trick is figuring out what it is that you are particularly good at and using those strengths to craft the processes and systems that capture wealth.

Cashflow Ninja M.C. Laubscher came to the US from South Africa in 2001 with a backpack and $500. He played competitive rugby and learned the real estate business via experience, buying his first property at the age of 21. M.C. befriended a wealthy multifamily investor who became his ‘accidental mentor,’ asking M.C. to serve in several different capacities from maintenance to leasing to property management to acquisitions. This education served him well, giving M.C. invaluable insight into the world of the wealthy and an understanding of all the moving parts of real estate. Now he is the President and Chief Wealth Strategist of Valhalla Wealth, a wealth management firm that leverages the Infinite Banking Concept to help clients co-author a plan for achieving financial security, independence, freedom and significance.

M.C. is also the host of Cashflow Ninja, a popular business and investing podcast that seeks to empower people to grow and protect their wealth in the new economy.  Today M.C. shares the best investment opportunities out there that combat wealth destroyers, why people struggle financially, and his advice for investors who want to break the mold. Listen and learn how to determine the wealth-building vehicle that’s right for you and the importance of investing in your own health, relationships and education. You are your own greatest asset, and M.C. is here to inspire you to reach your potential through multifamily investing!

Key Takeaways

 [2:48] How M.C. got involved in real estate

  • Read Rich Dad, Poor Dad
  • Bought first property at age 21
  • Befriended wealthy multifamily investor

[5:14] What surprised M.C. about ‘the world of the wealthy’

  • Complexity of determining overall plan

[6:36] M.C.’s take on the best investments out there

  • Combat wealth destroyers (taxes, inflations, commission/fees)
  • Real estate
  • Insurance products

 [10:05] Why people struggle financially

  • Outdated education model
  • Doesn’t empower people, teach skills to thrive
  • Lack of financial education
  • Outsource wealth-building
  • Conventional model set up to fail
  • Current environment (government debt, bankruptcy)

[14:08] M.C.’s advice to people who want to break the mold

  1. Be crystal clear about what you want (economic independence number)
  2. Determine why it matters
  3. Decide who you need to become
  4. Create systems/processes to capture wealth
  5. Put wealth into something that provides cashflow
  6. ‘Rinse and repeat’

[19:45] The benefits of investing in insurance products

  • Safe, secure, growing and liquid
  • Ability to borrow 90% from policy, put into real estate investments
  • Taxes on seed, not harvest

[23:07] How to figure out which vehicle or process is best for you

  • Focus on one thing in beginning
  • Once hit number, look at diversifying

[26:26] M.C.’s lowest depth of misery

  • Sports background prepared to absorb enormous disappointment
  • Sports injury, failed business deal and relationships fell apart all at once
  • Learned due diligence

[28:56] M.C.’s aha moments

  • Invest in self as life-long learner
  • Continue to grow network

[31:22] What M.C. would tell his younger self

  • You are your #1 greatest asset
  • Second greatest asset is relationships
  • Certain skills will not go away (marketing, sales and customer service)
  • Business must solve problems, create outcomes

[34:30] M.C.’s perfect day

  • Work out, family time and personal development
  • Attack the day at 11am (calls, interviews and case designs)
  • Family time, reading in the evening

Connect with M.C. Laubscher

Cashflow Ninja

Valhalla Wealth

Collapsing Time Webinar

Banking Principles Presentation

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

Becoming Your Own Banker: Unlock the Infinite Banking Concept by R. Nelson Nash

Coaching with Michael

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

Review the Podcast on iTunes


Wealth is code for freedom.

If you want to be a millionaire, it’s probably because you want control over your time. You want the autonomy to make your days your own and spend them with the people you love. Today’s guest chose real estate as his path to freedom, spending less than he earned and investing the excess in apartment buildings. Maybe you are interested in doing following a similar path, but something is holding you back… 

Paul Morris is the co-author of Wealth Can’t Wait, a New York Times bestseller that identifies the seven traps that keep people from building wealth and equips readers with a comprehensive set of skills to achieve financial freedom. An active and consistent investor, he has grown his real estate portfolio to more than 700 rental units and 150,000 square feet of retail commercial space, and Paul was named among the 200 Most Powerful People in Residential Real Estate in 2013 and 2014.

Prior to working full-time in real estate, Paul enjoyed a successful legal career, working as an associate at a major international law firm and as Senior Counsel with the US Department of Justice. He has a degree in economics, a master’s in management from Oxford, and a JD from Cornell Law School. Today Paul shares his early experience in real estate, investing in a duplex while he was still in school. He speaks to the kinds of investments he prefers, the pros and cons of working with a partner, and how to get started in real estate with little to no money. Listen in to understand the three rules for investing that have helped Paul avoid losing money, as well as the seven wealth traps that keep people ‘stuck on the sidelines.’ Find out what’s holding you back and get on the path to health, wealth and freedom!

Key Takeaways

 [1:55] How Paul got into real estate

  • Working class dad invested in real estate
  • Provided income without working
  • Bought duplex in 1990 (Ugly Duckling)
  • Always worked with partner, gives courage

[4:59] The pros and cons of having a partner

  • Paul recommends working without partner
  • Choose partners based on brainpower, integrity
  • Clarify deal points, exit strategy in writing

[8:11] The kinds of investments Paul favors

  • Prefers buy and hold strategy
  • Buy and flip too risky

 [11:03] Paul’s philosophy of wealth as code for freedom

  • Ask yourself why you want to build wealth
  • Money affords power to choose, create
  • Allows to pursue greater goals
  • Love, health and time

[15:57] The 7 Wealth Traps

  1. Staying in a comfortable job
  2. Avoiding risk
  3. Viewing wealth negatively
  4. Giving up (not staying the course)
  5. Holding on to toxic friendships, the Weak Social Circle
  6. Victimizing yourself
  7. Thinking you know it all

[26:40] How to start investing in real estate with little or no money

  • Buy a home, live with roommates to cover mortgage
  • Use other people’s money

[29:32] Paul’s 3 rules for investing to avoid losing money

  1. Buy where you know
  2. Buy value-add (worst house in great/gentrifying neighborhood)
  3. Buy cashflow

[33:12] What Paul is excited about

  • Providing great, safe units in LA neighborhoods ‘turning a corner’
  • Traveling with daughter, girlfriend
  • Becoming better table tennis player

[34:04] Paul’s perfect day

  • Freedom to dress casually, work from home/coffee shop
  • Finished in time to pick up daughter from school bus
  • Hot yoga class with girlfriend

Connect with Paul Morris

morrisx.com

Paul on LinkedIn

Resources

Wealth Can’t Wait: Avoid the 7 Wealth Traps, Implement the & Business Pillars, and Complete a Life Audit Today! By David Osborn and Paul Morris

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko

“7 Ways You’re Hurting Your Chances at Building Wealth, According to 2 Self-Made Millionaires” in Business Insider

Interview with Lewis Howes and Grant Cardone

“7 Strategies That Will Help You Build More Wealth, According to 2 Self-Made Millionaires” in Business Insider

“Are You on Track to be Wealthy? Two Successful Entrepreneurs Share the Most Important Skill to Have” in Forbes

“5 Timely Investments You Should Consider This Summer” in Forbes

Coaching with Michael

Review the Podcast on iTunes

Direct download: MB_082__Wealth_Cant_Wait__With_Paul_Morris.mp3
Category:Commercial Real Estate -- posted at: 7:09pm EDT

There’s more than one way to skin a cat, and though we spend a lot of time on the podcast addressing aspiring syndicators, there are other routes to financial freedom via real estate investing. High net worth individuals who are interested in getting a little skin in the multifamily game should consider the benefits of passive investing. Regardless of approach, the end game of apartment building investing remains the same: Permanently replace your income and get out of the rat race for good!

