Finding Off Market Multifamily Deals

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Ever wonder exactly how syndicators find off-market multifamily deals? Learn how on today’s Money Monday$!

VIDEO TRANSCRIPTION

00:00
to money mondays disrupt tv studios
00:03
how’s it going that’s going good man
00:05
we’re celebrating halloween
00:06
i’m givingly the dwarf and i got guy fox
00:08
here next to me so uh
00:09
hey you know i figured we’d step it up
00:11
so
00:13
my friend this is what ben used to look
00:15
like before he had hair guys if you
00:17
don’t realize
00:17
uh you know i worked really hard no it
00:20
looks pretty good man
00:21
yeah but monday monday do this every
00:23
monday 3 30 central we’ll talk about a
00:25
bunch of different topics for those of
00:27
you tuning in for the first time
00:29
we do it every monday and you know we’re
00:30
happy to basically
00:32
collect any ideas for topics people want
00:34
to see and if anyone has an idea feel
00:36
free to reach out let us know but this
00:38
week we are talking about
00:40
finding off market deals the holy grail
00:43
to our business i think that’s the uh
00:45
probably the biggest
00:46
myth in this business so we’ll talk
00:48
about what that actually means so stay
00:50
tuned
00:50
everybody yeah you know i mean i think
00:52
uh you know people are always like oh my
00:54
deal’s off market my deal is not off
00:56
market right you know
00:57
i i think we’re going to kind of get
00:58
into some of the the discrepancies in
01:00
that statement here in a little bit
01:02
right but
01:02
you know we want to kind of um you know
01:05
go through this kind of
01:06
celebrate halloween at the same time we
01:08
will take masks off here in a minute but
01:10
we wanted everybody that was kind of
01:11
joining us right off the bat
01:12
to kind of see us in this thing you know
01:15
but um
01:16
so all right let’s get right to it man
01:18
because we ran a little bit long last
01:20
time so we want to kind of be
01:21
respectful everybody’s time what
01:24
is an off-market deal off-market deal so
01:28
i think
01:28
you know everyone thinks an off-market
01:29
deals a deal it doesn’t go through a
01:31
broker
01:31
that only a mythical secret set of
01:34
people get to see
01:35
yeah right and i think you know for me
01:38
personally it’s one of the
01:40
almost annoying thing whenever some
01:41
someone buying a deal is like oh i got
01:43
it off market
01:44
you know but i saw that deal too i mean
01:46
so there’s a really off market right
01:48
so i think really the off market came
01:50
from you know probably in the past where
01:52
people used to do a lot more of mailers
01:56
and kind of soliciting buyers directly
01:58
yeah and unfortunately i think two
02:00
things it’s too hot of a market right
02:01
now
02:02
and honestly i mean the brokers are
02:04
really good at their job they do feel a
02:05
purpose right they are getting the top
02:07
dollar and so
02:08
most people you know most sellers don’t
02:10
really sell for off market and we’re
02:11
talking about bigger deals guys right
02:13
hundred units and above
02:14
yeah that’s actually because yes off
02:16
market still exists for smaller stuff
02:18
let’s actually focus on that real quick
02:19
because of some of our some of our
02:20
viewers right they might be trying to
02:22
start off get their first deal
02:23
right and i’m gonna have to take this
02:25
off man because guess what everybody as
02:27
everybody knows
02:29
i love my starbucks and i need to have a
02:31
set
02:32
so we’re gonna go ahead and bite that
02:33
bullet my friend but um
02:36
off market deals are probably direct to
02:38
seller is what i always considered off
02:40
market right
02:41
you know nothing that there’s no there’s
02:42
no broker involved there’s none of that
02:44
happening
02:45
and you can do that at the smaller level
02:47
right say one to fif
02:48
you know five to fifty units is probably
02:51
a good a good example of that right
02:52
where you could do a mailer
02:53
or you could maybe potentially have
02:55
somebody’s phone number you give them a
02:57
call and say hey are you interested in
02:58
selling
02:59
and we actually know people that have
03:00
done this you know what are you doing
03:02
man
03:02
focus i’m working on the hard stuff man
03:05
you get a so
03:06
five to 50 units true direct to seller
03:09
right that’s a thing right people are
03:12
able to get deals done sometimes that
03:14
way not all the time you’ll still see
03:15
those go through a broker as well
03:17
right but you’re probably the frequency
03:19
of that happening at that level is going
03:21
to be a lot more than
03:22
at say 50 and above or 100 and above
03:25
right
03:25
almost exclusively those are probably
03:27
going to go through a commercial real
03:29
estate broker
03:30
yeah you know which is really just an
03:31
agent folks they call them brokers for
03:33
some reason commercial
03:34
they’re just a real estate agent and um
03:37
they’re going out there
03:38
and they’re doing one of two things
03:41
first thing is
03:42
it’s on market now what is on market
03:44
that means they have the slick om
03:47
they’re emailing their whole entire list
03:50
they’re doing
03:50
property tours they’re doing best in
03:53
final offers
03:54
the whole shebang the whole entire
03:56
process to solicit the best
