Apartment Building Investing with Michael Blank Podcast (general)

You take that promotion at work because you want to provide better for your family. But then you’re working MORE hours and seeing even LESS of the people you love. So, what if you could stop trading time for money? 

What if you didn’t have to decide between realizing big dreams for your family and spending quality time with them?

Lee Yoder is the Founder and Managing Partner of Threefold Real Estate Investing, a multifamily investing firm based in Lebanon, Ohio. Lee was working as a physical therapist when he started investing in real estate, and by December of 2020, he quit his job as a physical therapist to be a full-time investor. Lee also hosts the Threefold Real Estate Investing Podcast, a show that focuses on leveraging multifamily investing to enjoy a stronger relationship with your family and a better walk with Christ.

On this episode of Apartment Building Investing, Lee joins cohost Garrett Lynch and me to explain how his faith and family inspired him to pursue real estate. He describes how he gained confidence by analyzing hundreds of deals and attracted the help of a mentor to guide him through his first multifamily closing. Listen in for Lee’s take on why the Law of the First Deal works and learn how he is enjoying the flexibility to work when and where he wants as a full-time investor!

Key Takeaways 

What inspired Lee to pursue real estate

  • Time freedom to be more present at home
  • Coworker offered copy of Rich Dad…

Why Lee took a 30% pay cut to make time for real estate

  • Faith and family are top priorities
  • Long-term plan to bring in passive income

How Lee talked his wife into ‘the real estate thing’

  • Time + believable behavior = trust
  • Forced him to slow down, think through choices

How Lee shifted into the multifamily space

  • Join local REIA to connect with investors
  • Learn to underwrite in Apartment Focus Group

How Lee attracted the support of a mentor

  • Coachable and willing to do the work
  • Lead with value to get foot in door

How Lee landed his first multifamily deal

  • Practice underwriting to gain confidence
  • Submitted offer on deal on LoopNet

Lee’s approach to his first multifamily deal

  • Jump and build parachute on way down
  • Lean on mentor to make it less dangerous

How Lee raised money for his first few multifamily deals

  • JV with friends and family on 16-, 8- and 10-unit
  • 45-unit deal = first syndication

How Lee led a syndication without a track record

  • Reputation of integrity, success in flipping
  • Network with local investors in REIA 

Lee’s take on why the Law of the First Deal works

  • Personal confidence in team, lending process
  • Brokers take you seriously

How Lee decided when to quit his full-time job

  • Replace W-2 income with rental income
  • Equity from sale of first 2 deals afforded runway

Lee’s top lesson learned in real estate

  • Build occupied units into rehab budget
  • Consider deferred maintenance costs

How Lee’s life is different now

  • Mid-week morning coffee date with wife
  • Flexibility to work where, when he wants

Connect with Lee Yoder

Threefold Real Estate Investing

Threefold Real Estate Investing Podcast

Lee’s Free eBook: 5 Steps to Passive Income for the Full-Time Dad

Email info@threefoldrei.com

Resources

Register for Deal Maker Live

Learn More About Michael’s Mentoring Program

Access Michael’s Free Report—What’s the Best Investment: The Stock Market or Real Estate?

Join the Nighthawk Equity Investor Club

Purchase Michael’s Syndicated Deal Analyzer

Rich Dad Poor Dad by Robert T. Kiyosaki

REIA

LoopNet

BiggerPockets

Podcast Show Notes 

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

Direct download: ABI_264.mp3
Category:general -- posted at: 1:00am EDT

If you can see it, you can be it. And as more female multifamily investors speak up about what they are doing, it gives other women permission to pursue real estate too. To that end, Elizabeth Faircloth is creating a community where women investors can get support the way they need it.

Elizabeth is the Cofounder of the DeRosa Group, a multifamily investing firm on a mission to transform lives through real estate. She and her husband Matt manage a portfolio of 1,000 units worth $60M up and down the east coast. Liz is also the Co-creator of The Real Estate InvestHER, a community that empowers women real estate investors to live a financially free and balanced life.

On this episode of Apartment Building Investing, Liz joins cohost Garrett Lynch and me to offer advice for couples on aligning their goals early on. She explains how to delineate roles in a real estate business partnership and why building community is so important. Listen in for Liz’s insight on increasing the number of women investors and learn how she features female role models through The Real Estate InvestHER platform.

Key Takeaways

How Liz got into real estate

  • Read Rich Dad… and introduced husband to idea
  • Invested in first duplex together 15 years ago

Liz’s advice for couples on aligning your goals

  • Have conversations about what you value
  • Attend personal growth weekends together

How to delineate roles in a business partnership

  • Consider individual skills and experience
  • Factor in passion and personality

Why it didn’t work the first time Liz left her W-2 for real estate

  • Market crashed and didn’t delineate roles correctly
  • Too many different strategies (lack of focus)

What inspired The Real Estate InvestHER community

  • Partnership with Andresa on deals, mastermind
  • Create safe space to support other women

How Liz scaled her community to 40 Meetup groups

  • Use Dan Hanford model, Meetup Pro account
  • Partner set up portal with agendas and scripts

Why building community is so important to Liz

  • Research on women (longevity, financial literacy)
  • Passion around empowering women to invest

Liz’s insight on the small number of women investors

  • Societal conditioning to fly under radar
  • Must highlight journeys, lift each other up

Liz’s role with the DeRosa Group

  • Assemble team, lead STR acquisitions
  • Oversee investor relations

Liz’s advice for aspiring multifamily investors

  • No overnight success, takes time and energy
  • Stay the course and don’t give up

Connect with Elizabeth Faircloth

DeRosa Group

DeRosa Group on YouTube

The Real Estate InvestHER

The Real Estate InvestHER Podcast

The Real Estate InvestHER Community on Facebook

Resources

Learn More About Deal Maker Live

Learn More About Michael’s Mentoring Program

Join the Nighthawk Equity Investor Club

The Only Woman in the Room: Knowledge and Inspiration from 20 Women Real Estate Investors compiled by Ashley L. Wilson

Elizabeth on BiggerPockets EP203

REIA

Rich Dad Poor Dad by Robert T. Kiyosaki

CASHFLOW Game

Awaken the Giant Within: How to Take Immediate Control of Your Mental, Emotional, Physical and Financial Destiny by Tony Robbins

Landmark Forum

Andresa Guidelli

Dan Hanford

Meetup Pro

Matt Faircloth on BiggerPockets

NMHC

Podcast Show Notes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

Direct download: ABI_261.mp3
Category:general -- posted at: 1:00am EDT

According to the Law of the First Deal, a multifamily investor who buys their first apartment building will do their second and third deals in rapid succession, achieving financial freedom in just a year or two. But there is an exception to every rule, and Ed Hermsen is the ONE investor I know who did his first deal—and then life got in the way. So, what can he teach us about keeping momentum and staying committed to our multifamily goals?

Ed grew a portfolio of single-family rentals while working as a mortgage loan officer in Fort Collins, Colorado. Five years ago, he started studying multifamily and eventually partnered with a close friend on a 22-unit deal in Pensacola, Florida. After revisiting his goal to retire by 50, Ed realized he needed to recommit to multifamily, and in the last two years, he has leveraged the partnership model to build a portfolio of 210 units and quit his job with real estate!

On this episode of Apartment Building Investing, Ed joins me to describe how a 9-to-5 in mortgage banking inspired his real estate investing career and share his secrets to successful multifamily investing with partners. He discusses what made him the sole exception to the Law of the First Deal, explaining why there’s a four-year gap between his first and second deal and what finally inspired him to get back in the game. Listen in for Ed’s insight on the value of accountability and learn what YOU can do to stay committed to your multifamily goals.

Key Takeaways

How Ed got into real estate

  • Work in mortgage banking exposed to wealth-building potential
  • Bought SFH rental every year to build portfolio of 10

What inspired Ed to pursue financial freedom with multifamily

  • Never off clock, have to take calls (even on vacation)
  • Rely on real estate agents + economy for livelihood

Ed’s first multifamily deal

  • Friend found 22-unit in Pensacola, FL in 2015
  • Bought for $740K, valued at $1.5M now
  • No distributions first year (units in bad shape)
  • Challenge to manage vendors from afar

Ed’s second multifamily deal

  • Purchased 88-unit in Wyoming with 3 partners
  • Lead from attorney handling family dispute
  • Great loan from local bank, refinancing now

How Ed found his partners

  • Kids go to school together
  • Clients from mortgage business

Ed’s insight on building successful partnerships

  • Accountability and clear division of labor
  • Invest in attorney to do operating agreement

What made Ed the exception to the Law of the First Deal

  • Went back to buying fourplexes
  • Fell back into 9-to-5 routine

Ed’s advice around staying committed to your multifamily goals

  • Write down goals and revisit every morning
  • Build in accountability with mentor or coach

Ed’s latest multifamily deal

  • Bought 100-unit deal in Tulsa, OK with 2 partners
  • Establish relationships with local bank and realtor
  • Must follow housing authority rules

What’s next for Ed

  • Put 22-unit on market
  • Look for deals in Oklahoma
  • Learn more about syndications

Ed’s advice for aspiring multifamily investors

  • Build good team
  • Get educated on markets
  • Get first deal done

Connect with Ed Hermsen

Email edhermsen14114@gmail.com

Resources

Purchase the Replay of Deal Maker Live

Learn More About Michael’s Mentoring Program

Fellowship of Christian Athletes

Hal Elrod

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

The Ultimate Guide to Buying Apartment Buildings with Private Money

Syndicated Deal Analyzer

BiggerPockets

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

LoopNet

CREXi

Podcast Show Notes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

Direct download: ABI_225.mp3
Category:general -- posted at: 1:00am EDT

Real estate investors are cautious when it comes to implementing a short-term rental (STR) strategy because of the regulatory uncertainty in the space and the extra expense of hotel taxes. But what if we could enjoy the benefits of an Airbnb model WITHOUT the uncertainty or the extra expense? Al Williamson leverages an extended-stay strategy targeted at business travelers to 10X his net income on a small multifamily property.

