Getting Started as a Multifamily Investor!

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Whether you are interested passive investing or taking down your own deals- go grab our multifamily investing cheat sheet that lays out the action items you should take when investing in multifamily real estate!

VIDEO TRANSCRIPTION

00:00
uh welcome to monday mondays everybody
00:01
down from five dude i was counting down
00:03
from five all right
00:04
well you gotta get you know your
00:05
daughter i don’t know if i’m gonna say
00:07
her name but get her up here she can
00:08
kind of do the countdown for us
00:09
she might yeah she might have better
00:10
luck than i do and then sometimes once
00:12
you get past four man
00:13
it’s it’s all bars off you know so
00:15
welcome monday mondays everybody
00:17
money mondays disrupt tv ben
00:20
ferris are your hosts and what are we
00:22
talking about today man
00:24
we are talking about how people can get
00:26
started in multi-family investing right
00:28
as an investor so
00:30
you know just kind of the ins and outs
00:31
what it takes some things to consider
00:33
right i know a lot of people came from
00:34
residential including myself right and
00:36
really talking through how that compares
00:37
and so
00:38
you know yeah that’s probably our topic
00:40
today so for those who don’t know
00:41
our money mondays every monday at 3 30
00:44
central
00:45
right we will go through all sorts of
00:47
different topics usually have one key
00:48
thing that we’re presenting but again
00:50
we’re happy to
00:51
talk about other things people want to
00:52
talk about so you’re welcome to ask
00:54
questions we will go through those live
00:55
here q
00:56
a and feel free to let us know what you
00:58
guys want to know what things are
00:59
interesting what’s going on in your
01:00
world we’re happy to talk to them
01:01
yeah i mean we’re we’re coming up with a
01:03
lot of these on our own uh in terms of
01:04
the the topics
01:07
yeah we do want it to well we want it to
01:09
be interactive folks right so i mean
01:10
and we’ve told us told you guys this in
01:12
the past right we didn’t have to be
01:13
multi-family don’t even have to be real
01:14
estate related right we could talk about
01:16
being an entrepreneur
01:17
being a business owner tips and tricks
01:19
to you know be a better businessman
01:21
right more importantly i thought about
01:23
this today whenever i put the shirt on
01:25
ronnie just said he didn’t get the memo
01:28
so how’s it going ronnie long time to
01:30
see
01:30
it’s funny man like every time on monday
01:32
mornings i’m like ronnie
01:34
ronnie has to be nervous whenever i wear
01:35
him should i wear a plaid this morning
01:37
and then i think
01:38
no you know ronnie would not ronnie
01:40
would not like not approve
01:42
no he would not approve so no man so
01:44
how’s it going buddy
01:45
thanks for always thanks for always
01:46
tuning in man yeah you know but uh
01:49
all right so let’s kick this thing off
01:51
man so
01:52
we have a couple questions here you know
01:55
what makes multifamily
01:57
investing i guess so popular i mean you
02:00
know lucrative whatever you would like
02:01
to call it right it seems to be one of
02:03
those things that’s
02:04
even through kovid it has still been
02:06
very very popular yeah i think it’s
02:08
getting more popular i have a theory
02:09
that i think in the long run
02:11
multi-family cap rates will compress
02:12
right it’s a reminder to everybody that
02:14
hey you know so what is that let’s let’s
02:16
step back you’re throwing some
02:18
technology basically the things are
02:20
going to get more value because there’s
02:21
gonna be a lot more interest
02:22
let’s keep it dead simple well or things
02:23
might be getting you look at the flip
02:25
side right and things are gonna get more
02:26
expensive
02:27
no no but more valuable i meant more
02:28
expensive yeah yeah yeah
02:30
gotcha people there’s gonna be more
02:32
demand therefore
02:33
people that currently own it it’s gonna
02:34
increase in value because it’s getting
02:36
more expensive
02:37
so if you bought five years ago
02:41
you’re probably sitting pretty
02:42
absolutely yeah no but that doesn’t mean
02:44
that you still can’t find deals we’re
02:45
making offers
02:46
we’re you know there’s still stuff out
02:47
there so you just have to buy
02:49
at the right cap rate for that area and
02:51
make sure that your rent’s supported
02:52
yeah i know absolutely so
02:53
you know it’s um it’s a good place to be
02:55
and i think we’re going to see
02:56
where where the next six months go right
02:58
we’ll start to see if
03:00
some of these multi-family deals you
03:01
know don’t perform as well as they used
03:03
to right and maybe we can pick up some
03:04
deals cheap or maybe they continue to so
