196: How to Make Big Money in Small Apartments by Lance Edwards

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Welcome to the Heroic Investing Show. My name is Gary Pinkerton and I co host this show with Jason Hartman. This is episode 196. My guest today is Lance Edwards. Lance is the author of the best selling book how to Make Big Money in Small Apartments. His company, First Cornerstone Group is a real estate education and marketing company which enables both new and experienced real estate investors to accelerate their path to financial independence through small apartment investing using other people's money. And it totally applies to investing in real estate that we talk about on this show. But that's not why we're here exclusively with Lance. What's Lance's connection to first responders in the military? Well, Lance supports the Intrepid Fallen Heroes Fund as we talk about on this episode. Proceeds from every book he's written go into that fund. Intrepid builds critically needed centers for treating United States military personnel suffering the effects of traumatic brain injury and post traumatic stress syndrome. You know, on past episodes and in fact, the first one that I did when I took over Heroic Investing was with a dear friend here who runs a charity effort in my local town for the tunnels to towers race in memory of her brother. And across America, they build homes for critically wounded members of the military. The Intrepid foundation. Just as strong, just as important. It's fantastic that Lance contributes to that. Let's get into what he can teach us about real estate investing and giving to others.

Today we have the pleasure having with us Mr. Lance Edwards. Lance hails from many generations, his family being down in the Florida area and recently wrote a book about that that he'll jump into here, I think shortly and has a business and does quite a bit in the real estate space. So very nice combination of tie to the military that we'll talk about in a moment and real estate investing and growing long term wealth through the vehicles of real estate and other asset protection kinds of vehicles. So you hail from Houston with the actual business but most of your time down in Florida? I think so. Lance, welcome to Heroic Investing.

Well, Gary, thank you so much. I'm really excited to be able to speak to that and really appreciate the opportunity. So thank you for inviting me.

Of course. Lance. As you know, our audience is made up of first responders and members of the military, veterans and retirees from both that are looking to maybe change their lot in life a little bit or expand on what they've been able to save and grow while they were in the military. Also perhaps start up their own business, get some time back with family and to passions of theirs. If you wouldn't mind a little bit of an introduction and how you got involved in real estate from the years ago when you started.

I got started way back in 2002, so been doing this quite a while. Got a full time job, was looking for additional source of income and I discovered a niche in small apartments, a niche in real estate, specifically small apartments, two to 30 unit buildings, and got involved with that and within three years was able to retire from a corporate job and been doing apartments full time since 2005. I've been teaching it since, teaching people how to do the same thing since 2007. And that's, you know, that's our business we run here and we have students and clients across the country. We teach people how to create financial independence for themselves through small apartments. And they start with small apartments, they can scale up into large apartments. And certainly many, many of our clients, our training clients are active military and or veterans. And so I'm really pleased to be able to, you know, speak about the topic here, especially for your audience. Gary.

Wonderful. Yeah. If I understand it right, what you're teaching the clients is how to, well, purchase with other people's money. So essentially doing some syndication, raising funds, putting together the deal and the purchase, doing kind of a repair, make ready and then, or not make ready but a repair rehab and then getting it up to higher operating standards. Is that, is that pretty accurate?

Certainly that's part of it. I would say it to give kind of a broader range. There's three particular areas we teach with small apartments. And by the way, all of them are using none of your own cash or credit. One of them is wholesaling buildings, that's putting them under contract and simply selling your contract. You don't do anything but sell your contract. Make minimum $20,000 doing that wholesaling small apartment building contracts. Second area is, what you're referring to is well, buying and holding them using other people's cash, other people's credit, getting that passive income, that mailbox money. And then the third area is finding the distress stuff, you know, need some sprucing up low Occupancy, buying it cheap, fixing it up, filling it up. And you not only get great cash flow doing that, but you can sell those improved assets for, I mean, six and seven figures. And that's, you know, that's, I call that the rehabs and turnarounds. So it's wholesaling, buying and holding and the rehabs, all three areas and people can do them simultaneously. And again, our whole instance is using other people's resources. The thing about small apartments, which is where I encourage people to start and the biggest question, where's the money going to come from? Well, you start with small apartments, all you need is one investor, just one to get started. So it's a great, great way to get entered into the multifamily space.

Yeah. And so you go all across the country teaching on this. What's kind of the scale of you teaching once a month or 500 people every weekend or you know, kind of like what's the scale of your.

