Multifamily Vs Single Family Real Estate Investing

  • Share:

In this episode you will learn: -Investment perspective: Pros and Cons of both single-family and multifamily investing -Differences in returns, cash flow, scalability, and barriers to entry! Interested in expanding your knowledge in multifamily investing? Want to get tips on how to get started and scale as a multifamily real estate investor? Access our free multifamily investing cheat sheet here: https://www.disruptequity.com/mfcheat…

VIDEO TRANSCRIPTION

00:00
on point and ready to go now thanks for
00:02
tuning in everybody
00:03
and welcome today monday mondays every
00:05
monday 3 30 central
00:07
yep yep kind of talk about a bunch of
00:09
different topics this week we are
00:10
talking about
00:12
we’re multi-family versus single family
00:14
right not been on the spot he kind of
00:16
you know brain fart there were
00:17
so many no laughing back there all right
00:19
but uh
00:20
maybe yeah i kind of threw ben off his
00:22
mojo guys so feel free to leave comments
00:24
making fun of us
00:24
you know him getting thrown off of it
00:26
but monday mondays talk about different
00:27
topics this week we’re talking about
00:28
multi-family or single family yeah
00:30
but you know at the end we’ll do q and a
00:32
so open questions people can talk about
00:34
anything they want to talk about so
00:36
you know feel free people to open it up
00:38
and you know ask questions i mean you
00:40
ask now
00:40
ask later we will take these questions
00:42
live and get going yeah
00:44
so one thing to point out right you know
00:47
our shows
00:47
not only just about multi-family or even
00:49
about real estate right you know we’re
00:51
doing this
00:52
every monday to talk about all things
00:54
investing and being an entrepreneur so
00:56
we do
00:57
want you guys to give us feedback in
00:59
terms of the other
01:00
you know topics that you want to hear us
01:02
talk about too right you know it’s a
01:04
broad spectrum right and we’ve done
01:06
we’ve done a lot of different things so
01:07
you know thanks for tuning in like we
01:09
said we’re going to get right into it
01:10
multifamily versus single family
01:12
so you did a lot of single family i did
01:14
some you did more than me
01:15
so i’m going to let you kind of talk a
01:18
little bit about the pros and cons right
01:20
you know and i’ll give i’ll give my
01:22
feedback real quick from my
01:24
limited experience and then you can kind
01:25
of get into it right
01:27
so pros i always look at it it’s um
01:30
lower barrier of entry right you know to
01:33
get into a single family investment
01:34
right you know
01:35
maybe less money less time you know
01:39
less experience needed you know you know
01:42
if you look at the brokers right they’re
01:43
going to sell it to you if you want to
01:44
buy it
01:44
at the price that they’re going to sell
01:45
it to you for they’ll sell it to you
01:47
right whereas in commercial right they
01:49
really
01:50
regardless of whatever offer you give
01:51
them they really look at your background
01:53
and how much experience
01:54
you have and what your team looks like
01:55
because ultimately there’s a lot that
01:56
can happen during the closing period on
01:58
a commercial property
01:59
that can completely blow up the deal
02:01
right so you have you can have less
02:03
experience
02:04
less capital probably devote less time
02:06
depending on what you’re doing let’s
02:07
just talk about rentals versus
02:09
multi-family investing right yeah and so
02:12
those are probably some of the pros
02:14
right yeah and you know i mean it’s
02:17
ultimately everyone starts with single
02:19
family
02:20
you know not everyone but most people
02:21
start with single family because it is
02:23
just an easier thing to get your head
02:24
around people do buy a house
02:26
people do go through the process maybe
02:28
you know they lived in a house growing
02:29
up they know what houses are
02:30
not everybody lives in an apartment and
02:32
most people think apartments are
02:33
too big too crazy it must be some big
02:36
company down the street yeah you know in
02:37
new york that owns it right well
02:39
i think that’s ultimately why and as
02:40
people get more educated i mean i and
02:42
again i came down that pathway right
02:44
i read you know a millionaire real
02:45
estate investor i highly recommend that
02:46
book to everybody
02:48
it gives you a good understanding of
02:49
real estate basics right and again in
02:51
that book it talks about residential but
02:52
a lot of that can be applied to
02:54
commercial and so
02:54
as people kind of grow in their real
02:56
estate career i like to say they get
02:57
more educated
02:58
and they realize that there are good
02:59
things with real with single flaming
03:01
there’s some bad things about it right
03:02
and so
03:03
you know i think that’s why everyone
03:05
starts there right like you said it just
03:06
doesn’t need as much capital
03:08
yep right and you know again that’s not
