OCREIN - Multifamily Is Better Than Single Family

Hi, my name is Goldie McDowell. I'm a real estate agent under Pelago with Joe, also an investor in San Diego and Orange County. Hi, my name is Brian McDowell and I'm an investor in San Diego and Orange County. Hey guys, I'm Alex Barnett. I flip mobile homes and single-family homes all over SoCal, looking for more deals and more private money. Hi, I'm Nargiza and I'm a real estate agent. Nice meeting you all. Hi everyone, Eric Kwong. I'm an investor. I'm also looking for some opportunities to, to do fix and flip.

Did we miss anybody?

Hello in the back?

Nope. Did we miss anybody? Did we miss you?

Hey guys, I'm, uh, Tom DiPietro. Real estate investor. I'm here to network and better my understanding about multifamily investing. Good evening, everybody. My name is Nicole Tenez. I'm a financial advisor with Edward Jones, but also an investor of real estate, and I'm here to learn more about everything. Cameron Eden, realtor. Thank you, everybody.

A lot of realtors here tonight. Again, my name is Joe Homs. I've been a real estate agent and broker for 50 years. 5-0.

Bye, Bo.

Bye, Bo. I just thought I'd throw that out there because there's a lot of people saying, I've been an agent for 20 years. I was like, okay, meet one that's been here for 50 years. So yeah, um, I've been doing this event for the last 10 years, and Mike and I met in a limousine on our way to the Nixon Library where Bruce Norris, if you know Bruce Norris, was speaking. And we were invited by Karen Hall, who does UDirect self-directed IRIS stuff. I have to have her speak here one of these days. But anyways, Mike and I met, and as you can see, gray hair, gray hair.

Right.

We're like, you know, kinfolk, so to speak. We sat at the same table. We've been through a lot of the same things. I was very impressed with Mike, and so this is the second time you've spoken at my event here. So you're going to learn a lot today. I have him focusing on how to get started with multifamily, what he looks for. He does most of his stuff out of state, correct?

Yep.

Most of his stuff is out of state. So he's a very interesting speaker. Please ask questions along the way or at the end. I don't know how you normally do it, but please, please ask questions along the way. And anybody who has any questions for me, what I usually like to tell everybody is ask me for my calendar. It is hooked up to either Buy Me Coffee or Buy Me Lunch. Okay, and I'm happy to meet with you for an hour, except FBI agent. I'm scared of FBI agents. So, um, if you, if you don't know where you're headed, you don't know how to get started with real estate, please meet with me for an hour. I'm happy to head you off in that right direction, whatever that may be. I've I've pretty much done everything except I have not done multifamily. That's one thing I have not done. I never really got into multifamily. I do primarily fix and flips. I run a brokerage. I've got 350 agents up and down the state of California here. So with that, without further ado, Mike, it's yours.

Thanks, Joe. Thank you. Nice to see you again.

Yeah, let me go by you here.

Okay. There's your. Yep. And and I keep saying that I'm going to hook my calendar up to for lunch and coffee too. So I think that that works well for people. So you know, for those of you that don't know me, I was here about a year ago. I spoke at the hangar and Andy. Said, oh, I saw you a year ago. I said, and you came back again? So obviously I, I didn't do too bad. And I said, well, the presentation tonight will be a lot different than when I spoke a year ago. So last time I really just told my story, and tonight I'm going to give you a lot more education. So let me ask, most people here are residential real estate agents, right?

Yes.

In the residential investing? It's okay, you can raise your hand. Okay, and anybody here in the multifamily or commercial business? Okay, a couple people, great. And does anybody— does everybody understand what it means to syndicate real estate?

Yes.

Okay, and who doesn't understand that? Okay, so who under— does everybody understand the difference between active and passive investing?

Yes.

Okay, all right, good. So a few people cooperate. Okay, that's good. So let's try and make this interactive. Okay, as we go along, if you have a question, let me know, uh, and, you know, raise your hand. If I feel like stopping, I'll stop and answer it. I really like this because if I say something bad, they can't rush the stage, right?

That's right.