In my business we run monthly three day seminars. We go around the country, we rotate different compass points to cover all the different geographical regions. We do seven or eight cities at this point. Monthly seminars are three days. We'll have, you know, no more than 50 people in it because these are close knit. I'm teaching them and we're teaching people how to get started. I think people, I would say this because the biggest thought that people have that well, I can't do small apartments. Well, of course, actually I've got a 10 year old that bought a duplex, came to the boot camp, bought a duplex and I have to, I could qualify with his dad's help. I got 12 year olds, I got 18 year olds and I got 80 year olds. So this is a field, it's a niche that frankly most people disqualify themselves unnecessarily thinking, well I'll do some house deals and I'll graduate in the small apartment space. Please break that notion because anybody can get started here and there's less competition, competition than single family. And it's much more leverage of your time, frankly.

Cool. So doing that for a while, that business is up and running and running well obviously and gave you some. An opportunity to go after a passion. And you recently wrote a book, which I've participated in writing a couple of books. I know it's a, it needs to be a passion because it is a very, very challenging thing to do. Right. And you sold it and it. And it did. Well, talk to us a little bit about your most recent book.

I've been very fortunate. We've got actually two best selling books. One of them is on the apartment space. There's a book called how to make Big Money in Small Apartments and that book went to number one. And then my book that just came out very recently is called, as it should be, Tales of Old Florida has nothing to do with real estate. It's about myself and my family, seven generations growing up in Florida. And I tell the story of that and the values around growing up in what I call old Florida. That book was, you know, a bucket list thing and it went to number one on Amazon as well. So that's the two books that are out there. And you're right, Gary, you gotta have a passion. Cause it's a lot of work if you're gonna do it right. It's a lot of work. But I'm very proud of both books.

What were some of the surprising things that happened as you went through that last the process of writing your. The book that was more about the family. And I'm sure you discovered some things that maybe in your research you hadn't really appreciated before.

Oh my gosh, you're exactly right. You're spot on.

People ask me how long take you to write the book? I answer 50 years. It was a lifetime. But I wrote it actually put words down period about six or seven months. And I discovered something about my family, my history, I didn't know. For example, my four time great grandfather was one of the first settlers in 1848 to step into Florida. Discovered that there's a county park actually named after him. This all came to the research. But the other thing I would say that I think everyone can relate to is what I discovered is everything is connected. When you start looking back over time, you can see these random events that the times seem just totally random but over. You know, when you look at, you look at the impact of what happens, you come to see that everything is connected. We are where we are today because of things that happened centuries or decades ago. And so that was a big epiphany out of that. And you know, that really became a core theme of the book, how everything is connected. Where I take seven generations of my family and things that occurred beyond that, not just my family, but in the state of Florida itself. To show how the things that are going on in Florida right now really a result of decisions and actions that were taking 150 years ago.

Cool. So we haven't yet gotten into the, you know, kind of the connection with the military audience and service members.

As you were leading up to the.

Book launch, you made a decision about what you were going to do with some of the proceeds. Can you talk a little bit about that?

Certainly. This was, you know, one of these connections that happened. So in the book, as I'm writing the book, I talk a lot about the respect that people in Florida, not just Florida, all over the country, have for our military and our veterans. My family, heavy military background, including my daughter, my brother, my grandfather, et cetera. And so part of the connections I talked about was our belief in our military in the book. And as we were approaching the launch day, one of the things that I decided to do was to promote the book launch. I said, okay, I have this book coming out, Tales of Old Florida. You can buy it. And I want everybody to buy it on a certain day, because that's how you drive it, number one. Well, I said, what I'll do is, when you buy the book on launch day, I'm going to take the gross dollars you spend on it, which is $15 each, I'm going to double it, and for every dollar you spend, I'm going to send $2 to the intrepid Fallen Heroes Fund and the Intrepid Fallen Heroes Fund. Can I speak about that for a moment?

Of course. Please do.

And so Intrepid Fallen Heroes Fund is. I found them. They're one of the top nonprofits that serves our active military. And there's great nonprofits, obviously great ones out there. But the reason I chose Intrepid is one of the thing that really is unique about them, is that every dollar that is donated to intrepid, 100% goes to benefit our active military. And the way they're able to do these. So how can they. How can they do that? Don't they have expenses? Well, of course they have expenses, but their board members personally underwrite all the nonprofit expenses. And that just resonated with me. So I kind of took as a challenge, all right, if these guys can put up 100% expenses, I can put up 200% of the gross sales on that day. And so that was part of our launch day. We had a successful launch, went to number one on Amazon that day, and as a result, end up writing a check for $10,000 to the intrepid fallen hero. So, matter of fact, it was just about three weeks ago, I was in New York City on the USS Intrepid, the aircraft carrier, the museum, which the fund is named after, and I met David Winters, the president of Intrepid Fallen Heroes Fund had a check ceremony, handing over a picture of him and I on the deck. Flight deck. So it really started, Gary, because it wasn't part of the plan in writing the book. The book just kind of started developing. The connection started happening. The military aspect became part of the connection. And out of that, my decision to, well, let's make this about our active military. And one more thing, and I'll shut up, let you ask me some more questions.