03:10
that you need a lot of capital
03:10
commercial but you need someone’s
03:12
capital
03:12
right and so absolutely um you know but
03:14
for me i mean my biggest thing is you
03:16
know i
03:17
did the first four plex and then i
03:18
bought a bunch of houses and you know i
03:20
liked it i mean hey it’s cash flow the
03:22
numbers are working right numbers don’t
03:23
lie
03:24
but it just got to the point of you know
03:27
just
03:27
it doesn’t scale very well right so i
03:29
did like the fact that it does cash flow
03:31
you know it is nice fannie and freddie
03:32
loans and it’s not
03:34
you know with commercial our loans are
03:35
eight 10-year notes 12-year notes but
03:38
with multi-family every single family
03:39
it really is 30 years yeah right i mean
03:41
so like literally you write it out for
03:43
30 years if you want to and so
03:44
that is something good and unique with
03:46
the single flame that you don’t get
03:48
right and then kind of going down that
03:49
same tangent i mean you know it’s close
03:51
right more flame is further away so it’s
03:53
different kind of play and
03:55
you know you can self-manage it if you
03:57
really want to yeah and then we say that
03:58
you know they do right but then
04:00
sometimes then they become and that can
04:01
be family investors because
04:03
it’s that probably will lead to a con
04:05
that we’ll get here in a minute right
04:06
but
04:07
the other thing that i always kind of
04:08
saw why it was popular is that
04:11
you know obviously the hdtvs and the
04:13
flipping shows everybody kind of
04:14
seems to think that they understand how
04:16
it works right from a flip to a rental
04:18
right there’s a lot of
04:19
there’s a lot more knowledge out there
04:20
right and so i would say that
04:22
if you really don’t know anything about
04:23
real estate there’s probably a lot
04:25
easier
04:25
path to getting into single family than
04:27
there would be for multi-family or
04:29
or commercial in general right there’s
04:30
just a lot more information out there
04:32
you know so it makes it a little bit
04:33
easier to kind of get started you know
04:35
when you’re getting into real estate
04:36
investing
04:37
so all right so let’s talk about the
04:38
cons man the pros you know everybody
04:40
kind of knows
04:41
you know but you’ve been there i’ve been
04:43
there let’s talk about
04:44
why we ultimately gravitated to another
04:46
aspect i hated the insurance part of it
04:48
honestly like and it shouldn’t have but
04:50
i mean it’s just to me
04:50
so what is that though right it’s each
04:52
property has a different insurance
04:54
policy and they all expire in different
04:55
days and
04:56
yeah i mean i probably could have and
04:57
should have spent the effort to get them
04:59
all consolidated but i mean it just
05:01
each month you have a different thing
05:02
that you don’t know what’s due whether
05:03
it’s hoa is due for some property
05:05
somewhere
05:06
insurance to do for some property
05:07
somewhere the loan mortgage maybe got
05:09
changed to another company and now you
05:11
they’re not going to auto pull and you
05:12
have to reset it up
05:13
you know tenants paying or not pay i
05:15
mean it just becomes a
05:17
an intractable problem almost because
05:19
and again you could build
05:20
systems and teams around it but it just
05:22
you know where i was it was
05:23
big enough that i probably needed a team
05:25
small enough that i probably didn’t
05:26
yeah yeah you’re kind of in that quasi
05:29
where if you bought maybe another 10 you
05:31
could have probably
05:32
yeah justified that’s kind of that was
05:34
the biggest problem honestly just
05:35
the you know it doesn’t scale very well
05:37
the maintenance side that you really
05:39
hear about
05:39
i was probably lucky about it i had good
05:41
tenants stayed you know it’s about
05:43
screening them up so let’s talk about
05:44
that so did you put money because
05:46
every one of my properties i put capex
05:47
in so because some people don’t do that
05:49
right they just buy it
05:50
yeah i wasn’t there to poor boy right i
05:51
mean i was looking for good tenants
05:53
put money into them and you know most of
05:54
them i bought at a discount
05:56
because they needed some work right and
05:58
so i was able to get nice updated
06:00
properties and
06:00
you know get good quality tenants in
06:02
there so luckily i didn’t have a lot of
06:04
issues and you know there were some
06:06
right we wouldn’t work through them but
06:07
overall that wasn’t the horse was it
06:09
was it maintenance related or was it um
06:12
was it tenant related
06:13
you know what was the big maintenance i
06:14
mean it was all i honestly had very
06:16
little turnover on all my properties
06:18
so that’s good though right you know
06:19
because a lot of people will talk about
06:20
the worst
06:21
horror stories of tenants too right yes
06:23
your tenants guys
06:24
i have an uncle same thing you know they
06:26
had their horror story and they didn’t
