A short YouTube talk (Jonathan Cronin) advising viewers how to choose between investing with personal funds (100% ownership) versus using other people’s money (OPM) for rental property investing. The speaker argues that using OPM—particularly in larger commercial deals (30+ unit apartment buildings and syndications)—enables faster scaling because (1) deals become a team sport with partners and loan sponsors who add credibility and experience; (2) pooled capital and lending provide greater financial leverage, allowing larger acquisitions while the general partner can retain significant ownership; and (3) larger deals are more passive due to professional management and bigger operating budgets. The video ends with a CTA inviting viewers to learn about syndications and join a mastermind.
What's up guys? Today we are doing a sequel from last week where we talked about the differences in single family versus apartments. Today we're going to be talking about what investment you should make based on the consideration of using your own money, maintaining 100% ownership to using other people's money and giving some of that away. What should you do in what circumstances? And my partner and I, again like I mentioned, we have scaled our rental properties and we've done well in using our own money, using smaller deals. But we talk about all the time we wish we started in commercial and started allowing other people in because it's allowed us to go much further, scale a lot faster, do a lot more. And so today I'm not going to give a biased opinion, maybe a little bit of bias, but mainly facts, mainly just talking about the differences. Okay, so let's jump in. There's three points I want to talk about. One is if you were to use other people's money, you were to get into bigger deals. We mainly focus on 30 plus unit apartment buildings. If you didn't see our last video, check that out, it'll give you a little more breakdown there. But in those deals we bring other people on and what we love about getting into bigger deals, bigger commercial real estate deals, is that it's a team sport, right? So there's many people coming together. A lot of times, especially if it's your first deal, you'll probably need what we call a loan sponsor. So even if you found the deal, structured deal, you're going to manage the deal and you're the only general partner, you're the only person that's really putting the deal together. If you don't have the experience, a bank will probably want you to have someone who has experience to be able to partner with you. Even at a small equity percentage, just say 25%, you know, and, and with that, the cool thing about that is yeah, they're just the ones signing their name on the loan docs, but they're also bringing experience to the table. Why? Because the bank sees them as credible. They have that a similar asset in management or you know, something similar. So the cool thing is you're leveraging other people's experience, not just their money, you're leveraging other people's experience experience. So you bring on your limited partners, but you also have a loan sponsor and you have more credibility with that. Right? To get the best deals on the market, you have more experience, it's safer because you're going to skip the headaches that most people have already made trying to do it by themselves. Right? And if you know me, if you've been following up with me, that's probably one of the biggest things I love in life is getting around those people that have already gone, have already been where I want to be. Right. I want to get in front of those people, I want to get around those people. I want to partner up with those people. And because it's going to allow me to accelerate much faster. So I love partnerships. Okay. I love doing that because it allows us as people to go faster than we could have on our own. Okay? So that's. Number one, it's a team sport. Okay? So it's one thing to consider if you're trying to decide whether to use own money versus other people's, that's an advantage that it's going to have over using your own money. Secondly, more leverage. Okay, I already talked about that from an experience standpoint, but even from a financial standpoint, you are utilizing, you're getting into much bigger deals. Yeah. People say, well, taking out loan is leveraged for, you know, being able to take $100,000 and turn it into $400,000. Well, say you have $100,000. Well, you partner up with. With four other people that has $100,000. You know, you go find the deal, you know, you bring it to the table, you lock it in, you know, then you have, you know, $500,000 that can then turn into, you know, 2 million, you know, 3 million, whatever that, whatever that you could do. So, so the leverage gets a lot greater. Okay? And as a general partner, you, you should retain a bigger. If you follow the steps that we talk about and you're looking for the types of deals we're looking for, you're gonna retain a lot more ownership as a general partner, not just a limited partner, not just someone who's putting the funds in. So you're going to be able to scale much faster. You're going to be able to have a lot more equity, a lot more ownership even without putting your own money in. Or. Or we're putting, you know, a small portion of what's required in equity. All right, so that's number two. Number three is going to be. It's more passive because it's bigger. Okay. Generally, I mentioned this in our last video, but you're. And I would encourage you go check that out. Single family versus 30 plus unit apartments. But if it's a bigger, bigger deal, you're going, even as a general partner, the one that Found the deal, the one that's structuring, the one that's doing all that. You have much higher level management companies, you have much higher level professionals maintaining the property, being able to do the financial aspect, being able to do many different things because you have bigger room in the budget, right. The expenses are going to, you're buying a business, right? So you know, if you buy a big business, you're going to pay a high price. But you're, but you should, if it's a healthy business, be able to be a lot more hands off, right? You should be more of, in a board position rather than a CEO position. Okay, so that's another one. If you want to dive deeper into that particular point, go check out that video. But the idea, the thing that I love is being able to bring partners on both from a financial standpoint and from an experience standpoint. If you can learn how to find the right deals, I'm telling you, you will attract talent to be able to make sure the business plan that you've set off in the beginning of that plan is going to go according to plan and that it will, you know, do investors, you know, people would love to keep coming and investing in your deals. Okay, so if you're thinking, should I, should I go into and use my own budget, use my own money, use my own resources, I promise you you will go a lot faster in life if you learn to use other people. I say it all the time, but why do companies go public? Because they're trying to utilize other people to help them go faster than they could on their own. Okay. So I hope that helps. I hope that was valuable to you. If it was, let us know. And if you're looking at syndications, apartment syndications, if you would like to learn more about that or accelerate your journey in that, let us know. We'd love to partner with you. We'd love to see if our mastermind, where we're bringing other investors together if it would be good for you. So either way, hope to see you soon. Bye.