Al is a full-time real estate investor and Managing Partner of Easy Corporate Housing, an extended-stay STR housing solution for business travelers in Sacramento, California. He also serves as a speaker, author and mentor for investors through Leading Landlord, a platform designed to help landlords increase their income and equity. Al has developed creative strategies for growing NOI as much as 10X above a conventional landlord operation, and he shares those tactics in his books, Building Wealth with Inner City Rentals and 40 Ways to Increase the Net Income of Your Rental Property.

Today, Al joins me to explain how he quit his job as a civil engineer with the cashflow from an 8-unit property in an inner-city neighborhood. He describes how he went about fixing the neighborhood and discusses what inspired him to experiment with a short-term rental strategy. Al also shares how to determine your target market and walks us through the six types of extended stay customers. Listen in for insight around the benefits of offering 30-day stays and learn how to identify an ideal property for the extended-stay STR model! 

 

Key Takeaways

How Al quit his job with an 8-unit class D property

  • Reposition inner city neighborhood
  • Leverage pay-day rent schedule
  • Rent bicycles, coordinate internet

How Al got started investing in real estate

  • Started with house hack (3-unit building)
  • Maintenance costs eating up cashflow

Why Al purchased the 8-unit class D property

  • Value of 3-unit quadrupled, ‘let’s do it again’
  • Remove blight (gangs, guns and prostitution)

How Al went about fixing the neighborhood

  • Exercise leadership + create sense of community
  • Easy as calling in broken streetlights, parties
  • Offer cash for keys as necessary

What inspired Al to try a short-term rental strategy

  • Travel for work himself, hated hotels
  • Net income = 8 to 10X traditional model

How Al implemented a short-term rental strategy

  • Set aside single unit for business travelers
  • Realized benefits of one-month threshold

The best areas for an extended-stay, STR strategy

  • Near Extended Stay America, Residence Inn
  • Use Airbnb as backup plan

Al’s advice for determining your target market

  • List on Airbnb and see who comes
  • Build relationships with local businesses

The top 6 types of extended-stay customers

  1. Vacation travelers
  2. Medical
  3. Military
  4. Student housing
  5. Insurance
  6. Temporary

Why Al only needs a few units to be successful

  • Huge income per unit ($1800/month)
  • Single unit covers cost of mortgage

The ideal property for an extended-stay STR

  • Margin far above market rent
  • Furnish according to target guest

Connect with Al

Extended Stay Landlord

Leading Landlord

Al on BiggerPockets

Al on LinkedIn

Resources

Mr. Landlord

Building Wealth with Inner City Rentals: Success the Catalytic Landlord Way by Al Williamson

40 Ways to Increase the Net Income of Your Rental Property by Al Williamson

Tim Hubbard on ABI EP111

Michael’s Mentorship Program

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

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

Direct download: ABI_178.mp3
Category:general -- posted at: 11:47am EDT

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

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

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

Key Takeaways

How Ryan got started in real estate

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

Why Ryan chose passive over active investing

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

Why Ryan chose multifamily over other investment options

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

The beauty of the multifamily cash out refinance

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

A high-level overview of the cost segregation study

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

Ryan’s advice for aspiring passive investors

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

How Ryan vets a multifamily operator

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

Ryan’s insight on waiting until after a downturn

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

Ryan’s timeline to financial freedom for passive investors

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

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

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

Ryan’s transition from passive to active investing

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

Connect with Ryan

McKenna Capital

Resources

Deferred Sales Trust on ABI EP166

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

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

Nighthawk Equity

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

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

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

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

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

 

Key Takeaways

The disadvantages of investing in the stock market

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

The downside of investing in single-family homes

  • Susceptible to market cycles
  • Issues around property management

The advantages of multifamily syndications

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

Active vs. passive investing in multifamily

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

The market outlook for multifamily

  • Cognizant of possible correction
  • Taking steps to protect investors

How to protect yourself from a market correction

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

Connect with Bronson

Nighthawk Equity

Email bronson@nighthawkequity.com

Resources

Deal Maker Live

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

Doug Duncan on CNBC

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

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

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

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

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

Key Takeaways

The role a construction company plays in acquiring property

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

The owner’s role in overseeing a construction project

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

The property manager’s role in a construction project

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

How to approach large-scale value-add projects

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

Ira’s advice on hiring and managing a contractor

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

What construction gone wrong looks like

  • Failed inspections
  • Poor communication, execution

Ira’s insight around how to increase ROI

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

Ira’s tips for reducing expenses on a property

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

How amenity pricing varies by market

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

The trend toward offering services

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

Connect with Ira

Mosaic Construction

ira@mosaicconstruction.net

Connect with Marc

Enodo

marc@enodoinc.com

Resources

Deal Maker Live

Save Water Co

National Apartment Association

CoStar

Partner with Michael

Michael’s Mentoring Program

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

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

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

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

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

Key Takeaways

Why Jerome quit his job before he had a deal

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

Jerome’s struggle to land his first multifamily deal

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

How Jerome finally landed his first apartment deal

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

Jerome’s experience with The Law of the First Deal

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

Jerome’s second multifamily deal

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

Jerome’s advice around partnering

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

The difference between partnering and syndicating

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

Jerome’s ‘dreams should be real’ philosophy

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

Jerome’s advice for aspiring multifamily investors

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

Jerome’s insight on ‘burning the boats’

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

Connect with Jerome

Myers Development Group

Dreamcatchers Podcast

Resources

CASHFLOW Game

Deal Maker Live

Nighthawk Equity

Michael’s Mentoring Program

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

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

So, you want to achieve financial freedom with real estate investing, but you’re a busy person with a demanding job and a lot of responsibility. You don’t have time to learn the ins and outs of putting together an advisory team, finding a good deal, or making decisions about the financing and management of a property. The fact is, you can STILL enjoy the benefits of real estate investing by becoming a passive investor in a multifamily syndication!

Doug Marshall is the founder and president of Marshall Commercial Funding, a firm dedicated to helping clients get the best possible financing for their rental properties. Doug has 36 years of experience as a mortgage broker, and he received his CCIM designation in 1999. His journey into passive investing began 10 years ago, and to date, he has invested in 11 properties—8 of which were apartment buildings. Doug is also the author of Mastering the Art of Commercial Real Estate Investing:  How to Build Wealth & Grow Passive Income from Your Rental Properties.

Today, Doug joins me to discuss how he achieved financial freedom through passive investing in commercial real estate. He describes the difference between an active and passive investor, sharing his goals as a passive investor and the characteristics of an ideal candidate for passive investing.  Doug also offers insight around his preference for multifamily over other asset classes and explains how to calculate the amount you need to invest for a particular cash-on-cash return. Listen in to understand the incredible tax benefits of real estate investing and get Doug’s take on the #1 thing passive investors should consider before handing their money over to a syndicator.

Key Takeaways

Doug’s path to financial freedom with passive investing

  • 20 years living paycheck to paycheck
  • Went into business for self as mortgage broker (3X income)
  • Partnered with client as passive investor

The difference between active and passive investing

  • Active investors make ALL decisions (team, management)
  • Passive investors decide WHO to trust to achieve returns

Why Doug prefers multifamily over other asset classes

  • Vacancies have less impact on returns
  • Low vacancy rates during recession (5-10%)

The advantages of multifamily real estate investing

  • Deferment of capital gains taxes
  • Generates cashflow
  • Opportunity to buy below market
  • Depreciation limits income taxes
  • Leverage properties to amplify return

Doug’s goals as a passive investor in multifamily

  • No hassle of day-to-day decision-making
  • Cashflow + upside appreciation
  • Financial freedom (family trip to Scotland)

The ideal candidate for passive real estate investing

  • Made good money over lifetime
  • Desire to generate passive income

How to calculate the right amount to invest for retirement

  • Living expenses minus social security benefits
  • Cover difference with cash-on-cash return

The cash-on-cash return Doug looks for in a property

  • 4-5% from start with value-add opportunity
  • Up to 8% once improvements made

The most important considerations for passive investors

  • WHO to invest with (vet syndicator for integrity)
  • WHAT asset class to invest in

Connect with Doug

Marshall Commercial Funding

Mastering the Art of Commercial Real Estate Investing: How to Successfully Build Wealth & Grow Passive Income from Your Rental Properties by Doug Marshall

Resources

Deal Maker Live

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

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_157.mp3
Category:general -- posted at: 1:02pm EDT

Too many of us get to the end of our lives and ask, “Why didn’t I follow my passion?” But what if you didn’t wait? What if you asked yourself the tough questions NOW? What if you put your energy and resources into the thing that really makes you come alive? What if you took a now-or-never approach to pursuing an intentional life?

Paul Nagaoka is Managing Partner at Syndicate, a commercial and multifamily real estate investing firm based in Kansas City. He draws on his background as a mortgage broker, realtor and investor to identify high-yield investment opportunities and manage risk through careful analysis and creative problem-solving. Prior to Syndicate, Paul ran his own solo real estate investing company, growing the team to 30 employees and subs with ownership in 350-plus units.

Today, Paul joins me to share his approach to living an intentional life. He discusses his hiatus from real estate, explaining how the passive income from investments allowed Paul to pursue an acting career and become a celebrity in Southeast Asia! He offers insight into why he needed a break from real estate and describes how he is running his business differently now. Paul also covers the value in developing an abundance mindset and finding opportunities that others miss. Listen in for Paul’s secrets to finding off-market properties—and get his advice on getting off the sidelines and engaging in an intentional life.