03:06
we’ll see what happens
03:07
never know right i think you know it was
03:08
one of those things if you would ask me
03:10
the same question back in
03:12
april i probably would i probably would
03:14
have had a little bit more of a bearish
03:15
look on the whole market but you know
03:17
once again multi-family and this is one
03:19
of these are
03:20
one of the reasons why me and ferris got
03:21
into multi-family is because
03:23
it is so resilient right it’s you know
03:25
we are providing housing
03:27
to a very very big sector of of the
03:29
united states right
03:31
you know and our biggest partner is the
03:32
federal government they are in it’s
03:34
it’s in their best interest to make sure
03:35
that these are performed that people can
03:37
pay their rent
03:38
and that these properties provide
03:39
affordable clean quality housing right
03:41
and that’s that’s that’s how we’re
03:43
that’s how we serve the market
03:44
absolutely but let’s let’s rewind a
03:46
little bit so let’s talk about
03:48
do you like multi-family ben i do like
03:50
multi-family all right good
03:51
because that was probably the only
03:52
answer you could give um but no we love
03:54
multiple but i’ll tell you guys why
03:56
right i think one of our on our slides
03:57
one of the questions is what makes
03:58
multifamily investing so lucrative and
04:00
i’m going to answer it
04:01
is you know i came from a software
04:02
background i like things at scale and
04:03
what i like about multifamily is that it
04:05
does scale yes
04:06
right came from the residential side my
04:08
very first purchase of the four plex
04:09
it’s about a mile down the road from the
04:10
office and
04:12
it you know i got a taste of it but then
04:14
i bought a bunch of houses you realize
04:15
it does not scale very well right you
04:16
end up having 12 loans 12
04:18
insurance policies 12 everything right
04:21
and it kind of sucks
04:22
so multifamily is complete opposite
04:23
right especially if you’re in
04:24
syndication syndication is
04:26
very much a scalable type business if
04:28
you can run a business appropriately
04:30
and so i mean i think you know that
04:32
that’s what attracted me to multifamily
04:33
and really the biggest thing to me is
04:35
just
04:35
around how you can do force appreciation
04:37
that’s what made it more lucrative for
04:38
me is that
04:39
i like that too i can’t make a house in
04:41
the neighborhood be worth more than the
04:42
other houses right even if i put
04:44
if i put a million dollars into that
04:45
house i probably am not going to get
04:46
because it’s all driven by comps right
04:49
sales comps right that’s probably let’s
04:51
step back let’s let’s
04:52
and talk about that right you know
04:54
because i think this is one of the
04:55
biggest differentiators i say from
04:57
single family to multi-family right
04:59
you know so what is forced appreciation
05:01
force appreciation so let’s go back
05:02
against the cap rate somehow i keep
05:04
talking about cap rate for those who
05:05
don’t know what is a cap rate a cap rate
05:07
essentially is a way
05:08
to identify a property’s value relative
05:11
to other properties
05:12
right like ben said in a neighborhood
05:13
you have comps cops are attractive
05:16
because you can say what the house next
05:17
door the house is street over what those
05:18
are worth
05:19
because they’re all generally very
05:20
similar well in the commercial world you
05:22
don’t have as many comps nearby to
05:24
compare again so instead
05:26
cap rate is how they look at it right
05:27
this is a five cap area this is a six
05:29
cap and really all it means
05:31
if you bought the property cash and did
05:33
nothing different than what the previous
05:35
owner is doing
05:36
right how much can you get return on
05:37
your cash and so if you’re buying a deal
05:39
that’s a five cap
05:41
right if i bought it cash again i’m
05:43
taking leverage and the benefits of
05:44
leverage out of the equation
05:46
i bought it cash and i’m not going to do
05:48
anything special i’m going to operate it
05:49
just as
05:50
effectively or ineffectively as the
05:52
current owner right what would i
05:53
get return wise that’s what a cap is now
05:56
with multi-family right the cap
05:57
referring to for
05:58
the sorry the equation for cap rate it’s
06:00
noi over value equals your cap
06:03
so if you’re in an area that’s a five
06:05
cap five is a fixed number it’s not
06:07
changing
06:07
right now your noi is what you can
06:10
change right i can do things to improve
06:12
my oi
06:13
i can make interior upgrades i can right
06:16
net operating income i can you know
06:18
update the interiors i can install
06:20
carports things are going to boost my
06:21
income yep well if i boost my
06:23
income then my value x what i’m solving