Dr. Tom Black (also known as The Passive Income Physician) was working as a busy emergency doctor in a high-volume trauma center. Yes, he was making good money, but he was working insane hours and he rarely saw his family. Tom was financially secure, but far from financially free—and he was fed up with sacrificing his time for money. Already enamored by the cashflow potential of real estate, Tom purchased several single-family homes and even tried his hand at commercial real estate before stumbling into his first multifamily deal, a 305-unit in Arlington, two years ago.

Tom’s brother, Tim Black, enjoyed a 32-year career in entertainment, retiring as the COO of a large hospitality company in March of 2016 when the business was sold to private equity. Eventually, his brother convinced him that multifamily was the best means to making your money work for you, and together they started Napali Capital. The firm has grown quickly, and the Blacks currently have 1,000-plus units in assets under management. Today Tom and Tim explain why multifamily is the best choice for passive investors, how to assess the risk profile of a multifamily deal, and the characteristics to look for in a potential syndicator. Listen and learn the returns a passive investor can expect from multifamily, the skill set necessary to become a successful investor, and the staggering tax benefits afforded by the platform.

Key Takeaways

[2:41] What prompted Tom’s involvement in real estate

  • Poor student in HS, gained confidence in Navy
  • Top of class in medical school
  • Couldn’t sell house after finishing residency
  • Rented to incoming resident
  • Enamored with cashflow
  • Busy doctor in high-volume trauma center
  • Making good money, but sacrificing too much time
  • Bought land in east Texas for commercial development
  • Resigned from practice and moved to pursue real estate

[5:51] When Tom identified multifamily as a ‘way out’

  • Bought foreclosures in Houston during downturn
  • Single-family was hard work
  • Studying economies of scale
  • 16-unit commercial development offered buffer in budget
  • Multifamily could take him to next level

[7:23] Tom’s shift from single family to commercial real estate

  • Cashflow limited to specific markets, required travel
  • Single-family very competitive
  • Saw vacant land, wanted to be ‘master of own destiny’

 [8:19] Why Tom wanted out of full-time medicine

  • Concept of security vs. freedom
  • Medical practice not sustainable
  • Doctors in their 70’s still working

[9:25] Tom’s first multifamily deal

  • Moved to Dallas for medical directorship
  • Attended real estate investing lectures
  • Stumbled onto 305-unit off-the-market deal in Arlington

[10:29] The difference between commercial development and multifamily

  • Developing is rough, many working parts
  • Multifamily offers formula for success, mitigated risk
  • Evidence-based reasoning appealed to Tom as doctor

[13:31] Tom’s advice around quitting your day job

  • He continues to work in medicine one day/week
  • Don’t be in a hurry to quit until achieve cashflow

[14:34] How Tim came to work with his brother

  • Poor student, but excelled at leadership
  • 32-year career in hospitality/entertainment
  • Retired in March 2016 (COO of large hospitality company)
  • Started Napali Capital together, capitalizing on each other’s strengths
  • Firm has grown rapidly, responsibly
  • Education is foundation of their business

[16:54] Why multifamily is the best choice for passive investors

  • Money works for you (cashflow, appreciation, depreciation, amortization)
  • Lack of affordable housing, cultural trend to downsize
  • Multifamily is stable and tangible

[19:22] How to assess the risk profile of a multifamily deal

  • Depends on syndicator, underwriter
  • Napali Capital is very risk averse (2% raises year-over-year)
  • Tim & Tom don’t offer huge returns (9% cash-on-cash)

[20:41] The returns a passive investor can expect in multifamily

  • 9% cash-on-cash
  • 90-100% return in five years
  • Napali always exceeds projections
  • 130% in 24 months on 305-unit

[22:22] The skill set necessary for a passive investor

  • Ability to read P&L
  • Knowledge of underwriting
  • Understanding of costs (rent rates, insurance)
  • Consider a mentor

[23:58] The Black’s advice around choosing a syndicator

  • Look for trust, integrity
  • Communication is key
  • Transparency (share financials)
  • Invest alongside you

[25:54] How to pacify the passive investor’s fear around risk

  • Trust the track record, pedigree of the syndication team
  • Stock market presents much greater risk

[27:06] The staggering tax benefits of multifamily

  • Stock market, mutual funds require payment of capital gains tax
  • With depreciation, taxed income is either substantially less or zero

[30:10] Tom’s final tips for aspiring multifamily investors

  • Get off the sidelines
  • Dip your toe in the water (crowdfunding)
  • Get educated

[31:09] What the Blacks are excited about

  • Growth of firm
  • Dynamic of relationship

Connect with Tim & Tom Black

Napali Capital

Email Tim: tim@napalicap.com

Email Tom: thomas@napalicap.com

Resources

The Passive Income Physician Blog

The Passive Income Physician: Surviving a Career Crisis by Expanding Net Worth by Thomas Black MD

Invest with Michael

Financial Freedom Summit Wait List

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


One of the big real estate rookie mistakes is to turn into a Walmart shopper as you build your team. It is easy to see a coach, lawyer, or property manager as an expense and choose to go with someone less experienced—or even elect to do the job yourself. But today’s guest can attest to the fact that a quality team is an investment that can save you millions in the long run.

Damion Lupo is a serial entrepreneur with a ‘think big’ mentality. In the last 25 years, he’s founded more than 30 companies in a number of industries including insurance, precious metals, venture capital, financial consulting and real estate. Damion is also a black belt in three different disciplines and the architect of Yokido, his very own martial art.

Damion’s personal philosophy centers around self-responsibility and a conviction that candor, growth and a big vision provide the only path to freedom. His commitment to these values led to the creation of Total Control Financial, a FinTech that seeks to reinvent financial control and empower Main Street with the tools of financial transformation. Today Damion discusses his first multifamily deal, a 119-unit property in Memphis that resulted in a $2M loss, and the lessons he learned from the experience. He shares the transformational power of failure, the importance of building a team you can trust, and the extraordinary value of a mentor. Learn how Damion’s shift from consumer to contributor had a revolutionary impact on his life.

Key Takeaways

 [4:03] How Damion got into real estate

  • ‘Tripped’ into it
  • Read Rich Dad, Poor Dad
  • Attended seminar for additional resources
  • Attracted to big-time cashflow potential
  • Quit insurance to pursue real estate

[5:44] Damion’s first steps in real estate

  • Bought house with Visa card
  • Planned to sell on payments after remodel
  • Strategies in place to pursue more properties, but wasn’t taking action
  • Failure to return phone calls almost led to bankruptcy

[7:18] How Damion was able to avoid bankruptcy

  • Gained momentum by purchasing eight houses in month
  • Purchased another 50 houses over next year (AZ, AL)

 [7:58] How Damion got stretched too thin early in his real estate career

  • Despite success, decided to try something different
  • Started high-end rehabs all over country
  • No team in place to help
  • Lost track of projects
  • Not paying attention to numbers
  • Let ego take over (want more and more)

[9:35] The lessons Damion learned from his first multifamily deal (119-unit in Memphis)

  • If you can’t be there, send team member with ‘massive integrity’
  • Listen to the numbers, get out if necessary
  • Stress test your team before going all-in
  • Don’t delegate too much, too soon

[14:31] What Damion could have done differently on the Memphis deal

  • Choose experienced partner
  • Move to site or have partner on-site
  • Invest in an experienced team, especially project manager
  • Leverage experience of mentors (make new mistakes)

[19:50] The value of a coach/ mentor

  • Damion lost $5M over two years after firing coach
  • Powerful to have people ‘call you on your shit’
  • Don’t let ego get in the way of listening
  • Helps you be methodical (rather than emotional)
  • Offers perspective, intuition to pass on bad deals

[24:48] Damion’s advice around leading a team

  • Clarify expectations up front
  • Have team share back what was heard in own words

[25:52] How Damion reinvented himself after hitting rock bottom

  • Equated net worth with self-worth (identity tied to money)
  • Learned that impact must be driver, wealth as side effect
  • Spent two years making shift from consumer to contributor
  • Teaching (martial arts, financial literacy) allows him to give, be present
  • People with contributing mentality happier, more successful
  • Can’t think your way to your Om, must do

[32:45] How dark times set you up for success and fulfillment

  • Must experience trauma to learn you are not in control
  • Recognize difference between success and fulfillment
  • Damion finds fulfillment in seeing people get out of ‘financial bondage’

Connect with Damion Lupo

DamionLupo.com

Damion’s Books

Reinvented Life Workbook

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

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Tim Ferriss

Financial Freedom Summit Wait List

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

Review the Podcast on iTunes


‘That’s just the way I’m built: Nothing’s going to stop me.’

