488: From 4 Units to 2,000 and Why Large Multifamily “Isn’t So Scary”

Hey you. Are you a BP superfan? Have you gone way back in the archives in the days when Josh and I sounded like nervous 8th graders presented in class, staring down at the floor? If so, would you want to be put on a short list to join David and I on our live call in shows? What about exclusive access to new segments and show ideas? We're testing. So can you help shape the sound of the show? We're looking for a small group of power users, passionate, raving fans of the show who crave more behind the scenes access. And all we want from you is your genuine feedback as we build this show even bigger and better than before. We need about a hundred people, so this is going to fill up fast. If you're in, go to biggerpockets.com poweruser to sign up again for exclusive access to new content before it ever sees.

A light a day.

Go to biggerpockets.com poweruser that's biggerpockets.com power user. This is the BiggerPockets podcast show 488.

On the deal we're doing now. We are going in significantly lower leverage than what we could, right? Literally to the tune of $8 million less leverage to reduce risk. Right? We don't know what the future holds, but we know we cash flow and we reduce risk. So it' a safe investment. You're listening to Bigger Pockets Radio. Simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the hype.

You'Re in the right place.

Stay tuned and be sure to join.

The millions of others who have benefited.

From biggerpockets.com your home for real estate investing online.

What's going on, everyone? It's Brandon Turner, host of the Bigger Pockets podcast here with with my co host, Mr. David 31 flavors green. What's up man? How you doing?

Well, I just got a new nickname, so I gotta say I'm doing pretty good. Can you explain what that means?

No, no, I'm not gonna explain it. It's gonna come up later in the show. You'll hear it later. So stay tuned for that. A little bit about David's background. You might not know about him that I did not know about him and I'm like your bestie. I'm a little offended actually. I didn't know this, so I learned it today.

That's because all we ever do is talk about you. If you, if you talked about me more than yourself, you'd know a lot more.

About me. Let's talk about you. So what do you think about me?

I think that part of the reason we get along is. Yeah, that's actually very joke. It's like you said a comment one time but before I was on the podcast that I always thought was good when you said millennials will say things like I'm a millennial, I don't like labels or I'm a millennial, we don't like labels. I always thought that was one of the funniest things I ever heard.

I don't know if I was them. I think I said that and you just made fun of me for it. I don't rem. Today's show is not about you. It's not about me. Today's show is about Ferriss. Actually an amazing guest named Ferris. Musa Ferriss is a super awesome guy. He's gonna talk a little bit going from like the small deals and the mindset of like the single family and the small multi start with a 4 Plex all the way into buying like a hundred unit. And now like today like, like he's owns like thousands of property, has bought thousands of units. I mean, so cool story. You're gonna hear a lot about that today. A little bit about underwriting, how to run the numbers on properties and make sure you're not making messing up there. We talk a lot about networking. That's really good. I talk about how David's a astronetworker. You're going to learn David's secrets today. So grab a pen for that and a lot more. So that and more to come. But first, let's get to today's quick tip. David, why don't you hit today's quick tip today something real estate related. What can you share?

Today's quick tip is don't make the fatal flaw of assuming that year one numbers are going to be the same as year 30 numbers. Real estate is an evolving moving target. Many deals don't look great right off the bat and are incredible three, four years later. Other deals look like home runs and are nothing but a headway headache three to four years later. So the quick tip now is what I call zoom out. When you zoom in, you tend to see the problems and you then amplify them in your brain. You look at inspection report, you see there's a foggy window and it just becomes a deal breaker for you. But if you zoom out 30 years, there's not a person alive that ever bought a house that could tell you what was even in that inspection report. And they're very glad they bought the property. So take some pressure off of yourself by taking a bigger picture approach.

I like it. It's actually one of the reasons I like the bigger pockets calculators like the rental property calc, especially in the burc is because at the bottom of that page when you go to the results pa, it has like year 1, 2, 3, 4, 5, 10, 15, 20, 25, 30 and you're like oh wow, if I hold this hundred thousand dollar property for the next 30 years it's going to make me a $1.1 million in profit. You know, over those 30 years. You're like oh, I guess a $20 like light bulb, you know that I'm freaking out about right now is really not that big a deal. Yeah, zoom out. I like it man.

Good job Toyota Thon is on and right now your local Toyota dealer is celebrating with can't miss year end deals on the vehicles that built Toyota's reputation for legendary Discover the stylish and efficient Camry and Corolla, both available with all wheel drive or go with the RAV4 or Grand Highlander. Versatile, adventurous and ready to take you and your family wherever the road leads. Need muscle? Take it up a notch with a Tacoma or Tundra, built tough and always ready for the long haul. And no matter which Toyota you choose, you'll find smart financing and lease options available to qualified customers, making it easier than ever to get behind the wheel of the Toyota you've been waiting for. But don't wait. These year end savings won't last. Shop the entire Toyota lineup and find a great deal today on buyatoyota.com toyota let's go places.

I've had my home security system for quite some time now, and the best part? Half the time I forget it's even there. It's just quietly doing its job, keeping my place safe while I get on with life. If you're wondering what I use, it's Simplisafe and it has been solid from day one. What makes it different is how proactive it is. Most systems only react after someone breaks in. That's like opening an umbrella after the rain stops. Simplisafe helps stop trouble before it starts its AI Cameras can spot a potential threat outside and real live agents jump in, talking through the camera, letting the person know they're on video, that the police are on the way, or even flipping on a siren or spotlight if needed. It's protection that actually prevents problems instead of cleaning up after them. That's why I've stuck with it all these years. It just works quietly and confidently like the world's most polite bodyguard. And right now is a great time to get started. 50% off any new system. For a limited time, go to simplisafe.com host Again, that's simplisafe.com host because there's no safe like SimpliSafe if you own a short term rental. Here's something worth knowing. Not all landlord policies are built for your type of property. And with holiday bookings, chilly weather, and higher guest turnover, having the right coverage is more important than ever. Steadily offers insurance designed specifically for short term rentals, covering property damage, liability, lost rental income, and even unexpected issues like bed bugs. Steadily works exclusively with real estate investors so they understand the details that make short term rentals unique. And they build coverage to match it. A quick review of your rates and coverage every year can help you protect your property and your cash flow. Get a quote in minutes@biggerpockets.com landlord insurance steadily rental property insurance for the Modern Investor all right, we're about ready to.

Jump into this now. Quick disclaimer. I do want to put this out there. Ferris, who's our guest today, he is actually a jv. We're doing a JV deal together right now. So I just want to make that aware of like we're doing a big apartment deal together. So if you're wondering, that's not why he's on the show. He's got a cool story and he's super good at explaining topics. But I don't want people to think that I brought him on and didn't mention that he's a partner of mine. So Ferris is a partner of mine. Kind of like David Green here is a partner of mine like about 100 different things in life. In crime, Partner in crime.

Partner in fighting crime, baby.

We fight crime.

Getting triangled. What do you buy? Geometric partner. You triangle me all the time.

Oh, I like it. Geometric Turner. That might be my new nickname I'm going to give myself. All right, forget beardy Brandon. We're going Geometric Turner. With that said, time to get in today's show. And hey, if you're watching this on YouTube, don't forget to get a little thumbs up like below the video and subscribe to our channel for more amazing podcasts like this. Farris, welcome to the Bigger Pockets podcast, man. Good to have you here.

I'm glad to be here. Thank you very much, Brandon.

Yeah, well, let's jump into your story a little bit. I mean, you and I hung out in person there down in Houston, Texas, a couple weeks ago, we really hit it off, and I was like, I got to get this guy in the show because you have a cool story. So how did you get into the world of real estate? Why real estate investing? What were you doing before that? And then kind of, where did the inspiration come from?

Yeah, so, I mean, for me, my background. Software, right? I used to work at Microsoft, had a software kind of company in high school. And then after Microsoft had a software company and really, you know, was looking to invest in something, and believe it or not, I started listening to the Bigger Pockets podcast many, many years ago. And really, you know, I'm the kind of guy that listen a lot of podcasts, read a lot of books, and hop in and figure it out. So I pounded down probably 100 episodes the first three months and really got inspired and bought my first purchase, really, a fourplex down the road from our office now. And so bought that, got a good taste of what multiple units looks like and bought a bunch of houses, realized it doesn't scale, and the rest is history. So fell in love with real estate, right? It's the things that I love. It's people's numbers systems. So that's maybe the short answer, and I'm happy to give you more if you want to know.

So I want to jump into the fourplex, then. Tell us about that. Where'd you find it? What were you feeling like when you got it? Walk us through that.

I was still in Seattle at the time, and literally, you know, I got inspired to go buy a Fourplus. I knew I was going to move back to Houston and did all the research, found a deal, ran all the numbers, and again, I'm a very numbers guy. And I just called up a random agent that I found on Bigger Pot because I'm like, hey, I've already found the deal. I just need someone to transact it for me. And boom, lo and behold, I went out there, and my dad thought I was nuts because I never bought any real estate in my life and bought that fourplex and did very well with it in the long run. But it was nice for me because it gave me a taste of what having more than one unit looks like. That's the big thing. And coincidentally, it's literally a mile and a half from our office. Brandon. So, you know, you almost. We almost drove right by it. I didn't point it out to you.

That's funny. All right, so walk us. You said you bought some houses as well. What Were the big differences between multifamily and the single family for you? Like, what did you find and why did you get attracted to the multifamily? Because I know you do a lot of big multifamily today, but what steered you away from the single family long term?

Yeah. So, you know, maybe to give a little bit more to the story, I bought that fourplex in Houston because that's what everybody was talking about. But there's not a lot of fourplexes and duplexes in Houston.

That's part of the problem. Right.

Houston's a very, you know, we grow out not up right here in Houston. And so really didn't find many more fourplexes. So I bought a bunch of houses, scaled in. I did. I think I did 16 closes in the first year, year and a half. So did a lot. And then realized it just doesn't scale very well. Right. It's not a business where you can have a dedicated team until you get much bigger. Right. And so I didn't really like that. The fact of it. And you're really. It's a numbers game. Right. You know, you get one hit and sure, you just bought a house, but that house is a $200,000 house. You can't grow much more quickly. That said, I was going to go do my own small apartment. I'd already got a taste of the fourplex. I saw the power of that one because guess what? A tenant leaves, there's still three more people there paying rent. As long as two people are there.