03:58
um offer for that deal right that’s an
04:00
on market deal
04:01
now off market right same size deal same
04:05
everything
04:06
but maybe for whatever reason we’ll get
04:08
into those why you would do this here in
04:09
a minute
04:10
the broker is just going to shop that to
04:13
probably his
04:14
10 20 top buyers right or people that he
04:17
knows are going to like that deal in
04:18
that market
04:19
or that size and he’s going to say
04:21
seller wants this
04:23
this is their terms here’s the
04:24
financials what can you do
04:26
right but ultimately there’s not a big
04:28
price discrepancy between what the
04:30
seller is going to accept on a
04:31
non-market deal versus what they’re
04:33
going to accept on the off market deal
04:34
right first of all market dictates what
04:36
the price is going to be one way or the
04:37
other
04:38
right you might have some high flyer
04:39
that comes in with some stupid money
04:42
you know on an on market deal but that
04:44
rarely ever happens
04:45
usually they’ll kick tires and then
04:47
they’ll back off most of the time
04:49
you’re gonna get what the what the
04:51
market dictates the price to be
04:52
and you can get that just as easily off
04:54
market as you can on market
04:56
yep right and so so for those of you
04:57
that are kind of newer right so let’s
04:58
talk about for if you’re a passive
05:00
investor
05:00
someone says off market right really dig
05:03
in and understand what that means and if
05:04
you’re a buyer a newer buyer
05:06
really what we talk about whenever we
05:07
say off market is hey we know the
05:09
brokers really well
05:11
right we’re on the short list right
05:12
we’re in a handful and literally right
05:14
before this i was telling ben there’s
05:15
one deal that we got to get back to the
05:16
broker on
05:17
yeah because really showed it to us and
05:18
i think three other groups right that’s
05:20
really an off market but guess what
05:21
they’re still a broker involved the
05:22
still getting there’s still some
05:23
competitiveness and the broker adds a
05:24
lot of value and they’re building
05:26
competitive value for us
05:27
and they’re adding value for the sellers
05:29
right moving the transaction quickly
05:31
he knows who’s hot and who’s not he
05:32
knows what to fit what’s not right so
05:34
it’s a win-win for everybody and so but
05:36
it’s not the mythical
05:38
hey you know i got it directly from the
05:40
seller and nobody else saw this deal
05:41
right
05:42
i’ve seen many deals where people say
05:43
it’s off market you know they’re out
05:45
there raising money
05:46
you know and i’ve seen that deal three
05:48
times to come around or or not even
05:50
direct to seller but saying that they’re
05:51
the only ones that the broker showed it
05:53
to
05:53
that trust me guys we have great
05:55
relationships especially with brokers
05:56
here in texas and in atlanta
05:58
they ain’t just showing it to us as much
05:59
as we would like to say that we’re the
06:01
cool guys in the room
06:02
right they’re definitely shopping it to
06:04
at least three to five other groups
06:06
yeah right because they do want to build
06:07
that that competitive environment but
06:09
let’s pause right there so for those of
06:11
you tuning in for the first time monday
06:12
mondays do this every monday 3 30
06:14
central
06:14
we’re talking about finding off market
06:16
deals but we talk about a lot of
06:17
different topics
06:18
and at the end we’re gonna do a
06:19
basically you know five ten minute q a
06:21
and so if anyone has any ideas for
06:22
future topics feel free to let us know
06:24
if anyone has any comments go ahead and
06:25
leave them and you know i’m gonna go
06:27
through a few of them so
06:28
jefferson says i love masks so do we so
06:31
you know we’ve got a lot of things in
06:32
common
06:33
uh amir says taking mass to a whole new
06:34
level of course that’s what we do here
06:36
at disrupt right we’re disrupting the
06:37
market of uh
06:39
masks uh mirror also says what’s up
06:41
what’s up amir we’re gonna see you
06:43
a lot more here soon kevin easterly says
06:46
money monday mondays absolutely kevin so
06:48
you know
06:49
we got to get you on the show next time
06:50
we’ll get you a mask as well this is
06:52
this is a kevin mask right here he
06:53
probably he probably would have picked
06:54
this match
06:55
you don’t think kevin wants to be a
06:56
dwarf no he’s a rebel he’s a rebel man
06:59
he wants to be dwarfish i think this guy
07:00
this guy could do some gym time
07:02
oh yeah he’s a lot more stronger than
07:03
your guys he definitely needs to go to
07:04
the cycle bar
07:05
but let’s keep going so back to our
07:08
topics
07:09
all right so why do off market deals
07:11
happen i think we kind of touched on
07:12
this a little bit right
07:13
you know i think it’s well no actually
07:16
we didn’t talk about it was why would
07:17
you do this
07:18
i mean so we’re doing it right now are
07:20
we so we have a deal in atlanta that
07:22
we’re selling if anyone wants to buy a
07:23
deal on atlanta let us know right
07:24
um it’s actually a nice deal right but
07:26
essentially it’s got a ton of meat on it
07:28
we’re not doing the entire cycle of you
07:32
know showing it to everybody blasting it
07:33
it’s really disruptive
07:35
sorry for the pun right to staff and you
