4 steps to buying your first apartment building

What's up guys? So if you are a real estate investor, maybe you're just starting out or you're seasoned, but you want to scale and you want to go quicker, more efficient, more profitably. I want to talk to you today about value add apartments and literally four steps that can get you in the door with taking bigger deals down, you know, 30 plus unit deals with and have one locked in within the next four to six months. In fact, it's funny because just this past weekend a guy, a good friend that's been working with us for literally only two weeks just locked in a 51 unit apartment complex which he's never done it anywhere near that size. So it's totally possible. Even if you have no money, you have no credit. I want to talk to you about the four steps on how to get there. So let's jump in. Alright. And my name is Jonathan. Me and my partner, we run a group that helps investors get into apartments. We also buy apartments and it's amazing to see how just one deal can change your whole life. So if you're taking notes, I'm going to walk you through four steps now. Cool thing. It's recorded because you can watch it again if you don't have notes. But either way, number one, the first thing you're going to need to do if you want to get started asap, right? You want to, I mean preference that you're going to need some time, right. You need to allocate. How much time do I have on a weekly basis to give to this endeavor. Right. People get into apartments because it's one of the most passive vehicles you can be in. But if you want to be a general partner and take a larger portion, you've got to treat it like a business and you've got to be willing to give a little bit of time in the forefront. It's just like buying a house. It's, it's, it can serve you well in the long term. Actually no, single family houses don't serve you well in the long term unless you got a lot of them. But just hypothetically maybe it does serve you well. You still have to buy it, get it fixed up or do whatever you got to do, get it rented out before you can actually be supposed passive. Now we get into apartments because it is a lot more passive because you can have things go wrong and have the cash flow to cover it. You can and it doesn't take an entire year's worth of profit just because you need to place, replace something. Right. But let's talk about it. So you identify, you need, you need five to 10 hours a week, bare minimum. And I would honestly say if you're doing this by yourself, if you're not in like a group like what we have, or you're not in some type of like thing where you're able to skip the mistakes other people have already made, I would honestly say you probably want to have more like 15, 20, 25 hours a week. Okay. To where you can start lead generation. And that's if your timeline is four to six months, you want to have a deal locked in or even 12 months, right? Like if you've never done apartments and you want to see 12 months from now locking in a deal, I would probably want to set aside 20 to 30 hours a week. Okay? Now if you have a longer time horizon, that's up to you. But alright, number one, enough beating around the bush. Number one, you need to think about lead generation. The hardest thing for anybody in apartments, not just beginner investors. One of the hardest parts is going to be lead generation, finding deals, right? I mean, in my opinion, what I've seen, there's plenty of money out there. The biggest thing you need to understand is lead generation. Now if someone's talking about they're struggling with money, it's probably because they don't have good deals and maybe they just don't know who to go to. But honestly, if you know how to find good deals, you probably know who to go to. So let's talk about lead generation. One of the best things in my opinion for apartments is going to be cold calling. Okay. And networking with brokers, networking with people in the game, right? Networking with, with attorneys, with all kinds of different people, property management companies, any vendors own an apartment. We do actually have videos that break down how to find deals off market. That's the overarching thing. You don't want to be on market, right? When I say networking with brokers, I'm really talking about, hey, Mr. Broker, do you have any pocket listings or anything that is in the pipeline? Not something you've been advertising to thousands of people and they've said no, right? That's what I mean by networking with brokers. So that's why I talk about cold calling being one of the top because we need to go direct to seller. If you can master the art of cold calling, whether that's you or whether that's hiring a virtual assistant for four or five bucks an hour, we've seen some killer deals taken down by using VA, right? In fact, there was one just recently. 16 units, 95% seller financed. You know, I think it's $800,000 for the whole deal. That means 95% of it seller finance, no banks were involved. Just bring $40,000 to the closing table and you, and you got the deal, right? So that's lead generation. And if you're, if you're struggling, that, if that doesn't make sense, if you want a bigger list or maybe a little bit more wording, just reach out to us. We can give you a little bit more instruction there. We also really exciting thing. We just launched a VA service recruiting aspect to our company, the REI accelerator. So where we actually will hire, train, optimize and give a 30 day guarantee on VA's for you. Like we'll recruit them, make sure they're trained up, make sure they're plugged in, make sure you got all the systems rolling. So that's really exciting. If that, if that's something that interests you, let me know. Second thing you need to do, if you want to find apartments, I would honestly say this is part two of just lead generation because you need to start making offers, right? You need to start talking to sellers and start saying, hey, you know, I've done some underwriting, I've done some analysis. This