That fourplex would have been mine for free in the long run. Did that and then just learn about apartments. Luckily, I did not win that very first deal that I had offered on. It's a 32 unit in Conroe here in kind of near Houston. And it's kind of a funny story because I didn't win that deal. Well, fast forward three years later. Right. Obviously, I buy much larger apartment complexes now. And that broker, I had asked him about a deal that he had for sale. I think it was a $70 million deal. And he asked me, he's like, how do you go from the 32 to the 70 million? And I asked him the same thing. I'm like, how do you go from listing the 32 to listing that $70 million deal? So it's kind of funny how things come full circle.

It is. So why, I guess you said earlier, you said, I'm glad I didn't get that 32 unit. Why?

Because I would have been stuck with it. Right. Meaning I would have focused all my time and effort in that. And yeah, I would have done well with it. Right. But it's not a. That's a get rich yourself kind of business. But it's not scaling and building a business I love. I'm an entrepreneur. I love building businesses. I love building teams. I love building cultures.

Right.

That is just building wealth for me. Whereas. And I would have probably spent two years with that deal and not really opened my eyes up and learned more about syndication and kind of started disrupt equity.

Right.

So that's maybe the reason why I'm happy I did not win that deal.

Dude, I'm so glad you brought that up. So this is an important distinction in real estate, right? There are. And if, in fact, you know, the book that we're launching here at the end of July, the Multifamily Millionaire, is in two volumes, volume one and two. And people ask, what's the difference between them? Well, volume one is all about, like, the first thing you said there, which is like, the small deals. I'm in it, I'm getting rich because I'm involved, right? Like, that's a different approach. Like, the way you buy a duplex, a five unit, a 20 unit, is very different than the way that, for example, we're buying a 530 unit.

Right.

It's a completely different game. Same business and still real estate. But, like, you would never plan on picking up a toilet and moving it because you can't get it to plunge. Right? You never do that in a 500 unit. Like, you just. It's a different. It's really. It's a mindset game, right?

It absolutely is. Right. One's a me sport, one's a team sport, right? And so, you know, getting past that and understanding that piece of it, I think is crucial to people. And I think that's what. That's what I love about it.

Right.

That's why I'm glad I didn't win the smaller one because, again, you know, it's fun to do things with a team, with people and, you know, build entire companies out of it, if that's what your thing is.

Right.

So, you know, I'm on the younger side, right. And so I still got many more years in me, and I want to really build a, you know, a company with a track record, reputation. So that's kind of why I'm happy I went that direction.

Yeah, that's cool, man. So question for you. Do you think people. I got a lot of questions for you. It's a Podcast.

Do you think people should start. Is. Is there a case where somebody should start with the big, like start with the 50 million or 60 million or whatever that like, you know, 20 million even, like, should they start there? Or should everyone go through the 4 Plex, the single families, the 10 unit, and then scale up? What are the. What are your thoughts on that?

I mean, so you learn a lot, right? I mean, Brandon, you know this yourself, right? You learn a lot changing those toilets or dealing with those contractors, and you start to learn about quality, right? And people and how shady or unshady people can be. So I think those are valuable lessons that you learn. I would answer the question as it depends, right? If you are doing a larger deal with qualified people that have done many of them that know the ins and outs, that's okay, right? You're there to learn. But if you're going to go do that yourself, I mean, I think unless it's your own money and you don't really care if you lose it, all, right. I think it's reckless to kind of go at it, you know, with other people's money really is kind of a big part of how I look at it. So I think it's valuable to learn a lot about closing real estate, about operating real estate, about even transacting and selling real estate. Right? And what does a buyer look for and what does a seller look for? Right? Those are two different parties, two different people. And kind of putting yourself in that mind thought and sure, you do a larger apartment. It's all just to what you said, Brandon. It's all the same thing just happens to be scaled out, right? And with teams involved instead of individuals.

So going on, on that same topic of the bigger deals versus a smaller. Maybe you can dive into, like, what are some of the skill sets that you have to develop in order to do that bigger. Those bigger deals, the scalable ones you mentioned team. It's a team sport. I agree. It's not a me sport, it's a team sport. So what. What are those things you got to be good at?

Now? The very first thing you got to be good at is delegating, right? You know, it's. And I think a lot of people really struggle that it's not about you doing everything, even though you can. Right? And I'm constantly. My business. I pause and I think about, okay, what is the. What is the thing that is taking the most of my time, that I could bring someone in that is better at it than me, that can really micromanage that and do it more successfully. Right. And so I think that's a huge skill that you have to learn. Whereas whenever you're buying a smaller residential house, a fourplex, it's all you. You're wearing every single hat. Right. That's one piece. The other thing I'll say actually is structuring. Right. I think where you get really successful with real estate on the larger side is being able to get creative in the structuring, understanding the debt, understanding the seller and their situation. Right. And really being able to get creative.

Right.

You know, people talk about that on the residential side, really on kind of the wholesaling front, but it really has kind of a multiple on the commercial side. Right. And being strategic, being smart and knowing that, I think is a huge skill set that you learn over time because it starts to open up more doors. So whenever we analyze a deal today, it's very different than whenever we analyze the deal four years ago. Right. Right now we literally have a checkbox of different ways that we could structure this thing to make it possibly work and figure out what is the way to reduce the most risk but get the most gain. So I think that's a huge piece of it.

Yeah. The reason that it's much harder to use creative financing on smaller deals specifically for and under is really the financing. Most people are using a Fannie Mae Freddie Mac loan to get into that, which is great because they have these low down payment options. If you want a house hack and they have really low interest rates, it's easy to originate those loans. Well, it's. They're available to a lot of people, I should say. The problem is because they're done at scale, the lenders have to comply with these Fannie Mae and Freddie Mac guidelines that are very not flexible. It has to fit in this box so they sell that loan. And that's why you don't have a lot of the stuff that you hear Brandon and I talk about and Faras is going to talk about with smaller deals is because the lender won't allow for that. But when you get into commercial lending, everything opens up. You're not held into that box. And you also have more moving pieces, which means there's more stuff you can play with where you move this piece over here and move on to that. Is that similar to what you found in your investment?

No. Absolutely right. Even the simplest example, I want a seller to keep money in the deal. You can't pull that off with a Fannie and Freddie. Right. That's a simple concept. But you can't do it. Whereas right now we're doing a deal in downtown Atlanta.

It's an.

It's a. It's an office to apartment conversion. And that deal only works because the seller is going to keep a significant chunk of money in the deal. They believe in the story, they believe in everything. They did not have the rest of the team to get that deal done. Right. But we're able to make that deal work. And it's an awesome deal because the seller is going to keep a significant amount of equity. Us and our investor are bringing a small piece, and guess what? We sit sister to sister. So it's reduced risk for everybody, right. The seller is obviously the one that believes in it the most. They're keeping, you know, putting their money where their mouth is. But doing those kinds of things is a way you can unlock a, you know, really potential deal. And so that's maybe the biggest thing and maybe the last thing I'll add, which kind of ties to this, Brandon and David is just underwriting and really understanding the intimacies of underwriting.

Right.

In the end, you know, it's all numbers, right? I'm a numbers guy, I'm a spreadsheet guy. But really being able to look at a deal kind of quickly sniff it out and understand, hey, what potential could there be? And then figure out how can I back into it creatively to make that deal potentially work. Right? And nine times out of ten, it doesn't pencil out, but sometimes you find that last piece of it, right? And, oh, can I add one more, Brandon?

Please, Please do. Please do.

Networking, that is probably the biggest thing that is huge in the multifamily world. I think that is. And I regret this, right. Whenever I was in, you know, whenever I was still at Microsoft or even had my software company, I wish I was better at building my audience and networking with people. I've met people all over, amazing people, but I did not follow up with them or not keep up with them. Right. Whereas multifamily, it's a whole nother sport. And so I think that is probably, actually, if I was to say the number one thing that can differentiate a person is a person that knows how to network themselves probably more than anything else. Right. Because you can bring in other good people for each piece of it.

Right?

But if you know how to network, you know how to get out there, meet people, form meaningful relationships, I think that's huge.

Yeah, that's. That's such a good point. There's a bunch of stuff there I think we could unpack. But yeah, like networking, for example. Like the fact that, I mean, if you think about here, here's the long picture shortened down into about three sentences. But I went to a real estate conference, right? I think was best ever conference with Joe Farrell's event. And that's what got inspired me to get into the large, like to change my game from the me game to the team game, right? So that was that. That's what shifted. It was being around those people. Then I started this Maui master class mastermind here in Maui where people came out in the first year I did it. Brian Murray shows up, right? And Brian Murray and I became good friends, and we ended up starting Open Door Capital together. And then from there, Brian introduced me to you guys, like, for funny.

So then I'll tell you my side of the story, right? You know, I joined a mastermind. People say, oh, why do you spend that much money on a mastermind? You go out there, you're just hanging out with people. Well, guess what? I'm that mastermind. I met Brian, and then I happened to sit with him to dinner on the bar on the shuttle over. So we kind of got to have a real meaningful conversation. And now we're partnering with you guys on a big deal. So, you know, you never know who you're going to meet. And, you know, you have to explain that to people, even to my wife, you know, she's like, you can't possibly meet more people. I'm like, no, you never know who's out there, who's looking for what. Do I have a solution to their problem? Do they have a solution to my problem? Right. Can we all grow together? And I think it's really getting out of that mindset that it's not just about you building. Well, it's about a team building, kind of growing together.

Yeah, that's a really good point.

Yeah.

You know, sometimes people ask me about different masterminds I'm a part of, like, for example, gobundance or my Maui Mastermind, or the masterclass stuff we do. Any of that. It's like, like, is it worth it? Like, do you always get your money's worth? And I'm like, well, it's. You might go to an event and have a great time and then go home, and nothing might ever come from it. And you're like, well, that was a waste of five or $10,000, whatever it was. But if you went to four of them, and out of four of them, three of them, you know, you didn't get any, like, tangible money making value. But one of them, you met a partner who ended up helping you buy a hundred million dollars of real estate. It's like, oh, well, that kind of. So like, you can't look at it in a. Like, did I get my exact return on investment from this event that I went to? This. It's a lifestyle, right? Networking, connections, reaching out. It's a lifestyle. Does it pay back?

Yes, it totally is. I think that's a very good way to put it. It's a lifestyle. And to your point, it's more about. I just look at the caliber of the people there, Right. That's the value. Then it's for me. It's up to me to go fish that group and see if there's any connection. Right. Maybe I don't connect with anyone like you said, and something doesn't fizzle them. Maybe you meet someone really cool and so it's all networking and that's how you can grow.

