Financial Freedom with Real Estate Investing (Commercial Real Estate)

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

MB 120: 20 Units to Financial Freedom with Multifamily – With Aaron Howell

Direct download: MB_121_-_Proactive_Property_Management_in_the_5_Phases_of_Multifamily__With_Bryan_Chavis.mp3
Category:Commercial Real Estate -- posted at: 5:37pm EST

Fri, 13 July 2018

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

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

MB 119: Building Your Multifamily Resume Through Partnerships – With Danny Woodford

Direct download: MB_120_-_20_Units_to_Financial_Freedom_with_Multifamily__With_Aaron_Howell.mp3
Category:Commercial Real Estate -- posted at: 12:23pm EST

Mon, 9 July 2018

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

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

MB 118: Investing in the Growing Cannabis Industry Through Real Estate – With Leslie Plettner

Direct download: MB_119_-_Building_Your_Multifamily_Resume_Through_Partnerships__With_Danny_Woodford.mp3
Category:Commercial Real Estate -- posted at: 2:19pm EST

Mon, 2 July 2018

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

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

MB 117: Pushing Your Limits to Strike Multifamily Gold – With Anna Simpson

Direct download: MB_118_-_Investing_in_the_Growing_Cannabis_Industry_Through_Real_Estate__With_Leslie_Plettner.mp3
Category:Commercial Real Estate -- posted at: 1:12pm EST

Mon, 2 July 2018

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

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

MB 116: Reawakening, Reinvention & Opportunities in Commercial Real Estate – With Alan Schnur

Direct download: MB_117_-_Pushing_Your_Limits_to_Strike_Multifamily_Gold__With_Anna_Simpson.mp3
Category:Commercial Real Estate -- posted at: 1:12pm EST

Fri, 15 June 2018

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 101^st 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

International Council of Shopping Centers

National Apartment Association

National Real Estate Investors Association

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

MB 115: Enlisting an SEC Attorney to Protect Yourself & Ensure Compliance – With Mauricio Rauld

Direct download: MB_116_-_Reawakening_Reinvention__Opportunities_in_Commercial_Real_Estate__With_Alan_Schnur.mp3
Category:Commercial Real Estate -- posted at: 1:16pm EST

Fri, 15 June 2018

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

Register with SEC (two-year process)
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

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

MB 114: The Ten Commandments of Negotation - With Stefan Aarnio

Direct download: MB_115_-_Enlisting_an_SEC_Attorney_to_Protect_Yourself__Ensure_Compliance__With_Mauricio_Rauld.mp3
Category:Commercial Real Estate -- posted at: 1:05pm EST

Wed, 13 June 2018

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

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

MB 113: From Auto Mechanic to Self-Made Millionaire Through Multifamily – With Peter Conti

Direct download: MB_114_-_The_Ten_Commandments_of_Negotation_-_With_Stefan_Aarnio.mp3
Category:Commercial Real Estate -- posted at: 2:07pm EST

Fri, 8 June 2018

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

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

MB 112: Scaling Up from a Duplex to 2,700 Multifamily Units – With Ivan Barratt

Direct download: MB_113-_From_Auto_Mechanic_to_Self-Made_Millionaire_Through_Multifamily__With_Peter_Conti.mp3
Category:Commercial Real Estate -- posted at: 11:41am EST

Tue, 5 June 2018

“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

Ivan on BiggerPockets

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

MB 111: AirBnB for Apartments with Tim Hubbard

Direct download: MB_112-_Scaling_Up_from_a_Duplex_to_2700_Multifamily_Units__With_Ivan_Barratt.mp3
Category:Commercial Real Estate -- posted at: 3:56pm EST

Thu, 31 May 2018

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

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

Download
Text “secretbook” to 44222

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

MB 110: Conservative Underwriting & Risk-Management in Multifamily Investing – With Omar Khan

Direct download: MB_111-_AirBnB_for_Apartments-Tim_Hubbard.mp3
Category:Commercial Real Estate -- posted at: 8:07pm EST

Fri, 25 May 2018

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

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

Download
Text “secretbook” to 44222

Contact Michael

Michael on LinkedIn

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

MB 109: The Law of the First Deal - with Michael Blank

Direct download: MB_110-_Conservative_Underwriting__Risk-Management_in_Multifamily_Investing__With_Omar_Khan.mp3
Category:Commercial Real Estate -- posted at: 4:10pm EST