07:37
know you get a lot of tire kickers this
07:39
or that versus
07:40
you know we we have a price in mind we
07:43
know we can probably get that price
07:44
right it’s realistic it’s not like we’re
07:46
shooting a high in the sky
07:47
and the brokers know who’s hot for deals
07:48
or not right so we don’t really need to
07:50
go through
07:51
all of the headache of doing the full
07:53
marketing cycle
07:54
whereas we you know if we hit our strike
07:56
we’re happy and we’re good to go
07:58
it’s because it’s a time suck for us
07:59
right as the seller
08:01
it’s also very very i guess
08:04
anxiety-ridden
08:05
process for the on-site staff right are
08:07
is this gonna be my new boss whenever
08:09
you’re doing property tours
08:11
you know they’re going to ask them a ton
08:12
of questions that’s disruptive to the
08:14
staff
08:14
right and they’re also thinking you know
08:17
should i say that was i allowed to say
08:18
that and what am i supposed to say
08:20
you know i mean that’s that’s why you
08:22
know the brokers over there trying to
08:23
coach the
08:23
you know the on-site manager and they
08:25
don’t want anybody to talk to the
08:26
maintenance guy because he’s probably
08:27
gonna say something stupid
08:29
you know ultimately then those people
08:31
are leaving they’re thinking am i gonna
08:32
have a job in the next two months
08:33
right so ultimately we like to get the
08:36
process a little bit farther along
08:37
have a psa in hand right that we feel
08:40
like is is
08:41
is solid then we would inform the
08:43
property management company or inform
08:44
the staff
08:45
right you know for for disrupt
08:47
management so
08:49
that’s why we do it now now everybody’s
08:51
the same way right but we
08:53
we tend to sell all of our deals off
08:54
market and we like to buy off
08:56
off-market deals too but we might do a
08:58
full market here soon so yeah who does
08:59
we’ll see
09:00
right so you know one of the other
09:02
questions that kind of came in how do
09:03
how do you find off market deals right i
09:06
think
09:06
ultimately everything that we keep
09:08
talking about it’s relationships
09:09
it’s numbers in this business folks
09:11
right so how do you find these types of
09:13
deals
09:13
you got to build relationships with the
09:15
business relationships relationships you
09:16
know
09:17
once again if you’re starting off and
09:18
you’re going for that 5 to 50 unit
09:20
right maybe come up with a yellow letter
09:23
campaign or
09:24
get a list and start cold calling people
09:26
once again your hit rate is going to be
09:28
very very slow
09:30
or very very low and it’s probably going
09:31
to be very very frustrating for quite
09:32
some time but you might get a hit
09:34
we know people that have actually
09:35
they’ve sent letters letters out they
09:36
got a hit
09:37
right so it does work maybe less than
09:40
one percent of the time
09:41
right so you send a thousand letters out
09:44
you can kind of do the back of the
09:45
napkin right you might get 10 responses
09:47
you know so that’s why we tend to focus
09:50
on the relationships that we have with
09:51
the brokers
09:52
and then they bring us off market deals
09:54
right absolutely so
09:55
the last thing that we’re kind of
09:56
talking about is what’s the benefits we
09:58
kind of talked about what’s the benefits
10:00
of uh of it for the seller
10:02
right us right because we’re going
10:03
through that process right now it’s it’s
10:05
less disruptive for the staff
10:07
we have less tire kickers it’s less work
10:08
for us right
10:10
what’s the benefit for the buyer and
10:12
i’ll give you a real example it’s just
10:13
so much less headache right on the
10:14
buyer’s side
10:15
you’re not doing the best and final and
10:16
then a triple best and final and then
10:18
three buyers interviews and then not
10:20
winning the deal ask me how i know all
10:22
right
10:22
i’m better uh but you know for a buyer
10:24
right you’re getting a few
10:26
you know you know you have a few other
10:27
competitors right you can be
10:29
candid with the seller or the the broker
10:31
and saying here’s my price and here’s
10:33
why it is sorry it’s not the right deal
10:34
for me or it is yeah right but you’re
10:35
not having to
10:37
deal with as much non as much noise
10:39
right you and the broker and the seller
10:40
can have a more
10:42
direct or more intimate conversation
10:44
right without all the noise of 50 offers
10:46
50 tours all that other crap
10:48
yeah that’s really i think on the buyer
10:50
side what it boils down to right you can
10:51
you know and then because there’s less
10:53
noise you probably can strike a more
10:54
unique deal than you may have otherwise
10:55
right i do like that’s maybe one other
10:57
thing to think about
10:58
yeah you can probably get a little bit
11:00
more creative right
11:01
you know the one thing that i like about
11:03
it you know from a buyer’s standpoint
11:04
we’re
11:05
we’re big proponents on having less
11:06
competition right you know
11:08
less competition usually means less of
11:10
the price being driven up
11:11
by some idiots that might come from
11:14
somewhere and i won’t name
11:16
names or places but you know they’ll
11:18
come in with money that they’ve got two
11:20
they’ve got more money than cents let’s
11:21
put it that way
11:22