Really.

Right.

Hey, David, can I just ask you this question? Because David's. David's. I don't know. I gotta have a good analogy for it, but you're very under the radar, amazing networker. What I mean by that is, like, David's not the guy that's out there, like, passing out business cards and flashy. Like. Like, David, you're usually in a corner having a deep conversation with someone, and then you end up doing business with that person. Or people walk away from that conversation going, david just changed my life. Because that guy, like, you're like the under the radar, like one of the best networkers that I know at these events. So I'm wondering, David, what's your secret?

That's a really good question. I think part of it is just, that's who I am. My personality is. I tend to go an inch wide and a mile deep. So if I try to play the role of what I think a networker is supposed to be, which is this idea we have in our head of someone just out there passing out business cards like candy at Halloween and talking to everyone, it won't work.

You get a business card, you get a business card, you get it.

Yeah, yeah. Like those people give. Just as a side note, I think business cards are actually a terrible way to network.

Yeah.

It's just. No, I get. I put in my pocket, I throw it away. I think everyone does too. You're way better off to get a follow on social media or somewhere you can keep connection. But what I'm looking for is who could I Actually benefit, who could I actually help in their business or in their life or with whatever there's going on? Because I don't think I can help everybody. So if I'm trying to network with people that I don't believe I even can help, I right off the bat and being disingenuous, and I'm missing the point of what you're trying to do, which is to bring mutual value. So the reason I kind of sit back is I like to look and get to know people. People, what problems are they having? Can I help them? If I identify that's a human being that I could help in some way, then you have that conversation, and during that conversation it comes up if they are willing to help me or if they could help me or whatever. That's why, I mean, what you're really talking about is like making friends or being a good person. But we, we throw the word network onto it, and all of a sudden people are like, I don't like that.

Well, for first off, being such a great networker, David, I'm disappointed we haven't networked and met at an event. So we're going to fix that here soon. But I mean, you know, and to hit the point that we're saying networking is not about just giving out a lot of business cards. Some people really think that. And we all know those people, they just come up handy, a business card and walk away. And I'm like, great, what do I have? I have some starter for my, my, my fireplace. I mean, you know, I got no value from that. And I really like what you said, David. Around, you know, really looking at is how can I add value to them?

Right?

And I think that's where it starts. Because if you can add value to them, they are more receptive to having that conversation and engaging. Right. And it's about building meaningful relationships that, you know, you maybe spark something and then you can follow up offline. I think that's, to me at least, what networking is about. And so the people that come at it as just, hey, who do I need from here? Well, you know, you might not find anyone, but really there are people that might know someone or might have other ways to really add value if they had heard what you could do first.

Right. So, yeah, yeah, it's really good. Really good stuff. All right, so you mentioned, you know, the networking thing, super important, especially if you want to get bigger and get into real estate. But even if you're small time, you're doing your first deal, you're trying to Buy a duplex, Netflix. Just going to local meetups. And now that Covid's kind of winding down a little bit, hopefully it stays down. You know, we're meetups are opening back up again. Conferences opening back up. BPCON's happening soon. There's lots of conferences gonna be happening because everyone missed out on last year. So, like, I just. My. My advice to people listening is get out there, even if you're scared. If you're not good at talking with people, you're not an out. You're an introvert, you're not an extrovert. Just go to these events and like David said, go. Like, don't worry and freak out about meeting lots of people. Like, aim for like three. If you meet three people total in the entire four, three, two day event, whatever it is, and you meet three people that you have a good conversation with, like, I'd call that a win. And if you did that every year, like, you're gonna build a good relationship.

With people and don't be scared. They want to network just as much as you want to network. So it's. It's a mutual thing. I think people really forget that. And you know, and maybe to drive the point home, Brian, I mean, I literally met my partner Ben at a meetup, right. That's how I met him. And you know, fast forward, we started this company and now we have multiple companies. Right. All because I happen to go to that meetup and get to really know the guy guy.

So, yeah, actually I met. I met Ryan Murdoch, who now lives here in Hawaii next to me and is one of my partners. Ryan and I met at a meetup, which is. Yeah, funny. Actually, David, you and I met at a GoBundance Mastermind weekend. So crazy.

Like, how much person.

Yeah.

Our first, like, bro date.

Yeah, that's.

That's it.

However, even. Even more, you. You came on the show because Hal Elrod introduced you to me.

That's.

Yes.

And how Elrod knew you from the gobundance Mastermind. So it's again, almost every, like. Yeah. Relationship that I have, I feel like today came from some sort of networking event.

I first learned that principle when I was trying to get my first job and I went and I drove all over town, dropping off applications at every single place I could possibly. I probably dropped off 50 applications. It was like months of time. And then I was complaining to my friend about it, and he went, oh, I think we're hiring at Baskin Robbins. I can get you a job there. And I had a job in Three days. And I just. That's how the world works. And so, like, going against the grain makes it very difficult.

I didn't know you worked at Baskin Robbinstone. That's funny.

Oh, so you were, like, a classy version of what I did. You're like, oh, that's. That's cool. Your first car was a Honda Civic. Yeah, I had a Maserati.

You don't sing for tips. I mean, come on. I do.

Yeah. So that's why it's so important that the impression that you leave people with is that you're a good person, because things get done through what people say about others.

Yeah. People want to work with people they enjoy working with, period.

Yes. That's so true, man. That's so true. Like, people want to work with people they enjoy working with. I always say, like, people want to sell to people they like. They want to buy from people they like. They want to work with people they like. Like, if you just remember that and be likable and, like, stop trying to do it. Like David said, stop trying to pull the networking word. Like, just be, like, make friends with people. Like, it's amazing what happens. All right, so. All right, so you mentioned the networking. Huge skill for any real estate investor. Be focused on. And by the way, I do want to say this as well. All those skills that you laid out a minute ago about, like, you know, the networking and underwriting, like, those are the same skills you have to be good at in the small. The small deals as well, but just on the small deal, sometimes you do got to be good, or you. You try to be good at changing the toilet or, you know, painting the wall. Those are added skills, but you don't need to. I mean, you. Like, David doesn't paint or move toilets, and David has a, you know, a portfolio of smaller deals. But anyway, yeah. So I just want to warn people, don't just turn this off because you're like, well, I'm just. I'm not buying big deals, so. But I want to go back to underwriting for a little bit. A lot of people want to get into multifamily, and the word underwriting just sounds overwhelming. Like, you're like, wait, whoa, whoa.

I know how to analyze.

But underwriting. What is that? What is. That's a whole new thing. Can you explain what underwriting is? And then can we walk us through, like, your process? Like, what do you do to find the right multifamily investment opportunity? How do you know there's a bad one and that you should stay away from it.

Absolutely.

So underwriting is no different than what the lenders do, right? It's called underwriting because you are assessing risk. That is what everybody is doing, right? Whether you are an investor or you're a lender, right? You are assessing risk, and all it means is analyzing a deal and figuring out where it performs today, what you possibly have to do to get it perform better, and what that performance looks like, and what it takes to go from A to B. That's, in a nutshell, what it is. Don't let it scare you, right? So let's just take a very, very simple. Let's not even talk about apartments. Let's say you're going to buy a pizza shop, right? You know how much it costs to make the pizza. You know how many pizzas they've been selling on average for the past, you know, 100 years, right? And so therefore, you know what your income and your expenses are now. You know that, hey, if I could upsell 10% of my customers with a Coke, well, now my income can increase, but maybe my expenses, you know, stays about the same, right? And so now I've created more value, I've created more income. Now apply that to apartments. Same exact thing, right? I know where the deal collects and where it. What the expenses are, right? We know what our taxes are. We know what the insurance are. We know what our repairs and maintenance are. There's a lot of things. And again, for those of you that are looking underwrite, Go get educated. There's tons of content out there between, you know, this podcast, other podcasts, books, right? Brandon's got a book coming out here as well, right? There's a lot of information out there. Go get educated. We're in a world where it's easier to learn anything than it's ever been, right? And so there's a set of expenses that we know. There's a set of income that we know. And ultimately we're saying, okay, based on, you know, the income of the expenses and whatever debt that I have. And that's where we talked about getting creative, right? How much cash can I produce with this thing, right? And meaning if I get the thing 100% financed, let's say I bring $1 to the table and that's all I had to bring to that deal. Well, guess what? If all I did was make $1, I've made 100% return that year, right? And so you're really looking at how much money did I need to bring based on the structure that we have based on the income and the expenses and how much profit did that generate? Hopefully that simplified it. We're not too crazy. I mean, at a high level, happy to dig in.

Sure. Yeah. And I mean like, like you can go real in depth on analysis and you can have a 40 tab spreadsheet and all that. And eventually you, if you're trying to get into the big deals, you might get there. But in reality, like, it all can kind of boil down to, yeah, how much do you, how much comes in, how much goes out? And understanding those numbers, like, not just like, well, taxes are this, well, what are taxes going to be next year? You got to make some assumptions maybe a little bit, but you can dive into that information and the more you know your area and your market, the easier those become. So, yeah, underwriting is basically that. Income, expenses, and then what's it look like in the future?

Yeah. And as you underwrite more and more, it becomes secondhand. Like, I like to joke with my partner Ben that I can smell a good deal.

Right.

Like little, I just glance at it, I can tell, hey, okay, there's some opportunity here. Let's go spend the time and effort to get the team and go decipher everything and full quotes. Right. But you, as you do more and more of it, I can quickly say, hey, this payroll on this property is $1600 a door. It could be 1250 because that's what we have in our portfolio in Houston. Right. Like, I know that number off the top of my head. Taxes, same thing. Hey, the taxes are here. Well, I know Harris county, which is Houston, is a very aggressive county. They're probably going to get us to 95% of what we buy it at. So that's where we need to assess the taxes. And if it comes in lower, great, we just made some extra money. But it's those kinds of rules of thumb, these are start to build as you do more of it. So definitely get out there, get educated. It's not that scary.

Can I take one second to comment on this concept of projecting for the future? Working with so many investors with the David Green team and just talking to people that we come across. I think this is one of the biggest sticking points that stops people from getting started investing. There's this, this need. The human brain has to understand exactly what's going to happen. And that that alone stops people from getting into investing because they don't know what to expect. But even when you've accepted that and you're in, it stops you from buying deals when it doesn't work on day one. Now, for a long time we've told people, don't buy anything that doesn't cash flow on day one. And you can't expect any kind of appreciation. And that has been sort of like the. What's the word that you're looking for? Just the knee jerk response or the classical advice, whatever it is. What's that?

