The ULTIMATE Multifamily Deal Flow Masterclass 2026 (Find & Close Apartment Deals)

Finding and attracting good deals. Guys, this is super important. This should be our number one thing we're focused on and this. And then the other thing is finding and attracting capital. If you master those two skills, you are dangerous, right? You know how to find good deals, you know how to attract capital. No matter what industry you're in, you're going to do well, right? Finding, attracting capital can go anywhere, right? We're not wasting our time on bad deals. This is what kills investors the most. All right? We've been, we've taught thousands of people so far. And I tell you what, this is probably the biggest killer right here is spending too much time on bad deals. All right? So now, cool thing about this week, you know, we're going to try and pump out as many Lois as possible. But the thing about this week is you're not, you're probably not going to send a bad loi or, you know, you have too many people in the room. Jack being the primary suspect here. You got too many people in the room to submit a bad loi. So if Lois do go through, then you, you can probably feel pretty confident in those Lois. But either way, we want to create a focus on maximizing good deals and spending less time on bad deals. Poor management of time, and then the last thing is just being inconsistent. So for this, we've got to get up to making three to five offers per week. And the most important one is finding attracting good deals. Because at the end of the day, as we go through the equity splits, you're going to see like, I mean, the person who finds the deal at the end of the day, they have control, right? They're the ones that they found the deal. Now they're going to need different things in the deal. So then that's the negotiation. That's a discussion that we have to talk about is like who's going to play what parts based off the risk, based off the deal, based off different things. So we're going to break that down to a team. All right? So today we're going to cover buying criteria, core marketing channels, your napkin analysis, pulling your list and scripting and call again. What we want to do in this event is just hyper focus you on how do we get the most deals in the room, right? We want to have just a groundbreaking event where there's so many deals that it's, it's inspiring, but it's also, we're all participating together. Look, I wanted to share this guy, you've probably seen him before. Josh bought 200 units in nine months through what we're talking about today. Okay? He would. Now, Josh had a full time effort that wasn't just five hours a week. Right. This was a guy probably in your situation where he's spending four days, you know, he had a lot of time, 60 plus hours a week, right now, buying 200 units that was broken up over a couple different deals or a few different deals. Now again, you just break that down. What kind of time pass do you have? Right, because at the end of the day, we gotta be doing good deals. And what that looks like is being consistent in the time that you have. Okay. This guy Glenn, good friend of ours, bought over 72 units in less than 12 months doing the exact same things we're talking about and has zero experience. All right? So step one, write this down. Buying criteria. We are about to dive into your buy box and your core marketing channels. We just updated our buy box and so we have a strong, we have a deeper scope.

Am I here?

Yeah, we have, we've detailed it more and so I'm about to share that with you. But key thing about your buy box. All right, so some of you already have your buy box nailed down. Some of you are just looking at everything out there. Some of you are just entertaining anything that comes over your desk. And it's very tempting to do as a new investor because you're just like, I just want anything. Right. And that, that could be a temptation. But I promise you, if you can nail down your buy box to an exact a figure which I'm about to go through and get it refined, think about this. When, when a broker comes across a certain deal and you're just doing any deal, those are going to think of first. Probably not you, because you're just one of thousands of people he's already talked to that may be open to that deal. But if you called that deal specifically, if you said, I'm looking for 20, 20 to 50 units, or if I'm looking for, and it's got to be a light value add or medium value add, and you're calling out that exact thing that he's looking at right now in that area. Right. It's going to be much more chance that he's thinking of you. Right? And that's just from a standpoint of we're creating our brand, right? This is what you're trying to do. Because every single time I'm going to go through, I think on day four to show you how different people have scaled and typically, right after their first deal, guess what. They're getting calls left and right about all kind of good deals from other people. And it's just a snowball effect because you just put all this work in on the front end. Whenever you've created, whenever you've gotten the first deal, you put in all this work to build your brand and have people know that this is what you're looking for. You've connected with tons of people, you've talked to tons of sellers. And so that brand is what now then snowballs and you begin to do 2, 3, 4 deals in the same amount of time that you did that one deal. All right, and so I'm going to show you a bunch of case studies how people did that and partnered up to do that. But it starts with narrowing down your buy box. All right, so 20 plus units, if you are just starting out, go lower. But I would still say 10 plus years, right? I mean, even 20 plus units is pretty low. But I would say bare minimum 10 plus units. I mean, we did a 16 unit deal that was in our backyard, right? So even for us, it's not that big of a deal if it's right back behind your, behind your house, right. If it's right here, or if you have a team in place that's already running deals in that area, if you have a team in different markets, then obviously you can go lower in those markets. So that's what we're about to share with you on our buy box. Because now we have teams and boots on the ground in different places. We can now expand, right? That's the idea. So we're typically. I'll break it down in just a second. Georgia, Florida, Alabama, north, South Carolina, we're expanding into the Sunbelt and we'll talk. And then we can even do things. We've done things in New Hampshire, we've done things all over. But it's really just about the boots on the ground. The people that are in that area. Do we have solid boots on the ground, people that are able to help us with the deal. And then value at light to moderate value add. You've heard me talk about this all the time, right? So light to moderate, we're not doing heavy, right? Renovations, heavy, new construction. If you want to do that, you got to talk to Arthur. I'm just kidding. So, I mean, look, we're not going to say don't do a deal that's heavy repositioning or heavy value add as in full guts. It's under 60, occupied. We're not gonna say don't do it we're just gonna say, typically, it's not the best to focus on. All right. As a newer investor, it's like I get people to ask, ask me, you know, I want to do new construction. Like. Well, have you done before? No. Have you had any experience in new construction? No. It's probably not going to work, right? It could work, but you're taking on more risk than you probably should, right. As a newer investor. Now, if you have experience in new construction, you have experience working with that kind of deal. And not only that, you have the liquidity. Right. You have some reserves to hedge for that risk. Right. You. It may be in the question. Right. But it's based on your situation. Right. If you are wanting to do heavy repositioning, that just means that you have to be willing to wait longer in what's called lag time. Right. So from the time that you. The shovel hits the dirt to the time it's built and it's bringing in income, it's called lag time. Right. That means that you're vulnerable all through that if the market crashes, whatever happens, then all of a sudden that's. This is what happened, you know, recently, in recent years, they couldn't finish the projects and so that they couldn't make sense of it. So it's just going to increase risk if you're doing heavier, you know, guts and renovations. So AB areas, BC properties, all in at 70, 80% of save all these value, just. Yeah, we've already talked about it. You know, you're not looking for class D areas. If you're in class D areas, it's not going to appreciate, it's going to be hard to keep up with. And then guess what? You're going to do one deal, you'll be like, you know, I don't want to do any other deals or I need a year before I do the next deal. Right. And you're going to be managing that property. It's going to consume your life. And then that's not conducive to actually growing in scale. So what kinds of class D area?

What are you looking at?

Like bad school games? Yeah. Yeah. So I mean, class D just means it's like Warsaw. Yeah. Games, crime. Crime is really high. You would not want to live there, right? Yeah. If you don't want to live there. I mean, you still buy there. I wouldn't buy there, no. Okay, 78 of stabilized value. So we're going to talk more about that in the NAFTA analysis. But let me zoom out here and show you guys our buy box here. So this is our buy box when it comes to our capital and deals that do not meet this buy box should not proceed to partnership or underwriting discussion. Okay, so this is first step. That's what I say. Biggest issue is people spend too much time on bad deals. So that's the first line right there is don't. If it doesn't fit this, you. It's a no go. Right. We don't keep going. We don't just entertain it for the sake of maybe I could step out of my buy box and, and try and make it work. Right. It's not going to help you in the long run. If we're thinking about efficiency of time, you've got to stay focused. All right, so market location minimum 25,000 population prefer 50,000 plus for stronger stability and liquidity. Market fundamentals stable or growing population solid employment base and income trends. All right. Regulatory environment, no rent control, reasonable. Eviction timelines, city specific, acceptable. Again, if you have questions about any of this, just save it. We're going to bring a Q and A in just a minute. Okay. Neighborhood quality, C plus, B minus or better. All right. Avoid high crime or declining sub markets.

Well, just to say a lot of times people say C class but there's such thing as C minus that should be very difficult but it really goes to that area. High crime, declining markets, but nothing really to add there. 25,000 populations, not a hoard, probably firm firm but you know, we bought deals in 10,000 area populations and I've seen a lot of deals brought to the group but they can work short term. But what we've experienced is just being able to exit that will sell and refinance cap rates are higher, tenant base, tenant demand slower. So there's a lot of reasons there. Yeah.

