Creative Finance Live - Q&A

I think with that we are live. Happy Wednesday. Today we're going to be going over your questions, and by we I mean you and me because Christian is not here today. We've got a bunch of questions, we're going to jump straight in, around the resort specifically. Uh, the first one is, can you tell us how you bought the resort and why you bought it? Well, the, the actual why was it was an extension of an adventure Christian and I had set out on to go buy apartments. We wanted to buy 100 apartments in 2 years and we ended up buying it in 11 months. And so that was really a celebration piece for us and it was an extension of the adventure. We never thought we were going to do anything like that. But that leads into your question of how did we buy the resort? We bought it exactly the same way as we've bought every single apartment deal we've ever purchased. We got our deal lined up. We found it. Dion McNeely sent us a lead. He said, hey, you should buy this. It's off market. It's going to be low money down. By low, he meant zero money down, and it's going to be seller finance. And so we reached out, called them up, found that, hey, this deal is actually pretty cool, lined up the seller finance debt, and that was for $3.5 million. And then the problem was we're buying it for $4.5 million. We were a whopping $1 million shy on that deal. Whenever you want to buy any piece of real estate or any business, you have to line up the deal first, find the opportunity. From there, you need to find the debt. And the debt you want to structure as cheap as possible because that's going to determine really if you're going to cash flow or not. Debt, whether it's good or bad, can make or break your business model. So what we ended up negotiating was $3.5 million 4.25% interest. We got an 8-year term, and that gives us enough time for our business with the 100 apartments to pay it off. Now, it still leads into that second question of, uh, how did you structure it? Well, the million dollars down, that was from an investor, and that was just over coffee meeting. That's from a relationship that we've built in the past. And this is why we always say relationships have to come first when you're getting into the game. You can't just focus on buying every deal. You got to focus on building those relationships. Because a real estate owner that I've never bought from— Christian actually bought his first duplex from him, but it was a total fluke, didn't know that until years later— it was someone I never ever bought from. They ended up funding the whole million dollars, and that just was one cup of coffee, that was one phone call. We weren't even looking to get the whole million from them. We made the pitch, they said, what would it look like if we funded the whole thing? And with that, we got the deal closed. Now, someone else asked, what's the actual cost of that million dollars? Because you bought the real estate zero money down, but there's a price to get into the deal, and then there's a cost of the money. When we cash out that money, it's going to be about $1.2 million to $1.3 million. We got $300,000 of it at 0%, and then we got our $700,000 at a much higher than 0% rate. The 0% money, they wanted more so tax benefits than everything. The $700,000 for the, for the difference, they wanted a return on that. And so the way that it was structured is part of it was for a return and part of it for was just for the tax benefits. Looks like we've got a couple people jumping in, so if you have questions, feel free to put them in the comments below. I'm going to keep going through these until we have some pop up. Someone asked, hey guys, would you be able to talk about how you structure your equity when bringing in an equity partner and raising money? Absolutely. So it depends on every single deal, but the overarching thing, the, the message that we like to share is you buy based on cash flow for equity growth. So if you're bringing in partners, if you're raising money, you have to have enough cash flow to float those partners to where they're happy. And you have to have enough upside to cash them out. This is the, uh, two-edged sword. It's a little bit difficult in the beginning. You got to do really good math. But when you're looking at the deal, if someone gives you $100,000, it's not for free. They're typically going to want to make some type of monthly return, and they're typically going to want to multiply their money. They come in, they buy based on the cash flow, or they're investing with you based on the cash flow with an expectation that you're going to be able to multiply their money. And typically the way that we do it is we let someone put money into our deal, someone that we've built a relationship with. We understand their goals, they understand our goals and our method of getting there. They know the type of real estate we're buying, like they've looked at what we've done. If they put in money into a deal as a joint venture with us because we built out that relationship, the expectation is, hey, we will buy you out at some point in the future. We're not going to ride this with you forever. So the way we structure it is they're a partner. They have a percentage of equity to protect their money so that they feel good and comfortable at night. They're going to get whatever percentage they own of that deal's cash flow, that percentage of the tax write-offs, because there are some pretty cool benefits when you buy real estate. And they're going to be entitled to any gain if we were to sell the asset before we cash them out. However, on every deal except for a select few when we have some really close partners We have a buyout agreement. There's something that is signed, it's within the operating agreement. For short, that's an OA, but that spells out how the LLC is going to be run. For almost every single investor in the portfolio, if they are a partner, we have a buyout agreement that says we can buy them out in the future. And the goal for us is to own everything but make people money along the way that believed in us in the beginning. That way we can eliminate variables down the road. In the beginning, you're gonna have the most amount of variables, the least amount of money, and the least amount of knowledge. So that is the— that's the difficult hurdle that most people get stuck on. What we want to push for is less variables. And so what we do to do that is have buyout agreements. So as we get more money, as we get more knowledge, and our ability to raise new money and get new debt goes up, we can also eliminate variables by cashing people out, getting them a great return, and allowing us to own the real estate with no contingencies. Someone in the chat— see, Caleb, what's your biggest fear and concerns with your portfolio? That's a good question. As we scale, you have to build systems, and we bought a lot of real estate, like a lot, lot of real estate relative to the amount of income that we make, because we don't make enough. And Christian, I always joke about this, but we make a bunch of money, but we don't make enough money to have bought all the real estate we bought conventionally, which is why we had to buy creatively. So we're playing a little bit of catch-up right now on building reserves. I truly believe you don't need reserves if you have enough cash flow coming in every single month. We are getting more cash flow as we pay down our debts. If you owe less money, you have less payments, you just have more money coming in. But the way that we built the portfolio, we expanded rather quickly relative to how most people do it. And so really, the, the biggest concern with the way we built it the way we did is just the liquidity position. We can come up with liquidity if we need it, but that's through borrowed money. We do earn money, and we have some businesses that do well, and we've got the real estate that's cash flowing, but we're a little bit behind where we probably should be for liquidity. And so that is the big push of the next 12 to 18 months Christian Osgood, multiple six figures, if not seven figures liquid, because we focused everything on expansion and spent every dime on renovations, stabilizing the assets. And you get to pick and choose your problems. We could have gone slower and had more money. We opted to have no money and more real estate. So if something were to go wrong and everybody were to stop paying, those are some big ifs, but if every single person stopped paying and there was no relief system through the government, then that's a concern. So that's why we're pushing for liquidity. United Viral: I know every deal is different, but how common is seller financing interest only with a 5-year balloon? That's very common. You don't get what's fair, you get what you negotiate. And this is something that a lot of people miss. It is not how fair the parties are. It doesn't matter what's fair, it matters what can you negotiate. And so you have to ask some people get in their own head and they negotiate against themselves. This is a character flaw that I've faced, but you just have to ask for what you want. We have an interest-only deal, 15 years interest-only fixed rate at 5%. It's phenomenal debt product for the deal that we bought because we're getting a long-term fixed-rate debt, a rather low interest rate, and, um, we love that it's interest-only because that keeps the risk on the lender till the last possible minute. Ryan Mitchell asked if there was a live stream last week. I don't think there was. Christian and I were both buying deals out and about, and we butchered it and soiled it, so that is on us. But we are here this week. Jonathan, should you get an LLC before starting your first deal? No, it's really important. There's this logic test that my first mentor gave me. You have to