Yeah, safe answer.

Yes, the safe answer.

Yeah.

And that is true in certain conditions and for certain people. If you don't have a lot of money, money that yes, you want it to cash flow, we don't want you to lose your property, or if you don't know what the economy is going to do, that becomes even more important. It could lose value. So you want it to cash flow. But in many situations, like Brandon, you and I talk about the, the rules of the game start to change when things like inflation creep up and your money is losing value by not investing it. And not just the property's values appreciating, but the rents are appreciating as well. It becomes foolish to not have some form of projection that taxes are going to be raised, rents are going to be raised, expenses could be going up. The wage you have to pay your handyman or maintenance person should be increasing just like everything else. And I see so many people that get scared by that unknown. I don't know what it's going to be five years from now. So I just won't do anything. And it's probably the worst thing that people could do. So I, I just want to give encouragement that from experienced investors it is okay to not know exactly what rents or expenses are going to be in three, four or five years from now. It's not okay to have zero idea where they're trending. You should have some idea of what to expect, but you're never going to know altogether. I think a lot of people start looking at multifamily deals and they look at what it is right now and they say, oh, I can't buy that, that's only a 4% return. Whereas the three of us look at that and we say in five years that's going to be like a 17% return, plus I'm going to have all this benefit, plus I have this value add. That's a clear great deal. And I just see a lot of people that don't get in the game because of that. So I wanted to kind of highlight. It is okay to understand that the way your property performs in year one is not going to be the same as it is in year five. Is that similar to the experience that each of you have had in your portfolios?

Absolutely. I think you hit on a lot of good things. Maybe to highlight a little bit, right. A, it's a numbers game. Not every, you know, don't fall in love with the deal, first of all, right. Like the numbers are the numbers, they speak for themselves. But to what you're saying, David, it's about really assessing enough risk to be comfortable with it. But you're not going to know everything, right. And really, even at the high level, right. So not to get too political, a ton of money got pumped into the economy. Right. Right now CDs and 10 years are worthless. Right. They're pennies, they don't generate any money. So even if someone has looked, you mentioned a 4% return, David. Right. That is so low. But that is probably 20x what they can get in a 10 year. Right. So it's actually very attractive for bigger money. So you have to kind of look at the bigger picture. So to someone else, maybe that's a really good return. And again, if, if the deal checks a lot of your boxes and maybe it's, it's not what you wanted on the exit because you're being ultra conservative. Well, think about the bigger picture, right? And to your point, I mean, you know, every deal I didn't buy is a deal I regret not having not bought. Right. But I mean, you know, it's about assessing risk. Right. And really, and that goes to a lot of things. Can you structure it in a way to reduce risk? Right. On the deal we're doing now, we, we, we are going in significantly lower leverage than what we could, literally to the tune of $8 million less, lower, less leverage. Leverage to reduce risk. Right. We don't know what the future holds, but we know we cash flow and we reduce risk. So it's a safe investment. Right. It's about, that's what I love about real estate. Again, it goes back to what I said earlier. It's about getting creative, about structuring things. And can you reduce risk while also keeping the upside that you want right up to the level?

And the majority of your risk will be at the beginning of the deal. The first couple years is when you have the biggest degree of risk. And so people often get like, oh, all this stuff could go wrong. I don't want to do it and just forget. It's not going to be that way for the first 30 years or the next 30 years. Just like the first workout you get is hard. It sucks. You don't get very much of a return on it. But if every workout was like that, we would never work out. I see that all the time. Where, like with, with surfing, right. Right before you catch that wave, you expend so much energy, it's so stressful trying to make sure that you put yourself in the right position, you get enough speed, you're paddling really hard, then you got to stand up, up. But once you're up, man, you go really far. And I found real estate investing is very similar to that, but the new people just focus on that very initial part and they get scared.

Yeah. And I want to mention one quote that I think I heard on this podcast. It's real estate is not a get rich quick scheme. Right. It's a get rich slow thing. But you do build wealth over time. And so really, to your point, that first year is always the worst year. I mean, once you, you know, because you don't even know what you just stepped into, Right. Like, yeah, you know the numbers, but you don't know where the bodies are buried on that property, so to speak. Right. Once again, that's where, you know, it's what Brandon said a little bit earlier, right. About know who you're buying from. You want to work with people that you like working with. So on the deal we're doing now, we know we're buying from institutional. They're great folks. We know that there's not going to be a lot of skeletons in the closet, Right. Versus, we've bought deals for people that we probably that should have never owned an apartment. Right. And so that first year is whenever all of this comes to a head and you start to figure it all out and, you know, challenge after challenge after challenge, but then it all simmers down and now, you know, where your kind of baseline is to grow.

Well, and there's one, one more thing I'll throw in there about, like, people who are afraid and they're like, well, I don't want to take a risk. And it supports what David, what you were just saying. But like, the first few years, yes, are risky, but we're not investing for a year or two, right. We're investing for a decade, two decades for our kids, for our grandkids, right. So when I, when I make a big investment, yeah.

I.

We, like, like, for example, like Ferris, the deal that you were doing together right now, right. Like, we, we don't know what, what five to ten years are going to look like in Houston. Right. I Don't. I don't know for sure, but I can see the trends of the. The population moving there. A million people going to be moving there.

Right.

In the next few years. I can see the lack of housing that they're building. I can see. I can see these data points that help offset some of the risk as well. So it's not like we're sitting there like real estate investors, just, like, making a guess. We're saying, look, what does this mean in a. In a world where they're printing money like it's Monopoly money, and. And there's not enough building going on for the amount of people who want to buy? And, like, what does all this mean? I think it supports that rent's going to go up pretty dramatically and supply and demand is going to make property values go even higher over the next decade. Might we see a blip in there? Of course. But long term, I don't think any of us believe that a property in any of these major cities is going to be worth less in 20 years from now than it is today.

Exactly.

Right.

So, again, I tell people it's about assessing risk and squeezing the risk out. Right. And so even to the points that you made, the risk that you do have, oh, is there a blip sometime in the next few years? Great. There's ways to solve for that. Right? It's a problem. You solve for it and you move on. So as long as you believe in the bigger picture, I mean, it's absolutely kind of the way to play it.

I think that's really the point I wanted to highlight, Brendan, that you were saying is it's okay to let go of needing to understand, if I do, a B will happen. That is not the way this works. And experienced people have that fluidity where they. They are making decisions based off that.

That.

And the last point I'll make for a move on is when Blackstone was buying every single house that they could possibly get their hands on, there was a lot of people criticizing them. Oh, that doesn't even cash flow. They don't know what they're getting into. Yeah, these guys are. They're idiots, right? As if we're smarter than the brightest minds and the biggest hedge fund that's ever existed. And now, like, they didn't care. They just kept buying. And now Blackstone looks like complete geniuses that probably made the smartest move to any company and we're all trying to buy from them, like. Like Ferris was just saying. So I just got a deal from.

Them, like, two weeks ago. There you go.

So like when you hear, you know your neighborhood real estate investor that owns two properties at the pub, talking about how dumb someone is for buying a house or just consider that there's people that take a longer term horizon that don't know exactly how it's going to work out, that do very, very well compared to the people that operate from that. I need to know exactly what to expect.

Yeah. You know, I once, I once heard Jocko Willink say something about like in the military, maybe it was in one of his books, but he's like in the military and you're going into a situation, you don't know the other variables, you don't know who's hiding around the corner, all that, all you know is what you know. Right. So, but a leader takes what they know and like this is a situation as I see it and they're decisive, they make a decision, they move, right? And then, then they, they get to a new spot and they say, okay, now what's the situation that we know right now? Now we're gonna make a decision and we're gonna move again. And, and so, so many people in real estate again, like you were saying David, they look and they can't see down the road 10 yards or you know, a thousand feet, a mile, whatever. So they just like stop. They don't do anything but like if you treat it like a military operation, we cannot know everything. What do the facts say right now based on what we know and make a decision, be decisive, go for it, but then correct course along the way. Agreed guys, Totally agree.

Toyota thon is on and right now your local Toyota dealer is celebrating with can't miss year end deals on the vehicles that built Toyota's reputation for legendary reliability. Discover the stylish and efficient Camry and Corolla, both available with all wheel drive. Or go with the RAV4 or Grand Highlander. Versatile, adventurous and ready to take you and your family wherever the road leads. Need muscle? Take it up a notch with a Tacoma or Tundra. Built tough and always ready for the long haul. And no matter which Toyota you choose, you'll find smart financing and lease options available to qualified customers, making it easier than ever to get behind the wheel of the Toyota you've been waiting for. But don't wait. These year end savings won't last. Shop the entire Toyota lineup and find a great deal today on buyatoyota.com toyota. Let's go places.

I've had my home security system for quite some time now and the Best part, half the time I forget it's even there. It's just quietly doing its job, keeping my place safe while I get on with life. If you're wondering what I use, it's Simplisafe. And it has been solid from day one. What makes it different is how proactive it is. Most systems only react after someone breaks in. That's like opening an umbrella after the rain stops. Simplisafe helps stop trouble before it starts. Its AI Cameras can spot a potential threat outside. And real live agents jump in, talking through the camera, letting the person know they're on video, that the police are on the way, or even flipping on a siren or spotlight if needed. It's protection that actually prevents problems instead of cleaning up after them. That's why I've stuck with it all these years. It just works quietly and confidently like the world's most polite bodyguard. And right now is a great time to get started. 50% off any new system. For a limited time, go to simplisafe.com host again, that's simplisafe.com host because there's no safe like Simplisafe.

Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of the smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to steadily. They focus exclusively on landlords. Whether it's a single family rental, a BRRR Builders risk policy, or midterm holiday guests. You get fast quotes, flexible coverage and protection for property damage, liability and even loss of rental income. Income. Now is the perfect time to review your rates and coverage. Get a quote in minutes@biggerpockets.com landlord insurance steadily landlord Insurance designed for the modern investor.

All right, I want to move back a little bit to your story, Ferris. Like you decided to get into larger deals. Now, where are you at today? How many units do you have right now? And what kind of, what's your portfolio look like? And then we'll kind of unpack it.

