436: Going into Multifamily When You’re Fairly New to Real Estate with Jamie Gruber

This is the biggerpockets podcast show. 4:36.

You think about that. People say like, well, I don't have credibility to start a meetup. I can't be the expert. It's like, you don't need to be the expert. Like, you know, you need to be maybe a chapter ahead, right? So you could be a chapter ahead of somebody and add value to them. And that's all we were. We had a business plan for multifamily that we could show brokers most people in the room didn't have that month. 2. My partner, who's the spreadsheet guy, did a deal analysis. Well, guess what? Three syndicators showed up.

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What's going on, everyone? It's Brandon Turner, host of the Bigger Pockets podcast, here with my co host, Mr. David Green. David, welcome to the show, man. How's. How's life?

Awesome. Had a great weekend. I'm looking at houses again for myself. So I was out this weekend looking at places to house hack in the hills of the Bay Area and going through all emotions again about buying a property and getting all excited. I was out in Hawaii looking at condos and I put one under contract out in your neck of the woods. And I'm looking at probably three or four more right now. So I'm like a kid in the candy store. Once I can start buying real estate again.

That's awesome, man. I'm excited for you. Yeah, once you have a place out here, you can come out every week. You can go every Monday for our podcast recordings. We typically record on Mondays. I don't think you will, but that would be. That'd be funny.

Well, we have technical difficulties today and so it's so frustrating. I might take that five hour flight over trying to figure out this recording person.

I don't think it's a bad idea. Or we just like cram like nine weeks of recordings every nine weeks and just do them all in like a two day period, which is actually kind of a cool idea to batch. But anyway, today's show has nothing to do with that whatsoever. So today's show is a really fun episode with a buddy of ours named Jamie Gruber. So Jamie is a real Estate investor in the Michigan area who went very quickly from like, single family to some duplexes to multi, like larger, multifamily, or midsize. You could call them midsize apartment complexes. And that's really what today's journey, this story is about, is how you don't have to stay small forever. You can scale up pretty quickly if you use the right tools. Specifically, he talks a lot about networking because I know it's like a cliche term, networking, but the way that he does it is very unique and something that you could start implementing today. So listen, for all of that today especially, I love his. He. He said this phrase on the show. You're going to hear it later. And we didn't really dive into it, but you're going to this theme. Throughout Jamie's life, he said this. Be intentional, get educated, and then take action. Like, those three things, Be intentional about what you want, get educated about that thing, and then take action. And I just, I love that that reoccurring theme is through every area of his life, you're going to hear that and how you can apply that to yours as well. Now, before we get to the interview, though, let's get to today's quick tip. My quick tip today is call 14 banks today. Now let me expand on that. Jamie tells us his story today in the podcast. You're going to hear about how he called 14 banks to get good financ and the lesson he's trying to teach here. And then I'm going to just, you know, tell you right now, spoiler alert, is that sometimes the best loans don't come until call number 10, 11, 12, 13. And now 14 is an arbitrary number. I'm just having fun with it. But the point is, don't just accept one loan. If you're trying to get started in real estate, like, don't just accept one lender. Don't just assume you're going to talk to one bank, talk to a bunch of them. I know you've done that as well, David, in your life, because different lenders have different products.

Yeah, there was a point in my life, I showed up to work, I got my stuff done, and then I literally just googled every bank I could find in Arizona and just made a huge spreadsheet and just started emailing them all, calling them all, like, every day for hours at a time. That's what I would do. Because if you want to buy real estate, that's what it takes. And then through that process, you start to figure out, oh, credit Unions are much different than banks. That's why these people are offering me things that these people aren't. And that's what you got to do. But you usually only got to do it once. Once you figured out how to find the right institution, you can just. What's the example that we use? It's like you're wandering the desert and you find a well, night snow to go right to that one well. But you're wandering around with that little. You know, the piece of wood that they hold.

Yeah, the. What's it called? The wishing stick or whatever. I don't know, like the.

Yeah, you're wandering around like an idiot with one of those things.

Whatever the name of that thing is called, let us know on Instagram @David Green, 24 or Beardy Brandon.

There you go.

What's that name of that stupid stick? It's like they walk around. It doesn't actually. It's a witching. Witching stick? Is that what it's called?

I wish I knew. It was in like every cartoon or movie I know as kids.

Whatever.

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With that said, let's get to his interview with Jamie. Jamie is an awesome dude. You're going to love this interview. I'm excited to introduce you to our buddy, Jamie Gruber. Here he is. Jamie, welcome to the Bigger Pockets podcast, man. It is an honor to have you here. How you doing?

I'm doing great, man. It's. It's incredible to be here. I'm a bit of a longtime fan, so to be here is sort of a. Sort of a coup for me. I appreciate it, guys.

Thanks, man. So tell us where you at in the world?

So I live now currently in or just north of Ann Arbor, Michigan. I'm an east coast guy by birth, I guess. So I lived in New York. I grew up in New York, lived in Boston for a number of years and moved here about three years ago. So Midwest.

Okay, The Midwest. Yeah. And I think I met you in person, didn't I, in Detroit when I was driving through. Right?

You did, you did. You came up here, you dropped this big, big to do, like, I'm here, everyone come see me. And everyone came and saw you.

Yeah, you know, that's. That's typically how it goes. Just like, you know, coming to a city and I. And I want to do a meet up and I'm like, who's the meetup people? And you're the meetup guy. We're talking about that a little bit later today.

That's right.

But it's just, it's so fun to be able to, like when you go travel to new city to meet the real estate investors in that city, like, who's doing business here, who's doing deals, and again, one of the guys, you and I just hit it off really well there. And so now you're on the podcast, we're talking about your journey, and you have not been doing this for 50 years. You don't have 10,000 units, but you got a really cool thing going. And so I want to Kind of dig into, like, first of all, what do you do for a living? And then how did you get from that into the idea of buying real estate?

Sure. Yeah. So my. My day job is I'm in the insurance world. Insurance claims. I call myself a claims executive, which just simply means I'm in an equity position. Right. So I get stock options, all that stuff. The golden handcuffs, as they call them. Right. So, so that's what I've done for almost 21 years now, right out of college. And. And I've been. I've been with the same company ever since. Moved around a little bit, as I mentioned, New York to Boston to Michigan, taking different positions, bigger positions or whatever the case may be, and really started investing real estate in, I guess, 2005, but didn't really intentionally invest in real estate until 2017. So a bit of a gap between the two. I was an accidental landlord to start and really got intentional about it recently.

Accidental landlord? How'd that happen?

So, 2005, for those that are old enough to remember investing or buying pre 2008, I'm getting this promotion at work. I've got a car, I've got the girl. Hey, I got to buy the house. So found a house in this town in upstate New York, Elmira, New York. For anybody that knows where that is, it's nowhere. It's a small town. And I remember it was $142,000 to buy this beautiful home. And I got on the phone with the bank, and the bank was like, yeah, hey, look, this is what we're going to do. We're going to take 20% as a home equity line or home equity loan, and put that down. And then the other 80% will put in a traditional mortgage. And you're going to avoid pmi. And I was like, yeah, yeah, man, avoid pmi. No idea. Yeah, I was. But I financed the entire thing. So I bought $140,000 house with no money out of pocket. In fact, I think I got cash back at closing somehow. And within a year of that, I doubled down and said, hey, you know what? I keep hearing about people refinancing. And I refi'd out to the new value of 149, and they gave me 100% financing for that as well. So life was going great. I had this house. It's 2005, 2006, got the job. What's going to happen? Two, three years, it'll be worth double. I'll sell it. And here we go. Right, so that's the house I live. That's exactly it. So 2008 rolls around, I actually get a promotion. I moved to Boston. And the one thing I couldn't do at that point was sell my house. And I even had a relocation package which gave me a $25,000 loss on sale provision. In other words, if you sell the house for 25,000 less than you bought it for, we'll pay that difference, go ahead and move. Couldn't get rid of it. Could not sell the house. For the life of me, what's the next thing you do? You put a renter in there. The good thing at that time was this hydraulic fracturing. Well, good, depending on how you feel about it, I guess. But this natural gas mining thing was starting to explode. It was big in Pennsylvania. This town is right on the Pennsylvania border. Companies were moving in, expecting New York to allow it. So my rent was hundreds of dollars more than my expenses. I was like, yeah, this is pretty cool. I'm making a couple hundred bucks a month. I've got this house, somebody else is paying the debt off. It's all good. But then a couple years later, as things dragged on or whatever with the state, they decided, you know what, we're not going to allow this fracking, hydraulic fracturing thing to come into New York. So the Halliburtons and Exxons or whoever, the world moved out and my rents went south. So my rent went down to about maybe a little bit more like 50 bucks more than what I was paying in mortgage, taxes and insurance. So I was making no money, probably anything. Something happened, I was spending money, right? So it became an albatross. It became a problem for me. Like, man, this house, this burdensome house, I can't stand this thing. It was what it was. So fast forward now, I'm kind of accelerating my career. I'm taking these different roles within the organization to achieve what I'm doing now. This equity level job, it's kind of the top of it, right? And along the way, I'm traveling 45 weeks a year. I'm on a plane taking that job because nobody else would do it, right? Whatever I could do to kind of advance my career. And I start to feel this lacking fulfillment with this approach. I feel and think that the job I want is going to get me the fulfillment. But somewhere in there, looking back now, I was starting to lose a little bit of traction with my desire to continue to do what I was doing. So I read again at 24, I read it once and it kind of made sense, but didn't really do anything with it. I read Rich Dad, Poor dad, and I'm like 36, 37 years old, and I was like, oh, man, all those years, all those years, and now I get it. So I read that book and then it was like, all right, well, hey, I got this property. Let me just sort of refi. Make this thing an asset. Not only, not only physically, but mentally, like, in my mind, making an asset versus this albatross. And I did that. And then we actively started sourcing additional purchases at that point. Made a couple more after that, so that's cool, man.