Joseph Gozlan’s story defines the word GRIT. Once he decided that multi-family was the route he wanted to take, Joseph continued to drive through every challenge, getting creative and doing whatever it took to secure his first deal despite the roadblocks and frustrations. Three years later, he is the proud owner of two apartment buildings, and he has five properties in the pipeline. Joseph’s living expenses are covered, and he is considering a transition into full-time real estate in the very near future.

Joseph got his start in real estate back in 2005 when he and his new wife realized that their new five-bedroom home was too big for just the two of them, so they chose to stay in an apartment and rent the property. Two years later, they moved to the United States from Israel and recognized the opportunity provided by the market collapse. The Gozlans secured their real estate licenses and began actively hunting for deals, purchasing a duplex and several single-family homes.

In 2015, Joseph realized there was much more value in apartments than could be gained in scaling single-family homes, and he started extensive research into multi-family investment. Unfortunately, Joseph faced a number of hurdles along the way, and it took a full two years to secure his first 22-unit apartment complex. When many would-be multi-family investors would have given up, Joseph persevered, and today he shares his long road to successful apartment building investing with us. Listen in and get inspired as Joseph discusses why he chose real estate in the first place, the circumstances around his shift to multi-family, and how he has maintained his full-time job in IT while developing a lucrative real estate portfolio.

Key Takeaways

 [1:59] Joseph’s start in real estate

  • Read Rich Dad, Poor Dad in college
  • Got married, lived in small apartment
  • Purchased house, too big for couple
  • Chose to rent house, stay in apartment
  • Moved to US in 2007
  • Joseph and wife got real estate licenses
  • Actively hunted for deals after market collapse
  • Bought duplex in Plano, TX (paid $180K, invested $30K in renovations)
  • Purchased additional single-family homes until numbers changed in 2013

[4:34] Why Joseph chose real estate in the first place

  • Wants to write giant cardboard check for $1M to children’s hospital
  • Early retirement, comfortable living, won’t have to answer to boss
  • Tangible assets like real estate trump stock market
  • Realized could be wealth-building strategy, key to financial freedom

[6:26] Joseph’s definition of financial freedom

  • Do what you want
  • Work from anywhere
  • No worry re: bills
  • Kids won’t experience struggle (like he did)

 [7:22] The circumstances around Joseph’s shift to multi-family

  • Two and a half years ago, duplex had foundation issues
  • Big ticket damage to another property at same time
  • Spent $40K to fix, wiped out five years cashflow
  • Recognized advantages of multi-family (single location, risk spread across multiple units)
  • Began extensive research (books, podcasts, BiggerPockets)

[11:11] The long road to Joseph’s first deal

  • Reached out to brokers, no response
  • Decided to source deal himself, began marketing (postcards, letters, phone calls)
  • Built rapport with owner/custom-builder of 22-unit apartment
  • Owner agreed to seller financing
  • Refinanced duplex and another property to afford

[14:02] The results of Joseph’s first deal

  • 23 days from signed contract to keys
  • Brought in property management company
  • Added $600—$800K in value via operation efficiency
  • Spends one hour with management company/week to assure accountability

[15:58] How Joseph handled concurrently working full-time

  • Sacrifice necessary
  • Some sleepless nights
  • Spent weekends looking at property, took occasional days off
  • Difficult but doable

[16:53] How Joseph secured a second deal within six months

  • Brokers responsive now that ‘closer’
  • Lead through property management company on 102-unit in Lubbock, TX
  • Knew costs, rent and demographics (unfair advantage)
  • Tight underwriting, made win-win offer

[18:11] How Joseph financed his second deal

  • ‘Ignorance’ gave him the confidence to raise funds
  • Elected syndication to raise $1.4M
  • Had to adjust underwriting model
  • Learning curve around how to talk to investors
  • Learned to focus on benefits (no headache), returns, low risk
  • Did all himself in 45 stressful days
  • Once one investor signs, recommend friends

[22:31] How Joseph’s second deal is performing

  • Only three months in
  • Great so far, working on renovations
  • Compliments from competition, positive feedback from residents
  • Joseph’s living expenses now covered on paper
  • Anticipates feeling comfortable enough to quit job after second quarter

[24:33] How Joseph stuck with the multi-family plan despite his initial frustration

  • Went into contract on another property first
  • Realized much-deferred maintenance
  • Seller refused to negotiate
  • Had to back out since numbers didn’t work
  • Not in Joseph’s personality to give up

[26:30] The snowball effect of multi-family deals

  • Joseph already under contract on third deal for 28-unit
  • Only took three days to get LOI signed (motivated seller)
  • Five properties in pipeline now (off-market deals)

[28:17] Joseph’s plans for the future

  • Recently renewed real estate license
  • Sourcing deals himself (sent 1300 pieces of mail)
  • Continue to work acquisitions
  • Also transition to brokerage side
  • Enjoys ‘coaching’ property management company, contributing ideas to improve processes

[30:08] What Joseph would tell his younger self

  • Skip single-family, go straight to apartment buildings
  • Could have thousands of units by now

[30:51] Joseph’s advice for hesitant multi-family investors

  • Don’t go it alone
  • Partner or get mentor to establish realistic expectations
  • Offer value to mentor (i.e.: underwriting, boots on the ground)

Connect with Joseph Gozlan

EBG Acquisitions

Eureka Business Group on Twitter

Multifamily Investing for Financial Freedom on Facebook

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

BiggerPockets

Michael’s Products

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

Review the Podcast on iTunes


Most of the time, careful planning is a good thing. It is smart to develop a strategy first, and then take action on your goals. But the one situation in which it might be better to just put the blinders on and jump in? Multi-family real estate investment.

Pili and Jason Yarusi have a background in running restaurants and bars as well as experience in the family construction business. So when they were starting a family of their own and wanted to get out of the grind, real estate investment seemed like the perfect fit. They started doing capital-intensive flips and had success with out-of-state duplexes, but soon realized that flipping was a job that would have to be repeated time and time again. If the Yarusis wanted to achieve cashflow, apartment building investing was the way to go.

After doing a lot of reading and reaching out to mentors with multi-family experience, Pili and Jason found a quality property management company in Kentucky, and made use of the firm’s expertise to find a deal that fit their criteria. The Yarusis sold investors on their background of success in other businesses, and raised the $800K necessary to close on a 94-unit property. Today they share how their willingness to jump in without a clearly defined strategy paid off in the end and how they overcame the mindset challenges around multi-family investing. Listen in for Pili and Jason’s advice about reaching out to mentors and learning as you go.