Key Takeaways

Paul’s hiatus from real estate

  • Planned 6-month trip to Asia with family
  • Became popular actor, celebrity

Why Paul needed a break from real estate

  • 14 years in business, grew team of 35
  • Too much time on things he didn’t like

How Paul is running his business differently now

  • Focus on strengths (relationships, marketing)
  • Rely on partners to handle other duties

Paul’s insight around taking on partners

  • Must bring on others to truly scale
  • Okay with giving up equity to grow

Paul’s take on living an intentional life

  • Develop growth + abundance mindset
  • Put energy where passion + talents meet

What inspires people to act on their passions

  • Big enough WHY (now or never)
  • Make decision to do what’s in heart

What Paul is excited about moving forward

  • Goal of $35M in 2019
  • Find opportunities others miss

Examples of where Paul sees opportunity

  • Identify places to reduce expenses
  • Negotiate seller financing deals

How Paul finds off-market deals

  • Cold call off-market properties 3-4 hours/day
  • Access to CoStar through brokers on team

How to find off-market deals without a broker

  • Choose area, tag properties on Google Maps
  • Use property tax records to pull contact info
  • Drive to location, ask to talk to owner

Paul’s advice for aspiring multifamily investors

  • Invest in knowledge + ‘get your jersey dirty’
  • Analyze 10 deals/week, make 3 offers/month

Connect with Paul

Syndicate

How to Invest in Real Estate

Paul on YouTube

Resources

Deal Maker Live

Andrew Carnegie’s Concept of Vertical Integration

CoStar

Clemons Real Estate

Google Maps

ListSource

Cory Boatright & Sean Terry on ABI EP151

Invest with Michael

Michael’s Mentoring Program

Partner with Michael

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

Podcast Show Notes

Review the Podcast on iTunes

Michael on Facebook

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_153.mp3
Category:general -- posted at: 12:28pm EDT

In a perfect world, honest real estate investors would never have to deal with frivolous lawsuits. But we live in the real world where being sued is a very real possibility. So, how do you protect yourself so that an angry tenant cannot get to your personal assets? What kinds of insurance do you need to protect your real estate assets from an ‘outside attack’? And where should you set up a holding company to take advantage of the strongest possible asset protection laws?

Garrett Sutton is a corporate attorney, asset protection expert and bestselling author with 30-plus years of experience supporting entrepreneurs and real estate investors. He serves as Rich Dad Advisor and asset protection attorney for Robert Kiyosaki and founder of Corporate Direct, a firm dedicated to supporting clients in protecting their assets, maintaining their privacy and advancing their financial goals. He has sold more than 850,000 books, including the invaluable Loopholes of Real Estate and Start Your Own Corporation.

Today, Garrett joins me to explain the ins and outs of asset protection. He discusses how the LLC protects your personal assets, why it’s important to set up an LLC from Day One, and how insurance serves as your first line of defense. Garrett offers insight around entity structure, speaking to the value of setting up a Wyoming holding company with charging order protection. Listen in to understand the concept of equity stripping to further protect your real estate assets—and learn to avoid personal liability by following the four corporate formalities!

Key Takeaways

Why it’s important to set up an LLC from Day One

  • Too late once sued
  • Plaintiff can reach all personal assets

How the LLC protects you as an individual

  • Courts respect lease in name of LLC
  • Attorney will work to get name off suit

The role of insurance in providing asset protection

  • Serves as first line of defense
  • LLC provides second line of defense

Why Garrett recommends an umbrella policy

  • Extra coverage for home + auto
  • Protects against outside attack (i.e.: car wreck victim)

How to set up the best possible entity structure

  • LLC in state property located
  • Several LLCs under Wyoming holding company
  • WY = strongest asset protection laws, privacy

The value of a charging order protection

  • Doesn’t allow forced sale of assets
  • Victim must wait for distributions

The 4 corporate formalities

  1. Annual meeting w/ minutes
  2. Registered agent in state
  3. Separate tax return
  4. Separate bank account

The consequences of failing to follow corporate formalities

  • Personally liable in any suit
  • ‘Veil pierced’ 50% of time

How Corporate Direct can retroactively fix compliance issues

  • Operating agreement, minutes + membership certificates
  • Transfer ownership from individual to WY LLC

The concept of equity stripping

  • Leverage debt as form of asset protection
  • WY LLC provides credit, receives first deed of trust

How to notify your insurance company re: title transfer

  • Use grant deed, inform of transfer to LLC
  • Add LLC as additionally insured (avoid higher premium)

Connect with Garrett

Corporate Direct

Call (800) 600-1760

Resources

Loopholes of Real Estate by Garrett Sutton

Start Your Own Corporation by Garrett Sutton

Books by Garrett Sutton

Rich Dad

Michael’s Mentoring Program

Partner with Michael

Invest with Michael

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

Podcast Show Notes

Review the Podcast on iTunes

Michael on Facebook

Apartment Investor Network Facebook Group

Michael on Instagram

Direct download: ABI_152.mp3
Category:general -- posted at: 9:40pm EDT

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

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

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

Key Takeaways

Keith’s experience as an NFL player

  • ‘Accelerated life’
  • Popularity, money

Keith’s realization around life beyond football

  • Lack of spiritual purpose
  • Began search for something deeper

Why people struggle with life transitions

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

The importance of defining your WHY

  • No one immune from storm
  • Purpose provides foundation

Keith’s advice around defining your identity

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

Keith’s mission to awaken people to their truth

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

How to incorporate your values in everyday life

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

Keith’s insight on building a legacy

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

Connect with Keith

Email keithelias@verizon.net

Resources

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

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

Real Estate Guys Create Your Future 2019 Goal Setting Retreat

The Financial Freedom Summit

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

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

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

In a perfect world, we could syndicate a multifamily property and then sit back and wait for the checks to roll in. But in the real world, we must oversee the apartment buildings we’ve purchased and make sure they perform according to plan. What all is involved in asset management? What is the best way to communicate with investors? And how does your property manager’s competence impact the amount of work that falls to you?

Drew Kniffin is the President of Nighthawk Equity, a firm committed to helping real estate investors achieve financial freedom through practical education and high-quality multifamily investment opportunities. Drew became an ‘accidental landlord’ in 2008 when he was unable to sell his condo and rented it instead. But it wasn’t until 2015 that Drew shifted his focus to small apartment buildings. Eight months and three deals later, he was able to quit his job and pursue real estate full-time. Now, Drew helps manage a 1K-unit portfolio through Nighthawk, and he also serves as a mentor with The Michael Blank organization.

Today, Drew joins me to share his definition of asset management and explain the syndicator’s role in finding problems to solve during the acquisition process. He describes the significance of a good property manager, discussing how to gauge if a property manager is the right fit, what you should expect from a property manager, and how replace a property manager if necessary. Drew also covers reporting, offering insight around the level of detail to expect from your property manager as well as the key performance indicators a syndicator should monitor. Listen in for Drew’s advice on communicating with investors and learn what aspects of asset management can be outsourced as you scale!

Key Takeaways

Drew’s definition of asset management

  • What you do once bought property
  • Make sure performs according to plan

What to look for in the acquisition process

  • Capable, competent property manager
  • Problems that can be solved

How to find a good property manager

  • Ask for stabilized profit and loss projections
  • Learn how report, communicate with owners

What makes for a great property manager

  • Execute on marketing property, managing to budget
  • Less than 10 minutes/month to review financials

The reasonable expectations for a property manager

  • Online listings, ads competent
  • Changes made first time asked
  • Interested in communicating

The fundamentals of reporting

  • Consult with bookkeeper, accountant re: details
  • Know investors, report to desired level of detail

How to determine if a property manager is not the right fit

  • Micromanaging on smaller level as time goes on
  • Change after 2 months if ‘managing the manager’

The key performance indicators to monitor

  1. Net occupancy
  2. Punch list items
  3. Actual vs. budget

How to keep a property manager honest

  • Require plan to deliver on budget
  • Quarterly audits

Drew’s advice on replacing a property manager

  • Transition in middle of month
  • Know what files need to transfer (e.g.: rent rolls, leases)
  • Don’t use 30-day earn-out, bring in new team on Day 1

The fundamentals of investor relations

  • Deliver ongoing communication (monthly report)
  • Provide high-level qualitative and financial summary

How to communicate with investors when things go wrong

  • Build long-term trust by delivering bad news
  • Be honest but have plan and follow up

The value in uniformity of reporting as you scale

  • Standardization affords control
  • Software streamlines format, provides investor portal

How syndicators should spend their time

  1. Raising money
  2. Finding deals
  3. Operations/systems

The asset management tasks that VAs can do

  • Keep investor information current
  • End-of-month reporting

Connect with Drew

Nighthawk Equity

Drew at Michael Blank Mentorship

Resources

Drew Kniffin on ABI EP027

The Financial Freedom Summit

The Michael Blank Deal Desk

Google Sheets

Upwork

Jing

Loom

Invest with Michael

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

Michael’s Website

Michael’s Live Training Webinars

Michael’s Coaching Program

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_141.mp3
Category:general -- posted at: 6:42pm EDT

Let’s say you have a single-family rental that makes you $100 a month. What if you took advantage of a 1031 exchange to purchase a 5-unit building that generates a dramatically higher monthly income of $1K? When Michael Zuber realized the potential cashflow of multifamily investing and the lack of competition in the market for small apartment buildings, his mindset shifted. He went from seeing real estate as a smart place to keep his money to an opportunity to achieve financial independence.

Michael is a full-time real estate investor who specializes in 5- to 20-unit apartment buildings. After 15 years of real estate investing, Michael quit his W-2 job to start One Rental at a Time, a company focused on helping busy professionals begin their own journey to financial freedom. Michael’s goal is to help 1K people learn the fundamentals of real estate investing through his educational platform. He is also the author of the book, 15 Year Journey to Financial Freedom Via One Rental at a Time

Today, Michael joins me to explain how losing six figures in the stock market led him to real estate investing and describe his initial strategy to buy and hold several single-family homes. He discusses his realization around the cashflow potential of small multifamily properties, sharing how he leveraged the 1031 exchange to transition from eight to 80 units in 18 months—right before the crash in 2008. Michael also offers insight around his strategy during the crash, how he is preparing for the likely market correction, and how he might have accelerated his journey to financial freedom. Listen in to understand how Michael opened his mind to multifamily and learn how he can help you through his new platform, One Rental at a Time.