And so at the time, when did you get from New York then to like, was that in 08 is when.

You moved to Michigan Late? Oh, wait, no, no, no, no. I moved from New York to Boston in 08. I moved from Boston to Michigan in 2017.

I see. Okay. And so, like, by the time when you move there, I guess, what was your next purchase? Where'd you go from? Yeah, the.

So I'm in one house now.

You're intentional about it.

Yeah, I'm in Boston and, you know, I'm listening to this podcast you may have heard about called BiggerPockets, learning all about. About real estate investing. And it was just. It just, it made sense to me. It was fascinating to me. I'm reading, I'm diving in, what a lot of people do when they start getting into the real estate investing world. I go to a local RIA meeting in the Boston area and it was great. Got to, you know, met some people, learned some things. But the one thing that became clear for me was like, man, it's hard to invest in area. Just prices are high, cash flow is low. All of the things I had learned on the BP podcast didn't seem possible there, but I have this house in New York. I have this house in upstate New York. It's where I'm from. I have family back in that area. So I decide, you know what, hey, let me look there. Because it's way more affordable. Rents are pretty good. I can get, we talk about 1%, 2% rule. I can get 2%, 3%, 4% rule in some of these markets. And I found a couple of distressed duplexes. I had heard of the BRRRR method by that point, and I decided, you know what? Perfect. I'm going to do that. I'm going to burr these two properties, got them under contract and purchased them. I think together I purchased them for 170 combined. And that was kind of the first intentional purchase of Real estate. And I did that late 2016, got the promotion to move to Michigan in January 2017. So I literally closed in mid January 2017 while living in Boston and then moved to Michigan about three weeks later. And now I got these properties. A flight away in New York versus a four hour drive away in New York.

Yeah.

Yeah. A couple of things to point out here real quick. First of all, the fact that you chose New York, I think that's so smart in that we talk a lot about unfair advantages. Like when you were looking at where to. Where to invest, you had people there, you understood that area, you knew that market, and you're like, hey, that's gonna be my market now. Which is one thing we encourage on the show a lot of times is if you, like, where do you have your unfair advantage? I hate the question, like, what's the best market to invest in? I'm like, the best market to invest in is like, the market where you have a team. Like, where you have where the numbers make sense, which is most markets you can find something that makes sense there and where you have a team. So that's cool. So how'd those duplexes go?

So duplexes, we purchased them. We learned a ton. I'll say that. Meaning we did all right with them. We still own them. We refied out of them and essentially executed the plan. Maybe not exactly, but for the most part, we executed the plan. But they were great. We had a sewer pipe go that cost a little bit of money. And it's funny, you talk about the experience, you get the first property, the one in New York that I moved from and had to keep. Sewer pipe went. So I learned that it's about a $5,000 deal. Right. First estimate for this sewer pipe on this new property was 18 grand. Well, thankfully, with the experience of the first sewer pipe, it was like. It seems a little steep to me. So got enough estimates to get this at, I think it was like 6500 or something like that that we had to replace for. But again, not knowing without having done that first property, I think that's something that I learned. Like, man, you just got to do that deal. You got to do that first deal. You're going to lose, no doubt about it, at some point, you're going to lose on that first deal. But, man, the stuff you gain, the knowledge, you gain the information, you gain understanding what the zoning commission will do if you have flaking paint on your house. I had no idea, right. How aggressively they come after you paint the house. How much a sewer pipe is all of that stuff. So the lessons from that first property really served us in, I guess, optimizing or mitigating expense on those two duplexes as we went through the brrrr process with those.

Yeah, that's really cool.

So one of the things you want to make sure when you're getting started, because like you're saying, Jamie, you probably are gonna lose money or time or whatever in the beginning, but you don't want it to be a knockout blow. You don't wanna end up to where you've lost all your capital, you can't get financing, and you're out of the game. Did you do anything specific to mitigate that risk? Sounds like you were kind of mat it, knowing this isn't going to be a home run. How did you make sure that it wasn't something that took you out of the game completely?

So we had cash reserves that we lined up ahead of time, so we made sure we had cash reserves. Another thing I did, I don't know if it's the right thing or not, but we had a lot of equity in our home in Boston. The market there was incredible. So we took out a line of credit. We didn't really use it per se, but we took it out just in case something happened. We had access to that, but the cash reserve part was probably the biggest piece for me. And it wasn't like we had tens and tens of thousands of dollars in the bank ready for this, but we had enough to cover what we felt would be some of the issues that could pop up based on what we saw, the property, and what we learned from the first one.

I think that's worth pointing out that there is what I would call a false sense of security that comes from thinking I have a lot of equity in a property. I'll hear people say, well, if the value drops, I've got this big cushion. But it doesn't really mean anything in practical terms. What your equity is, can you make the payment, is all that really matters. And cash reserves are so much more important when it comes to can you service that debt than this imaginary equity that can come and it can go. Equity only matters when you're selling a house. If you. If you. If you drop beneath what you owe, you're in trouble. But even if you gain equity, it doesn't mean anything to you unless you're selling. So being able to service that payment, I just wish more people understood. You solved most of the things that can go wrong with real estate by Having reserves, that's like the best piece of advice. Would you agree that that's why you felt confident enough to go in there and make that move and start your education 100%.

You have a cushion. I've got something to fall back on. I had a wife, one kid at that time, you know, it's at the stakes are higher. It's not just me. I lose, I move back to a one bedroom apartment and it's over. Right. So the stakes were higher and I wanted to make sure I had the right cushion for it. And to your point, I think debt is such an important thing to research and to find the right debt for you. We'll talk after this. I went into multifamily and how debt has been good and bad in that space for me, but specific to this property or those two properties in that town. It's a small town, college town, 20,000 people. But I called 14 banks and I can't remember if it's revisionist history, if it was bank number 14 that I called or 12 or 13, but it was late in the game. It wasn't like the first three calls that I made. It was 8, 9, 10, 12 bank that said, hey, we've got this portfolio product actually where we'll do this financing at this term. And it served what I needed for those properties. You know what I mean? It gave me everything I needed for those properties. I didn't need a ton of cash down. Their closing costs were much lower than if I went with a bank that was going traditional. Fannie, Freddie, I was building a relationship with this bank as well. So when we refi we went right back to them and we got terms that we really could endure. So to your point, that town is a college town in Covid has not done great. And that portfolio for us has been like, you know, we're e can buy, we're doing okay, but we're. You can buy on it right now. But the debt, the fact that we got good debt on it is what's to your point, allowing us to make the payment through this time and we're starting to see it come back thankfully now, knock on wood. But yeah, debt is so important. I learned that lesson big time with those two properties.

What have you seen being though that those properties are in New York? I know I've seen in the news a lot like New York shutting down evictions and not allowing this and that. And like they've kind of led the charge on the.