And that's the one place it's like okay, C minus, C plus, you got to kind of do your homework there. So that's the only place I say you may not necessarily know off the back what that area is and but yeah, I mean C minus, it may sound nice. You may have a killer deal. I'd be willing to look at the deal, you know, but it's definitely can fight you. Right. I don't know. Better to do no deal than about it.

Yeah, yeah. You normally can determine it about 30 seconds on Google too.

C minus versus C plus.

Yeah. You know, people have the C minus deals. I say yeah, but this and but that. But they're still shooting each other at the parking lot.

Yeah. Asset Criteria property class C plus or better. Area class C plus B or better. Vintage 1980s are newer 1980 pre1900. I can't talk A considered if located in B quality areas. Deferred maintenance. So that means, you know, typically B areas, things renovated years improvement. What's that all about it all the years. Yeah. Felt the mic surge. So unit count is 75 to 250. Now let's caveat there, you know, and the reason for that is it supports on site management and operational efficiency. Okay. Less than 75 units considered in markets where we already have a strong presence. So from our buy box perspective, this is what we're looking at. Occupancy 85 to 95% plus preferred minimum 75%. Okay. 50 to 75 considered only if offset by strong market fundamentals, clear operational upside, conservative underwriting and then capex budget less than or equal to 25 of purchase price. Again we're steering away from. Yeah, large heavy Renault basis. We must be less than 80% of stabilized value for CB class. Okay. 80 to 90% for B plus and A class with strong in place cash flow. All right, deal structure and returns target IRR 17 to 22% for limited partners, cash on cash, strong likelihood of 6 to 8% plus post stabilization. And then business buying clear executable value add strategy, realistic rent premiums and timelines. So any deal outside of this buy box requires explicit approval from REI capital leadership prior to. All right, everybody clear on that? Quick question, go ahead.

What's the typical holding carry for a buy box?

All three years. Holding five years, three to seven figure eights.

But it depends on the deal, right?

God, yeah.

Does that impact multiple and R?

So yeah.

Get only three to three to grandchildren. Really? Yeah, I mean if it's a deal, really life. I got one time in his office. I don't want to have any 10 of selling in it ever, ever, ever.

All right, so here's a fine criteria form we have. This is going to be sent to you in your email. So that's going to be one of the big things. Okay? So just grab the form, start filling your buy box out after looking at our buy box and in that document we're sending you, it has bar buy box that just went over and then it has a form that you can fill out like this. Okay? So make sure step one, then we can move on to finding deals. It's nailing down your buy box. All right, now we're going to talk about choose your channel so you can pick any streams you like, but this week we are going to talk about the two streams of deal flow that I believe is going to move the lever the most, move the needle the most for this event. Okay. And that's going to be direct to seller and pocket listings from brokers. Direct to seller, pocket listings from brokers, Pocket listing still technically means in my opinion it's off market. You could say. Well, it's still marketed to his email list of thousands of people, but it's not on that. And Crexy, okay. It's not on market being publicly advertised. That's what I consider off market. Okay. So direct to seller and brokers. Okay. So our premier channels here, they are pulling this off market properties for calling and mailing, finding brokers, key players, calling and texting. So that's another, that would be the third one if you're going to tap into anything else is power players, right. People that you may know in your network or you may just want to connect with estate attorneys, you know, any kind of attorneys pretty much that are talking to sellers and brokers. I mean there's, there's all kind of power players that you can, you can, you can reach out to. So that's going to be another one. Larry, walk us through this deal. This is one I just filmed last week and if you guys want to go buy it again, if we had a smaller group, we'd probably host it at this property. But it's, it's an 88 unit deal and it's in Phoenix City. So anybody wants to go buy, you can maybe we'll take a group or something later this week.

Yeah, go ahead, bring it up. 851 25th Ave. Is the grips Phoenix City, which is just across the river. So this was a latex property which this standards for low income housing tax credit. If you're not familiar with that, it's just where the developer gets really nice fees and tax incentives to, to build a deal. They're very competitive. There's an application process and there's only so many to go around in the states. So we would rather buy them at the end of their life. Tax compliance period, there's a, there's deed restriction that goes with these for anywhere from 15, 30 years. And the restriction is they have to rent to low income residents and the rents are capped based on so those rent amounts, median income or low income limits. So this was built 2008. So the end of its compliance period is actually 2000, the end of this year.

Wow.

So we can take it. What that means is you can apply to take it out of the program and then take it to market rate rent scenario restrictions. And there's no reason we wouldn't do that because we're not getting any advantages of it being a tax credit property at this point.

You get that when you build.

Yeah, there's no. And the developer we bought at a really nice price because they're actually a nonprofit and they, they got all their fees and they were running it not profitably because they don't really have incented any incentive to run it properly. Profitably?

Is that a word? Yeah, sounds good.

Anyway, I'm an engineer, I can make up words. So it was off market broker that we had a good relationship with brought it to me actually Maybe his favorite buyer had backed out. I don't know. I thought it was his favorite. But they had fallen out of contract plus another deal they had to didn't sell, didn't go through. So we're able to jump in and give him the price they wanted, which is a really good price. It was about 45,000 per door for a 2008 build property without, without holding anything else. You would think that's a good deal. So 4 million dollar purchase price, the occupancy was 96%. Just not being run efficiently and not, not increasing the reps to where they could. So you know, calculation we did during underwriting was we could be charging 760 per month and they were getting like 6, 600 or 770. It was 160 off and we had 225 improvements budgeted. The property was in really good shape. Just minor items and a little bit of buffer for, for the unknown. And then we had to put UP reserves of 20 to 13,000. We used a local bank and they require six months of principal and interest payments. So the. So it was just a local, local bank short term loan, five year loan with 18 months interest. So the acquisition cost 142,000 and that included our acquisition fee that we took. And they have a total cost of 4.58. So the loan was 3.38. We had to raise 1.2 million to get us that 4.58 billion required. So that was all from investors, not any of our own money. Certainly don't have an objection to putting money in. I like putting money in all deals. But we actually have more investors that wanted to put in money on this deal than could. We had to tell a few of them to, you know, catch the next one. So based on the pro forma raising those rents $160 per month. And if you watch Jonathan's training, you know he goes to the exercise of how multifamily properties are based on the net operating income. So every like you know, you raise the rent, what $50 per unit on a hundred unit deal and you increase the value of a million dollars for property depending on cap rate. So we're able to raise it 160 and reduce expenses or run the property more efficiently. So with that it goes from being worth 4 million to 6 million dollars, which it is today if you. And then this 5 to 7 year projection is based on taking it to market rate rent. So instead of 760, which is really about 800 today we'll be at 950 a thousand a month rent. So that's another 200. So that's where that additional to be important to be worth 4 million challenge 1 day, you know, I think you know, today pushing 70 a door and in three or four years it'll be a, you know, 85 triple or something if not more.

So not too bad. Who's going to be the first to find a deal like this this week? All right.

Yeah, why not?

Let's go.

The sad. Well, I'll tell the sad thing.

Don't tell too exciting.

Yeah, there you go. That's why I'm where I am today. Never satisfied. We found negotiate a deal first one guaranteed the bank loan executed value add plan on the asset management issue sales price. We ended up with 75.5% of ownership but we didn't put any money out of pocket.

But we're doing all the work and.

The investors are sitting back getting the check. They put in the 1.2 million they're getting 24.5% interest. So what that looked like for the investors, I think there was 11 limited partners came on this deal. They got an 8 and a half percent preferred return.

While everybody's in play, they get paid first.

They give the capital back first before the GP gets paid. You know, that's the other caveat we talked about. The GP does all the work. Well we're, we took acquisition fee and we're taking asset management fee. We're getting paid but we're not getting the benefit of the upside until the investors get their money back. So for the two year, just looking at a two year snapshot, the investors just say that one investor wrote a check for the 1.2 million. They would get 204,000 in preferred returns. They would earn 490,000 in equity based on that projection on what it's worth for three years. So that comes out to a 28.9% annualized return, which is pretty good. Most people are happy with it.

Yeah.

The sad thing is interest rates went up and we got a little more conservative with our buy box. The 52 unit. Literally next door to this park. They came available, another broker, another good relationship. We offered 47.5a door and we thought.

We were being, you know, a little.

More aggressive because this one was 45. They called and gave us a chance to go up. I think we went up to 48.5 and I think somebody bought it for 49 a door and that's where. And that buyer, you know, called us within 30 days. Want to buy this one for 6 million. So can't get them all, but you gotta. It's just the, the lesson learned there is be conservative, but don't be too conservative. Yeah, the numbers make sense.

