How Arthur Bought 18 Unit apartment deal with 0 dollars (and no experience)

All right. Hey, welcome guys. Today we have a very special guest and we are specifically talking about how Arthur, the man himself has been able to close 18 units and create a 15 million dollar fund without any of his own capital and without any experience prior. So he did it all in a very short amount of time. And so we're going to talk about exactly how he did that, how he found the deals, and he also has another deal locked up right now that he's about to close, an 80 unit deal in Atlanta, Georgia. And so I probably shouldn't say where it's at, but you know, we'll, we'll be breaking down exactly how you found these deals, structured it and raised the capital. So I appreciate you being here, Arthur.

Thank you, thank you, thank you. I appreciate it.

All right. Yeah. And then we got the man himself, Randy Lawrence on the, on the show today as always, and he's joining us together with all, all the team combined. Total, we have over 500 million in assets under management. And so we are excited to be sharing Arthur's story in light of the market situation right now and what we're seeing and how this is highlighting some of the things that we've already been talking about. And so, yeah, so in a nutshell, Arthur, you've been able to 30x your wealth essentially and just, you know, maybe a year so, going from 300, 000 in single family to 8 million.

Yes. So, yes.

Pretty wild man. Great job, man. Congratulations. And so, so I'll let you introduce yourself and you can kind of share with people who you are and what you got going on.

Sure, sure. So Arthur Lyons. My background for the past close to 20 years was in healthcare administration. I oversaw nursing home and rehab facilities, both the operations of the day to day nurses, doctors, CNAs, but then also had some experience overseeing the physical plant. So that gave me a little bit of, a little bit of taste of the commercial world when it comes to the construction side. And then about coming up on two years now, went all in on real estate multifamily and have been a full time real estate investor and huge thanks to REI and you gentlemen. And so now I'm a full time co fund manager and apartment investor.

I just want to all, you know, celebrate Arthur's success. And again, you know, I know he's been also in the mastermind and just really focused on execution. And I know on the show here we've been talking about some of the components of distress that have been taking place in the commercial and specific multifamily Market, you know, a lot of places maybe hadn't been speaking about that, but we've been talking about that. And then even in the context there in the mastermind group, you know, know, speaking about that, talking about what those opportunities look like, you know, and Arthur has just been attack, attack, attack, attack, meaning like just from the moment coming in, just digesting all the information, but then taking all of the, you know, the discussions, the input and just running with it and going full, full bore. And then you see the result of that coming up with not only the closing of the 18 unit, but these other two deals that he has in the works too. So just awesome job, Arthur, and look forward to, you know, kind of hearing more about it and sharing that with everybody here today.

Yeah, thanks. Well, it's been. I agree, Randy, that's. That's huge. And, and it's been astonishing just watching Arthur just plow and, and just really be consistent. And that's one thing I'd say about Arthur is he's consistent. And so just give the people watching just a little background on yourself. I mean, in terms of why did you got into single family? Why did you want to jump into multif family? How did that all happen? What were the barriers you were facing and like what, what sparked this whole thing?

Sure. So I've always been interested. My two passions have been healthcare and real estate. Healthcare, specifically helping the elderly in nursing facilities, assisted living, et cetera, real estate. My mom used to take me to open houses when we, when we were younger. I grew up in the Washington, D.C. area. We would go to Potomac, Maryland, which is one of the most affluent areas in the country. And we'd go to, we'd look at architecture, we look at houses. And so I had an interest in both and I've always wanted to marry the two by owning the real estate and owning the operations of healthcare. I started off, my dad back in the day would have VHS tapes of like Carlton Sheets and Robert Sheenan and Dave Lindahl. I watched VHS tapes from like high school on real estate. And I studied this stuff going, you know, back a long time. I got involved in single family first with wholesaling and then took some of the wholesaling money to buy my first fix and flip, buy and hold. And then I was doing single family houses one at a time. I quickly realized that if one roof needed repair or if one hot water heater or one tenant didn't pay, that really challenged your bottom line for that one single family house. And so I started looking into multifamily hey, If I have 10, 20, 50, 100 people under one roof and I have to fix a roof, the costs are spread amongst multiple doors. If I have, you know, one or two heating systems, it doesn't. Or one or two or three tenants that don't pay, I still have a lot of more tenants that are hoping to pay for that asset and then also the time it takes to scale. And I'm not knocking single family. There's 100 ways to make money in real estate or more. But I just believe that for my goals, multifamily was going to help me get there faster and spread my risk in a way better than single family.