06:27
screen tennis they didn’t take security
06:28
deposits
06:29
there was no incentive for a tenant to
06:31
not destroy the property
06:32
yeah i mean you know you have no skid in
06:34
the game right if
06:35
you piss them off or they’re going
06:37
through a bad day you know they’ll
06:38
destroy the property and up and leave
06:39
right right in the middle of the night
06:41
so that’s a con so it wasn’t so the
06:43
insurance and having to juggle all the
06:44
different things because you obviously
06:46
closed at different times right um
06:48
you know it’s not scalable right you do
06:51
have some level of
06:53
you know self-management that you have
06:54
to kind of yeah you can do third party
06:56
also right but then you know that’s
06:58
where that’s a big that’s another
06:59
problem right if you need third-party
07:01
you know it gets expensive those guys
07:02
aren’t in it to really reduce your
07:03
bottom line whenever your margins are
07:04
that tight
07:05
yeah right you can’t you can’t overpay a
07:07
little bit where you know on
07:08
multi-family it’s more about getting the
07:10
right work done
07:11
and quality work done versus not just
07:13
being the cheapest right it’s kind of
07:14
you need to weigh them all
07:15
or a single family it’s really about
07:17
bottom line a lot more so
07:19
no i agree i agree so that’s some of the
07:20
cons right let me think really quickly
07:23
there’s a couple more you know there’s
07:24
definitely you know i would say that i
07:27
hated the hoa stuff man that was part
07:29
just like it lingers or the tenant left
07:31
the trash can out
07:32
and the hoa gets on them and the tenant
07:33
doesn’t do it and now they find you but
07:35
the tenant did do it you’re playing kind
07:37
of middleman
07:37
no no you know we had one tenant that
07:39
liked to bring his rv that was it was
07:41
the rv
07:42
bringing up
07:46
and then maybe two weeks later come back
07:48
for a week and then think it hadn’t been
07:49
moved i mean it was just yeah
07:50
you know what i never really liked about
07:52
you know uh residential or single family
07:54
right was that
07:55
you can’t really control the you can to
07:57
an extent you can control the value
07:59
right you know you maybe put some
08:00
updated you know
08:01
you update the kitchen or do a few
08:02
things right but ultimately it’s very
08:04
hard to
08:06
grow the value of that asset whereas in
08:09
commercial and multi-family specifically
08:10
right
08:11
you there’s al it’s almost mathematical
08:13
right yeah you’re going to put all your
08:14
ideas
08:15
yeah it is right you know so you put
08:16
5000 in and you can charge an additional
08:18
100
08:19
per unit and you know you can kind of
08:21
you can apply a cap rate to that and
08:22
then you’re going to increase the value
08:24
substantially right especially on these
08:25
bigger properties
08:26
and so you know whereas in single family
08:28
right it’s all driven by comps
08:30
and so you know say for example you’re
08:32
the best looking asset on the street
08:34
right you’ve done a lot you’ve tried to
08:35
keep up with your property but guess
08:36
what
08:37
all your neighbors around you are doing
08:39
a poor job of that
08:40
right that’s going to bring down the
08:42
value of your asset unfortunately even
08:44
though you’re doing all the right things
08:45
you’re putting in money into the
08:46
property you’re still beholden to the
08:48
market yeah right because it’s all comp
08:50
driven
08:51
and so that’s kind of a con that i never
08:53
really liked about single families that
08:54
i had
08:55
i had very little control over the asset
08:57
value yeah it’s
08:58
right i mean it’s hard to do an
08:59
appreciation plan single family let’s
09:01
call the flip
09:01
right yeah and you know flips his own
09:03
thing go we can go into wholesaling all
09:05
of that i didn’t like any of that stuff
09:06
with a single family just very
09:08
different and so i mean yeah that’s
09:10
that’s yeah talk about labor intensive
09:11
though right
09:12
you know not the margins right yeah it’s
09:14
tough it’s tough too
09:15
right so that’s that’s probably a good
09:17
thing so differences in cash flow and
09:18
roi right
09:19
you know i mean so let’s talk about cash
09:21
flow right yeah but before we talk about
09:23
cash flow
09:24
for those of you tuning in multi-family
09:26
ah sorry uh
09:27
what am i doing oh we tripped them up 20
09:30
mondays we’re tripping
09:31
every monday three thirty central we’re
09:32
talking about multi-family versus
09:34
only
09:40
you know we go through all sorts of
09:41
different topics so feel free to leave
09:43
questions we’re happy to answer q
09:45
a live here or as it makes sense or at
09:47
the end
09:48
about anything doesn’t have to be about
09:50
um you know about our topic today
09:52
and let’s see so ronnie says what’s up
09:54
what’s up ronnie you missed it at the
09:55
beginning we talked about not having
09:57
plaid shirts and
09:58
and having our coffee we do we do have