Key Takeaways

How Michael got into real estate

  • Lost six figures in stock market in 48 hours
  • Year of research, bought first house

Michael’s initial real estate plan

  • Wanted security didn’t have w/ W-2 job
  • Buy and hold (while working full-time)

How Michael financed his first deals

  • Put own money down on first three houses
  • Refinanced for capital to buy more
  • Acquired seven houses + duplex

Michael’s transition to multifamily

  • Cashflow potential of small multifamily
  • 1031 all eight houses prior to crash
  • From eight to 80 units in 18 months

The details of Michael’s first multifamily deal

  • Looking for deals on local MLS, Loopnet
  • Found 5-unit through agent relationship

Michael’s mindset shift

  • Assumed multifamily above skill set
  • Little competition in 5- to 20-unit range

Michael’s strategy during the crash

  • Bought everything that made sense
  • Structure of deal most important
  • Solve problems for owners, banks

Why Michael waited to quit his job

  • Ego, identity wrapped up in job
  • Need something to commit to

Michael’s One Rental at a Time YouTube Channel

  • Educate busy professionals on investing
  • Allows to do good and track outcomes

How Michael could have accelerated the process

  • Identify underserved market sooner
  • Raise private money much earlier

How Michael is preparing for the market correction

  • Continue to play in affordable housing
  • Raising cash, selling weaker properties

Michael’s advice for aspiring multifamily investors

  • Get four rentals (two-year timeline)
  • Finance first on own or with partner
  • Track record to raise money for next deal

Connect with Michael

One Rental at a Time on YouTube

Resources

15 Year Journey to Financial Freedom Via One Rental at a Time by Michael Zuber

Loopnet

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

Michael’s Website

Michael’s Live Training Webinars

Michael’s Coaching Program

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_139.mp3
Category:general -- posted at: 5:34pm EDT

Once upon a time, Michael Beeman was struggling. He had a blended family of seven kids, and his corporate salary of $60K was not making ends meet. Michael started a side business splitting firewood, and he was bringing in an additional $15K—but he wanted to do more than just survive. Michael wanted his family to thrive. So, he started listening to multifamily podcasts and real estate audiobooks while he was cutting and delivering firewood.

By May of 2017, Michael had saved up $12K. His best friend and his mom contributed $20K each, and with $52K, he started looking for his first deal. Today, Michael has a 64-unit portfolio, and he is about to close on a 61-unit deal. The best part? Michael recently put in his two weeks’ notice so that he can pursue real estate investing full-time.

On this episode of Apartment Building Investing, Michael sits down with me to share the details of his current 61-unit deal, discussing the value of building broker relationships for introductions to pocket listings. He explains how he began his investing career just 18 months ago and his plans to quit his corporate job at the end of the year. Michael describes how enthusiasm for multifamily investing along with creativity and perseverance helped him find his first deal and overcome the challenges he’s faced along the way. Listen in for insight on building a real estate team with the right talents and attitude and learn how Michael’s ‘never quit’ philosophy took him from splitting firewood to get by to full-time real estate investor in under two years!

Key Takeaways

Michael’s current 61-unit deal

  • Pocket listing through broker
  • $50K away from $500K raise

Michael’s real estate journey

  • Married 5 years ago (7 kids)
  • Side business splitting firewood
  • Listen to podcasts, audio books
  • Start with $52K 18 months ago

How Michael found his first deal

  • Share enthusiasm for investing
  • Friend knew of 6-unit building
  • Paid $60K (100% financing)
  • Put in another $40K

Michael’s insight on the value of creativity

  • No money to acquire 5-unit deal
  • Borrowed from family at 10% interest
  • Must be willing to take risks

Michael’s setback in hiring the wrong contractor

  • Turn large house into triplex
  • Unqualified, ask for more money
  • Wife identified competent crew member
  • Established long-term relationship

How Michael built a talented team

  • Started holding company with contractor
  • Property management company with investor
  • Look for right talents and attitude

How Michael overcame obstacles

  • ‘American Dream’
  • Just don’t quit

Michael’s take on quitting his corporate job

  • Continue to work hard but on own terms
  • Spend more time with wife and kids

Connect with Michael

Michael on LinkedIn

Michael on Facebook

Email michaelbeeman@beemanandsons.com

Call (217) 508-8185

Resources

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

Michael’s Website

Podcast Show Notes

Review the Podcast on iTunes

Direct download: ABI_136.mp3
Category:general -- posted at: 9:31pm EDT

If you ask people at the end of their lives to reflect on their regrets, no one ever mentions money or work. Instead, their focus tends toward the relationships they neglected. So, when Ken McElroy realized he only had one shot at having a great rapport with his kids, he got serious about designing a life of balance that allows him to grow a successful real estate business AND be fully present with his family. 

Ken has 20-plus years of experience in real estate investment analysis, property management, acquisitions and property development. Ken serves as an advisor to Robert Kiyosaki of The Rich Dad Company, and he is the author of the bestselling books The ABCs of Real Estate Investing, The ABCs of Property Management, and The Sleeping Giant. An advocate for entrepreneurs and real estate investors, Ken makes regular media appearances and speaks at top industry events all over the world. He is also the host of Entrepreneur magazine’s Real Estate Radio program.

Today, Ken joins me to share his insight around work-life balance, explaining why he takes time away to work ON the business and connect with his family. He describes how his definition of success has changed over time and how the decision to prioritize relationships translates to his business. Listen in to understand Ken’s take on limiting beliefs and learn how he approaches life with a commitment to being self-aware and fully present.

Key Takeaways

Why Ken spends 3 months in Idaho every summer

  • Think clearer, bring back new ideas
  • Time to work ON business

Ken’s insight on work-life balance

  • Up at 5am to work for 4 hours
  • Fully present with kids rest of day
  • ‘Space allows’

Ken’s transition from employment to entrepreneurship

  • Hard leap to rely on self
  • First job in property management
  • Start with one rental as side project

Ken’s goals around financial freedom

  • Initial goal to be own boss, cover expenses
  • Scale business as expenses increase

How Ken’s definition of success has changed over time

  • From ‘job’ to ‘good job I really enjoy’
  • Focus on money in 30’s (millionaire)
  • Now relationships with family, kids

Ken’s decision to focus on family and relationships

  • Sought mentor for support (Charlie Dunlap)
  • Money, work not on list of top regrets

How Ken’s shift in priorities translates to his business

  • Create better environment for employees
  • Seminars dedicated to personal growth

Why Ken sees BE as the most important aspect of Be-Do-Have

  • Work on inside, outside changes
  • Focus on people changed company

Ken’s take on limiting beliefs

  • Where come from shapes belief system
  • Value in considering other’s opinions

How to work through limiting beliefs

  • Awareness is key
  • Present as ‘observer’

What gets Ken out of bed in the morning

  • Sense of purpose
  • Desire to contribute

Ken’s view of spirituality

  • Likes ‘no rules’
  • Just about love

Connect with Ken

Ken’s Website

Resources

Win a Signed Copy of Ken’s Book

The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss by Ken McElroy

Books by Ken McElroy

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

Awareness by Anthony DeMello

The Untethered Soul: The Journey Beyond Yourself by Michael A. Singer

The Power of Now: A Guide to Spiritual Enlightenment by Eckhart Tolle

Warriors Heart

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

Deal Maker LIVE

Review the Podcast on iTunes

Direct download: ABI_133.mp3
Category:general -- posted at: 2:04pm EDT

We’ve been conditioned to believe that a steady paycheck is a safety net. That if we pay our dues, the company we have been loyal to will return the favor, and we will ultimately be rewarded with a hefty 401(k).

But Clayton Morris contends that the opposite is true: As long as you for someone else (no matter how prestigious your job may be) consider yourself a line item on a spreadsheet with zero control of your own destiny—who could lose your livelihood at any time, through no fault of your own.

Clayton left a lucrative position as the weekend anchor for Fox & Friends to become the Founder and President of Morris Invest, a firm dedicated to helping people build financial freedom through real estate, and the host of the Investing in Real Estate Podcast. No matter how prominent his work in broadcasting, Clayton knew that his life wasn’t truly his own. He used real estate as the vehicle to gain financial freedom, and now he is on a mission to share his secret sauce with aspiring investors.

Clayton joins me to explain why he left a successful broadcasting career to pursue real estate full time. He shares how a flight to New Zealand inspired him to start a single-family portfolio and what motivated him to get serious about leveraging real estate to replace his income. Clayton addresses the significance of a strong WHY and the limiting beliefs that held him back early on. Listen in for Clayton’s advice around taking massive action and gaining clarity through whitespace.

Key Takeaways

Why Clayton left broadcasting for real estate

  • Power of controlling own destiny
  • Vitriolic politics, death threats

How Clayton decided on real estate

  • Met investor on flight to New Zealand
  • Followed formula to buy properties

Clayton’s initial investment strategy

  • Class C single-family, hardworking neighborhoods
  • Fall in love with ROI rather than real estate
  • Bought two properties, $800/month cashflow

When Clayton got serious about real estate

  • Couldn’t pay mortgage on NJ home
  • Calculated freedom # (12 single-family)
  • Got creative with money to acquire properties

Clayton’s last day of work

  • Didn’t want any part of destructive political narrative
  • Looking forward to spending weekends with family
  • Cleaned out office and didn’t look back

Why Clayton is making the shift to multifamily

  • Infinite returns, tax incentives

What held Clayton back

  • Fear of success, father never took action
  • Had to put on blinders, stick to one thing

The myth that a steady paycheck is a safety net

  • Average 401(k) only $90K
  • ‘Pawn on chessboard’

Clayton’s advice around taking action

  • Put together battle plan (one strategy)
  • People, deals and money

What Clayton is looking forward to

  • Multifamily investments
  • Writing book (mindset)
  • Creating more whitespace

Connect with Clayton

Morris Invest

Clayton’s Website

Clayton’s Podcast

Clayton on Facebook

Clayton on Twitter

Clayton on Google+

Clayton on YouTube

Resources

Freedom Number Cheat Sheet

REIA

Jeff Goins Mitigated Risk Article

Michael on Investing in Real Estate

Financial Freedom Summit

Michael’s Course

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

Review the Podcast on iTunes


Todd Dexheimer always wanted to be a multifamily investor, but he got distracted by single-family rentals and fix and flips. When he stopped to take a hard look at his portfolio, Todd realized that when it came to return on investment, the rentals were destroying the flips. Worse yet, he was still in a holding pattern—waiting to ‘graduate’ to multifamily. What would his cashflow look like if he stopped wasting time and shifted his focus to apartment buildings?