Key Takeaways

[1:39] The circumstances that motivated Pili and Jason to invest in real estate

  • Ran restaurants, bars
  • Family construction business ‘gratifying, but grueling’
  • Pili pregnant with first child

[4:25] Pili and Jason’s start in-house flipping

  • Capital-intensive flips
  • No strategy going in (let idea grow)
  • Also purchased two out-of-state duplexes on gut feeling
  • Gave footprint (right questions, team members and processes)

[7:40] Why Pili and Jason shifted to multi-family

  • Realization that one single-family vacancy = 100% vacancy
  • Five vacancies in building with 100 doors = 95% occupancy
  • Multi-family income means you can afford team (on-site manager, maintenance, etc.)
  • Experience with duplexes taught them to vet property management company

[10:49] How the Yarusis moved forward once the decision to do multi-family was made

  • Jason educated himself, sought mentors
  • Utilized resources like BiggerPockets
  • Looked for deals in favorable out-of-state markets

[12:50] The mindset challenges around multi-family

  • Numbers seem scary (large = hard)
  • Concerns about raising capital

[14:09] How to overcome mindset challenges

  • Surround yourself with team, mentors
  • Meet people at networking events, REIA meetings
  • Reach out to friends of friends, other investors
  • The more you talk, the more it seems doable

[16:28] The hurdle of raising capital

  • Challenging due to lack of experience
  • Sold people on background of success in other businesses

[18:24] How Pili and Jason chose the Kentucky market

  • Looking for population growth, job growth/diversity
  • Familiar with Kentucky (friends, sister there)
  • Found property management company to offer feedback
  • Discovered property that fit criteria

[21:58] The Yarusi’s outlook when it was time to sign the contract

  • ‘Game time’
  • Work toward closing
  • Remain conservative (ensure return for investors)

[23:36] How much capital Pili and Jason raised for their first multi-family deal

  • $800K
  • Verbal commitments prior to contract
  • Didn’t start due diligence period until written notice of records received (extra 30 days)
  • One investor pulled out 20 days before closing
  • Scrambled to fill in gap

[25:27] How the 94-unit property is performing

  • Very well, achieved rent increases
  • Modest increase for good tenants
  • Turnovers up to market price

[26:45] The lessons Pili and Jason learned in their first multi-family deal

  • Walk every unit on morning of closing
  • Talk to everyone (don’t leave out any high-level investors)

[28:34] What’s next for the Yarusis

  • 47- and 57-unit in Kentucky
  • Bigger CapEx than first property

[29:56] Pili and Jason’s advice for aspiring apartment building investors

  • If multi-family is your endgame, start now
  • Consider the advantages of multi-family
    • Easier to secure loan
    • Can afford team
    • Vacancies less debilitating

Connect with Pili and Jason Yarusi

The REI Foundation Podcast

Email Jason at jason@yarusiholdings.com

Email Pili at pili@yarusiholdings.com

Resources

BiggerPockets

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

Review the Podcast on iTunes


All roads lead to multi-family. It seems that no matter how you get your start in real estate, the vast majority of investors come to the same conclusion: For passive, everlasting cashflow, multi-family is the way to go.

Jack Bosch came to the United States from Germany in 1997 to finish his college degree. He worked in the corporate world for several years, but soon found that it did not afford the life he wanted. His visa was dependent upon keeping his job, yet the company that was struggling, so Jack was inspired to start a company of his own.

Attracted to real estate because of its cashflow potential, Jack got his start flipping land. Over the course of three years, he developed a system that allowed him to do 3,800-plus deals, and he achieved financial freedom in a short time. Jack eventually moved into the single-family space, developing a portfolio of rental properties, and he finally graduated to multi-family in the last year. Today he shares the specifics of his transition to multi-family, his experience raising money for the first time, and his advice for investors who dismiss apartment buildings as an advanced strategy. Listen as he explains why he would have liked to get into multi-family sooner, and how you can get started in the space with no prior experience.

Key Takeaways

[2:12] How Jack got involved in real estate

  • Constant travel for work
  • Only two weeks’ vacation
  • Not the life he wanted to live
  • Company struggling, many lost jobs
  • Visa dependent on employment
  • Desire to start own business
  • Real estate appealed because of cashflow

[4:00] Jack’s start in flipping land

  • Could sell land for seller financing
  • Generate long-lasting passive cashflow

[5:36] How Jack defines a transaction

  1. One-time cash deals (flip house, get paid once)
  2. Temporary cash (give loan, receive interest)
  3. Monthly payments (flip land for seller financing, receive down payment + monthly installments for six to eight years until paid off)
  4. Forever cash (passive, everlasting income via multi-family)

[8:47] Jack’s transition to multi-family

  • Began working real estate in 2002
  • As of 2009, still hadn’t touched rental properties (thought too complicated)
  • Discovered houses available for $50/ft²
  • Purchased several dozen, rehabbed and managed themselves
  • Made mistakes (bad tenants, spent too much on rehabs)
  • Eventually found good property managers
  • Learned to systematize
  • Still not hassle-free (deal with one property at a time)
  • Realized multi-family properties provide buffer

[12:52] Jack’s advice around the multi-family learning curve

  • Acquisition, sourcing, negotiation, analysis and management processes are different
  • Look for a partner-expert to learn from
  • Jack did first deal on 93-unit in Louisiana with experienced friend
  • Experience was ‘hands-on MBA in multi-family’
  • Now building own team, additional funding sources
  • Still works with partner on bigger projects
  • Looking to build out own portfolio as well

[18:10] Jack’s experience with raising money

  • First time on multi-family deal
  • Benefitted from having reputation in market
  • $1.4M raised in short time
  • Felt responsibility as steward for someone else’s money

[21:01] Jack’s conclusions about multi-family

  • At top of favorite investment methods list
  • Securing good property management company is key
  • Low risk, high reward (extremely safe investment)
  • 93-unit property has doubled in value
  • Recession-proof (extraordinarily low default rate)

[22:48] Why Jack would have liked to start multi-family sooner

  • Cashflow would have been multi-fold higher
  • Single-family experience did teach building, rehab
  • Could have gone right to multi-family with proper guidance
  • Employee mindset, thinking small held him back
  • Success with early investments helped grow thinking
  • Systems in place to make business scalable
  • Some aspects of multi-family are easier than single-family

[28:20] Jack’s advice for investors who dismiss multi-family as an advanced strategy

  • Shadow a coach/mentor
  • Mentor acts as ‘time compressor’
  • Help with mental hurdles, analyzing numbers

[30:26] What Jack is excited about

  • Cashflow affords family opportunity to travel (Trips planned to Europe, Asia, Germany, South America)
  • Business continues while they travel
  • Looking to secure 5,000 units in five years
  • Transform lives of investors (up to 16% yearly average returns)

Connect with Jack

Jack on Facebook

JackBosch.com

JackBosch.com/apartments

JackBosch.com/land

Mastermind for Business Owners

Resources

TheMichaelBlank.com

Michael’s Products

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

Direct download: MB_076__Multifamily__Forever_Cash_Flow__With_Jack_Bosch.mp3
Category:Commercial Real Estate -- posted at: 3:32pm EDT

Yes, crowdfunding is out of reach for the average newbie syndicator. But if you’ve got a great deal and a willingness to hustle, it is possible to partner with a larger real estate company and take advantage of the capital available through crowdfunding. Platforms like Realty Mogul are looking for sponsors with a track record, so if you don’t have one—find someone who does.

Jilliene Helman is the CEO of Realty Mogul, the premiere online marketplace for real estate investing. The platform employs cutting-edge technology to connect its network of 130,000 registered investors looking for passive investments in commercial real estate with established real estate companies looking to acquire and operate commercial properties.

Realty Mogul is a marriage of Jilliene’s affinities for financial services and technology. She founded the company in 2013 to take advantage of the opportunities around crowdfunding afforded by the JOBS Act. Today she discusses why Realty Mogul chose to focus on the commercial space, the types of investments the platform offers, and the Realty Mogul definition of a good deal. Learn about the evolution of the crowdfunding industry, and heed Jilliene’s advice about partnering for aspiring syndicators.

