How to Hit Massive Targets Quickly - Creative Finance Live

in the chat for Whiteboard Wednesday. We'll see you there. And we are just about live on YouTube. So hey YouTube, welcome back to Whiteboard Wednesday. We are in the Robin Hood Resort. Topic of today, before we get in everybody's questions, is how we built everything we built so quickly. And on that note, we're closing out the Robin Hood Village Resort in exactly 7 days. That closes in, uh, Well, next Wednesday. Yep. So that is going to be closing out our 12 months of partnership, Christian and I, and we started out with the ugliest building in Washington State. And now we are working on closing out one of arguably the cooler buildings in Washington State with a ton of history. So Christian, how did we scale so quickly?

Well, how did we scale that quickly? That happened really fast. And for everyone watching this, this doesn't mean that you need to go exactly as fast as we did. Part of it is we did this 1000% full-time plus, This was a lot of 12, 13, 14-plus-hour days put together. However, we did this all in one year. We've been partnered for 11 months now. Between the two of us, we own 107 multifamily units and in a week, this resort.

And we're working on going under contract on a 46-plex.

So yep, the biggest thing that we did to get from where we were at, which for me was 40 units, for Cody was 30 units when we first partnered. He's the freak. He was 21 with 30 units.

Freak.

Yeah, Cody's the freak of nature. However, I jumped on to what Cody was already discovering, which was we went after relationships instead of deals. And that is really it. We learned from the people who've done exactly what we want to do, how to do what they've done. We got a question yesterday that I actually loved, um, from our mentorship group that I wanted to share here. But the question was, um, how did you guys scale where you're at? And then once you did, does your script change? Like, when you meet someone new, you've bought— got 100 units, is the conversation still Hi, I'm a little person and you've done something big that I've never done. And the answer is yes. You want to play the game exactly the way we have. You want to scale as big and quickly as we did. The way you do that is every time you do a new project, you now have to find a new contact who's done something amazing that you haven't done yet.

And Christian talks a lot about this on his BiggerPockets podcast, finding new problems. The way that we go and find new mentors is looking at opportunities where we can find something new that they've done we haven't. Regardless of whether they own a couple duplexes, they own a couple hundred units, they own a couple thousand apartments, or they're in hospitality, we can find something new regardless. Whether they've done A-class, B-class, C-class, D-class, whatever type of real estate they've bought, we look for something that they've done that we haven't, and we use that to serve as our launchpad to really start learning from people that have played a game at a higher level than we have. And that is the secret sauce You know, we're not talking with sellers, we're talking with owners. And the most knowledgeable people in any given market are the owners in that market. It's not the real estate agents, it's not the lenders, it's not the title companies. It is the actual owners that own the type of real estate you want to own. So if you want to learn how to play the game at the highest level, you best start calling those people and not view them as sellers, but view them as owners and eventually friends and potential business associates. That's the way to play this game.

Now, if you guys see me on my phone, I am looking through the questions from this week's comments. Then we'll hop into the chat, but I have a totally different setup, so my laptop is really far away. I, uh, don't see all that well that far, so if you see me on my phone, I have 100 questions.

Getting distracted.

Yeah, no, just texting away. No, um, the question that we had this week from Gregory Craft, um, appreciate all the content you guys put out. Thank you. How would you go about talking to multifamily owners and building relationships when you're looking to buy out-of-state properties?

Okay, well, I met up with an owner who happens— him and his family have about 900 rental units in downtown LA. He lives in Colorado, and I don't live in any of those states. So it started with a phone call, then happened to go on a Zoom call, and out of the Zoom call ended up saying, hey, could I just fly over for coffee and meet you? He's like, well, don't fly over if you're just getting coffee. It's like, well, Would you meet with me if I did? And so I ended up flying over there, stayed the night at his house, and then flew back. I was in Colorado for less than 24 hours. Was it worth it? Oh, 100%, because every time I meet with someone that's at a higher level, it helps me clarify my goals and the processes. A lot of these are systems and processes to get to where you want to be. So it's same exact way. It can just be a phone call, it can be a Zoom call, and if you want to take it to that next level, offer to fly out.

After this video too, if you want to watch this again on our YouTube channel, I'll drop a link to a video that you shot when you're in Colorado with that owner.

If you want to see how these meetings actually work, I interviewed him on the channel.

Yeah, fantastic. Uh, what he did, we're not even close to doing yet.

Uh, not even— no, I mean, that's hundreds of millions of dollars. That's, that's way up there. I mean, even the whole portfolio today is worth about 20 when we close stuff out. We're nowhere close.

Now, uh, comments here from Davion Savant. Hello Cody and Christian. What are some strategies to get the seller their funds and out of the contract as soon as possible? Okay, so if they're seller financing, what's a way to quickly pay off the seller finance note? Well, there's only a few ways to do this.

So, well, you do it with money. Now the trick is, is it going to be debt or equity? Because if you're— debt, if you can refinance, you can recollateralize the asset and you go out to someone else. Could be a bank, could be a huge institution, could be another individual, another potential owner. You have to figure out how to get the money to pay them off. Could you earn it? 100%, you could earn it. We're doing that right now. We're working on earning income so that we can hammer our debts and pay off our sellers. However, you know, another way, you could just sell it. You know, you could earn it, you can refinance it, you could sell it. We're not a huge fan of selling stuff, but if you need to pay them off, you have to do it with money. You have to find where that money is going to come from. But it's just that simple. It's just, this may not be your money, If you get the value up enough, you could sell it, get some more money, then you pay off the seller and use that money that you got from the sale to go buy something else. That's what we did on the 38, except for we're not selling. We created a million and a half in equity in 11 months on a next to no money down deal. So if we wanted to sell, we could pay off the seller and we could take our million and a half and re-roll it.

A lot of different ways to do it, but at the end of the day, it's going to take capital. I got texted today, someone's like, well, do I use my earned income or the cash flow? And the answer is yes. Uh, you use the money at your disposal. You do actually have to make money to pay these off. So it either needs to be an increase in equity, earned income, or you need to refinance and bring in new capital.

Yep.

Um, but those are the ways to do it. We're looking at doing it in real time from the live chat, cuz your questions are pouring in. I wanna make sure that we get right on these from Darius.

And if, if you're right here, you're in the, uh, Instagram Live, hop over to YouTube and we'll actually see your questions there. Yes.

If you want us to read your questions off YouTube, if you're just in for the show, feel free to watch here on Instagram. All of you like and subscribe. Uh, Darius, how did you guys get your real estate license? Did you guys go to college for it?

Uh, you don't go to college for that. There's an online platform where you can do the, uh, in-person training. It's usually local at that level. I'm trying to think of which I did when I renewed my license. I went to realestateschool.org. That was pretty easy.

I went to Rockwell.

Yeah, I did Rockwell when I got licensed. I just couldn't remember the name.

Got it.

So rockwellinstitute.com, I think that's the website. But if you look up Rockwell Institute, that's where I got my license. I think that place is for Washington and California. However, it might be nationwide. And then realestateschool.org, I believe, is the other one. You can check that out, but, um, it's going to be based on where you're at geographically. Different states are going to have different requirements and different study materials. So you don't have to go to college for it.

I graduated college with a business degree that has nothing to do with any of the real estate that I've done.

And I didn't graduate college.

Yeah, now some of back-end operations, I've had a little bit of benefit from that. Like, it's, it's not been worthless. However, if you're trying to do this, college isn't one of the steps, right? Um, from Sullivan Moore, um, oh, Sullivan just commented they don't have a real estate license. I don't think you don't need one to be a real estate investor. We both do have it. Cody started as a broker. I started doing some property management things early on, uh, running a call center where I needed to be licensed. We do not broker a lot of deals. That is not a significant part of our business or our income.

However, we are both licensed and we own a brokerage and we own a property management company. Yep.

So, so the steps make sense for where we're at in the businesses that we've started. However, if your goal is to own real estate, you're going to do that by buying a piece of real estate, not by getting a real estate license.

Most real estate agents don't own anything.