06:26
for actually goes up
06:27
right and so that’s the theoretical
06:29
value of the property so you can do
06:31
those kind of things in multi-family to
06:32
me that was
06:33
the gravy i’m like okay i can actually
06:34
control that whereas i can’t control
06:36
comps
06:36
controllability scalability right you
06:39
know some of the other things that we
06:41
really love about it and this was
06:42
something that really wasn’t talked
06:44
about when we first got into the
06:45
business but now
06:46
the last few years is becoming very very
06:48
important you know to make a lot of
06:49
these deals work right it’s depreciation
06:52
right you know and so essentially what
06:54
it is you know
06:55
and and some of the cost sag has already
06:57
been around it been around for years
06:59
what’s happened through some of these
07:01
these acts
07:02
you know the jobs acts or whatever right
07:05
is they’ve introduced stuff that
07:06
makes cost segregation even better right
07:09
it it makes it uh
07:11
bigger and maybe you are able to pull
07:13
some things ahead
07:14
you know in the first year or two versus
07:16
having to wait over a course of
07:17
you know say five to ten you know so
07:19
you’ve got bonus depreciation now right
07:22
so those things you know come off come
07:24
along to a partner
07:25
in the deal on your k1 as a paper loss
07:28
right so you could be
07:29
you could be profitable but on paper it
07:31
looks like you’re losing money
07:33
because of this depreciation component
07:35
right so therefore all that flows down
07:37
to your personal tax return and that’s
07:40
gonna offset some of your passive income
07:42
if you have other passive income or if
07:43
you’re a real estate professional
07:45
some of your active income too right you
07:47
know check with your cpa we’re not cpas
07:49
there’s a lot of things that go into
07:50
this right yeah you don’t want ben to be
07:51
yours
07:52
you don’t want me to be a cpa right you
07:53
know we pay we pay good money to good
07:55
people to do that for us right but
07:57
you know bottom line it starts becoming
07:58
very very powerful
08:00
and so depreciation is another reason
08:01
why we think multi-family is
08:03
is one of the most lucrative asset
08:06
classes to be in
08:07
right so let’s talk about roles man
08:10
you know if somebody’s getting in trying
08:12
to get into you know multi-family
08:14
trying to be a syndicator or trying to
08:16
add value to a group that’s doing deals
08:18
you know what are some of the roles that
08:19
they can add before we talk about roles
08:21
let’s quickly so update people so
08:22
okay you know everyone you’re watching
08:24
multi you’re watching now money mondays
08:25
we do it every monday 3 30 central
08:27
right and the goal really we’re talking
08:28
about different topics today we’re
08:30
talking about
08:31
getting into multi-family and there’s
08:33
the being the beginning parts of the
08:35
multi-family business
08:36
you know at the end of it we’d like to
08:37
do open q a so you guys are welcome to
08:39
leave comments questions and we will go
08:41
through them live
08:42
um i know we have one coming up i’m
08:44
actually i’ll answer this one right now
08:45
savion how’s it going again nice times
08:47
but um you know he’s asking how many
08:49
projects would you say you guys aim to
08:50
do per year
08:51
i’d say in terms of acquisitions four to
08:53
eight yeah somewhere somewhere in that
08:54
range is what we’re trying to right
08:57
you know ultimately this year because of
08:59
covid we’re probably gonna be probably
09:00
not going to hit that goal but
09:01
two yeah yeah if we could do two we’ll
09:03
be happy campers right yeah
09:05
so so um keep going so roles you can
09:07
play in multi-family so the first and on
09:09
first and foremost and the way most
09:10
people get started passive investor yep
09:12
right
09:13
go find deals to invest in and it’s not
09:15
hard you can meet people at conferences
09:16
events
09:17
referrals friends you know and
09:20
finding deals that are attractive and
09:22
learning does that operate or does he
09:24
have a track record or not
09:26
but can he get you the results of what
09:27
you’re looking for and does his criteria
09:29
match your criteria yep
09:30
you know it’s all about risk tolerance
09:31
right so you know i mean you’ve got to
09:32
find the deals
09:34
that you want to invest in based on your
09:35
risk tolerance right so
09:37
some people for example might say hey
09:39
you know i don’t need cash flow right
09:40
now
09:41
so i’ll invest in that development deal
09:43
you know and get that big payoff in
09:45
three to five years right
09:46
you know whereas there’s other investors
09:48
that we have that say hey i need cash
09:49
flow
09:50
pretty quickly because that’s