Yeah, so right now we have about a little under 2,000 units. Currently we've also done, okay, four deals full cycle. And we have another, I think three or four that we're selling this year. So by then you'll have about eight units, eight properties full cycle. Then we'll probably Be at maybe closer to 1600 years because we're selling off a lot. So that's kind of stuff that we found, you know, we own and operate as well.

So. So, yeah, so full cycle meaning just that you bought it, fixed it up, did your. Did your value add?

Exactly. So, you know, like I said, we went into Atlanta a couple years ago, done very well in Atlanta, and just, you know, we're getting unsolicited offers at crazy price points.

And.

And we're opportunistic, so we'll take that. We'll take that buy when we can. I love that.

All right, so let's go. Let's go to how you got. Cause we talked about the early years, talked about the 30 some unit that you missed out on that you're glad you didn't. What was the first big deal that you did?

The first big deal I did was actually an Atlanta deal. So my partner Ben had done a deal for me. You know, I was gonna go do this deal regardless. And that's really the deal that we built up our partnership on. Right. And so, you know, for me, it's what I've learned, right? I left Microsoft with a vision of building software where in old industries like real estate. What I've since learned is the real opportunities actually use the stuff that is the norm in tech to make us a lot more effective, efficient than everyone else. Right? And that goes from asset management to even how we market ourselves, to even what we do on the property management side. Right? And using all the tools and systems and processes to just really help to kind of what David said earlier, right. Assess the real risk and understanding of the lay of the land. And so. So, you know, that's maybe kind of the answer there.

Cool. So let's walk through that. How did, like, what was that feeling, buying out how many units was the first one that you were.

99 unit deal.

All right, 99 unit deal.

Like, was there 99 units in Atlanta? Nine down units. And it was a deal that honestly, the current owner should have never owned. I mean, you know, they're just guys that stumbled into an apartment, right? But I learned a lot from that deal, right? And I learned about how many skeletons can you find in a closet, right? And really, you know, but it was a challenging deal and we worked through it, right? And that's where I like to say I got my. One of my four steps to a PhD in lending, right? I learned about how bad a lender can be, right? They were on that deal was really a loan to own Shop. They said that it was the best deal, best turnaround they've ever seen. We literally took a rough deal in an area and turned it into the diamond and, you know, turn it into a family friendly place, right? Where literally people came up to us, said, thank you very much. You've completely made this place, you know, you've transformed this place into a place where we are happy to be at. But we learned a lot, right, from, you know, bringing on security. We took down occupancy to give you some metrics, right? 80% is what we bought it at. On paper. We brought occupancy down to 40%. Then we brought it back up to 95%. We had nine down units. We put about $1 million into this property and, you know, ultimately made a really strong exit for our investors on that deal.

Right.

I mean, that was a deal that, you know, we think we got to about 25, 30% IRR. So did phenomenal in that deal. But it was a hard deal. And so I like to joke, that's the deal where my partner Ben lost all his hair.

It was a hard deal. And this is where to what David said earlier, we assessed the risk. We knew the things to be aware of. You get in there and there's more challenges than you expect. But it's about having the gusto to go solve one problem after another after another and work through them. Ultimately, if your business plan was, is reasonable, you can hit it and deliver.

And it's like that with everything else in life too. Okay? You start training in jiu jitsu, there's risk you could get hurt. So what they do is they say, we're not going to have two white belts go together. We're going to have a person monitoring what these people are doing. We're going to see that person's out of control. Let's stop. It doesn't mean you stop doing martial arts, but you, you assess risk. You put mats in there. So we're not slamming our heads on concrete all the time. Right? Like when you're learning how to drive a car, it's very risky. So we put an instructor in there with you. We make you pass tests. We go really slow. When you show you can do well, you go do more. Everything in life is like that. We're not saying something unique to real estate, like, oh, there's risk and you just got to be okay with it. Like, there's risk in every single thing we're doing. And we are naturally looking for ways to lower risk, which tends to be the most in the very beginning, like we were saying earlier, that's when your risk profile is highest. So if you're the person that can just make peace with that and get comfortable with the fact that, yes, there's risk, who cares? That's how life works. I will take these steps to limit where I can get hurt with risk. And then as I start picking up momentum, you start worrying less and less about risk, and things start to get smoother and smoother. And then you start to worry about the stuff that we're talking about today. Building a team, finding skill sets that are different than yours so that you can scale, seeing angles other people don't see. I'm sure on that big deal that you just mentioned, to bring it from 80 to 40 would have terrified most people.

Oh, yeah.

But you went into it knowing that could happen. And here's our plan for how we're going to survive that stage. I mean, was there a specific plan you can share for why you were comfortable going to 40% occupancy?

Well, it's funny. We did plan to get down to 40. So I'll tell you the thing we didn't plan for. It goes back to that lender. You know, whenever you're at 40% occupancy, trust me, people, you're operating in the red. You are losing more money each month. Your goal is to get out of that and get it back up to 60. 70 is probably where you at least break even. And on that deal, the thing we did not account for was that lender essentially intentionally trying to see if we default. That was little. In hindsight, we should have learned more about the lender. You think all lenders are created equal. They're not. Trust me. I've learned the ins and outs. And we've seen the good, the bad, the ugly, and all the different deals we've done. On that deal, the lender, I'm not going to mention any names, but they intentionally, basically, they were out there, they said, we love the property. We love what we've done with it. They know that we did a draw request. So the way for those of that don't know, right? In multifamily, whenever you're doing a big rehab, usually the lender holds on to the money, you do the work, and then you submit a request, they fund you back the money. Well, on this deal, we submitted the request and the lender basically said, you know what? No, we're not going to fund that. And they started making up excuses as to things they wanted us to do. Even to the point where they said, if you do abc, we'll fund you Y. And a month later, we got ABC done. And they're like, oh, our investors didn't agree with us. And also, Ben and I are looking at each other like, so why'd you tell us to do abc? Right? They're intentionally. The thing we didn't plan for was them not giving us the money that they have. That's our money. And so ultimately, Ben and I literally funded 200,000 into the deal, unjammed it, got it, you know, out of the negative rate because we know we're operating in the red. Like, it's not going to help you because you can't get out of that runt. And so got it out and like I said, got it to 95% four months later, and rock and roll. But so that was part of the business plan, going back to the risk thing and just be being resilient and willing to work through it. Right.

So how did you get lending on that? I mean, sorry, lending, but how did you raise money in that first deal? Because you hadn't done it. You hadn't, you know, you didn't have a huge track record. You didn't have a ton of experience in the big deal. So how did you get investors to fund you?

Friends and family. And Ben had done a deal, too. So I had been able to leverage some of his experience. Right. But ultimately, like I said, I was gonna go do that deal alone. So it was, you know, what was nice about it was 99 units. So. So it's not huge, but not tiny. And it was big enough that I felt like with a couple of friends, I can talk some people into buying it. Because it wasn't. It was a, I think $1.2 million check size. Right. If I remember correctly, on the amount of equity we brought to the closing. So it wasn't that much.

Yes. What'd you buy the property for?

Would you eventually sell it? So that was a deal we bought at 39,000 a unit. We sold it for 73,000 a unit, and we could have sold it for more, but, yeah, I mean, that's in 18 months. So, I mean, did very, very well in that deal.

This is why. This is why I love value add real estate, Right? Whether it's a mobile home park or an apartment complex or a shopping center. Like, I just love value add. Can you explain to those who maybe have never heard that term before, what the heck is value add and why. Why does it just work so. Well, sometimes, yeah.

So let's start with how, how commercial real estate is valued, right? So how the problem with houses and fourplexes, the way they're valued is you look at the other houses in the neighborhood, how much they're selling for. That's your theoretical valuation. With commercial real estate, it's all about how much money is, does that generate, how profitable is it, Right. And so if I can make it more profitable, I've actually increased the value significantly as well. So value add is all about can I bring money to the table, inject money into the property, increase the income and therefore not only increase my cash flow, but also increase the valuation, right? So let's take a very simple example.

Example.

Let's say I have an empty, I have an empty lot, right? It's worth something. But now let's say I turn it into a parking lot, you know, and I stripe it and I put a little machine. Well, now I've added value, I've spent money into the property, I've put up a machine, it's generating cash. So now we do that with apartments, right? Usually it's combination of doing things like spending money on the interiors, making the interiors nicer, right? So the deal we're doing right now, Brandon, what's the play? The play is to do exactly what the seller did on the first floor, do it on the second floor, right? And you know, continue that out. So we're not having a guest that rents, we know what they've gotten already. And then on top of that, do some other things like carports. Carports is a really easy way to add a really. You're adding in a many for the tenants and the tenants are willing to pay for that, right? Low hanging fruit. And yes, it might only be $30 a month, but 30 times, you know, let's say you do 50 spots. Well, that's real money. Then times that by 12 and then divide that over a cap rate and valuation, you've added 500,000amillion dollars in value to the property. So that's maybe my short, long answer for you.

I love it. You know, this is one of the examples I'll give in the mobile home park space. We buy a mobile home park, we like, we want to fill in like our expertise in, in the mobile home start space is called infill. We want to put a home in there that's rented and we'll even pay and we will lose money purposely to get a home brought in. For example, let's say, you know, Lady Cheryl she rents from another person's mobile home or she owns her own home, but she rents from another park. We will pay her the cost of moving her home into our park. We will lose $10,000 sometimes to get somebody to bring their home into our park. And the question is, why would we do that? It's because that $10,000 loss we will now add, let's call it $300 every month in Lawrence. Well, 300 times 12 of lot rent is. What is that? $3,600 every year. You know, on a $3,600 a year, which means in two years, three years, really, we're paying back our investment. But the real key there is by adding $3,000 of annual profit to our business, that's worth about $50,000 in value to the park. So in other words, we will spend 10 to add the value of, you know, $50,000 to a park, plus we get paid back our money over the course of three years. So it's not a big deal. So that's like how we look at value out of on the park side, the apartment side. The same thing, let's say, like the deal we're doing, right? We're going to add, we're going to remodel a unit. We're going to spend $5,000 to remodel that unit, and it's going to get an extra, let's call it a hundred dollars in rent. Now people are thinking, well, what's the. Why does it matter to add an extra $100 in rent? That's not a lot of money. Well, across 530 units, it is. But then in additionally, the value created there is $1,200 a year. Divide that over a 5 cap or a 4 cap or like now it gets think it's dramatically different, which is why value add apartments are so much.