and they’ll either come in with a very
11:24
very high offer or they’ll come in with
11:25
something crazy like a million
11:27
dollars non-refundable earnest money day
11:29
one
11:30
who’s going to be able to compete with
11:31
that right and ultimately a lot of those
11:33
people fall off they’re just trying to
11:34
wrap up the deal and then renegotiate it
11:36
after the fact
11:38
but sometimes those people are able to
11:40
kind of knock everybody out
11:41
they also sour the price though right
11:43
you know if somebody’s coming out but
11:44
if there’s a couple people that are a
11:45
million dollars more than everybody else
11:47
guess what the new price is it’s a
11:49
million dollars more yeah you know
11:50
because
11:51
hey if these couple groups are up here
11:53
and everybody else is down here
11:55
well what are these guys thinking right
11:56
and then they’ll really just
11:58
start laser focusing in on those two
12:00
groups and everybody else is pretty much
12:01
left to the wayside
12:02
so that’s what happens when you have too
12:04
much competition right now
12:06
covet is kind of damping that a little
12:08
bit but we’re starting to see
12:09
a lot of our friends are buying deals
12:11
you know i mean there’s stuff that’s
12:12
happening
12:13
you know things that were probably would
12:15
have happened over the summer
12:16
are now happening now because of covet
12:18
and so you know those are some of the
12:19
benefits right
12:20
you know that you’re going to see on
12:21
these off-market deals and why you would
12:23
do these
12:24
absolutely so for those pause right
12:26
there i gotta i gotta pause ben because
12:28
otherwise we’ll keep going
12:29
and going and going starbucks is pretty
12:31
good but money monday’s reduce every
12:33
monday 3 30 central we talk about a
12:34
bunch of different topics this week
12:35
we’re talking about finding off market
12:37
deals
12:37
if anyone has any future idea topics let
12:39
us know we’re open books we’re happy to
12:41
talk about just about anything
12:42
if anyone has any comments feel free to
12:44
drop them let us know i’m going to go
12:45
through a few
12:46
comments on newer says boo money mondays
12:48
money mondays boo back date you
12:50
so here’s our masks um i actually
12:53
dressed up as mr incredible but i forgot
12:54
my outfit so i
12:55
don’t know dude you’re the one over
12:57
there the one that you showed me over
12:58
the weekend was pretty cool
13:00
that was my uh that was my costume with
13:01
the kids but it’s all good
13:03
family dressed up as that one uh let’s
13:04
see uh chat says hello guys
13:08
hey chad how you doing she has a top fan
13:10
award which
13:11
leads me to ronnie who i’m sure is
13:12
probably envious that chad has a top fan
13:14
award where are you at ronnie i don’t
13:16
know why
13:16
it’s funny that the chat well well done
13:18
chad is a top fan ronnie not as much as
13:19
a top fan sorry ronnie
13:20
all right buddy says what’s up guys uh
13:23
it says i’d like to disrupt
13:24
the bluetooth polos one of y’all getting
13:26
plaid ones
13:27
i was looking man i don’t know you gotta
13:29
probably get that somewhere custom
13:30
custom made man you know so i was i went
13:32
through i went for another polo cause
13:34
i’m kind of a polo type guy
13:35
yeah i’m more of a tommy hilfiger now
13:37
kitty oh
13:38
all right uh so that said i think we’re
13:41
ready for a q a
13:42
yeah well let’s do a little bit look we
13:43
got one question that came in right yeah
13:45
so i don’t have any comments questions
13:47
feel free to drop them in the meantime
13:48
but
13:49
out of our deal flow right how many
13:51
would you say are off market deals
13:53
versus
13:53
on market i’d say you’re kind of our
13:56
acquisition so
13:58
being on market you know it’s easy as
14:02
just
14:02
giving someone an email address right so
14:04
you know you get a lot of noise
14:06
well i guess the deals that we focus on
14:07
though right versus what we see
14:09
let’s say let’s talk about 80 percent or
14:11
on market 20 are off market right
14:13
okay you know but a lot of the on market
14:16
one maybe they’re in the markets that we
14:18
focus on
14:19
but they’re not deals that we’re
14:20
spinning up the entire system right yeah
14:22
so
14:22
yeah we still kind of eyeball them
14:24
versus the off market one we take a lot
14:26
closer look at most of those because
14:27
those are very much brokers like hey
14:29
you’re you know i went to shortlist
14:30
here’s the situation here’s the price
14:31
here’s this this so as a buyer one other
14:33
thing we didn’t mention what’s nice
14:34
about the on market deal
14:35
usually there’s a price a very clear
14:37
price right hey you hit this it’s yours
14:39
not this well we’re kind of aiming for
14:41
this or that right yeah it’s a little
14:42
bit more loose
14:43
i would say yeah you know um and that’s
14:46
that i think that’s why we kind of
14:47
we kind of gravitate towards it there’s
14:48
there’s a way like you had said earlier
14:50
to kind of maybe negotiate it like how
14:51
can we
14:52
how can we uh you know sweeten our deal
14:54
a little bit right
14:55
through better terms or something else
14:56
getting creative so we can ultimately
14:58
win it and on those types of
14:59
transactions you can do that right
15:01
versus on an on market right it’s all
