Financial Freedom with Real Estate Investing
MB 039: Don't Think You Can Do Your First Apartment  Deal (Then Listen To This)

This episode is a bit different than the norm because I am the one being interviewed! JP Moses with realestatemogul.com interviews me about apartment building investing and raising money.

I talk a bit about my journey, the struggles I’ve had and why many people dismiss apartment building investing as a wealth creating strategy for themselves. We discuss the myths and realities of getting started with apartment building investing and how to overcome the initial roadblocks.

 

Key Takeaways:

[4:02] Success is riddled with mistakes and failures

 [6:02] You have to be willing to operate in an environment where you can’t control everything and be at peace with that.

[11:59] Key components that make a deal worth doing.

[13:24] Why there is less speculation in commercial real estate than in single family investing.

[13:56] Very few great deals are going to be in your backyard.

[14:10] The best way to find deals in through relationships with brokers.

 [16:35] Loopnet.com is useful in finding brokers to start relationships with.

[20:14] People dismiss apartment building investing for these 3 reasons:

  1. I don’t have the money.
  2. I don’t have the experience.
  3. It’s so overwhelming I don’t know where to start.

[21:40] Flipping houses or investing in single family doesn’t give you credit when it comes to investing in multifamily dwelling.

[22:25] If a broker is asking you qualifying questions they’ve already classified you as a newbie.

[27:00] Even in stable apartment building investments you need to be interacting with your property manager on a consistent basis so you don’t lose touch.

[31:45] The right way to introduce yourself to a broker.

[34:55] Putting together a sample deal for potential investors.

[45:37] How to make money on deals you can’t pull the trigger on yourself.

[48:29] Don’t spend money in the due diligence process until you are 98% sure you are going to get the deal done.

[53:04] Invest in your education. Everything else can be achieved with hustle.


There are many advantages to investing in multifamily over single family rentals and this week I’m joined by a guy that has invested a lot in both.

Rod Khleif has been a real estate investor for the past 25 years has owned over 2000 apartments and homes. Rod shares his fascination real estate investing journey and how he built a HUGE single family house investing business which kicked his butt during the recession. Rod gives us the pros and cons of Single Family Vs Multifamily investing and discusses why he thinks a correction is coming and why multifamily’s are the best investment right now.

But ask Rod what he is most proud of, and he will tell you about his work as a community philanthropist. Over the past 14 years, Rod’s work has benefitted more than 40,000 underprivileged community children.

Rod has a new book, coming soon, on the topic of multifamily investing and listeners of this podcast can get it for FREE by texting “Rod” to 41411. Rod hosts a new and already popular podcast called the Lifetime Cashflow Podcast.

 

Key Takeaways

[3:58] Single-family rentals either are rented or they are not. With multifamily dwellings, you can typically cover your expenses, even with a vacancy.

[6:03] Learn a business, and confidence and the ability to influence people will follow.

[7:30] Always be learning. Regardless of how much you know, there is always something to learn.

[10:28] To be good at investing, you need to learn to love it.

[10:47] Learn to find positives in negative situations

[14:24] Pros and cons of Multifamily investing

[18:08] The beautiful thing about multifamily is it’s valued based on the net operating income NOT comps.

 [19:34] By improving net operating income you can exponentially raise the value of an apartment building.

 [21:53] Financing on large deals can be easier to secure, with better terms.

[25:01] It’s easier to scale multifamily investing than single family.

[27:12] You can become finically free with ONE transaction in multifamily. It generally takes dozens of single family deals to accomplish the same thing.

[30:16] If you’re willing to do what others don’t do, you will be a success.

[37:09] The importance of visualizing your goals.

[39:47] Know the “why” behind your goals.

 

Mentioned in this interview:

  • Rod's Podcast is the Lifetime Cashflow Podcast: http://www.lifetimecashflowpodcast.com/
  • Rods new book all about multi-family real estate investing: Text “Rod” to 41411 and get the book FREE when it’s released.
  • Connect with Rod Khleif

The best way to connect with Rod is via email at rod@rodkhleif.com


About 98% of the people that come to me are not aware that they can invest in real estate from their RIA or 401k. Investing with your IRA or 401k brings enormous tax advantages, and therefore growth advantages, but there is quite a bit you need to know before you get started.

This episode is part 2 of my interview with Attorney, Accountant, and Real Estate Investor John Hyre. In this episode, John covers a few advantages and disadvantages of various retirement investing plans and the pitfalls of prohibited transactions which can easily blow up your IRA and cost you 50%-60% of the account value.