And that's going to be the wrestle of the week, guys. I'm just gonna let you know. I mean, you know, the reality of these deals is you got to get multiple eyes on the property. Get multiple, you know, Bagley says many advisors plan to succeed.

Right.

You got to get many people's thoughts on it. And you're going to have Jack, Larry, Dan. I would lean more towards Dan. Dan's probably going to put you in any deal. I'm just kidding. Dan. Dan, I'm just kidding. But I mean, you got to wrestle, right. Especially if you know that area. That's one of your greatest strengths as a newer investor is you're local to that area or, you know, you have somebody on your team that's local to that area and you know, you know that the rent should be, what, different on one street as it is to the other street. Right. I mean, it's same way in Columbus. Same way probably with a lot of you guys. Market is like one street's one way and the next street's a different way.

Yeah.

So you've got to be kind of bullish to an extent for sure. And that this event, we're going to probably give you some pushback. We're going to write it down. You give us a pushback. Right. Like do that and. And yeah.

The deal in New Hampshire, partner Jack killed it. I was. Didn't like it. And the operator, the GP was his own advocate. So you got to be your own advocate and show where they will get anybody.

Does Steven Tyler. So.

So Jack's looking at it strictly return on numbers. He's not looking at it from the. The operating. What you got to do, you know, to get it to that pro forma state.

Steven knew his. His threat.

I may be looking at it thinking it's an area where I've had challenges, but I don't know that Harrison may have some jobs. So you ain't going to be your own advocate for the deal.

Yeah. All right, let's jump into pulling a list of properties. We're trying to blow through this. All right, so you. Yeah, obviously there's that spreadsheet that's also in the overbeam document that's going to be emailed out to you guys go through that 100 ways to do it. But here we go. Run a list of using dealfire AI. You can also use anything else. We also have a subscription to CoStar. We have a subscription Economy prop stream is kind of similar. Obviously CoStar is going to be your number one. Right. It's going to be probably the most accurate. They have way they invest highly into calling. Like we get calls what happened with that property or whatever. You know, they have a whole team of just research. We've almost brought one of their guys on our team was interviewing for a job, but he was just letting me know like it's insane. They have a massive department for research and. And trying to get accurate comps. So they're definitely the number one in the industry. But below them I think everybody's pretty much the same. Reality may be a little bit higher level than like propstream deals fire, you know, this source. But obviously you're going to pay extra for those. So you all have access to deal fire. So I would just use that. Unless you just want to go the extra mile and pay extra for costar reality. Okay, so you're going to run a list in your buy box. You're going to get all the properties in. In that area. Again, for. For buy box, it's a little bit different than search parameters. Right. Your search parameters, you want to be a little bit broader and your buy box a little bit smaller. Why? Because you may find somebody in a different area that also has a property in your buy box. Right. Or a. A property that's lower in units. But guess what? If they own a 5 unit, they may also own a 15 unit or they may also know people that own a 30 unit. Right. So this is searching and calling sellers directly is just a networking game. It's not. I'm going to find that deal right there. It's probably the deal I'm calling about. Right. It's a networking Game. All right, so don't expect calling sellers to just be like, you know, you've got the deal, you want an offer or not. Like, it's about building relationships. I know people with hundreds of doors that still call a few hours every week. Just go call sellers. Why? Because it's a peer networking with a peer. Right. It's another apartment owner. And you build those relationships and that's where you see a snowball effect. So just understand that when you're getting deals from your VA or you're calling specifically to owners, those are just relationships you got to continue to build. And we're going to share examples of how we've leverage VAs and how they produce results. And so you can understand it from, from that aspect, but that's the big deal. Okay, so what you're going to do is you're going to use skip tracing software. If you're not using dealfire, AI, you're using List Source or anything else you would want to probably use like Lean Sherpa to skip trace those numbers or those properties. Skip trace just simply means you're getting the phone number and email of the name of the owner. Okay. Owner of the llc. Okay. Then you're going to create your script. We're about to roll it out in just a second. And then you're going to call leads or have your VA colleagues. How many have a VA in the room? All right, cool. So bas work. You work them, but they work. But you can call these as well. So at the end of today, we're probably going to try and wrap up around 3:30. So then you guys can go take an hour or so and just call, get direct to seller leads. All right. And then out of 50 dials. So here's typical metrics that I would, I would say base your projections off of 50 dials. You should get at least two seller conversations. All right. Out of 20 conversations, you should get at least five solid leads to follow up with. Okay. All right, so and then 30 plus, after you actually follow up, follow us. Name of the game. So that's, that's kind of your key metrics. So we have other ways to do this in the challenge, but obviously we're not. We're going to go into other marketing channels next or tomorrow. So we'll talk about some of those. We'll go into as deep as you want to go into all those other channels. Whether it's direct now, whether it's postcards, whether it's texting and email. I mean, we have a company that I can connect you guys with that, does cold email, and they. They can get you a bunch of leads that way as well. All right. We can just show you what they do. So you want somebody doing it for you or you just want to get to it? Cold email or direct mail, you kind of have to budget a little bit more than you would with just calling or B days. But other people to add to your list, write us down. We need brokers, we need management companies, attorneys, roofers, contractors, CPAs. Those are all people that are currently talking to a prospective seller. Right. We just want to think who is talking to the guys that we need to be talking to and connect with them. And then we have a script in the 100 Ways to Find Deals, all right, that is going to show you exactly how to connect with those guys and how to talk to them. All right, I'm going to share some scripts in just a second. But you're basically just saying, who do I. Who do you know that I need to know? Right. You want to end every conversation with that? Who do you know that I need to know? Right. I'm new to the market. I'm building a brand in the market. I'm building my portfolio in this market. Is there anybody that you could connect me with? Maybe a good attorney, maybe a good CPA or a good whatever, whoever that is. Right. Or any apartment owners that you know that maybe want to sell or maybe look at the. Get rid of their property. Okay, so this is all things on ways to get deals, all right? This is about deal flow. So be consistent. Everybody say, be consistent. Be consistent. All right? I promise you it pays off. I see so many people just do a week or two or maybe even months and then say, yeah, I just kept finding a good deal. And then we find out they only submitted five offers or they only found they only reached out to 100 people. Right. We used to have a. Our former acquisition director said he would. He would call, like, he would make 100 offers in one deal, and he would underwrite 100 deals to make one offer, which may be a little bit absurd, but I don't think you'll need that if you follow these principles. But. All right, Bill, your Legion machine continued here. Google property management companies and attorneys find brokers in your target market or key players. You can use LoopNet and Crexi for this. But typically what we're saying in the script, and I'll share that script with you in just a second, is I'm not necessarily shooting that property. You have any other Properties that you're looking to bring on, mark or bring bring out. Okay, but that's a good way to connect with brokers. They're all around you, they're active and you can, you can leverage those brokers that are going to be your, your highest leverage people right there. So leverage social media. Does your community know you're an investor that's focused on. Does your community know that you're an investor? Say that again. Right. Who in your circle knows? I mean I'm sure you let people know I'm going to a four day event, so a lot of people probably know. But have you shared that on social media? Have you shared anything to let people know that you're looking for properties? If your number one job is to find properties, does anybody know, you know, like we gotta get it out there and share on social media. Share. This is what I'm doing. So we have a whole team that can connect with you on actually creating that verbiage maybe for social media. We're gonna talk about that in a little bit. But long term networking, that's huge. All right, so here's your list. Here's what you need today. Off market list of sellers for cold calling. You can have your VA doing this step as well. But today if you have a VA that you would want to check in on that VA and see how they're going measure their KPIs off of this. Melvin is our VA manager so he can connect with you as well. Just message him. But they're doing a great job. I'm meeting with them very regularly and they're getting a lot of leads. Every week we measure how many leads per VA per VA manager and MGS scores. It's very important. So 200 leads and dials should equal 8 to 12 conversations. Should equal 2 offers which an offer. We're going to talk about this on the leaderboard in a second offer is anything that there's 50% confident in getting that deal and ideally you're within 60% of the sellers asking. Now I have seen where we've made them an offer for half of what they asked and it still got through. Who was I just talking to did that? Chris Caffrey. Anyway, somebody talk to Chris if you want to lowball somebody. All right. Effective low balling. All right, Commercial real estate brokers, masterminds, LoopNet, Crexi, Google. So these are all ways to, to find those brokers. You can. This is going to be a high leverage way right here guys. 30 dials for brokers gives you 10 good conversations.

Okay.