So, okay, so a little bit for those of you that don't know me, I'm Mike Morawski. I've been in the real estate business for about 30 years. People ask me today, what do you do? I say I'm the Chief Investment Officer for a multifamily group, and we buy large apartment complexes and partner with private investors and share in the profits. So basically, that's what I do today. I started out as a residential real estate agent. I sold residential for about 15 years. Prior to that, I had a general contracting business, and I was building about 25 room additions a year in the Chicago market. And I don't know, you know, as an entrepreneur— are there any entrepreneurs in the room? Why didn't everybody's hand go up? We're all investors, we're all real estate people, right? We're all entrepreneurs. As an entrepreneur, You, you do everything in your business. You know, you market, you go on sales calls, you write contracts, you order material, you hire people, you fire people, you do the bookkeeping. And I was still in the field banging nails, and we were building about 25 room additions a year, and I just burned out. So I was fortunate enough I had somebody knocking on my door to buy my business, sold my business, and went in the real estate business. I had met a very successful real estate agent at the time along the way. I haven't been in the business as long as Joe. I'm kind of glad about that. But about 35 years this year, and met a really successful real estate agent who encouraged me to go into business. And I asked him, I said, could I come and shadow your team? And he said, no, I'll do better than that. I'm going to make you a cassette tape. How many people have something that they can make a cassette tape on today? Can't even find that in a vintage shop anymore. But I followed this guy's process. And you know, I think that if you follow a process, you can do really well. So, I go in the real estate business, followed this guy's process to a T. My first 9 months in the business, I sold 78 houses. I went on to build a team, sold 125 houses a year for about 13 years consecutively and had always wanted to be in the apartment business. I understood the fundamentals. You raise private capital, you find a great real estate deal, you stay in the middle. As long as everything goes well, everybody does well. So in 2005, I went out, found my first multifamily property, was 11 units. Syndicated it, and from there, over the next 30 months, I built a $100 million company. We bought 4,000 units in 5 US markets, built a property management company managing 7,500 doors. In 2008, we crashed and burned. If you're old enough to remember what happened in 2008, the world went sideways, and we got caught up in that. Time flies. Over a period of time, got back in the business and have continued to buy apartments, syndicate apartments, and teach people how to do it. So tonight I'm going to go through what I teach people how to do in a coaching program that I, that I have. I've written a couple books along the way. I wrote a book called Multifamily Investment Secrets. It's an Amazon bestseller. Does anybody read anymore? Anybody want a copy? Now you can rush the gate. Yeah, okay, so tonight we're— say it again. That's why it says here. Ah, there you go. So we're going to talk about multifamily one-on-one. I believe in the multifamily business there's a lot of moving plates. You know, if you picture the guy in the circus that's got all the spinning plates going on the sticks, gets them all spinning, goes back, spins them again, that's kind of what this business is like. There's a lot of moving parts and a lot to take a look at. I believe it's split up in about 5 different pillars, and as we go through these tonight, if you have questions, let me know. You know, the first place I always like to start with people is what are your goals? What do you want to accomplish? You know, I think that you have to have some very specific goals, but even beyond that, why do you want those goals? Why do you want to accomplish that? You know, it's great to say, hey, I want to go out and own 5,000 apartments, but why? What's that going to do for you, or what's that going to do for somebody else? I think the clarity around your why and then the business plan planning around that? How are you going to get there? What steps are you going to put in place? You know, I use a very unique business plan that many major corporations use, and it's simple. It's a 3— it's a 1-3-5, right? You have that one major goal, and you can do this in any area of your life. You have that one major goal, and underneath it, there's 3 stepping stones that you need to reach. And under each one of those 3, you would list 5 activities that have to happen in order for you to reach each one of those goals. And if you reach all 3 of that, that midterm goal, you're going to ultimately reach that first one. But you can design your life around that, whether it's personal, whether it's relational, whether it's physical, business, financial, Whatever area of your life you want to work in. The next thing I work with people on is time management. You know, how, how much does the buyer demand of your time? You might go out and sell— show 20 houses, 30 houses, maybe to get a sale. I was a listing agent. That's all I did was list properties. And I gave all my buyers away. And I sold 125 