And if you're one of the few who are really good at brokering and really good at owning real estate, you are one of the top 99.9% of brokers.

Good for you.

Yes. Uh, Ironwood Workman, I was wondering this myself, are they— oh, they're all comments, uh, off the same, off the same question.

Cool.

So same answer. Uh, Joshua Millum, when doing seller finance, how do you refinance or take advantage of the equity that you have in the deal?

Well, there's a couple options for debt sources, especially if you're doing bigger deals. You can take it to, you know, agency debt depending on the deal size and location. And typically you can get a lot of non-recourse options and you can get access to that through mortgage brokers. Um, just talking with people in the business, you can take it private where you find a wealthy individual to just fund it. It's like seller financing. And if all these sellers that we just cashed out, we could go ask for another loan to refinance our debt stack because they've already loaned to us. And if we've paid them off, then they're more likely to write us a check again.

And I've seen private capital loaned anywhere from 2% to 18%. Personally, I've seen, I've seen everywhere in that range. So private capital is totally negotiable.

Yeah, it's all relationship-based, which is why the relationship is senior to everything else in this business. And you can go get local credit unions, local banks, you can get hard money. But when you find the deal, if you buy the deal and you get the equity up, the main thing is it's going to come down to cash flow. And if you can't cash flow your debt obligations, you're probably not going to be able to get the debt, whether it's private hard money, whether it's institutional level, lenders like to see cash flow because if you don't cash flow, eventually you will lose it and you'll run out of reserves.

Yes. How do you own it? How do you never lose it? You don't want to run out of money. So taking chips off the table after you have a big win, you actually do want to hold some liquidity. I'm going to say a quick thing on this because if you followed our channel at all, Cody and I almost never have liquidity. We have lived on cash flow. This last year was build year. The focus was just build. You have two different things you can focus on: your production capacity, how much you can bring in, which is what we focused on, get the assets to build the actual production, or you can focus on the production, which is where you actually take the cash you are saving money to reinvest. We focused on production capacity first. In the next 12 months, we're focused highly on production. We actually want to pull some money off the table to pay ourselves and say, well, we worked really hard, we're going to put this aside and we're going to move from a position of more liquidity.

Yeah. And we're working on closing out the pipeline. If we close it all out, including the couple buildings we're under contract on, we'll be at 156 units between the two of us and the resort. That was good enough for us for one year. Now we're going to stabilize and our goal is to each have $500,000 liquid in 2023. We're building, we're building out and stop spending money on assets. We're not going to keep focusing on accumulating. Will we keep buying stuff? Oh, 100%. We're going to buy something like this building every single year. Granted, there's nothing else like this building. Yeah, there's comparable stuff, it's similar but different.

I'm thinking vineyard. Yeah, we'll find out.

We may buy a vineyard. However, we're going to keep buying apartments, but that's not the main focus at that point. Now we're on how do we build up half a million each in liquidity, different goals to protect what we've built so we can move on to the next level.

Speaking about tons of real estate, the next question ties right into this. Um, Sullivan Moore, 20 years old, by the way. Hey guys, following your method and I currently have 62 units under contract, um, on 19 units more. I assume that's more in the works. 20 years old, that is a whole lot going on. I'm curious, Sullivan, if you, uh, type in the chat later, I am curious to see if you are, uh, syndicating or if it's all just creatively financed. Either way, it's a lot of units.

Good job.

Way to go out there. That is a sizable portfolio, really young. I hope you close out on all those that you have under contract. Uh, Board Game Club. Bobby in Barcelona here, coming home to PA tomorrow, looking to get into our mentorship. Um, awesome. We're looking forward to seeing you there.

Do it.

Can't wait for a big year. I hope you have a fantastic year. If you have any questions between now and then, reach out to me on Instagram @ChristianOsgood. I'm happy to answer any of the questions about anything else we do outside of this live over there. Uh, from Eric, uh, my guy Bradshaw sent me over, I'm looking to get my first rental property, how much would I need to get started realistically? Oh my goodness, I love that question and I love Alex Bradshaw.

Alex, if you're watching live, Alex, we appreciate you. Yeah, and I'm meeting with Alex and Trevor on Thursday.

Oh, no way. Okay, well, thank you, Alex. To the question, how much do you need to get started?

Well, I got started with $3,000 in the bank and I didn't spend it. At the end of the day, it comes down— you find your deal, then you find your debt, then you find your equity. Now, the cool part about debt and equity is it's all money. One costs you more money today— that, make— you got to make your payment, otherwise you lose it. And equity costs you more tomorrow, meaning down the road, if you want to buy it back. So if you buy it with a partner, it'll cost more typically on the back end to cash them out. If you do debt, it'll cost you more cash flow today, but you don't have to buy anybody out in the future. You just have to pay it off at principal value. So you got to find the deal first. That's the most important piece. That's something that Alex did. He found a duplex for $200 grand. Guarantee you he'll find a way to fund that. $200,000 for a duplex. Moses Lake is a great deal, and there's 4-bedroom units. You find the deal first, then you got to go find the money. Most people want to find the money before they find the deal, and they wonder why they never buy anything. If you find the opportunity first, then you can match the right money structure. You get the right attorney to help you figure it all out, but you match the right money structure, debt and equity, if you're not doing one or just the other, then you buy the deal. It doesn't have to be your money though. That's the main piece I want to put here. Mm-hmm.

Now what I don't want people to hear is never spend your own money on real estate, cuz some people do focus on, I'm just not putting my own money in the deal. How do I buy everything? $0 out of pocket. If you're starting from a liquidity position, myself, I spent a 7-year sales career saving up. I bought a house and then I saved up $100,000. That $100,000 got me into my first duplex and my second duplex. Was I buying too small? Absolutely. You guys should buy bigger.

Yeah. If you have the advantage of slap 'em around.

But you have the advantage of listening to this channel. I didn't have this channel, so it took me a couple of properties to get there. So to get started, if you have some money, use that to go buy some real estate. If you find something bigger that you can't afford, all it is is using the pieces you have. If you have a deal and no money, you have to go find it. If you have money and a deal, go buy that deal. And it's about that simple, but there's not a specific dollar amount. You can operate with nothing or a lot.

I love watching our, our YouTube lives 20 seconds behind. So I got to just watch the big slap.

Um, let's see here. If you seller finance the entire deal, no money down, how do you afford it with the debt service? Or how do you get the DSCR, uh, down enough for a lender to let you seller finance the down payment?

Okay, well, I don't typically seller finance the down payment. That's the one thing that's a little bit different. Some people want to just seller finance a small portion. My goal is to seller finance the big portion because I can actually negotiate that. I don't want to negotiate 25% of the deal. I want to negotiate 90 to 100% of the deal. So I want the seller to finance as much as possible because when you lever up with a whole bunch of debt, conventional means you're not going to cash flow in this market. It's not going to happen where the debt market's at. So I want to borrow as much money as cheap as possible. And I can't just say bank, I want to borrow at 3%. I go to a seller and say, hey, look, this is where cash flows at 3%. Now there, there are some ways to get more cash flow. Put more money down, reduce expenses, get income up. And the main one— and this is what our one of our mentors in Moses Lake said— just put more money down. It's like, well, Gary, I don't have more money to put down. So we, we just toggled with the interest rate. You can borrow cheaper money, you can reduce the expenses, increase the income, or you can put more money down. Those are the main options. You get cheaper debt or you get less debt. Those are the, the main components there. And so in that position, you want to negotiate as much seller financing as possible at the lowest interest rate possible so that you can keep your debt service maintained and make sure that you're able to cover and cash flow without any money. Because in the beginning, it's very difficult. You're not going to have a lot of cash flow. My first deal was south of $1,000 a month. I thought it was going to be $1,000, then I had repairs throughout the first year. I was I underwrote it a little above $1,000 and ended up being around $800, but $800 on a $0 investment today, fully rented out, that asset will cash flow closer to $4,000 a month. Because I just did some remodels with the existing cash flow, paid off some of the debt. I've paid off close to $200,000 of debt on that deal in the last 3 years.