Key Takeaways

[2:33] How the crowdfunding industry has evolved

  • Started five years ago with passage of JOBS Act
  • Has become more and more mainstream
  • Began with donation-based sites (e.g.: Kickstarter, Indiegogo)
  • Evolved into investment-based crowdfunding (i.e.: commercial real estate)
  • Since 2013, Realty Mogul has raised $300M online
  • Will continue to grow, scale
  • Over $1B in invested capital through crowdfunding this year alone
  • Provides investors access to private transactions

[3:55] Why Realty Mogul chose to focus on the commercial space

  • Huge opportunity in single-family space early on (2013-2015)
  • Banks off-loading residential properties
  • Not easy to make money doing fix and flips
  • Chose to focus on existing properties, tenants and cashflow
  • Less risky than vacant residential property being renovated

[4:54] The types of investments Realty Mogul offers

  • Joint venture (common) equity investments
  • Paid last (riskiest part of capital stack)
  • Gets piece of appreciation
  • Preferred equity investments
  • Paid before joint venture equity
  • Receives flat, pre-negotiated rate (doesn’t get any of appreciation)
  • Mezzanine debt investments
  • Senior mortgage debt investments

[6:54] What Realty Mogul is looking for in a sponsor

  • Don’t do business with first-time sponsors
  • History, track record of success
  • Real estate company with experience in market, property type
  • Investors want to work with sophisticated real estate companies
  • Typically don’t work with solo operators
  • Looking for full-time sponsors with own company, employees
  • Serious and professional about execution in investing in real estate

 [8:34] Jilliene’s advice for aspiring syndicators

  • Do a transaction
  • Raise capital from friends, family
  • Add value, build a track record

[10:12] Jilliene’s guidance around partnering with a larger real estate company to employ crowdfunding

  • If have solid deal, no reason you can’t partner
  • Will have to pay real estate company
  • Won’t have control of transaction
  • Realty Mogul requires one sponsor to have final say

[11:47] What Realty Mogul defines as a good deal

  • Every deal is different
  • Focus on cashflowing real estate (existing tenants)
  • Majority of deals are Class B assets in secondary markets
  • Look for opportunity to value-add
  • 7-8% average cash-on-cash return to investors
  • 15% IRR net to investors

[14:13] The requirements for passive investors on Realty Mogul

  • Public, non-traded REIT open to all investors (diversified pool of commercial real estate investments)
  • Private transactions limited to accredited investors (income above $200,000 or net worth above $1M)

[15:28] The process of becoming a passive investor with Realty Mogul

  • Sign up for user account
  • Select transaction
  • Entire experience is digital
  • REIT is blended vehicle
  • Accredited investors pick and choose specific properties

[16:40] The benefits of working with Realty Mogul

  • Track record
  • Over $300M invested in commercial real estate
  • Real estate companies do multiple transactions (speaks to experience)
  • Network of 130,000 investors

[17:23] How Realty Mogul came to be

  • Jilliene worked in banking (wealth management)
  • Wealthiest clients were real estate investors
  • With JOBS Act, Jilliene saw opportunity
  • Blends her passions—financial services and technology
  • Mission to help people generate wealth via real estate investing

[18:22] Jilliene’s take on the future of crowdfunding

  • Will continue to grow
  • More and more mainstream
  • Investors more comfortable with doing transactions on internet
  • Billion-dollar industry

Connect with Jilliene

Realty Mogul

Resources

 Deal Desk

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


Landing your first multi-family deal is much like pushing over the first in a series of dominoes: The second and third deals fall in rapid succession. In most cases, it is possible to replace your income one to three years from the moment you decide to change your life.

Brad Tacia’s story adheres to this Law of the First Deal. He was an engineer by trade, working for an auto parts manufacturer in Detroit. Though he survived the recession, Brad knew that he needed a backup plan. He began his foray into real estate with single-family homes, using a portion of his 401(k) to facilitate the investment.

Brad reached a turning point when he realized just how much of his daughter’s life he was missing. To speed up the process of achieving financial freedom, Brad and his wife used the Dave Ramsey program to cut their expenses and pay off their house—which allowed them to fund their first multi-family deal with a home equity loan. Brad’s second and third deals followed quickly on the heels of the first, and in two years, he had replaced his income. Brad quit his W-2 job, and now he controls 160 apartment units total. Listen as he explains his experience with Dave Ramsey’s Financial Peace University, how he funded his first three multi-family deals, and his secrets to becoming financially free in just two years. He also shares his knowledge around syndicating deals as well as the details of how his life has changed, making every day feel like Saturday!

Key Takeaways

 [4:26] Brad’s motivation to try real estate

[6:36] What precipitated Brad’s shift to multi-family

  • Daughter asking, “Do you have to work tomorrow?”
  • Desire to spend more time with family
  • Realized could achieve financial freedom faster with multi-family

[7:16] How Brad funded his first multi-family deal

  • Used Dave Ramsey program to cut expenses
  • Paid off house
  • Funded 12-unit with home equity loan

[8:14] Brad’s experience with Financial Peace University

  • Listened to Dave Ramsey audio discs with wife
  • Employed common sense budgeting
  • Made lifestyle adjustments (less eating out, cash budget for groceries)
  • Paid off credit card debt, auto loans and house
  • Felt safe in case of another downturn

 [11:23] Brad’s next two multi-family deals

  • Second deal six months after first
  • Bought another 12-unit with partner (property manager)
  • Third deal (63-unit) four months later
  • Bought 50/50 with different partner (realtor)
  • Replaced income in under two years

[13:23] How Brad developed the confidence to do his first multi-family deal

  • Reading books
  • Training, networking
  • Honed skills in financial analysis

[14:01] Brad’s advice around funding multi-family deals

  • Look for cheapest method
  • Home equity loan only 3.3% interest
  • IRA (taxes, penalty for withdrawal)
  • Syndicating

[15:19] Brad’s experience syndicating deals

  • Awkward to ask for money at first
  • Not as difficult as imagined
  • Frame as offering opportunity for 15% average annual ROI

[16:41] Brad’s secrets to becoming financially free in two years

  • Get your expenses under control
  • Employ courses that teach step-by-step process
  • Income will snowball

[18:00] The significance of the first deal

  • Learn the language
  • Contacts, team in place (property manager, banker, inspectors, real estate brokers)
  • Understand mechanics of deal
  • Become addicted to cashflow
  • Want to grow, take pressure off day job

[19:27] How Brad found time to do real estate on the side while working a demanding job

  • Full-time engineering manager with 23 employees (50-60/hour weeks)
  • Looked for deals before work
  • Made phone calls during lunch hour
  • Saw apartment buildings after work, weekends

[20:20] How Brad’s life has changed

  • Building stronger relationships with family, friends
  • Working out, eating well
  • Getting enough sleep
  • Completing projects had put off
  • Bonding with coaching students (Ultimate Apartment Investing Coaching Program)
  • Quitting full-time job allows to think more strategically, design life to make impact

[22:30] Brad’s perfect day

  • Wake up without alarm
  • Work out
  • Family time
  • Coach students
  • Look for new deals
  • Take vacations at will
  • Every day feels like Saturday

[23:22] How Brad wants to be remembered

  • Family man
  • Mentor
  • Inspire people to take risks (it’s risky not to go for it)

[24:34] Brad’s best advice for aspiring multi-family investors

  • It’s more doable than you realize
  • Choose five-year retirement plan over 40-year retirement plan

Connect with Brad

Ultimate Apartment Investing Coaching Program

Apartment Investors of Michigan Facebook Group

Resources

Apartment Building Investing Session #55

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

The Millionaire Real Estate Investor by Gary Keller

Bigger Pockets

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

The Financial Freedom Summit Live

Review the Podcast on iTunes


What is stopping you from achieving financial freedom through apartment building investing? Is it because you don’t have single-family experience? Are you intimidated by the perceived complexity of the multi-family space? Or maybe you think you don’t have enough money to consider pursuing multi-family deals? Today’s guest has encountered and overcome all of these limiting beliefs, and today he reveals how to get out of your own way and get on the road to financial freedom.

Tyler Sheff is the founder of CashFlowGuys.com and the host of the Cash Flow Guys Podcast. He was making six figures as a merchant mariner when he and his wife took a hard look at their future. Tyler didn’t want to wait until he was 65 to enjoy life, so he took compensatory time and gave himself six months see if real estate investing would prove viable and provide the cashflow necessary to attain financial freedom.

In just 11 months, Tyler had replaced his income. At that point, he had invested in 26 units in Florida and Tennessee – using none of his own money. Now he leverages his 17 years of experience to demystify the real estate investing space, encouraging others to focus on cashflow and take massive action toward their goals. Today, Tyler shares his journey, explaining how he landed his first few multi-family deals, why single-family experience is unnecessary in the apartment building space, and how he employs relationship marketing to raise capital. Listen in as he unpacks each of the limiting beliefs that held him back and reveals how to overcome ‘analysis paralysis’ and move forward with your dreams of building passive income and escaping the rat race.