That's good, that's good. So you, you figured you need to jump the ship, get into multi family and that's. We talk about that a lot on this channel. So, yeah, let's break it down. You had these two nine unit deals that you closed. How did those come about? How did you, you know, what was the purchase price? What, what happened there?

Sure, sure. So what I want to say here, and make sure I say it at the top of the hour, is that I think entrepreneurism, entrepreneurship is one of the most spiritual journeys I've been through. I think that the level of faith and the level of taking steps when you can't see the end puts you in a place to where you have to rely on something. And you know, for me that definitely was, was God and trusting and praying and having, you know, not being used to that every two weeks paycheck and just going all in and trusting that at the end of, of the road, you know, God had a plan for me. So I jumped in the way. I found the first deal was actually taught heavily in rei, which is off market. So I had a VA calling lists that were prepared with certain key targets that could be pre foreclosure, it could be out of state owners, elderly owners. And my VA was calling all day, every day and sending me leads and I'd work through those leads. And the first deal I found was a elderly owner that had owned the property for a long time. Over 15 years. He moved, he lived four hours away from the property. He no longer had the time or capacity to manage it. Plus he was older and ready to just liquidate his assets. So that's how I found the deal. The first deal was a VA calling, calling leads.

Wow, okay.

Well, you know, and that's just one of the services or, you know, part of being connected together with the right team then yields the right result, you know, so Arthur just again diving in, jumping and going after it and saying, well, look, I want to maximize my opportunity, maximize my time, utilize the VA services to scale that ability. And then boom, brings that in, where then he could now talk to a real live seller that has motivating reasons, you know what I mean? And then that translates into the deal that actually closes. And so again, a lot of times it is people that are listing. Our human tendency is we want to recreate the wheel, right? And if you've got a wheel that's working perfectly good, it's like, hey man, let me plug into the wheel and just adopt the wheel because it's working perfectly good, you know. So again, kudos to you, Arthur. Just with, you know, recognizing that, jumping in and doing it and taking action and using the resources to, to generate real results.

Yeah, yeah.

So you asked about the numbers on that one. When I first called the gentleman as nine units, he wanted 325,000 or something for nine units, which, depending on what market you're in, you know, that's, that's pretty good. And just to touch base on that, you know, when you're, you guys taught. When I first joined the group, I had a list of 11 markets. I had 11 cities I thought I wanted to, to invest in. And I chose them because either I like the sports team or I like the city or, or I just thought it would be a good place to invest. You know, you see some news here and there, but I really learned how to narrow that down, how to really get into the niche market and only focus on a couple. You can't be a master of 11 markets. You can't develop relations, relationships in 11 places. At least not at first, not by yourself. Maybe if you're a large team and you've got people focused on different areas, sure. But when you're by yourself, I really had to pick a market that had the metrics that I learned that were good. Landlord friendly states per door prices versus how much you can get in rent, the eviction process. When I say landlord friendly states, you know, some places people can squat for a year and a half without, without being, you know, kicked out, you know, all these different metrics. And so I chose market, that is one or two markets and really focused there. So I. He wanted 330. I called him up, went through the script, developed a rapport, a relationship, ran my numbers. I needed to be somewhere around 260 or 270. Based upon what he told me. I had him send me some pictures. I was able to kind of rough estimate the, the repairs. Long story short, through due diligence process, we found some minimal termite damage. But me being able to go back to the seller and say, hey, there's termite damage. I'm going to need, you know, a credit for this or a decrease in price. And then also the electrical, he said, was all done and reran when we did the inspection, there were a couple units that I needed to rerun electrical on. So between those two things, I got the property all the way down to 220,000 for nine units. And the way that was structured was both a reduction in price and partially a seller credit at the closing table. So that way the amount of money I needed to bring to the closing table drastically reduced as opposed to if I just took a reduction in price.

