Getting Your First Multifamily Deal - Part 3

You are going to be able to leverage that same network in order to generate leads, in order to generate deals. So don't think about funding as its own isolated thing. That comes later. Networking is so critical in the beginning stages because it's going to generate leads for you, it's going to generate investors for you, it's going to generate partnership opportunities. I really believe that 80% of your time should be spent doing direct outreach and networking. That means that the other 10% of your time should be spent on anticipating, analyzing the deals and funding the deals. And so when you think about analyzing the deal, do you understand the napkin analysis? Do you understand underwriting? Are you consistently analyzing deals? Are you consistently underwriting deals? Should you pull some deals from LoopNet or Crexi? And just practice so that it's intuitive, so that when you do see a deal, when you do recognize a deal, when it does come across your desk, you'll actually be able to act on it. You'll know what you're doing. You'll be able to go out and talk to investors and tell them why this is a good deal. And then when it comes to funding, who's in your network, are you anticipating that? Are you generating conversations, generating discovery calls? And I think that we often get this backwards, right? We often are so worried about funding the deal that we spend all of our time analyzing deals and underwriting deals. And we don't spend any time finding deals and going out to networking events and talking to people. So this was ordered intentionally because I think I often see like one of the number one mistakes I see is people doing this backwards. I know my handwriting is terrible, but funding the deal is. Becomes like analysis paralysis where I'm so preoccupied with funding the deal. Am I going to be able to connect with investors? Am I going to be able to raise enough capital? Am I going to be able to wholesale this deal that it. It really collapses our efforts. Okay, now I need to dive into analyzing. I don't understand underwriting. So I'm going to spend all of my time underwriting a bunch of deals, digging into them, and we end up spending way too much time on deals that don't have high potential of getting done. We spend way too much time on trying to become advanced experts in analyzing. And I tell you, we had somebody I just had a conversation with within the last couple of weeks, and he's been a member of several masterminds. He's gone to seminars, he's paid a lot of money for education, and he was so excited to be in our community because he said that he's learned so much about underwriting, he's learned so much about deal making, he's learned so much about lead generation. But after all these years of spending all of that money, he's never actually done anything. And our preoccupation here at REI Accelerator is to take action and to keep people moving forward, to keep them making progress toward their goal. So the loi, the first letter of intent that he sent out with our community was the first letter of intent he'd sent out ever. And so that's exciting for us because we are action takers. We don't want you to just dream about real estate investing. We don't want you to just dream about financial freedom. We, we want you to make progress, whatever that looks like for you. Wherever you are on the mountain, if you're way down in the Dead Sea, if you're already halfway up, or if you've got a train ticket, whatever the case may be, the view from the top is the same and we want everybody to get there. And the philosophy of our company is that we believe that everybody can, but you have to focus on keeping the most important things in the most important place. And that happens on your calendar, with your schedule, talking to property owners, networking with investors, and then secondarily using your underwriting and analyzing to support the deals that you're actually looking at, the deals that you're going out and finding. You don't have to be an advanced expert in underwriting in order to make a lot of money in this industry.

I see, you know, finding the deal, analyzing and funding, you know, the cornerstone, and 80% of focusing on just find, finding the. The first deal. I know it's going to be tough, but with the support of this group and with the help and guidance of the coach and the blessings of God, I think we can move forward.

Amen.

I really want to provide funding for ministries in South America. And all the net income that we're going to be generating from these deals is to expand God's kingdom in Guayaquil, Ecuador, in Peru, South America. So I'm really interested in expanding. We own two rentals, one in Northern California. I live in San Diego, one in Memphis. But when I want to scale up on multifamily so we can provide more funding. A typical bi vocational pastor in South America makes $450 per month. So we are supporting two of them, but we want to do more. So that's my why, and I hope to learn from you. I see Virgil Bolin is one of the Harmony lenders. I'm going to be reaching out to you. I have a couple of gigs that I need to discuss with you and so we can move forward. That's in land development and construction in Texas, parts of the meetup here in San Diego, and real estate. But when you talk about the direct outreach to property sellers, is there a software that you have used, a database or how do you go about finding them to do the direct outreach to the property sellers or property owners?