Tenant friendly and let's help tenants which you Know is good and bad maybe depends on who you talk to and what position. But what have you seen, I guess, over the last year? What have your tenants done? Have they been paying rent? What's life been like there?

They have. We had one tenant that negotiated down, like, for three months. We negotiated like a hundred or two hundred bucks less rent than she normally would pay because she was impacted by co. But that was early on. That was probably April, May, June of 2020. So we did. We dealt with that. But I mean, for me, we screen our tenants well up front. I think my wife does all of this stuff. So we screen our tenants well up front. You know, we use brokers in the area that have relationships with tenants that they've placed before people want to pay. You know, in most markets, like, there's your professional tenants out there, no doubt. Knock on wood. Again, we haven't appro. We haven't come across one yet. But our tenants have paid. They have. The bigger struggle is finding contractors to take care of some work in that area. But. But tenants have been pretty good. There's a couple tenant laws out there. I think California has one similar. That's like capping your. Your increase in rent that you can apply every year or whatever. And even that, the cap's like 5% or something like that. I mean, some people look at that and they get out of the market. To me, it's almost like, all right, well, it's kind of like thinning the herd a little bit, so it might be a place to look. When somebody says, yeah, we're capping it at 5%, it's like, yeah, but I'm not going to raise rents more than probably 3% a year at this point. So it doesn't really hurt me. But I get that the feel of it makes people run the other direction. And again, it's what it signals that the state is going to do in the future. They're going to get more and more tenant friendly. But we've been okay. We've been doing okay with our tenant base. I think screening is important.

100%.

So you bought a couple duplexes there and then what did you learn after those deals?

That two buildings with four units is a lot of work. And I'd listen again, bigger pockets. I'd listened to some podcasts in the past about multifamily, but they were really intimidating. Words like syndication words like capital raising and all that stuff. It was just like, whoa, that's another person's game.

Isn't that funny? I talk about that all the time, they're, yeah, we're going to get agency debt. Oh, that sounds really cool. You know, Fannie Mae loan, there's a ton of ways that multifamily can be made to sound very, very intimidating.

It can. And it's like anything else. Like, when you hear one thing, your mind automatically goes to, oh, my God, what else don't I know? Right? There's gotta be so much more. It's like, well, no, you didn't know that. You didn't know that agency debt was Fannie Freddie debt. And now you know that. So now the next thing you'll learn will slap you in the face and you'll go, okay, I know that now. So. So anyway, so I learned about multifamily. I learned that you could do it without the SY model, because, again, that just felt intimidating to me in that moment. And at this point, I'm in Michigan, so I'm living here. We're managing our properties back in New York. We have five units. I'm feeling like the big dog at the RIA meeting because most people had none. And I just do what I do. Whenever I get interested in something, I get intentional, I get educated, and then I take action. So got educated by finding. Actually, I think I heard him on your podcast, Jake and Gino. Love Jake and Gino. The guys are great. Learned a ton from Gino on what it is to buy multifamily, what it is to buy mom and pop multifamily, and. And how to kind of go about that. And all of a sudden, the 10 or 12 or 14 unit building didn't sound so intimidating. So the next step was, okay, I want to go this route. I found a partner, somebody that I met through a mastermind that I had joined. We had very, very similar ambitions, goals, a completely opposite or complementary skill sets. Like, I'm more the outgoing, I'll go network, I'll do all of that. He's more. Give me a spreadsheet in a dark room in a basement, and I'm happy kind of guy. So we complement each other really, really well, but found a partner that we could offset each other's weaknesses, if you will. And we started looking for multifamily, and that proved much, much harder than we thought it would. Because multifamily, the structure around multifamily, like the multifamily broker or agent, is a very different beast. Not in a bad way, but just a very different beast than your residential agent. Right? You go to a residential agent, you got a buyer's agent. You got a seller's agent. One's working with you, one's working with the seller. Maybe they're doing dual agency, but. But in the multifamily world, like brokers own the game. They have four people that buy from them and that's who they're going to continue to go to. So by the time you see a deal, it's been filtered through two, three different lists if you're new to the game. And that was a big learning for me going into that space.

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What else have you found? You know, we're going to get into your multifamily here in a second, but what else have you found challenging? Jumping from, like, the small deals into the larger multifamily?

Definitely. Like I said, the broker piece was the biggest thing. And that's where we created a meetup to get around that. I'll explain that in just a minute here. But the biggest thing was that, you know, there's a mindset component to it as well, I think that goes into it. So I think people just get intimidated. Like I said before about, and I did by, okay, wow, this big multifamily. Oh, my God. How much money? A million dollars. That's a million bucks. How am I going to spend a million dollars on a property? So I think it's honestly more just limiting beliefs and mindset more than anything. And then tactically, definitely for us, it was more the broker side of things. Just trying to find brokers that would take you seriously when you're. What you think is experience, hey, I got five doors. Right. But you're not multifamily experienced. So trying to break through with them can be difficult. That was my biggest challenge.

So how do you overcome that?

You got to take action, right? I wanted to be a multifamily investor. That was what I wanted to do. So the traditional route was we put together a business plan. We went and had lunch with brokers, paid for lunch. They were blown away by the business plan, which was great. Oh, wow. Most people are tire kickers. They don't even bring us this. They just come and say, yeah, I don't know, I'd like to buy a small apartment building. So the brokers that we met with would say all the right things and tell us, yeah, hey, great, I'm clear on your criteria. I'll send you guys stuff as it comes up. But then we wouldn't get that. We would either get something that's way outside our criteria or we'd get the thing that I just saw on LoopNet. The other day, like, no, you're not sending me that. I see that that's there. I've already looked at that. That's not a good deal for us to invest in. So my partner and I were talking about this, like, well, what do we do here? Because we want to break into this market. I've gone to some meetups. I didn't love the meetups. Some of them were more like the meetup was the business more than the meetup was a value add. I ran into that quite a bit, actually. And we looked and saw I met one guy that was in multifamily at one meetup. Like one guy had lunch with them and then nothing kind of came of it. But of the 40 people there, there was one other guy who had interest in multifamily. Everybody else wants to wholesale or flip or whatever, which is great. So for us it was like, look, there's no multifamily meetups around here. So one of two things. Either someone's tried it and nobody wants to go to a multifamily meetup so it's failed, or no one's done it yet. So we put together a meetup and we actually called it multifamily and more because we were like, well, if it fails on the multifamily, we got more. We could talk about more stuff. We could get into other things and not let the meetup die in the first month. So look, we put it out on meetup.com, we created a little Facebook group, but nobody was in there at that point. And first meetup we had a friend of ours loaned us a conference room in a local office and we had 15 people show up and all of them were there for multifamily. So again, we didn't have any multifamily property at this point, but it was for us just a way of creating a community. And what we thought was, hey, let's create ourselves as a face in this market around multifamily. Let's be known for that. We can get brokers to take us seriously or. Or whatever the case may be. So that was the plan.

That's cool. I like that. You know, I just, I was reading this weekend and I put it on my Instagram Beardy Brandon, if you want to follow me. I put up my Instagram story. This like 5 page section from Tim Ferriss book, the Tools of Tools of Titans and Tools is kind of like a summary of a lot of his podcast guests. But then also like, he pulls out just like these like lessons and things that throughout the book anyway. And he had this whole section on, I can't remember what's called basically like being a category king or like creating your own category. And we basically said it's rather than being like, like following what everyone else does, you just kind of create your own category and you become the thing. And even jokes in there about how like the term lifestyle design. He invented that term in the four hour work week. And then that became a thing that everybody knows. And it made me laugh too because like we did that with Burr and house hacking. Like we coined those terms here at bigger pockets and they became things because there were categories that didn't really have names. They didn't have a thing. You did the same thing with multifamily there. You're like looking around, you're like, well, there's a lot of meetups and if I just go start a meetup, I'm gonna be one of a hundred other meetups in the area or on, you know, thousands online of meetups. How can I be different? How can I be the only one in a category? So you created a brand new category called multifamily meetups. And you're like, I'm, we're the best multifamily meetup because you're the only one multi. Like, I'm sure there's now more, right? So I love that from a marketing aspect is if you can do that. We did that with our real estate fund. Like, I raised a lot of money in our fund. We, we don't have just a fund. We have a cash growth fund. What's a cash growth fund? It's a fund that gives you cash flow starting from day one and long term appreciation options through forced equity. Now that's a term I invented. Cash growth didn't exist before I put that word together. I put a little trademark on it now and it's like, hey, that's my term. But now all of a sudden people are like, oh, he's got a cash growth fund. Like, rather than taking two sentences or a paragraph to explain what we do, I'm now like the category king of that category. Oh, this is what we do. We, we do syndicating properties that provide cash flow from day one and appreciation options. You know, it's like, it's from a marketing standpoint. I love that. So let's dig into that a little bit because again, I think you're a very good marketer and you understand this stuff. So what did that multifamily and more Meet up. Like, what has that done for you? Where is it at today? I'm guessing it brought you leads at some point.