listings a year, and I could tell you because of my time management skills exactly what I did all day long. And I, I teach people to do that again today. I think time blocking is really important. You know, if you're raising capital, you need to be talking to investors. If you're going to networking meetings and going to these groups a couple of times a week, You know, you have to be balancing your time. So we work a lot on that, uh, building your investor identity. You know, we all come from different communities. Uh, we might come— you know, I, I work with a lot of people who are pilots, and, you know, that's a whole niche in itself. I work with a lot of dentists. That's a whole niche in itself. So what I want to learn is if you're going to raise capital to syndicate multifamily deals, then you're going to want to figure out your niche. Where that same type of person, that avatar of investor is going to come from for you that is going to invest in your multifamily deals. And then we work on setting up your business, right? I think a lot of times people don't understand what it is to have a business, run a business, be an entrepreneur, and all the things that go into that. I coach a lot of people that don't even know they need to go set up an LLC or that they need to have a bookkeeping system or some type of a database system, right? And some of these basics are you know, maybe you already know, but a lot of times they have to get put in place for people, and you really have to show people how to do that. I work a lot on team building and networking. You know, you could go to a seminar, you could come to a networking event like this, and, you know, sit down next to somebody, have a conversation with them, and all of a sudden decide, hey, let's go into business together and buy apartments together, or let's do fix and flips together. And that's not always the smartest idea. So I teach people how to build strategic teams and what's important around that. You know, I don't think that any of us should go into business with someone unless we have spent some time with them and found out what their core values are, what their beliefs are, what their work ethic is like. Because if you go into business with somebody who doesn't have the same work ethic as you, that's a recipe for disaster. So how do we help people to learn how to build those team members and other people? Strategic relationships are really important, and I, I believe that there's a lot of relationships that, that need to get built in the real estate space. So whether you're a realtor or whether you're an apartment investor or a commercial broker, there's different relationships that have to get built. In my world, I need to build relationships with private investors, people who are going to bring capital, because I'm a function of capital. I don't buy any real estate unless I have enough equity in order to go, go buy real estate. There's all kinds of debt out there. But how many investors can you build and build a relationship with that have capital or will refer you to other people that have capital to invest in your real estate offering? You know, how many people saw that Kevin Costner movie, Field of Dreams, where the saying in it was, you know, if you build it, they will come? It's not necessarily true in real estate, right? You can have a great deal But if you don't have the contacts to fill that deal, they're not going to just come from anywhere. So we talk a lot about that. Other strategic relationships are commercial brokers. You know, you need to have a good handful of apartment brokers. You know, in the apartment space, 92% of the inventory that's for sale is controlled by the commercial brokers. Brokers. And when you take a look at the commercial broker market, there's 5 to 6 major companies in every market. You've got Marcus Millichap, you have Colliers, you have Berkadia, CBRE, JLL. Some of those companies handle much bigger deals, some of them handle smaller deals. You need to have relationships with these brokers in all these different companies. But yet, don't forget about the boutique brokers, the Keller Williams brokers, uh, that if you're in Florida, there's a boutique broker called Franklin Street. If you're in Atlanta, there's a boutique broker called MMG. So, you know, you want to go out and build relationships with all these multifamily brokers. You know, Joe said I do most of my investing out of state. I like to tell people I built my portfolio from the coach seat of an airplane, right? Because I'm in different markets. We like the Southeast because those tend to be the better markets for apartments, and the lower Midwest. And so we'll go into those markets and we'll build relationships with the, with the multifamily teams in those areas. But then there's lenders, you know, there's There's different lenders for different loan products. There's different lenders for different equity products. So you need to be out circulating and meeting those people and building those relationships. What about insurance brokers? Joe mentioned Karen Hall, who is a self-directed IRA vendor, and, you know, have a couple of relationships with people that can help facilitate your investors. And help your investors find capital in their own resources to invest into your multifamily. Did you have your hand up? You were just waving. Thanks.