Bare minimum. Brokers like to talk. Two good deals or offers should come from that. Now you say every single one of them for probably 8 out of 10 is going to present you deals, but out of that probably two good deal.

All right?

You may actually get a lot of properties, but typically only one or two. All right? Because that's their job. And depending on how you run the call, which we're going to talk about depends on if they tell you the. The deal that they've had on for two years and they just still can't get it across the line.

Right.

Versus, you know, don't waste my time. Tell me if you have any deals that are actually good.

Right.

Power players, property management companies, private lenders, attorneys, etc. 30 leads, same metrics as above. So 200 dials to sellers, 30 dials for brokers, and 30 dials for power players. All right, Makes sense. You with me? All right, cool. And then also repeat the above metrics, then result. If results are under KPI, key performance indicators. We iterate. Understand, you know, this. These are two businesses. One is finding deals, one is raising capital. So we iterate. If we. We go after running a business and just. We don't nail it every time, right? It's not going to immediately be the most effective, most optimized machine that you've created. As soon as you start, you got to go back and see where in this KPIs the 200 leads, 812 conversations, two offers. Where is my funnel breaking down? Tomorrow we're going to actually go through constraints and break down every part of the funnel. If you're not hitting KPI, if you're not hitting those metrics, not having any conversations, what does that mean? Right? You've made the amount of dials but aren't having good conversations, you aren't making any offers. What does that mean? Right? We have tons of conversations, tons of deals, but we're not making any offers. Why is that? Right? So you've got to approach this as a business, right? It's a funnel, right? We got to make sure we address every part of the funnel to make sure we come up with a predictable system of buying a partner. Right? When we hire Dan, we can't just say, all right, go after it. Hope we get a deal. We're gonna pay you every month. But hope and hope we get a deal, right? No, we pay him and we say, okay, here's the metrics that we need to hit every week, every month, and if you do that, we can ensure and guarantee an ROI for ourself when we invest in employer. That right. Makes sense. Okay. All right, step three, quick analysis. I get Mr. Jack Zhao up here. We're going to do some napkin analysis. Important first goal is to decipher bad deals from good deals. The good ones aren't just laying in the streets. All right? So what's most important for finding good deals is that we decipher the bad deals quickly. Now, look, I know a lot of you came in here with a deal, but what's even more important is that you're still sourcing for deals, right? You're still keeping that pipeline strong. And then also, look, we're going to be real honest about our perception of the deal. You can give us pushback, right? And some of them we may. We do have an NDA. We're going to have everybody sign that we could probably send out, but. Oh, raise your right hand. Everybody raise your right hand. Nah, it's up here. You don't have to worry about it. All right? We gotta get through the bad deals quickly, and we gotta not attach emotionally to deals until we have to. Right? Until we're. Until we're in or at the closing table. Really? I want to say until we're after, Dude. Due diligence, and we've. Our earnest money has turned hard. But even then, it'd probably be better to back out, lose your earnest money than it would be to go even further in the hole by doing the deal. You want to say, okay, we'll do everything you can to make sure you don't get your earnest money. Go hard. But even then, it's like, you know, you could lose a lot more than that if you do the wrong deal.

But you should have to lose ship.

Yeah. Our goal here today is make sure you don't lose any. Cool. So let's do it. Jump into a quick analysis. Here's a buying criteria. A, B, sometimes C class areas. We've already talked about that. But here's how you qualify it. You want to drive it, or you can ask somebody to drive. Right? This is the point of having boots on the ground, partnering up, Right. If you're not in that area, you can have somebody go drive it. You could also ask handyman or ask somebody in that area to go look and give you their synopsis. But you can also Google street view it. That's my favorite. That's the first thing I do. Like you said, that's the first thing he does as soon as he gets a deal. You know, he just goes and looks at it on Google and it gives you a real time view of the property. You can drive down the street, you can do all that kind of stuff. So super easy way to do it. And then obviously if it's in a nice area, if it's in a C plus B area, it should be improving over time. Right. If things five years ago were kind of run down, you know, or if it's, if there's a few areas in there that is run down currently, you should be able to go back a few years and see that it was even worse and that it's actually improving over time. Right. So that would give you an idea of like it's a C plus B C area. Right. Versus deers. Probably have looked that way for a long time. You know, property management companies call and ask if they would manage it. A lot of people are wanting to rent there. What's one of the things you're asking when, when you're calling property management companies? Why not? Oh yeah, well, we're talking about, yeah, we're talking about deciding if it's a good deal or not.

Oh, not vetting the managers, but coming.

To manage it for you. Well, you can act like that. I mean you could tell the property manager, we could give you first bid if, if we buy the property. But even before that, really you just want to find out what they want to manage there.

Yeah.

Right. Because here's the deal. You get a property in a C minus area, that really your biggest issue. One of your biggest issues is the fact that it's going to be hard to find a good property management.

Yeah.

So you kind of want to know like is that. And that, that's really the hardest part.

Yeah, just general intelligence. Not just property management companies. You're just telling contractors, property management companies in the area just get the feel for that property. Because a lot of people local that have that knowledge will tell you things that obviously the seller and the broker aren't going to terrorize. Yeah.

Actually I got some experience that we're doing a 40 plus realignment acquisition with the family office. Two weeks ago I got a Reddit call from the family office asking about, hey, your Google review looks terrible. It doesn't look like you're a management of the property property. Your management company is doing a terrible job. What's going on? So the first thing I would look into it is definitely the Google reviews, see how the tenants reviewed this magic company and see their overall Google review. And that's the first thing I would look into. Us and the second thing is that I would, you know, have a boots on the ground experience. Just go and take the properties to see if the management company is taking care of the property very slow.

Things go back at night.

There you go. Yeah. All right, cool. Yeah, thank you. Yeah. So at your, at your property or when you call property managers, you really can go two routes. Just like one is, you know, you're, you're inquiring about the property, but then you can call the actual property management there at that property and see what their occupancy is like, you know, act like a renter. Act like you're going to come in and actually rent the property. Say, hey, if I were to, you know, apply for a two bedroom bath, like how many are you, you have openings there, how many, you know, how long do you expect before you know, it would be occupied or do I got plenty of time, you know, all that kind of stuff. Right. You're just kind of asking them based on being a renter. And that's the biggest thing around qualifying your, you know, and understanding what the, what the property is like is just act like a renter. Go to apartments.com, look for comparables that have similar amenities, all that kind of stuff. And then family watchdog, crime maps, area vibes, Zillow, all those are really good softwares and platforms that you can look at schools, safety, crime, you can look at all those different things. Okay, cool.

Are you doing the same thing, not just your property, but other properties to determine what that market rent is? To run initial analysis? Yeah, exactly.

Okay, all right, so napkin analysis. Who feels like they understand napkin really well? Okay, who doesn't understand napkin masks really well?

All right, well, there's some people in between.

Some, some people didn't raise their hand. Yeah, who's in between? All right, all right, next. They know, but they don't want to.

Have to come demonstrate on the floor.

All right, so look, what's needed for your napkin is simply market rents, unit mix. Well, the tech, tech, we back up here and say it's really just address. If you know how to find the property, you really just need the address. All right, so that's one thing to know. You can find out through online what is needed or what kind of units there are at that property. You can go to apartments.com, look up that address and it typically tells you. So really, if you have a seller, you know, have a hunch that the seller is willing to sell and, or they're not giving you much information, you could technically just Go look up the address. But to do the actual offer, we've got to know the market rents, the unit mix, the expense ratio and the renovations needed, and then obviously the cap rate. Okay, you do. If you can get the T12 and recroll, that's great. But that would be more for the deeper assessment on what we're trying to do in the napkin is just get a quick synopsis of like, what is. Is this worth my time? That's really. The napkin analysis is just a filter. It's really not supposed to be like, this is how much you can offer all that kind of stuff. This is just. Am I even close to the seller's asking? Is it even worth it for me to keep going? Okay, yeah.

And you're right. You can find just about everything. If I just knew the address. You go on to apartments.com and pretty much determine most things. The unit mix is really the only thing that you would have a hard time clarifying. Not accurate.

Yeah.

On even co star.

Where.