09:51
essentially already retired yeah i’m
09:53
already retired that’s
09:54
that’s what i’m living off of right and
09:56
so you know certain deals might not work
09:58
for them so you need to determine what
09:59
your box is right
10:00
and then you need to go find people that
10:02
are that are playing there and and
10:04
providing you deal flow um that fits in
10:06
that box yeah
10:07
right you know but what’s a progression
10:09
always there’s there’s a natural
10:10
progression that i see right so you go
10:12
from passive investor to what
10:13
and then from that really you figure out
10:15
a way to participate
10:17
in a gp in some limited capacity you
10:19
could find a deal you could help
10:20
operate a deal you could help you know
10:23
basically
10:23
uh so source the deal or equity kind of
10:25
go together right operate the deal
10:27
helping be a kp yeah be a kp right
10:30
selenium deal
10:31
provide liquidity provide the balance
10:32
sheet right maybe you’re really good at
10:34
construction helping manage the
10:36
construction rehab
10:37
so it’s really find a way to add value
10:40
to an operator that you know
10:41
yep that’s probably the next most common
10:43
way and then from that right
10:45
well now you’ve kind of got you know
10:46
because there’s a really i like to say
10:47
syndication is not hard
10:48
but it’s very much project management on
10:50
steroids there’s a lot of pieces that
10:51
are moving at the same time
10:53
right trying to do it on your own you
10:54
can do it you know obviously people have
10:56
done it we’ve done it
10:57
but it’s it’s you know partnering with
10:59
people that i’ve also done it makes
11:00
things a lot easier
11:02
yeah you got to find out what what you
11:03
like to do right because some folks it’s
11:05
funny they’ll get into being on the gp
11:07
or on the syndication side
11:08
and they’ll find out hey i don’t really
11:10
like doing whatever asset management or
11:12
construction management or something
11:14
right
11:15
and so now they know like hey on the
11:17
next one i’m not
11:18
if i if i can’t you know add value for
11:20
the things that i like to do then i’m
11:21
gonna have to find a group that i can
11:22
right
11:23
you know so but then sometimes there’s a
11:25
progression even beyond that point right
11:28
and that’s where you can be a lead
11:29
sponsor or elites indicator right
11:31
you know and those are the people that
11:32
are usually putting the whole thing
11:34
together right you’re putting the team
11:36
together
11:36
you’re probably ultimately asset
11:38
managing slash property managing the
11:40
deal
11:41
um you know you’re probably doing the
11:43
bulk of pretty much everything
11:45
and so you know that’s the natural
11:46
progression if you want to go down that
11:48
route but realize people
11:49
that this is an actual business right
11:51
once you get to that point it’s no
11:53
longer a side hustle it’s not something
11:55
that you can just
11:56
you know do whenever you feel you know
11:58
you know oh i want to do some
11:59
syndication today
12:00
it doesn’t work like that it turns into
12:01
a real job a real business that you have
12:04
to grow it’s not so passive it’s not so
12:06
passive on the active science oh it’s
12:07
absolutely an active thing that you’re
12:09
going to be living breathing and eating
12:11
you know until you sell that deal or
12:13
those deals right but we do have a cheat
12:15
sheet to help you
12:16
yeah we do we do disrupt equity.com mf
12:19
cheat sheet if you
12:20
kind of we put together chi chi just
12:21
want some things to think about right as
12:23
you’re getting into the business so yeah
12:25
definitely go go to the website go check
12:27
that out you can go down that today
12:28
but um how do people get started right
12:32
we talked about this a little bit
12:33
but let’s let’s just say what’s the
12:35
easiest path you know
12:37
if you and besides being a passive
12:39
investor because i think everybody
12:40
realizes that right
12:41
but what is the what’s the one thing
12:43
that you know people can do
12:45
i always say go find yourself a deal
12:47
yeah you know that’s number one
12:50
if you have a real deal trust me there
12:51
are a ton of people that will partner
12:53
with you on that yeah
12:54
you know i mean if you have a real deal
12:55
come talk to us we’re happy to take a
12:57
look
12:58
you know anyone out there that has a
12:59
real deal anything from 100 to 400 units
13:02
most markets in the country would happen
13:03
to take a look right if it’s a real deal
13:05
yeah because i mean i always say that
13:07
there’s two sides of the the coin right
13:09
you can
13:09
find the deal you can find the money
13:11
finding the money is a little bit
13:12
tougher right because you have to
13:14