Database management.

Database management, very important. You know, who in the real estate business has a database? It's your gold, isn't it, Tim? I mean, that's really where we, we make our money. So managing a database, you'd be surprised the people that don't understand that little system. When I first went in the real estate business, I used to carry my leads on 3x5 cards in my suit coat pocket.

100%.

And went through those every day and just handwrote everything. But once I learned how to use a database and how to use that system, that expedited my business, and it once went so well. So database management is important, and having a system that is kind— that gives you all the aspects, right? Not just contact management, but will help you build workflows and funnels and be able to host webinars and be able to have landing pages. All these tools are really important within that database you use. The power of social media. You know, in my world, what we do— how many people saw me on social media? Hey, could everybody take their phone out right now please and follow me on Instagram? I'll give you 30 seconds. But social media is really important. You know, and what I tend to do is I bring a lot of content out. So I talk a lot about real estate, real estate education. We talk about investments and how you can invest inside these assets. On LinkedIn, I talk all the time about passive investing and its advantages and what it can do for people. So social media is really important. And then raising capital. So So inside that first pillar, when I'm first starting to work with, with a coaching client, I'm teaching them how to raise capital because that is the first step. 2 really important things in this business. One is raising capital and the second is underwriting. And underwriting is that strategic ability to take a look at a deal, put all the numbers in a tool and see if the deal makes sense. Makes sense, if it's worth buying, if it's worth bringing to your investors, if it's worth doing the heavy lift that needs to happen in order to make that deal work. So, the second pillar is around the language of multifamily. And, you know, I spent 15 years in the real estate business. I thought I knew everything about real estate, right? And I understood that principle that I talked about earlier. You raise private capital, you marry it with a real estate deal, you stay in the middle. I thought that was all I needed to know. Well, the first time somebody said to me cap rate, NOI, yield maintenance, I was lost because we don't talk that way in the real estate, in the residential world, do we? So, you know, I had to learn a whole new language. And I think that, you know, there's a shift in your thinking from the residential to the commercial side to the multifamily side. The anatomy of a syndication. You know, when we bring these deals to the market, we generally split them 70/30. 70%— and I'll just give you guys some basics around this— 70% is the investor side. So the investors get the lion's share. Share of the returns. The 30% side stays with the GPs. Then you have to do things like split that 30% side up between people who bring earnest money, who raise capital, who underwrite, who do the due diligence, who do the compliance. So, you know, there's different ways that you structure these deals. So I go through a lot on the anatomy of a syndication Understanding the capital stack. You know, the first time I heard capital stack, I was like, what are you talking about? You know, but if you take a look at how some deals are structured, you're going to have your primary debt, typically 65% of the loan value is primary debt that you're going to get from an agency like Freddie or Fannie. That's going to be bank debt. And then you might be able to get some preferred equity. Preferred equity might come from another lender, and that might give you another 15— 10 to 15% in the capital stack. Then you might have to go out and bring in some common equity. Common equity would be just if you invested in my deal. deal with me, right? That's retail equity, common equity. So there's different ways to structure this. Sometimes you can, can put some gap or bridge funding in there to get a deal closed. But we bought a deal one time, 728 units in Dallas. It was a big deal at the time. I think it was a $60 million purchase. And we had 2 banks that were doing the the debt on it. So Bank of America did not want to take on the whole risk of $40 million in debt. So they went to LaSalle— that's how long ago this was— they went to LaSalle, and LaSalle said, well, we'll take half of it. So we had 2 primary lenders, Bank of America and LaSalle, each had 20%. Then we had a preferred equity lender that brought about $18 million to the capital stack, and the rest we raised in common equity, in private equity. So there's, you know, when somebody's buying a $100 million property, they're not buying that just with a little bit of equity and one loan from Freddie and Fannie or from a bank. There's different layers of capital that go into that. So we talk about that. I also talk a lot about developing a buying strategy. You know, it's one thing to say, hey, you know, I want to own apartments or I want to own a duplex, but what does that buying box look like? So I lived in Chicago forever. I never— I invested in single-family in Chicago but never in apartments because there was no money to be made in that market. So I developed a buying strategy that made sense in other markets. I like to buy garden-style apartments, 2 to 3 story units with pitched roofs that have interior hallways that are between 100 and 150 units that have 1¾ parking spaces spots per unit that have a swimming pool, that have some other amenities, or land that I can add some amenities to. So you need to design a buying box for yourself because when you call to build that relationship with that broker and, you know, you, you start that conversation and ask the broker, hey, can I get on your buyer list? And they say, what are you looking for? If you If you stumble around that and they know you're inexperienced, it's a lot harder to get their respect. You need to try and get their respect right away, get on their buying list so that you get, you know, deals to look at. As I said, they control about 92% of the active multifamily properties on the market. How do we locate and source on and off-market deals? Well, I talked about on-market deals, going to brokers, building those relationships, but off-market deals, there's plenty of systems in order to look at off-market deals.