Oh boy. Everything. So I've done two multifamily deals and we're working on our third right now actually. And all of it has come from our community or our communities. So yeah, it started out, it started out as, okay, hey, we want to go in there and we want to, we want to be the face of multi, multifamily, so we'll be taken seriously. And every month it kind of grew and we adapted. Like, hey, it's. This isn't the right location. Let's go to this location. Ah, this isn't quite the right location either. Let's go to this location. And that what the content was and you know, at those meetups and how it flowed and all of that, like we've, we, I feel, have perfected it. And I can get into that if we have time. But yeah, from there, people in masterminds that I was a part of, some big believer in being part of communities that are of like minded people. So we're all, we've talked, we're all part of go abundance, right? Like, that's a community that resonates with me. So guys and gals and masterminds that I was a part of said, hey, I'm in multifamily. Like, there's no meetups in my area too. Like, how'd you do it? How did you create it? So I literally wrote like a two page document of like every step. Like, here's what I did on meetup.com, step by step. Here's how I got people to come to Facebook. Here's how I created my meetup, here's how I found a venue and just kind of wrote it all out and we started creating chapters. Like, nothing official, just like, yeah, hey, let's do a chapter here and a chapter there. And we had three or four of them at that point and started growing it out. Growing it, I should say. Today we have 21 chapters, about 10,000 members across the Facebook groups. And yeah, we're in all corners of the country. But to that point, the third month of our first meetup, a couple came to us, a married couple, and said, hey, look, we love what you're doing here. We've got this eight unit under contract. There's actually 16 units. It's two eight unit buildings in a community. Any interest in kind of partnering up and buying this thing? And that ended up being our first deal. Then later on we Bought another deal with the guy and gal who run our Cleveland group. So. So, yeah. So the meetup itself, the brand, the multifamily and more experience, if you will, has been huge for me.

So once you got rolling with your meetup, what do you feel like you did? Well, that made your sort of past the competition and made it more attractive for people to join and be contributing to.

There's a few things. So I think the things I did well were that we were consistent. So here's what I'll say. I think that when you create a meetup or when you're starting out in the networking space, like, the first thing you have to do is set the intentions to add value. That wasn't my intention going in. My intention going in was to get brokers to help me. That was my intention. So we went to our first meetup. Again, mind you, we had no multifamily. And here we are, the multifamily meetup people, and we figured out how to be credible in that space. But the first thing I learned was, man, when we go into these meetups and we seek to add value, huge. That's a big, big piece of what we need in order to attract the kind of people that we want in our universe. And then the second thing I thought we did really, really good show, good job of building our online presence. So for me, you know, a meetup is a meetup, and there are a billion of them on meetup.com, where you meet once a month, you go out, you see people, and then you come home. Even if you're running that meetup, that's the exposure you get to them. But I've heard and I've learned this from a few different people that, you know, I think it takes like, six or seven interactions with somebody for them to know, like, and trust you enough for them to invest with you, partner with you, or whatever it is you're trying to do to accelerate your real estate investing career. Well, if I'm only gonna go to a meetup every month, it's gonna take me six, seven, eight months if I go consistently. And the same people are there for me to find the kind of people that I know like and trust. And for those people that know like and trust me, for me to go through with my real estate career. So I'm already, you know, seven, eight months out from the people I need in my world if all I do is a monthly meetup. So the other piece to this was, how do we build a community? So where we Started people out on meetup. We would move them over to our Facebook group and really pour into them there with. With virtual meetups. Brandon, you were a guest at one point on our virtual meetup where people who don't normally have access to you on a webinar would have access to you to ask you questions. Incredible value add for a lot of folks. We had a ton of people show up for that. So building our brand online and leveraging the Facebook group as a community has been, I think, the biggest piece of our success. Like, we're really good. I think there are 10 million Facebook groups, and there's 1.5 billion people in Facebook groups right now. So to stand out, we. You gotta be good in those Facebook groups, period. You can't be run of the mill. You can't do what everybody else does. You've got to be intentional, involved, consistent, engaged. You've got to delete and remove people when they're hurting the group. You have to look at it like it's your home and this is a party and people are coming into your home that you're hosting. And if somebody ran into your home and said, Hey, 5% interest, no experience needed, I'll give you 100% financing. Meet me in the bathroom, right? Like, you wouldn't hang out with that or you'd want them to get out of my house. But you see it all the time. PM me if you want this, that and the other. Like, we kick that riff raff out and we make it about the community. I think that is by far the biggest piece of what has made our brand successful.

The same thing is what made Bigger Pockets. Bigger pockets. Today, if you look back 10, 15 years of Josh, like, when he first started Bigger Pockets, it was like. I mean, he got threatened to be sued by multiple. Like, many people who just got angry people, like, threatening him. Like, you know, come to his house and beat him up, like, all sorts of. Because he would kick people out for violating the rules. And he's like, you guys, this is my house. This is my thing. Like, we want a safe space that you're not gonna get pitched. You're not gonna get felt. Like every time you come to the site, you're just me. Like, hey, join my, you know, $50,000 training course or whatever the thing they're trying to sell. Or I can get you, you know, you know, yeah, the private loan stuff, the wholesale stuff. Like, there's a time and place for marketing and for. And for deal making. And my guess is that somewhere in your meetup you have a place that you somehow allow people to work together, at least like in the networking we did.

So. Absolutely. Yeah.

Yeah. And so, you know, it's just. It's about being respectful of that. So when you go to a situation like you're on the BiggerPockets forums or you're in your. Your Facebook group, knowing what the rules are for, the thing is so important. And then also if you're going to start your own, which I think everyone should definitely consider doing, is how can you be the leader of a community by doing that. Yeah. You have to be that strict. You have to have those strict guidelines and rules. Otherwise it just becomes one of the many other Facebook groups I've been part of that just, just you leave. Because they just be overrun with spam.

Spam. Yeah, there's a lot of shares. I hate shares. I mean, I have a place, I guess, but whenever I see somebody share something that they posted elsewhere and it depends on the look not be funny. If it's you two in a Facebook group who are niche famous, well, it's beyond, you know, you're known in this space. Niche famous. I've heard that somewhere. Maybe it was you.

Maybe.

But if it's you guys posting a share, well, that's a different kind of content. But, you know, regular Joe locally or whatever that shares something that they put everywhere else. That's just. That's like sending somebody over with a flyer to your house again with that same reference and saying, hey, so and so sends his regards. Like, great, get out of here. Thanks, but there's no reason for you to be here. So that community is big. I'll give you a quick, quick story on the point about, about, like my community. So I think people are people first and investors second. So my, my content or the stuff that I put out there is often like, hey, what are the weekend plans for people? Or hey, if you could be a food, what would it be? Stuff like, people had fun with it, right. They co and it creates community. That's my objective, is to create community. Not just an investor class, but community. So one guy stuck a deal in the group and we have a space for that every Wednesday. Here's a post. Put your deal in the comments. Everybody can go find it. Right. We put hashtags on it, really clean. But he dropped the deal in there. I deleted it and I got that same thing. No death threats or anything. But hey, look, you could put what you have for Thanksgiving dinner, but I can't put a deal there. I'm like, no, man, that's my brand. That's my community. This is what we do here. So I appreciate your deal, but there are a zillion other Facebook groups where you can drop that deal, and people will find it if they want to. But what makes our community thrive is that we're people first before we're investors.

That's so good. How did you navigate Covid during the meetups? Did you guys stop meeting? Did you go online? What did you do?