Not half bad.

Yeah, but it's not get rich overnight, right? I mean, it still takes time, but you have to negotiate. What you want. You don't get what you, uh, you don't get what's fair, you get what you negotiate.

Yeah, though it is totally a legitimate strategy for— I have a few friends who have done this multiple times where they pair a bank with seller financing, especially if the seller has some debt on it. It's a good way to bust through the, uh, the financing is line up a bank and seller finance above and beyond that. The biggest thing is it does have to cash flow. It is harder to do in today's debt market.

Someone put in a live, this is how we went down in detail. Well, I don't think we're going down, but challenge accepted.

Yeah, I love that. That would be hard when all your stuff cash flows and long-term fixed-rate debt, but we will see.

Time shall tell. Yes.

From Board Game Club again, assuming you don't buy a property off your first meeting with the owner, what does your follow-up look like? Oh, I'll start this one.

Do it.

Follow-up meeting is just a build-off of the first one. Usually you're going to ask a few questions there. You're going to ask how they got started. You're going to share a little bit about what you're trying to do, and you're going to ask, based on what you did, what do you recommend I do? So the easiest way to get a meaningful second meeting is go apply whatever lesson they teach you in that first meeting and call them and let them know, hey, you suggested I do this, so I took these steps. I wanted to meet with you and see what you think about next steps. No one actually— almost no one follows up on the advice they get. People love collecting information, they hate applying it for whatever reason. That is how the title of this video is, how you hit massive targets quickly. That's the other thing you do. You go out, you learn from people, and then you execute exactly what they say. So your second meeting is going to be a build off the first one.

You're—

I don't want to say never— you're almost never going to get a deal after your first meeting. Yeah, owner, they're just not.

And how you shouldn't view them as a seller, you should View them as a mentor. We're in this game to learn. Did we finish that question? Because there's one in here. Apparently I misinterpreted it. They were asking specific details how it went down, how it went.

I was like, how we go down. I'm like, wow, that doesn't, that doesn't sound nice.

That's mean. It doesn't sound nice.

Okay. Well, let's readdress that. I think we answered that question. Um, thank you for asking a very kind question that we answered terribly. Let's try this again.

Well, yeah. Round 2 and make sure clarity. It wasn't super clear. However, Go for it. Let's talk about Pheasant Street. Yes, we bought the Pheasant Street Apartments, and originally when I started meeting with these owners, which was, you know, a year and a half, 2 years before we ended up buying these apartments, they wanted 6% interest, they wanted 20-25% down, and, uh, it didn't cash flow at that. So they're like, just put more money down. It's like, I don't have any more money. So what we ended up doing is we just wrote it where we could afford it, and it was $90,000 down. We brought in a capital partner with buyout agreement on that, and we're working on executing that buyout here shortly. But, um, capital partner got 33% of the LLC, they funded the down payment, and we have a buyout agreement on a 2-for-1 in 5 years. We're gonna buy them out a lot earlier than that, and for less than the 2-for-1.

Yeah, and that—

and they'll be happy, very happy. But it didn't cash flow at 6%, so we took it to them and we said, hey, what can we do here? We want to make sure this cash flows. You shared your story and every deal you bought negative cash flow for 2 years. We can't afford to do that right now. We don't have the earned income to do that. So they wrote it at 4.5% and they ended up countering themselves at 5% at closing table. And it's fine because it's still cash flow, but we just put the numbers out there like you start at negative cash flow. We don't want to do that. You told us you wouldn't do that again. So can we write this a little lower? And they said yes.

That was a year and a half though into a relationship. That was certainly not on the first meeting, tying into that last question.

Yeah.

Um, these relationships take time, which is why you do so many of them. My golden rule is one meeting a week, 52 owners a year. If you meet 52 people, deals will just start happening. You don't have to ask for the deal. There's just enough relationships.

We appreciate the clarity in the, the Instagram chat. I only see like little snippets of the text because it goes by so fast. We appreciate you not wishing our downfall.

Uh, Tudor says, I have a building bought with cash a few years ago with great cash flow. I hope so, because if there's no debt, that should flow really beautifully. I want to get money out to reinvest. What's the best strategy? Cash out refi or seller financing with a new owner?

Um, it depends. Well, I mean, if you want to seller finance to get rid of the asset, sure. You could sell it to someone, get some of your cash back, and hold the note. You'd probably get a premium on price if you did that. If you come to someone like us— granted, I don't know where you are, and we probably wouldn't buy that— but you go to someone that wants to get started and they can put some money down, and you can get a pretty big premium on a 3, 4-year note, and then you get all your cash a few years down the road at a much higher price. So that's one way to get your cash out and still get some cash flow. You could just take it to a bank and refinance it. You could just liquidate it. It depends on your goal.

Yeah, the question is, what do you want to do? If you want to have the maximum liquidity, to usually sell it. If it's a property that you want to keep as part of your portfolio forever, I would keep the property and refinance it. Um, and if you want to play the game and move forward, um, without doing that, you also have the option to just keep the asset and figure out how to negotiate a new deal at a higher leverage point.

Yep.

So lots of options there.

And then we got from Nick Yates We can do the back and forth.

Okay, let's do it.

So Nick said, do you buy properties that need a lot of work or do you focus on already livable properties? Well, just because it's livable or not livable doesn't mean it needs work or doesn't need work. We've bought properties that people were already living there and it still needed work. We bought absolute dumpster fires and then we're buying places like this. So I mean, we've done both, but the main thing is we have to underwrite it for cash. Flow day one, we bought one asset that negative cash flow $15,000 a month. That was a 38-plex. That was our dumpster fire. Today, cash flow is positive 5 figures a month.

Very lucrative.

Yeah, I think we paid ourselves $11,000 last month in actual cash flow because we're starting to do that now. But we've done both. The main thing is you have to know how you can hold it because if you can't afford the negative $15,000 a month, that wasn't our first deal, then you probably shouldn't buy a deal that negative cash flows $15,000 a month, even if it's got great upside. If you can't hold it, it doesn't matter what the upside is, because it's fun to buy stuff, it's less fun to lose it.

Uh, Sullivan from earlier, asked him to comment and he did. What he did is really cool. Um, so he currently has 34 rental units, just closed no money down on a 28-unit seller-financed. He's done 3 total seller-financed Deals. He goes on a couple of comments later to say they were mostly acquired with the BRRRR strategy. So he used hard money for the down and then refinanced the money back out.

Awesome.

That is a great combination of creative deals. That's one of the main things that we say here all the time and why we're called Multifamily Strategy is you want to learn every strategy that you can so you have more pieces to work with. I don't like the BRRRR strategy because people tend to get stuck on small deals. They go, oh, I have to get into everything zero down and pull the money out. If you found a way to do that effectively, Time and time again, you have that many units, you are applying multiple creative principles in concert correctly.

Yeah, that's awesome.

Very well done. Crazy.

What most people do is they focus just on the BRRRR and then they buy a whole bunch of houses which actually don't get them to their goal. And they find a great deal where they'd have to actually keep a little bit of money in for a few years. We have money that stays in deals. We've got $1.5 million in equity. It's like $1.8 million in equity trapped in a deal right now. Do we care? No, because we earn, you know, 5.5-6% on that $1.8 million. Oh well. And it wasn't $1.8 million of our own cash. No, we got the value up. We didn't burn, just pull all the money out. If you keep money in deals, great. But most people get stuck on, I have to burn, I have to have no money in my deals, that's the only way I'm going to get rich. It's not true.

Very, very cool. Um, let's see here. Uh, how Would your strategy change in a more expensive state? For example, in my state, transfer tax when buying is 2% plus title insurance.

Well, we don't change anything. I mean, we're looking at buying a vineyard in Texas right now. Taxes are really high, price is pretty high.

You're trying to buy for cash flow on fixed-rate debt, so you just have to make sure that the money makes sense. So I'm not huge on a ton of metrics. The one that I do love is cash-on-cash return. If you have a little bit more cost to transfer a property, that's just cooked into your money into the deal, right? Um, but you're just looking for a deal that cash flow is high enough that justifies a little bit more cost in the actual closing and acquisition cost.