just think through the question. The reason you have an LLC could be a couple of reasons. It could be anonymity. It could be because you're taking on partners. It could be just because you want to have a business to start building business credit. But if you don't have a business, if you don't have income because you don't have the real estate, why would you need an LLC? So the way that we do it, and right or wrong, this is how we've done it, is we find a specific deal. Once we're under contract, once we're pushing to close, after we waive feasibility, meaning we're done with our inspection and our financial due diligence, at that point then we start forming the LLC. If we have partners, we get everybody to sign off, we do the legal review, our attorney is going to draft up the documents, and that's when we make the push to close with the LLC. But we're not going to start a bunch of LLCs before we buy deals because now you just have these empty shell businesses that aren't doing anything. We don't want to do that. Caleb said, I'm, I'm in a very similar position as you guys, so you're very relatable. Well, I appreciate that. You're probably going through a lot of the same challenges we are, but money is only an issue in the absence of value. And so as you increase the value of your portfolio, liquidity will follow. How much time do you allocate a week towards all of your real estate ventures? Well, Christian and I are working all the time, and if we ever get free time, we start a new venture. So we are— it's like a full-time job plus some. But on the actual real estate itself, I spend a lot less time than Christian does. He bought me out of property management. We talked about that a little bit in the past video. We split ways on one of the many companies, but, um, that is the reason he spends more time in it. Eventually he won't have more time in it But myself, for the current real estate, it's probably 5 to 10 hours a week. And that's just coordinating contractors, projects, going to tour the deals. Next week I'm going to go tour the deals. But as far as the expansion piece, that's where most of my attention goes. That is my full-time job. I'm out building relationships. We're doing our speaking stuff so that we can reach out to new people, meet new owners. And keep expanding that network. And that is all the time, 24/7. I'm listening. Like has been hit, let's go! All Nighter Hider, you're the best. If you haven't hit the like button, we appreciate it, helps out. Ryan Mitchell, all good. I'm not sure if it's on the agenda, but I emailed in a deal I've been looking at here in Oregon. Any chance on running through that? Absolutely, Ryan, we can take a look. If you can send that to my email, uh, right now, then I can pull it up and go through it in real time. From Mac, I was wondering, does a property have to be debt-free to qualify to do seller finance? No. However, the best practice, which is what we talk about, is free and clear title when you buy real estate. So what that means is that there is no debt at time of closing except for the debt that you take on. So that could mean you could assume the loan, or you could pay off their old loan with a new loan. But if you're seller financing, best practices, you pay off any loans that they have against title. So if they owe $50,000 on a million-dollar property, you got to put maybe $50,000 down plus their closing costs. And you could borrow that money, but it is best practice, no matter how much debt they have on it, to make sure that that is all paid off 100%. Prior to you taking ownership, and that happens during the escrow process through your attorney or your escrow closer. There's other complicated ways you can get around that, but we say don't add steps because complications can tank your deals. It's one thing to buy it, another thing to never lose it, and if you had complications, you can't guarantee you're never going to lose it. From Austin, what is your debt service coverage ratio goal to close a deal. My goal for the portfolio collectively is 1.5x. So for every $100,000 a year in debt, I want $150,000 of net operating income. So that would mean I have 50% cash flow above and beyond my debt service so that I can fluctuate my rents. My expenses go up, I'm still covered. You don't want to be pinched on that. A lot of people say, well, if you can get in at 1.2, meaning your debt costs $100 grand a year, NOI $120,000, cash flow $20,000. That's great. Well, not really, because if your rents go down at all, then you're negative. So, uh, try and get that as high as possible. I like to be 1.5. Doesn't have to be that day one. United Viral: If a realtor finds me a seller finance deal, when does realtor get paid out? At the time of the balloon payment? No, they get paid at closing. Sellers, as a standard, pay the real estate agent So that you're going to make your down payment. And I know this sounds ridiculous, but this is how it's done. You make your down payment, and that down payment is going to go to pay off any of their debts, they're being the seller. If there's no debts, then it just goes towards the closing costs. And the closing costs have the real estate agent fee. So I bought a deal, my first deal, it was a 12-plex in Quincy, 10% down. Well, 2% and change went to excise tax, 4% went to the agents, and then they had more closing costs. They had like an 8% cost to close, so they only netted 2% down. That sounds ridiculous, but that happens more often than not. The agent is paid at closing out of the funds that come as a down payment. What's your email, if you don't mind posting that publicly? Well, our email is tied to our consulting company. That's multifamilystrategy@outlook.com. Feel free to send that over. Over and, uh, I'll take a look. Max said thank you. All right, and that is it for questions in here. Oh no, we're still going. Have you ever used a debt service coverage ratio, a DSCR, as your down payment for seller finance deal and just have the seller carry back in second position? If so, what lender would allow that? I haven't. So what you're talking about is 100% financing where you get a a DSCR loan for a big portion, and then you have the seller finance that down payment. There are lenders that will do that. That is fine. That's where you basically do 100% loan to value. I've seen people go above 100% if they want to get really creative, but you're going to see that more often with private money where you're working with individuals or hard money lenders that work directly with individuals rather than big institutions. The smaller the investor, the more likely you are to get really creative with that stuff. But, um, just because you can doesn't mean you should. Typically, if you're doing a standard debt service coverage ratio loan and then you're doing seller finance, the down payment, more often than not it's not going to cash flow. That's too much debt, and the DSCR loan rates are typically higher, so it's difficult to make cash flow unless you are in a high cash flow market. But our whole thing is buy based on cash flow for equity growth. So the markets that we could buy in typically that's not going to work. You could probably do that more often than not in the Midwest, but outside of that, uh, there's not a ton of markets where 100% financing with that type of debt product is going to flow. All right, let's see if we have more questions. I see you just sent that email. Oh, I got it. Thank you, Ryan. So let's see here, I'm just pulling this up and then we will go through more of the comments. So we are looking at— you sent me an OM, so it's— we're purchasing it for $1.2 million. It is a 5.5% cap rate deal, meaning that we've got $66,000 in net operating income Day 1, you're buying these for $70,000 a door. So if I do the math on this, $1.2 million divided by $70,000, so we're at— we're buying a 17-plex here, and this is in Oregon. So 17 units in Oregon for $1.2 million. So my thoughts on that deal, they're saying there's a ton of upside, saying it can go way above a 9% cap rate. Which on $1.2 million, we just multiply that out. They're saying they can get the net operating income from $66,000 a year to $108,000 a year. So if we just subtract that out, that's an additional $3,500 a month in net income across 17 units. So realistically, we're looking at like a $200 to $250 rent bump on those units. What I would do in that deal is make sure that that's feasible. I'd look at the rent and say, Can I feasibly raise my rent $250? If not, they're probably lying. And, uh, my other question would be, if it could really go up that much, why haven't they done it? But as far as that deal goes, your cost of capital, your total cost of capital, your loan factor rate, has to be less than the cap rate. Otherwise, you will not make money on the borrowed money. So when you're buying that, it's great that it's a 5.5 cap day one and they can get it above 9. But how long is it going to take you to get there? And can you borrow cheap enough to make it flow? Because if not, then it's not a deal. If they're willing to seller finance that opportunity, Ryan, what I would do is say, hey, look, we have to be, you know, if you're at a 5.5 cap day one, we need to be at 5% interest only for 5 years. It's going to give me time to get this up. We can raise the rate every couple years and we can go from 5 to 6 or 5 to 5.5, but give me time to, to get the income up so that I can get this to cash flow, get this to work. That is, uh, the way to make that deal work. And that's just quick numbers, but keep it simple. Net income $66,000— that is the total amount of money you have to service your investors, service your debt, service yourself in cash flow. So you just have to underwrite where your interest rate has your mortgage that is less than $66,000, and then anything you can get close