Mm-hmm.

There's programs out there that you can buy data for multifamily. You can go to a broker that you have a relationship with and ask him to pull you data and go to those sellers yourself. So there's those opportunities out there, and how do we find them? How do you find them? I think organizing your deal flow is really important, and one of the systems that I'll teach is how to organize your deal flow. You know, if you're getting 20, 30, 40 deals a week across your desk, how do you manage all that? Well, they have to go into a file system, and when you underwrite them, You have to look at them differently and maybe put them in a different file system or have a dead file for them. You know, I have deals that I've underwritten 2 years ago that I keep in a dead file because if I see— every time I get a new deal to look at, I go back and see if I underwrote it before and what it was priced at before. I'll give you an example. We looked at a deal in Dallas, Texas, Serena Vista. It was 218 units, and it came across my desk about 3 months ago, and I said, man, this is really familiar. And I— so I went back in my old files and I said, geez, I've underwritten this 2 times before. So the first time I underwrote it, it was listed for, for $21 million. The second time I underwrote it, it was listed at $16 million. This time One time it came across at $12 million and the broker told me I could buy it for $9 million. And it's not a distressed property. I know the seller. So, you know, it's interesting what happens over time. So you want to be able to track that stuff and you track that by keeping your deals organized and a way to look at those. And then, Scripts and dialogues. You know, a lot of times when I start working with people, they tense up. They don't know what to say. You know, when you started prospecting for real estate, did you know what to say to a seller? When you went on that first listing appointment, did you know what to say to a seller? And I was talking to somebody who said they follow Tom Ferry. Was that you, Sam? Yeah. And you know, I mean, they teach scripts and dialogues all the time. I coached for them for years and, you know, that's how you learn. So we have all the scripts and all the dialogues, how to raise capital, what to say to sellers, what to say when you're looking at raising capital. And then pillar 3, how do we master the market? You know, that first one is master the evaluating the market traps and what we look at is How do we pick a market? How do I know that San Diego is a good market versus Tulsa, Oklahoma? Or how do I know that Chicago is not a good market versus Milwaukee, Wisconsin? Well, we look at about 13 different fundamentals about the market, and I'm a market-driven investor. So if I can't check all the boxes on my checklist, it's not a market going in to worth going into. I need to see positive population growth. So we bought 400 units in Tulsa, Oklahoma in 2004— or 2024. And when my underwriter brought me those deals to look at, I was like, I don't like Tulsa, I don't want to go to Tulsa. He goes, no, you need to look at this market and look what's going on. So I looked at the population growth, and the population had gone up about 0.5% for 5 years consecutively. So it wasn't flat, because if it's flat, it's dead, it's going backwards. It wasn't really growing, but I saw something happening there. So the next thing I looked at was the employment diversification. I've been in markets where there's been 1 or 2 employers, and when the market changes, and people lose their job, there's nothing to back it up. But in the Tulsa, Oklahoma market, we had aerodynamics, we had medical, we had education, we had manufacturing, distribution, we had entertainment, we had retail, we had technology, which was really growing. And we looked at how technology in that market was, was really growing. Tulsa had a program going on where They were paying tech workers $10,000 to move there and work from home. And they had, they had run out of money on the first run of this program and still had 1,500 people move to Tulsa. So it started to tell me something about the market. Then I looked at what the household income was and was what the household income was in the submarket. Because when When we look at markets, we don't look at just the market as a whole. Here, I'll give you an example. Tampa, Florida. Tampa, Florida as a market is, is a pretty decent market, but there's 15 submarkets in Tampa, Florida. And if you don't know what those submarkets are and what the household income is in each submarket— So Tampa, Florida, the average household income is $82,000 a year. That's the average household income. But in one submarket, it's $24,000 a year. So I don't want to be in a market like that because I can't raise my rents. So I like multifamily that's market-rate rent. I don't do a lot of housing. I don't do senior housing. I don't do tax credit deals because I want to buy a property, go in, do my Renovations and raise my rents because value is created in multifamily by increasing rents and by what's called NOI, your net operating income. So we, we check the market off and then we start underwriting. I do a whole session on underwriting that lasts about 5 weeks. We start by taking a look at the offering memorandum. And how do you read that? What do you look for in an offering memorandum? Here's what I like. Are there— is there a commercial broker here? Okay, so I don't want to hurt anybody's feelings when I say this, but commercial brokers tend to exaggerate the truth a lot. So I'll read an offering memorandum and it'll say, oh, you can raise rents $250 a unit After you do this and this and this. Well, I always cut that in half. So they'll tell me I might need to spend $5,000 in renovations. I know I need to spend $10,000. They might tell me I can raise rents $250. I know I can raise them $125. So I always cut things in half by what a broker tells me. So you need to understand how to read that offering memorandum, the things to look for, what will save you heartache in the long run. Then we take a look at the underwriting. I have an underwriting tool that we've developed over the last 20 years. There's a lot of underwriting tools out there, but most of them are locked and you can't go in and change formulas and you can't move things around. I like mine because it's flexible. I get to move formulas, change formulas, show things in a different way, which, you know what, in this business, the math never lies. So you have to be able to underwrite and be able to manipulate some of those formulas in order to take a look at it. You know, I see a lot of exaggerations when it comes to underwriting. People increase rents to increase returns. They say they're buying properties less than what they're actually buying them for. They're saying that exit cap rates, when you, when you're selling a deal, that the cap rate is going to be different than what it really is. And there's formulas around putting that together.