John has a course on this topic that I have reviewed on my website: http://www.themichaelblank.com/ira. For a limited time, John is offering this course and the live conference footage (discussed in this episode) for only $1,197 (Regular Pricing: $2,391).

Key Takeaways:

[3:42] An IRA is the biggest loophole out there.  The best way to deal with income is to make it not taxable to begin with. 

[10:59] Roth IRA VS a traditional IRA

[11:33] It’s much better to be taxed on the seed now then the crop later.

[12:02] Self-directed 401K’s are superior to traditional IRA

[12:15] The value/importance Health Saving Accounts (HSA) and Coverdell Education Savings Accounts (CESA) are often underestimated.

[14:30] Why you should set up an HSA TODAY

[15:39]- why 401K’s are “infinitely superior” to IRA’s. Penalties for prohibited transactions are MUCH worse for an IRA.

[19:45] The power of tax-free investing.  

[26:26] Prohibited transitions in IRAs- what makes them so scary. Don’t just be conservative, be Paranoid.

[33:32] Statue of limitations on prohibited transactions (NEW)

 

 

Mentioned in this interview:

IRA Investing: Review of the Tax Litigators Guide to Tax-Free IRA, HSA & CESA Wealth by John Hyre- Special Limited Time Offer:  Buy  the course + live conference for just $1,197 (Regular Pricing: $2,391)

Purchase here: http://www.themichaelblank.com/ira

 

 

Connect with John

Iralawer.com

Realeastatetaxlaw.com

 

 


Bookkeeping is often an overlooked, underappreciated part of business for new investors. However, if you don’t understand your books and your business entity you are probably losing a lot of money, and not just during tax time.

John Hyre is an Attorney, accountant and real estate investor, (in that order according to him), and he was kind enough to join me on the podcast to talk about choosing and maintaining a business entity and the importance of keeping your books the right way. John even has a class on both topics, and the two can be purchased together here for just $499: www.themichaelblank.com/hyer

The information packed into this episode can save you a lot of pain, suffering and money.

 

 Key Takeaways

[3:10] Biggest mistake that business owners make is the failure to document. If you can’t prove it, you can’t claim it.

[4:35] Use Quickbooks instead of Quicken. Reason; Real estate investing is a balance sheet intensive business and Quickbooks is better suited for that than Quicken.

[5:45] Doing your books the right way saves you money on the front and back end. It lowers your overall tax bill and saves your accountant time, and therefore you money.

[6:07] The books tell you how the business is doing. If you’re not keeping them correctly, you probably don’t know how your business is actually doing.

[6:42] You can delegate bookkeeping, but you need to know about what goes into the books and what you should see to know that whoever is doing it, is doing them correctly.

[9:03] The best insurance against an IRS audit is the bookkeeping and record keeping.

[10:01] Pay your kids to do work for you like scanning receipts. It’s a tax write-off and the money stays in the family. (More on this later in the episode).

[12:03] An LCC is like life insurance.  You want it if you need it, but you want to keep the probability of needing it as low as possible.

[13:50] You can avoid a lot of lawsuits by being nice to people.

[14:41] Entities are like children; Fun and easy to make but a lot of work once you got one.

[15:00] The #1 way to destroy an entity is to co-mingle money.

[16:40] Generally the best entity to use for apartment building investing is an LLC

[20:08] Once you involve someone who you are not married to as a partner, you will want a lawyer to write a customized operating agreement. Don’t use a template.

 [27:28] If you want a court to treat your LLC like a business, you need to treat it like a business.

[28:18] Rules & guidelines for paying your kids.

[46:32] Trust law is much more complicated than entity law.

 

Mentioned in this episode:

Entity Selection Course, Bookkeeping course: www.themichaelblank.com/hyer

-purchase for 299 each or 499 together

Iralawer.com

 

Connect with John

Iralawer.com

Realeastatetaxlaw.com

 

Direct download: MB_036-_How_to_Pay_Less_Taxes_With_John_Hyre-2.mp3
Category:Commercial Real Estate -- posted at: 3:28pm EDT

MB 035: Just Do It (And Figure It Out Later) – With John Cohen

It’s never too early to get started.