10:00
our coffee though man yeah
10:02
it would be it wouldn’t be a money
10:03
monday without it at this point ronnie
10:04
says like a problem
10:05
he likes single family flips yeah all
10:07
right well you know they’re they’re nice
10:09
it just
10:10
you could kind of play yeah no
10:11
definitely there’s there we know people
10:13
that are wildly successful doing it so
10:14
we’re not here to knock one way or the
10:16
other right this was just more so our
10:18
journey yep
10:19
you know um between single family and
10:21
multi-family but
10:22
uh we know people that are seven finger
10:24
or something no i mean you could
10:26
figure flips and there’s a mastermind
10:28
figure flip
10:29
flipping right start figuring yeah so
10:32
definitely
10:33
um a lot of ways to do it but let’s keep
10:35
going so cash flow back to what you said
10:37
cash flow all right so you know i mean
10:39
ultimately one of the reasons that
10:40
everybody kind of gets into real estate
10:42
right is
10:42
you know you get a little bit of that
10:43
mailbox money yeah right you know that
10:46
applies to both of them
10:47
yeah single family or multi-family so
10:49
let’s talk about cash flow the one
10:50
one of the things that i really loved
10:51
about multi-family and the concept of
10:53
multi-family right was that
10:55
you’re spreading your risk across a lot
10:58
of different units right
10:59
whereas you have a single-family renter
11:01
and maybe you have somebody like ferris
11:03
where you’ve got a long-term tenant
11:04
five years guess what they say hey i
11:06
finally got another job you know
11:08
and they give you the 30-day notice and
11:10
maybe it takes you another
11:11
you know 60 to 90 days to get the the
11:14
the single family home up and going
11:15
again and get a new tenant in there
11:17
well guess what that two or three months
11:19
that you didn’t have a tenant you’re
11:20
paying the note
11:22
right you’re having us flip utilities
11:23
and do all this other stuff and pay for
11:25
all that in the meantime as well
11:26
whereas in multi-family right you know
11:28
you’ve got one average cost service just
11:30
like buying stocks right you shouldn’t
11:32
you know whether you buy high or low as
11:33
long as you continue to cost average yep
11:35
usually it works out
11:36
no so you know i mean out of out of 100
11:39
units right if you have one person that
11:40
leaves right yes that that
11:42
stinks but it’s not going to affect very
11:44
much it’s a rounding error
11:46
and so that’s one of the reasons that i
11:47
loved it right so you’re getting your
11:49
your your cash flow obviously is you
11:51
know um more stable i would say
11:54
right it’s not going to fluctuate you
11:55
know down to zero
11:57
you know which would happen in a single
11:58
family versus a multi-family right that
12:00
never happens
12:01
well i mean we’ve seen some deals where
12:03
there’s it’s been completely boarded up
12:04
but that’s
12:05
that’s besides the point right so return
12:08
that’s why you don’t believe your
12:09
property’s dry guys
12:10
no that’s that’s true that’s true so
12:12
it’s called a lot of return on
12:13
investment i’d probably say you know
12:15
total returns too there’s there’s a def
12:17
there’s certainly
12:18
different metrics you know here baby you
12:20
want to come over here and you
12:21
i know you’re i know you’re excited so i
12:23
got my daughter with me and she’s in
12:25
there
12:25
making all kinds of third co-hosts she’s
12:28
really really excited
12:29
so i’m just gonna i’m gonna bring her in
12:31
all right so you’re gonna let daddy and
12:32
mr ferris get over there i know you know
12:35
she could probably do a better job
12:36
or finish it up you know all right so
12:38
let’s talk about roi man and
12:40
and maybe the other returns beyond cash
12:42
flow no absolutely right so i mean
12:44
roi turn on your investment right and
12:46
what you know what is what are you
12:47
getting and that’s where leverage
12:48
becomes valuable
12:49
right with both ass with both types you
12:51
can do get leverage
12:52
very good leverage right and you know
12:55
that’s what makes your money go
12:56
right and so you know with both of them
12:58
i’d say it’s similar it’s back to your
12:59
point earlier right you cannot do forced
13:01
appreciation so your roi is really
13:04
you know cash flow constrained on single
13:06
family then you’re just betting on
13:07
general appreciation yeah whereas in
13:09
multifamily you can literally say i’m
13:11
going to bring these 20 units online
13:12
these 20 units will generate
13:14
some some money and i know what the cap
13:16
rate in the market is therefore i know
13:17
how much have i increased the value
13:19
right and so i mean you know you’re i
13:21
would say with both
13:22
asset classes your cash flow it can be
13:24
there it’s sufficient your i don’t know
13:26
why he was there as well but it’s just
13:27
ultimately you have
13:28
just less control right i think those
13:30