Key Takeaways

 [2:55] How Tyler got started in real estate

  • Desire to ‘get rich quick’
  • Made money as house flipper
  • Sold portfolio before market crash
  • Acquired huge tax bill
  • Went to work for government as merchant mariner
  • Climbed ranks to six-figure salary

[4:32] Why Tyler returned to real estate

  • Way to legally, ethically avoid taxation
  • Focus on cashflow this time (not appreciation)
  • Job on ship kept away from family
  • Not feasible to continue for 20 years (physical toll)
  • Wanted better quality of life, time on hands

[8:08] Tyler’s experience as a landlord

  • ‘Accidental landlord’ in late ‘90’s to maximize returns on sales of fix and flips
  • Got into multi-family in 2014 to scale quickly

[9:10] Tyler’s first multi-family deal

  • Pre-approved for VA mortgage
  • ‘For Rent’ sign on four-plex
  • Paid zero down, received check for $1700 at closing
  • Moved into one unit, rented other three
  • Rehabbed quickly
  • Cashflow right away
  • Converted one unit to vacation rental
  • Cashflow increased from $1,200 to $5,000/month

 [12:12] Tyler’s next two deals

  • Learned to raise capital (Secrets of Successful Syndication seminar, Sam Freshman book)
  • Built team, cut teeth on ten- and 12-plex in Memphis
  • Tennessee known for cashflow (not organic appreciation)
  • ‘Overimproved,’ didn’t see anticipated ROI
  • Learned to analyze needs of tenants
  • Brought to total of 26 units in 11 months
  • Capital raised through IRA lenders
  • Tyler able to quit government job

[17:22] The limiting beliefs that held Tyler back

  • Analysis paralysis (first deal so good, couldn’t stop comparing)
  • Fear of making mistakes was crippling

[19:22] Why single-family experience is unnecessary to enter the multi-family space

  • ‘Almost better off with no experience’
  • Tyler feels single-family background made him too conservative

[21:49] How Tyler achieved multi-family deals without using any of his own money

  • Partnered with experienced property management company
  • Enlisted exceptional legal and accounting teams
  • Experience of team led to capital (didn’t matter that Tyler was inexperienced)

[23:05] How Tyler leveraged ‘relationship marketing’ to raise capital

  • Started podcast, Cashflow 101 workshops
  • Positioning self as expert led to referrals
  • Matched investors with experienced syndicators
  • Learned from those syndicators (willing to help)

[24:44] Why the complexity of multi-family is a limiting belief

  • Same as single-family, just larger scale (only one roof)
  • Tyler contends apartments are easier to work with
  • Many moving parts, must be able to manage others effectively

[25:50] The importance of Tyler’s first deal

  • Critical in realizing he could do this
  • Second and third deals built confidence as he encountered and overcame problems

[26:56] How Tyler’s life has changed

  • Doesn’t have to ‘hunt’ for next check as buy and hold investor
  • Receives mailbox money each month
  • Continues to attract capital, source opportunities
  • Time available to educate others with free content
  • Freedom to spend time with family

[29:51] Tyler’s perfect day

  • Watch sunrise in kayak
  • Fish all morning
  • Work on podcast, instructional video in afternoon
  • Help others attain same kind of financial freedom

[30:27] Tyler’s advice for aspiring multi-family investors

  • What do you have to lose?
  • Only tangible thing is time
  • Educate yourself and take action

[31:02] How Tyler wants to be remembered

  • As change-maker who ‘made difficult stuff simple’

Connect with Tyler

Cash Flow Guys

Tyler’s YouTube Channel

Resources

Secrets of Successful Syndication

Principles of Real Estate Syndication by Samuel K. Freshman

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


More money, more problems.

One of the major pain points for high net worth individuals involves taxes. Today’s guest was hit hard with a $497K bill in 2010, and that’s when he decided stop giving his money away to the IRS and start investing in multi-family properties!

David Zook is a wildly successful entrepreneur and experienced investor in the multi-family space who has syndicated over $50M worth of real estate in his career. His portfolio includes 3,000 apartment units in several states as well as Ambergris Caye, the largest resort in Belize. David has entered the ATM market as well, capitalizing on another investment that offers tax-advantage cashflow.

David is also a sought-after speaker and published author who has presented at venues such as the International Business Conference, The Jason Hartman Real Estate Mastermind, and The Cash Flow Wealth Summit. He credits his success to working with world-class teams, and today he discusses why it’s patriotic to take advantage of available tax breaks, the AHA moment that initiated his transition from passive investor to real estate syndicator, and how multi-family investing has evolved over time. Whether you’re a high net worth individual looking to reduce your tab with the IRS or a syndicator looking to raise money, this episode is for you. Listen in as David shares how he leverages paper loss and cost segregation to reduce his tax bill from $475K to nearly zero.

Key Takeaways

[5:43] Why it’s patriotic to take advantage of tax breaks

  • Incentives encourage certain activities (e.g.: oil exploration)
  • Government rewards for engagement

[7:27] The tax benefits associated with multi-family investing

  • Without creativity, can write off in 27½ years
  • Take ‘paper loss’ (allows to claim 3.6% annual loss)
  • Cost segregation study accelerates depreciation
  • Reinvest capital would have given to government

[10:49] How to exercise cost segregation

  • Licensed professional evaluates property
  • Report breaks down depreciation of component parts (i.e.: washer/dryer, pavement, plumbing)
  • Write off 70% of physical asset in five to seven years

[13:07] David’s advice around choosing syndicator (as a passive investor)

  • Find competent people with track record of success
  • Watch syndicator closely in early stages
  • Start small

 [15:08] How David transitioned from passive investor to syndicator

  • Came into market with cash, partner brought opportunities
  • Ran out of cash, invited family to invest
  • Finally had to slow down as ran out of cash
  • AHA moment on board of local startup bank, discussing .5% interest on CD
  • Realized could offer others double-digit returns via multi-family

[18:02] David’s approach to passive investing

  • Not involved in daily headaches
  • Must trust, believe in partners
  • ‘Team is more important than asset’

[20:24] How David raised money for his first deals as a syndicator

  • Psychological challenge (reputation in business)
  • Lived in Amish country, visited successful farmers
  • Listened to stories, identified pain points
  • Shared own successes
  • Raised $850K
  • Now can send email, get funding in two hours

[24:51] How David structures a deal

  • 5-10% range of cash-on-cash return
  • Investors concerned with consistent quarterly cashflow
  • Keep it simple

[26:28] How multi-family investing has evolved

  • Fewer deals today, must hustle
  • David’s team no longer aggressively chasing deals
  • Good broker, reputation for closing can procure 5-10% discount

[29:52] David’s ATM investing opportunity

  • Started as passive investor in 2012
  • Became partner last year, raised $9M in seven months
  • Introduces investors to exclusive asset class
  • Fits philosophy of investing for tax-advantage cashflow

Connect with David

The Real Asset Investor

Email info@therealassetinvestor.com

Email atm@therealassetinvestor.com

Resources

Email infor@therealassetinvestor.com

  • 8 Real Life Lessons for Syndicators and Their Investors
  • K-1 Sample (How Depreciation Works)

Robert Kiyosaki Books

Review the Podcast on iTunes

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


Real estate is no longer a local game, and smart apartment building investors have properties all over the country. The tricky part is finding a way to consolidate the data so that you can manage and analyze your portfolio all in one place. Is it possible to streamline the important property management processes when your investments are operated by different property managers using different software in different states? Today’s guest says, ‘Yes, you can,’ as she reveals how to remotely self-manage your real estate portfolio.

Dana Dunford is a real estate management specialist, licensed agent, and technology guru out of San Francisco. After earning her MBA from Harvard Business School in 2015, Dana co-founded Hemlane, a technology-enabled property management solution designed to support real estate investors in the remote management of their rentals. As CEO of the company, Dana understands that the best investments may not be in your backyard, and she is on a mission to provide investors with a single platform that consolidates and manages properties using intelligent software, virtual maintenance coordinators and local support.