15:02
about price price price you know
15:04
call for offers best and final best in
15:06
final number two
15:07
investor question or seller
15:09
questionnaire seller wants to do
15:11
you know a questionnaire and hey do you
15:12
have any more juice i know we just did
15:13
two best in fact yeah
15:14
like i don’t know you know we’re going
15:15
to talk about the price right you know
15:16
i’m like really this is
15:17
how many best and finals we got going on
15:19
here and for all my broker friends out
15:20
there i’m sorry but we just have to kind
15:22
of say that
15:22
well we had a bad morning we thought we
15:24
thought we had a deal and
15:26
you know so we already went through that
15:27
process so ben’s already had five
15:28
coffees to make up for
15:29
making up for it so all right so we got
15:32
any q a that we’re going through
15:33
yeah so let’s see so chat says what an
15:35
honor top fan
15:36
and uh we i thought i thought that was
15:39
wrong i liked it but i guess the
15:40
the disrupt liked it i thought
15:41
sabrando’s gonna be a good sport and he
15:43
liked her comment but
15:45
but anyone has any more comments
15:47
questions feel free to let us know
15:50
come on this is a pro i think one
15:52
question that came in how aggressive can
15:54
you be with off market offers
15:57
i think just as just as likely you can
15:59
be aggressive on that versus i would say
16:01
it’s really not much different honestly
16:03
except for you can kind of again because
16:05
there’s a lot less people
16:06
you’re not really as worried about where
16:09
all the other noise might shake out
16:10
you’re really just talking to the broker
16:11
hey here’s my price but i need this this
16:13
this
16:14
the broker can go have a direct
16:15
conversation with the seller and you’re
16:17
not time boxed like
16:18
oh you know deadlines are tomorrow any
16:20
of that stuff and the broker can come
16:21
back and tell you hey
16:22
yeah here’s where he’s at he wanted to
16:24
counter he did he wants to
16:26
he’ll accept the hard money but won’t
16:27
give you early access or whatever it is
16:28
right so you can
16:29
i’d say you can probably get more
16:31
creative with an off-market deal but you
16:32
just say in terms of aggressiveness is
16:34
the same i guess i don’t like the
16:35
question
16:35
the way it was asked maybe the better
16:37
question to me is how different can
16:39
offers be and i’d say
16:40
very similar but you can get more
16:42
creative yeah yeah and once again i go
16:44
i’ll i’ll answer that question you can
16:46
be just as aggressive on a non-market
16:48
deal as you are in off market right it
16:49
really just depends on
16:50
what you know how aggressive do you want
16:52
to be on that deal maybe it’s a deal
16:53
that
16:54
you love that part of town you love that
16:56
vintage that is your deal you see a
16:58
clear path to executing your business
16:59
plan
17:00
you might step up a little bit right but
17:01
that could just as easily happen on a
17:03
non-market deal as it could be on an off
17:04
market right
17:05
you know i don’t that’s where the
17:06
misconception is i think really where
17:08
that where that question is kind of
17:09
coming from is
17:10
you know are you going to see more
17:12
aggressive offers on an on market deal
17:14
versus an off market and i’d say
17:15
not really you know you might have like
17:18
like i said you might have some idiots
17:20
that are somewhere that might throw some
17:21
high ball offer out there but
17:23
at the end of the day that could just as
17:25
easily happen on off market deal
17:26
right and ultimately what i love about
17:28
off-market deals is especially as a
17:29
seller
17:30
i’m dictating what my price is going to
17:31
be right my strike is this
17:34
you know and then i determine if i want
17:35
to take something less than that right
17:37
you know and you know then you can kind
17:39
of test the market almost
17:40
yeah right you know without having to
17:42
commit to anything that’s also another
17:44
benefit of going with the off-market
17:46
kind of process
17:47
absolutely all right so if somebody’s
17:50
getting
17:51
well no one has any more good yeah no no
17:54
no no go ahead man you’re no
17:55
no no no no you got it sorry i don’t
17:56
like where you’re going you go ahead
17:57
paper scissors rock
17:59
everyone’s going to watch me beat your
18:00
papers as a rock right here right now
18:00
let’s do it boom
18:02
boom boom boom boom all right all right
18:06
all right
18:06
so what does that mean do i go first
18:08
yeah all right so i’m getting started in
18:10
multi-family
18:11
uh you want to learn some tips right you
18:13
know we have got a cheat sheet for you
18:15
so disrupt equity.com
18:17
mf cheat sheet you know it’s completely
18:20
free
18:20
we’re not trying to sell you anything
18:22
right now
18:24
on the second bullet point i am trying
18:25
to sell you something but i’m going to
18:26
give you a good deal on it right you
18:28
know go to investoracademy.net right
18:30
and it will show you how to become a
18:31
multi-family deal sponsor right
18:33
me and ferris we spend hours sweating
18:36
blood sweat and tears into these things
18:37
we put hours of content online
18:39
we walk step by step on how to on how to
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show people how to be a deal sponsor