Todd began his career as a high school teacher, but the meager pay and lack of job satisfaction had him looking for other opportunities. In 2008, he and his wife used their savings to purchase a rental property as well as a live-in flip, and before long he had a significant rental portfolio and 150 flips under his belt. But Todd never stopped dreaming about multifamily, and in 2016 he got back on track and purchased a 22-unit building in Cincinnati. Now he has a total of 106-units and the ambition to grow by another 800 units in 2018.

Today Todd explains how fear, distraction, and a lack of resources held him back from pursuing his multifamily dreams. He shares the details of a 15-unit deal that didn’t go so well, yet taught him several valuable lessons and set him up for future success. Todd discusses how a hard look at his portfolio got him back on the multifamily track and offers an overview of his last two apartment investments. Listen in for Todd’s advice around being taken seriously in a new market and learning from other investors to go big quickly, rather than waiting to ‘graduate.’

Key Takeaways

The Cliff’s Notes version of Todd’s story

  • High school industrial tech teacher
  • Developed interest in real estate
  • Invested in single-family, duplexes and fourplexes
  • ‘Graduated’ to multifamily

The problem Todd was trying to solve with real estate

  • Little job satisfaction in teaching
  • Liked interaction with students, but disliked politics
  • Income not there, not fulfilled by work

Todd’s initial investment strategy

  • Wanted to do multifamily, but lacked resources
  • Found house for $60K, rent at $1,500/month
  • Financed with savings
  • Refinanced properties to buy more
  • Started flipping houses, built rental portfolio

 Todd’s first multifamily deal

  • Bought 15-unit with passive investor in 2013
  • Building had plumbing issues that renovation budget didn’t cover
  • 80% of profits went back into repairs
  • Made money, but didn’t reach expected return

What Todd learned from his first multifamily deal

  • Understand what type of building you’re buying
  • Budget for necessary repairs, replacements
  • Provide investors with appropriate financials
  • Mind your books, understand expenses
  • Don’t get distracted with other projects

What inspired Todd to pursue multifamily again

  • Parted ways with business partner
  • Realized rentals destroyed flips on ROI
  • Conducted market research on multifamily

Todd’s second multifamily deal

  • 22-unit off-market deal in Cincinnati
  • 10% down payment, owner financing
  • Equity, renovation financed through investor

Todd’s approach to being taken seriously in a new market

  • Find commercial brokers through LoopNet, local sites
  • Call to discuss specifics of what you’re looking for
  • Follow up with email asking for recommendations
  • Contact referrals (property managers, lenders, attorneys)
  • Show up face-to-face, spend three days

Todd’s first syndication deal

  • 84-unit building in Lexington, KY
  • Heavy lift value-add ($9K/unit)
  • 88% occupancy, rents low
  • Improving C+ neighborhood
  • 11 investors to raise $800K

The value of the first deal

  • Learning sets up for future success
  • Conservative underwriting = profit (even if things go south)

Todd’s advice to his younger self

  • Get educated in multifamily, investing in general
  • Surround yourself with right people
  • Don’t get distracted from what really want

Todd’s insight for aspiring multifamily investors

  • Okay to do single-family, flips to gain experience
  • Find/learn from apartment investors from day one
  • Go big quicker, don’t wait to ‘graduate’

How Todd’s life changed after he quit teaching

  • Never nervous, very prepared
  • ‘Every day is Saturday’
  • Excited to grow real estate business

Connect with Todd

Venture D Properties

Email todd@venturedproperties.com

Todd on LinkedIn

Todd on Bigger Pockets

Todd’s Podcast

Resources 

Episode 89

LoopNet

Episode 77

Michael’s Coaching Programs

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

Review the Podcast on iTunes


If 2018 is YOUR year, the year you plan to do your first multifamily deal and get on the road to retirement, then the next step is to determine the route you will take to get there. There are four different roles you can play in a general partnership: syndicator, passive investor, balance sheet guarantor, or money raiser.

Today I’m getting into the nitty gritty of each of those four paths to financial freedom, exploring what’s important to each member of the team and how to get started. I begin with syndication, discussing the importance of analyzing deals, meeting with investors and building a team. If you want to be in the driver’s seat, then the role of the syndicator may be perfect for you. I go on to cover passive investing, outlining how to ask the right questions and find a partner you can trust. If you see yourself as more of a passenger on this road trip to retirement, then passive investing might be the part you play in a general partnership.

Another lesser-known role is that of the balance sheet guarantor, who cosigns the loan for another syndicator. I explain the circumstances under which a balance sheet guarantor is necessary and the benefits of signing on to a deal in this way. The fourth role is that of the money raiser, and I wrap with the networking skills necessary to take on this role. Listen in and learn the significance of getting educated in the multifamily space, building a working relationship with trustworthy partners, and getting on the road to retirement with apartment building investing!

Key Takeaways

What’s important to becoming a SYNDICATOR

  • Learning to analyze deals
  • Constantly raising money

How to get started as a SYNDICATOR

  • Educate yourself with free content, invest in education
  • Analyze deals, meet with investors and build your team
  • Consider coaching (accelerate results, avoid mistakes)
  • Avoid overwhelm by doing ‘next three things’

What’s important to becoming a PASSIVE INVESTOR

  • Learn right questions to ask
  • Find partner you can trust
  • Transparency, integrity and communication
  • Look at track record, team

How to get started as a PASSIVE INVESTOR

  • Educate yourself enough to ask right questions, call BS
  • Network at events like REIA, meetups or Financial Freedom Summit
  • Find one or two partners, invest in multiple deals

What’s important to becoming a BALANCE SHEET GUARANTOR

  • Required by lender when net worth of partners not > loan balance
  • Willing to cosign loan for syndicator
  • Risk exposure low, compensation varies
  • Can receive 5-15% of general partnership

Who are ideal MONEY RAISERS

  • Have capital themselves, ability to attract more
  • Prefer networking to cold-calling brokers, analyzing deals

What’s important to becoming a MONEY RAISER

  • Access to capital
  • Finding trustworthy partner

How to get started as a MONEY RAISER

  • Educate yourself enough to answer questions
  • Start raising money TODAY

Resources

Partner with Michael

Invest with Michael

Deal Maker’s Mastermind

Syndicated Deal Analyzer

Sample Deal Package

Ultimate Guide to Buying Apartment Buildings

Michael’s Coaching Programs

Financial Freedom Summit

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

Review the Podcast on iTunes

Direct download: MB_090_-_3_Ways_To_Retire_With_Multifamily_-_Michael_Blank.mp3
Category:general -- posted at: 3:10pm EDT

Analysis paralysis? A fear of failure? Too many other responsibilities? Procrastination? The idea that you’re not good enough?

What’s holding you back from FINALLY making the decision to live the life of your dreams? What if you could overcome these limiting belief systems, otherwise known as BS, and take action on your goals? What if you could totally crush it in 2018?

Rod Khlief is an authority in real estate, business and peak performance. He has personally owned and managed 2,000-plus apartments and homes, building more than 22 businesses in his 40-year career. But it wasn’t until he lost his shirt in the recession that Rod learned how to build a successful life that had richness and meaning—with a focus beyond himself. Now he combines his passion for real estate investing with his understanding of ‘the psychology of success’ to serve as one of the country’s top real estate investment and high-performance life coaches.

Today Rod shares how he came back from the experience of losing $50M and why he is a better person for it. He walks us through his goal-setting methodology, explaining how to develop a WHY for each objective and the value of finding images associated with each of your goals. Listen in for Rod’s insight around truly deciding, overcoming fears and discouragement, and taking action on your goals. Learn how to leverage the Dickens process to change your mindset and the value in realizing it’s not all about you.

Key Takeaways

 [1:31] Rod’s $50M seminar

  • Owned 800 C- single-family houses in Florida
  • High taxes, insurance minimized cashflow
  • Ugly, painful setback during recession

[5:05] What Rod learned from the experience

  • Giving to others provides richness, meaning
  • Success without meaning beyond self is empty

[9:17] Rod’s methodology around goal-setting

  • Write down everything you could possibly want in life
  • Material things
  • Skills to learn
  • Who you want to help
  • Put a number next to each item (how long to achieve)
  • Pick a #1 goal and your top three one-year goals
  • Write a WHY paragraph for each goal, include PAIN if not achieved
  • Find images associated with each goal to view daily

 [16:33] Rod’s insight around taking action on your goals

  • Identify your WHY and associated PAIN
  • Magnificent life on other side of comfort
  • Confidence comes from competence
  • Fear diminishes with action

[20:22] The value in truly deciding to change your life

  • Mindset is 80% of formula for success
  • Decision is critical
  • Tony Robbins’ Dickens process
  • Explore damage limiting belief caused
  • Stack 10X pain on top

[25:48] How to overcome discouragement (i.e.: lack of progress, losing a deal)

  • Get clear on what you want, why you want it
  • Revisit goals daily

[27:23] Rod’s advice around overcoming fears

  • Look at fear rationally, no basis in fact
  • Identify limiting belief, develop alternative
  • Eliminate self-imposed limitations

[32:30] The value of experiencing what you want

  • Harder to give up once you’ve had tactile experience

Connect with Rod Khlief

Rod’s Website

Rod’s Free Book

  • Text “Rod” to 41411

Multifamily Community on Facebook

Rod’s Podcast

Resources

Apartment Building Investing Episode 38

Tony Robbins: The Dickens Process

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

Review the Podcast on iTunes

Direct download: MB_088_-_Overcoming_Challenges_-_With_Rod_Khleif.mp3
Category:general -- posted at: 6:36pm EDT

So you want to get into multi-family investing, but you don’t have the money or the track record. Maybe you think that baby steps is the way to go, learning the game through single-family rentals or managing a small complex on your own. But if you have the right team, you don’t need to have $5M in the bank or 15 years of property management experience. You can serve as the quarterback and focus your energy on putting together deals, while your mortgage broker, property management company, and general contractor execute the playbook.