This week I’m joined by John Cohen who is just 29 years old and is the President of JC Property Group Inc., a company he formed in early 2013. John played college baseball and graduated with a degree in Economics from Queens College. Fresh out of college John started a job as a stock broker at Morgan Stanley and quickly realized that it wasn’t the path for him.


He switched his focus to real estate and quickly found that making money on tax deed properties wasn’t as easy as he’d hoped. He then joined Marcus & Millichap and became a successful commercial broker, all the while buying properties for himself, before leaving the company to focus 100% of his time on the growth of his company.

Key Takeaways:


[6:03]- The moment John realized that finance wasn’t what he wanted to be doing.
[9:23] People say they want to become a millionaire and retire early, but they don’t really decide that’s what they are going to do.
[9:48] How John got into tax deeds without knowing what he was doing and purchased two worthless pieces of land.
[16:04] John’s tax deed properties strategy
[17:45] Transitioning from tax deed buys to multifamily units
[23:52] Getting that first deal
[30:10] Strategies and tactics to finding deals.
[34:00] Direct mail: it’s not what you write, it’s the consistency
[43:11] John’s biggest aha moment- Don’t take things for granted. You have to work for what you want.
[47:10] Best Habits: Get up early, do the hardest things first.
[48:18}- Best Resource- People. Reach out to people that can help you. Meet with them instead of calling. Call them instead of texting.
[49:44] You need to find a mentor. Don’t stop until you find that person.

Connect with John


Cell:
Email:


MB 034: Do THIS to Get Into Your First Multifamily Deal (With Keith Weinhold)

“Dream big but start small.”  Today, it doesn’t take much to get started in real estate investing and in this episode you will find out just how little it takes to get into your first multi-family unit.

I invited Keith on the show to discuss how he got into multifamily investing by moving into his first home he ever bought: a 4-plex. Over the years, Keith has added to his portfolio and is now a full-time investor.

 

Keith is the Founder of Get Rich Education to teach others about the life-altering power of investing, especially through real estate. He hosts of one of America’s top investing shows - Get Rich Education - with thousands of listeners in over 160 world nations. He’s heard everywhere from iTunes to iHeartRadio, and regularly hosts Kiyosaki Rich Dad Advisors as guests.

 

Key Takeaways:

[3:19] You CAN move to a location that you dream of living in instead of moving wherever there’s a job.

[9:00] Sometimes we need to “unlearn” before we can learn

[10:40] How Kieth Got started with an FHA loan (it’s still available TODAY)

[16:55] Forget about compounding, the key is Leverage

[22:09] What to look for to make sure you “buy right”   

[25:50] How to find the best listings

[29:16] What to look for in a property manager. What to look for in the “Interview process.”

[32:57] ROTI- “Return on Time Invested” is a metric you need to think about when it comes to self-managing your properties.

[35:32]  Advise from Keith. If he could do it all over again, what would he do differently?

[38:57] How to think about debt: Outsourcing to tenants.

 Mentioned in this interview:

Mentioned in this interview:

Favorite books:

1] Rich Dad Poor Dad: Rich Dad Poor Dad- by Robert Kiyosaki

2] Loopholes of Real Estate- by Garrett Sutton

Online resources: www.16personalities.com

 

Connect with Keith:

ww.getricheducation.com

Keiths Podcast: Get Rich Education - https://itunes.apple.com/us/podcast/get-rich-education-keith-weinhold/id927263663?mt=2

 

 http://traffic.libsyn.com/michaelblank/MB_034-_Do_THIS_to_Get_Into_Your_First_Multifamily_Deal_-_With_Keith_Weinhold.mp3


MB 033: The Definitive Guide to Investing in the U.S. From Abroad With Reed Goossens

Michael gets a lot of interest from all of you international investors who want to invest in the U.S. but there are a lot of questions that need to be answered before you can close that first deal. Like, what do I need to set up? Can I invest in apt buildings and if so, how? What are the tax considerations?

In this episode, Michael is joined by Reed Goossens, who answers those questions and more!

Reed is from Australia and moved to the US 4 years ago. He's a civil engineer by trade but wanted to get out of the rat race and started to invest in multifamily properties in the U.S.  But he faced all kinds of difficulties investing here as a foreigner but finally figured it out. Now he's looking for apartment building deals all over the U.S. He hosts a podcast called " Investing In The U.S. - An Aussie's Guide to U.S. Real Estate" where he teaches people how to invest in the U.S. from abroad.