are maybe my two biggest things that i
13:31
would add about that
13:33
trying to keep you know trying to look
13:34
straight guys you know but she’s she’s
13:35
doing some you know
13:36
sign language for people so i don’t know
13:38
what i’m saying she’s gonna make this
13:39
one all right honest man
13:40
before we keep going monday mondays we
13:42
do every monday 3 30 usually go for
13:43
about 30 minutes we got about another 14
13:45
minutes to go
13:46
for those of you just tuning in you know
13:48
definitely feel free to drop any
13:49
questions comments you have we talk
13:51
about all sorts of topics
13:52
each week we pick a different topic but
13:53
you don’t have to ask about the topic so
13:55
we are talking about multi-family we’re
13:57
single family if it wasn’t obvious but
13:59
you know let’s kind of go through some
14:00
of the comments so yeah ronnie
14:02
we do need to get disrupt plaid shirt at
14:04
some point um
14:06
let’s see uh syndicating apartments is
14:08
pretty much a long flip kind of is
14:09
just sometimes a never ending flip yeah
14:12
you know
14:13
sam says what’s going on sometimes i
14:14
mean we hate to say it right but we’ve
14:17
we have flipped an apartment before
14:19
several we have one right now we’re
14:20
about to sell you know i mean so i’m
14:22
gonna
14:22
i gotta call our attorney dude and i
14:23
just remember that all right all right
14:25
all all good stuff for negotiating the
14:28
psa so deal we’re selling all right so
14:30
let’s talk a little bit more
14:31
we hit on some of these things and you
14:34
know shannon if you want to go to the
14:35
the presentation right so you know
14:38
differences in scalability so let’s talk
14:39
about scalability man
14:41
you know for somebody that wants to you
14:44
know
14:44
segue into this as a career right not
14:47
just the the guy that’s a worker or gal
14:49
that’s a working professional wants to
14:50
have a few rentals on the side you know
14:51
you want to grow
14:52
a real estate firm right it is
14:56
so much harder and it’s gonna take you
14:58
so much longer to buy a hundred
15:00
single family homes than it would for
15:02
you to buy one property that has
15:04
a hundred units right not if you buy all
15:06
the houses at the same time yeah
15:08
unfortunately unfortunately
15:11
we’re not hedge funds we can’t buy the
15:12
whole we can’t buy the whole subdivision
15:15
so it’s just not a scalable thing right
15:17
absolutely and
15:18
even if you were 100 closings 100
15:21
insurance policies 100 loans
15:24
and we know people that own that much
15:26
but it it’s it’s
15:27
something totally different right
15:28
usually they’re usually they they have
15:30
they have private equity behind them or
15:32
something like that where they’re
15:33
they’re going in and they’re buying a
15:34
hundred properties at the courthouse
15:36
yeah
15:36
just as little hair has been usually as
15:38
well from doing inside no i mean so it’s
15:40
not scalable right you know because
15:42
at the end of the day you know you’re
15:44
going to be chasing properties all day
15:45
long right
15:46
and you know i mean yes you can get a
15:48
property management company to do it and
15:49
that’s that’s
15:50
one way to do it but at the end of the
15:52
day that’s still going to take you a
15:53
very long
15:54
time to get to that point where it
15:55
justifies all that right absolutely
15:57
no no and that’s what i love about it
15:58
right it’s scalable right
16:00
and you know and again just back to that
16:01
too the other part of that is just staff
16:03
dedicated on-site staff that is doing
16:06
you know that is
16:07
living and breathing only about your
16:08
property not oh they have 200 houses
16:11
that they have across different
16:12
areas different towns right i mean it
16:14
just becomes a you’re spending so much
16:16
your time driving around
16:17
no no because it’s not gonna like you
16:19
you totally hit it on the head right
16:20
you’re not gonna have a hundred
16:22
properties in the same subdivision right
16:24
so you’re gonna have maybe
16:25
10 over on the north side 20 on the east
16:28
side and you’re especially when you’re
16:30
living here in houston
16:31
and anybody that knows houston is very
16:33
very wide city it’s one of the biggest
16:34
cities in the country right
16:36
and so you know you’d be driving all day
16:38
long right
16:39
so let’s talk about the other thing and
16:41
i touched on this a little bit earlier
16:42
right barriers to entry right
16:44
yeah i think you know scares people man
16:46
bigger scares people
16:47
you add that extra zero or two right
16:49
you’re gonna you know because even it’s
16:51
a big step up from
16:52
a hundred grand to a million but it’s
16:53
even a bigger step up from a million to
16:55
ten million yeah but but ultimately it’s
16:57
really not
16:58
once you get comfortable with it right
17:00
no but i’m just saying starting off no
17:01
no but it is
17:02
starting off no absolutely is but i’m
17:03
saying once people do the first deal or