Fri, 18 May 2018

‘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

Drew Kniffin: 12 months to replace income
Brad Tacia: 2 years to replace income
Tyler Sheff: 12 months to replace income
Joseph Gozlan: 2½ years to replace income

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

Determine average income per unit
Establish how many units you need to cover living expenses
Determine how long it will take
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

Contact Michael

Michael on LinkedIn

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

MB 108: Analyzing 100 Multifamily Deals to Find the ONE – With Andrew Cushman

Direct download: MB_109-_The_Law_of_the__First_Deal_-_with_Michael_Blank.mp3
Category:Commercial Real Estate -- posted at: 2:02pm EST

Fri, 11 May 2018

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

Michael’s Ultimate Guide to 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

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

MB 107: The 3 Spiritual Lessons That Changed My Life - With Michael Blank

Direct download: MB_108-_Analyzing_100_Multifamily_Deals_to_Find_the_ONE__With_Andrew_Cushman.mp3
Category:Commercial Real Estate -- posted at: 5:07pm EST

Thu, 3 May 2018

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

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

MB 106: Getting in the Multifamily Game, With or Without Syndication – With Mario Ortiz

Direct download: MB_107_-_The_3_Spiritual_Lessons_That_Changed_My_Life_-_With_Michael_Blank.mp3
Category:Commercial Real Estate -- posted at: 4:18pm EST

Tue, 24 April 2018

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

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

MB 105: How a Willingness to Fail Breeds Multifamily Success – With Todd Fox

Direct download: MB_106_-_Getting_in_the_Multifamily_Game_With_or_Without_Syndication__With_Mario_Ortiz.mp3
Category:Commercial Real Estate -- posted at: 12:33pm EST

Wed, 11 April 2018

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

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

MB 104: Building Community is Good for the Soul AND the Bottom Line – With Pete Kelly

Direct download: MB_105_-_How_a_Willingness_to_Fail_Breeds_Multifamily_Success__With_Todd_Fox.mp3
Category:Commercial Real Estate -- posted at: 11:52am EST

Wed, 11 April 2018

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

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

MB 103: Accelerate Your Real Estate Success with a High-Level Network – With Mike Hambright

Direct download: MB_104_-_Building_Community_is_Good_for_the_Soul_AND_the_Bottom_Line__With_Pete_Kelly.mp3
Category:Commercial Real Estate -- posted at: 11:45am EST

Mon, 2 April 2018

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

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

MB 102: Curing Entrepreneurial ADD with a Focus on Multifamily – With Ben Risser

Direct download: MB_103_-_Accelerate_Your_Real_Estate_Success_with_a_High-Level_Network__With_Mike_Hambright.mp3
Category:Commercial Real Estate -- posted at: 12:50pm EST

Mon, 2 April 2018

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

Much more scalable
Ultimate Guide course

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

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

MB 101: Living the ‘Sunsets and Palm Trees’ Lifestyle with Multifamily – With Corey Peterson

Direct download: MB_102_-_Curing_Entrepreneurial_ADD_with_a_Focus_on_Multifamily__With_Ben_Risser.mp3
Category:Commercial Real Estate -- posted at: 12:41pm EST

Tue, 27 March 2018

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

Mom’s new husband was investor
Read Rich Dad Poor Dad
Started with fix and flips

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

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

MB 100: Reflection Inspires Action in Multifamily Investing – With Scott Price

Direct download: MB_101_-_Living_the_Sunsets_and_Palm_Trees_Lifestyle_with_Multifamily__With_Corey_Peterson.mp3
Category:Commercial Real Estate -- posted at: 5:48pm EST

Thu, 15 March 2018

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

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

MB 098: Do Well By Doing Good - With Eddie Lorin

Direct download: MB_100_-_Reflection_Inspires_Action_in_Multifamily_Investing__With_Scott_Price_-_mp3.mp3
Category:Commercial Real Estate -- posted at: 6:47pm EST

Tue, 6 March 2018

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

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

MB 097: Marketing, Lead Generation, and Requiring Your Own Success - Michael Quarles

Direct download: MB_098_-_Do_Well_By_Doing_Good_-_With_Eddie_Lorin.mp3
Category:Commercial Real Estate -- posted at: 7:07pm EST

Tue, 6 March 2018

‘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

First American Title (ListSource)
Fidelity National Title

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

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

MB 097: Marketing, Lead Generation, and Requiring Your Own Success - Michael Quarles

Direct download: MB_097_-_Lead_Generation_in_Real_Estate_-_Michael_Quarles.mp3
Category:Commercial Real Estate -- posted at: 5:03pm EST

Tue, 6 March 2018

‘The guy or the gal that wants to quit their job and doesn’t is quitting themselves.’