Is now what we do is with our books is two times all the money spent on books goes to the Trepid Fallen Heroes Fund. Not just on launch date, all the time. And that's become part of our cause of my business. How many more books can we get out so we can get more money going to Intrepid?

Nice. And that's again with the second book, right, with the as it should be book.

Well, that's with any books we're coming out. So now I'm going back to my other book, how to make Big Money Small Apartments. Now I'm taking the, you know, we sell that book, we're taking two times the gross receipts of that book and sell it into and to make donations to Intrepid Fallen Heroes Fund. Certainly we're doing it with the as it should be book. But now there's a whole emphasis within my company to release more books and do the same process we did with as it should be to keep a recurring revenue stream going to the Intrepid Fallen Heroes Fund.

That's wonderful. That's a great effort. And you can find out more about the Intrepid fallen heroes@fallenheroesfund.org It's a great organization. I've been to the Intrepid many times, live up here just south of New York City, do a lot of submarine veteran events and things like that at the Intrepid. And it's a great museum, great organization, Fallen Heroes Fund, and familiar with some of the board members too. So pretty impressive organization. So I really appreciate you supporting that, as do most of the active duty members of the military, especially those that have suffered from traumatic brain injury or post traumatic stress. If you don't mind, I'll do a little transition back to the real estate side.

Sure.

So I'm curious what advice you would give to people who are considering using real estate. Maybe not so much active, maybe not doing wholesaling and things like that, but really just transitioning into a place to store and grow wealth as they're. Let's say we'll pick somebody who's 10 years from getting out. They've got their mindset on retirement 10 years from now. What would you recommend they do today to set them up for some cash flow income replacement when they get out there?

That's a great question. And that's really, that's really the whole objective is, I call it how to replace your job income. And the real main objective is buying and holding these assets because that's where the wealth creation has happened. That's where your passive income, I mean wholesaling is great, generates nice chunks of cash, but you really want these assets sending you monthly checks. And so really the main thing is to just get started and get out. Creating deal flow, that's one of the things we teach courses. That's the first thing I do get. Create deal flow, how to select these properties. I want everyone to start small because the reason I say that the most critical deal is going to be your first deal. It's also going to be your scariest because after all, we were not taught this stuff in school, at least I wasn't. And so we've got to learn about this investment vehicle. But the beautiful thing about it is you can do it using none of your own cash, none of your own credit. I don't care what anyone's financial situation is. I can show you story after story after story just for my own clients that got started using other people's resources. So don't let that hold you back either. It's a matter of getting some deal flow started, looking at some deals, making an offer. And I'm gonna tell you right now, the scariest offer is gonna be your first one. But you know, getting the process started. And the other thing I would say is let's bust up this notion that you're going to be self managing these buildings because you're involved with me. You're not going to be allowed to. You're going to hire professional management companies because if you start self managing these, these buildings, you're going to get burned out. So we use professionals. I want you to use professionals and start small and then you start scaling up. Because here's the beauty about apartments. Whatever you learn to do on a small apartment applies equally to a large apartment. It's just extra zeros. And it's all about cash flow and equity creation. You know, it's just getting started, creating deal flow and sticking to it. And I would say one more thing about it. I can't show you the math right now, but I could show you the case, you know, within three or four small projects you could be done and replacing your current job income. You don't need to do a lot of transactions. It's great leverage of your time. You can do it part time. That's how I did it. I was doing 10 hours a week on the side and within three years I retired from a 20 year job. And so it's just a lot of advantages. But you know, Gary, your question is spot on. It's just getting started, getting some deal flow, evaluating deals and making your offers and finding that one deal to get that first one under your belt, that's always going to be the critical one.

Yeah, that's awesome. So I'm sure you've had a student here or there who's gone through the program and not been successful. That's always heartbreaking from the teacher. I'm a teacher at heart as well. And it's tough, you know, when you believe in it, you know your system works. But that person can't succeed. Can you think of what maybe is kind of a common thread of those who it just doesn't work?