I like that you use the term database because I think that's exactly the right way to think about it. When you've identified a market that you're going to focus on, that market needs to become your obsession. That market needs to be your area of expertise. And both in outreach and in networking, you need to focus on building a community, building a team, but building, building a knowledge foundation and basis. So that goes down to analyzing, spending some time each week and being disciplined about it because you don't want to spend all of your time and get out of whack. But you know, building out your knowledge basis and really understanding what's happening in that local market. A lot of the home runs that I've been blessed to be of were because we had some unique knowledge about that particular market. Whether it was a school coming in, whether it was a government improvement grant, whatever the case may be that allowed us to get in front of it and really hit a home run. Came from community knowledge. But there are a lot of programs, there are a lot of lead generation sources. Nikki mentioned she just started using CREXI intelligence. That's fantastic. It's like a couple hundred bucks a month and you can go in and you can analyze deals through crexi. C R E X I. So we use some more expensive services like CoStar, etc. I don't necessarily recommend those for most people because they are list source. And these will also be in the phase one training as you start working through that. Yeah, so I often use a combination of costar, COSTAR a lot. And again, I don't recommend it because it's expensive. Like 500 bucks a month, 600 bucks a month. I use Costar, I use Reonomy. I've had a lot of experience with prospect now. But the thing to remember about these different service providers is that depending on the particular market. So the reason I use COSTAR is that we buy over a broad area. But if I was going to focus on one particular market, I would hone in on which lead generation tool worked Best in that market. Chris and I just met with a client who was telling us that he was having success with batch leads in California. When he his buy box switched to Texas, batch leads really stopped working. Right. And that happens. I mean, there's just no way around it. It's all dependent upon what we call aggregators. So they're taking public information from, from tax assessors, tax appraiser websites, building departments, these kinds of things, and they're aggregating all of that data. Secretary of State aggregating it and then selling it to us. It's all public data, but typical government, it's all over the place. It's hard to dig it out. You can do that for free. You can go to the tax assessor and you can find the owner information. It's usually an entity. And you go to the Secretary of state, you search that entity name and then you go through the documents about, you know, who the registered agent is, and then you reach out to them. That takes like half an hour to do one. And so for people who are absolute beginners, just getting started, that could be a useful tool. But for most people, we recommend going on propstream, going on list source, pulling a list, working through it, and just seeing. Does this make sense? In my area, tweaking the search parameters is an important step and iterating to make sure that you're getting more and more accurate information. As you iterate that process, you'll get to the point that just more people will start picking up the phone. You'll have more accurate information. But what I really want to encourage you is don't think about it as a list. Think about it as a database. I'm building a database. In that particular market, there's a finite number of apartment complexes. And over time, as you're building out your database, as you're pulling different list lead sources from different websites, different service providers, you want to keep track of all of that. Whether you're using a CRM like HubSpot, or whether you're using, you know, Microsoft Excel. It doesn't, doesn't really matter. Just depends on where you are in the process of scaling. You want to be keeping track of that. You should have an investor list, you should have a property list, and, and you track. Okay, let's see. I sent them a letter, I gave them a call, they didn't answer. I found their email and consistently circle back to it. The chances of you calling somebody up and then being like, I'm so glad you called, I'd like to sell immediately. Is slim. It's like 1%. It does happen. And in the beginning, that's really what you need to do. But over time, as you're building relationships, as you're building out your network, that database just becomes more and more valuable. So you can imagine somebody who's focused on a buy box in a particular market doing this iterative approach over five years. Do you think that database is going to be valuable? It's going to be huge. They're going to have ownership contact information, they're going to have rapport with certain people, they're going to be calling certain people every six months. They're going to be sending out letters, Christmas cards, whatever the case may be, and building up that networking. So that goes back to what we were talking about first, outreach and networking. They really kind of go hand in hand. You're reaching out to property owners. Those are also investors. I have found limited partners through cold calling property owners. But it makes sense. Like that might sound surprising, but it makes sense because what, what do I know that multifamily property owners are. I know they're real estate investors, right? It makes sense that I would call them if they are. If they don't want to do any more of their own deals, they don't want to do lead generation. And I say, yeah, I'm an active investor, then we, then we collaborate.