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

First American Title (ListSource)
Fidelity National Title

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

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

MB 096: Multifamily Investment Outlook for 2018 and Beyond - with Neal Bawa

Direct download: MB_097_-_Lead_Generation_in_Real_Estate_-_Michael_Quarles.mp3
Category:Commercial Real Estate -- posted at: 5:03pm EST

Thu, 22 February 2018

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

Sacramento
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

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

MB 095 : What Doesnt Kill You Makes You a Better Multifamily Investor With Nathan Tabor

Direct download: MB_096_-_Multifamily_Investment_Outlook_for_2018_and_Beyond_-_with_Neal_Bawa.mp3
Category:Commercial Real Estate -- posted at: 2:09pm EST

Tue, 13 February 2018

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

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

MB 094: Life by Design with Andrew Campbell

Direct download: MB_095_-_What_Doesnt_Kill_You_Makes_You_a_Better_Multifamily_Investor__With_Nathan_Tabor.mp3
Category:Commercial Real Estate -- posted at: 4:19pm EST

Wed, 7 February 2018

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 Contact Form

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

MB 093: Top 10 Ways to Protect Your Real Estate Investments - With Scott Smith

Direct download: MB_094_-_Life_by_Design_with_Andrew_Campbell.mp3
Category:Commercial Real Estate -- posted at: 3:10pm EST

Sat, 3 February 2018

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 Coaching Programs

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

MB 091: The Fast Track to Multifamily – With Josh Sterling

Direct download: MB_093_-_Top_10_Ways_to_Protect_Your_Real_Estate_Investments_-_With_Scott_Smith.mp3
Category:Commercial Real Estate -- posted at: 1:03pm EST

Thu, 18 January 2018

‘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

Freddie Mac Small Balance Loan

Entrepreneurs’ Organization

Michael’s Coaching Programs

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

MB 089: Increasing Your Productivity Through Purpose – With David Sweeney

Direct download: MB_091-The_Fast_Track_to_Multifamily__With_Josh_Sterling.mp3
Category:Commercial Real Estate -- posted at: 12:20pm EST

Fri, 29 December 2017

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

Think and Grow Rich by Napoleon Hill

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

MB 087: Self Storage - With Hunter Thompson

Direct download: MB_089_-_Increasing_Your_Productivity_Through_Purpose__With_David_Sweeney.mp3
Category:Commercial Real Estate -- posted at: 6:13pm EST

Sat, 9 December 2017

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 CoStar, LoopNet 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

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

MB 086: Become a Money Raiser to Quit the Rate Race – With Lane Kawaoka

Direct download: MB_087_-_Self_Storage_-_With_Hunter_Thompson.mp3
Category:Commercial Real Estate -- posted at: 1:44pm EST

Tue, 28 November 2017

‘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

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

Download
Text “secretbook” to 44222

MB 084: Be The CEO of Your Own Dreams – with Tamar Mar

Direct download: MB_086__Become_a_Money_Raiser_to_Quit_the_Rate_Race__With_Lane_Kawaoka.mp3
Category:Commercial Real Estate -- posted at: 12:41pm EST

Thu, 16 November 2017

“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

Bought townhouse at age 19
Owned rental properties last 15 years
Needed own business to be happy professionally
Read The Millionaire Real Estate Investor

[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

Continued pursuit of multi-family deals
Starting new podcast, Investing for Life

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

Coaching with Michael

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

MB 083: The Best Investments to Build Wealth – With The Cashflow Ninja M.C. Laubscher

Direct download: MB_084__Be_The_CEO_of_Your_Own_Dreams__with_Tamar_Mar.mp3
Category:Commercial Real Estate -- posted at: 11:15am EST

Thu, 2 November 2017

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

Be crystal clear about what you want (economic independence number)
Determine why it matters
Decide who you need to become
Create systems/processes to capture wealth
Put wealth into something that provides cashflow
‘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

MB 082: Wealth Can’t Wait – With Paul Morris

Direct download: MB_083__The_Best_Investments_to_Build_Wealth__With_The_Cashflow_Ninja_M.C._Laubscher.mp3
Category:Commercial Real Estate -- posted at: 10:04am EST

