Get unstuck in real estate with this one change

All right. Hello and welcome to Multifamily Strategies Live. Going vertical for us here today, going over a simple topic. This should be a relatively short live, but as always, ask your questions below. I also included a mini training on this exact same topic in our free school community. So you guys are more than welcome to join that. That's Multifamily Strategy Community on school, S-K-O-O-L, but have a completely free course in the classroom section there that you guys are more than welcome to take. With even more tips on how to get yourself unstuck in real estate. But for today's episode, I'm going to share the number one thing I— this keeps coming up when I'm talking to people in the mentorship group, I'm working with other people, they're feeling stuck in their market, in real estate in general, on analytics, they're not finding enough deals. This is one of the biggest difference makers in finding opportunities. So what I have found has made the largest difference for me and my business, for other people in their business, is the difference between people who who actually write the offers on deals. And I don't mean on every good deal. If you're looking in a town and let's say, example, you're on LoopNet or you're on CREXi and there's 2 or 3 listings there and all of them are bad deals, your mission is not to only find good deals to try to buy. And I think that's where most people are getting stuck. They're going, wait a second, I need to find these amazing deals. I'm looking for the best opportunities. I don't want to waste a phone call. If you call the broker and you ask questions about the deal, here's what I found. One, sometimes if you just work the deal and sometimes your offer looks nothing like what they're asking for, occasionally, not all the time, but occasionally they'll say yes. This happened to be a 26-unit deal, 26 units. They wanted $2.3 million. We offered $1.6 million. We expected them to counter this transaction. They just said yes. They're like, well, We tried. We got to take the offer that we have and we're moving money into development. I offered the seller a good enough offer. They're shooting for the stars. They didn't hit it. Didn't matter. They moved on. I got a stellar deal and we got it for astronomically less than it was listed for. That'll happen sometimes. But more often, this is what happens. You are the person who is calling the broker and instead of just going, oh, it's a bad deal, I'm not going to call, you're having the conversation on the deal. And what I recommend doing is work the deal, put it into the calculator. We have a free one also on our free school community, but check out the calculator, plug in your numbers and go, well, you know what, the deal doesn't work where it's listed, but this is how the deal would work for me. Now you can do this with creative finance on the debt side. You can just do a simple transaction with a bank where you go, hey, for the bank to lend on this, for me to actually cash out the seller, what we need to do is we need to offer substantially less for this deal. What am I not saying? I'm not saying go in and just start lowballing properties and you're going to get a bunch of deals. That's probably not going to happen. There's a lot of people trying to do that. You're going to be competing with them. What I am recommending, and this is the difference maker if you're trying to move forward in multifamily, write an actual offer that you can defend on why you think it will work. If I have a property, let's say I'm trying to get the debt service coverage ratio to like a 1.25, the bank will lend on this. My conversation with the broker is, all right, I looked at the deal. I've been looking at it here for a few minutes. I believe where the bank's going to come in on this is, let's say it's a million-dollar asking price and it's worth $800,000. I looked at this deal and I'm thinking the bank is going to want to lend on this at $700,000. Is it offensive for us to write that offer? Is it even worth our time? Or should I just move on? Either way, what you've done is you put yourself in a totally different category in a broker's mind. Now, there's a lot of people who will call on deals. I was an agent for 2 years before I became a real estate investor full-time. When you're working with clients and they are looky-loos, they ask lots of questions, they never give you offers, they're in one bucket. They're your tire kickers. Then there's the people who actually offer on deals, even if your offer is borderline offensively not what the seller wanted. If I'm having conversations with brokers who represent the type of property I want to buy in the area I want to buy, and I am someone who actually writes offers that make sense and I can justify why I'm writing the offer that I am, well, now these brokers will start sending you listings. Now, most deals trade off market. In fact, all of the properties I've ever sold have all sold off market. There's a conversation between me and a seller or a broker and a seller. I call my agent, he goes, hey, Before we list it, let me ask around in my network. The insiders get all the best deals, which is why you're not seeing listed in your market. So your goal here, while you'll occasionally buy real estate and occasionally get an amazing price, your goal here is simply to come in, be the one who writes the offer, be the one who builds the relationship with the broker, move from an outsider to an insider in your market. And what you're going to find is there's actually a lot more deals going on there. There's other people trading. Now, this got me into Stephenville, Texas, where now I have 186 units. It got me into Abilene, Texas, where we're closing on 144 units. It got me into Moses Lake, Washington, right over 100 units. In Ephrata, where I have 27 units. This broke us into Union, where I've only done 2, 3 transactions, but I have in that market a million-dollar house, a $4.5 million resort, and a $1.5 million RV park. How do we do all these transactions? Well, none of the— well, 2 of those of all the deals that I did in there were listed on the MLS. Everything else came in off market, and a ton of these came in from brokers. I've shared this story before, but Eric Bubel, one of my favorite brokers of all time, he came in and after I had purchased a triplex, He called me about a 10-plex. I wrote the offer. We closed on the 10-plex. He later found me a 5-plex mixed-use building, a 9-plex, a 12-plex. And he's the one who actually brought in the RV park. I partnered with him on that deal. He brought capital to the table for that deal. So not only did I do 5 transactions with this guy, 3 of them had creative finance. 