you really either have to be piped into
13:16
a group that is already
13:17
has wealthy individuals within it and
13:19
you’ve already built that trust for
13:20
whatever reason
13:21
or you know you have to have a track
13:23
record right but whereas
13:25
you can still you can still get yourself
13:27
a deal and get into a deal right
13:29
you know without having the the access
13:30
to the equity and so i’d say that’s
13:32
always the best way to get started
13:34
right you know if you’re trying to get
13:35
into multi-family go bird dog yourself a
13:38
deal
13:38
that’s probably the best way to do it
13:39
right yeah so we got some open q a
13:42
yeah so i had a few questions come in
13:44
from online so if you guys have
13:45
questions
13:46
definitely feel free to chime in but
13:47
before we go to q a right
13:49
watching multi-family mondays we do this
13:51
every monday 3 30 central
13:53
today we’re talking about getting into
13:54
multi-family investing what that looks
13:56
like
13:56
but again you’re welcome to ask
13:58
questions about anything we’re open
13:59
books transparent
14:00
we’re happy to talk about things that
14:02
people want to talk about so if you have
14:03
questions go ahead and leave them
14:04
and um the first one is uh bonus
14:07
appreciation
14:08
yeah i mean i maybe want to mention what
14:09
bonus appreciation has been yeah i mean
14:11
we talked i
14:12
i hinted at it earlier right it’s it’s
14:14
something that’s that’s fairly new
14:15
because of the jobs act
14:17
but you know essentially it it allows
14:20
you to pretty much supercharge cost sag
14:22
right you know so cost segregation
14:24
allows you to kind of come in and say
14:26
all right on this building you know this
14:28
thing is going to
14:30
you know it’s useful life is you know so
14:32
many 27 and a half years right
14:34
and you’re five years into it there’s a
14:35
certain amount of depreciation that you
14:37
can take for that item right
14:38
especially when you come like in real
14:39
estate the average you know real estate
14:41
if let’s say you buy a house right you
14:42
appreciate that over 27 and a half years
14:44
well guess what that stove is not going
14:46
to last 27 years right
14:48
so with cost segregation they’re going
14:49
in they’re saying okay all the stoves in
14:51
this building
14:52
are worth x these depreciate over five
14:54
years so we can kind of
14:55
get get it accelerated right that’s what
14:57
you call accelerated appreciation
14:59
right that’s why you’re doing the cost
15:00
segregation study bonus depreciation is
15:03
what came out of the jobs act where you
15:04
can say on top of that i want to go
15:06
you know accelerate even more of what i
15:08
could typically do yeah instead of
15:09
say five years you might be able to do
15:10
it in one or two right so that first
15:12
year or two folks
15:13
you can really juice that that you know
15:16
the the benefit of a cost segregation
15:18
study right and
15:19
madison specs is the company that we use
15:21
they’re good guys
15:22
um you know so you should check them out
15:24
they can answer any questions
15:25
you need about that type of stuff
15:27
because it is kind of evolving right
15:28
some of this stuff’s a little bit newer
15:29
but
15:30
um you know it’s it’s it’s pretty
15:32
powerful yeah so question
15:33
another question from savion question
15:35
from my understanding you shouldn’t be
15:36
communicating with potential investors
15:38
without a ppm drafted can you hire a
15:40
securities attorney
15:41
to just draft the documents so that you
15:42
have something tangible to use to refer
15:44
to
15:44
in order to address concerns of a
15:46
potential investor yeah i mean you can
15:48
have someone draft what your potential
15:49
bpm will look like right i think you
15:51
have to be careful probably how you talk
15:52
about it
15:53
that’s probably a better question better
15:54
for a security attorney than us yeah i
15:56
mean if you need referrals reach out to
15:57
us we’re happy to kind of point you at a
15:59
few of them
16:00
um but you know i think it’s like yeah
16:02
you can say here’s what my ppm will look
16:03
like whenever i have a deal i don’t have
16:05
a deal yet but here’s what i will have
16:07
in it and the returns were are dependent
16:09
to that deal
16:09
you know and and really what there’s
16:12
nothing wrong with having a simple
16:13
conversation right say hey i’m looking
16:15
at deals and i’ll just throw
16:16
i’m looking at deals that are 100 units
16:19
and above
16:19
in houston that were built between 1970
16:22
and 1990 right
16:23
the returns could be anywhere from eight
16:25
to twelve percent cash on cash blah blah
16:27
blah blah blah
16:28
right you can type you can talk in
16:29
hypotheticals nobody’s gonna get in
16:31
trouble
16:31