Yeah, we got a comment here. Do you recommend buying out of state? If it's a great deal, if you want to, but if it's a house and you want to buy a 10-plex, it doesn't matter if the house is a great deal. That's what we're looking at right now. We just turned down a 19-unit It was a 5-unit, a house, and a 13-plex over in Ellensburg. Off-market, seller-financed, great deal, but it doesn't make enough money to justify buying it anymore. So just because it's a great deal, you need to look at the factors, how far it actually plays out into your long-term vision. We don't need to own 19 units in Ellensburg. We would just buy it to sell it, and that's not our main business model.

However, if you're somebody getting started, that deal is fantastic for You, just not big enough for us to change where we're already.

Yeah, so if you're buying out of state, just make sure that it's big enough to warrant the, like, the time commitment, because you will probably have to fly out there a few times.

Ambassador for Grice, I actually skipped over this one. Uh, what are your views on what Grant Cardone is calling the big freeze? Oh, you've been watching his videos on this?

No.

Okay, essentially Grant's saying the banks are gonna freeze up and we're gonna economically spiral and we're gonna have a year of Downtimes with tons of deals.

And it's a good thing I don't— oh, tons of deals. I like that.

Tons of deals, but no, no ability to move cash. So get liquid, stay liquid, stop investing for the next year, and then go back in.

And I'm going to keep buying. I'm going to keep buying real estate on long-term fixed-rate debt. Yep. I don't care what the gurus say, because if I just keep buying cash flow on long-term fixed-rate debt, decade-plus long debt, I don't really care what happens next year. Yeah.

Does the economy go up and down? Absolutely. As long as the debt term is long enough and you have fixed rate debt, then you're good. You can pay, get paid to wait it out.

Now, if every single person on planet Earth stopped paying rent, we'd lose it all. But we got bigger problems if that happens.

Yeah.

Everybody's got bigger problems if that happens.

Have you guys utilized hard money before?

Yes. Yes. Yeah. On flips and all that. Done flips, down payments. That's more private capital, but it's hard money. Hard money is easy to get, hard to pay off. Be careful.

It's expensive.

What are your main ways generating deal flow in such a tough market? Well, I wouldn't call it a tough market because that's a bad attitude. I just call owners. The most knowledgeable people, the most affluent people in any given market are the people that own all the real estate. So if you want to get more deals, call more people and don't ask them to sell to you. Ask them how they got to where they're at. They're not sellers, they're owners. That's the big thing that most people get wrong. View them as owners, not as sellers. And when you do that, it's just a breath of fresh air and it's real, it's genuine, and you get more opportunities that way, whether it's from them, their friends, or not. You learn how to play the game at a higher level, and you can identify deals that no one else sees.

That ties nice into the next question. Uh, it's a double question. Uh, when you guys say I should start, or I could start with nothing, uh, where would you get the best loans? Also, would you guys be open to meeting up? I'd love to pick your brain.

We meet up with people almost every day.

Yes, just give us a little bit of time because we close on this transaction next week, then we're at BPCon in San Diego, then my little sister gets married. But after October 15th, we are free again and happy to meet with any and all of you. Absolutely.

As far as where to get the best loans, I wouldn't even focus on trying to get the best loans. I'd focus on getting a loan, because if you don't get a loan, you're not going to get any. You know, you got to get one to get the better deals, and you may pay more interest in the beginning And that's fine. I've paid 18% on loans. I had over half a million dollars at 18%. I've had over half a million dollars at 12%. Not fun.

You just have to do really conservative math. Would you borrow at 18% to make 200%? Yeah, I would. Now, if you're in zero down, technically your return is infinite, infinite, but within reason. You know, I would borrow at 18%, you know, if I'm paying $10,000 extra dollars, as long as that 18% isn't a 1-year balloon.

Because if you're borrowing 1-year debt, loan to value doesn't matter as much if you have long-term debt. But as soon as you have to get new loans or you're cash flow negative or you have to sell, well, that's where you're in trouble. And so make sure if you're borrowing money, it's long-term fixed rate debt that cash flows in great locations. Because as soon as you start doing short-term stuff, that adds a lot of risk. And most people forget about risk.

How do you find the real asset value? Many cities are looking good right now, but I think they're going downhill. Examples: Detroit, Baltimore all looked great before they became ghettos.

Well, I mean, everything works until it doesn't.

I love that phrase.

So I mean, it's going to work until it doesn't. That's why you got to make your best guess. Nothing's guaranteed, but you need to look at the employers, like what's the employee situation, who, who's actually housing people out here. Where I invest, you got Microsoft, Google, Amazon, Boeing, Verizon, Intuit, Sabre Data Centers. That's pretty solid compared to Detroit right now. If you've got a single employer in an area and it's dependent on that to do well, probably not the smartest choice. You could probably go find somewhere that's a little bit better, a little more stable, but know that when something's more stable, the returns are less. It's more stable.

It's not as volatile because somewhere like Detroit, you were heavily, heavily, heavily focused on automotive. And as stuff started to shift around, destroyed that. If you have a nice diverse market, the other thing you're looking at, and I do this on worldpopulationreview.com, but you can do this anywhere they calculate census data or aggregate census data, is I want to see population going up steadily, consistently over time. Is it somewhere that where people want to live? I personally don't love the climate in areas like Minnesota. Too cold, too many trees. In the summer, I'm sure it's lovely, but there's certain places where I'm like, man, I wouldn't want to live there personally. I have trouble investing over there. I've never been to Detroit, but I'm going to guess it's probably a little bit more of the same. It's not somewhere where you're like, holy crap, I got to live in Detroit. I just don't imagine that being something that people want to do., which is a factor when you're doing your analysis. Where do I want to invest? Your market's people who want to live somewhere, so figure out where they want to live. Um, we have Ambassador for Christ again. Uh, what is the normal financing terms today? I underwrite at an interest rate of 7%, 30% down payment, 20-year fixed. Should I underwrite at a lower interest rate? You can. Those are super— I mean, that's really conservative. That's—

you should underwrite at the debt that you can actually get. Like our deals, we're not looking at bank for acquisitions. So everything is like, this is what we can do. And typically it's 4%, 5%, 6% interest. The 46-unit that we're looking at right now, it's actually a mixed-use building as well. It's got some retail space on the bottom. First time we're doing that little diversity play on the portfolio, also in Moses Lake. Plug to Moses Lake, go check it out. But, uh, we're picking that up 6% interest. Seller note. Underwrite the debt that you can get, because if you can't get the debt and you don't actually have the money, it's very hard to buy real estate. Yeah.

Now, if you're looking at— there's no such thing as an average seller finance note. They're all completely custom. But if you're writing at 7%, 30% down, and 20-year fixed, that's pretty conservative. You— yeah, I'm gonna imagine you can find that or better.

Yeah, you could probably find that debt.

Um, Um, that's all right. That was— it was a statement. I was seeing where the question was here. Um, is a statement. Um, is a statement. Um, let's see here from, uh, Ethan. Hello, first off, you guys are amazing. Thank you, you're amazing. Uh, second, uh, from what I understand, you primarily do large multifamily besides the resort. What are your thoughts on buying retail with seller financing?

Well, if that's the business model that you want to build, do it. But make sure that you got long-term tenants. I don't want to go into a whole bunch of turnover or vacancies. I don't know how to fill that, never done it before. Out of the 46 units, 3 spaces are retail. We're taking a little jump into something we don't know how to do.

Yeah, that's something that you definitely want to think about. What is your overall goal? For us, and I know people have done this multiple ways, I know people who started in hospitality like we're in a resort right now, really high cash flow opportunities, really high potential, a lot more variable income. They did very well there and they moved the money into multifamily because multifamily is more stable. For us, I wanted to start with a stable base. That's what I personally care about. Multifamily is a very stable asset class. People always need roofs. My one worry with retail is you have something happen like COVID, I have been in a building where the owner just bought the building, it was vacant, and then COVID hit. They weren't able to fill it up. Not good. Granted, that was office with some retail on the lower floor. Yeah, um, but just factors to think about. There's nothing that I'm aware of that is more just traditionally stable, plug and play, than multifamily.