Devin Elder was born and raised in San Antonio, Texas. After graduating from UT-San Antonio with a degree in business, he went the corporate route, working in sales and operations for several area companies. But with each promotion, Devin lost a little more time and a little more autonomy. Then he got fired. In that moment, Devin vowed to find an alternative. At about the same time, Devin bought, renovated and refinanced his first single-family rental. Initially skeptical of real estate as a viable investment, he soon realized that the cashflow from rental properties could be his way out.

Two years and 20 doors later, Devin quit his last corporate job and became a full-time investor. Since then, he has shifted his focus to multi-family, working his way from a six-unit that he managed himself to a 75-unit to a 192-unit. Today Devin shares how a desire to scale his real estate business inspired the shift from single- to multi-family and why he takes pride in having a positive impact on the community. He explains the initial lack of confidence that held him back from pursuing multi-family and how he overcame that with the right peer group and a ‘someday is now’ philosophy. Listen in to understand why Devin would pursue entrepreneurship sooner if he could do it all over again, and hear his advice around ‘borrowing credibility’ to jump-start your multi-family business!

Key Takeaways

 [2:33] What inspired Devin to leave the corporate world for real estate

  • Climbing corporate ladder, lost time/autonomy
  • Giving his all, got fired
  • Vowed to find alternative
  • Single-family investment proved viable

[5:00] Devin’s initial strategy

  • Acquire enough cashflow to cover bills
  • Put team together, several single-family rentals
  • 20 doors in two years
  • Moved to tears on last day of work

[7:59] Devin’s shift from single- to multi-family

  • Wanted to scale business (5X cashflow)
  • Realized multi-family was more feasible
  • Banks willing to lend (established business model)

 [9:37] Devin’s multi-family starting point

  • C-area six-unit bought, managed himself
  • Wasn’t ready to take other people’s money
  • Friends from local mentor group encouraged bigger deals

[12:17] Devin’s second multi-family deal

  • 75-unit, deep value-add
  • Unsafe building, occupancy low
  • Capital raise with 11 investors
  • $1.2M renovation

[15:46] Devin’s take on working your way up in multi-family

  • Jump into 80-plus units
  • 5-80 units is ‘no man’s land’
  • Larger project allows for staffing

[16:59] Devin’s advice to his younger self

  • Multi-family is way to go
  • Hoard your money to get first deal done
  • Second will follow in quick succession

[18:06] Devin’s current multi-family deal

  • 192-unit in nicer area
  • 8-10% cash-on-cash return
  • Equity multiple of two over five years

[19:27] Devin’s advice to aspiring real estate investors

  • Employ ‘borrowed credibility’
  • Build team with experience, track record
  • Act as quarterback, specialize in putting deal together

[22:47] Devin’s failures

  • Lost own money on flip house, improved systems
  • Counts not pursuing entrepreneurship sooner as failure

[24:00] How Devin overcame a lack of confidence

  • ‘Someday is now’
  • Quitting job as mental hurdle

[24:52] Devin’s AHA moment

  • Desire to create life he enjoys every day
  • Not working toward ‘someday’

[25:33] What Devin is excited about

  • Making positive impact on community through multi-family
  • Rewarding to give investors good return
  • Rehab of property impacts neighborhood

Connect with Devin Elder

DJE Texas Management Group

Resources

Partner with Michael

Invest with Michael

Podcast Show Notes

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

Review the Podcast on iTunes


Your chances of doing even a 60-unit multifamily deal on your own—with no track record—are very slim. Even with the capital and the knowledge, if you are lacking in the reputation department, brokers will have no confidence in your ability to close. Enter Nighthawk Equity, my partnership with Mark Kenney. You bring the deals, and Nighthawk does the rest.  

Mark has been investing in real estate since he graduated from Michigan State 23 years ago, partnering with his twin brother to buy and rehab a $36K duplex. He continued to pursue small deals and flips during his career as a CPA and consultant for KPMD. Eventually, he started his own IT company. The business thrived, but 80-hour weeks and extensive travel translated to suffering in his personal life. With his marriage in trouble, Mark made the decision to take a huge pay cut, hand off the big projects to someone else, and pursue real estate investing full-time.

With the support of his family, Mark spent nearly a year securing his first big multifamily deal, a 64-unit building in Dallas. Adhering to the ‘law of the first deal,’ his second and third deals followed right away. In four years, Mark has purchased 2,000 units and raised tens of millions in capital. Today, Mark shares the process of working with Nighthawk Equity to secure a deal, explaining how we came to join forces, the response to Nighthawk, and the right time to get Nighthawk involved in your deal. Listen in to understand the mission of Nighthawk Equity, and how the firm also supports passive investors looking for a solid ROI.

Key Takeaways

 [2:36] How Mark got started with real estate

  • Didn’t have much money growing up
  • Knew real estate was tangible
  • Bought $36K duplex right out of college (with brother)
  • Used money saved over years for down payment
  • Full rehab
  • Continued to buy, rehab small multifamily properties

[5:13] Mark’s decision to become a full-time real estate investor

  • Worked as CPA, then consultant for KPMD
  • Founded successful IT company
  • Working 80 hours/week, projects all over world
  • Personal life and health falling apart
  • Decided to quit four years ago
  • Took huge pay cut, turned projects over

[7:16] Mark’s first syndicated multifamily deal (64 units)

  • Took nearly a year to secure deal (build relationships, team)
  • Raised $1M with one general partner, 14 other investors

 [9:44] The deals that followed in rapid succession after the first

  • 208-unit within two months
  • 255-unit, 454-unit and 344-unit within short period after that
  • Found partner with track record, relationships in Atlanta
  • 800 units in Atlanta this year alone
  • Raising money easier as well ($2.8M, $6.2M, $4M)

[11:30] The importance of surrounding yourself with the right people

  • Mark’s dad talked him out of buying early on
  • Risk involved in anything you do
  • Listen to wrong people, never do deal

[12:46] Michael and Mark’s partnership

  • Joined forces to scale transactional side of business
  • Chances of doing deal on your own very slim
  • Leverage their track record, reputation as partners

[14:51] The response to Nighthawk Equity

  • Looking for deals as syndicators
  • ‘Floodgates opened’ after Episode 74
  • Deals in OKC, Dallas, Memphis and Houston
  • Nighthawk diminishes fear of raising capital

[17:47] The process of working with Mark and Michael

  • Do initial underwriting, receive feedback
  • Coach qualifies (realities of assumptions)
  • Patrick reviews deal
  • Strong likelihood deal will work before gets to Mark

[18:52] The right time to get Nighthawk involved

  • After deal analyzed, researched properly
  • After pre-negotiation (verbal agreement, numbers discussed)
  • Before LOI
  • Before contract signed

[20:44] The future of Nighthawk

  • Help new investors alter mindset (i.e.: 69- to 321-unit in five months)
  • Continue to pursue joint ventures with students
  • Carry on mission to help others gain financial freedom

[24:44] Mark’s pitch to passive investors re: multifamily

  • Meets basic need, never going away
  • Incredible ROI
  • Performed well during recession (.4% default rate)
  • Tax benefits (pay little/nothing due to depreciation)

Connect with Mark Kenney

Think Multifamily

Email: mark@thinkmultifamily.com

Nighthawk Equity 

Resources

Podcast Episode 74

Partner with Michael

Invest with Michael

Financial Freedom Summit Wait List

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

Review the Podcast on iTunes


What gives a 27-year-old with no experience in apartment building investing the audacity to swing for the fence?

Patrick Duffy grew up in Southern California before heading east for college. After graduating from Harvard in 2013, he returned to SoCal to work as a commercial real estate banker and later for a hedge fund, buying non-performing mortgages. He grew up around real estate, his family owning a multi-family property since the 1950’s, and he had always intended to invest in apartments—as soon as he had the money to do so.

Before long, Patrick was unhappy at his job, so he started reaching out to investors he had lent to in order to get clarity on how to analyze deals. Despite his lack of experience on the principal side of real estate, Patrick started studying LoopNet and set the goal of securing 100 units in two years. Eventually, he discovered Michael’s Deal Desk resource, and used the Syndicated Deal Analyzer to get feedback on a 69-unit property in Memphis. The deal met Michael’s criteria, and the two forged a partnership.

Today Patrick explains the steps he took to research the Memphis market, how he made use of the act ‘as if’ approach to secure a letter of intent, and his best advice for working with investors. Listen in as he shares the mindset that helped him swing for the fence on a multi-family deal and how doing his first deal has changed the game for Patrick, as he aspires to reach 1,000 units in the next 12 months.  