18:44
how to show people how to be a passive
18:45
investor how to underwrite deals
18:47
and just how to understand multi-family
18:48
in general right so once again for our
18:50
viewers because you guys
18:52
are very very loyal and we appreciate
18:53
you guys tuning in
18:55
money mondays the coupon code get 30 off
18:57
there
18:58
you know we love you guys i want you
18:59
guys to kind of you know learn the
19:00
business the right way
19:02
right there’s not going to be any upsell
19:03
there it’s just a straight up course you
19:05
guys can kind of look at it on you know
19:06
at your leisure from your tablet tablet
19:09
laptop
19:10
computer so we’ve got two questions that
19:12
came in
19:13
um our friend cody says are you seeing
19:15
as many off market deals now postcode
19:16
but as pre-covered
19:18
um no i wouldn’t say as many the
19:21
you know it’s i think the ones that are
19:24
in
19:25
in dire situations still haven’t really
19:27
hit
19:28
right those guys got forbearance they
19:29
got other things to kind of save them
19:31
yeah and honestly right now
19:34
you know right now the guys that wanted
19:36
to sell if you kind of think about it
19:37
right we have the election tomorrow
19:39
we have cover that kind of happened the
19:40
guys a lot of people sold
19:42
you know in the spring right then code
19:44
would happen so kind of pent up demand
19:46
so you had a lot that just hit the
19:48
market where people like hey we just
19:49
want to
19:49
sell this the time to sucker it before
19:52
the election so yeah august
19:54
was kind of the time so a lot of stuff
19:55
hit the hit the market yes we got some
19:57
off market deals
19:59
would i say more no or would i say even
20:01
they’re not really that different yeah
20:03
like overall there’s definitely less
20:05
supply right now
20:06
right i think that people are holding on
20:09
they’re trying to figure out what’s
20:10
going to happen with the election what’s
20:11
going to happen with stimulus what’s
20:12
going to happen with eviction
20:13
moratoriums i think a lot
20:14
i think you’re going to see a ton of
20:15
deals go on the market probably q1
20:18
right and some are gonna be because they
20:20
have to right they’ve just they’ve maxed
20:22
out what they can potentially do on
20:24
their own and they just have to sell the
20:25
deal
20:26
or you know they’re just you know that’s
20:28
just the the frequency of how this stuff
20:30
happens because
20:30
it’s cyclical right you usually see
20:32
stuff come on february
20:34
march april right and then you’ll kind
20:35
of see stuff in the in the tail end of
20:37
the summer
20:38
right so i would say definitely volume
20:40
is down but the percentage of off market
20:42
on market is about the same from what
20:44
i’ve seen
20:44
right all right man so let’s see we got
20:47
one more
20:47
from our buddy ryan uh ronnie ryan
20:49
ronnie uh
20:51
what’s your name ronnie phillip without
20:53
the s guys not phillips
20:55
uh you called him philip for like six
20:56
months dude thoughts
20:58
we love your friends deals in the
21:00
current market um i think it’s very
21:02
even market specific right i think some
21:03
markets you could find
21:05
great price points like i say deals
21:06
where there’s not a lot of institutional
21:08
on the side yeah um other markets i mean
21:11
stuff is hot so
21:13
you know the thought process is while
21:16
the class a people won’t have as much to
21:18
link once he arguably
21:19
as class c right class c is more retail
21:22
more front
21:22
you know you people facing jobs
21:24
unfortunately right class a can do more
21:26
work from home
21:27
usually and so you have that benefit
21:29
going for you but then also class a
21:31
right if you’re talking about depends on
21:32
what kind of
21:32
tier within class a yeah but class a’s
21:35
work you know people have to compete on
21:37
price and that’s
21:37
not always the best place to be either
21:39
yeah and once again it’s i would say
21:41
that it’s really sub-market-driven like
21:43
to make to take a bl a broad swath of oh
21:45
class a is going to hurt because
21:47
you know blah blah blah or whatever and
21:49
class b is the place to be
21:50
i think it’s all that’s what i love
21:52
about real estate right it’s hyper local
21:54
you know what might be working in
21:55
atlanta doesn’t necessarily work in
21:57
houston and vice versa
21:58
you know you have to look at each market
22:00
that you’re in and saying what’s working
22:02
in this market and why
22:03
right and then invest accordingly right
22:06
so you know i mean we we’re looking at
22:07
some class a deals here in texas
22:09
and they’re working right whereas before
22:12
they weren’t
22:13
right you know but why are they you
22:14
start kind of you know take taking a
22:16
step back and look at it holistically
22:18
and you figure out you know there’s
22:19
there’s certain reasons why we’ve
22:20
stepped into that market right
22:22
you know all right all right what else
22:24
do we got one more question so jefferson
22:26
says any opinion on buying distressed
22:28
properties at 65
22:30
market price and able to refi and get
22:32
all money back in two or three years
22:34
do those still still exist oh yeah they
22:36
still exist i thought he had one i was
22:38
like i don’t know is that a good deal
22:39