Yeah, it's super stable. People need to live somewhere. Someone asked what our thoughts are on South Florida. Miami, Fort Lauderdale.

Oh, Miami, Fort Lauderdale. Lots of competition. If you were buying there a few years ago, just deal central. It's a lot more expensive. People still want to be there. If you can find opportunities, which you can absolutely do creative financing anywhere, I love the market. People love living there. The climate's fantastic. It's Oh, and then also landlord-friendly, which we have no experience whatsoever investing in a landlord-friendly state. Never done it, but I imagine that that would be a glorious feeling knowing that your government is somewhat on your side. Um, but yeah, love that market.

How about Georgia? I, I've never been to Georgia.

I've been once. I've been to Atlanta. Um, I've actually helped a couple clients in my broker days. I gave a couple referrals over to Georgia and they were excellent. Cash flowing deals, smaller multifamily, a 5-plex, duplex, and a— I think it was a triplex. Yeah, triplex. Um, they loved the deals. They love being down there. So from a very limited sample size in, uh, Northern Atlanta, I think it was the Buckhead area, great reviews. We actually had someone on the channel, uh, she plays DC's Stargirl, um, Breck Bassinger. She has an Airbnb as her first investment property in Atlanta. And she slays it. Um, so from a small experience and small properties, people seem to love it there.

Yep.

Do, do, do.

Let's see here. Thoughts on California?

No. Nope, I wouldn't do it.

No is the only sentence I have for that. What's the next question?

People want to live there, but that's the only thing it has going for it.

It's the most beautiful broken place on planet Earth. Yeah, not my quote.

Um, Ironwood Workman says 18%. Wow, so risky right now. Wow, wow. Risk is a factor of your underwriting on the deal. I'm just going to use an example because this is very true of many of our deals. If your cash flow is 50% day one on a deal— and I've, I've done that, I've, yeah, I've had that before multiple times. My second deal was like 40-ish percent cash on cash return.

I brought it to him, it was on the MLS. Yeah.

I borrowed at 9% to do that one. But if I borrowed at 18% and day one, it cash flows 40-plus percent, that's a huge spread and it's a stable asset.

And I'd like to say that if you borrowed 18%, that alone is not enough functions for you to say whether that's risky or not, because you don't know the debt stack. If we had 18% debt on $100,000, for $2 million of real estate, it's almost irrelevant. The ratios matter. And so don't just quantify risk with an interest rate, because if I paid 100% interest on $100, it's still only $8.33 a month. You got to get a few more key pieces to know whether you're truly at risk or not. Yeah.

And there's other ways to structure it. Like we've looked at 18% but with an equity partner where the buyout is factored as if it was 3 years. So basically what we're doing is we're deferring all the payments. It's not hitting my monthly cash flow. The buyout is mandatory and it's put together as 18% year 1, 18% year 2, 18% year 3. It's compounding. That being said, it's a property that should triple initial investment.

From Lambo Oscar, California. Now that's not my quote, but Cali is the most beautiful broken place on planet Earth. It's very broken.

Uh, from Daylon Harris. Daylon, I think we've messaged on Instagram before. I recognize your name. We have. Um, when it comes to obtaining deals out of state, would you work with the same attorney within your state that has structured your previous deals if they are licensed and familiar with the state you're buying in? 100%, work with the person next to you. Most of the time there's going to be a little bit different contract law, there's different things for them to know. You're usually going to want to work with an attorney in the market you're buying at.

I'd say Granted, we're not buying out of state yet, so we can't speak from experience, but that is what we would do if they were licensed in both areas. What does your legal structure look like for seller financing? Well, the way that we've done it, you got a promissory note and a deed of trust. The promissory note is your loan agreement. It's your promise to pay. And a promissory note is only as good as the backing behind it, which is why you have a deed of trust. Now you can look into what a deed of trust is online, go through the big long spiel from someone way smarter than me. However, it basically states that they trust you're going to pay them, but in case you don't, they're going to take it back and that's it. They're going to put a lien on title. A lien means a loan. L-I-E-N. It's very, you know, it's basically interchangeable. And if you ever sell, you got to pay them off. They can foreclose on you if you don't meet your loan agreement. That is their backing in the way that we structure our deals with our attorney and our owners. That is the backing behind the loan agreement. So we have to make sure we pay our loan. Turns out if you borrow money, you should pay it back.

This is a comment, but I actually— this gives me a thought, so I'm gonna share this. Uh, Ironwood Workman, uh, the way you guys think is totally different. I'm sure this is why it is working. Yes, if you guys have read— and I think most people who watch our channel have— Rich Dad Poor Dad, The mindset is, how do I own it? How do I do things? Instead of, I can't afford it. Um, we took that to heart and Cody's actually met with Kiyosaki and yeah, a couple times. Yeah. We both run into Cardone. He actually did a smaller event with more one-on-one time with him, but we've met with a lot of the people who say these things and we spent a lot of time, like a lot, lot just studying Jordan Belfort, uh, Chris Voss, people who are very, very good in their given fields and what makes them different. The main thing is, is people who ask, how do we do it? And that's all we do.

We all— I see in the bottom right corner, Cody and Christian in all caps. That's funny.

Oh, hello. Um, but we studied really hard people who've done huge things, hit massive targets, and the main things we did is we set our goals, we asked how we do them, and we met with the people who have accomplished similar things Every time we get out of a meeting, and this is the game changer for us, I think. Yeah. Every time we're out of a meeting, the first thing we do immediately, what were your takeaways?

That is, and I started that.

I mean, she did.

Yeah. And now we both bring it up to each other because that has been everything for us when it comes down to going to a meeting. I always, I have a bad memory. So the reason I started this with Christian is so that he could remind me what we learned. But as my memory has improved and I've been able to take notes, It's gotten better. However, I'd always ask Christian, what are your takeaways? And he'd give me a different point of view. And then he'd ask me mine and I'd give him my point of view. And from that, we elevate a lot faster.

Yeah. If you want a tip to learn really, really fast, I honestly think, and this is a totally made up statistic, but I think we learn 5 times as fast because we do the takeaways. I'm of the same meeting. We will do that meeting for someone who doesn't do that activity. You'll miss out on a ton of the takeaways. It'll take you astronomically longer to learn.

And before we go into the meeting, we have an objective going in, objectives going in, takeaway coming out. Speaking of goals, someone asked what our weekly and monthly goals are. Right now, our weekly goal is to close this thing because we want to get this closed and it's our biggest deal. It's $1 million down. We haven't done that before, but we're just excited to get it done. Because it's been a big push up until now. Due diligence, looking at bank statements, and granted, we're working with some of the nicest property owners I've met. I mean, they're very, very nice people, and it's helpful when there's trust involved. But, uh, we're just pushing this through. Next Wednesday we're set to close, so next Whiteboard Wednesday will be an exciting one.

Um, from Sullivan Moore, um, he's our seller financing— yeah, some big stuff. Uh, what's the process like to get on your channel and talk about my journey? I actually really love doing the interviews. However, if Cody is the one running point on it, we'll get more views because Cody's more popular. Um, however, however, um, if you want to join us on the channel, um, the easiest way to contact us directly is through my Instagram. Um, I just— that just seems to be the easiest place for me to track it. So @ChristianOsgood, just hit me up there. Just put in Sullivan Moore. That's easy to remember. But put in your name from YouTube to say, hey, we talked on YouTube, we wanted to chat. I will absolutely connect with you and I would love to hear about how you did that because that's a lot of units very, very young.

Hey, Tyler J has got 8 short-term rental doors in Seattle. Let's hang, dudes. Okay, let's hang, dude. All right, then from Alex. Awesome. Thanks, Cody. Hope to see you at next year's investor summit. You're on.