17:04
two you kind of realize it’s a lot of
17:06
the same thing right
17:07
i can if i’ve gone up 90 sets of stairs
17:09
i can make it to that last hundred you’d
17:10
have to take a little bit of a break
17:12
right yep
17:12
i just pulled that analogy out of
17:13
nowhere but hey i’ll go well
17:17
um you’re doing a great job she’s making
17:19
this one that she’s making this one nice
17:21
and challenging so you know
17:22
i mean yeah i mean it’s just a much
17:26
it’s really not as hard as it looks but
17:28
there’s a lot of moving pieces
17:29
this is where you have partners and
17:30
that’s the other thing too let’s talk
17:32
about leverage right you know
17:33
because you know the barriers of entry
17:35
what you’re what you’re saying
17:36
is they can be broken down by you
17:39
leveraging syndication right
17:41
by leveraging good debt and period
17:44
so i mean you know leveraging your
17:46
attorney who’s done it a hundred times
17:47
it can help
17:48
guide you from screwing up right we’re
17:50
literally doing that right now
17:51
to leveraging a mortgage broker helping
17:53
kind of figure out the right debt versus
17:55
the wrongdoing for the business play
17:56
that you’re trying to do
17:57
leveraging other partners who have done
17:59
50 closings and know the 50 steps
18:01
that it takes to do a closing right so
18:03
you don’t miss a step you know i mean
18:05
there’s just kind of goes on and on and
18:06
on and that’s why
18:07
really real estate’s a you know it’s a
18:08
team sport especially in multi-family
18:11
it’s all about your network and so i
18:12
think that’s just a critical piece so if
18:13
you have the right team folks that’s
18:15
what we’re kind of trying to get to
18:16
right if you have the right team
18:17
you can you you can utilize leverage
18:20
right
18:21
both on the equity and the debt side you
18:23
can break down those barriers right
18:24
no it’s gonna take some education and
18:26
you know you’re ultimately gonna have to
18:28
run in the right circles right and have
18:29
the right team but
18:30
that makes it a lot easier right we’re a
18:32
single family right you know you wanna
18:34
go buy a hundred thousand dollar homes
18:35
as long as you got 10 or 20k to put down
18:37
right you can go buy that
18:38
you know so there’s it’s a lot easier to
18:40
get into absolutely and i think that’s
18:42
why most people start off including us
18:44
and single family
18:46
all right well we got a little bit of
18:47
open q a yeah so if you have questions
18:50
go ahead and leave your comments we will
18:51
go through these live it doesn’t have to
18:53
be about what we just talked about
18:54
like i said monday mondays we do it
18:55
every monday 3 30 central go through all
18:57
sorts of different topics
18:58
this is really meant for the peop for
19:00
you all for the audience so feel free to
19:02
ask questions
19:03
if you need to learn any sign language
19:04
we do have a guest as well that can help
19:06
with that one
19:07
right and so you know we can figure out
19:08
the letters and so yeah people feel free
19:10
to ask your questions
19:11
so let’s see yeah we had one as outside
19:14
of multi-family what other asset classes
19:16
do you all see
19:17
opportunities in right now so
19:20
i would say self-storage right you know
19:22
mobile home parks maybe
19:24
those are those are stable i mean those
19:25
are all those right those are generally
19:26
true
19:27
those are generally assets that we like
19:29
yeah but i would say in terms of special
19:31
unique opportunities relative to kind of
19:33
where the environment is today
19:35
you know it’s very i’d say location
19:37
specific and here in houston
19:39
i like the idea of buying a i’ve told
19:41
that then this multi-time
19:43
buying an office building at a true cab
19:45
because there’s just over supply of
19:46
office plus
19:47
you might have some comments on that and
19:49
so i’m curious it’s a contrarian it’s a
19:51
controller
19:52
if i can buy it at the real cost basis
19:54
right i had a real cap and then all i
19:55
have to do is lease it up
19:56
and i know that’s easier said than done
19:58
yeah but i guess maybe what i’m getting
20:00
at is a lot of the office in houston
20:02
it’s more i’d say quasi-institutional
20:05
and they need to show
20:06
an average lease of a certain amount
20:07
because their their hypothetical
20:09
evaluation is based on that
20:10
whereas for me if i can buy something
20:11
twenty percent lease and i just need to
20:12
get it fifty percent lease
20:14
even if i do what if i gotta give it
20:15
away almost for free the first you know
20:17
i mean but you
20:17
you hit something right on the head
20:19
right buying it at a true
20:21
cap rate folks right what’s what’s
20:22
happening now is a lot of this stuff’s
20:24
compressed
20:24
because there’s so much demand you know
20:26
for it whereas you know i mean if you
20:28
can buy a 10 cap and it’s the 10 cap on
20:30
actual versus
20:31
some tin cap on you know whatever you
20:34