Key Takeaways

[3:30] How Patrick landed on the partnering strategy to finance multi-family

  • Briefly considered flipping single-family
  • Preferred multi-family, but biggest block was capital
  • Looked at creative financing options
  • Partnering seemed like most feasible route
  • Goal to secure 100 units in two years

[6:04] How Patrick found the Memphis deal

  • Clarity re: how to analyze deals
  • Practiced via LoopNet (comparing markets, packages from brokers)
  • Underwriting to get feedback
  • Memphis market seemed ideal (cap rates, unit sizes, price)
  • Reached out to learn about Memphis market
  • Found 69-unit deal on LoopNet
  • Submitted to Syndicated Deal Analyzer
  • Positive feedback from forum
  • Called broker on New Year’s Eve

[9:23] Why Patrick continued to move forward

  • Nothing to lose
  • Deal met criteria for partnering via Deal Desk
  • Act ‘as if’ approach to secure LOI

[11:13] Michael’s partnership with Patrick

  • Impressed by Patrick’s thorough research
  • Surprised by return (Memphis not one of published geographies)
  • Got contract from seller, proposed changes
  • Built team as went (property manager, lawyer)
  • Patrick took initiative
  • Under contract with seller
  • Wire EMV
  • Collect due diligence docs
  • Financial due diligence process
  • Create investor package
  • Met in Memphis to look at property
  • Michael sent sample deal package to investors
  • Acquired financial commitments
  • Hired SEC attorney
  • Started appraisal process

[13:18] Patrick’s experience working with investors

  • Michael’s network eager for deals that fit criteria
  • Addressed questions about specifics of market
  • SEC attorney had drafted necessary documents
  • Used DocuSign to track eSignatures

[15:23] The closing process for the Memphis 69-unit deal

  • Loan approved, investors wired funds
  • Patrick received acquisition fee of $23,000
  • Also reimbursed for expenses incurred during due diligence

[16:25] The impact of doing your first deal

  • Only so much can be taught re: what to expect
  • Once learn to partner, can scale quickly
  • Feel more comfortable and taken more seriously
  • Brings down barriers
  • Patrick under contract on 196-unit deal two weeks later
  • Expects to hit 1,000 units in next 12 months

[19:50] Why size isn’t a factor for Patrick

  • It’s about process
  • Anything under 500 units is viable
  • Don’t worry about equity
  • Finding deal is the issue (not money)

[21:35] Patrick’s advice for aspiring multi-family investors

  • Take advantage of Deal Desk resources
  • Does require high level of commitment
  • Hard work is worth it

Connect with Patrick

Email: pduffy32@gmail.com

Resources

Deal Desk

Syndicated Deal Analyzer

Ultimate Apartment Investing Course

The Financial Freedom Summit Live

LoopNet

DocuSign

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


In this episode, Mark Walker shares with us how he replaced his income from a high-tech job with passive income from multifamily properties. Like so many people I’ve talked with, Mark started with single family investing before realizing that multifamily investing would allow him to achieve his dream of financial freedom.

His path was not always easy but one day in Mark “decided” that he was going to achieve financial freedom and from that moment on he worked towards escaping the rat race. In my experience, once you truly decide to do something you can’t stop yourself from taking action! So decide already!

Mark has some great advice and he’s even got a free PFD that you can download entitled   “10 "Not So Obvious" Ways to Boost Your Multifamily Property NOI.”  You can download it here

Key Takeaways

[1:15] Mark’s Backstory

  • Worked for a high-tech company
  • Left his job in January of 2015 to become a full-time real estate investor

[3:38] The day Mark “decided” to achieve financial freedom

 [5:16] Why Mark started investing in condo’s and townhomes

  • Higher returns (post-tax)

 [6:05] Marks Hiatus from real estate investing

  • Defrauded on a deal

[9:10] Why Mark decided to shift strategy and start investing in multifamily

  • value-added opportunities with cash flow
  • Economies of scale
  • “The bigger the deal, the easier it is”
  • The way a multifamily property is valued

  [13:04] Why Mark decided to do bigger multifamily deals

  • Bigger payoff for time spent
  • Non-recourse financing that he couldn’t get on smaller deals

[14;13] Marks mental struggle transitioning from a W2 employee to a full-time real estate investor.

  • Had 36 units when he left his job
  • 6-12 months to get used to no regular paycheck

[17:4] What Mark would do differently if he could do it over:

  • Find a mentor/co-sponsor that is doing multifamily deals

[20:11] Why a very successful investor would be willing to partner with a noobie

 [23:10] Marks advice for a new investor

  • Never stop learning! “Learning leads to action and action leads to success”

Resources mentioned

Mark's gift to listeners: 10 "Not So Obvious" Ways to Boost Your Multifamily Property NOI

 


MB 048: How I Closed My First 22-Unit Apartment Deal in 3 Months (With Ed Hermsen)

For many of these episodes, I bring on someone who is already very successful in multi-family investing and I will continue doing so because there is a lot to learn from these people! However, I also really enjoy talking with relatively new investors about their first deal since that first deal is always the hardest, and it’s the most important step you can take towards achieving your financial goals.

This week, I welcome to the show Ed Hermson. In this episode, you will find out how Ed was able to close his first 22-unit apartment building deal just 3 months after getting started, and how long it will take for Ed to achieve his goal of $10,000 per month in passive income!

Key Takeaways

[2:26] Ed’s backstory

  • Worked in Mortgage Banking for 14 years
  • His commission pay structure made him nervous
  • 2008 was an eye-opening experience

[6:22] Why Ed decided to stop investing in single family housing

  • Not enough short-term income to justify the work/hassle

[7:36] Why Ed decided that Multifamily was a good fit

[9:36] What stops people, (including Ed), from getting that first deal done

[10:43] How Ed overcame his monetary limitations

[12:12] Why Ed decided to focus on smaller markets

  • Less competition

  [18:21] How Ed found his first big deal

  • The power of property managers and why you should be nice to them

[23:21] Why paying for an appraisal on an apartment complex is usually a waste of money

  • The Single Family Investing Mindset

 [24:29] Ed’s advice on building an investment team

  • Choose people with diversity of experience

[25:34] How you can find the time for multi-family investing while working full-time

 [36:53] Ed’s advice to new investors

  • Find 3-4 individuals that have skills/knowledge that you don’t have
  •  Start putting together sample deals with deal analyzer

[38:19] Why you should focus on building relationships with bankers and property managers (instead of just realtors)

Connect with Ed Hermsen

ed.hermsen@mtggroup.com


This week’s guest is Bill Manassero. Bill is truly one of the world’s good guys. He’s has done a lot in his life and most recently he spent 11 years as a missionary to orphans, abandoned and at-risk children in Haiti.

At the age of 60, Bill realized that he was closing in on the age of retirement and he wasn't financially ready for it! Other than a little money in an IRA account and social security benefits Bill didn't have a method of generating income. Being a Walmart greeter didn't appeal to him so he started looking for ways to generate passive income. After throwing out a few ideas, Bill chose real estate and he decided to go big. Bill’s goal is to control 1000 doors in 6 years. He’s 3 years in and is well on his way! 

Since finding some success in real estate Bill has decided to help others who like him are getting close to retirement and need to generate income. Bill started The Old Dawgs Network which began as a blog and is now also supported by a podcast!

In this episode, Bill shares his inspiring story as well as the "why" behind his goal. Bill has a very strong “why” and we discuss what that is for him and why it's so important you find your "why". I hope you all enjoy this episode as much as I did!

Key Takeaways

[8:41] Why Bill chose multifamily investing to generate income

[12:50] Why Bill decided to focus on multi-family over single family real estate investing

  • Economy of scale
    • 1 insurance policy, 1 loan etc. for multiple units
  • Less risk of 100% vacancy

[15:09] Factors Bill considered when assessing his first big deal

  • Identified key markets
    • Great job/population growth
    • Make sure the place has landlord-friendly laws
    • Rent to value ratio

[19:28] How Bill used the inspection process on his fist “big deal” to get a better price

[27:01] The importance of identifying your “why”

[31:13] How Bill broke down his big goal into manageable steps

  • Accomplished each step before moving on to the next

 [32:40] The importance of remembering that real estate investing is about more than just money

 [34:23] Why Bill decided to move into his apartment building

[37:48] The inspiration behind “The Old Dawgs Network”

Connect with Bill Manassero:

Old Dawgs REI Network

Twitter

Resources mentioned

Old Dawgs REI Network Blog

Old Dags REI Podcast


In Gary Keller’s book “The One Thing” he asks the following question; What's the ONE thing you can do such that by doing it everything else will be easier or unnecessary? In this podcast I pretty much talk about one thing, that’s getting your FIRST deal. No matter the size, after you’ve done your first deal, the subsequent deals will be much, much easier.


This week I’m joined by Brooks Everline from Hagerstown, Maryland. Brooks is Truck Driver with UPS and just did his first deal in March of 2016! Brooks started with a fourplex before moving on to some small apartment building deals. I get that when you have a full-time job, finding the time and energy to do your first deal can seem daunting, but that's no excuse! Brooks sais that all you need to accomplish something is to make sure that your "why" is stronger than your why not. I couldn't agree more!

Key Takeaways:

[8:20] Most of the time our biggest regret is not doing more, sooner.

[8:50] Strategies for finding your first deal

[23:20] Brooks second deal

  • The importance of constantly searching and making MANY offers

[27:21] The only thing stopping you from taking the first step is yourself

[30:20] Take your biggest, scariest task and do that FIRST

Connect with Brooks:

yournextplaceinvestments@gmail.com

Phone: (301) 465-9047


In this episode, I’m joined by Kathy Fettke, CEO and Co-Founder of the Real Wealth Network and host of The Real Wealth Show podcast. She is a frequent contributor to national news including CNN, CNBC, NPR, FOX News, CBS MarketWatch and the Wall Street Journal. Kathy is a lot of fun to talk with, and her story is both educational and inspiring. She has a ton of real estate experience in both single family and multifamily investing and has experienced some incredible highs and lows in her personal and professional life.

In this interview, she tells us about her husband coming home with the news that he’s been diagnosed with cancer with only six months to live and how she turned to real estate to pay the bills. She also tells us about a 92-unit apartment deal that looked oh so perfect, before turning into a nightmare. Kathy has been through and accomplished a lot and lucky for us she's more than willing to share what she's learned!