Thoughts on markets like North Carolina, or in North Carolina, like Raleigh, Durham, Greensboro, Charlotte, etc.? Never personally been. Everyone who I've talked to loves investing there. It's a market that's been hot for a little while, so I think some of your super low-hanging fruit. You have competition in that market because people love living there, but, uh, investor-friendly. People want to live there. Great weather.

We only own in Washington, so from experience, we can only speak to Washington.

I like people from North Carolina though. The Carolinas, uh, our buddy Cody Rebs. Ah, Cody Rebs, he's a Carolina boy. Uh, I like the— I, I like people from out there, so I'm gonna, I'm gonna guess it's a good market. Uh, the fundamentals I've seen are there. Population growth is phenomenal, um, and really diverse jobs. Yep.

So overall, like, I'm just saying yep because I don't know.

30,000-foot view. Well, I used to work for commercial real estate data, so I used to be in this stuff all the time.

Christian is so much smarter than I am.

That is not true, but I'm a data nerd. Yeah, from like 30,000-foot view, absolutely love North Carolina. No personal experience though.

Um, ooh, what are your thoughts on rents during these raising interest rates? Well, I think that it's either going to go up or it's not going to go up. Those are the options. And if it doesn't go up, it's not going to go down, meaning that as long as I'm buying on cash flow today, I don't really care what it does. Everyone's focused on what are the interest rates doing. Someone made a post on a Facebook group called WARI, Washington Real Estate Investors. That's the main group where I found my very first mentor. And they were like, okay, well, the rates are going up, everybody saddle up, get worried. I'm like, if you guys just stopped playing the stupid games and bought long-term seller finance debt, then you wouldn't have to worry about the economics of all this because it's irrelevant.

All the people who said we were crazy when we were borrowing at 5, 6% when banks were lending at 3% now are asking how to do it.

Like, just buy on principles. That's why we post our principles online once a week, every single Monday. If you're a principle-based investor and buyer and you're just being a good human, turns out you can get great deals. But if you're focused and playing the same game everybody else is playing, You're going to have a hard time because everybody's trying to sit at that dang board game. We're not trying to sit at that table. We're playing at our own table and there's no competition. We set our rules based on the relationships that we've built. And because of that, back to the topic of the video, we can go fast, super fast.

I got, uh, 2 questions from Eric. Both of them are great. Is it a good idea to get licensed just to invest in real estate specifically?

Absolutely not. No, no.

Um, now if you want— if you want to be a broker and that is what you want to do, do it. 100% do it. But if your goal is to invest, being a broker has actually nothing to do with it. It typically will get in your way. You typically lose time. I know a bunch of brokers who are obsessed with, hey, I became a broker so I can roll my commission fees into all my deals, and they waste all this time to try to get an extra 2% rolled into their deal.

Oh, it's ridiculous.

If 2% makes a significant difference in your deal, you're already buying the wrong deal.

Yeah, you're I'm already in trouble. So Gavin, you're the GOAT.

Um, the second part of this question: and do you guys partner up for all your properties?

Not all of them, but we partner up on all our properties.

Cody has a 12-plex that I do not. I have my primary residence is owned by my wife and I.

What, I'm not a partner on that?

No. Well, you live there enough, but no, I could probably be staying on my couch tonight. But, um, I own a house and my first duplex without Cody. He owns his first 12-plex without me. He actually let me buy into some of his properties as we got started because he needed some liquidity. And I actually had a little bit of liquidity.

I was 100% owner on my 6-plex and then my first 2 12s. And I let him buy into the 6. He's a 10% owner on the 6-plex. Baby owner. Oh yeah. And he's a 33.33% owner on the 12.

Yes. But generally speaking, we partner on everything. Is that a best practice? According to every lawyer I've talked to, No, but we don't care.

50/50 is, uh, if this goes wrong, we're in big trouble.

Yeah, we have a different set of problems. I don't recommend any legal structure, but, um, most lawyers say not to do what we're doing. I have implicit trust with Cody, and I believe it's both ways since he keeps putting me as 50% partner on stuff. However, traditionally, 50/50 is your highest odds of conflict, so just know that going in if you do partner. But we do partner on And we split it down the middle.

I always keep 0.01 extra if we have a third partner though. Yeah, they're usually my deals.

Oh yeah, and I also don't care. Um, let's see here.

From—

nope, not a question, not a question.

Okay.

If you had to start over today with no real estate— ouch— would you change anything like goals or maybe, uh, what you believed when you first started? I would have bought bigger first.

I would have done— I would have Bought the same size that I started with. Yeah. If I had to start over at 12, there's so many 12-plexes out there that are seller financeable. I would just go straight there. Christian, like you said, would skip the duplex model.

I would have structured our 38 originally as debt instead of equity for what we wanted to do.

Yep.

It was very expensive to change the equity. Oops. Into debt. Um, that's now we, we bought out the partners and we own it 50, uh, 50/50, but I hadn't practiced this enough, so I would take that experience and maybe rewrite a couple of debt structures more affordably.

And we have better attorneys now, and so we'd be able to figure it out.

So we would tweak some stuff from experience. This is just me. This isn't advice for everyone, but for me personally, I would never have let anyone else manage our properties. I wouldn't have used third-party management. We started our own property management company.. And I would've just started just keeping all everything in-house. In-house. Yeah. Those are the changes I'd make. Any other tweaks you'd make?

Bring them on. Nope. I'd buy the same thing I bought.

We, we went very close to exactly what I wanted to do. I, I wouldn't change it.

It was almost a perfect model. There were a couple bad business partners that ended up being thieves. However.

Yeah. A couple of 'em were really bad turd burglars. William Matthews. Hey friends, how can I learn from you guys? Well, our YouTube channel. We show everything for free.

Yeah, so if you're here, go over there, and if you're there, stay there.

Yes, and if you're here, watch till the end of this live and then rewatch it and like it and do all the stuff that helps us out. However, if you want to structure it faster, we have an online course, themultifamilystrategy.com. We just put it together very linearly with short videos and mini quizzes.

It's all the information. And if you want the actual application, you do the lifetime, and the lifetime comes with the live consulting, which means 3 times a week.

Yep, simple as that. Is it possible to negotiate 0% interest but give them— well, first of all, whatever your question is, yes, because you can negotiate anything. Um, but a 0% interest but give them $500K to $1 million more than they're asking for? For sure. You have to have long enough debt on that though.

Yeah, if you overpay for stuff— and this goes back to the gross example that I always share— it's not gross because it's actually gross, it's just a gross, you know, exaggeration of what you should do.. But if you had a million-dollar property, you could buy it for $2 million, zero money down, and it cash flowed $4,000 a month. It's a great deal. But if the debt's due in a year, it's a terrible deal because you're definitely going to lose it. If it's due in 50 years and you're going to get paid $50 grand a year, $4 grand a month for 50 years, awesome deal. You can afford to overpay and it'll probably be worth that in the future.

It'll be worth a lot more than that in 50 years.

Hopefully.

Property's more than double, uh, hopefully. Yeah, historically But if it did— gonna happen, but even if it didn't, the cash flow covers it.

The cash flow pays it off, so who cares? If you can get the real estate to realistically buy the real estate before the note is due and it doesn't cost you anything to buy it, you can't guarantee anything, but you can math it out to where if everything logically happens, you know, the way it should and nothing gets blown up, you know, you don't have massive strike or something, odds are you can math it out. And that's the part about investing, not guaranteed, but you stack your odds in your favor. And in that case, yeah, you could overpay if you had long-term debt, didn't cost you any money on the entrance, and it cash flowed significantly day one.

3 more questions right now in the chat. So if you guys have more questions, post them now. This is kind of the initial last call.

I can see everybody's stuff here. I didn't know if I'd be able to. So if you have questions, feel free to put it in Instagram. Um, from Dana Klein.

I know Dana. Yes. A good friend of ours. Go check out the duplex. Yes. Interest rates don't discourage my vision. You guys must continue positive, creative ways to negotiate your deals. Communication is everything. Hashtag mentors. Thank you, Dana. It's one of our favorite people. Yes. We, we love Dana Klein. Um, do you guys secure a private lender in a second lien position with a promissory note? We got a fun question in chat.