is what I think I can get you for your property, right? So we want to get a lot of leads and then we want to make a lot of offers, right? And we want to, you need to figure out if Your timeline is 6 months, 12 months. You need to be like weekly making offers. Okay. I don't know how many for you specifically. We'd have to jump on a call for me to like nail down. Here's how many you need to make every single week in order to get to this outcome, no matter what guaranteed, right? And you need to underwrite it like this. You need to be really looking through some numbers, blah, blah, blah. You just need to think about getting, talking to sellers and learning how to underwrite, learning how to analyze properties and figure out what's a good deal, what's not a good deal, how much you can, what's your maximum allowable offer? We have another video on that if you want to check that out. On how to find your maximum allowable offer, just search through our channel and you can check it out. Probably the marketing person would say, no, you need to link that video so they can binge your content. Well, sorry guys, I don't have that much time. But you'll find it if you just click videos on our channel and just look at how to analyze properties, how to underwrite properties, or how to create an LOI letter of intent or whatever. Step number three, after you've done that, you should be 60 days, three months, maybe four months in, and you should be getting close to having someone get serious about an offer you made them. So then we move into step three, which is all about funding, right? We need to be funding, funding the property. Okay? Part of that is creating your final pro forma for investors. So we enter into the contracted phase, we do our due diligence. You know, due diligence in these large apartments need to be very heavy, right? We need to be looking at the financial operations, the operational due diligence side of the management company and all that kind of stuff. And then the actual physical property, we need to have high level inspections on all of these. And so after that, you're able to create a final pro forma for investors, okay? And so, and even lenders, right? We need to know exactly what, what's going to happen, how much renovations are going to be needed, what actually is needed to get this property up to market rents, okay. On the property management side, on the property financial side and on the physical property side, okay? And then we want to source out the best financing, get the best, you know, loans on the property. And then also we want to fill that deal up. Okay? We got a lot of These contracts are 45 days for due diligence, 45 days to close. Some are 30 day, 30 day, some are 30 day for the entire thing, right. Those are probably going to be smaller deals or just really good deals. And the seller wants you to move quick, right? So you just got to think how we need to get this deal funded quickly. There's strategies around that. I don't need to go into that. But trust me, from an overarching perspective, if you find a good deal, I promise you there will be funds if you do just a little bit of networking, a little bit of reaching out. Now if it's a massive deal, you may be, may need to do a lot of reaching out, right? But if you want more information on raising funds and stuff like that, just reach out to me. Let's talk. Okay? And then last step. So I just gave you lead generation side, you know, talking to sellers, underwriting and all that stuff. Number three is contract financing and raising the funds. Now we're moving to the closing table and what we recommend is taking a acquisition fee at the closing table. This is to pay for your time doing all the things I just told you to do. Right. So you charge 3% of the purchase price. Right. So if it's a 5 million dollar deal, 150 grand, right. Generally now it could be less, could be more. Right. But typically 2 or 3%. Okay, last step and then I'm gonna be done. Step number four is just simply you've got to renovate the place and you've got to get it to market rents. Once you do that, what I recommend is buy and hold. Right. But what you've done in that process is you've created forced appreciation. Okay, what do we do with forced appreciation? We take that, we refinance that at a cheaper rate. If you can get it stabilized, over 90% occupied for 90 days is considered stabilized and then you qualify for a better 5 financing cheaper debt. Right. So then we can refinance, take that money, pay off investors, or give them a portion of their money back. We're in. We're at a much lower rate of investor returns now and cheaper financing. So we should be doing a lot better in the cash flow side. So where you can take the rest of that and put it into the next deal. Sounds great. Right? Well anyway, I hope that makes sense, that step one to four, a lot to give you all in 11 minutes. But if that, if that's something that you want to go deeper in or I hope that helped. Right. I hope you just go off to the races, go buy an apartment building in the next couple weeks like our friend did that just came in the other day. But if you need more information, you need more help or more guidance, let us know. All right, I'll pop a link in the description, you can book a call with us. But anyway, I hope that helped. Otherwise there's many videos on our channel that'll show you other things like finding deals, lead generation and raising funds and all those kinds of things. So excited to be partnering with you. We are a kingdom minded group of faith based investors and I think that if there's one thing you need to know, it's have a greater mission. If it's just about money, you will not be sustained, you will not thrive. You may thrive for a short season, but the reason we do this is because we are called to create impact, not just income. And if we learn that you will multiply your income and you will be able to multiply your impact, purpose and fulfillment in life. Okay, God bless, hope you have a wonderful day.