Yeah.

So we spend about 4 weeks just going through the underwriting tool, filling in the blanks, seeing how to use it, and then doing a stress test on it. And then I will teach, I will have my coaching clients go off and for the next few weeks Source a deal on their own, underwrite it on their own, bring it to the coaching call, and then we tear it apart and we look at where the challenges could be in that particular deal. And then I teach how to— what, what the next step is, and that's the broker call. So if you underwrite a deal and you look at it and it makes sense and you think, wow, this might work, right? I'm kind of close. Let me call the broker. What do you want to know from the broker? You want to know how old the roof— roofs are, how old the windows are. You want to know when the last time the property traded. You want to know what capital improvements the seller has pushed off. There's a series of questions that we ask, and then we get to that last question, what's the whisper price? Or give me some pricing guidance. Because if they listed at $10 million, the whisper price might be about $8.2 million. And if it— if they're coming down and saying that that whisper price is $8.2 million, I know I can probably get it down a little bit more.

Yeah.

Especially in a market right now, there's not a lot of competition. A lot of people have gotten out of the multifamily business the last couple of years. A lot of operators are still dealing with issues and challenges, and now's the right time to get in the business. You know, I've said for 30 years, Joe, if I could just get in just before the market changes and the cycle changes, because when you have the wind at your back, you look like a genius. And there are no geniuses in this business. There's only market cycles. And that's what we look for, is that market cycle in order to To empower that property moving forward. So that broker call will give you a lot of insight. And brokers, they want to tell you the story right away. And, and what I want to do is say, hey, hold the story for a minute. Let me ask some questions. Get down to that. If I get the answers I'm looking for— because if I underwrite something and it's closed and then he tells me I need to put roofs on a building or a parking lot in, I, I'm, I'm out.

Right.