Okay.

Okay. We'll do this one. Then we'll do that one. Do you guys secure a private lender in a second position lien, um, with a promissory note, or is there something else you can secure them with?

We do prom note and deed of trust. It'd just be a second deed of trust. That's just the security. And it's different in a title theory state. You got your lien theory states, your title theory states. We're not here to educate you on that. Just look it up. There's a lot of good YouTube videos. However, in a lien theory state, those loans get paid off in the order that they're recorded. So if you've got a first note to the seller and then you got a second note to the person who's loaning you the down payment, could be institutional hard money, there's different structures for that, could be private. Then the second hard money lender, the person in second position has a higher risk, which is why their loan rate is going to be higher, because if you sell it at a loss, the first person gets paid off and the second person may not get all their money. They may have to settle, and most people don't want to do that.

So now your options are always debt or equity. So if you want to bring in new capital, you can also bring in a new partner, which would be them buying equity out of the deal. So there's other ways to bring in new money, but if you're bringing in an actual loan, lien to real estate, you'll be second position.

Someone asked from Tyler, thoughts on Pace Morby's subject-to material?

Oh, don't get sued.

Okay, okay. Um, so first off, we'll start with there's usually a lack of trust in those situations. You go into deals with people you typically haven't built a relationship with, and you're expecting that they'll keep paying their mortgage. We've had a lot of people message us that have reviewed some of the sub-to material and they've gotten in sticky situations. Now, most of them have figured it out. However, uh, you're kind of going around the bush there. To hide things from the right person, talk about insurance. Yeah.

So you can get— it's usually a second insurance policy that goes behind your primary that will insure the sub-2 note. You also absolutely— and Pace shares this all the time, so I mean, he does the best job he possibly can do of securing these. And you can use a note servicing company where you are paying the mortgage amount and that note servicing company directly pays their bank. That is the correct way to do it. However, what you tend to do on those subject-to things is you're working with someone who has existing debt. While that is an option, usually people who are farther along, who have mastered the game, built the portfolio you want to build, have less debt and have more ability to seller finance. If you've never had to do that, I don't want to go around it. The one other thing that I don't want to do is I try not to go around a bank. Because if a bank actually knows what you're doing, you can trigger the due-on-sale clause.

And most people, when they're getting started, are not in a position to be able to float that. If we had an issue and we had to come with half a million dollars, we could do it. The question is, can you? And so if you're taking on those types of risks, you need to ask yourself those questions. And most people are not able to do that when they're just getting started. The other reason that we're not a huge fan of that model is it typically goes after people that are in a little bit more distress. Or duress. I don't know which one the right— distress.

Yeah, the properties are distressed and the people are under duress.

One or the— one or the other. We go after people that are playing the game at the highest level because we want to learn how they played the game at that level rather than just buying the real estate. I have learned more strategies from the owner of this resort than I've learned from most of the people before that. I learned a lot on seller financing from the people before me. Before I met the owner here. However, the owner here took me to a whole nother level because he's played the game at the B level. And if you're wondering what the B level is, we're talking about billions, not millions. And all the people I met with before were millions. And so if I just tried to buy the real estate, I wouldn't have learned all that. If I just tried to buy some from someone who's under duress and the property was distressed, well, what am I going to learn from them? Well, it's what not to do. And while you need to learn what not to do, you also need to learn what to do. And that business model doesn't really focus on the super affluent people because a lot of the super affluent people pay off their stuff.

The biggest difference, um, I think though between the education portion of this channel and something on anyone else's channel— I'm not going to pick on the individual in question— but one thing that a lot of people will do is they will try to go for the sale, and it's a very salesy call, and they share the calls online so you can watch them. That's grips.

Yeah.

Well, what happens if, if you don't pay the mortgage? Well, what happens if I do? I'm like, well, that's not helpful.

Yeah, that's stupid.

We've watched the video before. I want to have a relationship with someone. I want there to be trust, and the terms look much different with trust. Every time we've asked for it, the down payment is way lower when you have trust. The pieces that you have and your ability to move quickly depend on the depth of your relationships and Generally speaking, you lack a little bit of that in the sub-2 model. So that's all we'll say about that. It's still viable, it's still creative financing. And a lot of the stuff you asked about Pace Morby, he's done some really impressive stuff.

Yeah, he's moved to syndication, which is another thing. What's the best way to find owners? Google Maps. Google Maps. We have a video on our YouTube, How to Find Any Property Owner Ever. If you want our phone number, I put mine in there. We'll see if you can find it.

It's pretty simple, but, uh, it's all over the screen.

This— yeah, the strategy is repeatable. That's how I got in contact with people like Jordan Belfort, Bradley, people that are higher up in the space. And we'd probably both know their name. You can find owners just through Google Maps and a little Google search. Doesn't cost any money unless you're in LA County. LA sucks. Sorry. How do you get constant deal flow? Well, relationships. And that's just, you know, I started building the relationships over 3 years ago now, and it's been a grind for 3 years. Okay, Google Maps, find the big roofs, figure out who owns them, learn their story, get the takeaways from the story. I've been doing that for 3 times longer than I've known Christian, and then we've been partnered anyway, 2 times longer than I've known you because I've known him for about a year and a half, partnered for a year.

And I've spent 4 years working in this industry meeting a lot of the biggest owners in the well, a few of them nationally, but a lot of the players in Washington with banks and owners. Like, we, we had relationships, and so that helps a lot when you have people you can call. But ultimately, I think what moves you forward to the next level is your ability to share your personal story, and that will grow as you continue to play the game.

Yeah, your ability to communicate your goals, where you're coming from, where you're going, and why determines how far and how fast you go in relationship to those goals. That's it. If you could communicate effectively, you can go a lot further, a lot faster.

We would not be standing here if we didn't share the story of the 38 online, which helped us meet new people who introduced you. Uh, you met Brandon Turner's friend who got you on BiggerPockets, which got, you know, close to 900,000 views.

That got me connected with a lot of people, but it's only because we talked about the 38 online. We posted a video and showed pictures of when some tenant drove into our building and knocked over the wall. Someone else just did that again last week.

Yeah, people love to drive through our 38-plex. Yeah, it's a brick building.

I don't recommend trying. Yeah, they'll ding up their car, but whatever.

When you're doing that though, the story is worth more than the real estate. So as you play this, just a function of time in the game, you will build more credibility, you'll have more relationships, and deal flow is constant. Going to the next question, um, you said that you'd start with a seller-financed 12-plex. This is Cody saying you you know, do what you do.

That's me.

Uh, what would your ideal cash flow be? Positive for that? Yeah. Is there a number of cash flow that you look for?

I remember I started— I like $1,000. $1,000 is a great number. I didn't quite hit $1,000. I did on my underwriting, and then I realized that there's actual expenses that pop up. Magic. It wasn't that many, but it brought my actual average cash flow at about $800 a month. I would shoot for $1,000.

Gonzo, I'm looking for a mentor. Do you guys provide that service? Yes, with our lifetime membership, we do that for 3 months, 3 times a week. Yep. Check that out. The link's in the description here, but it's themultifamilystrategy.com. If you're a lifetime member, we want you to have the information first and then we'll work on the application. That's why we do that that way. Eric, again, how would someone who's not licensed find off-market properties to get that competitive edge?

Well, Google Maps. Yeah. The licensed people don't even see the off-market stuff unless they're working for it. It's the same exact strategy. You find out who the owners are, Call them up. And if you want them to sell to you, then yeah, you can ask them to sell to you. But we don't do that. We ask them to teach us how they did what they did, and then we get a lot more opportunities than most people ever get.