Went online. So I actually took a course so I could learn how to have more effective Zoom meetings, right? Because it was like, again, wanted to add value. So I went through and I learned a bunch of stuff. Little things like, as simple as movement on a screen. Like, everybody. You start a Zoom meeting. We're all on Zoom right now. You just sort of sit in here like, hey, what's going on? It's good to see you. But you could pipe music through Zoom. That's a good way to start a meetup off. You know, you can have people do things like, hey, what's on your desk that's important to you? And have them show the screen. They're interacting, right? Their. Their hands are moving. You know, there's. They say, like, the camera adds 10 pounds. It also takes, like, 30% of your energy. It does.

I say that all the time. Yeah, it's totally true.

So. So if you're, like, flashing, like, water bottles, it's. It's all of a sudden, you're watching a screen full of engagement instead of a bunch of heads sitting there. So. So we did. We pivoted to virtual, and we were doing a component of virtual before, so we're a little bit ahead of our time. Not expecting Covid. There's no genius here, but it was another touch point for us. Like, we meet every month in person, and we meet virtually, like, second Wednesday and in person fourth Wednesday of every month.

Hey, Jamie, what's something on your desk right now that's meaningful?

My stapler. Staple. My lips shut when my wife is telling me I'm talking to you.

There you go. Okay. Okay, good. All right, so let's go back to the real estate deals. I love the conversation on networking. We could talk there all day. But I want to know more about these deals that you bought. So. So the first multifamily you got came from somebody in your group. What Was that deal?

So 16 unit deal. We purchased it with traditional financing, if you will, so from a. With a credit union. And when we bought it, I could get into this now Or I can. I could do it more on the deal. Deep dive is up to you. It's. How do you want to.

You said it. Let's go to the deal.

Deep dive. Deep dive.

Thanks for bringing us there, Jamie. This is the part of the show we dive deep into one particular deal that you've done.

Sure.

So we got a lot of Ds here. So let's go into it. Number one.

What kind of deal was this and where was it located? What type of property?

16 unit property. So two eight unit buildings about two blocks from one another. And it's in a town called Pinckney, Michigan. So it's like a bedroom community to Ann Arbor. People have heard of Ann Arbor because the University of Michigan. So outside of Ann Arbor. And real quick, it's actually part of a 32 unit community that the sellers sold half to one seller at one point and half to another seller at another point. So we own 16 of the 32 and they're not next to each other. We own this one and this one and another person owns the other one next to us on one block and the other one next to us on the other block. Weird.

How did you find this deal?

So at the meetup, this couple, like I said, brought us the deal. We worked with them on the eight units that they had under contract and then worked on the other eight units with them as well.

Can we talk about this real quick or I want to just bring up this point. It's interesting that they wanted to work with you despite you having no multifamily experience. You've done. I mean, you've got the duplexes right in. In that house. But like, it's interesting how because you were the host of the meetup, you were the community organizer, you have a level of trust and credibility that just because you have the ability to organize people, people come to you and bring deals to you. Isn't that fascinating? Like it is people. Yeah, go ahead.

The other part too is, I mean, like, you think about that. People say, like, well, I don't have credibility to start a meetup. I can't be the expert. It's like, you don't need to be the expert. Like, you know, you need to be maybe a chapter ahead. Right. So you could be a chapter ahead of somebody and add value to them. And that's all we were. We had a business plan for multifamily that we could show brokers. Most people in the room didn't have that month. Two, my partner, who's the spreadsheet guy did a deal analysis. Well, guess what? Three syndicators showed up. So my partner sweat bullets like, what am I going to do? But we turned it into a discussion, right? These syndicators help. Helped my partner and me and everybody in the room kind of. Kind of develop what this should look like. But, yeah, you know, for those that are thinking like, oh, can I do this? Or whatever, I think there's two decisions you can make. You can either be the knowledge. And in some aspects, I am. When it comes to some level of multifamily that I have experience with or anything with mindset, I'm a mindset junkie in that regard. I could be the knowledge. So I can create content as the knowledge, or I can broker the knowledge, which is what I do with my meetups. I bring in people that know a lot more than me and let them provide their knowledge to add value to the community. All I'm doing is facilitating and brokering it at that point.

That's so good. So good. I like that. Brokering the knowledge. That's pretty cool.

That's clever, right?

Yeah, it's clever. I like that.

Probably the hidden value in what you're doing, Jamie, that maybe those who haven't gotten started haven't realized it yet, is you're pulling back the curtains and you're letting people see into your life. It's that simple. When you go to a thing like this and you get to know somebody, you're removing all the elements of distrust by letting them get to know your personality, which makes you more likable, which makes people want to work with you. It really is that simple. It's the introverted people like me who don't like meeting new people. It's expensive to be that way because my little circle of people that know me really, really like me. They trust me a lot. We're very close. But everyone that looks at me from the outside says the same thing. That guy always looks angry. I don't really like. He's kind of scary. I don't. They're not going to bring me the deal is what I'm getting at. They're going to go right to Brandon and like, hey, Brandon, please take my money. So for those people that like to meet with people, or even if you don't, it's a good business skill to have is what I'm getting at. There's always a distrust with someone you don't know. And if you can remove that makes it much easier for people, the universe, whatever, to bring you those opportunities. I think. Brandon, didn't you get your first multifamily deal talking to people at church and just telling everybody what you wanted?

Yeah, my first apartment was from an older couple at my church who I just was like, I want to buy an apartment someday. And they're like, weird. We have one.

And then you're very charming. They probably liked you. They're like, hey, we can help this guy out. We can get him started in the game. Jamie, there was probably an element of that, too, that was happening with you.

Yep. Absolutely. Absolutely.

Well, you know, people probably heard that story of my. That first property. I don't know if I've ever actually said, this is that first apartment where I mentioned to the people at church. I did not convince them to sell to me. I did not. I would. When they first told me they had an apartment for sale, like, I never tell the full story, but basically I was like, oh, that's great. You have an apartment. Cool. Have a good day. And, like, that was about it, right? Like, I wasn't like, okay, sell me your property. Let me tell you, I'm gonna make you this offer. I can do this. I was like, okay, that's. That's. That's great. Oh, lucky you guys. And, like, it took a year of them convincing me to buy their property, not the other way around. It took us a year to fit because I had all these limiting beliefs of, I'm only, you know, 24, I don't have any money, I don't know what I'm doing. I got no experience, and, like, one by one, the guy helped me work through it. Now, why would he do that? Like, why. Why would he. Why would he fight to help me buy his property? Because he liked me.

No, he.

Yeah, he. He liked and trust me exactly. Like, he knows, like, and trust. And you get those things, and people will fight to give you their deal oftentimes because they want. He wanted me to have it. I don't know. I think sometimes, like, people put people like us, like, you know, three of us, and others who lead groups on a pedestal is like, oh, they know what they're doing. They've always done what they're doing. I have no idea what I'm doing. I still don't know what I'm doing half the time. Like, it's just, like, I have a loud mouth, and I talk and, like. And people know, like. And trust me and you. That, though, is enough. So get people to know.

I can trust you absolutely to that point, too. Like, what you find is, you Know, you start to. Like, I've been able to network with. With you and some of the bigger multifamily names out there. Like, they're in my phone now. I mentioned Gino. I could call Gino with a question. So by. By being the lead of this and adding value, you start to attract these folks doing things at another level into your world. And they become my mentors. They become people that I can rely upon when I need information. So.

Well, that's the thing you learn when you watch them do something. You go, oh, I had no idea. That's all it took. That's all I gotta say. You know, that's just. There's. That happens so often in all of our lives. I'll admit this. A couple years ago, I didn't know that there was only like, four kinds of business entities. You've got an S Corp, a c corp, an ll, maybe another one. I thought there was like 400. Just in the back of my head, I always assume, like, there's a billion ways, like, how could I figure out which of the 400 to do? And, you know, when you talk to CPAs, they're not the easiest to understand. And then one day we were talking and it clicked. I'm like, wait, that's all? There's only four things I gotta learn. There's a couple differences between them. I can't believe I spent this much time being that intimidated. So for everybody listening to these talks, we're not that much different than you. We just hear more stuff from people that have already done it and. And that information is passed along?

Yeah, 100%.

All right, next question of the deal. Deep dive. How much was the property? Would you pay for it?

So we paid 755. 755,000 for the 16 units.

All right, and how did you negotiate that price?