Mon, 30 October 2017

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

Staying in a comfortable job
Avoiding risk
Viewing wealth negatively
Giving up (not staying the course)
Holding on to toxic friendships, the Weak Social Circle
Victimizing yourself
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

Buy where you know
Buy value-add (worst house in great/gentrifying neighborhood)
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

MB 081 - The Passive Income Investor - With Tim & Tom Black

Direct download: MB_082__Wealth_Cant_Wait__With_Paul_Morris.mp3
Category:Commercial Real Estate -- posted at: 7:09pm EST

Tue, 3 October 2017

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

Financial Freedom Summit Wait List

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

Direct download: MB_081_-_The_Passive_Income_Investor_-_With_Tim__Tom_Black.mp3
Category:Commercial Real Estate -- posted at: 6:41pm EST

Wed, 20 September 2017

MB 079: How I Lost $2M in Multifamily and Lessons Learned – With Damion Lupo

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

MB 078: Never Give Up to Quit Your Job with Real Estate – With Joseph Gozlan

Direct download: MB_079__How_I_Lost_2M_in_Multifamily_and_Lessons_Learned__With_Damion_Lupo.mp3
Category:Commercial Real Estate -- posted at: 7:43pm EST

Fri, 8 September 2017

‘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

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

MB 077: How We Took Down Our First Multifamily Deal (94-units!) – With Pili & Jason Yarusi

Direct download: MB_078__Never_Give_Up_To_Quit_Your_Job_With_Real_Estate__With_Joseph_Gozlan.mp3
Category:Commercial Real Estate -- posted at: 4:04pm EST

Tue, 5 September 2017

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

MB 076: Multifamily … Forever Cash Flow? – With Jack Bosch

Direct download: MB_077__How_We_Took_Down_Our_First_Multifamily_Deal_94-units__With_Pili__Jason_Yarusi.mp3
Category:Commercial Real Estate -- posted at: 2:04pm EST

Thu, 24 August 2017

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

One-time cash deals (flip house, get paid once)
Temporary cash (give loan, receive interest)
Monthly payments (flip land for seller financing, receive down payment + monthly installments for six to eight years until paid off)
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

MB 075: How to Harness the Power of Crowdfunding Even If You're a Newbie - With Jilliene Helman, CEO of RealtyMogul

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 EST

Tue, 22 August 2017

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

MB 073: The Secret to Quitting Your Job With Real Estate - With Brad Tacia

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

Direct download: MB_075_-_How_to_Harness_the_Power_of_Crowdfunding_Even_If_Youre_a_Newbie_-_With_Jilliene_Helman_CEO_of_RealtyMogul.mp3
Category:Commercial Real Estate -- posted at: 7:50pm EST

Fri, 18 August 2017

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

Recession hit in 2008
Depressing time, had to lay people off
Wanted to develop Plan B
Read Rich Dad, Poor Dad and The Millionaire Real Estate Investor
Initial ten-year plan to buy ten single-family houses

[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

MB 072: How to Overcome the Most Crippling Limiting Beliefs – With Tyler Sheff

Direct download: MB_073_-_How_Every_Day_Can_Feel_Like_Saturday_-_With_Brad_Tacia.mp3
Category:Commercial Real Estate -- posted at: 1:44pm EST

Fri, 4 August 2017

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

Direct download: MB_072_-_How_to_Overcome_The_Most_Crippling_Limiting_Beliefs__with_Tyler_Sheff.mp3
Category:Commercial Real Estate -- posted at: 3:59pm EST

Tue, 25 July 2017

MB 071: Why it’s Patriotic to NOT Pay Taxes – with David Zook

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

MB 070: How to Remotely Self-Manage Your Real Estate Portfolio – With Dana Dunford

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

Direct download: MB_071_-_Why_its_Patriotic_to_NOT_Pay_Taxes__with_David_Zook.mp3
Category:Commercial Real Estate -- posted at: 2:16pm EST

Tue, 25 July 2017

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.: QuickBooks, SmartMove, 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

MB 068: Why Bigger is Better with Multi-Family Investing – With Kira Golden

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

Direct download: MB_070_-_How_to_Remotely_Self-Manage_Your_Real_Estate_Portfolio__With_Dana_Dunford.mp3
Category:Commercial Real Estate -- posted at: 1:59pm EST

Tue, 18 July 2017

‘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