Because then that Cost just accelerates way too much. I talk a lot about construction planning and management around that. How do we estimate how much we— a unit turn is going to cost? Are we going in and doing a complete renovation? Are we doing a minor renovation? All things that you need to look at. And then exit planning. I wrote a book one time, or the book before this one was called Exit Plan. Because I really believe that you have to know what your exit is before you ever get to the closing table. So even when I'm on a residential deal and we're buying a property, I always thought, you know what, how am I going to get out? What does it look like when I get out? How do I get out? You know, I think there's different ways to exit a deal, whether it's through refinance, through liquidation, through Through trade, through an exchange. There's multiple ways. You just have to know which one works and have a couple of different plans in case the market cycle's a little bit different. Any questions?

Absolutely.

Okay, pillar 4. This is where I say, are we really buying what the seller is selling? You know, those offering memorandums can come out. They look really pretty with pictures. There's all these great stories. The broker tells you these great stories. A seller is really telling great stories. The first deal I ever bought, I dealt mostly with the seller. I had a broker, he had a broker, but the seller and I talked a lot. Here's what the seller told me. Hey, look, you can go in, put a boiler in this building, put a parking lot in, fix the balcony, Put some exterior lighting up, fix the landscaping a little bit, rehab the interiors of the units, and there's no doubt you'll be able to get a better tenant in here and charge $200 a month. I said, great. Now, I don't know anything, right? I'm coming from the residential business, done all these rehabs, fix and flips, built room additions. I figured this is a no-brainer. Well, I buy the building, we go in, we put a boiler in, we put a parking lot in, we fix the balconies, we put lighting up, we do some landscaping, and I get the same tenant in there. I didn't do any research on the demographics or the market, right? I didn't look at the market traps. So I get the same tenant in there, the tenant moves out, I have to rehab the unit again. Then they start the building on fire, and then it's one problem after another. The deal worked out over time. Time cures everything. So the deal did work out over time. But it was a learning lesson. The things that I learned along the way about what to look at before you go in and how you're going to exit made a lot of sense. Financing the acquisition in the capital step. You know, how do we set that financing up? If you're going out buying your first multifamily property, anything over 5 units today, you're not getting a loan at the bank yourself. You have to be with somebody who has experience and knowledge because lenders today know how difficult the market has been, know how hard it's been for operators to operate, and if you don't have experience in this business, you— they're not going to loan you money. So So we help you get that experience. We'll partner with you on your first and second deal as part of our coaching and help you build your portfolio. How do we raise equity? Now in this pillar, this is where I really get into raising more equity and how do we really build those relationships. You know, I kind of look at raising equity as being a fisherman. And I don't fish, but I love this analogy. If you throw one line in the water, you might catch one fish, right? But if you have 5, 6, 7 lines in the water, what's your chances of catching a bunch of fish? Pretty good, right? So how many systems can we put in place for raising capital? You know, some social media effort, some lead magnets, do some webinars. Go to networking events, do live presentations, bring deals to the market. There's a number of systems to put in place in order to do that that don't cost you any money in the beginning. But then when you start making money, you can start to spend money on paid marketing and ads. And then going, you know, the first step is retail equity. And then from there, we go to family offices, and then we can go to institutional money. But that all comes with experience and it comes with having a number of assets under management. Talk a lot about investor relations. You know, I've learned over the years that you need to have a great communication with your investors and be very transparent with your investors. You know, our communication with our investors are in, in most cases monthly and quarterly. So monthly, our investors will get a newsletter. It'll talk about our financials. It'll talk about what we've done construction-wise. Quarterly, we get on an investor Zoom call with all our investors, and we talk about what we've done the last 90 days and what the goals are for the next 90 days. Make myself accessible for my investors. All my investors have my personal cell phone, so if they need to get a hold of me, they can call me if they have a question. If we put a report out and they have a question on that report, we put all of our financials in an investor portal, so at any time they can go there and they can take a look at the month-end financials. Transparency is really important, so when you raise capital as an investor Or bringing investor capital into a deal, you're held at a much higher level. And so you want to make sure that you're being upfront and honest with your investors.

Mm-hmm.