Connect with Reed:

Website: http://www.rsnpropertygroup.com/

Email: reed@ rsnpropertygroup.com

Podcast: https://itunes.apple.com/us/podcast/investing-in-u.s.-aussies/id1071004776?mt=2

 

 http://traffic.libsyn.com/michaelblank/MB_033_-_The_Definitive_Guide_to_Investing_in_the_U.S._From_Abroad_With_Reed_Goossens.mp3


MB 032: Everything You Need to Know About Crowdfunding

Michael welcomes to the podcast Nav Athwal, the founder and CEO of RealtyShares. RealtyShares is one of the oldest and largest companies out there in the relatively new and exciting market of real estate crowdfunding.

Nav has drawn from his diverse and impressive background to build RealityShares into a market leader. Nav was once worked an electrical engineer, then for a raw land developer and then became a land-use attorney before starting RealtyShares from his living room! It’s not in his living room anymore. RealtyShares has now raised almost 150 million with a diverse set of operators located in over 60 markets!

Most of us are pretty aware of the basics of crowdfunding and the advantages it creates in the marketplace. So instead of painting in broad strokes, Michael and Nav get into the nuts and bolts of RealtyShares and what that means to you, the listener. In this show they cover the following:

  • Investor qualifications – (these standards may be loosened soon)
  • Investing minimums
  • Investing opportunities
  • Raising capital through real estate crowdfunding
  • RealtyShares ability to provide the ENTIRE capital stack
  • Preferred Returns
  • And much, much more

 

RealtyShares  Website: www.realtyshares.com

RealtyShares contact info:

Email: contact@realtyshares.com

Twitter: @realtyshares

 

 

Nav Athwal contact info:

Email: nav@realtyshares.com

Twitter: @navathwal

Direct download: MB_032-_Everything_You_Need_to_Know_About_Crowdfunding.mp3
Category:Commercial Real Estate -- posted at: 4:44pm EDT

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
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Direct download: MB_028_10_Practical_Tips_To_Achieve_Your_Goals_This_Year.mp3
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Direct download: Week_8.mp3
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Direct download: Recording_Week_6.mp3
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Direct download: Phone_Conference_Recording_11-20-14-FINAL.mp3
Category:general -- posted at: 4:36pm EDT

Listen in as national speaker and educator John Bowens teaches how to use your investors' IRA accounts to invest in your multifamily apartment deals. Learn what to do and what not to do and how to explain it in simple terms so that your investors say YES to investing in your deals!

Direct download: MB_018.mp3
Category:Commercial Real Estate -- posted at: 1:09pm 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
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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 interview real estate investor Joe Fairless as he describes his journey from just a few rental properties to his first apartment building deal, a whopping 168-unit property -- what an awesome story I know you'll enjoy and learn tons from!

Direct download: MB_010.mp3
Category:Commercial Real Estate -- posted at: 9:43pm EDT

Join me as I talk with Kaveh Shirazi about how he launched his commercial real estate investing career right out of college and on someone else's dime. So we much we can learn from this young investor!

Direct download: MB_009.mp3
Category:Commercial Real Estate -- posted at: 2:59pm EDT

In this episode I jam with aspiring commercial real estate investor Scott Isley as we discuss techniques for raising money and structuring the deal. 

Direct download: MB_008.mp3
Category:Commercial Real Estate -- posted at: 1:37pm 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

Having trouble finding good apartment building deals? In this episode we'll talk about the SINGLE best way to find deals. We'll also talk about how to look for deals and build your team outside your own area. Get out your pen and paper and let’s get started!

Direct download: MB_004_-_Tom_Musso.mp3
Category:Commercial Real Estate -- posted at: 3:47pm EDT

In this episode, my good friend Jonathan Mickles asks me a 101 questions about analyzing apartment building investing deals, and how to do so as quickly as possible. We talk about investment criteria, returns, the 50% rule, how to value commercial real estate, and how to determine the most you should pay for an apartment building.

Direct download: MB003.mp3
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Direct download: MB_002.mp3
Category: -- posted at: 8:34pm EDT

Hi everyone, and welcome to my first Podcast!

You can download the podcast to your computer or listen to it here on the blog. It'll also be available on iTunes soon.

In this first episode, I introduce myself and talk about some of my entrepreneurial ventures that have led me to today. I also talk about what you can expect in future podcasts, which I hope to put out every 2-4 weeks.

Items Mentioned in This Session:

Direct download: MB001.mp3
Category: -- posted at: 8:33pm EDT