I'll give you a very simple. I literally just did the math while we're talking, right? So let's say you're in a six cap market, right? For every dollar of revenue that you increase right. On that property a month, you actually create $200 of value a year. Right.

Evaluation.

So in the math I did, for those that want to validate one 12, 12 months in a year, right. So $12 generated and divide that over 6 cap, that's $200. So to your point, Brandon, for every $1 you brought into that park, you know, as long as it didn't cost you more than $200, you're actually in the positive, right?

Yep. Yeah. And this gets so fun. We talked about this on a recent episode we did with Sharon Lecher on the podcast the, you know, co author of Rich Dad, Poor Dad. We talked a lot about this idea of, like, businesses like real estate, like commercial real estate, are valued, like you said, based on their profit. So it's, it's a really fun game. I love this game where you get in and you buy a property, you buy a business, which is exactly what an apartment is. It's a business. You buy a business, you decrease the expenses and. Or increase the income. Now it's way more profitable. You make way more money. You either refinance it, pull a bunch of money into your pocket tax free, or you sell the thing and make a bunch of profit that way and then just turn that into the next deal and that it's. It's fun.

Exactly. Commercial real estate. You are buying a business. There's dedicated team, dedicated people. It's a business. You need to treat it and run it like a business too. Right. And so that's what I love about it. I like to say, like, we were serial entrepreneurs because each one's a different business. And, you know, I mean, Disrupt Management's 110 people now. Right. That's a real group of people. And, you know, they're on the properties. Right. So it's a business.

I've noticed a lot of the people listening to the podcast think when they hear this, well, why would I be able to increase the rent or decrease the expenses if the current owner didn't? The assumption is everyone that owns real estate cares about it as much as we do, who record and listen to podcasts religiously about this topic. But I'm sure, as you guys have found, most of the people that we're buying real estate from have not paid attention to it in a very, very long time. They don't want to deal with it. So the value that we're bringing is our knowledge and our time or the systems, like you were saying earlier, that allow us to increase the. Decrease the expenses, increase the rent, increase the performance of the property. And you're probably buying it from somebody who hasn't been doing that.

Yeah. And actually I'll add one more thing to that too.

Right.

Because people ask me this. So the deal. Let's keep going on the story. The same deal we're talking about, right. That 99 unit, Atlanta. I care a lot about it. To what you said, David.

Right.

We obviously looked over very carefully. We thought we squeezed the juice that we had. Right. Well, guess what? We only brought a million dollars in capex to that deal. So the amount of juice I could squeeze out of that deal was limited by that million dollars. Well, I sold it to the next guy and guess what, he cares a lot about real estate too. And so the question is, why would the next guy pay the price that we sold it for? Right? It's ultimately because he can bring a fresh set of capex, right? A new set of money and do things that we had no more money to do. So while we could operate the property in cash flow and pay distributions like we were, right. It's actually more beneficial to get someone to pay a premium for it because they know if they bring another million or two or three, whatever the business plan is, they can actually elevate it to even a higher level. And so sometimes it makes sense to sell. People always ask that, why are you selling? And then people ask the inverse, why is that guy selling? And it's really the same answer, right? I'm coming into the fresh business plan. I can bring things its current owner doesn't have, which is usually capital, right?

So, yeah, what I find is on small deals, typically almost every small deal I have ever bought has been from a failed landlord or a distressed seller.

Right?

Almost everything has been because they personally person failed at it, they gave up. But in the commercial world, that's not usually the case. It's not. You're not just buying stuff because they failed at it. I'm sure the person, ferris, that we're buying our deal from together, like, I don't think they're looking at themselves going, oh, I failed at this deal. I'm sure they're going to make a killing off of it, right? And someday we'll make a killing off it and the next person made. And like in the commercial world, that's just what it is. Like people recapitalize for a number of reasons. They sell for a number of reasons. It's usually not failure.

So I mean, let's go to even the deal now, right? Why are they selling? That's a good question. Well, they reached the end of their fund. They're already making the profit and there's a clear pathway for someone else to do something. So they're selling because they have a time bomb. They have to sell. We're buying because we see a way to do value add, right? We can push the rents. Great area, great deal. So it makes sense for both parties, right? It's in commercial real estate. And I think people really think negotiation is about I win, you lose. And that's not really how it works. The best deals are the ones where you structure them. I win, I win. Both sides win, right? Whenever we sell a deal, we also set it up in a way that the next, next guy has a clear pathway to pay a premium to us and improve the deal. And whenever we're selling a deal, we also make sure that we don't blow up their debt and we give them all the stuff they need to make it easier.

Right?

It's a win. Win.

Yeah. That's really good, man. Well, let me give you kind of relate this back to the small deals, because I know a lot of people listen to this show are into the, you know, trying to buy their first deal, second deal, third deal. So I'll say this. Do you have some hope out there? So I got a. I got a property right now. It's a duplex that I'm going to sell. It's in Grays Harbor, Washington, in. And it needs, like, it needs a. It needs a work to make it really nice. Like, it's been 15 years since I remodeled this thing, and I'm just not gonna do it. Like, I just don't want to do it. I bet you fixed up, it's probably worth 250, but, like, I'm like, I don't. I just don't have the energy or the desire. It's not a failed property. Was fine, but I'm gonna sell the thing probably for like 180, right? So somebody's gonna get like, potentially they can buy it for the 180. Let's say they put in 20 grand worth of work and now it's worth. They got $50,000 equity. Great Meat on the bone, but I just don't need that. I'm at a different part of my investing career that. That doesn't matter to me anymore. What matters to me is moving on to these bigger deals, these different deals. So again, I say that because I want people knowing, like by contacting local landlords in your area, by small mom and pop landlords, they probably have property in their portfolio that they would be willing to part with because they just aren't a different part of their life, a different part of their investing. They're tired of it. They're just burned out. They don't care about their. That property anymore. But you get to bring fresh enthusiasm to it. So when people say there's no good deals anymore to be found, like, they're everywhere. Just get out there. And there's a word again. Network, right? Connect with People who own property.

I'm in the same boat, Brandon. I mean, those properties that I house, that I have been slowly selling them off. I sold that four place a year and a half ago. And you know, there's meat on the bone for the next guy and I'm okay with that. And they're, you know, they're happy. It's a win, win. So, you know, again, it's not worth me to spend all that energy and effort. I'm happy to give up that 5,000, 10,000, $20,000 of meat to them and, you know, you kind of move forward.

Yeah. Cool, man. Well, what about, let's talk about some like red flags you see when you're trying to buy in a large multifamily deal. What are some like that you're instantly like, oh, yeah, I don't, I don't want to deal with that. Anything come to mind?

So on the buy side, not on the investor side. Right. So you're asking. So on the buy side, I mean, ultimately we've learned from that Atlanta deal really to understand who we are buying from. We've bought from the institution and we've bought from the guy that should have never owned a deal. And we've seen the spectrum. I've learned I want to be halfway and up the spectrum. Yes, sometimes there's a lot of money to be made on these deals and that's okay, but there needs to be more meat. Like the Atlanta deal, our investors did phenomenal, but it was probably way too much work for us versus what we got out of it. It's really understanding who you're buying from is a really big red flag. Understand if they're doing third party management or are they poor boying it themselves. They're managing it themselves. I literally throw out the financials and I just basically say, okay, if I just adopted this deal out of the blue, what could I do with it? That's another really big red flag is just looking at the financials and the quality of the financials then really? I always like to understand the story.

There's a story behind every deal and understanding the story and see if it jives with what you're seeing on the deal. Right. And that could be a red flag in itself. Versus, hey, it was a partnership. One of the partners passed away. They thought, we're going to keep it for 10 years and now it's for sale. We saw that deal literally four miles away from here and we offered it, but again, it was not in a great area. We couldn't get the rents that we wanted to. So we ultimately did not win it. And so, I mean, we really like to see deals that have meat on the bone. That's the other thing too, right? Is, can we actually do a value add or is it the BS Value add, right. You hear this all the time. I mean, every deal has a value add and every deal is off market. But in this day and age, that's not true. Every deal, larger deals goes through a broker one way or another. Because again, I think it's reckless if as a seller you don't. And then the other thing is brokers say every deal has value add, but you need to assess what your risk is and do you agree with that value add. And so we like to see a track record, a proven pathway to value add. Right. Either we own a deal next door and we know what we're getting in that submarket, or the seller did a decent number, you know, like on this deal they did more than half the unit. So we know what we could get.

Right?

It's continuing that. And so those are maybe the biggest red flags, I'd say.

And then that's really funny that you mentioned some of those. Like off market is one of those deals that people just throw around. Like I think the word foreclosure used to be that way. Ten years ago you said, I want a foreclosure that was synonymous with I want a really good deal, that's really, that could just find really easy. But foreclosures, if they actually go through the foreclosure process, get put onto the MLS just like every other property, once they, once it's a reo, you're not getting a better deal on those than anything. And now it's just off market. We have a lot of people that will come literally to our team and say, can you guys find me an off market deal? And I said, well, who would be paying your agent? Like, you're going to have to pay him. And all of a sudden it's not a great deal anymore. So you're making a very good point that you need to know the specifics of what you're looking for. Don't just throw around words like, oh, I want a value add deal and experience broker will sniff right through that. And just like this, this person does not know what they're doing. I'm not going to waste my time with them. So what I wanted to ask you was what are you specifically looking for in a deal? For you to say, this could work. Let's put this into our, our pipeline of analyzation.

Great question.

So you know, where we are in our career in our business is we are, I like to say, glorified matchmakers. Right. What we bring to the table is we have a very, like I said, I'm a tech guy. So our acquisitions pipeline, Brandon saw it himself. It's definitely a thing. We built a system to underwrite and look at more deals than anyone I know and really do in depth on all of them. Now why we made that investment because we match deals to equity. If I have an investor that wants a 1% return and the best deal in the best area, I can buy just about any deal in Houston or any deal in any most of the country right now. It's about again, I need to find a better box that fits my investors. Typically what we're looking for today, we're looking for deals that are for a newer deal, maybe a seven and a half cash on cash average throughout the hold on a B, you see, and up, we're looking from 7.5 to 9.5, 10.5. That's the cash on cash play we're looking for. We are cash flow investors. So that's our number one thing. As we've grown, we're really looking for 250 units and up deals, more institutional issues, quality assets. We're not really looking for the deep, deep distressed deals. Yes, there's money in those. But again, is it really worth the time and effort? Probably not. It's risky. There's a lot of risk in those plays. So we're looking for deals that have a clear pathway to value add, whether they're a B and C. I like to say risk adjusted. I like to make a joke about some groups that will buy an A and a B and a C. And every time the returns are the exact same. That doesn't make sense to me. Right. It needs to be risk adjusted and realistic underwriting. It's not about just making the numbers work because again, I'd rather not do a deal than do a deal that we can't deliver on. That's maybe the answer there. It's just really deals that fit our box, that cash flow, and we're looking to double people's money in that five to seven year play.