So, like I said, the 8 unit was already negotiated ahead of time. We had a conversation with the owner. I'm trying to think of exactly how it took place, but I think we were at his lawyer's office. We talked about the second building. He wanted a little bit more because those other two buildings I mentioned had sold in the meantime. So he saw what his old neighbor got and said, I got to do a little bit better on the second building. So we found a price that we felt was reasonable, but he locked in on the first one. Older guy, he was, unfortunately, had failing health, as did his wife. So he was like, look, I gave you my word on the first building. It wasn't actually signed under contract, but he essentially committed to this price. We went to the second building and said, yeah, hey, look, willing to pay up to x. Which once you dollar cost averaged them out the two buildings together at 755, it ended up being like 47,000 a door. It was well within our range of purchase at that point. So it was a pretty easy negotiation from that perspective.

I would venture to say the fact that he liked you caused him to want to honor his word more and knew you. It's easy to break your word to a person on the other side of a transaction when there's two agents between you. That's not a human being. But it's different when you know that person and you're going to have to see them.

That's why I always try to find ways to get myself into every transaction. Like, forget the agent.

You're so smart. I was just. So I'm looking to buy a house for myself right now. I'm looking at house hack. And I was telling my buyer's agent, Johnny, who I have representing me, I want him talking to the other agents, but I want to be getting to know the seller. And he was, he was giving this really good description or the strategy to the listing agent that I had given him and said, hey, here's what we're going to do. And I was like. I told him that's never going to work because that is way too much information to make it to the seller. You think you're talking to the agent, you're not. The agent is a filter to get to the person who's the decision maker. And Brandon, you're so good at just like bypassing all that, getting through the firewall and getting right into their hard drive. And like, boop, I'm just going to upload this right here. You're going to love me. And I just made myself $100,000.

That's funny.

Yeah, that's exactly what you're trying to do.

Yeah, 100%. 100%. Relationships absolutely matter in this business. And to your point, right. Our partners, having gotten to know this guy in advance, did a great job of setting him up. And as a team team, we kind of brought that home with. We did what we said what we would do. We showed up when we said we would show up. You know, we closed when we said we would close. Right. All of that happened. And I think trust is a huge component of that.

That's a good tip. If you're trying to buy something, make yourself a person to the sellers on the other side do whatever you can to make it personal to where there's an emotional connection. And they think if I don't do this deal or if I back out of this deal, it's going to affect another family, as opposed to. It's just I got to sign a paper saying I want to cancel the contract or whatever.

Yeah. And that was a mistake I made as far as, like, the trust. I almost violated trust with the seller because when I met him and I'm talking to him, we had this idea of seller financing. Like, hey, maybe we could do this. And I pitched him on it. To your point, Brandon, I pitched him as opposed to listening to him and his needs. And he was fine. We didn't end up doing it. It wasn't like a long, drawn out thing. It was like a two minute awkwardness. But I could feel myself like, ugh, like I'm pitching this guy. Like, I'm literally coming after him. Like, here's what it benefits you, here's this. I just gave him like, like this buffet of benefits and didn't listen to him. And I've learned my lesson on that. Just, hey, what's his. What does he have to get out of this? And then can I work within that? And if I can. Great, then deals are made.

Yeah, that's cool. All right, so how did you go about funding this property?

So we put each 55,000 in. That was for down payment, closing, due diligence, as well as a reserve account. So four people bought the property, me and my business partner and then this married couple. $55,000 each in. And that was cash. And my partner and I said, hey, let's test some private money here. Because we really hadn't done that. We took like a $50,000 private money note from somebody in a mastermind, right. That would kind of invest with us. And we gave them a guaranteed return. So we went that way with it, got a credit union to finance it. And the terms were tough. It was like 20 years, 6% at that point. This is about late 20, 18. So two years ago, at this point, 6% interest, 20 year financing. It wasn't the best financing, but like my partner Ben and I always say, but it got us our first deal. So it was great financing in that regard. So that's how we did. That's how we funded it with some capital, some private money, and then just with traditional bank financing.

All right, so it was $220,000 all in. Did that cover just the down payment or did that cover some of your rehab costs?

Too. Yeah, it created the reserve account for rehab and everything else. Yeah, we had a roof to put on and some other stuff that we wanted to do. So it gave us a reserve account.

Okay, all right, awesome. So what did you do with it once you bought it?

So we had a repositioning strategy where we thought we could get rents from an average of, I think it was 578,000. So the renters had been there since like 99 to 2008 kind of thing. Like it started their leases then and they had not moved. Like their rents were the same from 1999 or 2008 or whatever the case may be. So tons of upside. So we saw it as, okay, 578 is the average rent. We think we can get average rent up to $700. And these are all one bedroom except for two, which the prior owner actually marketed still as one beds because he didn't want kids in there. He just wanted like quiet retired people in there. So he only called them all one bed. So we're like, well, all right, there's two, two beds. There's a little bit of a find there and that we can move rents. So the first thing we did was we went in and we saw where we could again add value. Right. So it wasn't like, great, new owner, here's the new rent. It was what maintenance issue. Do you have a faucet, a toilet, whatever. We'll take care of that. No problem. We went in and we cleaned up the common areas. We did some landscaping, we made the place look nice, and then we came to them with leases at that point. And our strategy was, because there were zero leases in place to stagger them. So we did some three month leases, some six month leases, some nine month leases, some 12 month leases so that when they renewed for a year, we had leases staggered. We don't want to sign a bunch of 12 month leases in April, and then next April the entire building comes up for renewal. So we staggered that a bit. Today we. So we are well past $700 per door. In fact, we just rented a unit for 925 that was previously rented when the guy lived there before when we bought it for 575. And what we did was we set a price for current residents that we would move them all to. I think it was like 675. Every resident goes to 675 from wherever they are right now. And then new tenants we brought in at market and we just kept testing it. 6957-257457-95850, 925. So it's kind of gone up and up. But in August, before this 925rent, we actually refinanced. The original partner said, hey, we're good. We kind of want to go. So we refinanced and bought them out with the refi proceeds. And my partner and I own the building together now. But the refi was 25 years, 2.99% interest. I mean, we caught it at the right time. So we got really, really good debt. Debt, which matters. Our debt went up like 300 grand, but our payment went down like 500amonth or something like that.

You had me thinking about that, Jamie, when you were discussing that the financing wasn't great is I realized it's easy to think that the loan and the house are the same thing. Okay, I'm buying a house and this is my payment. The house doesn't go anywhere. The loan can be changed. You can get into a deal with bad financing. In fact, I do that kind of frequently. Bad being like, compared to the market, not like bad for me personally. This is a much higher interest rate than other people are paying. This is a five year balloon payment situation. But I've secured an asset that I really like that I got under market value, that cash flows, whatever, the financing can just be improved. The house doesn't change. Don't make the mistake, if you're listening to this, of thinking that your loan and the house are all one and the same. The loan is a vehicle to get the property and it can be changed. I'm okay to go in at 7% interest, get the place stabilized, and then refinance into 3.875 or something like that. And I think there's a lot of people that hear, oh, 7% interest, I'll never do it. Or it only makes this much money. And they just get stuck on that way of thinking because you did it exactly right. You did what you had to do to get your foot in the door. Then when your foot was in there, you wedged the rest of your leg in and you turned it into a really good deal. So I think that's a great story.

Yeah, no, thank you. We saw a really clear upside, right? This was an obvious upside situation. Rents were severely low, and even now we're probably sitting on because we still have a lot of the original renters. There's 1,500amonth lost to lease. Right. As far as what the potential full leases and that's not even at that 925. I don't know if we'll get that again. That might've been one renter we found, who knows? So that's not even projecting at that rent level. Right. So yeah, our loss to lease is still pretty good. It's still $1,500 ish, conservatively per month. So yeah, to your point, securing the asset became, I don't want to say all we wanted, but we wanted to get decent. It was your priority, it was a big priority. And we figured out some way anyway to get the property that was, that was tenable for us, that we could deal with it.

Yeah. And financing is also largely dependent on the condition of the property at the time you're trying to get the financing or the condition of your own finances. So you can use financing, get worse financing on a property that's not as good, or even if you have credit issues or debt to income issues, whatever, when those improve, your financing options improve as well.

Yeah. What I love about multifamily, too commercial generally, is that you can bring in the people that fill those gaps for you. You don't have good credit, you can bring in a partner with credit. It's very different from residential in that regard, where you are what they're looking at, what the bank is looking at. They're looking at the asset in commercial and the team, do they have all the components we need? I mean, within reason. You can't have 40 people on a 10 unit deal. But do you have all the components that you need? You have credit, you have experience. And to that point, this group, this couple that came to us, I did have experience. I had five units, so I could list that. That first property that I hated way back when gave me enough experience for the bank to say, okay, hey, experience is in the equation now. So we're rolling.

And since your goal with almost anything that you're buying is to improve its value in some way in multifamily, that's usually improving the noi financing. Get better terms, which are based on the way that the property is performing is sort of a byproduct of what you're already doing. It's not a whole nother thing of work you have to do. You already did it now, boom. Just throw the cherry on top. Now when we refi, we get better terms because we made the property worth more and it's cash flowing harder. Yeah, I noticed the that financing seems incredibly easier for commercial in general than in residential. I think Brandon's probably sitting inside, like, yes, because we know what it's like when I'm trying to. I told you, I'm trying to buy a house. There's like 38 mortgage statements that I have to get together and property tax things to show they're paid. And it's just absolute hell trying to get that done. And you go to buy a property and it's like relatively painless when it's commercial.

As long as you're honest on a personal financial statement, it gets you a long way. So, yeah, absolutely.

Well, thank you for sharing this. What lessons would you say you learned from this?

So I think the first one was, you know, and I learned it thankfully before we did it, but we were ready to go in. Like, rents are low, go. But you know, the first lesson we learned early on was these are people first. Like, this is their home. So going in with that softer approach of, hey, look, let's, let's go in and take care of some issues. Let's get to know these folks before we all of a sudden jack rents on them. We'll be very clear. Like, yeah, look, we're looking at if the rents are low, we're looking at what they're going to be if they ask. And all of them ask, great new owner. How much more you charging me? That was like the first thing they said when we opened the door, but we brought them a little care package. We were good to them. So I think people first add value first in any component. We talked about that in networking, but I think it's just as important when you acquire an asset and there are people in it, it's an asset to you, it's home to them. So making sure that you add value to them, that was one big lesson. The second one was, and I forget who I talked to, but it was an investor that I had a conversation with in advance. But just making sure you have a really, really, really good operating agreement. We did. We ended up having a good operating agreement. Our partnership dissol very, very amicably. We agreed on a price. We wish each other really well. And it was never contentious, it was never bad. They're good people. We still keep in touch now. But the operating agreement I think was central to that. And we were ready to go in with a boilerplate off a Google operating agreement. And I forget who it was. It was somebody in gobundance. I forget who it was that I talked to. And he said, hey, look, so let me just run this scenario by you with your current operating agreement that you're about to sign. What if this, that and the other happens? Then what do you do? I'm like, like, I. I don't know. So he's like, maybe you want to upgrade, you know, find an attorney, get a good operating agreement in place. So I think that was another big learning for me.

Yeah, there are things that you can skimp out on a little bit, and there are things you should not. And I think that's a good one, especially if you're going with partners. Like, yeah, operating agreements are something that's very, very important. It just, it manages. It's all about managing expectations. Like operating. Operating agreement doesn't matter if everything goes perfect, like really much. But it matters when things go wrong. Which things always go wrong, though.

Yeah, we'll call it an expectations agreement. That's what it. And that's why everyone that has one has a good experience. It's not that the operating agreement was magic. It's that it forced expectations and conversations to be had about what they were brought up to the surface. And that's really the key to good relationships. It seriously is just understanding what expectations you can have. Yeah.

We didn't know these our partners right before, like, really we got to know them, but, you know, we knew we shared values. They're high value people. They're very good people. And they. It wasn't the plan for us to buy them out after. After a year and a half. The plan was to refi take the proceeds, buy another. Well, we just bought the other eight units, essentially. But for them, they had an opportunity and they wanted to run with it. And it made sense for all of us to kind of go forward with it. But to your point, being clear on what our arrangement was, I think is key.

That's good, man. Well, that was the end of the deal. Deep dive. Now I want to move into the second deal.

Deep dive here.

No, we won't go as deep. But I'm wondering what was the next property you bought? Another multifamily then it was larger, right?

I did 22 units, not much larger. And that was with the folks that run our Cleveland Multifamily and More chapter. So. So, yeah, this one, I don't have as much detail out. I'm a smaller partner in this deal because they needed, again, they needed a part of the team. Right. They needed some liquidity, they needed some net worth, they needed that sort of thing. So I got in on that deal for a smaller percentage, have my share in it, but we get a weekly update on what's going On. I'm actually able to be fairly passive with that, but it's a nice value add play. Again, I know this person that we have a lot of people that come to us with, hey, can you sponsor this deal? Can you sponsor that deal? But very, very selective with saying, no, I'll sponsor this deal, because I know the person, I know the market, I know the asset set. And that's what we got into with the set with the next deal.

Cool.

Where's that one located at? Just out of here.

Cleveland. Just outside of Cleveland, Ohio? Yeah, about two hours from me.

Very cool. All right, man, this has been. It's been good. And we're. We're slowly wrapping things up here. A couple of thoughts before we get out of here, though, and before we get into the Famous Four, I'm wondering who are, you know, leading both, like, the. The multifamily and more group. I know you're also leading a new. You have a new thing which we'll talk about a little bit later. What was it called? The thing through Gold Buns Emerge. Yeah, we'll talk. Yeah, we can definitely talk more about that. And Emerge is, you know, largely a goal setting mindset thing. So I'm wondering if you have any advice for people who are thinking, you know, I don't set a lot of goals. I'm not a big goal setting person. I really want to take. I wanted something different on my life, though.

Like what.

What's kind of like the process you tell people to go through who are just getting started with their real estate journey and they need some structure to that.

Yeah, you have to have a vision, and it doesn't have to be perfect. And I would say to you, take the how out of the vision.

Vision.

So many visions that I see are like, I'm going to have this, that, and the other by investing in multifamily properties. Like. No, no, take that part out. Take that out. Just, just what's your vision? You know, you gotta be somewhat realistic, but at the same time, dream a little bit. Like, I'm gonna own a $5 million home in six months. Like, maybe not if you're not already in a position to buy that $5 million home. But if your goal is to live on the beach of. Live in Maui, you know, like you, Brandon, that put that in your vision. Right? And every day you should set that vision, look at it and then let it go. Forget about it after that. Just every day, recall it, but don't dream all day. Now. You got to take action. So the first thing is you have to have a vision. The second thing is you need to be able to outline your goals specifically, like what goals that you need to accomplish to achieve that vision. And I love breaking it down to now kind of goal setting to the now. So in two years, I need to X. So this is my goal for two years. So in one year to hit the two year, I got to do this. That's my goal this quarter for this year. I got to do this this month for this quarter to achieve that goal all the way down to. Well, right now, what do I need to do? I need to open a Facebook group so that I can start inviting people to create my community or whatever the case may be. So you got to have the vision that compels you. You got to have the goals that really kind of set the measure for you and they need to be measurable. There's a big distinction between intentions and goals. Like, I want to be a better husband is an intention. But. But you can make that a goal. Like, I'm going to take my wife out on 26 dates this year. Does it make you the best husband in the world? Maybe, maybe not. But it's the right. It's a goal, it's a measurable that you can track and look at consistently to get you toward that goal. And then thirdly, you have to have a mechanism by which you recall and look at your goals consistently and you plan out the next week, the next month, or whatever the case may be. Every Sunday I sit down, my wife knows this, I leave for an hour or two, I go sit down and I look at my week. I look at, okay, what do I got to do this week to achieve this month's goals? What do I got to do this month then to achieve this quarter's goals? And I do that every week religiously to make sure that I'm make sure I'm tracking in the right way. People just, I didn't spend the time on this. I didn't learn this until joining GoBundance, which is why I'm like so passionate about this whole goal setting thing. And I did a webinar with David Osborne. For those that don't know. He's private jet millionaire, right? Like he's a big millionaire New York Times bestselling author and all that stuff. But we did this webinar where he went through his goal setting exercises. And I mean, I'm hosting it, but I'm just listening to this guy give more and more information. And I just took a ton from it. But I think you have to be intentional. I think you have to have a vision that compels you and you have to systematically have a habit that makes you recall your goals. But the vision, the vision has to be something you look at each morning. I do it with part of my morning routine. That's my vision. And then I'm done. I'm onto action from that point on. And it's amazing how those visions start to kind of come true as you take that action over time. That little 1% change each day, it drives you there. Get a little excited about this.