Yeah, okay. Yeah. I mean, but yeah, exactly. Yeah. Napkin analysis. And you're just trying to get quick synopsis. Okay. All right, so here we go. Here's the calculation. I need you to get your pens and papers out, get your calculators out. We're going to do this together. Market cap rate. You can, you know, the most accurate source for your market cap rate is going to be your commercial mortgage brokers or your. Or your. Who's doing the assessment. What's the name of it? Appraiser Appraisal. Because they're actually seeing deals sold recently. And that's really what you're getting that market rate or market cap rate based off of what did the. What if the properties in the central organization itself recent. Okay, example one. Here we go. We're gonna do this calculation together, let's say. Oh, okay. First off, quick calculation. So it's basically your unit mix times your market rent rates times 12 months. That's your gross potential rent. That's the first number you need. Unit mix times your market rents times 12. That gives you your gross potential rent of the property. All right, now you take your gpr, your gross potential rent, and you multiply that by your expense ratio.

So GPR multiplied by your expense ratio. That's not.

Interval. Yeah, you're technically. Because it's 50%, it's what we're going for. So you just assume it's 50%. So you can do 0.5. It's technically the. You. You subtract your expense ratio, your expenses.

Yeah, it's actually expense ratio and losses gross potential. If we want to complicate.

Yeah, you're assuming the extension ratio is 50%. That's going to vary between 40 and 60 depending on your property, but we'll talk about that. Now look, if anybody feels confused at any point during this napkin or during this whole training, write questions down. I promise you we're going to go over this more times than you'd want us to go over this. All right? So don't feel like you, you're, you're getting left by.

Yeah, don't want to complicate it. Protect safe, keep it materially.

Correct.

Yep. Gross potential rat.

Rent.

I, I think I was saying the GPR times expense ratio, that's the operating expense. The noi should be your GPR minus your expense.

Exactly right. I got you.

Yeah, yeah. Let's, let's get through this real quick. NOI divided by your cap rate, just say it's 7%. All right, so that's your market cap rate. I probably need to put that in there because people get confused there. I just said we need the market cap rate. That's not the same as what the broker put on the om. As far as your in place cap rate. Right. What the property returns if you pay cash for it right now. Right. That's.

Don't hold it at the bottom.

Okay, so that's not the same as, you know, when a broker says you can make 7% on your money, you know that's not the same. Right. This is market cap rate for as in what can I sell this property for if it's fixed up. Okay, if the property is fixed up in good condition, what can I sell it for? Typically I would say nationally it's probably six, six and a half somewhere around there. If you include class A, it's probably more like five and a half. But just saying in this example, the market cap rate, 7%. So your NOI, your net operating income is what we got. Once we took our income, gross potential rents minus our expenses, that gives us our noi, our net operating income. That's our profit before debt for investors. Right. That's our noi, net operating income. Okay. Then we take that noi, the mid operating income, we divide it by the market cap rate and that gives us our stabilized value. Okay. All this is about future projections. This isn't about what the property is currently doing because as an investor I just want to know what can I make for this property and then we can back in. What can I offer based off what's going on today. All right, so noi divided by your cap rate gives you your stabilized value. Stabilized value times 70%. And our buy box example we showed you, as long as it's under 80%. Now if it's a nicer property, it has very minimal work to do. We may be 85, maybe 90. Right. But that's going to be, you know, typically your nicer properties get a longer term play. All right. It's not necessarily the typical model that we're showing you where you could do like we did in that deal, make $2 million in two years. Same thing. We'll talk about that in a little bit. All right, so your stabilized value times 70%. That is a discount based on us saying the property is not in the future. Right now I can't buy for its future value. Well, what is it going to take me to renovate this property and get it to the future value. So I need to bank in a discount. And then that's called your total cost basis. Your total cost basis. And then I gave you another word there. Maximum cost basis is another word for that. Maximum cost basis minus your rental cost equals your maximum allowable offer. So big things you need is Margaret rent unit mix expense ratio or just assume 50% market cap rate and an estimate of your renovation. And again you could just estimate, you know, if it's, if it's immediate light to media value add. You could just, just estimate 5k a door, 3k a door. Right. For renovation again you'll go deeper in this after under fun the natural analysis.

All right. Yeah, I think we can just give like a real world example real quick too give rent. So we could show you.

Yeah.

Theory used to get what you do.

With your head office. Yeah, that's going to be the whole thing this week. All right, now get analysis. So do this on your calculators. We got a two bedroom, one bath. Two bedroom is a thousand dollars market rent. One bedroom is $800 market rent. Okay. And then I like. We make the slide a little bigger. All right, so unit mix, let's call it 50 units for 52 bedroom units. 71 bedroom units.

Just stop us if you can't see something. We'll.

Doing it on the board here.

Don't look at it. Just do, do it by yourself. Don't look at it. Do it for yourself.

Yeah, don't, don't give me the answers. All right, expense ratio, just say 50% renovations needed. Let's just call it 1.2 million. So this is a total of 110120 unit. Deal. And the asking price is 6.2 million. Here's our formula. NMX times your market rent rate times 12 equals your gross potential rent. Who's got that number? There it is. Who got that? 1.2. All right, so all it is is your two bedrooms. 1,000 times 50 units. 800 is your one bedroom times 70 units. You bring those together, you add those together, and then you multiply that by 12 months. Gives you your gross potential rents. 1.272 million. All right, now, who's got the NOI? GPR times your expense ratio equals NOI or minus your expenses. But in this case, we could just do 0.5. It still works. No, it still works because it's challenging.

Jack's brilliant brain there.

It still works.

To multiply, if you're taking gross rents, you got a 6% expense.

What expense?

Yeah, yeah. If. If it's 60 expenses, then your NOI would technically be 40, right?

Yeah, yeah.

So it'd be. But either way, we're at 50. It's just. Quick napkin. All right, that makes. Yeah, yeah. Easy pull. Who's got it? 636. Boom. Got it. Who got it first? Dustin.

I'm calculating 60% express ratio.

But anyway, Jack wants a better deal.

I want to be more conservative.

So using six.

Yeah, I want to walk through that at the end, talk about the. How it's changed. We'll talk about it.

All right. Renovations needed. We got one point. Oh, we're done. We're. We're here. NOI divided by cap rate divided by.07 equals your stabilized value. Where we at? 9.8. You got it. 9.085. If you're not with me, let. We'll. We'll talk about a little bit.

Look on your neighbor's paper.

Look on your. All right, stabilized value. Time stabilize value times 70 to 80%. In this case, we're going to go with 80%. So your stabilized value, then we want to back out a discount. We only want to pay 70 to 80% of what it's worth in the future. And then we're going to. Minus our rental cost. But for right now, what is the total cost? Who's got it? Boom. Guys are on top of it. Let's go. All right. Yeah. So stabilized value, like I was saying, you know, Basically, if it's 70 or even lower, it's typically based on the. The fact that it's got a lot more work to be done. It's a lot more risk. You know, we. Because what we're doing is taking stabilized value, what it's going to be worth if it's fully occupied or if it's fully at market rents, if it's in the future, you know, and then what we want to do is say, well, it's not there and it's going to take some work to get there. And so this is where you get competitive about, you know, what are you willing to take. So we'll break this down on the deal analyzer where it actually shows you your cash flow month, you know, what you're actually going to produce year one as far as cash flow, as far as your investor returns. So all this will get more clear and you'll be able to make the decision as far as how much of a discount do I need? Whenever you look at the deal analyzer. Okay. Because you just got to say, is it worth my time to, to do this deal? This is where it gets for us. Like if we do a 20 unit deal, we got to be careful that we're not spending time getting an extra $10,000 in cash flow a month or whatever that is, right? That's right. Yeah.

Yeah.

You just want to know what plug in, right. So it's your discount. So what if it's a nicer property that you like, you know, nice area, bit more aggressive than 80. But see glass, you, you know, it's got a little more hair on it. Or just do 75 every time like these.

Yeah. Again, the idea of the NAC is just a quick assessment. Right. We can break it down further later, but if you just know like, hey, this is this property main. Need a little bit of improvements. It's not, not going to need like it's not under 70% occupied, you know, stuff like that. It's not a super old property that's in the 60s. You're old property, you know, you got to think about, you may need a 65, 70%. But for the most part, as long as you're staying within our buy box and what we're kind of teaching you, it should be around 70 to 80. You can call it 75. All right, for this one stabilized value, total cost is 7.26. And then total cost minus the rental. What do you got? You got it. All right, now here's the rule of thumb. Go ahead. So how do you determine that? Renovation. So yeah, renovation amount. We'll get into that in a little bit. Yeah, just write the question down. We'll make sure to cover that. But again, right now we're just thinking how do I Make my natural analysis process like 60 seconds now 90 seconds of the most. All right. Because we got to get rid of bad deals. So the question is, do we keep moving? For this deal, you're asking with 6.2. We found out 6,068,000 is what we can offer. Now the rule of thumb for me is if it, if I want to spend my time going to the next level and doing more assessment on this deal, I need to probably be within just say 30% of the sellers asking. Right. So 6 point or 6 million is what of 6? 2. 97. So we are well in the range to keep, to keep going. Right. So as long as it's over 70, I'm typically keep going. Makes sense. I say 30 is in a margin there between us, but it's actually over 70.