When we were meeting in person, you mentioned something to me. You said you went over a year at one point during your career without a deal where you were analyzing a ton underwriting a ton, and you went a long time with that one. What was going through your head during that Point like, were you just thinking, this doesn't work anymore, I should just give up or were you just plowing forward, analyzing, analyzing, offering, offering.

I mean, for us it was patience, right? I mean again, it's easy to buy a deal. I could buy any deal. It's really easy to buy a deal, right? You have investor confidence. We have a long track record. Our investors will believe in us in anything. But again, I guess what's going in my head is my partner and I were both in our mid-30s, right? We're younger, we got a long career ahead of us. We cannot falter, right? So patience, patience, patience. Because guess what? If we do the right deal, we continue to grow and continue to buy more in the future versus, you know, there's people that will just do a deal to do a deal. And it's again, it's easy to do a deal. But you know, and me and my partner's mind, our goal is to really, we dump the money back in the company. We keep continuing to do that and we have a 30 year career. And my wife likes to make fun of me. She's like, do you ever plan anything? Short term answer is no, right? I have a long term plan. And so, you know, what's going in my mind is patience, patience, patience, right? And also maybe to add to that, Brandon, is I've since started looking at nicer, newer deals. As we've seen cap rates compress, the difference between an A and a B and a C has gotten so small that sometimes it's worth paying a little bit more for a much newer asset versus continue to duke it out and you know, in the C value add. So.

Yeah, I agree. That makes a ton of sense. Yeah, I think, yeah, there's a level of like deal that you cross into. For example, like when you're buying duplexes, four plexes, eight plexes, like I don't want to say you can be reckless, you shouldn't be reckless, but if you were reckless, you could probably go and do more of those. And nobody at that level, nobody would ever know that you screwed over some investors or you, you know, you ruined your reputation with this small group of people. But what's interesting at this level, when you get to like buying the 10, 15, 20, 50 million dollar, you know, 57 million dol, like we're doing right now, like when you get to that level, like everybody knows everybody in that space, especially in an area, right? Everybody in Houston knows everybody who's doing that size of deal. All the brokers know Each other. So you. If you lose your reputation because you were greedy or because you were impatient, like, you're not just affecting that one deal you're losing. You're affecting your entire career.

And I've had.

I've had a. Numerous investors say this to me who are in my fund, you know, invested in opener capital that they're investing because they know that I can't afford to lose my reputation because, like, it's just, I can't hide. Like, if. If I lose that, it's just too big. So it's interesting. Like, and that's one of the reasons that I, you know, I chose to work with you guys and we deliberately have been building this relationship is because I'm like, dang. Like, I like that you're patient and you're not like, oh, crap, it's been 30 days. We better go and just, you know, adjust our underwriting and get a little bit more fuzzy with it to land something.

Because you're like, yeah, you said it. You said it perfect. I can't afford to lose people's trust, right? It's not to say every deal is perfect, right? Every deal has its challenges, and we have the home runs and the deals that have been a pain, but we ultimately will perform and keep that reputation. But you said it exactly right. I hadn't heard it that way, but, yeah, I really can't because, you know, again, whenever you're. Some people will just do 3, 4 deals as fast as they can before anyone knows any better, and boom. Right? Whereas, you know, again, if you're trying to build a sustainable company, that's why we continue to hire on more and more people like, you know, we are. There are people that have three times as many units that we have, which have half the staff that we have. But it's about doing the right thing and really, you know, to your point, can't afford to lose that, you know, that reputation.

So, yeah, super important. When did you quit your job, your day job? When. When was that in your career?

It's funny because after Microsoft, I had a software company and, you know, then what happened is really, we started. We had made a lot of money with apps, and then after that, really, we, you know, we knew we made a lot of money in apps. We knew that was not long term, not sustainable. So we decided to double down and build property management software, of all things, right? Because I was getting in the real estate thing. That did not pan out. And so that was kind of a nice transition between that winding down while I was Starting to grow in real estate. And so those two things kind of went hand in hand, and it made life a lot easier. That was what, that transition, like, four years ago, five years ago.

Wow. Yeah. And then you found Ben somewhere in there. So, like, why him? Like, let's talk about partnerships for a minute before we kind of begin to move towards the end. Like, why?

Yeah.

What attracted you to Ben?

And so I've had multiple partners, right. I've had multiple businesses. And, you know, the thing, the most important thing is someone that has the same kind of outlook, Right. Like I said, Ben doesn't complain whenever we continue to invest back in the company. Right. I have a joke with Ben. I'm like, don't worry. One day we're going to make money from this business. Right? That's really our joke because we continue to pay everyone else and continue to build on, bring better people in, Right. Because we have that same outlook. So I don't have to fight those battles with Ben on, hey, are you cool with me hiring on this person? I this much, right? We have that. That's an important thing. And ultimately, Ben is similar to me, where we will both roll our sleeves up, good, bad and ugly. And just like, if I got to go replace the toilet on a property, I'll go do it. Right? Like, you know, it's. It's not. Some people have this stigma or this mentality of, hey, I'm not, you know, that's. That's beneath me. Whereas Ben and I, it's like, hey, you know, it's about getting what we need to get done, done and moving on. So, you know, we're both very dynamic, very fluid. And like I said, I met him at, you know, the meetup, got to know him from the multiple meetups, right? And then fast forward. And the joke I have with Ben is he'd been running that meetup for like a year prior to me. But again, he had. It wasn't systematized. Like, he'd literally hold his finger to the air and say, you know what? I'll hold the meetup next month, right. For next week. And once me and him partnered, it became very much a system, Right? We, you know, we do it the first Thursday of every month. We're actually doing it this Thursday. We started back up after Covid, so we're excited. We should have probably 150 people out there, but we're the first Thursday of every month. We start at 7 o'.

Clock.

We have people sign in three days before the meetup. We send them an email. The day of the meetup, we send them an email and get it buttoned up. And so it's been a good partnership and we both look at it, continue to grow that. And so someone that you jive with, someone that you trust and someone that has that same outlook, I think is the biggest thing. Right. Whereas I've had previous partnership where we were almost too similar.

Right.

And that has its own problem. So Ben and I are different enough and we're both willing to kind of grind it out where I needed it.

Yeah, that's really good, man. What about, like, let's go with money real quick. Let's talk about money for people who are listening to this going, I want to get into the bigger deals. I want to invest in the, in the big stuff. Do you have to invest, like, do you have to put a lot of money into your own deals? Is it possible to do no money down value add multifamily syndications? Or is that, is that like, how does that world work?

Yeah. So I mean, once you get past, you know, small, like, let's say 50 units and up, right. It's hard to do no money down. Right. Like, yes, your lenders will finance you 70, 75, maybe 80%. Right. But someone's bringing money somewhere, whether it's you got creative and you had the seller keep money in the deal, you put your own money or you syndicated and brought investor money. Right. And so there's definitely money involved, but it does not necessarily mean have to be your money. Right. And so I've heard of the phrase opm, other people's money. Right? Now Ben and I, we invest in every single deal because I'm also not a big believer in just being a fee guy and monster the next. And it's funny, my joke is literally our biggest home runs were the deals that I had the least in, and the deals I had the most in were not. But it's a numbers game in some capacity, right? And so it's about really just kind of having that fiduciary duty to the investors, right. And also showing them, look, I'm aligned with you. My money is sitting on the same side of the seat as yours, Right. I really want this deal to work. Trust me.

Yeah. I'm a big believer in that. I don't need to put money into open door capital, but I've put money into every one of our funds because I want every investor knowing like, that I'm, I'm on the LP side as well. It's almost more of like I mean, yeah, I know my deal is going to do really well. I know it's going to make a good return, better than I getting anything else. But it's more important to me that everyone else knows that, like, I'm not making up. I'm not getting rich off this. I'm getting rich when this makes you rich. And like, by putting your own money into it. Yeah, it's been a big piece, so. Yeah, I'm glad to hear you say that.

And I'll add one more thing too, and it's about taking care of your investor, right? Because again, if you're, if you're in it for the long haul, right, you're not making money a quick buck from one deal. You make money from 100 deals, right? And so the real example is we literally got an unsolicited offer. Brandon, this is like last week after you guys left on one of our deals in Atlanta, we bought the thing for 14 million. Let's just say we got an unsolicited offer at 26, really, really high price point, like in two years. And on that deal, I remember I had to half my initial investment because we had too much investor interest and I wanted one of our main investors to able to get into that deal, right? And I'm, now I'm just like, man, that deal is a home run. But again, it's okay, right? Because it's, you know, but it's taking care of the investors and, you know, showing again. Look, I am invested, I'm aligned with you, but then also kind of give them the meat on the bone.

Yeah, that's cool, man. I love it. Well, it's been, it's been fun to hear kind of your story, how you got from, you know, just getting started on those small deals, jumping into the big ones, and now you're taking down just, I mean, massive projects that like the one that we're doing, what is a 57 million, like crazy, but it just shows, it feels, hey, it's all.

About having the right team and the right people networking, right?

So that's what it is. The right network, the right people, the right team, the right mindset going into stuff. So getting into value at multifamily is totally doable. And I want to encourage anybody listening to this right now. I don't feel like it's something you have to have an MBA for. You have to be super wicked smart for. You have to be like, well connected and born, you know, a trump. Like, you don't have to have any of that stuff. Like you can just like learn this stuff, like read a book or two on it or, or attend some classes on it, like follow somebody around or what you said earlier, you know, you said you've partnered like that first deal with Ben, the first big one, because he had done a deal before and now we're going into the large multi space. We're partnering with you because we're like, hey, they've got the experience that we don't have in the, in the large apartment syndication space. Right. So a lot of this is just again, building the right team. Even if you're not the, the hero of the team, you can be a partner or a piece of it or an employee of it or whatever you got to be to get that knowledge, get that experience, get that traction and then it sure makes the rest of your career look a lot easier.