It's actually more complicated by just a little bit when you're an agent, because off-market opportunities, the agent has to call and then they have to balance. And I see agents get stuck on this all the time. I have to balance, am I brokering this deal or am I buying this deal? When you're calling you're just another owner. Like when I had my first duplex, I'm just calling people with 12s going, hey, I own a duplex down the street from you, we're property neighbors. They're like, so? I'm like, well, I want to get to know the neighbors in our community. I have this goal of expanding and I don't know how I do it. Yeah, you've done something I've never done with the 12-plex. I got no money, so couldn't buy it, but I want to know how you got to where you're at. Got enough money for coffee. Yep, that's pretty much how it goes. If you're a broker and you try to do that and I'm an owner and I know that you're a broker, I instantly go, oh, they're gonna have a pitch for me, they're gonna want to sell my stuff. So I think it's actually easier to source off-market deals without flexing the broker thing. Um, oh wow, we actually got a bunch more. Boom shakalaka! You guys actually listened when I said last call for questions.

Thank you. We'll go until the questions end.

Uh, does your private capital, uh, mind being in second lien position? Um, not to know, because there's trust. Interest usually goes up a little bit, usually a lot of it.

Yeah, but you know, from 4 to 12. But trust is important, and that's why relationships matter. Work with people you can trust, work with people that trust you, but have contracts in place so they don't have to trust you and you don't have to trust them.

Ooh, I know we both have the answer to this one. Cody doesn't read a lot of books, but I know you have a book for this. Uh, do you have any recommendations slash books slash videos on becoming an effective communicator?

Books?

You've read Chris Voss, right?

Yeah. Well, that's a great one.

That was a while ago.

Okay. Well, fine. Never Split the Difference. Chris Voss is great.

Fantastic book on communication.

Jordan Belfort. Thank you. Jordan Belfort, Way of the Wolf's got a great book.

Straight Line Selling. Jordan Belfort talks a lot about how to manage your tonalities. By the way, do that in audiobook because if you read about tonalities, it's just not the same as listening to a master express the tonalities while reading the book.

Yeah.

It is just much better in audiobook. Chris Voss just has an epic voice. You can do that in audio too, but the content is the same whether you are a physical book person or an audiobook person. Those are the two books that I immediately think of for effective communication: How to Negotiate, How to Speak Confidently, Where Does Uptone and Downtone Go. If you go through those two books, I would argue that's all you need to start becoming an effective communicator.

Well, our live is going insane. Oh, there, now it's back. That was very strange. Brian called me. Oh, Brian, get out of here.

No, yeah, join our, join our live. Cody and Christian, I've, uh, been around a long time now. I've lived in Western Washington, Montana, uh, sounds familiar to someone I know. Yeah, yeah, West Virginia. I was like, why, why V? Where is that? Oh yeah, West Virginia. West Virginia. I can see that you guys, uh, are the real deal. Thank you very much for this info. Oh, Not a question, but, uh, you are very welcome and thank you so much. I appreciate, uh, the affirmation from someone who's been around a little bit. We have noticed we have not been.

Yeah, we have a lot of haters. I have more haters than Christians, so we appreciate getting recognized by not haters. Yep. I get a lot of hate mail.

Yeah, meanies. But man, um, if you— if anyone wants, uh, short-form social media to take off, Instagram, TikTok, YouTube Shorts, be really young and do epic stuff and have everyone comment, uh, cap.

I just learned what that meant, cap. And then we put a fancy cap below the cap.

But if you put a whole bunch of comments that are negative, the algorithm blows it up. So, so be obnoxious on short-term stuff and then provide valuable content on YouTube. Um, what happens when the seller, uh, dies in seller financing? Does the family take up the loan?

Yes. Yeah, typically. I mean, you got to make sure it's structured properly. But if it's through a note servicing company, that's one of the reasons people actually do seller financing. It's easier to pass a note than it is to pass property. You don't have to manage the note.

Very, very typical. But it will follow just like all their assets.

It's a note, is an asset, and that will flow to their heirs as appropriate. Thanks, Andy.

We appreciate that.

Andy cares.

Boost the algorithm. I usually will respond with the top hat because it's fancy caps. Fancy caps only. Um, Andy also had a question here. Um, also, how would I raise capital if I find a good seller finance deal but need capital for the down payment?

Well, call your sphere. Luckily we're in your sphere, we can help out. But no, you call the people that you know. This is why building relationships with owners matters. We had an owner funder Professor Street Apartments.

Um, let's see here.

Off-Road Tracks.

Oh, he said he's here late. Well, we're— you are late. However, we do this every day—

or every day, not every Wednesday.

What did you sign me up for? Every day that starts with when? Um, every Wednesday, uh, 3 PM Pacific, we're here. So you can always join again. Um, and if you have any questions, post it here because we're, we're on the back, uh, the back nine here. But If you have a question, ask it here. What's the minimum car insurance liability you need to protect your assets? Would you go the highest coverage? Because we have cars driving through our buildings. That makes sense. It will fall into your just general insurance. I think we have a deductible of like $1,000. Yeah, it costs us $1,000 to fix the building. Worth it. And last time they actually damaged a part of the— damaged into the shower zone, which we actually needed to redo the shower. Which was convenient. It was actually economically beneficial.

Yeah.

Oh, that was also the— that was the one unit in there where we didn't have contact info for the tenants.

Turns out they were squatters. So yeah, we got rid of them.

They left. Uh, that was a very fortunate crash. Uh, this last one, I would prefer that people would stop running the building.

Yeah, stop running into our buildings.

Well, um, uh, from Andy, how do you, um get and find investors, uh, what type should I get? So when you're actually looking for investors, it's the exact same way that we're finding owners. You have relationships with people who are in the game. Magic. Some people have capital, some people have deals, some people have knowledge, some people just want to sit down and get coffee, and all of it is fine. You're just building your network. But when I start talking to people— we talked about early in the call, uh, we talked about the Feather Street duplexes. Yeah, the investor there, I talked to him one time when I was running a call center, because he just sold a property and we were just uploading data. And he had mentioned in the call, hey, are you going to be talking to any other owners? I'm looking to place money into a deal for tax purposes. And so I met up with him for coffee and turns out all he's trying to do is double his money in real estate.

That was the 2 for 1, 5 years.

So that's how we wrote that, is someone communicated a goal that they had and later we had a deal where I'm like, oh, you know, it'd be perfect. Exactly what he wants to do is what we can offer. And that's what the right investor is, is when you have a relationship and you line up exactly the needs they've expressed to the right deal. And property owners are investors.

Mm-hmm. It's a lot of emojis.

There are. I'm scrolling through, uh, comments. Comments. Are your contracts unique to each property?

Yes.

Yes. Uh, and if it's an on-market deal, do you and the seller work together on building the terms? Typically you're going to work through the broker if there's a broker.

Yeah, if it's on the market. On market. Yeah, this, the, the Robin Hood is actually on the market, and we didn't know that until after we already been hanging out with the seller.

Your first deal though, the owner was an opt— or not the owner, let me try again. Your first deal, the owner, seller— no, broker. There we go, words, Christian. The broker was an obstacle. So you actually got permission to go to the seller, right?

Yeah. We, I just started working directly with the seller cuz the broker was hard to work with and that's why the deal never sold in a year and a half. So I got to work directly with the owner, but had to get specific permissions in writing.

Mm-hmm. You wanna navigate that very carefully, but typically if it's on market, you're gonna work through the broker. That is why the owner has contracted them. Oh, Off-Road Trucks. Hey, you got a question.

Awesome.

Uh, you probably explained this. Uh, how did you approach the Robinhood?

Um, Dion McNeely sent us a text. Yep.

And were they already offering seller— I assume the next word would have been financing.

Yeah, they, they were offering seller financing. So Dion McNeely has a YouTube channel. He's a bigger YouTube channel than ours.

Dion Talks Financial Freedom.

You should check it out. Yeah, check it out. He's, uh, helping us grow. However, he sent us a deal. He just retired. Congratulations, Dion. If he were here, he'd say send us a like, because every time you hit the like button, an angel gets his wings. Yep, we didn't get that here, so he was not watching. However, he's a great channel. He sent us a text. He just retired. He had a deal that was too active for him because he just retired, so he's like, you guys should do it. