This TV Show I Was On Changed My Investment Game!

Based off—

The first presenter to enter the Deal War Room is Nathan.

What's going on? My name is Nathan Payne and I'm from Salt Lake City, Utah. I've been in real estate for about 5 years. Got my start doing door-to-door sales and now, you know, I jumped into real estate because I really wanted to get into that realm. I really want to make this deal work. I want it to work so bad that I actually got on a Greyhound bus to get here. The flights were packed to get here when I got the call to come on the show, but I made it happen. I went on a bus ride for 9 hours, almost got left at Kingman, Arizona. I ate at an Indian buffet at a gas station, which probably wasn't the best idea, but I did it just so I could get in front of the panel and get my deal reviewed. I need the money that much. The deal that I have is in Springville, Utah. It's an 8-plex, and the goal is to take it and raise the rents. So we can sell it eventually in the future and double our investment in the property. The purchase price is $1.1 million. We're buying it for cash, direct to seller. We found it off market. And the goal is to sell it in 5 to 7 years for $3 million. We're looking to make a deal with the dealmakers. We just need $250,000. We already have a loan from the bank. They just need $250,000 down plus $100K in repairs. So we're looking for $350,000. For 45% equity in the deal.

Nathan's deal is for an 8-unit apartment building in Springfield, Utah. His goal is to sell it for $3 million in 5 to 7 years. He's asking for $350,000 for 45% equity in the deal.

Nathan, I appreciate your persistence and drive to get here. Congratulations on making it.

Appreciate it.

I actually didn't have to drive, but it was—

Oh, a comedian.

Oh, here we go. Bus driver, you know, they had it.

Do you have— I mean, tell me about some of the guys on the bus.

Oh, you don't even want to know. Oh man. So we were about 2 years—

we're talking about real estate here. Let's, let's bring it back.

I can only imagine what you experienced.

Okay, so tell us about this 8-plex.

Recently, like about 2 years ago, I started putting on my social media that I'm buying, I'm fixing, flipping. And this actually came from networking and, you know, me being loud, right? So it was actually one of my family members owned an 8-plex. And, you know, since I've been more louder, they're like, hey, you, you buy. And I was like, yeah, I'd love, I'd love to buy that 8-plex. So that's how it kind of came across. I was just letting people know I did.

And so you got the family discount.

Yeah, I mean, $399.

Yeah.

So generally you're a single-family investor though and found—

Exactly, exactly. I'm hoping with your guys's help I can have the funding so I can, when I find these deals, I know how to take them down.

Have you had rentals before?

I have a single-family rentals, but I have not gone into the multifamily.

How many of you, how many do you have?

So I have 2.

Do you manage them yourself or do you have somebody else?

Self-managed, yeah.

You think the rehab is $100K?

Yeah, yeah. So we walked the property, we have videos, and it's, uh, it's really interesting because the— you can almost rent them out in that area without rehabbing them, but in order to get the top, top value on the rent— you know, so I have a partner that has done more multi-units, so I brought him with me and he said $100K, so I just kind of left it at what he said.

No diligence, just You just trust the guy. Well, okay, it is—

you mean due diligence?

Let's go.

Well, I mean, he, he came and he had the experience, so I mean, I didn't really call him out on it.

So here's a couple questions you could ask your partner. How do you break it down per square foot? And can you take that $100K and spread that out if you're going to hold this property for a while? Maybe you don't need $100K.

Yeah, and I think, I think you're right. I don't think we need— would probably necessarily need $100K up front. I think it would just be to— for the maintenance.

Is it 100% leased currently?

Currently, month to month.

What is the unit mix?

They're all 2/1s, but one of them is a 1/1.

Tell us more about that value add. And, you know, rents are low right now.

You can raise them.

What numbers are we looking at, though?

So currently, I think most of it's like averaging $800 a unit. It's going to be like $1,200, $1,250, and one might be like $1,000 because it's the 1/1.

MEPs are good.

MEPs.

There you go.

You're getting me.

Mechanics, electrical, plumbing.

Yes.

Mechanics, electrical, plumbing. Are really nice.

Are they really not— they're really nice? Are they up to code? Do they function? They're really nice guys. Here's 100K right now.

They weren't rusty.

Yeah, so we, we went and looked at the, uh, the utilities and everything separately metered, and yeah, I would, I would say from what I saw, it looked good.

Is it, is it fair to assume that you— your experience on this is just minimal compared to your partner?

Minimal.

Because we're getting no answers out of you.

Yeah, but it's okay, it's okay. You can come here as new. We just want to know where, where we're starting.