And how much was it you needed to bring to the closing table?

I ended up bringing $25,000 to the closing table.

All right. And you raised that capital?

I raised that capital from two investors, so no money out of my pocket. Oh, I forgot, I forgot. I actually, because I got such a reduction in price, I ended up. I ended up wholesaling the deal to myself. So I ended up walking away from the closing table, actually, when it was all set and done with roughly 45. $45,000 at the closing table.

Okay. Yeah. What, what, can you elaborate on that? You wholesale the deal to yourself.

So.

Okay, sounds interesting. Yeah, so I got it down to 220,000. I knew that it was still a deal up to the 260, 270 range. So essentially my entity that I had originally got it under contract with was just me by myself. I assigned it to a second entity not for 220, but for 265. So the second entity that I'm also a part of, along with my guarantor, who I was being my first apartment building, I needed to partner up with someone who could sign on the loan for me. That entity that we closed in purchased it for 265 from the original entity. Everybody was on board, sellers on board. He signed off, lenders on board, signed off title. Everybody in full transparency, which is key. And so the new entity that closed on it bought it for 265. I had it under contract for 220. So that spread was my wholesale fee on the deal.

All right. You ever done anything like that, Randy?

Yeah, we've, you know, we've working on a couple of deals now. But, you know, there's an ability either whether it's in an assignment Fee or an acquisition fee. You know, there's an ability to, you know, incorporate that in, you know. And then again, you know, Arthur said there too that you've got all that disclosed, you know, in the commercial arena, it's, you know, part of the contract and you know, lenders or buyers, etc. Yeah, excuse me, sellers are, are aware, you know, so all good. I mean, so there's, you know, there's a number of ways. And again, Arthur taking, you know, and again taking action and then taking all the tools to begin to implement, you.

Know what I mean?

And, and that's, that's really key to see that. And then, you know, leaning on God, right? Like, I mean, leaning on God's help to like, you know, so many times people get stuck with, hey, I'm not sure, I don't know. And it's like, look, there's people that can help you move forward and that's the deal. And so just, you know, that's part of what again, I look at and I appreciate art, you saying that at the outset it's like, man, I had to just trust in God because some of these things were probably uncomfortable. And it's like you take that step, you take the action and it works.

So, so yeah, that's good, that's good. And, and look, you know, for those watching, if you've been following, as you understand, we, we preach value at apartments, you know, typically 10 plus units. But you know, if the deal is right, everything has a number. And, and then being able to get that deal from, from you know, below market rents, scale it up and raise capital. And Arthur just jumped in head first. He went in there, got the strategies and not only participated, but he, he went in from a standpoint of I want to be able to give back, I want to help people. And that's why I tell everyone, you know, one of the biggest things he does he did was join a network, a mastermind, but then didn't just consume, he went in to give. And that, that, I think that opened doors for him like, like no one else, right? And because people see that and they're like, man, I want to invest with Arthur, man. And now they're presenting deals to Arthur, hey look, I got this deal. You want to partner with me on it? But the other thing is Arthur went in there and took the capital raising strategies and then even put his own twist on it and started doing things that was extremely creative and, and, and just did an amazing job with the current strategies. But you created a $15 million fund. Let's talk about capital raising, won't we? What, what is the strategy behind that, that fund? What are the things that you've seen success in in terms of capital raising? What does that look like?