talking about that right and if i have
16:33
this deal mr investor
16:35
can i come talk to you about it you know
16:37
there’s nothing wrong with that right i
16:38
don’t think you need a ppm to do that
16:40
have that conversation
16:41
now you obviously if if you’re gonna
16:43
start raising real money
16:45
you need to have a real deal and you
16:46
need to have a ppm right you know don’t
16:48
take one dollar without that
16:50
subscription agreement and that ppm in
16:52
hand
16:52
right because you couldn’t get in a lot
16:54
of trouble yep so
16:55
um yeah if you keep it below that dollar
16:57
threshold it should be saying you should
16:59
be okay 99 cents i don’t know i don’t
17:01
know
17:01
go talk to the sec about that one but
17:03
you get what i’m talking about
17:04
it’s it’s better to err on the side of
17:06
caution folks you know when you’re
17:08
talking about this you don’t want to end
17:09
up on
17:09
you know the the front page you know
17:12
nine o’clock news come on no
17:13
newspapers are dated all right now we’re
17:15
on tv yeah i lost my hair you know i’m
17:17
obviously old so you know
17:19
but all right so tips on taking down
17:21
your first deal as a multi-family
17:23
syndicator right
17:25
and that’s a loaded question that is a
17:26
very loaded question you know i guess if
17:28
you’re doing it
17:29
all by yourself right let’s say you are
17:31
the chiefs indicator
17:33
i mean tip is stay organized and have
17:35
people out also can help steer you in
17:36
the right direction right there’s a lot
17:37
of moving pieces
17:39
right we do we do have a whole course on
17:41
this on our investor academy so
17:42
investoracademy.net
17:43
yep if you’re interested we do deep dive
17:45
and really talk through what are the 20
17:47
different moving parts
17:48
of syndication and closing process to
17:50
help make sure people
17:52
you know make avoid those mistakes
17:54
definitely highly recommend you guys
17:55
check that out investoracademy.net is
17:57
the website yeah reach out to us we got
17:58
coupon code we want
17:59
we want people to do the business right
18:01
and that’s where that’s where a lot of
18:02
this is this educational piece is going
18:04
to be
18:04
yeah you know because yeah that is a
18:06
loaded there’s a ton of things yeah so
18:07
really the tip is just yeah don’t screw
18:09
it up
18:10
be careful make sure your deal is going
18:12
to perform right especially
18:14
if it’s first one your best investors
18:15
are investors that
18:17
you know continue to invest with you
18:18
right ben and i did an exercise where we
18:19
were kind of going through investors and
18:21
one investor referred 13 other people
18:23
right yeah and so that’s
18:24
that’s powerful right so do good to your
18:27
investors even if you have to give up
18:28
your
18:29
your share of the deal right if you need
18:30
to make sure they’re whole so i think
18:32
really that’s my tip is you know it’s
18:33
other people’s money take care of their
18:35
money better than you take care of it
18:36
yourself yeah look at it
18:37
through the lens of you know you do not
18:40
want to lose
18:41
people’s money right the secondary to
18:43
that is making people money right but
18:45
you talk to a lot of these high net
18:46
worth and ultra high net worth
18:47
individuals right it’s all about
18:49
preservation of capital right and
18:51
obviously probably tax benefits when
18:53
we’re talking about commercial real
18:54
estate
18:54
right if they end up making you know
18:57
eight to ten percent cash on cash great
18:59
right they do not want to lose a penny
19:00
of that money so be very very careful
19:02
double check all your numbers and also
19:04
rely on a good team right
19:06
you know as ferris had mentioned earlier
19:07
there’s people that are that are trying
19:09
to shepherd the deal towards closing and
19:10
they’ll make sure you stay out of
19:12
trouble so
19:12
it actually gets to closing and then
19:13
make sure that you have a good property
19:15
management company
19:16
and a good asset management on the back
19:18
end to make sure that you can hit that
19:19
business
19:20
um you know those business objectives
19:22
right because otherwise it’s all just
19:24
projections
19:25
so those would be my tips is to make
19:26
sure that your team is set in place and
19:29
they are good and they are solid
19:31
right yeah all right so next question
19:34
how to find investment opportunities as
19:36
a passive investor
19:38
all right that kind of that’s a good
19:39
question this kind of ties to this so as
19:41
a passive investor
19:42
right go to events go to different
19:45
facebook groups right go to multi-family
19:47
masters right that’s a good group you
19:48
can kind of see
19:49
there’s a lot of them right i know john
19:51
has a texas multifamily investor
19:53
network very good group as well right
19:56
search online ask for referrals ask us
19:58
we’ll give you a list of 10 other guys
19:59
that we know right we’re happy to kind
20:01
of you know
20:01
point you at people and ultimately to
20:03
figure out can you find a sponsor that
20:05
can perform
20:06
can you find a sponsor that has a
20:08
similar investment criteria to what
20:09
you’re looking for
20:10
yeah like we talked about earlier right
20:12
are the deals that they’re doing in your
20:14
box right
20:15
you know but one thing to kind of take
20:17
into consideration right
20:18
you know passive investors it’s a truly
20:21
passive thing
20:22
right our expectation from our passive
20:24
investors is you fill out four pieces of
20:25
paperwork
20:26
and you make your wire transfer in right
20:29
and then we hope that you’re reviewing
20:30
our monthly financials
20:31
some people do some people don’t um you
20:34
know but that’s essentially all you have
20:35
to do
20:36
right so you know if you’re wanting to
20:38
take a more active role right then you
20:39
need to start looking into how do you
20:40
add value to somebody that’s doing deals
20:42
that’s what we talked about earlier
20:43
right
20:43
but how to find investment opportunities
20:46
you got to network
20:47
you got to get you got to put yourself
20:48
out there and that’s really at first and
20:50
a lot of people like i don’t really like
20:51
the network
20:52
and you know we’re in covid and we get
20:54
all that right but if you’re really
20:56
serious
20:56
you have to find the people they don’t
20:58
just these things are very tight-knit
20:59
there’s 20 or 30 investors tops on a lot
21:01
of these deals
21:02
so if you want to be one of those 20 or
21:04
30 people that gets in on these
21:05
opportunities
21:06
then you got to go seek out those people
21:08
that are doing deals right absolutely
21:10
all right so you’re watching monday
21:11
mondays right we do monday every monday
21:13
3 30 central
21:15
we’re talking about multi-family
21:17
investing and kind of how to get into it
21:18
but
21:19
we’re happy to talk about anything so if
21:20
you have any questions q a feel free to
21:21
leave them
21:22
i know we have another question that
21:23
came in what’s the best way to locate
21:25
property owners say in washington dc or
21:27
multi-family buildings
21:29
okay okay so i think the answer that is
21:32
a 99 of actual larger multi-family comes
21:35
through a broker one way or another
21:37
right that’s money that is well spent
21:39
meaning you know
21:40
don’t try to save a buck right cut them
21:42
out of it you actually work with them
21:43
right they’re really good at knowing all
21:45
the sellers
21:45
and so i think that’s my first piece of
21:47
advice second piece of advice co-star
21:49
has a lot of this data
21:50
yeah right we do have a co-star
21:52
subscription you know that’s not free so
21:54
you have to kind of
21:55
figure out a way to get access out of
21:56
data co-star does have it and there’s
21:58
some other services that can help with
21:59
that
21:59
it’s ultimately about what size property
22:02
you’re looking for i’d say if you’re
22:03
looking for
22:04
you know and we’re talking about
22:05
anything that’s probably well i guess if
22:07
you’re looking in dc anything 60 units
22:09
and up right
22:10
you’re probably going to go through a
22:11
broker one way or another now if you’re
22:12
looking at smaller multi-family check
22:14
your county records right
22:15
people do this a lot today with houses
22:17
right skip tracing and kind of all of
22:19
that stuff so
22:20
you can leverage some of that stuff for
22:22
the the multi-family world it just
22:23
doesn’t
22:24
it kind of starts to not be so effective
22:27
as you get bigger
22:28
yeah no i agree right there’s things you
22:29
know especially if you’re talking about
22:30
smaller multi-family a lot of the
22:32
the stuff that you might be potentially
22:34
doing on single family might work right
22:36
you know letters we know juan vargas is
22:38
a great example he’s got a great story
22:40
where he him and his wife
22:41
were sending out these these letters man
22:43
and they locked up i think a 30 unit
22:44
yeah
22:45
you know here in the in the houston area
22:47
so this that stuff works sometimes
22:49
um you know as ferris said there’s kind
22:51
of probably diminishing
22:52
you know returns as you get higher and
22:54
higher right you know and so yeah work
22:56
with the broker because sometimes
22:57
you’ll find brokers that will be your
22:59
buyer’s broker too right they’ll go out
23:01
and they’ll find deals for you right but
23:02
you’re going to have to
23:03
ultimately pay their pay their fee but
23:05
who cares if the deal still works then
23:07
what’s the big
23:08
deal exactly right it’s worth it to pay
23:09
that one to three percent
23:11
right so you know but uh
23:14
yeah that was a good question though
23:15
yeah so you know if anyone has any more
23:17
questions feel free to go ahead and ask
23:19
them right monday mondays
23:20
monday every monday 3 30 central we go
23:23
through
23:23
we’re talking about multi-family
23:24
investing but we’re happy to talk about
23:25
any questions people may have so yeah
23:27
feel free to ask questions if you have
23:29
them also we put together a cheat sheet
23:30
for this so check out www.sup
23:32
yeah sorry mf disrupteequity.com
23:36
sheet to check out kind of our cheat and
23:38
some tips and tricks and things to kind
23:39
of
23:39
think about as you’re going through it
23:41
but if anyone has any more questions
23:43
we’re happy to talk through them
23:44
otherwise we can talk about
23:45
you know ben’s shirt i really like the
23:46
shirt all right
23:48
just from
23:52
um all right we did get another question
23:54
all right actually i’ll show how
23:55
we got two more questions but i’m gonna
23:57
i’m gonna answer the more important one
23:58
first sorry no offense savion
23:59
ronnie asks how many times do y’all go
24:01
to starbucks a week
24:03
at least five dude at least yeah then
24:05
i’m usually stopped by a starbucks in
24:07
the morning so i guess we do both have
24:09
starbucks cups
24:10
starbucks is not a paid sponsor yet he’s
24:13
actually he’s actually the problem he
24:15
you know i used to not drink as much
24:16
starbucks
24:17
we did expand the office and now we have
24:18
a sink and we will have a national
24:20
machine so it’ll cut back on the
24:21
starbucks
24:22
problem i don’t know maybe a little bit
24:24
no it’ll say it’ll save us it’ll save us
24:26
a couple calls yeah so now let’s go back
24:28
to the other question that we got uh so
24:29
you would suggest using stuff like list
24:31
source
24:31
et cetera to pool list of owners on
24:33
smaller properties
24:35
but the bigger property properties
24:37
brokers are more than
24:38
likely going to control those properties
24:40
yes that’s exactly it right
24:42
smaller stuff list source your county
24:44
records you know
24:45
even just finding random nuggets on your
24:48
like your uh
24:50
real estate agent websites right houston
24:51
it’s hard net
24:53
you know yeah you can find some smaller
24:54
stuff on it too so you know you’re gonna
24:56
have to mine some of that right you’re
24:57
just kind of sifting through the bad to
24:58
find the good
24:59
mls yeah you know we i’ve seen stuff
25:02
that’s right
25:02
that’s what i was trying to say the word
25:04
i was looking for that’s where you can
25:05
find you know some of the smaller stuff
25:07
and
25:07
again it’s about finding the situation
25:09
where the wrong agent was
25:10
listing that right those are the person
25:12
that doesn’t know how to list the five
25:13
unit like for example
25:15
someone that is looking at a fourplex
25:16
and listing it as okay well
25:18
i know in this area price per square
25:20
foot’s a hundred dollars and so i’m
25:21
gonna list it like a house but that’s
25:23
actually four units and you have to
25:24
count for that too so
25:25
finding those situations is where you
25:27
can make some money that is where you
25:28
can make a lot of money
25:29
you know you always want you always want
25:31
the wrong broker on the right deal yeah
25:33
right
25:33
yeah that’s how we know absolutely
25:37
yeah but um if anyone has any more
25:38
questions feel free to drop them
25:40
otherwise we’re going to wrap it up here
25:41
in another minute
25:42
so all right all right any more
25:44
questions
25:45
go on once we’ll give them another 10
25:47
seconds i feel like we have like maybe a
25:49
five second delay on the video feed
25:51
but if anyone has more questions go
25:53
ahead and drop them
25:54
we’re happy to talk about it check out
25:56
including our starbucks yeah as well
25:58
we’ll talk about the starbucks and how i
26:00
lost my hair
26:01
yeah you don’t want to know how that
26:02
muscles yeah i don’t want to know lots
26:04
of long stories
26:05
it’s a long story multifaceted still
26:06
here until this day multifamily related
26:08
right
26:08
you know but yeah check out that cheat
26:10
sheet folks that gives you a little bit
26:12
more information and
26:13
like ferris has mentioned on investor
26:14
academy we really take a deep dive on
26:16
all this stuff from passive investing
26:18
to being a sponsor to underwriting a
26:19
deal right yeah
26:21
so check that out as well but i guess if
26:22
no one else has any more questions we’ll
26:24
go ahead and call it a wrap then
26:25
all right signing off from disrupt tv
26:28
studios see you guys next monday

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