No, that's, that's totally fine. I mean, that's— I know in order to get into this space, I'm going to have to pretty much just go for it, right? I mean, I'm not going to know the answer.

You mentioned a partner a couple of times, right?

Yeah.

Okay. Tell us about the partnership and do you have the authority to negotiate a deal with us?

I do. I do. So fully transparent. We have funding at 50% equity for the $350,000. So I reached out and the reason why I have the partners, because I've never done this before and I wanted to work with someone that had and The guy I'm working with, he's done multiple, many of these. So I'm not exactly sure what you would, uh, what role you would take. I was kind of thinking of this as like a silent partner where you just give us the money and say, hey, don't, I don't want to talk to you. Just when you sell, give me my money. And that's what I thought.

I don't think that's going to work that way, but here's what I want.

I want you to just give me the money.

Just give me the money.

So to recap. If you don't take his money, you don't have a partner.

I would like to work with someone that's hands-on, just like we would develop a relationship or a working relationship. I wouldn't want to, you know, cut them out.

From our standpoint, it's not so much about cutting your other partner out, like, why, why are you dating that girl? I'm a little more serious than she is, or whatever. It's more of, it's more of, we want to make sure you have enough skin in the game because you've got our bait and we want to get our bait back at some point.

Yeah, that's, that's a good point. Uh, I, I want more than anything to grow in this industry, so I would— if you gave me your money, I wouldn't.

And it's smart too that you look for somebody that had experience. I mean, that is something to be said, that you look for that, because a lot of people don't do that. They just try to do it on the, on their own, and they end up making massive, massive mistakes.

So Nathan, I want to thank you for your time today, and we'll see you at the Mentor Moment.

I wonder what the deal presenters thought about Nathan's drive to get here.

Is there enough meat in there to share for his other partner, us, and him to keep him interested in it?

Well, he came in willing to give up at first negotiation with almost half of the deal, which is not common for us. So we like that.

Yeah, for sure.

All right, so I'm out here right now with Nathan Payne, who just got wrapped up with his first pitch for Funding Face-Off. Nathan, how do you think it went?

I feel pretty good about it. Yeah, I gave them all the juice. I gave them everything they needed to know, and it's up— it's in their court. The ball's in their court.

All right, so information aside, how do you feel about your presentation, the delivery?

I feel like I delivered pretty good. I was open, honest, and I told them everything they needed to know. I didn't hold anything back. So, you know, I think they have all the information they need to make a good decision.

All right, well, best of luck to you, man. Hope it works out.

Appreciate it.

When we return, Ray will pitch his deal to our dealmakers.

Whatever you resent, you resist, and whatever you have guilt towards, you'll give away.

Because we think wealth is just about growth, health is just about growth. That's not true.

Join us as our mentors give invaluable feedback to each of our presenters. Each presenter presented an opportunity that our dealmakers might find worth our capital. Nathan is offering a 45% equity on his 8-unit apartment complex in return for $350,000, but he carries the risk of not having enough equity in the deal himself to keep interest. Or Mario and Todd giving our dealmakers 2 different options on their 80-townhome project, but it carries the risk of having a lot of moving parts. Ray is asking for $300,000 $1,000 in return. He is offering 40% of the returns, but the litigious renter might be extremely difficult to evict.

Well, welcome, fantastic, Nathan.

I want to share with you, we appreciate your hustle. We appreciate the fact that you ate gas station food to get to us, right? So, um, and, uh, it's just, just a little bit of advice is obviously when you're transitioning from single family to multifamily, I've done that. I primarily focus on much larger properties than yours. But it's really important that when you're talking to investors, you want to understand your numbers. I know you're working with another partner. And sometimes when we hear somebody that's like, well, I just have $100,000 estimate, I'm not really sure how they got to it. Obviously, you know that, right? Is we like, we don't need to see all your itemization here, but just understanding what those numbers are, because you're asking for us to give you that amount of money. And so for us to understand that you understand where that came from would be helpful.

Totally get it.

Yep.

I'm going to go with the tenant. Okay, good.

So now we come to the hard part. This is where we need to eliminate a deal. And so Roddy the dog is going to come at it.

Mario boys. First and foremost, everybody in this entire studio loves the mission. We know that hands down. Great ideas.

They didn't—

Well, you made it. Take a big deep breath. Now comes the time where you need to fight for your funding, basically.

Not physically.

I do jiu-jitsu.

You do?

Yeah, I'm old-fashioned.