Dana’s impressive resume includes positions at Apple, where she was a part of the worldwide financial planning and analysis team, and tech startup Nest, which was acquired by Google for $3.2 billion in 2014. Today she shares her expertise with the Apartment Building Investing audience, discussing the role of a property manager and the pros and cons of self-management. She covers the metrics you should be tracking as an owner, the benefits of property management software, and the processes that should be centralized across your portfolio. If you have between two and fifty properties, this is a must-listen interview that uncovers the tools available to help you remotely manage your investments.

Key Takeaways

 [3:25] The costliest expense in the property management space

  • Bad tenants
  • Turnover costs
  • Eviction expenses
  • Vacancy during inopportune months

[4:39] How to avoid the expenses associated with turnover

  • Advertise early and often (good tenants look 30 days out)
  • Advertise on as many sites as possible
  • Respond quickly, schedule showings asap
  • Screen thoroughly via comprehensive background/credit checks on every applicant (not just primary)

[6:28] The pros and cons of self-management vs. hiring a property manager

  • Makes financial sense to hire property manager for class C and D properties
  • Consider self-management in case of class A properties
  • Good idea to have licensed professional you trust ‘on the ground’
  • Maintain a sense of control by having access to financials, business records

[8:23] The role of a property manager

  • First to blame, last to get credit
  • Must be jack of all trades (finance/accounting, maintenance/repair, salesperson)

[10:17] Dana’s guidance around making property managers ‘offensive players’

  • Open communication, transparency in decision-making
  • Establish owner’s criteria for approving tenants
  • Collaborative partner when problems arise

[11:41] Dana’s advice about interacting with your property manager

  • Frequently in beginning to establish expectations, any time issues arise
  • Weekly call if oversee more than 200 units
  • Email weekly summary (# of tenant applications, leads)

[13:18] The benefits of property management software

  • Provides owner with real-time insight
  • Long-term savings offset $30 monthly investment

[14:28] The metrics owners should be tracking

  • Income statement is crucial (profit/loss, expenses, ROI)
  • Should be able to answer general questions about portfolio
  • Reasons for vacancies
  • Tenant risk mitigation (Following policies? Inspection reports?)
  • Financial risk (Autopay? Late payments? Late fees?)
  • May shift based on need (maintenance, marketing)

[16:17] The processes an owner should prioritize

  • Tenant selection
  • Legal contracts
  • Maintenance management

[17:39] How to incentivize tenants to pay on time

  • Daily late fees
  • Require payment of late fees before rent
  • Report late payments to credit bureau
  • Check state/county laws

[19:34] The processes Dana recommends centralizing across your portfolio

  • Marketing
  • Application
  • Financials, bookkeeping
  • Maintenance tracking

[21:15] How to consolidate your records

  • Newer software allows for integration (email support team with questions)
  • Export all data to single platform (e.g.: QuickBooksSmartMove, Excel)
  • Enlist help of VA only after processes in place

[24:45] The free tools Dana recommends for managing your portfolio

  • Trello (project management)
  • Slack (team communication)
  • Google Sheets
  • Dedicated email, phone number and business bank account

[25:59] The fundamentals of Hemlane software

  • ‘Best investments not in backyard’
  • Add any property to platform
  • Consolidates data for entire portfolio
  • Streamlines property marketing, applicant screening, lease tracking, rent/payments and maintenance

Connect with Dana

Hemlane

Hemlane on Twitter

Hemlane on Facebook

Email: dana@hemlane.com

Phone 385-355-4361

Resources

QuickBooks

smart move

Upwork

Trello

Slack

Google Sheets

Review the Podcast on iTunes

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


‘When others are fearful, be greedy. When others are greedy, be fearful.’ Today’s guest took Warren Buffet’s advice to heart, moving past her fear and reaching out to investors at the top of their game to ask for guidance as she shifted from single-family fix and flips to 300-plus unit multi-family properties. Her bigger-is-better philosophy has led to a love of investing in sizable unloved properties and performing a full-gut rehab to revitalize the property – and the community.

Kira Golden is the CEO of Direct Source Wealth, a real estate development company out of Denver that does direct deals and serves as a platform for new and experienced investors. By the time she was 18, Kira had holdings in both the real estate and stock market. After graduating Magna Cum Laude from George Washington University with a master’s in public administration, Kira worked as a financial advisor at Edward Jones until she was in a position to live off her investment income. She currently owns properties in Washington, Colorado, Arizona, Illinois, Ohio, Puerto Rico and France.

Kira is on a mission to bring high-quality deals to Main Street, providing clients with the financial freedom she has earned through investment in real estate. Today she shares how she financed her first deals, what prompted her shift from single- to multi-family properties, and why she reaches out to big name investors at the top of their game. Listen in to understand how to choose the right equity partners and why Kira recommends investing in apartments – the sooner the better!

 Key Takeaways

[2:25] How Kira got her start in real estate investing

  • Watched Robert Kiyosaki infomercials as ‘12-year-old insomniac’
  • Experienced windfall/freak-out cycle as daughter of inventor
  • Desire for consistent cashflow led to buying houses at 18
  • Bought five houses in three years

[5:13] How Kira financed her first deals

  • Invested $3K savings in stock market, grew to $10K
  • Used $10K to finance first house
  • Put $1K deposit on condo, then sold option to homebuyer (value had increased during construction)
  • Used profits to finance second house

[9:14] Kira’s minimalist philosophy

  • Continued to save money, work full-time during college
  • Conscious decision to ‘live like college kid’ until age 30
  • Passive cashflow exceeded expenses by 22 ($2K/month)

[10:56] Kira’s shift from single- to multi-family investments

  • Goals grew from $1M to $100M
  • Weary of fix and flips, borrowing hard money at 18%
  • Got into private lending
  • Time became more valuable than money
  • Feedback from lenders indicated that $1M loan for multi-family was easier to secure than $100K loan for single-family home

[15:07] Kira’s intent behind reaching out to potential partners

[16:56] Kira’s first 30-unit multi-family deal

  • Continues to take 20% of time three years later
  • Bank deal, bought distressed asset
  • Bought $5.4M bank note for $1M
  • Invested $2.5M to complete construction
  • Used investor capital, joint venture with equity partner

[19:19] How Kira attracts investors

  • Shares her excitement for deals
  • Distinguish between fear and intuition
  • Go where you’re afraid, reach out to big names
  • Founder, CEO of fifth largest mortgage bank in US
  • Large real estate investors at top of game

[23:12] What Kira learned from reaching out to sought-after investors

  • People you’re hero-worshipping are just people
  • Deep respect for what they have accomplished
  • Emulate skills that made them successful

[27:34] The importance of alignment in selecting an equity partner

  • Had to buy out partner on 30-unit after legal battle
  • Long-term buy and hold vs. high-velocity fix and flip will end in conflict

[30:47] How Kira would approach raising money for 30-unit deal without equity partner

  • Not beyond door-knocking (pushing own boundaries to raise more capital)
  • Approach bank to carry back the debt
  • Raise construction capital after closing ($250K/month)

[31:56] Kira’s 315-unit full gut rehab

  • Mentor offered pocket deal, he functioned as silent partner
  • Vacant, drug-/crime-infested area of Dayton, OH
  • Turned around, named top-ten complex in city
  • No equity partner, built engine to find investors (first generation made good)

[34:16] Why Kira wishes she had done multi-family sooner

  • Fix and flip experience was valuable (can’t be snowed by property management companies, contractors)
  • Two years would have been long enough
  • Multi-family is a better vehicle
  • Had to build confidence while maintaining roots

[37:21] Kira’s advice for aspiring real estate investors

  • Determine whether you are a deal junkie or just want to retire early
  • 10% who are deal junkies should align with experienced partner to short-cycle learning process

[39:15] What’s next for Kira and Direct Source Wealth

  • Three days meditating in Sedona
  • $100M fund to bring high-quality deals to Main Street

Connect with Kira

Direct Source Wealth

Connect on LinkedIn

Facebook

Resources

Partner with Michael

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


The vast majority of women perform a number of unpaid jobs every day, from childcare to housekeeping to food preparation. There is simply no time to pick up another job! But today’s guest argues that there is a way for women to generate substantial income that doesn’t require a lot of time and energy – apartment building investing.