yeah i mean honestly there’s no shame in
22:41
buying a deal where you got to do bridge
22:42
right yeah dude you know we’ve looked at
22:44
those kind of deals we’ve done those
22:45
types of deals yeah so
22:47
you know do we think you can get a
22:49
refund in two to three years yes are low
22:50
interest rates here to stay let me check
22:52
my crystal ball
22:53
it tells me i don’t know but i do think
22:55
that they’re probably here for a while
22:56
right and you know and if not just have
22:58
contingency plans make sure you have
22:59
more reserves than you need
23:00
make sure that if you can’t go out 80
23:02
percent leverage but you can go out 70
23:04
that you’re not yeah
23:05
going to be underwater right so and
23:06
check out peak my uh financing right
23:08
anton matli he’s always sizing up all of
23:10
our deals
23:11
you know the guy really knows his stuff
23:13
and he’ll it’ll kind of tell you the
23:14
bridge market has changed since covered
23:15
like a lot of people
23:16
pulled out you know so that’s it makes
23:19
it a little bit more challenging to do
23:20
those deals but
23:21
absolutely don’t shy away from a deal
23:23
just because it’s bridge
23:24
right a lot of the good bridge lenders
23:26
will give you a three-year term
23:27
with two one-year extensions that’s five
23:29
years folks that you can get your
23:30
business plan done
23:31
if you can’t get it done in five years
23:32
you’re probably not doing something
23:34
right so
23:35
you know ultimately it’s not like one of
23:36
those things where you’re going to flip
23:37
out of a hard money loan in six months
23:39
yeah right so that’s the misconception
23:40
about bridge so
23:42
yes i mean we’re we’re down on one
23:43
bridge loan i think on our assets
23:45
one bridge so we did a big refi last
23:47
friday so that’s a good one right
23:50
that was a bridge to a fanny and it’s a
23:52
lot more work than we expected and you
23:54
know
23:54
just there’s all sorts of things that
23:56
you kind of have to work through so well
23:58
i mean one thing that we’ll point out
23:59
right and we’ll we’ll do a little bit of
24:00
a case study on this in the coming weeks
24:02
right so i’m not gonna i’m not gonna
24:03
completely spoil that but
24:04
you know um there’s definitely some new
24:06
escrows because of coven yep
24:08
right so you know we’ll kind of get into
24:09
that in the coming weeks we have 886 000
24:12
sitting in an account that the lender is
24:14
holding but we can get that in nine
24:15
months right because
24:17
maybe 12. i don’t know it’s still two i
24:19
think i think nine months is the
24:20
quickest you can ask for it right as
24:21
long as you
24:21
me and ben have a bet here he’s learned
24:23
not to bet me because i just kicked his
24:24
butt at
24:25
basically rock paper scissors paper says
24:27
rock but uh i’m telling him in nine
24:28
months is whenever according to the
24:30
paperwork we can request it in nine
24:31
months
24:31
and as long as we get it we meet the
24:33
stress tests
24:34
uh they don’t actually release it for 12
24:36
months i dispute it all right
24:38
bet you we’ll we’ll review the loan
24:40
agreement
24:41
bottom line that’s still new i’m not no
24:44
hell no i need to get on video evidence
24:45
all right
24:46
no but you know with the money sitting
24:48
with the lender and at some point we’ll
24:49
get that back and that’ll just be
24:50
straight cash to our investors but
24:52
at the end of the day that’s different
24:53
than it was six months ago
24:55
so you know i mean refinances you can
24:58
still get them done
24:59
but the other thing that they’re really
25:00
looking at is delinquency right you know
25:02
across the board in our industry that is
25:04
that is a
25:05
the underlying problem that a lot of
25:06
people are not talking about is that
25:08
there’s people that are just aren’t
25:09
paying their rent and then you can evict
25:10
and if you are so the balance continues
25:12
to get yeah and maybe this is a good
25:13
thing because this came up um
25:15
you know for our management company
25:16
right one of the people we managed it’s
25:18
kind of
25:19
talking to them basically one thing a
25:20
lot of syndicators don’t realize is the
25:22
difference between what accrual versus
25:24
cash basis actually does to the
25:25
financials right
25:26
you can a deal can look like it’s home
25:28
running on the collection side if you’re
25:29
never writing off your bad debt yep
25:31
right and as an owner you can take
25:33
pretty much as long as you need to to
25:34
write off your bad debt if you can’t
25:35
move the personnel
25:36
arguably is that bad debt when is it
25:38
considered bad debt right
25:39
well no but but but you could the flip
25:41
side is we’ve had people come in
25:42
six months later with five thousand
25:44
dollar checks and said hey i’m here to
25:45
take out my whole entire balance too and
25:47
so um i like those tenants uh but
25:48
basically
25:49
what we’re getting at is that it’s
25:51
important to understand what
25:53
the cash collections and number actually
25:55
is that is true money in the bank
25:57
and so if you’re a buyer definitely ask
25:59
for that from the sellers
26:00
and lenders aren’t stupid they ask just
26:02
that too and you’re doing it you know
26:03
they get into all that right they’re
26:04
getting that
26:05