Yeah, you know, I've never considered myself a capital raiser. I think previous two discussions we've had, I looked at it as if I was borrowing money or, or begging for money even or you know, getting people to, to give me money. The there had to be a mindset shift where when you have a deal that there's meat on the bones, when you have a deal that you're super excited about, where there's an opportunity for not only yourself to make money, but for others to make money. People are looking for that and people aren't. You know, there's sophisticated investors that know their way around, but there's also unsophisticated investors or investors that are accredited but they still may not know the ins and outs of investing in apartments. And so you're offering something to them that they're looking for a way to be involved in real estate. Because most people know that real estate is a wealth builder and a generational can have a generational impact on families, but they just might not know. So you're that person that is offering them education to how they can make better than average returns than in their self directed IRA or in their 401k or stocks especially the way things are volatile. And so yeah, for me, capital raising is one believing in your product, believing in your asset, being excited about it and talking to people, letting them know what you're doing. People tend to raise their own hand and you don't even have to ask them. If you're just genuinely excited and talking about what you're doing to everybody that you know to date, I can't say that. And I've raised a good amount of capital now and I still don't all the way consider myself a capital raiser. But I've done so just by talking to people excitedly about what I have going on and then they, they ask questions, they come to you, they kind of raise their own hand. Now if you're just silent and you don't talk to anybody until you have a deal and you've never talked to them before or if you're just trying to cold outreach, it's going to take longer to get those people on board and to raise money from them. This is my opinion. But if you've been talking to people all along the way through the journey, letting them know the ups, the Downs. That's what happened in my case. I was searching for a deal for months, six months or so. But deals I was finding, I was letting people know about them, and then I was letting them know why those deals didn't work, why I didn't put an offer out, why an offer wasn't accepted, letting them know, no, I was only going to buy it at 4 million. They wanted 6 million. And I did that consistently. So that way, once I actually found one and I went back to them and I was excited and said I found one meeting all the criteria of why I said no to the others. Now they know and have, they've seen the work that you've been putting in. So once you have one, they're like, oh, I know how hard it took for you to find this. I'm ready to put money in on this deal.

Right.

And just even too, to comment on that for a second. I mean, that's, that's a, that's a true principle. So energy attracts energy, right? And, and so, you know, Art is, is enthusiastic, he's excited, he, he's sharing the good, the bad, the ugly with the people of frustrations of six months of looking and looking and no good, no good, that's extra work. But also his energy level remained high because he's excited. He could see the vision of what's going to be achieved. And that energy attracts other people to it. You know, the same energy. And just like you said, people raise their hand, that's, you know, Tony Robbins, where focus goes, energy flows. And, and when you're focused on your vision, you're focused on what you know you're going to achieve. You have an elevated level of energy. You're putting out that energy and you're attracting those similar people to you that have an interest. And then it results in, you know, the good things that he's sharing with us here today. So another great, just awesome principle, somebody.

Else said, where, where energy goes, money flows or capital flows, you know.

Yeah, yeah, for sure.

That's good, man. And then really what I said not too long ago, you know, the, the one with the most hope has the most influence. You know, when you're, when you're bringing that level of hope and excitement, people are drawn to that, man. You know, so I think that's awesome. And you, you orchestrated a lot of events and, and, and different things to bring people together. And so you have some pretty good strategies. We even took some of your strategies and put it in the, in the training and the, in the group say hey, here's. Here's some value, guys.

Yeah, it started really organically, but it was something that I was nervous about in the beginning. But you got to push through any fear and any nerves, because fear is not of God, you know, does not give us the spirit of fear. And so I really took that to heart. Another verse that you. I hadn't seen that verse until you mentioned it. Habakkuk talking about writing the vision and making it plain. And so a combination of those two things. So in the beginning, I didn't see myself as an expert in multifamily. I wasn't. I was brand new. So I was like, how can I host an event? I don't even. I haven't even closed the deal yet. But I've had to push through that because the knowledge I did have is still slightly more than somebody, you know, under me.

Right.