Whitney Nicely believes that every woman should control her own destiny by investing in real estate as soon and as much as possible. Born into a family of entrepreneurs, Whitney was inspired to invest in real estate as a creative outlet that would allow her the freedom to be her own boss. She flipped her first house in 2009, and has since grown her portfolio to include 17 residential houses, 19 apartment units and seven chunks of vacant land across east Tennessee.  

Whitney’s philosophy is to take action first and figure it out as she goes. Her bold, ‘throw spaghetti at the wall’ strategy has proven successful, and now she teaches women how to invest in real estate with no money, no credit and no bank necessary. Listen in as she shares why she prefers apartments to single family homes, how she landed and financed her multi-family properties, and her advice around building a reputation as a local real estate authority. Learn why women need to start building a portfolio – today!

Key Takeaways

[2:27] How Whitney got her start in real estate

  • Mom is real estate investor (mailbox money)
  • Went in with no plan
  • Bought land for $1,500
  • Rents driveway and land for $750/month

[5:38] Whitney’s experience with single family homes

  • Bought two houses to rent
  • Realized would take 115 years to get money back
  • Discovered lease option (no money, no credit)

[6:38] Why Whitney quit the family business to do real estate

  • ‘Too much family, not enough fun’
  • Family of entrepreneurs
  • Sought creative outlet of her own

[7:29] The advantages of apartments (vs. single family homes)

  • More money with less time
  • Property manager to deal with problems
  • One roof, one tax bill
  • If one set of renters can’t pay, mortgage still covered

[12:30] How Whitney landed her three multi-family units

  • Property in country near industrial park
  • Previous owner lost through foreclosure
  • Local bank owned, managed by local realtor
  • Listed in small, local MLS (big players unaware)
  • Whitney in contact with agent, lead when price dropped
  • Used HELOC from house paid off to make offer ($25K for 5-unit, $35K for 11-unit)

[15:58] The cashflow on Whitney’s current multi-family properties

  • 19 units total
  • Triplex units bring in $550/month for each, mortgage $60 ($900 profit)
  • Five-units rent for $500/month, mortgage $800
  • 11-unit brings in $4,000/month, mortgage $1,100

[16:52] The other expenses associated with owning apartments

  • Real estate taxes, insurance
  • ‘Bug guy’
  • Property manager
  • Yard maintenance

[17:51] What’s next for Whitney

  • Mobile home park
  • Old building to rent as think tank/co-op office space

[19:04] Whitney’s early real estate misstep

  • Purchased house she hadn’t seen for $15,000
  • Fleas, squishy floors, dubious neighbors
  • Could not rent
  • Sold at auction for $11,000

[21:50] Whitney’s philosophy around taking action

  • Once you buy, three options (sell, rent, do something creative)
  • Play ‘what if’ too long, someone else will take your deal
  • Not bothered by not knowing what’s next

[24:27] How Whitney chooses people to do deals with

  • Lease option not for everyone
  • Focus on people tired of being landlord or making payment on empty house
  • Adopt take-it-or-leave-it attitude

[25:45] What sets Whitney apart from other investors

  • Talks to five to ten sellers per day
  • No fear, just put it out there
  • Finds off-market deals via personal Facebook page
  • Provides HGTV-style edutainment on social media
  • Local authority (crooked ‘I buy houses’ button)

[28:14] Why Whitney believes all women need a real estate portfolio

  • Allows to control own destiny
  • Statistically live longer, may have tendency to spend more money
  • Already do unpaid work at home, no time to pick up extra job
  • Extra $10,000 provided by real estate can make or break marriage, retirement

[30:03] How Whitney’s family reacted to her real estate investments

  • Husband, family not always on board
  • Thought she was wasting time, money
  • Started to take seriously after first $60,000

[32:34] Whitney’s advice for aspiring apartment building investors

  • Take action, figure out as you go
  • Don’t sign your name on $100,000 loan if not comfortable
  • Start small (land, dinky house, ‘lipstick-on-a-pig flip’)
  • Real estate is not complicated

Connect with Whitney

 whitneynicely.com

Whitney Buys Houses on Facebook

 7-Day Lead Challenge

 Resources

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


Most of us feel uncomfortable asking people for money, yet as apartment building investors we must raise capital to operate a successful business. Today’s guest argues that he doesn’t ask people for money, but offers opportunities to collaborate on projects that are a good fit for individual investors.

Victor Menasce is managing partner of US Real Estate Partners LP and author of the book Magnetic Capital: How to Raise All the Money You Need for ANY Worthy Venture. He spent the first 25 years of his career in high tech, achieving success as a microprocessor designer. But the frequent travel was a strain, and Victor realized that the days of building wealth in that industry were over. In search of a career that would have a meaningful impact, in an industry known for creating wealth, he started investing in real estate as a side hustle. His first projects involved medium-term executive rentals for parliamentary and embassy staff in Ottawa as well as local rent-to-own transactions. Victor then expanded to US markets and transitioned to real estate full-time.

His current specialty involves building new apartments in an infill urban setting across multiple domestic and international markets. Leveraging the skills around raising capital he developed in the tech industry, Victor has become an expert in helping investors divert their money from high-risk equity markets into safe multi-family real estate assets. Today Victor details the five key elements of raising capital and explains why some people repel the very money they’re trying to raise. Listen and learn from a developer who has raised more than $300 million in his nine-year real estate career!

Key Takeaways

[7:01] Why Victor views real estate as a team sport

  • Foreigners viewed as risk (lenders perceive lack of recourse)
  • Local partner facilitates investment

[7:47] The most difficult part of Victor’s transition from full-time job to real estate

  • Used savings to invest
  • Caused stress as savings dwindled
  • Chose wrong partners early on

[10:00] Why some repel money when they’re trying to raise it

  • Mistake to skip steps in basics of human relationships
  • Can go from natural progression to ‘creepy’ very quickly
  • Pace conversation so doesn’t feel forced

[11:17] The first key element of raising capital – RELATIONSHIPS

  • Build genuine relationships with prospective investors
  • People don’t want to be used
  • Forcing a connection pushes people away

[15:18] The second key element of raising capital – TRACK RECORD

  • Proof of results necessary in raising money
  • If just getting started, partner with someone who is established (borrowed credibility)

[17:42] The third key element of raising capital – TRUST

  • Goes beyond ‘dealing with honest person’
  • Includes alignment of intention
  • Decisions happen quickly when trust exists
  • Employ ‘trial close’

[20:09] The fourth key element of raising capital – COMPELLING OPPORTUNITY

  • ‘Compelling’ in eye of beholder
  • All good deals get done
  • Consider creating your own deal (scarcity vs. abundance mentality)

[25:40] The fifth key element of raising capital – ALIGN PROJECT GOALS WITH INVESTOR

  • Must be a good fit (i.e.: shoe shopping)
  • Different segments/classes of investors
  • Criteria include rate of return, control structure, tax consequence, security, risk, etc.
  • Sophisticated investors clear on all criteria

[30:55] The biggest mistake entrepreneurs make

  • Raise too little money
  • Delays, increased construction costs may leave you short
  • Victor recommends securing extra 5% equity
  • Hard to raise money when desperate

[33:28] How to invest like a billionaire, even if you’re not

  • ‘Buy on the line, move the line’
  • Identify dividing line between ‘hot’ and so-so neighborhood
  • If line arbitrary, purchase 5-10 on depressed side
  • Move line and you set value

[35:36] Victor’s advice for people hesitant to ask for money

  • Reframe as opportunity to collaborate on project

Connect with Victor

 victorjm.com

Resources

 Magnetic Capital: How to Raise All the Money You Need for ANY Worthy Venture by Victor Menasce

 Magnetism Scorecard

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

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