you know they want to make sure luckily
26:06
that deal is collecting cash so i’m
26:08
definitely proud of the team for that
26:09
one so team i know you guys
26:10
the team does watch our show so team you
26:12
know definitely appreciate your
26:13
hard work on that one oh great job guys
26:15
so uh but you know it makes a difference
26:17
right and so just know that if you’re
26:18
going in for a refi right
26:20
it’s not just what your noi looks like
26:22
according to your accrual basis they’re
26:24
going to ask what is your collections
26:25
well why aren’t you writing it off and
26:26
that can screw things up no
26:27
what is it what’s your delinquency right
26:28
there they’re good they’re going to look
26:29
at it i believe it worked out for us on
26:31
that one yeah
26:31
just kind of you start to realize how
26:32
much they did again on some of these
26:33
other nuances
26:35
so i know we went off on a little bit of
26:36
a tangent but that’s that’s the answer
26:37
to your question
26:38
all right let’s see the jefferson says
26:39
okay mark in this date in nine months
26:41
that will get refinanced or not
26:42
that’s the question in the case study
26:43
will be awesome transition from birch to
26:45
fainting yeah
26:45
nine months you guys heard it here i’m
26:48
gonna find out before we do our case
26:49
study
26:50
and then i’m gonna make him stroke me a
26:51
check for 100k or
26:53
you’re going to stroke me a check for
26:54
100k not an ore but
26:56
you mean but that said money monday
26:59
through this every monday 3 30 central
27:01
talk about a bunch of different topics
27:02
we’re talking obviously about finding
27:04
off market deals
27:05
today is kind of that was a topic
27:07
usually at the last five ten minutes
27:08
we’re doing q a like we are now
27:10
but we’re open to topics we’re open
27:11
suggestions so if you don’t have any top
27:13
any comments questions feel free to let
27:15
us know yeah we want it to be
27:16
interactive folks like you know you’re
27:17
seeing people comment right we want
27:19
people to comment we want people to ask
27:20
questions we want people to
27:22
you know propose topics right now we
27:24
don’t have to just talk about
27:25
multifamily we know a lot about real
27:26
estate we know a lot about
27:28
running businesses being an entrepreneur
27:30
technology
27:31
you know so i mean if any of that stuff
27:33
you know resonates with you guys you
27:34
guys want us to dive a little bit deeper
27:35
in that we’re open to suggestions
27:37
but before we wrap up what’s next week’s
27:39
topic
27:40
ben got nervous there he was wishing he
27:42
were the mask so i wouldn’t see the
27:43
nervousness the deer at the headlights
27:45
kind of uh the face because that was so
27:47
hard the question i was going to ask but
27:49
yeah now you guys what you don’t see is
27:50
i get to see the preview of what the
27:52
next one is you know so
27:54
you didn’t know what the question was
27:55
that’s why you got nervous how do you
27:56
how do you refinance your multi-family
27:58
property which is what we’re talking
27:59
about so i guess we’re doing that case
28:00
study next week
28:02
so i guess we’re amazing we mentioned it
28:03
this morning and now it’s on the agenda
28:04
for next week so
28:06
shanna is on top of that i know i don’t
28:07
know so um you know so we’ll go through
28:09
this
28:10
this is gonna be we’ll open up our
28:11
kimono this could be the good the bad
28:13
and the ugly because we want people once
28:14
again to do the business the right way
28:16
so we’ll kind of go through what
28:17
happened on this is real world just
28:19
closed on friday
28:20
case study so you guys need to tune in
28:22
for that it should be exciting
28:24
says uh i just totally clicked off
28:28
he was saying he said wait for it
28:31
wait for it waiting for it to load still
28:33
waiting for it to load all right so
28:34
great info guys thank you you’re welcome
28:36
all right thanks buddy all right with
28:38
that said
28:40
going once if anyone has any more amanda
28:42
larson how’s it going amanda long 10 0c
28:44
says great topic looking forward to it
28:46
thank you thank you thank you looking
28:47
forward to that
28:48
hopefully you host another event here
28:50
soon and we’ll make sure we’ll make that
28:51
oh
28:51
actually no we are hosting an event mfin
28:55
oh well i met amanda hosting a small kid
28:59
yeah geez way to take away amanda’s
29:01
thunder sorry amanda ben
29:02
tends to do that but ben’s right mfi n
29:04
we did last week decide we will do our
29:06
next conference multi-family investor
29:07
network february 27th february 27th
29:10
here in houston folks so that’s the
29:12
that’s our big one right
29:13
the flag we’re going through here we
29:14
have almost 400 people in we had the
29:16
mayor of houston
29:17
all sorts of breakout panels so one
29:19
action-packed day
29:20
open up calendars keep it empty february
29:23
27th look forward to seeing you guys
29:27
yeah we’ll have some coupon codes and
29:28
some other stuff just to kind of make it
29:30
you know um you know because we want as
29:31
many people there yeah so we’re gonna
29:33
have an opportunity absolutely all right
29:35
so we’re gonna
29:36
call it a wrap then all right everybody
29:38
very much we will see you next week

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