Key Takeaways:


[5:25] There's not just one Market Cycle

  • There are a lot of markets all with a different cycles
  • It’s the time to buy in some markets and time to sell in others

[7:27] The worst real estate markets right now

  • Wherever foreign investors have come in and paid all cash and driven prices up. Primarily big cities.

[9:14] Metrics to look for in a market

  • Job growth = population growth
  • Look for cities that are proactively creating jobs

[8:30] Some of the best real estate markets right now

  • Reno, NV
  • Pittsburgh, PA
  • Cleveland, OH

[16:21] The insurance clause you NEED to be aware of when your property is vacant

[17:48] The one thing you ALWAYS do right before closing on a property

  • The final walk through

[22:38] When something goes wrong, communicate more with investors! NOT LESS!

[24:58] - Trust your gut.

  • Even if the number look good, do a gut check

[26:24] What to look for in a Syndicator/Sponsor

  • A long, proven track record of success
  • Someone who has been through a storm or two... and survived

[34:28] Get your advice from people who have already done what you want to do

[41:51] There is no “happy ending”. We are here to grow

  • Your end goal shouldn’t be sitting on a beach for the rest of your life

Connect with Kathy Fettke

Realwealthnetwork.com | FREE to join

 

Direct download: MB_045-_Living_Life_to_the_Fullest_as_a_Real_Estate_Entrepreneur-2.mp3
Category:general -- posted at: 12:54pm EDT

The multi-family market is hot right now making it harder to find good deals. Finding a way to charge above market rents is one strategy that allows us to buy properties at market and still get the returns we are looking for.


There are various strategies for achieving this, but a relatively new one that has come to my attention is renting out properties on a short-term basis via AirBnB. This week Nav Athwal joins me to discuss this strategy and some things you need to think about before implementing it.


Key Takeaways


[4:43] AirBnB and how most hosts utilize the platform

  • Hosts rent out rooms and/or entire personal homes

[7:31] Alternative ways to use the platform

  • Buying properties for the exclusive purpose of renting through AirBnB
  • Renting out empty properties through AirBnB while you are unable or unwilling to use them for another purpose

[10:15] Where the short term rental strategy can work

  • Look for cities where AirBnB is already very active
  • Look for cities with favorable regulations toward short term rentals

[11:42] Scalability of this strategy

  • Not completely proven
  • Services like Pillow offer on demand concierge and property management

[13:46] Regulatory Uncertainty

  • Some cities are limiting short term rentals while others are outlawing them completely.

[15:36] Pro AirBnB cities

  • Seattle
  • Austin
  • MANY international cities

[19:22] Nav’s advice to real estate investors evaluating this strategy:

  • Make sure your ROI is higher than it would be for a long term rental
    • Factor in cost to manage
    • Factor in expected occupancy rate
  • Research the cities regulatory environment
  • Location- Is this a location that will attract travelers?

Resources mentioned

Blog Post: THE RISE OF THE PROFESSIONAL AIRBNB INVESTOR- https://www.realtyshares.com/blog/the-rise-of-the-professional-airbnb-investor/

Connect with Nav

Website: www.realtyshares.com
Email: nav@realtyshares.com
Twitter: @navathwal

 

Direct download: MB_044-_The_Rise_of_the_AirBnB_Multifamily_Investor-2.mp3
Category:general -- posted at: 12:39pm EDT

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


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

Key Takeaways:

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

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

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

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

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

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

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

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

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

[8:51] Week 1: Educate yourself

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

[9:35] Week 2: Determine investing area

  • Less important than in larger multifamily investing

[10:27] Week 3: Analyze 5 deals

[15:33] Criteria:

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

[17:58] Week 4: Start raising money

[19:04] The Last two months

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

 


Direct download: John_Hyre_Highlight_Audio.mp3
Category:general -- posted at: 4:21pm EDT

This episode is all about doing due diligence on commercial real estate.

Due Diligence is rarely talked about because it takes back seat to sexier topics like raising money and finding, analyzing and negotiating deals.

But I have found that more investors make mistakes during the due diligence than any other part of the process.

To help us with due diligence I have on the show today Brian Hennessey.

Brian has been in the commercial real estate industry for 31 years as: a commercial broker for 22 years; a Senior Vice President of Acquisitions and Dispositions for 6 years for a major investor, and ran his own real estate syndication/asset management company for 3 years. He has represented a number of Fortune 500 Tenants including Bank of America, The Walt Disney Company and Baxter Healthcare.

With over 9 million square feet of sale transactions, many painful, but valuable lessons were learned and a wealth of experience was accumulated. 

He is the author of the book “The Due Diligence Handbook for Commercial Real Estate Investments”, a top selling
book on commercial real estate available on Amazon, Audible.com and on his website www.impactcoachingsystems.com.

He's going to share with us the Top 10 Mistakes people make when doing due diligence on commercial real estate.

So it's important to pay attention to what Brian has to say.

Here are the complete show notes and transcript:

http://www.themichaelblank.com/session31/

Direct download: MB_031.mp3
Category:general -- posted at: 8:14pm EDT

I heard of two deals recently that ended up going south after the lender apparently did not come through with the loan. Upon closer inspection, though, it was ignorance by the sponsor about how the lender would underwrite the deal, i.e. how they would value the asset and determine the LTV, for example. Or what they require of the sponsor. Or that they require (gasp!) a capital reserve at closing.

All of these materially alter the deal and need to be understood upfront.

To avoid these mistakes, it's imperative that you "interview" your commercial mortgage brokers so that you understand how they underwrite deals and they will require of you. Then you can incorporate those assumptions into your financial model (i.e. the SDA) and you won't be taken by surprise a few weeks before closing.

In my course "The Ultimate Guide to Buying Apartment Buildings with Private" I have a list of 10 questions to ask your commercial mortgage brokers. What I wanted to do in this episode is actually interview a broker and ask them the 10 questions.

That way, you know the questions to ask and you'll also get an idea of what answers  you can expect.

To help us with this exercise, I have on the call Ira Zlotowitz, founder and president of Eastern Union Funding and Shai Romirowsky, VP at Eastern Union Funding.

Here are the complete show notes and transcript:

http://www.themichaelblank.com/session30

Direct download: MB_030-REVISED.mp3
Category:general -- posted at: 8:12pm EDT

Direct download: MB_029.mp3
Category:general -- posted at: 10:33am EDT

Direct download: MB_028_10_Practical_Tips_To_Achieve_Your_Goals_This_Year.mp3
Category:general -- posted at: 2:42pm EDT

Direct download: MB_027.mp3
Category:general -- posted at: 3:19pm EDT

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Category:general -- posted at: 10:38am EDT

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Category:general -- posted at: 10:34am EDT

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Category:general -- posted at: 3:48pm EDT

Direct download: MB_023.mp3
Category:general -- posted at: 4:08pm EDT

Direct download: MB_022.mp3
Category:general -- posted at: 2:30pm EDT

Direct download: Week_8.mp3
Category:general -- posted at: 3:16pm EDT

Direct download: Recording_Week_6.mp3
Category:general -- posted at: 3:05pm EDT

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Category:general -- posted at: 4:31pm EDT

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Category:general -- posted at: 11:45am EDT

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Category:general -- posted at: 4:40pm EDT

Direct download: Phone_Conference_Recording_11-20-14-FINAL.mp3
Category:general -- posted at: 4:36pm EDT

Michael Becker doesn't think small! He describes how he overcame his fear and went from 9 to 1,000 units in just 12 months using other people's money. Find out why he uses only Fannie Mae debt and how a single partnership propelled him into orbit.

Direct download: MB_017.mp3
Category:general -- posted at: 3:48pm EDT

Direct download: MB_016.mp3
Category:general -- posted at: 3:56pm EDT

Direct download: MB_015.mp3
Category:general -- posted at: 1:53pm EDT

Join me as I chat with Chris Winterhalter about his fascinating journey from wholesaling houses to his first apartment building which almost cost him his shirt! Now he owns 100 units within a mile of that building and has his sites on 500 units.

Direct download: MB_014.mp3
Category:general -- posted at: 3:39pm EDT

http://www.TheMichaelBlank/session13: In part 2 of this series, Dan Miller of Fundrise describes in detail how to raise capital for your next commercial real estate deal using equity crowdfunding.

Direct download: MB_013_-_Part_2.mp3
Category:general -- posted at: 10:53pm EDT

http://www.TheMichaelBlank/session12: In part 1 Dan Miller of Fundrise gives us an overview of how equity crowdfunding works and why it's great for commercial real estate. We also talk about what it's like to invest in a crowdfunding project.

Direct download: MB_012_-_Part_1.mp3
Category:general -- posted at: 10:52pm EDT

http://www.TheMichaelBlank.com/session11: In this episode I talk with Spencer Cullor who chronicles how he got started with commercial real estate investing. After educating himself, he got into his first commercial real estate deal which didn't pan out the way he imagined. He stuck with it, licked his wounds, and learned from his experiences and got into apartment buildings, and he's never looked back.

Direct download: MB_011.mp3
Category:general -- posted at: 9:49pm EDT

In this episode I cover how to go about getting your first deal in an area you've never been in. We'll talk about cold-calling brokers, building trust, analyzing deals, scheduling the first trip to the area, conducting the meetings, and follow-up.

Direct download: MB_007.mp3
Category:general -- posted at: 2:58pm EDT

I'm excited to be able to welcome Tommy Bateman to the show this week. Tommy started his career with a single town  house in SE Washington DC that he bought with the help of his grandmother. His focus as been to find problem properties and add value in a short period of time, using the equity he creates to purchase more real estate. Today he owns apartment buildings, rentals, a property management company, and he loves development projects.

Direct download: MB_006.mp3
Category:general -- posted at: 3:49pm EDT

Brian Burke started flipping houses on the side while still employed full time. Over the years, he's not only built the house flipping business but amassed several hundred apartment building units. Let's listen to his story.

Direct download: MB_005_-_Brian_Burke.mp3
Category:general -- posted at: 3:02pm EDT

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