to their pro forma, their fake numbers, that is all profit at that point. What are some tax benefits to the seller if they do seller financing? Well, number one, they, they're not realizing all their gains. If they bought— like, I'm buying a 15-unit right now for $1.4 million. They bought it for $140,000. They bought it seller financed. You're zero money down. They bought it 100% leveraged seller finance, where they did 80% seller financed on this 15-unit way back when, and then 20% against the house, the rental house that they owned. So it was 100% seller financing, and, um, they bought it for $140,000. Well, if they paid $140,000, they're selling it for $1.4 million. Their basis is going to be pretty ridiculous because they've already depreciated it. They bought it 40 years ago. So they have no more depreciation on it. Their cost basis is really low, but they're selling it really high. So they're going to pay taxes on all that. Well, I'm giving them like $100,000 down and I'm going to borrow that because the deal will cash flow and the deal will pay off the $100,000 before it is due because it's a long-term $100,000 note. So the nice thing on that is they're not getting a huge gain. Because they're not realizing the money. It would be flawed if the IRS said, well, you're selling it for $1.4 million, you got to be taxed on that. If they never realized any of the money foreclosed, then how would the basis be adjusted? So they're not getting all their money and they're not paying taxes on all the money because they didn't get it. You get paid and you pay taxes on the money that you receive. So you get to defer that over time. And that is why some people like to do seller financing, because it is a way to mitigate the amount of taxes they're going to pay. You can have a bunch of money come in the first year, you can have more money come in the second year. And the way we're getting that deal so low down is we're gonna have $100,000 due in, in the closing, $50,000 due in 12 months, $50,000 due in the next 12 months after that. That way we can start chunking down their principal and they'll pay taxes little by little instead of all at once. Puts them in a lower tax bracket overall. One note, there's no seller financing available on that deal. Well, Ryan, you got to make sure that you can get that net income up because on that 17-unit, if you could raise around $250,000, I think it's feasible just based on what they presented. And you got to remember, buyers are liars, sellers are worse, and brokers suck. So I wouldn't trust them as far as I could throw them. However, that you just got to make sure you can get the debt. If found the deal, you have a general understanding of the opportunity. I would make sure you can get those rents up $250 or get the net income up $200. And if you could do that, now you need to locate your debt. And as soon as you get your debt, maybe you get 65% from a bank, you're gonna have to figure out that other $400 grand down. And that could be from investors, that could be a loan. But those are your next steps. Once you solidify the deal, go get your debt, go find your equity down. Could be through partnership, could be through, um, just local relationships, people that are willing to lend you money. But until you have your debt, you don't need to worry about the down payment. And I don't believe you're going to find a bank product that is going to work with that low of cap rate, so you're probably going to have to do some type of bridge financing. So I'd really solidify your terms to make sure that you can get that income up. Otherwise you're going to get stuck, get pinched, and end up like some of these big players that are losing all the real estate right now. Deal reviews live are pretty cool. Yeah, if you have deals, if anybody has deals they want to send in, I'll just go through it. We don't even have to do a spreadsheet. Everything is super simple. Income less expenses equals cash flow. We can go through it live anytime you want. Patel, I've seen a quadplex. They're asking $199,000. The gross rents are $2,400 a month. It's cash flowing $1,900 a month after expenses. So your expense is going to be $500 per month. You're gonna have $1,900 in net operating income. You said you got 2 Section 8 tenants, so I would actually add a little bit to those expenses. It sounds light. I would maybe budget even if their expenses are actually $500 a month. Your taxes are going to go up, your insurance is going to go up. People, when you're buying real estate, you got to remember that people typically underinsure their properties because they're insuring it based off of the cost that they bought it for. They might have increased a little bit, but they probably bought that place for $40,000, $50,000, $60,000 way back when. And so maybe they're insuring it at $100,000. When you go to insure it at your rebuild cost, which is probably $200,000 or more, your insurance is going to go up. So what I would do in that deal, I'd say, okay, we got $2,400 a month in gross income. Let's just say we've got $850 in actual expenses. Let's say it actually goes up. You've got $1,550 a month in NOI on an annual basis. That's $18,600. All I did was multiply that by 12. We're going to divide that by your purchase price, $199,000, and you've got a 9.3% cap rate, which works. That pencils. 9.3% cap rate is really good depending on where you're buying. If you're buying in Seattle, you'd have the steal of the century. If you're buying in the Midwest, you may be overpaying for the asset. But price is only an issue in the absence of value, and this is something that a lot of people people forget. They keep that in mind, and that stops them from buying deals. If they're willing to seller finance that, where the cost of capital is anything less of that 9.3%, you will make money on the money they're lending you. So if you could get a 20-year seller finance note or a 10-year seller finance note at 6% interest or 5% interest or 7%, you could actually make money on the borrowed money. And that is where that deal could really start to make sense for you. If you just remember, your total cost of capital expressed as a percentage is called a loan factor rate. That just has to be less than your true cap rate, the dividends the deal produces. Then you make money on every dollar you borrow, and that's when you want to have positive leverage. That's what it's called, because you're making money on those borrowed dollars, and then you can borrow as much money as you want as long as it's long-term fixed-rate debt. But that sounds like a good deal. I just, I don't know about the location, but if you can get cheaper debt, true cost of capital is less than that 9.3%, I think it's a go. Daylon. Hey Cody, I have a 7-unit deal in KC. I'd love to digest the numbers and chat real quick. Gross potential rent is $36,000 a year, so about $3,000 a month. Total expenses is $1,500 a month. So we have an NOI. Okay, so your NOI here is— you said about 8% cap rate. Yeah. Okay, so you have $19,000, just shy of $20,000 NOI. That sounds like a deal to me. You're doing 20% down, 8-year balloon. So tell me about your rate. What's your interest rate? What's your amortization? 5% interest. Okay, so if we're at 5% interest, the beauty of this is we can just go to Google. For those who don't like to do math in their head, we just go to Google, we'll go to a mortgage calculator, 30-year AMM. So that's perfect. So you're doing— now, what was your purchase price on this? You said 20% down. Oh, 8% cap rate. You gave me the numbers. Okay, so we're gonna do $20,000. $20,000 divided by 0.08. So you're buying it for $250,000. You're going to put 20% down, $50,000. You're going to have a $200,000 loan. So if we put in $200,000, you're going to be at 5%. Then your payment is going to be $1,074 a month. Oh, that's sweet. So you got it seller financed. So $1,074 a month times 12, your cost of capital is going to be about $13,000. Your cash flowing, your NOI, is about $20,000. So if we subtract this out, then you've got about 7 grand a year in cash flow. On $50,000 plus your closing costs, so maybe $55,000. We take the $7,000 divided by the $55,000, you have a 12.5% cash-on-cash return. That works. That's like hard money lending rates, so that's phenomenal. So you get an asset, you have a long-term balloon— relatively long-term, midterm, 8 years seller finance. If that market is an 8% cap rate market, all day long, get it closed, buy it, you You don't have the equity piece connected yet for the 20%. So you gotta figure out $50,000. So based on what you shared, you've got $200,000 lined up. You've already got a commitment for $200,000. This is the piece that people don't conceptualize. You've got the big part done. If they've committed, you've got $200,000. You need to find the small piece. And the nice thing is you've got 12.5% cash on cash on that down payment. To serve as a small piece. So your goal, if you're borrowing the down or you're bringing in a partner, find someone who's willing to accept less than 12.5%. If they're willing to accept 7%, 8%, 10%, you will make a spread on that money. And now you get paid to buy real estate. That is what we do. We just do math and we say, okay, if the deal is yielding 12% or 20% or 10%, Whoever I bring into this deal through the investor network that you build just has to accept less than that, and then you get to make the difference. And then you structure their equity where they get paid enough cash flow to be happy with their return. Dividend Dave, hello! Looking forward to seeing you this weekend. Absolutely excited to see you, Dave. Daylon, does that answer your question? For the 20% down, you're just going to have to find someone who's willing to accept less than 12.5% cash on cash. You could probably get a line of credit from a bank for that, but, uh, if someone's willing to give you 25, maybe you get a line of credit for the other 25, and then you can buy it borrowing the down payment because your line of credit is probably going to be less than 12.5%. Patel, how would $150,000 at 5% for 10-year note work out on that deal? Okay, uh, if it is— it will depend. If it's amortized over 10 years, then it probably won't cash flow a ton. If you did interest only on that original deal, the— I believe that was your deal, the 9.3— yep, 9.3% cap rate deal. If you did 5% interest only, the beauty is you'd make 4.3% cash on cash on every dollar you borrow. So if you put, let's just say, $50,000 down, which is what you're talking about there, you're gonna have $150,000, $150,000 note, at 5% interest, your payment's going to be $7,500 a year. Your net operating income on the deal is $18,600. So if we subtract that out— I believe that I said $7,500— you're gonna have $11,000 a year in cash flow on, um, your $50,000 down. So you're looking at 22.2% cash on cash. If it's amortized, your cash-on-cash return is going to be a little lower. But if you can get $150,000 seller-financed, 10-year balloon, whether it's interest only, whether it is amortized on a 30-year, 10-year balloon, that deal is going to cash flow well. That's a high enough cap rate where that makes sense. Daylon, yes it does. Thanks, Cody. The owner also stated that I could individually meter each of the units to minimize my expenses. Love that. That's going to cost you money though, so you need to budget for that and get a bid out to see what that's going to cost. There's a lot of projects that we could do that would save us money, but they would also cost us money up front. And everything you do in this space, you're investing to make more in the future, but you got to have that money to invest, whether it's borrowed, whether it's equity that you bring, whether it's equity that someone else brings. The money does have to come from somewhere. The way you pay your debts, the way you pay your bills. Is with cash. And where does it come from? Either yourself or the people around you. So make sure you get that bid out and then get a cost so you can account for that properly. Kevin, I live in San Diego. Do you have any tips for finding seller finance deals out of state? You're trying to do exactly what Caleb did. Caleb is one of the OG mentees, and, uh, he bought in Texas. You need to pick your market The easiest way to get out-of-state deals is through brokers. The easiest way to get deals in a local setting is through owners. I 100% believe that. If you want to meet with the people around you, you can buy in San Diego and you can do seller finance. You got to call up the owners, or yeah, call up the owners and meet with them for coffee. If you want to do the out-of-state game, you're most likely going to be able to swing that through real estate agents who already built those owner relationships. They've met with the owners, they've grabbed the coffee. That's skipping steps for you. Don't add steps, don't skip unnecessary steps or necessary steps, but call the brokers. That's what Caleb did. He lives in San Diego. You should chat with him. But he bought 28 units, zero down, seller financed over in Texas. Originally wanted to do Nevada, found out there was nothing that was trading there, so he picked a different market. But pick your market, stick to the market until you make it work. What's the best way to get others interested in a bigger deal? Ken McElroy stated that if you find an awesome deal, you can find others to, uh, to get the money, no problem. Well, it's absolutely no problem. There is no absence or lack thereof of money. There is a lack of great opportunities. That is it. If you can line up an opportunity, your next thing is to share it with people. Some people will burn you and try and snipe the opportunity, but if people burn you over an opportunity, the ones that you're looking at in the beginning, they're probably not super big opportunities. They're not going to be big investors. It's just a good red flag for them, and then you can move on. But, um, when you're getting started, you position the opportunity as, uh, if you're looking for money, as a few things. How are you protecting the money? Like, people don't want to lose money, they want to make money, but really they don't want to lose their capital. So how are they protected is number one. How stable is it? Is it going to fluctuate? Do you do a good job of controlling the variables is number two. And number three, how are they getting paid? If you can map out those three things, people will put money into your opportunity. Now you just need to make sure you market it correctly. That's why we always do the relationship thing first. We don't crowdsource because we don't want to worry about the SEC poking us with a stick. But you build relationships with people, and then you just have to frame out those 3 things. Is their money safe? Is it stable to where it's not going to fluctuate in the future? That just comes down to market conditions and the market that you're putting the money into. And then how are they getting paid? Because if those things are mapped out, they feel secure, they feel that things aren't going to change, and they know how they're getting paid, and it's through the real estate, not through you, It's so easy to get people that you build relationships with to give you money because they just don't want to lose it. And if they know it's secure, it's not going to change, and it's going to pay them every month, and the real estate's going to do it, they don't have to rely on you working some job to make the payments, becomes very, very easy to come up with money for your deals. How do you share it with others? Well, when you go build a relationship, like example, we're building a relationship, we're going to meet up, we have coffee, I don't have any money, but you do what you're doing with me with other people that do have money. And you're not going to know that day one, but you learn that by going through the circle drill. The reason I love coffee is it's just a good conversational piece, 20, 30 minutes with somebody to learn about their goals, where they're coming from, where they're going, and what changes when they get there. It's that exact circle drill. You map that out for people, you learn about their pieces, and the best players in this space, the best buyers of real estate, the best managers of real estate know how to manage their pieces effectively. And so as you start sharing your pieces with other people and you start learning about their pieces, when an opportunity comes up, if you can manage the pieces you've got on your board and manage the pieces other people have on their board effectively, you get to use their pieces to play your game. That's the beauty of this. But if you don't ask, you will not know. And if you don't know, you can't use that to your advantage. So you gotta go meet with the players first. That's like, in the beginning it was very slow for me. I bought one deal, and I bought another deal 9 months later, then about another deal 9 months later, and then started buying a deal every single month. It's not because I knew something special at that point, it's because I had been building relationships for the prior 18 months. That's the important piece. Ryan Mitchell. Put my first call into an owner in my area, spoke with him, he invited me to a local real estate meetup he was speaking at, then invited me to walk around the neighborhood. Luckily, he's super cool because I totally botched it. It's perfect. Don't expect or hope for perfection. We have this rule that done is better than perfect. Because everybody strives for perfection, we strive to get it done. Now perfection is a good thing to shoot for, but I'd rather have it done. I'd rather have done the meeting and gotten my takeaway. You should go into every single meeting you have with an objective, and you should walk away with a takeaway. And if you don't do that, you're not intentional. There's no sugarcoating it. If you don't do that, you're just not intentional. So you need to find a way to get a takeaway from everything you have. You totally botched it, that's great. I did that for all my first investor pitches. It happens. But what you did do is what 99.9% of everybody else won't do and commit to showing up and chatting with someone who's farther ahead than you are. But your takeaway from that could just be how they operate business. It could be when you hit your goals, what are you going to do differently to help the next person feel more comfortable? There's so many different things you can get for takeaways. But you got to keep it simple. And good job reaching out. Use whatever your takeaway was in that meeting to better your next engagement with that person and with the next few people that you call. Jesus, or Jesus, I don't know which one. Aren't you 100% leveraged if you bring a private money lender into the deal with? Thanks for sharing all the amazing knowledge. Well, it depends. Uh, absolutely you could be 100% leveraged in the beginning. That's what I did. My first deal was 100% leveraged. However, my total cost of capital was lower than the cap rate expressed as a percentage, so I made money on all the borrowed money. So I actually cash flowed positive, zero money down, 100% leverage. You get to pick your problems in business. I truly believe that you can be 100% leveraged or you can own nothing. If you have no money, the money does have to in fact come from somewhere, and you can either earn it or you can borrow it. But those are really the, the two options. You've got debt and you've got equity. Those are the two types of money in the business. There's different types of equity, but to keep it really simple today, you've got debt, which you have to make payments on every month, and you've got equity, which costs more to get rid of in the future if you want to buy it back. You get to pick your problems. I picked being highly leveraged, getting passive income to start coming in that I could build off of, build a story, build a reputation, and start chunking down debt over time rather than not owning anything. I'm glad that I made that decision. It could have equally gone wrong. I would have learned from it, and everything can go wrong. I mean, that is just It's part of investing. You can lose all your money. You can also be strategic trying to avoid it, but you can lose all your money in the business. So you have to pick your problems wisely and think about what you can stomach. If I lost my first deal, I would have signed it over to that investor who lent me the money down. They would have been really happy because I structured a 30-year fixed rate mortgage, no balloon, on a 12-plex. Can't get that with a traditional lender. So it was a good opportunity. It cash flowed well. I just had to make sure I kept paying that mortgage payment, and I would sign it over before if I couldn't make it. But, uh, limit your risk the best that you can and make sure that you do everything based off a long-term fixed rate debt if you're borrowing money, and positive cash flow with margin. Because if you have those things, you can build up liquidity, which is the one piece that's missing from that equation— having the liquidity. And that is what's going to help protect you in case of a downturn. How are your mentees doing? Can you talk about your mentorship program? Kevin, sure, we can talk about that briefly here. A lot of the mentees are doing well. The ones that show up, that ask the questions, that have been with it for a couple months, they're buying deals. We've got people that have bought in Ohio, that have bought all the way over near Jersey. We've got people that are working on closing out in Florida. They're There's some people that just did the course that messaged me and said they're on their 8th deal. Um, Caleb, who's wheeling and dealing in Texas— you can do this all over the place. I've got a buddy who bought in Colorado, who bought in Moses Lake, which is where I like to invest. So it, uh, it works. The, the hard part about that is there's information, there's application. We've talked about this on the channel before. There is a vast majority of people as a whole who fall into the category of loving to absorb information, but they, they don't apply it. They just like to get smarter, and that's, that's fine. That's why we have all our rules, super simple. Just, uh, don't add steps, and, uh, application is more important than information. Done is better than perfect. They all work together, but there are some people that get stuck in that trap and they just absorb information, then they move on to the next one, next course, or next mentorship group.. And so we've seen some people go through that, but a lot of people that are showing up that are applying are buying real estate, and it's wonderful to see. Jesus, if you do get a private money lender, will they be fine going in a second lien position? How do you give them reassurance that they're well protected? Well, you don't get what's fair, you get what you negotiate, to the point that I mentioned earlier. They're going to feel comfortable if you're buying a great opportunity, number one, and two, they believe in you, they believe in the deal, they believe in your, um, ethics, they think you're going to do the right thing, and they have a good understanding of how the deal actually works. If you go into a deal and it cash flows really well with 100% leverage, they're probably more likely to do it than if it cash flows negative. If you have a couple deals under your belt, they're probably more likely to give it to you, but that's not necessarily, uh, important to everybody. There are some people that will just lend you the money to help you get that start. That's why the relationships are super important. But, um, the reassurance— if it's a great deal, if the cash flows, if you've controlled the variables, you have an understanding how that deal works, you've done great due diligence— that is going to be a few, just a few of the things that could give them more confidence to give you that second position. And yes, they're typically going to go into second position. Dividend Dave, how do you become a mentee? Multifamilystrategy.com. Javier, wow, same question 3 times. This must be important. Do you have a better chance at seller finance with on-market or off-market deals? Both, about half and half. So I've bought half of my deals on market, about half of my deals off market, and all of which are seller financed except for one which I bought 100% leveraged with hard money. I bought that with a first position hard money loan and a second position hard money loan. That was a negative cash flowing deal. Don't be dumb like me. But that— we're developing on it and it's going to be one of our best deals ever. So, uh, you can do that. To your question, the seller finance piece does not care if it's on market or off market. You're going to get it based on the simplicity that you can bring to the opportunity, the relationship that you can instill, the confidence you can instill. If anybody's in Seattle, you should come to the event tonight. We're speaking at, uh, Laker's building because we're talking about simplicity, but there's this term we're going to chat about tonight. You want to become the most logical buyer. If you can become the most logical buyer for every piece of real estate that you pursue, you will get every piece of real estate that you pursue. That is how I've been able to build the business that I've built with no money. And when I say no money, it's like $10,000 out of my pocket total today for buying the real estate, and that's bought about $25 million of real estate. So it's virtually no money. That's a lot of money when you're getting started, and I understand that. But, um, I've become the most logical buyer for all the deals that I bought. For the Robin Hood, I moved on site because the owner needed to see that, and so I just did it. And it was a terrible decision. I ended up moving back because that messed up Christian and my business quite a lot, but I did it anyway. We became the most logical buyer because we were super comfortable with seller financing. We we had a good base multifamily that helped us survive the winter when the resort wasn't doing as well. When we're buying the apartments, we do these things called land assemblages where we'll buy one property and then we'll just call up all the property neighbors, say, hey, I'm a new property neighbor, just want to call, say hi. And over time they end up selling to us. We're the most logical person because we built the relationship, we own the property next door, and then we expand outwards and we take over a large portion of land. If you can position yourself, regardless of what you do or do not own, as the most logical buyer for every deal you pursue, you will win regardless of if people have more money than you or not. So that is the— to your question, like, if you want to do it on market, off market, doesn't matter. You just have to build your credibility to that. And your ability to simplify your universe and simplify the communications you have with other people determines if you become a logical player or not. Orthodox Pilgrim, he said when he started he found most deals on the MLS. Yeah, my first deal, my first 12-plex was on the MLS. My second 12-plex and my first 6-plex were off market. Then the 38-plex was on the market. That was on the market for 13 years. It got listed for $2 million when I was 8, bought it for $2 million when I was 21. Ryan Mitchell When's the next Robinhood event? July, uh, I think so. I don't know that for a fact, so I have to check. Dividend Dave, sup, Hyder? Were you on my roof last night? No, I sucked it up and kept flying. Oh my, good bird, man. Thinking AI, 13 years, they were in no rush. They weren't in any rush at all. They had a little bit of debt on it. Surprisingly, it was a negative cap rate. Some people say that can't exist. Those people are wrong. They live in pro forma land where everything is sunshine and rainbows and butterflies. But that deal owned outright would lose money every single month, which means it loses money every single year. And, uh, if you want to make money, you need to not live in pro forma land and you need to live in reality. I love when those people hate on our YouTube Shorts, but I'm going to skip past that. That deal was terrible in the beginning. It made negative money if we owned it in cash. So how do you make that work? Well, you get a great deal. Well, the roof was wrong. Like, the roof was bad, the electrical was bad, the plumbing was bad, the windows were broken, the tenants were less than desirable just because of how the previous owner ran it. They went from being phenomenal tenants to just getting used to living in slums, and so they stopped paying. And then things got worse and worse, and basically everything from top to bottom on that deal was bad. So our thought was, well, everything's bad, it loses money if we own it in cash, only way it can go is up. And so we bought it for $2 million, seller financed, We didn't reduce payments in the beginning, and we quadrupled the income. And if you quadruple the income, that helps with cash flow. So we did that by taking care of the tenants. We threw some of our first new appliances that we bought for people that weren't paying. We went in and said, hey, do you need anything? Even if they were paying or not, we threw new appliances on a credit card. They started paying, believe it or not. They're open to a rental increase. And that allowed us to get our income up enough to make it a good deal. But it sat on the market because nobody wanted to fix it. How do you find those properties on the MLS? From Dividend Dave. Well, if you're a real estate agent, you look on the MLS. If you're not a real estate agent, then you find one who can give you portal access to look on the MLS. And with that, we are through our chat. If anybody has any more questions, feel free to drop them down below because I will stay on as long as anybody here wants me to. But we can talk Q&A, we can talk deal structure. If you have a deal you want to underwrite, let's do it live. And if not, we will end the chat for today. Okay, well, with that, I will see everybody next week on Wednesday. Appreciate everybody dropping in. Oh, someone said wait. I will wait. Oh, now they roll in. I'm looking at a deal with an assumable loan. I have to assume the loan. I'm thinking about having seller finance the difference, the equity. Have you done something like this? Absolutely. And you would do— it's a seller financing— you would do a real estate contract, and you would have to talk with your attorney. I don't know what type of state you're in. There's different types of states for how liens are looked at. But, uh, in Washington State, when you do seller financing, you do a promissory note and a deed of trust. And most lenders don't like seconds, meaning they don't want a loan behind their loan. So there are these things called real estate contracts, which don't use promissory notes. It's just a contractual obligation that doesn't create a lien. So the way that that could work, it depends where you're at in the US, and you'll have to run this by your attorney. But there'd be a contract of sale instead of a warranty deed. That's how it works in Washington. And there's no recorded lien, so it would not necessarily invalidate your first loan. This is where something like a subject-to clause could come in if they were keeping the loan in their name, because the seller would have legal title and you'd have equitable title, so it may not invalidate that loan. However, if you're assuming the loan, then, uh, it would be in your name. You wouldn't be doing subject-to, you just have a real estate contract that has a contractual obligation for you to make payments. At which point it could revert back to the seller if you don't pay. Orthodox Pilgrim said, let's check out a deal. Well, let's check out a deal. Send one over and then we'll go through it. How much do you typically put as your earnest money deposit? That depends. If I'm buying a $4.5 million resort, which we did, it was $45,000. There have been deals where my first 12-plex was $10,000. There have been deals where it's like $8,000, $5,000, $3,000. Best practice is to put 1% down. That is what I have done as a standard. Some people say 3%, some people say 5%, I say 1 because I'm willing to lose 1% down on a deal. Ryan Mitchell, thanks homie. Looking forward to seeing you guys in the mentorship fairly soon. We'll see you there. For those who don't know, we do meet 3 times a week, Monday, Tuesday, Thursday. So if you wanna check that out, multifamilystrategy.com. If not, then keep coming to these events. And by events, I mean Whiteboard Wednesday. So many Ryans. I'm a Ryan too. There are a lot of Ryans here. Oh my goodness. Ryan, Ryan, and Ryan. 3 comments in a row. Well, Orthodox Pilgrim, you said let's check out a deal, so put a deal in the chat. If anybody else has a deal they want to look over, put it in the chat. I will underwrite it, rip it apart, or show you how to structure it if it makes sense. Ryan Mitchell, we should meet up. Yep, meet up of the Ryans, the real estate Ryans. We can make that happen, and we could make a Whiteboard Wednesday out of that. Well, I'm not seeing any deals. What are your thoughts on California market? I would not buy there. I did— I got this from Grant Cardone, and he probably got it from someone else, and I don't know who the someone else is. That's like quoting Michael Scott quoting, uh, Wayne Gretzky, but, uh, I believe that's the one. But California is the most beautiful broken place in America. It is very pretty there, a lot of nice people, but, uh, it is rather broken. And so I would not put money into an area that is broken. While I'm saying that Washington's quite broken is how it's run, problem is I already own a bunch here. So if I own a bunch of Cali, I'd probably keep buying in Cali, but I don't see the, the reward being there for the size of player I am and I own nothing there, so there's no reason for me to go into a broken environment. Any tips on building out your sphere of influence? Yeah, put your goals out into the world. Let people know what you're working on. And really, that's it. If you have an objective of getting to 100 units, tell everybody that you know that you're trying to get there. And there's this rule of 6 degrees, and within 6 degrees, you know every single person on the planet. But everybody you know is the first, and everyone they know is the second, and then so on and so forth. And within 6 of those, you know everybody. So if you share everything you're working on, what changes for you when you get there, where you're coming from— again, the circle drill— where you're coming from, where you're going, what, like, what changes when you get there. You share that with people, they will share that with people. I was at the Alderbrook today in Union, and someone saw my YouTube, is connecting me with their son who's done really freaking well, uh, in the music industry and made half a million bucks at 18 years old. Like, just because I share stuff online, that builds out the influence. But if you're not sharing stuff online, you gotta share with the people in your sphere because they will talk, and then people you don't know will know who you are, what you're about, where you're going, what changes when you get there. That's the significance of what you do, and that will open up opportunities for you. That is how you build it out. How often do you fly over and visit your different properties? I drive. I'll be driving over next week. I like to visit. Okay, we're doing a lot of projects. We're doing a lot, lot of right now. Um, I like to drive over once a week just to look on it, but once a month is good for me just to see the properties. If it was out of state, I'd probably fly buy over once a month or once every other month. If you're starting fresh, would you buy any amount of units or would you look for a 12-plex again? Well, I know how to buy bigger, so I would buy bigger. But if I could— this is the main thing: once you set your goal, you just have to buy to get to the goal. You can do it 2 units at a time, you can do it 20, you can do it 200. But if you don't have the systems to do the 200, that would be a bad idea. I have the systems to do the 50 units, to do the 40-unit deals, so I would do that if I had to start fresh. But, uh, if you have a goal to get into 100, you buy everything that increases your positive cash flow on long-term fixed-rate debt. How do you buy it? How do you never lose it? You lock those two things down. You buy everything you can in the area you're trying to buy in that hits your criteria of how you buy, how you never lose it, until you hit your goal. And then you can optimize. There's the build phase, and you stabilize, and you optimize, and you can get rid the duplex, triplex, fourplex, tenplex, whatever, and go to the 40, 50-unit deals, however you want to optimize it. And then you pay it off. But, uh, I would buy everything that I could that increased my net income on a monthly basis, because if you increase your net income above and beyond your expenses every single month, it's hard to go broke. People want to help someone who is ambitious, hence this live right now. Facts. Boom Flicks, I haven't seen you in a little while. Do you use CRM for your relationships? I do not. I have my phone, and that— Christian just texted me, but, uh, that is how I handle— oh, Christian's friend's car broke down. That sucks. But it's just in my phone. When I think about people, I reach out to people. I don't have a CRM, probably could be more organized, but my relationships are my relationships. It's not a business. Business happens with the people that I know, but I don't treat them as a business or a business person. I just treat them as a friend. Do you prefer closing with out an agent for seller finance deals because the commission can get tricky. No, I want to close with an agent because I want them to get paid if they brought me the opportunity. If they didn't do anything, then they don't deserve it. They don't deserve it. Like, it's easy to write up a contract, have your attorney do it, but if they're bringing you opportunities, they deserve to get paid, and you should figure out how to get them paid because that's how you get them incentivized to bring you deals. I have a real estate agent, his name is Eric, and we're working on doing like $10 million of deals right now. More than that, but that's because every deal he brought me, I bought. Brought me a 10-plex, within literally 5 seconds, like, done. We'll close it. Didn't renegotiate, didn't do anything. I just bought it. And it was like a 30-day close. It was supposed to be a 60-day. We just closed it early because we could. Deal with that equity, figure out how to buy it, how to never lose it, you're good. But, um, you get your brokers paid, then they bring you more stuff. Shortly thereafter, he brought me a 12-plex. I bought it zero money down, seller financed, found the deal, which he did, and he got paid for it. And then line up the debt, seller financing, which he did, got paid for it. And the down payment, I lined up, I found it. It was through a relationship that I'd built, and it aligned with the investor's goals. So about the 12-plex, that incentivized him because Eric got paid to go find another deal. So he found a 5-plex seller finance deal and that was lined up. I lined up the equity and bought another deal, zero money down. Well, no, that one we actually bought, we put $32,000 down. That wasn't zero down, but, uh, we had the money so we threw it in the deal. Boomflix haven't appeared in a minute because putting my head down working, took a pivot and wholesaling residential properties and looking into flipping some this summer. Got to make that money. So that's awesome. Congratulations. Made a few offers and they were accepted. Got to get them under contract. Cool. Make it happen. It helps to have more money. You don't have to have money to play this game, but it sure does help. Oh no, we're out of questions. Okay, well, with that, I'm gonna end this live, and I will see everybody next Wednesday. Christian should be on that one. But we'll say there, if anybody here is in Portland, I'm gonna be in Portland Friday, this Friday, Saturday, and Sunday. We're speaking at an event. Feel free to message us or email us multifamilystrategy@outlook.com or send us a message on Instagram. Would love to see you there. We're going to be in Dallas June 1st to the 4th speaking at Deal Maker Live. There's gonna be about 600 people. Talk about building out your sphere of influence If you'd like to go, message me and I can get you a discount, which is more better than not getting a discount. So if you're in Texas, you should go to that. Trying to think of anything else. If you're in the military, in September, September 1st to 3rd, there's going to be a huge real estate event in Vegas. If anybody's near Vegas, just putting this out there since this is live. And, um, Ryan said he's not far from Portland. Yeah, shoot me a message on Instagram or shoot me an email and I'll get you the deets. And with that— oh, we got one more chat. If anybody has more chats, I'll stay here. I got time. I don't think the Seattle event starts until 6. Not 100% sure on that. Yeah, it starts at 6, so that's good. Give us a reflection on who you used to be and who you've grown into. Well, at 16 years old, I was a gymnastics coach with no money. My dad reminded me when— so I got into real estate, I was, uh, just— I just turned 19 and I was getting out of college. My dad reminded me of a time that I guess I suppressed because I completely forgot about it. But there was about a 6-month period where literally all I ate, because that's what I could afford, was black beans, chips, and salsa. I was trying to get protein from the beans. That was my thought. And, uh, it's all I bought was black beans, sometimes chips, and sometimes salsa. And so there's all these cans of black beans at my dad's house, but I was just getting by. It was rather difficult. And, um, so I was coaching gymnastics making a little bit of money, not making a bunch of money as a real estate agent, dropped out of college, living on literally beans. And about— I did that for 6 months. And then through that 6 months, I got my commission, I got my first deal sold. So I started buying real food because I made like $3,500 or something like that. And then I sold a little mobile home and I made $6,000. And Then I bought a 12-plex, and that was my first 12-plex, which kicked it all off. But where it's coming from was no money, college dropout, gymnastics coach, because I had done gymnastics for a while, done parkour at that point in my life for a little over 9 years. And, um, yeah, that was— it was a fun adventure, but it took 9 months from getting my license till when I bought my first deal. And it took another 9 months to get my second deal, and, um, still don't pay myself consistent cash flow. We're gonna get there, but it's been a fun transition. I mean, it's been almost 4 years. It'll be 4 years in October since I bought my first deal, my first 12. And it's crazy to see how much stuff has changed. But, um, if you just try and get better— this is something I heard from my first mentor Just try and get a little better every single day. It's amazing how far you'll go. Javier said, were you as sophisticated as you are now for your first deal? Absolutely not. No, I didn't know what I was doing. I didn't know. So I knew a little bit about what I was doing, but I didn't know how to articulate it. So I was very far from where I'm at today. And I didn't know how to explain it. I didn't know how to keep it simple, which is why I botched a lot of my pitches. In— there's this thing, uh, 4-Box Drill, and we shared it before on the channel. We've shared a lot in the mentorship, and it's all over the course. But, uh, there's this box, it's, uh, number 3, and it's where in theory you're an expert but you haven't applied it enough times to actually be an expert. And that's where I was operating out of. In theory, I understood how things worked because I had done the study material, I had underwritten deals. I had met with some people that have played the game. I listened to a lot of podcasts, but I hadn't done it yet. And so in theory, I knew what I was doing, but practical application, I didn't. And because of that, I couldn't explain it. There's a lot of people that get stuck there. And one of the first people that ever wanted to mentor me was trying to mentor me on flips. And I come to find out he hadn't done flips. I learned about it like 2 and a half years later that he'd never done a flip. He did his first one 2 and a half years after he was trying to teach me how to do it. Bad place to be. So no, I was not as sophisticated. I didn't understand anything compared to how I see it now. But that's how it works. Beginning, you know, the least amount of money, the least amount of knowledge, least amount of connections, and you have to do the most with the least. That is the hard expectation that you have. How have the ups and downs been throughout the journey? What made you get through those low points? Well, there's definitely been a lot of ups and there's been, uh, you know, some downs. I haven't lost money on any real estate deals. I've lost money on partnerships, which has been very hard. It sucks when you put your trust in the wrong person. That can really set you back, and that set me back a long ways. I put everything, all of my trust, into the wrong individual And I looked at this person as like a second father. So that was very hard when that didn't go well, both emotionally and financially. That was very difficult. Set me back multiple six figures of figuring stuff out. And that was at 21 years old. So that was 2 years ago. It's weird to think about too. But, uh, Getting through the lows. If your goals are big enough, you'll get through it. That is a Cardone-ism, but that is true. If you have goals high enough, you'll jump over your lows. It sucks and it'll leave some scars, but you'll get better for it. Ryan, just slid into your DMs. Sweet. I'll see you there. Books you've shared, The 4-Hour Workweek and the book on rental property investing are both solid. I don't believe in a 4-hour work week, and I haven't read the, the book on rental property investing. Those are probably Christian's books. But, uh, 4-hour week is, uh, I'm not a huge fan. I think you should work hard and work smart. Just work hard a little longer. I was doing really, really, really long days for a while trying to make this thing work, and if I was trying to do it 4 hours a week, would not be where I'm at day. Even if I had all the systems, wouldn't have worked. So you got to put in the time as well. I like Deals on Wheels by Lonnie Scruggs. There's some people that say it's outdated. I say they're wrong. The, the principles and the fundamentals in that book are solid, so I would check that out. For an on-market deal, should I pitch seller financing to the broker, or is it over the— or is over the phone just fine? Oh, in person versus over the phone. You can do it either way. If you're meeting with the broker, then I would probably do it over the phone. Just make the pitch, don't waste their time. Say, hey, would you hold the contract, yes or no? Don't say the yes or no, but just, would you hold the contract? You can ask that at the end of your conversation. Orthodox Pilgrim said Deals on Wheels, bet. Yeah, it's like a $300 book ever since I broadcast that on BiggerPockets. It went from like $100-something bucks to $200. So if you can get the audiobook, that's probably better. What sacrifices have you made to get to where you're at today? Well, I, uh, basically every dollar I've ever made has gone into the real estate. I lost some friendships, not because of deals. I didn't part— I don't partner with friends. But we just went different ways because they did the party route and I did the business route. That happens. You just go different directions in life. I have sacrificed stress. I mean, I've stressed a lot. Like, my hair is finally growing back. You can look back on the channel, see when, like, it was literally just bald, bald, bald because my hair fell out. But that's finally coming back. So, you know, you put a lot of time into this if you don't have any money. And you get the trade-off. If you have access to easy money, then yeah, you can play the game and you don't have to spend as much time, you can just accelerate faster. If you don't have that, you're going to typically go through a period of a lot of stress. And so outside of the relationships, like some of the old friendships that are now gone, Every dollar I've ever made goes back into real estate. I don't get to splurge on a personal level. Lost the hair. It's all temporary stuff, um, but it's not really a sacrifice if you get to the end goal. Like, if it's, if it's the objective, it's the objective. Go get it. There are— there's a