4 of the 5 transactions were off market. One of them he helped me fund. That is the difference. And that's where I see a lot of people get stuck. There's a lot of other things people get stuck on. I'm stuck on the capital raise, I'm stuck on the mindset. And again, that free mini course I did, I went through the 10 most common things people get stuck on and I help you get over those. If you want to check it out, it's Skool, S-K-O-O-L. Just type in Multifamily Strategy Community, you'll land right on it. There's a free course in there. I actually spent a ton of time on it. If you're like, well, it can't be that good if it's free, I think it's some of my best content. So you guys can check that out if you want to. Have more tips on how to get unstuck. But that was the single biggest difference between people who buy lots of real estate, people who don't. It's the people who are actually working the deals and asking the question, how would this be a good deal? Instead of, is it a good deal or bad deal? If you're calling on the deals, you're getting momentum, you're building relationships, you're establishing yourself as a ready, willing, able buyer. I'm going to get over a few more of the main things here. I'll give you the highlight reel if you're feeling stuck. One of the other major, major ones is the capital. How do I buy real estate without any money? People ask this all the time. I'm going to answer it as directly as I can. It is never, ever, ever about the money. It is about the deal. If a deal makes a ton of money, guess what? You're not the only other investor looking for deals that make money, and lots of other people have more money than you do. So if you hold the opportunity all the people who want to own in that market now have to come to you to get a piece of it. The capital is the easiest part. Everyone doubts this until you do your first capital raise. So if you're sitting here scared to start or not making calls or not making relationships or not writing offers because you're worried about the capital, the capital doesn't just magically take care of itself. It's— there's way more capital available than there are opportunities, and there's way fewer people who are making opportunities happen than there are people who have money. So the capital is just the easy part because it is the most abundant resource available to you when you are buying multifamily. I just want to encourage you, I've been coaching Multifamily Strategy for 5 years. We have never seen a mentee ever fail a capital raise ever in 5 years. Good deals will bring money. I just want to give you that encouragement. The third one that I wanted to share out of the 10 that I have in this little mini section The third major one is imposter syndrome. People don't call owners, they don't call brokers, they don't make the relationships because they're like, well, I'm just not ready. I don't have enough experience. I call and I feel like a phony. I don't— look, you don't need money to buy real estate. We've already established this. So if you find a good deal, you can put it under contract. There's nothing impressive about me. There's nothing special about me where I was able to raise a bunch of money. Caleb Hommel, who's on this channel all the time. He started at 18 years old. He had a credit card with a few thousand dollars on it. He had no job. He had no income. He had no college degree, barely had a high school degree. This kid comes in today. He owns over 180 rental properties. He's under contract for the 144-unit deal with me. He started with no qualifications. You don't have to be qualified to buy a piece of real estate. You need to find and negotiate a deal. If you have the simple ability to identify a cash flowing property and can put together an opportunity to close on that property and last piece, give a return to other investors, which is pretty easy to do on a cash flowing piece of real estate, then guess what? You are a real estate investor regardless of having capital or not. If you made the decision, hey, I'm going to get in here, I'm going to actually go move forward, succeed, write offers, get accepted, close. That's the difference maker. I remember sitting on the train on the way to work at CoStar, making the decision of like, hey, I'm going to get over this imposter syndrome thing. Other people have done it. Other people aren't better than me. I can do this too. And voilà, here we are, 400-whatever units later, one resort later, several companies later. That only took 5 years to pull off. And we're moving way faster today with the experience of having made all of the other places. So if you're getting stuck, number one thing, absolute number one thing. If you are feeling stuck, be the person who writes the offers, work the deals, build the relationships with brokers. The broker relationship will be done by being transactional into a relationship. Owners are the opposite. You want to start a relationship before you get transactional. That's a topic for another video. Capital will be the easiest part of this journey for you. It is okay to be worried about it upfront. It is okay that that is stressful. That is normal and everyone goes through it. Do not let a lack of capital hold you back from finding, negotiating, and putting together deals. It is the easiest part, and your ability to put together deals is the worth that you bring to the table and how you make the most money in real estate. Lastly, if it's just a confidence issue, practice, practice, practice those broker calls, the owner calls, getting around other people. Just go out and do it. My original business partner Cody used to be scared to order from Starbucks baristas. It was like ordering food was scary. He was so introverted. He just went to Starbucks every day for a month and said, hey, I'm going to strike up a conversation with the person serving me coffee. Basically the same thing in real estate. Brokers are real estate order takers. They're there to talk about their deals and to sell the deals. Strike up a conversation, talk deal. You will build the confidence, but you will never do it if you don't pick up the phone. There's plenty of other tips there. Again, SKOOL, S-K-O-O-L. You guys can check that out for Multifamily Strategy Community. If you guys want to go through a completely free mini course, I don't sell you anything there. There is no upsell. It's just an awesome course. I decided to spend a full day putting together, editing, and I really went through over a series of weeks the top 10 or 12 things that people were getting stuck on and how we got over them and other people within Multifamily Strategy overcame them over the past several years. So if you're behind where you want to be this year, you're trying to close that first deal before the end of 2024, check that out completely free. The community is completely free. There's no sale here. This is just a free thing that I'm giving you. So if you're lacking community, if you're lacking any knowledge in how to get started, go ahead, hop over there. Multifamily Strategy Hub School. See you there. Quick live today, but appreciate seeing you all. Have a good one.