So Nathan, you're going to tell us what you're looking for and what you're willing to offer. Ray will come to you. And then Nathan, back to you one more time, right to you. And then, you know, depending on what you offer, we may even come back and counter. As soon as one of you accept an offer, the deal is done and we're moving forward. Okay. So Nathan.

Yeah. So we're looking for a 45% equity for someone to bring $350,000 for us to buy the deal. It's just $350,000 down, $250,000 for the down payment, $100,000 for the repairs. And that's, that's what we're looking for, 45% equity.

I'm willing to give you guys 60/40 split, 40 on my end, 60 on your end.

Awesome. For how much money?

On the profit.

For how much?

For $300,000.

For $300,000. Now it's tough.

Oh, well, shoot. That's a bigger split than I can give you guys.

Nathan, can you, can you confirm the bank financing part again?

Yeah.

So it's 6.5%. It's already locked up with a credit union. And we're ready to go. We just need the down, and, uh, we're looking for a partner to fund it. So 45% is what makes sense for me at this moment. I told you guys, full transparency, I have 50% already, but I'd love to work with you, uh, all. So, so you're gonna stay?

You're gonna stay, um, right there?

Well, I meant, does even 46% even make sense? Like, you, you know, that— was that sway any of you? Is that going to make a difference?

And the exit strategy, I think You said 5 to 7 years?

Yeah, yeah, 5 to 7 years.

What's the real hurdle? Like, what's gonna drive a sale?

To sell it? Yeah, to sell it. Well, I mean, the value going up. I mean, there's not, cash flow is not the play here. It would be to sell it and increase, you know, make money on the sale of the property. So if, I mean, if we could sell it, if it appreciates that well enough, like when 2, 3 years, I mean, we're ready to exit if it makes sense.

Okay, and Ray, are you changing your offer?

No, I think I'm providing a pretty good offer.

Yeah.

I think I'm looking for $300,000. I'm giving you 60% of the return. And I'm just keeping the 40% for my legwork.

Okay.

You have something I can say though. So you did not grill me, but you said, hey, what about the $100K? What is that for? Right. Well, you know, that's— I guess we could say that's negotiable, as you know, we could really dive in and say, hey, what really needs to go into this deal? And, you know, we could talk about that. I feel like that'd be fair instead of just saying, hey, I believe it's $100K, right?

Well, we did this on one of our prior offers. Would you have interest in maybe letting us get first right of refusal participating in another deal in addition to this one?

You can have all the rights of refusal. I think the value that you provide, I would love for you guys. I don't know if I need to be like, there's a time limit of a year where, you know, then I'm a baller and I don't, I want to look at them myself without that. But yeah, I would love for you guys, despite you accepting this deal or not, for you to look at the deals I have. I mean, the value that you provide is immense.

So, I have a question for Ray. If you'll help me remember, you had a certain amount budgeted for resolving the tenant issue.

Correct.

What is that amount?

Right now, I set it at $100K.

That's pretty substantial. I mean, I don't know California well, but—

Will the dealmakers choose Nathan Payne, who chose to keep the same interest and ask as when he pitched, offering 45% equity on $1.9 million return for the potential of $855,000, or Ray asking for $300,000 at 60% equity of an $850,000 return for the potential of $510,000? Which would you choose?

I love Cupertino. I love the interest rate. But that tenant is just— I've had some gnarly ones over the years. They destroyed the place when they left and things like that. I'm willing to knock on their door.

Yeah. So I think I'm leaning towards Nathan Payne.

I'm a young gunner. This is not going to be the first one I bring.

This is the kid that rode the bus to get here.

I like both of them.

I know. I know.

It's just the term that gets me with Nathan Payne.

Nathan? Done deal.

So you're saying the butter chicken was worth it? Mario, Todd, and Ray, those were the guys. And these guys, you know, stiff competition that, you know, they've been in the game for a while. So when I looked over at my competition, I was like, whoo, I stand no chance. But, you know, luckily they saw something inside. Inside me and inside the deal that, you know, made them want to choose the deal. So that's exciting. If you're thinking about being on the show, apply, guys. When I applied for the show, I had no idea that they'd get back to me, no idea at all. But I got a call and I moved quick because that's, you know, if you want opportunity, you got to go and take it. You just can't sit on your butt and think someone's going to call you to be on a TV show and fund a deal of yours. So if you're thinking about it, do it. That's what it's all about. That's kind of my motto, is just go out, take massive and perfect action. And if you do that, you're going to succeed in life.

If you want to present a deal, find out how you can help fund a deal, or find out more about our dealmakers, go to fundingfaceoff.com or find us on social media. Thank you for joining our impact investing movement.