Yep. And if you want to get four at bats, you know, when you're learning this, dude, do 80 here every time to be a little more aggressive. And then after 15 of what they're asking, have a conversation with them anyway and tell them and follow up.

Exactly. Yeah, no, we'll talk about that. If you're 50%, you can still give a courtesy call to the broker, give a courtesy call to the seller and say, hey, our underwriting team came back. We're not anywhere near. You know, I don't want to waste your time. Just, you know, let me know if you have any other deals. So. All right. Our biggest mistake in analyzing properties quickly to hit your targets. Very important problem number one, you're looking on market or you're looking at stabilized properties. All right, solution. And why is that a problem? Because typically if they're on market, they've already been passed by thousands of investors and there's something going on.

Right.

And it's just again, we're maximizing our time with people with little time, busy newer investors. Where is our time best spent? All right, and we could say we could look on market all day, but that is probably not going to be your hottest leads. All right. And you can look, you can say for the sake of, you know, just getting something in, you can go to a property that's been listed for more than 100 days or something like that, see if they want to come down.

Right.

That's fine, but it's not going to be a bulk of your time. It's not going to be that much of your time. So. So main thing as we want to be more prospecting, stabilized properties typically have lower in place cap rates, higher occupancy, minimal to no capital expenditure. Needed or no pain reason motivation to sell. Example bad management. That's why it's not really that exciting. Right. You know you're going to have no pain right there. It's like why are they wanting sell? And then your timeline is a lot longer. Problem number two, assuming too high of a market rent, finding accurate market comps is the solution. Okay, so like I said, go to apartments.com, act like a renter, you know, find accurate market costs. Jack, do you have anything on finding accurate market comps? Yeah, first of all, first of all.

You know the broker static will give you some market comps but it doesn't mean these market comps correct or they're honest. So the best way to do it.

I would go to. There is a very.

I mean the best way to do is definitely to request something for the cold star which is a third party vendor report. The brokers usually get provided but some small shops, they won't be able to provide a full star report. So what you can do is to go to a website that's called apartments.com. Anybody here have used apartments.com before? You feel it's good, useful, good, you like it. So go to apartments.com, find that subject property and then click on the map. Then you can find some comparable properties right next to the subject property and then you click into each comparable properties to make sure they're at the same vintage. They'll build around the same time, the same quality and sometimes also check their management company. Some management companies are terrible. Check the reviews if you find their reviews are similar, their quality similar, everything looks similar and that must be a good cop. And one more thing it's worth mentioning is that you might find some properties with very low rents in that area that might because that's a lifetime property which is low income tax credit property, they have some rent restriction. So if you are doing a market rate property to make sure to confirm that article market rate as well. That's my experience.

Did you say the low income.

It's called the Life tech low income tax credit property. Essentially low income housing. Low income housing. So essentially the housing light, whatever that spare stack is, he bought the properties.

Yeah, I got it. I'm an expert.

Yeah. The fund usually give them the money for the development but in return the developer, the developer has have to lower the rents or restrict the rents at a certain level to make sure it's affordable for low income people.

Right.

So if you are buying a market rate property and you're looking at the rent for these low income aspect Properties then you're not depending on with apples to apples to make sure that you're also looking at partner with properties. That's your call. So that's how I buy those the comparable properties.

Find out if they have. Yeah like.

Yeah yeah. Let me present it. Nobody told you. Well you expanded to the underwriting. It didn't feel like time.

Different.

You can have Section 8 in your properties. Some people get confused. There's a properties that have half contracts that are you know, restricted as well at certain percentage rated only to section 8 10.

Yeah, we'll get into that. We'll get into that. So finding accurate market comp s class neighborhood Google Maps drive the area age of the property similar amenities. You know the market to get get know the market to get faster. So this is the whole crux of the issue with NAVA analysis. This taking you 10, 15 minutes makes sense if you don't really know the area. You're having to research all this from scratch. But we can pump out free offers in 30 minutes because we know the area like we, we know that market cap rate. We know the market rents like we know what's going on. So the more you know your market the faster you can get at deciphering the bad deals get getting better deals. All right, so research your market and again this is going to come with reps. You know it's, it's one thing to get. I mean the more you do it the faster you're going to get. Okay. Problem number three is assuming too low of a market cap rate. All right, so you want to get better comps check sold comps 7525 typically 25 being properties on the market for less than 66 months. So you could go on that look at sold comps. You could go on everything like that. Anything else Jack around Biggest mistakes analyzing properties quick to to for investors investors Biggest mistakes analyzing properties for new investors.

I would say the rents are definitely that most you know that most important thing you have to figure out that you're looking at the right properties the right cost of to find out the.

Reds for don't don't take the murders there and also property tax as well.

That's very brutal. A lot of times assessors will just reassess the property value to the taxable value of the property to very close 90, 95% of the purchase price. So for example in Florida if the property hasn't transacted since 1980s they have a cap on this tax value increase.

So.

Their taxable value on the sensor's website could be much lower than their market value. But when the property transacts, they will bring the taxable value all the way up to market value of the property.

So you get sometimes you will see.

A couple of triple of property tax after transaction some of the markets. So these are things that you should, should always look into before I make that decision.

It's good.

So calling sellers. We got 30 minutes and I got.

A lot to cover.

Okay, calling sellers. We're going to talk about keys to success in calling. I'm going to roll out a new script that we just put together. Get to the point quickly. Hey, this is Jonathan, owner of our. No, hey, is this. Sorry, reversing this. Hey, is this name. If you don't have the name LLC name is this, you know, Golden Gate Capital, whatever or bro, bro, hey, bro, don't do that. Hey, is this the name of the owner with the property at Blanket Blank Street? Because you open it up that way it could be anybody, right? Your neighbor telling your apartment's on fire, you know, so like kind of want to just open up that. Hey, this is Jonathan Southport at South Cork Capital Group. I wanted to see if you would be open to getting an offer on your property. All right. Be confident yet engaging and down to earth. And we're going to show you plenty of examples how to do this. But say something funny, relatable or light hearted to break any tension. We'll give you guys a list of jokes by Larry. Larry's got you guys build rapport over everything else. Many of these connections will result in deals in the future. I cannot over over explain how important this is. Yeah, these relationships are going to pay off long term. What the people you meet in this room this week, it may not be transaction the next 30, 60 days, but I promise you, if you steward the relationship you make in this room and the people you talk to on the phones, you're going to see dividends for years to come. All right? Okay. Make them remember you do something wild and crazy. I'm just kidding. Make them remember your goal is to provide value. So value is how they remember you, right? If you actually provided value, you care. It's a very rare thing that you can. People actually care, right? You actually care about them, about the property, about, you know, your southern accent. Use your best southern accent. Be consistent and follow up. Tell them you'd like to keep in touch and add them to your pipeline and track conversations. So you can track conversations in deal, fire, CRM or just spreadsheet. I know there's a lot of big companies that still use a spreadsheet. And if you're like me, I love spreadsheet. So just make sure you track it, log what the conversation was about, and then you have with a date to follow up. Okay. Dial fast. Don't let fear drive in action. Just keep dialing. This is the biggest thing. Whenever you go out and you try and knock out a ton of dials, you just gotta keep that, you know, half the numbers lined up, and then as soon as one's hung up, you're dialing another one. All right.

Yeah.

Who's. Who's.

Who has or doesn't like calling strangers?

You don't like one honest guy.

So who likes calling strangers? Who likes getting cussed out?

All right.

Henry had a great story as a broker. He had a really good story on our Thursday call last week that I thought was really good for being persistent.

Yeah.

So being persistent, very important. Like, we talked about following up.

So one quick story.

There was an owner I wanted to.

Get in contact with.

He owned a lot of property in the area, and I just couldn't get.

Him on the phone.

So I kept calling and calling. You know, it's on your list. And I called, and I finally get it to answer. He answers the phone. I'm like, this is it. This is my shot. Don't blow it. As soon as I go to say something, how effing dare you call me at this hour? Like 7:30, I'm having dinner with my effing family and you're calling me?

Who the f are you?

I'm like, oh, my goodness.

I'm like, oh, I blew it.

I blew it.

So I'm like, all right, cool. Hung up.