Absolutely, man. Put better people around you and all.

Grow and learn together.

Right. Have the same goal and you can accomplish anything. Like literally right now, I'll give you even a better example. I'm hiring on a key position in the company and yeah, that's well above our range of what we initially thought. But ultimately if I have a team of superstars, I can go accomplish anything. Right, Right. So again, it's gonna, it's a short term pain for a long term gain.

Yeah, it just goes back to the. You're thinking long, you're not thinking year, two years, three years down the road, you're thinking 20, 30, 50 years down the road. And when you look in that horizon at real estate, it's amazing what's possible.

Yeah, absolutely. That's what I love this business.

I love it. All right, man. Well, we're almost ready to get into the famous four. But first question for you. Where do you see the next 10 years of your life headed? You guys have like big 10, 5, 10, 15 year old like goal set or is it just like to see where the world takes you?

Oh, great question. I mean, for us, you know, like I said, we, we're vertically integrated. We've continued to make the investments in the different parts of the business. That makes sense. Right. So you know, for us, it's really about continuing to build up the management company, you know, first and third party.

Right.

But acquiring deals. Right. I mean, multifamily is what we do. A to B, A to A to Z.

Sorry.

And you know, having other partners for other things. Right. So we're not disrupt multifamily, we're disrupting. I love that phrase. Right. And multifamily is our expertise. But guess what, Brandon? One day I'm going to beg you guys to let us go do a mobile home park with you guys so we can again go do something bigger, better together. Right? And so for us, about having key operators that are experts in their space continue to provide that as, you know, as an opportunity for our investors. And, you know, we vet the deal, we make sure things, you know, look attractive. Right. We provide that benefit to the investors, but really continue to grow that. And building a company in a culture, right. That's what gets me excited. Right.

It's.

Money is one thing, but I love building a company and a culture and a place people want to be at.

Right.

I really like to say you came by the office. I mean, I, I think we run our company more like a tech company than we do a real estate company.

Right? Yeah. You have. What's that game called with the, the whatever, the little beanbags.

I don't even know what corn is called. That's a random thing.

Cornhole.

Yeah.

Yeah.

Cornhole.

Yeah.

Yeah.

So, you know, yeah, it's just really building a cool culture, a place that people want to be at. And I think I'm seeing that more and more, especially with management. Management's a really hard business for a lot of reasons. Right. And it's a high turnover business. Now I'm really kind of fixated on how do we fix that. Right. What's missing in that type of business model to make it that culture, that place that people want to be at. And I'm the kind of guy that's crazy. I'll literally, Brandon, I joke with the team, but very, very soon, we have a team in the Philippines as well. And I tell our team here, hey, soon I'm going to fly the whole team out there, there. We're all going to do a big, you know, powwow there in the Philippines with the rest of the team.

Right.

And so make it that thing, because if you can take care of people for life. There's a phrase that. And I just blanked out, the Oracle guy has a really cool phrase, but essentially it just boils down to, you know, teach people to be able to leave, but make them want to stay for life kind of thing. Right. So I'm a big believer in that and that gets me excited. So kind of where we're headed is really continuing to grow that really build out each part of the business to be the best in class in each space and then, you know, really focus on that culture.

I love that. I love it. Well, now you mentioned you got a team in the Philippines. Explain that. What are they doing?

Yeah, so great question. So one of the, I would say in tech, you know, having what we call VAs virtual assistants is kind of a normal thing, right? I mean I had them literally 15 years ago whenever I first had my first one. And you know, one of the things we've done on the management side, I think in terms of innovation is having that team as well, right? Where we have an external extension of our on staff. They are people in the Philippines, all digital, but they are very qualified people and we pay them really well for over there and they do things that help really facilitate the business. And I'll give you a real example, right? A very simple one is I have them call every week, call every single property. And every Friday we get into teams, right? We use Microsoft Teams. They dump a report saying which property answered, which one didn't, which one called back, which one didn't, which one introduced themselves, which one didn't. They're very simple things like that that, you know. And Brandon, you probably have all these cool ideas that come to mind and you're like, man, it'd be cool if I knew ABC every day and guess what? I can turn around and we have a savvy enough team to go and turn it into a process and a system and we get to see that every week. So I mean literally the list goes on and on. There's like 60 of these things, right? And to the point where I'm just like, man, we get a lot of reports but it's good stuff, right? Because it helps you keep performing up and take care of the important parts of the business.

So that's awesome. All right, there's a, a good quick.

We love our team out there. So they're watching. I mean they know they're an awesome team. You know, they do phenomenal and we like to take care of them.

So that's awesome, man. Appreciate it. Well, let's move on to the last segment of the show. It's time for our famous for Famous for same questions we ask every guest every week. And so we're going to throw at you. First one, what is your current favorite real estate or all time favorite real estate related book?

I'd say the Millionaire Real Estate Investor, right? And the reason for that, right, it's an eye opener, right, for people that are new in real estate. It does a good job, I guess for me. I only really like it because one part of the book where it talks about the couple that doesn't make a lot of money, but how over 30 years, they retire millionaires. Right. Just. That really is an eye opener. And I remember reading that. So, you know, in any book written by Brandon Turner, obviously fits that box as well.

Well, thank you. Thank you.

All right. What's your favorite business book?

I'd say the E. Myth Revisited. I'm a big proponent of that book, and that's. And I was thinking just the other day, it's been five years since I've read or listened to that book, and I think I'm at the point in our business of probably listening to it again and really rethink it. And so for those that don't know, the book really talks about how do you systematize a business? How do you not become the chef that's really good at cooking but really doesn't know how to run a business? And how do you really bring on a role and kind of systematize that?

Yeah, Yeah, I love it. Yeah, I. 100% agreed. Life changing book.

All right, next question. What are some of your hobbies?

Me, man, I love sailing. Unfortunately, I'm in Houston, and Galveston's really ugly. Right. But, you know, sailing is a lot of fun. Mountain biking is fun. But lately it's been just, you know, a lot of family time. Right between. My hobby is real estate. That's really maybe the short answer. I love real estate, and so that takes up a lot of my time, and I enjoy it probably too much. And then the other stuff is, you know, as I can find time for sport.

That's cool, man.

What do you got?

What? You said family life. What you got for family? What's your.

I mean, you know, I heard a phrase, you know, a while ago, and I really resonated with me. It's basically health, family, work. Choose two. Right? So, yeah, you know, unfortunately, I guess, you know, I'm not as in shape as I used to be back in my Seattle. That's maybe my. You know, I used to be into mountain climbing and, you know, all that stuff.

But there's something to that. I. I've been trying to figure out my whole life. I always say either my bank account's healthy or my body's healthy. I've never been able to get both at the same time. I think it. It must have something to do with just your. Your reticular activating system. And when you're thinking about fitness, you're scheduling time to go to the gym, and you're eating healthy and work just fits in around It. And then with work happening, just all your resources are going towards that. You have no, like, emotional energy.

Wholeheartedly believe it, David. Let's write a book on it.

What do you believe separates successful real estate investors from those who give up, fail, or never get started?

You know, And I guess the answer really people that will just put in the effort, right? Problems come up. And I see it at a time and time where people hit a problem and they just, like, implode on themselves, right? It's be confident, have confidence in yourself, and really work through them. Challenges. There's challenges every step of life, really. Right. And just don't let it kind of overwhelm you and just work through it and move on and realize everything. There's a problem, there's a solution. And so I think that's the number one thing I see, right? Whether it's people that get bogged down with analysis paralysis or people that, for whatever reason, don't get a deal done. And they just say, you know what? This sucks. Right? And I've seen all of that, Right? Whereas, you know, we've been through A, B, C and D, right? And, you know, you get up and you go at it and you work through it and move on, Right? So that's my answer.

I love it. It's a great answer, man. All right, with that said, we got to get this thing closed up. So, David, last question. What do you got?

Where can people find out more about you?

Yeah. Www.disruptequity.com-I S R-U-P-T equity.com or send me an email. Ferris disruptequity.com or Brandon will appreciate this. My Instagram is Ferris Musa. M O U S S A. All right, so I'm not good on the Instagram thing. You know, Brandon's gonna inspire me here. We're gonna get you. We're gonna get you there.

We just gotta put some more funny, stupid videos on your Instagram.

Like, that's the soft company we should have done.

There's no one better, if you want funny, inst. Stupid videos to have in your corner than this man right here.

All right. I was actually. We were laughing when. When Ferris and I were hanging out in Houston and we're talking about how, like, I wonder if there's other syndicators out there who are having a conversation about putting together some, you know, $57 million deal at the same time making funny, animated mouth, like, talking videos of, like, you know, I don't know, Michael Jackson songs. I'm like, I Don't know if. If there's other companies out there, I do it, but I. I like operating that way.

Same here, man. I like to say I'm the kind of guy that despite how old I get, I'm always gonna be the guy standing on the shopping cart and pushing myself through. Right. Like, enjoy life, like, you know, be laid back. Don't be that uptight person. Right. That's really my philosophy.

Is that where you made the video that I put on my Instagram of the Shakira, So.

Yes.

Yeah. I was hanging out with Ferris when I made this. Yeah.

You singing Shakira? Yeah. If you guys want to see David singing Shakira, go check out his Instagram. It's back on. I don't even know what date probably endo of. Was it early June?

It would be like, I think, probably one of morning. So I don't post that often. It's me and you. Me and you and the sea shed. They just click on that one.

Yeah. Okay. There you go. And you'll see David singing some Shakira. It's pretty great. All right. But that said, we gotta get out here. Ferris, thank you so much. Appreciate you. Love to hear your story of going from the small stuff to the big stuff and kind of the mental shifts you had to make to do that. Making millions through value add multifamily. It's awesome, man. I love it.

Thank you guys very much. Definitely a pleasure. Loved it. It's a lot of fun. Take care.

All right. This is David Green for Brandon Magic Mike Turner signing off.

You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the hype.

You'Re in the right place.

Be sure to join the millions of.

Others who have benefited from biggerpockets.com your.

Home for real estate investing Online.

Most.

Investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of the smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to steadily. They focus exclusively on landlords. Whether it's a single family rental, a BRRR Builders risk policy, or midterm holiday guests. You get fast quotes, flexible coverage, and protection for property damage, liability, and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes@biggerpockets.com landlordinsurance steadily landlord insurance designed for the modern investor.