Sorry about that.

Me too. This is good. This is great. This is great. All right, so that said, let's move over to the next and last segment of the show. It's time for our famous four. This is the famous four. It's the part of the show we're at the same four questions to every guest every week. But before we ask Jamie his questions, let's hear what's going on this week around the bigger pockets podcast network.

Hey, what's up, guys? It's Tony from the real estate rookie show. I just wrapped up one of the best episodes I've recorded. If you're looking for motivation and inspiration on how to get started. Episode 47 of the Real estate rookie show with Andres. He shares his story about how he immigrated from the Dominican Republic to America with only $500 in his pocket and how he built a portfolio of seven units in less than a year. He's got a really cool story about how he's using other people's money, how he's managing his rehabs, how he's now transitioned into developing land, and he's got a really cool story. So if you're interested in hearing, head over to real estate rookie show 47.

All right. And that said, let's get to the famous four. Jamie, this one's for you. Number one favorite real estate related book.

I struggled with one. So I'm going to give you two. The first one is the best ever. What is it? The best ever apartment syndication book by Joe Fairless. Yeah, great book because it's. Yes, it's very tactical. Yes, it gets into syndication. It dumbs it down. But for me, chapter three or so gets into thought leadership. That's a big component of Joe's whole vision. In fact, I interviewed him on only that on thought leadership because it's such a compelling thing. So that's one. The other one, I think, for multifamily investors looking to jump from that duplex to multifamily I love Wheelbauer profits. It talks about the simplicity of the mom and pop model. So shout out to my boy Gino.

All right.

Does Joe Fairless have like a best ever cookbook, Best ever fitness book, Best.

Ever comic book, Best ever undies, Best ever everything.

Yeah, I got a pair on right now. They are comfortable. They are the best.

They're the best ever.

They're the best ever.

All right.

What is your favorite business book again?

I don't like just one, so I'm going to give you two here. And I don't know if you call them business books, but they're more mindset. The first one by far is Outwitting the Devil. A huge, huge fan of that Napoleon Hill book. I don't know if you've heard of it.

I have it, but I never finished it. I started it and I never finished it.

Well, you need to finish.

Not from. Yeah, not from lack of liking it. It was great. I just like somehow set it down and never picked it back up.

Got you not to read it.

Devil got me not to read it.

It was founded me.

Outwitted. It's a weird read in the way it's laid out, but it's. It's foundational for Think and Grow Rich. So that was a big mindset book for me. The other one I've really gotten into biographies and the one I read recently that I love is Shoe Dog by Phil Knight. The Nike Story. So many business lessons you can glean from that, you know, go on for days. So that's. I consider that a business book. That's taught me quite a bit. A bit.

When you read Outwitting the Devil was anything like the screwtape letters by C.S.

Lewis.

Informat you?

I don't know that language you just spoke. No, I. What is that different book?

It's somewhat, somewhat similar, David. I guess. Yeah, it's. It's. It's got a.

It's written from the perspective of the opposition. You're getting into their head, so to speak.

He interviews the devil in his own way, like he's actually speaking to the devil. So the book is written almost like an interview format. But yeah, he, he's. He's essentially understanding not to give the whole book away, but like the devil's true crime. The devil. I say in air quotes, like it doesn't have to be a religious thing, but the devil's true way of getting people is not like burning in hell over. Over killing or whatever. It's making them drift through life. It's it's like, you know, so Taking away intention. Desire. Taking away intention. Yeah. And it was just a really, really well laid out book. And again, I think it. I think it sets up think and grow rich well.

Awesome. All right. So what are some of your hobbies?

Yeah, I have a couple. It's funny, I feel like I do this a lot, but a couple hobbies. And it's a big football fan. My Buffalo Bills are actually good this year, so I'm excited about that. But I haven't watched a game in a few years.

Are the Bills still playing? I didn't even know they were still a team.

I'm going to bypass that. I haven't watched a game in a few years because I have young kids and it just felt like a waste of three hours I could be spending with them. But the five year old is starting to watch, so I'm starting to watch again with him. So that hobby's back. The other one, I love spinning and I have kind of a warped mind. Like you go spinning, not like sewing things, but go to a spin class. So I take the spin instructors quotes, I twist them to be a little bit less than what they're supposed to be, and I post them on Facebook all the time. People get a lot of joy out of it.

It makes me smile whenever I see them. It's pretty.

Give us an example of one now. We need to hear.

Oh, God, yeah. All right, so. So in spinning you have a resistance knob, right? Okay, so you have to turn the resistance knob. But this instructor may say something like, come on, reach down and turn that knob. I can see you. That just cracks me up. So I put that out on Facebook. Facebook. You know, with a little innuendo, people.

Yeah, you crack me up quite a bit.

Too much. Sorry, did I go already?

What's your handle? If people want to follow you now and they want to read these, you.

Can follow me on Instagram at the Jamie Gruber. It's been a while because our spin studio has been closed down recently, but I'll start up again hopefully. Mid January, Michigan opens up. But at the Jamie Gruber, everywhere you can find, you can find those.

That's awesome. All right, last question for me. What do you think separates successful real estate investors from those who give up, fail, or never get started?

I think it's a couple of things, I think, and we mentioned it. One is they don't have clearly defined goals, which we go back to that vision and setting goals. They just don't take the time to truly define Their goals. There's a stat, and David said this in the webinar that I mentioned, 95% of people don't set goals. 95% of millionaires do. Right. So there's a clear distinction between, you know, if you're a millionaire and you're doing well, you have goals. That's one. The second one is, and I'm guilty of this, bigger pockets is a tremendous value as far as a podcast. But I think some people, when they listen to the podcast over and over, they hear the mistakes everybody makes, and they make an endless checklist of go through a deal and make sure I don't make all these mistakes. And so they find one little thing. It's like, oh, can't do this deal. When it's like, that's not a deal killer. It's just something you have to be mindful of. So doing a deal. And I don't say that flippantly, like, just go buy something. Not all. Write the numbers down, make sure it pencils out, and then with your best knowledge, buy the thing. Understanding. Like I said before, you're probably going to lose on that first deal, or you're going to lose at some point on that first deal. But you gain in knowledge. What you gain in knowledge and experience is exponential.

Yeah, maybe there's an analogy of you're at the top of a hill, you want to go snowboarding, you're going to fall going down that hill. You are not going to have fun on your first time, but you don't want to go to a black diamond. You don't want to die on your snowboard. But if you can figure out a way to mitigate the way that you're going to take those bumps, you'll learn snowboarding. And then there's people that absolutely love it.

That's a great analogy.

Thank you. If I don't come up with them, then biggerpocket said that they're going to replace me with, like, Drew Carey or Steve Harvey or one of those guys at Benchmark.

MP is rolling Steve Harvey in here.

Good man. There's a lot of pressure on me.

All right, thank you, Jamie.

Last question for Steve Harvey on the podcast. That'd be an amazing episode.

Would be. I don't see how that wouldn't be entertaining.

If anybody knows Steve Hart, Harvey or Drew Carey, we will take either of them as a guest on the podcast. Thank you.

The price is right.

Yeah. Yeah. Okay, let's see.

Last question. Tell us where people can find out more about you.

Yeah. So I mentioned a couple of things. So for multifamily more, check us out on Instagram at multifamily more. You can do that anywhere on YouTube, on Facebook, @ multifamily and more. But follow us on Instagram there. I mentioned I'm really excited about this GoFundance Emerge program. For those that are familiar with gobundance, it's the tribe of millionaires, right? I'm lucky to be a part of that tribe. But this is the first time that I think gobundance has ever offered anything for somebody to become a millionaire as opposed to having to be one first. So you can go to goabundance.com goals and there's a great webinar that I did with David, I mentioned already that you can watch. And he goes through his goal setting exercise, which is he shows his book all of his goals. I mean, it's really, really tactical. So goabundance.com goals, you can check it out.

There. That's awesome, man. Really appreciate it and look forward to you doing that and just provide so much value for people in all your communities. You got multiple communities here and you're. You're awesome, man. So appreciate having you on the show.

Today. Thank you. Yeah, no, thanks for having me.

Guys. Thank you. David Green. You want to get us out of.

Here? This is David Green for Brandon Cash Growth Turner signing.

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Online. Thank you all for listening to the BiggerPockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico. Content and editing is is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential or other damages arising from a reliance on information presented in this podcast.