Then sure enough, two weeks later, guess who comes up on my list again? I'm like, oh, man, do I give him a call? Press call.

Give him a call.

I'm like, here we go again. What happens? As soon as I. I'm like, hey, it's Henry. We spoke last week during dinner.

And.

He said, I am so sorry. You know, you were like the fourth person that called me that day. And I was just fed up trying to have dinner. My phone keeps going off. I am so sorry. And then it turned out to be a wonderful conversation. I ended up getting the meeting, going to his office. And that could have easily been a call that I didn't make.

Right.

Easily a call. I keep talking.

Yes. That was so good that you called him back. Most people did that.

Send thank you notes, follow emails, keep in touch, guys. We're going to drive the point home. Conquering fear. I'm going to run through this really quickly. Limiting belief. I don't have any credibility or provide any thoughts. Value on the calls. Now again, we're going to do partnerships. Some of you like, you know, I'm going to outsource this talk to the people thing or find a partner in the room who's willing to do it. Totally fine. It's up to you, right? But for those who want to level up in this area, this is really important. Okay? I think every single one of you have the ability to do it. I don't have credibility or providing you value on the calls. Empowering thoughts. You are calling them to help themselves solve a major problem. All right? They want to sell their property or know that one day they have the option to sell their property. You're also, you have a team of investors who can help, right? We're partners. We're, you know, you're, this is a team sport. You can use the word me. You can use word partners. You know, like this is, this is, we're behind you. All right? So just be empowered to understand that also you're going to take care of their property. Give them personal insurance that you, you care. Right? So you are providing value because you can take care of their property. You also have local market knowledge. And you know, the reality is fear comes from ignorance. Confidence from knowledge, right here comes from ignorance or, or incompetence. Right? Competence equals confidence. Okay? And then you're, you're also, you're also making them an offer and a proper, that's, that's value in of itself. If you're going to give them a real market valuation. Right. It's based on your assumption. All right? Take action. Even if small steps. The best way to overcome fear is to face it head on. Okay? Take action. Even if it's small steps at first, each step will build your confidence. Visualize success. You see yourself as a successful real estate investor. You're no longer after today. You're no longer aspiring real estate investors. You are in real estate investors, all right? That is who you are, right? So understand that you are successful. You will have a major portfolio very soon, regardless of the person you are talking to. Doesn't matter who's on the other end of that phone, right? And then every no. Mark Cuban said every no gets me closer to a yes. It's a numbers game. You have to get no's in order to get a yes. Right? How bullish are we talking to sellers and brokers? Try to invest to speak directly to the seller or the broker that is speaking directly to the seller. So if the bro. If you're talking to a broker, we don't want to be going broker, you know, several brokers in between the seller. We want to be able to talk directly to seller, at least through that broker. No wholesaler. Sure. So, yeah, simply do your best to hear what they want. You got to actually listen. What do they want? That's going to be your key. Right? Don't overthink or over talk. Just make the connection and get the needed metrics and say, I'll reach back out after talking to my partners. Okay, can we give you a call later today so I can have my partners on the phone as well to give you the best offer so it can be later this week. So this is one thing that you guys are going to be able to do is just set appointments for us. If you want to just watch us talk to the broker, talk to the seller. And you just want to see how we do that. While you're getting up leads, talking to brokers and sellers, just say, look, can I have. Let me talk over my partners. Can we give you a call later today? I can have my partners in the room and talk to you then. Okay. Proof of funds. I'm going to share a little bit of script on that. But reality is just as much as they know, they want to know you are serious. You need to know up there serious. All right, we're going to talk about that in just a second. Credibility app. My partners have been buying apartments around the Southeast and are looking to expand into other markets and add another thousand units this year. All right. Just to give yourself more credibility. It's just something you can add. All you need is the T12 and rent roll. Look at the deal analyzer. So we're going to talk about that in a second. And so when you're talking to sellers and brokers, that's what you want. Understand, not everyone's going to be nice. It's a number scam, like Larry said, over being cussed out. You'll be, well, I'm just kidding. I don't, you know, follow up on both leads and offers. All right, so here's the broker script. Let's zoom out. Oh, all right, so this is the. This is the document that we're sending you guys. It's an updated overview of the resources for today, but it goes through our buy box, pulling leads, NAFTA analysis, and then here's the new broker script. We just Just created. And the cold calling script is still the same. This is how you cold call same for VAs and how you could do it. So you just made that your own but broker script. Let's jump into it. All right. This is much, much simpler. Hi, broker name. This is your name. Part of a multifamily acquisition group actually buying apartments in the blank market. I wanted to introduce myself and see if you are seeing any opportunities. See what opportunities you're seeing coming up right now. Obviously I just put it together, so probably should proofread it real time. We're working together.

All right, well, while you're following us.

Oh, great. How many deals do you bought? Yeah, we're going to go through that.

Just a second, buddy.

All right, there we go. What opportunities you're seeing coming up right now, we focus primarily on value add or light reposition opportunities and can move pretty quick if the numbers make sense. Okay. If you saw the current listing online. Hi, this is Jonathan. I'm an investor of the area. I saw your listing on LoopNet. Do you have any other multifamily deals in the pipeline? Stop talking. Let the broker respond. Now, we're just going to assume they've got objections, low objections. But again, ideally they just say, yeah, we got several different things going on or may say, who are you working with? All that kind of stuff. But we're going to talk about that. So proof of funds. We'll need proof of funds before moving forward. Totally understand. Just so you know, we're trying to vet the deal just as much as you're betting us. We work with syndication so capital gets lined up once we confirm the deal fundamentals. If you can show the T12 and current rent roll, I can quickly confirm whether this is something we'd actually pursue. I don't want to waste your time or ours. Makes sense. Okay. And then you stop talking. Broker pushes. Well, we just want to make sure you can close. That makes sense and that's fair. The best way to make sure we don't want to waste. We don't waste any time. Is to confirm the deal actually work. Works first. Once we're aligned on pricing and structure, proof of funds isn't an issue. Okay. Seller requires proof of funds up front. Got it. How about we meet in the middle? If you can send me over the T12 rent roll and Capex history, I'll take a serious look and let you know quickly whether we were moving toward an LOI at that point. If we're aligned, we can address next step. If it's a good deal. We can figure something out. Like, you know, you need a screenshot of a bank account. You know, but I mean, then how many people are like, and I got $5 million in my bank account ready to close right now. You know, they're not expecting that. They just think that you're not able to close.

Created a mini of my own group of buzzliters over here.

Bank of America.

Okay?

They just check a box. Don't commit fraud.

All right, why don't you already have the proof of funds? Because we don't raise capital blindly. We make sure the deal fundamentals work before we pull investor capital into the process. That's how we avoid retrace and fallout later. Right. Flip the script. We've had buyers waste our time before. I get that. And that's exactly what we're trying to avoid. All I need to determine is seriousness is a teach or to determine Seriousness is a T12. If it pencils, we move forward quickly. If not, we'll tell you right away. All right, who are your investors? That's a good one.

Yeah.

I'm saying we work with a group of capital partners. Depending on the opportunity. Once the deal checks out, we align the capital for.

Like, bottom line, got sales this now. What you.

Yeah, yeah, there you go. Yeah, send me your email. I've sent you a list. I mean, and then reality is like, okay, let move on to the next question. All I want to know, is this deal worth it? Is it worth me spending my time? I don't want to be getting someone proof of fonts or even anything if the deal doesn't make sense. So bottom line is never argue about proof of funds. Just reframe it as a deal vetting issue. And like, as long as you're confident. And it was like, this is. This is what I mean. Like, I'm not trying to waste my time. Nor are you trying to waste your time. So, like, just tell me what's going on. Or if not, hey, see you later. Like, you know, next call. All right, cool. So I think we can handle that. Do you have something? Just real quick. Just. We've spent a lot of time on Objection. Handling. That's great. Why would they be so. Why would they be so opposite. Or resistance to bullets in a ritual. I mean, how long does that actually take? A lot of effort.

Because they're protecting their sellers. They think you're. They sense that you're not an experienced, seasoned buyer. You know, they want the guy that just closed 100 kids last year, and the now he's closed 100 units, so that's the reason for the investment. But you can sum all this up. I'm just saying real quick. I mean, it just boils down and being quick on your feet, confident and not. You don't have anything to hide. You know, we talk about that a lot, but. So by the time we leave this event, I think you can make your own. You got to put in your own words what you're with. You try to say all those things, try to word a word, you're going to sound even more fake.

So.