period of time where I didn't see a lot of family because I was just focused on make it work, get the business to, to get by, and take care of everybody along the way. So when you just focus on that, like, your attention is going to go to where you put it. Wherever you are, that— or wherever you go, there you are. Imagine that. But that attention is going to leave everything else. And so my attention left all the other things. I just focused on the business. And as a byproduct of that, there was a couple years where I didn't see a lot of friends, didn't see a lot of family. It was just work, work, work, figure out how to buy more real estate, figure out how to grow the brand. At that point in time, I started doing these YouTube videos. If you look at my first YouTube video, my buddy Ludic forced me to make that. It was like a minute 20. I was so scared to do it. I had like 10 edits in it and it was only like a minute 20. So I was just super nervous, but I was trying to build a brand, trying to get my name out there. And we're still doing that today. It's a little easier today than it was back then because I didn't know what I was doing as much. So I just focused on the business and sacrificed everything else to try and build the business. So if you want to do something similar, you might have to do that. You might not have to go as extreme. It's, it's simpler now than I thought it was back then. So I added steps. I didn't have principles established. I didn't really have a mentor who had done it I had a mentor told me he'd done it before, but it turned out he didn't own any multifamily, and he said he did. So that was different. But, uh, if you can simplify it— that's why we say it on the channel, just keep it simple— you'll stress less, you'll buy more, and you'll go faster than I did. What is the most valuable skill set that you have? I believe the most valuable skill set I have is communication. Effective communication matters. When I got started, I was super introverted. I was afraid to talk to everybody. I was just super nervous, and I didn't know my stuff, so I wasn't comfortable putting myself out there. Like, I was afraid to talk to one-on-one. So doing stuff like this every week has helped with that. But effective communication and a clear idea of what you want, that goes a long ways towards getting to your goals. And so if you have a goal of getting to $15,000 a month or $3 million of equity paying you 6% a year, $180 grand a year, if that is your goal and, um, you know that to be true, you know that'll hit everything you ever want, You need to talk to people who have done that. You're on a $3 million of equity in the type of business that you want to be in. For me, it's real estate. But, uh, you have to keep it so simple that they'll buy into what you're doing, who you are, and they'll actually give you a lift up. Your question of what does effective communication look like— it looks like simple, concise points that are not only relatable but that are received well by the other party and that can be widely relatable amongst masses. If you can relate to a bunch of people with your message, regardless of how relatable you actually are, if your message can relate, it resonates with people because it's actually received and there's some significance at the end of the tunnel. You create this thing called buy-in where people will actually give you a lift up, people that have done what you want to do. They will do things for you that they wouldn't do for sometimes their own family because they believe in who you are as a person. And if you don't keep it stupid simple, you're typically not going to get there. That's why the overarching point in all of our lives, in all of our videos and multifamily strategy, everything we do is keep it simple. Because that allows for the opportunity to become a better communicator, to really grasp some takeaways from what you're doing. If it gets complicated, it's not repeatable. If it's not repeatable, it's not worth anything. And if it's not worth anything, it's a self-fulfilling prophecy. It's not worth anything. So you just gotta keep it simple because from that you can learn and really dissect the situation and get your takeaways. You become intentional and you grow a lot faster. Can you explain the process of offering seller finance to an on-market property with an agent? Absolutely. So there's a few questions you're always going to start with. So the first one is, hey, is this available? You don't want to go through the script and then find out, oh, actually this one went— it went off market, they, uh, they don't want to sell, or they're under contract. That takes the wind out of your sails and then you're done. So first question is always, is it available? I want to then push into some Thoughts on the location, thoughts on the specific deal, questions regarding the bankability of the asset. How's the bank going to look at it? Because if it is not performing well, or if there's a lot of deferred maintenance, bank's not going to look at it, which then I can lead into the question of would you hold a contract? And that's it. Simplicity matters. Would you hold a contract? They may say, well, what do you mean? Would they be open to seller financing? Or do they need to be cashed out? And I asked this on every single phone call. Even if they say they have a bank loan, would they be open to holding a contract? Because maybe their bank loan is $300 grand and it's a $2 million deal. I'll come up with 15% down, cash it out. So I always want to ask— I want to ask as simply as possible, and then I'm going to zip it. Because if you add more words, they're not going to believe you're credible. People, when they get started, try and over-justify. That's why we say simplicity matters. I'll say it over and over and over, less is better. So keep it super simple and don't add extra words because they're not gonna believe you're credible if you do that, if you try and justify why you're doing what you're doing. Is your event in Seattle going to be published anywhere afterwards? I don't know. I'm speaking at someone else's event, so I'm not sure if it's recorded or not, but the best way to see it is to be there. That's the only way I can guarantee you'll see it. But I will ask and I'll let you know. What do you do on a day-to-day basis to grow your business? That's from Boomflix. I just meet with the existing people in my network today. There's a point where you have enough relationships. If you just keep cultivating the relationships, you'll get new opportunities. And the byproduct is they'll typically introduce you to more people that can help you out. So some of the people that I'm meeting with, like, I just got introduced from one of the first donors I ever bought from, introduced me to an engineer. An engineer is doing the site plan so that I can get it developed and turn my 6-plex into a 22-plex with townhome-style apartments. You get a huge cash-out event on a refinance. But relationships that came through relationships— there's this rule that's important to acknowledge, that people that own real estate know people that own real estate. And so if you just build super solid relationships with people, they will do the rest of the connections from there. Makes the outreach much easier. When is the next multifamily strategy event? Our next one is going to be later this year. I, I don't know if it's in July. I know we've got one at the end of the year. We've got an event in November at my friend's villa. He bought a— it's like, it's worth $12 million. He bought it for $3 million at auction. He bought it zero money down, and, uh, so he's created whatever that is, like $9 million of equity out of thin air. On a zero-down deal. So we're going to be talking at his villa. He's going to talk. He's just an owner that I've built relationship with. He lives like 30 minutes from me, and I'm actually seeing him tonight. So, um, we're gonna— he's gonna be at that event. But that is something that, um, we're gonna be hosting in November. We'll get an exact date. I think it's the first week of November. Would you recommend going in with an agent on my first offer deal? I wouldn't partner with them, but I'd let them, I'd let them bring opportunities for you and write it up. Absolutely. See, what do you say to off-market owners? Well, I just acknowledge that they've done something that I've never done and that I'd love to grab coffee, learn how they got to where they're at. I try and keep it just that simple. I'm not trying to buy their stuff. My objective is you've done something that I've never done. I'd like to repeat it. When I get there, I can retire my mom. You just share a significant piece of your story. What do you want to do? And then acknowledge, hey, I'd love to grab coffee. I haven't done this. You have. Curious how you did it. Can we grab coffee? I want to learn how. That's it. Do you still get nervous speaking? Yes, I still get nervous speaking. Absolutely. Even doing some of these lives, I get nervous. But no, mainly in person, not so much on YouTube anymore. But there's one in Texas with 500-600 people. I did this one last year. I think there was 400 or 500 people. Absolutely. I get nervous because I still think back to when I was speaking to 20 people in Spanish class because I took Spanish for 5 or 6 years. And I'd get so nervous talking to just a few people. And that hasn't really gone away. I still keep that in mind, but it gets a little easier every time. I just try not to think about it too much on stage and get through it. Okay, well, I'm out of questions. So with that, I'm gonna get off and then go to Seattle. So I will see everybody next Wednesday. And I appreciate all the chat, appreciate everybody that lasted the whole hour and a half. That was phenomenal. I will see you on Wednesday.