Yes, great question. And it's kind of what I was alluding to just a moment ago. We were not taught this stuff in school.

Inside our brains we've had this conditioning about how certain things are going to be done, which we were basically, the way I was conditioned, I went to school, is come here, get good grades, get a good job, that's fine. But at some point, if anybody interested in doing this, you're looking to move away from your job, most likely, or you at least have that option to move away from your job. So we've got this conditioning in our brains about how to be good employees. And so now when you step out to owning apartment buildings, you're really entering the world of entrepreneurship. It's new and fears come up. It's all this stuff in our head and it's the fears that is the biggest impediment to people stepping out and doing this. Because your brain, frankly doesn't like you trying something new. Not with all the programming we've all had about, you know, how to be good employees. And so part of the big thing I have to talk about and teach people is recognizing that and being aware of it. Because once you're aware of it, then you can start dealing with it. But if you're not aware of it, then these nagging fears end up jeopardizing your own success. And so the short answer to your question, Gary, is what holds all of us back, by the way, are these fears. And they're all false. It's just stuff in our heads. They're just false fears. Right.

And so the best way to get beyond that is my answer would be probably, you know, connect yourself with people who are like minded and doing it so that you have a group of individuals to confide in rather than, you know, going back and running to someone who is not thinking this way, never has thought this way and all you'll get is I told you so.

Well, you're exactly right. You're exactly right. Surround yourself with community of like minded people. And so in my space is real estate clubs. I tell all of my students, make sure you join a real estate club because let me let you know a secret, they've all got the same fears, but the ones that are doing it have learned how to, you know, work through it. And so you'll be hanging around those people and you come to realize you're not unique. We've all got it, we've all got it what you don't want to do. And Gary, you just said it. Don't go get advice from the person who's going to tell you that stuff doesn't work to begin with. No, go get advice from the ones that are actually out there doing it.

Right, yeah, yeah, that's a great point. You know, we're coming near the end, Lance and I really, really appreciate again your efforts towards the fallen heroes. But as well, everything you're doing to help people see the path of light for real estate, maybe give some contact information and then anything else that I haven't asked, it's important about our conversation.

Well, I think you really hit the nail on the head. My main message I will share to everyone. Is everyone listening right now? I don't know your background, I don't care what your background is. But I'm telling you you are qualified to get started in small apartments right now because I've got the whole host of clients been doing this for so long I can punch it to anything, 10 year old up to 80 year old. You don't need to use your own cash, you don't need to use your own credit. You just need to devote about 10 hours a week to it and make it part of your new process. So it's open to everyone. It's a great leverage of your time. It gives you passive income, it gives you equity and wealth creation. And so that's my main message as far as contacting with us. I'd like to, with your permission. I've got a gift for your listeners. Gary May I?

Wonderful. Please, go ahead. Yeah.

So my book, how to Make Big Money in Small Apartments that I alluded to, that was my first best seller. It covers everything about this business. How to find the deals, how to find the investors, how to analyze the deal. Everything we've been talking about, number one best seller. You can buy it on Amazon every day. But I want to give it to you for free, everyone, for listening. There's only one caveat. I ask you to pay the shipping and handling $6.77. I'm gonna give you a website. It's called free apartmentsbook.com free apartmentsbook.com go to that website. We'll send you the book, the paperback book. There's other resource materials we're going to send you as well. Physically going to mail it to you. And again, just ask for the six bucks to cover the shipping and handling. We'll send you those materials for anyone interested. So it's free apartments book.com and so, you know, this is one of the new things we're doing now. For every dollar that goes into that, we send $2 to the intrepid Fallen Heroes Fund.

Wonderful. Well, thank you very much. How about any other contact information? Or is that.

You can go to. You can go to lancedwards.com my name, lancedwards.com and it will direct you to our website where you can get more information on what we're doing in the apartment space.

Awesome. And you have your podcast as well. It's called the REI Greenlight Podcast, Is that right?

It's called. It's called. Yeah, thank you. We have a podcast called Greenlight, rei Greenlight, rei. And we interview, you know, people involved in real estate space. There's another website you want to listen to the archives, go to greenlight reinvesting.com greenlight reinvesting.com A lot of great experts talking about different topics, real estate in there as well.

Wonderful. Well, Lance, thank you so much for spending a few minutes with a heroic investing audience.

Gary, it's been very great. Thank you for the opportunity. I really, really appreciate it. Great honor.

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