know it’s on some pro forma
20:36
or whatever right you know you’re
20:37
actually buying it at what you should
20:39
buy it at
20:40
um that’s huge yeah right absolutely so
20:43
you know but i would i would
20:44
buy it and keep it office right i
20:45
wouldn’t convert it conversions are
20:46
their own
20:47
special issue i heard it’s actually
20:48
really expensive to convert a office
20:50
building into an apartment
20:51
but that’s what they’re talking about
20:51
they’re talking about doing balls to be
20:54
compliant
20:54
i think i think the other thing too is
20:56
this is our thesis on multi-family has
20:58
held true even through kovid right you
20:59
know there’s
21:00
there the lack of affordable housing
21:03
you know they’re not building class c
21:04
and b stuff anymore folks right it’s all
21:06
a plus plus there’s some trailblazers
21:09
that are doing a little bit
21:11
less high-end you know new development
21:13
but it still has a costs associated with
21:15
it right
21:16
you know and so there’s always going to
21:17
be demand for that and the federal
21:18
government is our biggest
21:19
partner in these in these opportunities
21:21
right and so it’s in their best interest
21:23
to take care of the residents and make
21:24
sure
21:25
that you know they’re incentivizing us
21:26
to take care of the properties right so
21:28
we still love multi-family but i was
21:29
going to say industrial too right
21:31
obviously with all the warehousing and
21:32
logistics and all this
21:34
stuff because you kind of need to bet on
21:35
one guy taking the whole space and if
21:37
you well yeah it’s definitely just you
21:38
know
21:39
what you’re doing and cap rates are
21:40
pretty compressed there too yeah
21:42
it might scare me for lack of knowledge
21:44
so you know maybe i should go learn
21:45
somebody educate us on industrial i’d
21:46
love to hear a little bit more about it
21:47
right or if anyone has a good industrial
21:49
opportunity
21:50
come talk to us we’re willing to partner
21:51
with you if anyone has any good deals
21:52
we’re happy to partner with people
21:53
that’s our mo guys
21:54
yeah and we’re still buying apartments
21:56
or not so we’re still buying so all
21:58
right
21:58
any feedback for transitioning from
22:00
single family to multi-family so i guess
22:02
it’s kind of a broad you know question
22:04
but um that was one that kind of came in
22:06
yeah so i mean the feedback is you know
22:09
there’s there’s i’d say there’s a ramp
22:10
up to getting educated on multi-family
22:12
right we do have investoracademy.net we
22:14
launched that a few months ago where we
22:16
put together a lot of content to kind of
22:17
educate people on commercial
22:19
and really just specifically apartments
22:20
right the whole process whether passive
22:22
investing or active
22:23
so definitely check out
22:24
investoracademy.net if you want to check
22:25
that out
22:26
but i mean ultimately the first steps
22:28
get educated yep then i like to tell
22:29
people really go do a deal passively
22:31
right
22:31
where you invest in someone’s deal just
22:33
to kind of learn the process
22:35
then go find a way to get more of an
22:36
active role right and then you know
22:39
hopefully you’re you’re you’re an active
22:41
member and you’re
22:42
also along for the ride on that gp side
22:44
right and you know you learn a lot of
22:45
what goes into it
22:46
and then you know enough to go to your
22:48
own deal right so kind of you spread
22:49
your there’s a progression right
22:51
you know i mean you you got to walk
22:52
before you can run you know but i always
22:54
kind of say you know
22:56
people think that you need to have some
22:58
certain amount of money or you know if i
23:00
don’t have 500 000 in the bank how am i
23:02
ever going to be able to pull this off
23:03
you know that’s not true right because
23:05
once again i go back to
23:07
you’re leveraging other people’s time
23:08
money and resources too right so
23:11
if you feel like oh i don’t i can’t put
23:12
that earnest money down on a 30 million
23:14
deal guess what there’s people out there
23:15
that can’t absolutely so you know
23:18
don’t overthink it right get yourself
23:20
educated like ferris said and you know
23:22
ultimately go out there and
23:23
ready fire aim right absolutely you know
23:25
i mean that’s kind of how i look at it
23:27
exactly like don’t get analysis
23:28
paralysis you know there’s a lot of
23:30
people that get nervous
23:31
don’t make a face it’s the zero find a
23:33
way to make a step forward right
23:35
i’m a big believer that it’s always
23:37
important to keep moving forward maybe
23:38
not as fast as you want but it’s a lot
23:40
better than having a complete stop
23:42
and so it’s that boulder because once
23:43
you stop it’s hard to keep going so
23:45
you ask ben i’m pretty anal about just
23:47
across everything we’re doing across the
23:49
company
23:49
we like to dig in and just where does
23:51
this go is this moving forward is this
23:52