And then closing an acquisition. How do we, how do we get a deal closed? Sometimes it's a struggle. How many times do you have a hard time with a residential property? You know, multifamily properties that have a few more zeros behind them, Can be even a little bit more difficult. So putting that together. So one of the things that I want to talk about is creative financing. So I've done a lot of creative financing over the years. I bought single-family properties with no money down. I bought multifamily properties with little or no money down. There's a lot of strategies. I believe, and Joe, I know you teach us a lot. I believe in this market right now that there is a ton of opportunity. I bought a property last year, 65-unit multifamily property, that the seller was in distress. He had— he was 60% occupied. He had 26 units that were uninhabitable. The rest of them should have been uninhabitable. He had drive-through drugs being sold out of the alley of the property. He needed a roof, he needed a parking lot, and he was going to lose the property. He had an overpriced— I'm sorry, I'm sorry. Onslaught of deals that people have said, you know, when this trillion dollars of debt comes due, most of it will be worked out. Before it ever comes to the market. So go ahead. How do we go after syndicators that are doing capital calls, or if they're bridge loans, or can we do bridge a lot right now? How do you go after them? Yeah, like how do we get to the syndicators so we can possibly negotiate? So if you know a specific property and you can trace down who the owner of that property is, you know, we get calls all the time from investors saying, hey, do you want to sell? And they don't even know our, you know, our situation. Are we operating well? Are we not operating well? You know, have we had a capital call? Have we not had a capital call? You know, so— If you have a specific property, It would just be a matter of calling those operators, those owner-operators. So, you know, and you can— that data is readily accessible. So, anybody else? Go ahead. Mike, do you think that if Trump's supporters get the decision by the presidential fight, do you think they're going to put more money, extra money into the office candidate? Uh-uh. I don't, I don't think so. I don't think that there'll be any more institutional money that is already there and or come in. You know, Blackstone last year, the end of '24, bought $10 billion worth of multifamily. You know, that was one of my first indicators that I said this market's starting to change.

Right.

But, but that was a big, that was a big acquisition. I, you know, I have a good friend, his group My group right now is buying, is in the process of buying 6,000 units between Miami and Connecticut, so right up the East Coast. So, you know, there's deals out there and capital out there for them. How does it look like that this can be the best opportunity? You know what, there's so many deals out there and there's so many properties out there. God, I heard a number the other day. I wish I could remember it. I'm not even going to say it because I'd be lying about it. You just look, you know. That's my contact information if anybody has an interest. That QR code on this one will take you to a landing page on my coaching program. So if you have an interest in coaching, if you have an interest in going deeper into multifamily, I have a couple programs. I have a group program and a partnership program that I work with people. And, you know, I can give you— I have a partner today. He's a partner. When he came to me 4 and a half years ago, he was a coaching client. He was struggling closing a 45-unit multifamily deal. Well, within 3 weeks, I helped him get that closed. 4 and a half years later, after a year and a half of coaching, coaching. He owns 800 multifamily units, 2 commercial properties that he's redeveloped, and he's in the process of building a 151-unit Class B property in Arizona. So, you know, does coaching work? It works. So, you know, are you— you know, do you work is really the question. So go ahead. How much capital did he start with? Did he start with?

Yeah.

You know, he raised all the capital that he needed to do all that. So he quit his corporate job, liquidated a couple hundred thousand out of his 401 just to live on. Didn't even invest any of that in real estate. Anybody else?

Go ahead.

What kind of returns are you underwriting these days? That's a great question. So when I bring a multifamily deal to the market, I look at it from the investor perspective. So remember I told you the anatomy, you know, we split that 70/30, and I want to make sure that my investor can achieve about I'm looking for about a 16 to 17% IRR per year, and I want to make sure that I can pay between a 6 and an 8% cash-on-cash preferred return along the way. So deals are kind of soft right now, but they're coming back. I'm seeing things underwrite a lot better, and a lot of it has to do with pricing. And I think sellers have gotten more realistic over the last 14, 15 months, and the prices have come down a lot. So a lot of sellers are ready to, to move on, you know, because they have investor pools that want them to get out.

So, okay, thanks.

Thank you.

Sorry for that.

Friggin' noobs.

Thank you, Mike. I appreciate it. Uh, no more questions?