Or I can invite people that have more knowledge and we can all just break bread together and talk. So my first dinner, I just talked to a few people that I know were. That were in from my single family world that wanted to get into apartments at one time. And I just asked people to come out to dinner. I didn't pay for it. I didn't put flyers out. I didn't. I just invited six people or so to dinner. Everybody paid their own way. And I said, we're going to talk about multifamily. And all I talked about was what my VA's had done for that week, what deals I had came in, what deals were not good, which ones I might be looking at, why I think this deal works or not. And we just, you know, broke bread and talked about that. It grew from six people to 10 people, to 15 people, to 20 people, to. Now I have a event coming up, and I'm still keeping it casual and conversational, But I'm expecting 35 people to show up. And from that came a couple LPs. So once I had a deal, we've already been meeting monthly at dinners. I wasn't even asking for money. I just brought them a deal, was excited about it, said, hey, I got this under contract, told them the numbers, and without me asking, 150,000 worth of money showed up at that table to. To offer. Now I didn't even need 150,000 for that deal. So now I was able to tell some of the people, I'm sorry, you're gonna have to wait for the next one. I don't need that much money for this deal. This. This is closed. And now it created A sense of scarcity for the next one. So when I had the next deal and I went out, I already had people lined up that were interested and wanting to be involved. And then once you have a person that wants to invest, I think sometimes we forget to ask them if they know anybody else that's similar to them that wants to invest as well. You could turn one person into two or three just by asking that simple question.

Wow, that's good, man. That's some nuggets right there. Well, look, I appreciate you sharing all that, Arthur. That's a lot of value, man. And we're looking forward to seeing you get this deal closed, get this fun filled up, man. I think we've got a lot of work ahead, but it's exciting to see how far you've come and so I appreciate you putting in the work for those people. Arthur, that is watching maybe where you were in the beginning, what would you say to them right now?

What I would say is definitely find your tribe, your community. Rei has been a blessing for me. And then Randy touched base on it. When you get in there, push through your comfort zone. There are different personality types, believe it or not. I'm an introvert, believe it or not. But I do get excited about apartments and I get excited about like minded individuals and so I end up talking more in these groups. But aside from that, I'm rather quiet. But I would say find your tribe. REI is a great one. Be vocal, you have knowledge in some area. You may not be an expert in multifamily yet, but I've met people that were experts at marketing or CRMs or whatever it is, painting or construction. You have something of value to bring an ad and definitely do that. I went from, you know, zero doors just from the community and engaging and helping others and now can't believe. I'm co fund manager of a $15 million fund called Invictus Elite Capital, by the way. But yeah, I would say find your tribe, engage and follow the steps and push through the fear. There's going to be things that you're not comfortable doing, but you have to push through because success is on the end of that.

It's good.

Amen. I throw two things into the mix off of what Arthur just said. You know, kind of a Tony Robbins massive action plan. Massive action and then you can't get better than James. It says faith without works is dead. Right. So it's like you've got to marry the faith together with the work, meaning the you got to press forward just like Arthur did. And that's a message for all of us. And so, you know, praise God. That's the deal, man. It's like, you take that action, you take that step, you hit resistance, you believe in God, believe in yourself, and you move forward to the next step. Being around other people that have like mindedness, you know, again, that community helps you to excel forward. When you stumble, there's another great quote says a righteous man, though he stumble and fall seven times, rises again. So it's like you keep going, you keep going, you keep going and you see the results. And you know, Arthur, I want to just. Again, you're living proof of it right there, brother. So. And the best has only just begun. And so look forward to hearing more of the accomplishments. And you know, no doubt you're inspiring people who are watching to take the same Amen.

Amen. Oh, blessings. And, and look, guys, if you're watching, you want to connect with Arthur. We dropped his website in the description, so check that out. Connect with Art. He's got a lot of exciting updates constantly coming out, but check that out. And if you're looking to join a group of high level real estate investors that are looking to scale and grow in their portfolio, closing deals consistently, I also put a link in the description. You can check it out. We'd love to see if it's a good fit for you at REI accelerator. So. All right, guys, thanks for tuning in. God bless. Have a wonderful day. Until next week.

Thanks again, gents.

Thank you.

All right, thanks, guys.