moving forward you know
23:53
it doesn’t have to make herculean move
23:55
forward but it has to just
23:56
don’t get stalled out baby steps yeah
23:58
yeah that’s that’s i i still see that i
24:00
mean
24:00
you know obviously this year’s been a
24:01
little bit weird but before that right
24:04
there has been people that um you know
24:06
have that analysis paralysis and will
24:08
look at 100 deals and they’ll never make
24:09
an offer
24:10
and i look at it like this right make an
24:12
offer that is that you feel comfortable
24:14
making right
24:14
get your foot in the game because if you
24:16
don’t right the brokers are never going
24:18
to take you seriously they’re just going
24:19
to say oh gosh so and so keeps calling
24:21
me and they never make an offer
24:22
i need to call a broker about an offer
24:24
with me see this is all this is helping
24:26
this is helping you with
24:27
you remember all the stuff that we got
24:29
to do today man
24:30
but you know this is this will be on the
24:32
phone for the next hour guys if anyone
24:33
needs anything from me wait an hour
24:36
um but yeah so i guess um let’s see so
24:38
you know we got about three more minutes
24:40
money mondays use every monday 3 30
24:42
central
24:43
we go through a lot of different topics
24:45
we i don’t know we have a catalog now
24:46
all sorts of topics
24:47
and it’s really an opportunity for me
24:48
and ben to talk because we like to talk
24:50
a lot
24:50
right no i’m kidding but really we like
24:52
to talk about what we’re doing we’re
24:53
happy to share and help teach people
24:55
so if you’re you know if you want to see
24:56
any other future topics let us know
24:58
if you have any questions go ahead and
24:59
drop them we will answer them live it
25:01
doesn’t have to be about art
25:02
we want it to be interactive right you
25:03
know i mean so yeah come hit us with you
25:06
know
25:06
questions that might be on your mind or
25:07
you know and they like it like fair said
25:09
it could be completely random
25:10
it doesn’t have to be about what we’re
25:11
talking about today you know but
25:14
like i said between you know ben’s hair
25:16
or sign language we can do it all so
25:18
feel free to let us know but if anyone
25:20
let’s see if we have any more questions
25:21
actually
25:22
uh we did have some more questions so uh
25:25
do you all see single family prices
25:26
rising in houston
25:28
yeah i think prices just across the
25:29
whole country have unfortunately been
25:30
going up just because the rates have
25:31
fallen right
25:32
yeah yeah and so are they going to
25:34
continue to rise i’ll be surprised if
25:36
they do continue
25:37
i don’t expect them to continue to rise
25:38
i think they’re going to flatten yeah i
25:39
think it’s all just you know there’s
25:41
probably some pent-up demand
25:43
right and obviously interest rates are
25:44
like at historic lows like if you can
25:46
re-fi or buy a house with a 30-year note
25:49
that’s at 2.5
25:50
percent you know i mean we talk about
25:52
our parents like they’re
25:53
you know back in the 80s their interest
25:54
rate was like 18 percent
25:56
so they look at it like oh you’re paying
25:58
2.5
25:59
that’s pretty good yeah you know you’re
26:01
locking that in for 30 years so that’s
26:03
why i think
26:03
right now you’re seeing a little bit of
26:05
a refinement i’m just going to lock in
26:06
at 2.75
26:07
for 30 years i mean for 30 years you’re
26:09
not well it’s not full leverage though
26:11
i didn’t do cash out but yeah it’s crazy
26:14
let’s see so
26:14
uh more questions um do you all ever
26:17
change all starbucks or
26:18
starbucks orders no watch same thing
26:20
every day yeah i like it why would i do
26:21
that same thing every day
26:22
granted pie with cream mine’s a little
26:25
my own fancy
26:26
yeah ben ben’s drink costs twice as much
26:29
as mine
26:30
it’s really not fair but um you know i
26:32
like the sandwich
26:33
i’ll get you two bikes for starbucks
26:35
i’ll get you two i’ll get you two pikes
26:36
instead of the the grande mocha
26:38
not only yeah not only is his drink more
26:40
expensive but then he also gets the
26:41
customizations that add even more so
26:42
it’s just
26:43
i’m a chief starbucks date the drip
26:44
coffee i’ve loved it i drank it a lot
26:46
twice a day
26:47
there you go there you go but yeah so
26:50
coming up on top at the top of the hour
26:51
four o’clock so we’re going to give it a
26:53
wrap unless anyone has any more last
26:54
second questions monday mondays either
26:56
every monday 3 30 central
26:58
sometimes we got guest hosts yeah
26:59
sometimes we’ve got guest hosts we
27:01
brought the world’s top sign language
27:03
that’s a word and we might have other
27:04
future guests but no we will probably
27:06
start to bring in some guests it’s kind
27:07
of hope it calms down a bit more
27:09
yeah and start to explore that so
27:11
otherwise it’s called a wrap it’s called
27:13
a wrap thanks for

Leave a Reply

Your email address will not be published.