But that gives you a good structure. That's a grand structure. Things that come up, you've saved it. I think we're going to either call a lot of brokers and sellers at this event, or we'll role play so you can, you know, take your notes and leave here with what works for you. And that's the reason they're. They're doing that, like quickly. Oh, I mean, now's gonna be close. You know, just since you're another one of these people who watched a YouTube video, that's calling them wasting their time and not serious. That's really level on that level. You're serious. You're gonna buy apartments, you got pieces in place to do. There's nothing coming that answer.

It's not.

Is it acceptable to say sorry? They're the guard, they're the gatekeeper, the guardian, the seller. The direct sellers aren't going to usually hit you with that. They'll play along with you, but they're. They're gauging that. You can bet in the conversation, this guy, I'm wasting my time or not.

Is it acceptable? What do you do?

You.

What they do say let. Let him go ahead, if you don't mind. He was in bid question there.

Is it acceptable to say the group that I work with, REI has 500 million under management?

Yeah.

I mean, to, to get the broker.

Yeah, for sure. Yeah. I'm hesitant to tell people to throw out too many numbers of domain names driving because then they. Since that is on their. You know, I would just be confident. Like we've got. Yeah, I work with Drew. We've got capital ready to go. I'm the guy, point guy to get the deal, see if it's a viable deal. We're ready to close one.

Oh, that's great.

You know, we want to close and I want. I. I was thinking about my own script. My college people. Usually I'm just making small talk that probably come out of the gate with we Put together a lot of capital. We need to buy a dental this month. We came by but Walnut is yours. Going to be the fifth.

There you go.

So a little bit of scarcity and capital stuff. What was that?

Yeah, he got it. Yeah, that's good. Now I would probably say REI capital or REI just puts it off. I mean, you know our accelerator, you know, that's maximum. Still could be fine. But yeah, I would just probably say ar just to give an invitation to.

You know, you're working with a group that has experience. Yeah, yeah. But it's also, you don't want to. You don't give them all your cards either. So who you're working with? We have some investors, a lot of money. Oh, who are they? Well, why would I give you their name? I'm gonna give you their name.

But who's your investor? Give me your best investor. I'll give you my best. Seriously, this might sound funny, but it's really how you got to think about it.

Yeah.

Because you're confident. Then they go, oh, this guy's. You must drive a Mercedes.

I think we usually do is to.

Tell them, say hey, I have a group of high net worth investors which I have invest LinkedIn for, you know, five, six, $10 million during the last three, five years. That's narrative you can use or a family member. That's what you choose.

Yeah, it's your own voice. Right, everybody?

All right, follow up script. Last point here. You want to send this so we're going to have time to do this talking to people today. 24:48 hours. You're following up. Thanks again for taking the time. As mentioned, we're actively reviewing value add multi family opportunities in blank market and plan to be acquisitive this year. Please keep in mind. So I'll replace that. Please keep in mind as opportunities come up. Happy to take a look and give quick feedback. All right, so here's the needed information. Write this down. This is the needed information for brokers today. What do you, what kind of potential do you see? First one, what kind of potential do you see? This is what we're initially asking brokers when they present as a deal or sellers. What kind of potential do you see? All right, why are you stay interested in selling like Larry said, if it's been on the market and your first question is like why is it not sold yet? Right. But this is assuming it's off market.

And you can even say, and I'll say it too, I'm sure you might put this in front of Your best buyers, you know, why. Did any of them pull the trigger?

Yeah.

Make them talk, ask them questions. You're not, you're not calling me questions.

Yeah. What elements are most important to you such the seller. So part about the sale, is it like just retiring? Is it, is it boarding capital gains? You know, what is it most important to you about the sale? Someone taking care of your property. You know, what is that? That they're most interested in selling? Some of these mom and pop sellers that have the property passed down through generations, it's so they want to know that you're going to take care of the property. Right. So be surprised. Network for more names. Who do you know that I need to know? Who do you know that I need to know? Put a star next to that question. We're trying to build our pipeline. So who are the best property managers, worst property manager? Any recommended lenders, any power players I can spec? Don't call them power players, but inspectors, attorneys, real estate, trust litigation, divorce estate, etc. Network for Import names. Build your network. That's probably a good exercise for you today is to look at your current network. Who do you need in your network? Where's the, where's the parts of your business that you feel weakest at? List those out. Just ask for those people. Hopefully you find some of them here today, but maybe there's other ones that you need, whether it's CPAs or whatever that is. All right, submit LOI. So we're almost done. So LOI, obviously this is going to be primarily this. Today is about getting on the phone with sellers, getting the leads, doing the market analysis, getting confident in what kind of offer you can make. And then tomorrow is going to be more about loi, about letters of intent. But hey, if you, if we run through your deal and you feel confident, by all means, go ahead and do it. But I would say for the most part, for most of you, if we're just starting out, we're just getting these things going. We just want to get things in the pipeline, make calls and then assess them on narrative analysis. That's the win for today. Tomorrow we can start pumping out those. Lois. All right, so just a quick summary on Lois. It's letter of intent. It's basically a handshake. All right? It's a non legally binding document declaring the preliminary commitment of one party of your business with another party. Outlines the chief terms of a prospective deal. It's not legal. Okay. Once you get that accepted, typically, you know, you've got about a week, two Weeks, maybe five days minimum to get that property under contract. All right. And so we got a LOI template for you guys. All right, so here's a quick deal. Just want to give you another idea. Example, you have equity for the down payment or if you have the equity for the down payment, which could be through limited partners or if you have a 1031 exchange or anything like that, you can do this model. But it's basically, you know, Brandon was a key example. Construction background, family, two kids, no experience on larger deals. Brought in partners. We're going to be talking a lot about partnership. 27 units, $750,000 or 27 units all in cost. Closed three months ago. Bank 75% lifetime value, 75% loan to value, 7% interest. Down payment was $210,000. He did a cash out refine finance, 8% interest two year term. And you use the partner, give them.

All you need to cash out on other properties.

Yeah, yes, exactly, yeah. For that down pay. Here's another example. Larry, you want to run through this? Yeah, this is really good. Power of direct to seller.

FDA found this guy. Actually it was three guys that only 75 units. Said originally they agreed to sell in total the entire 75 units to us. Then they changed their mind. You know all the great problem with partners. So kept following up with this guy. He was most engaging because he really wanted to sell. So they end up splitting the portfolio and got all that done after 12 months. He ended up with a few houses and this 16 unit. And they, they all agree on all of them pre include. They just built this up for 10, 20 year period. They all still had jobs that were managing the property. The guy's cell phone number was in front of property on the toilet.

Didn't work.

He's the one that got called and actually went and worked on it. So he was motivated to be done with property management or he wanted his property manager, maintenance too. He was everything. So we offered in, you know, walk through our offer would be less than 800 what he was wanting for the property. I don't know what it was. Maybe it was 650, maybe 700. And we kept, you know, inching up higher as he was able to provide maybe better terms. So we ended up at 800,000. And then after some due diligence we went from 1980% of finance in the 90 and then eventually in the 95. So it was just all negotiating and realizing that he really wanted to build this property and all he wanted, you know, he didn't Want cash. He didn't need a bunch of cash. And he was also aware of him having to pay taxes on all that cash. And when we do, would you do installment sale or seller financing? The other pay capital gains taxes on the money if they receive it. So there's an advantage for the seller. So we were able to get it with only $40,000 down, which is 5% and really cash flowed out of the gate. But he was also well below market rents. You know, I think he had people in there 5, 600. Now we're getting to 8504. You have to renovate those units.

You know, you also have.

People have been living in there for 15, 20 years with very outdated units and dirty units. So that's what a lot of these violent mobs do. You know, they don't want to go up on the rent because they don't want people to move because he's going to have more work to do because he's the mainstream, you know. So it's like they're fine with those people standing there 15, 20 years, but they're afraid to go up on their rent. So you got, you know, lower value. So, so, you know, I don't know what it's worth today. Maybe 1.2 ish or something. But that wasn't the point. I meant for the long haul. And you can overpay for a property when they're giving you fixed financing. I think he may have pushed back on the 15 year because he's an older guy. But we ended up, I know that these 10 year. But amortization is like basically 20 years. So it cash flows really good. And we've got a fixed like 4. I don't remember what it was 4.25. That's 4.25% interest rate which was lower than market interest rates at the time too system. But the, the key I think wanted to point out is just a follow up of this guy. And then a year after this one of the partners that saw the light came back and sold us his properties. Fortunately they were just such a dirty, dirty duplexes but they still because they were backyard. And he did financing as well.

Not too bad. Direct to seller follow up. Those are the two key terms there.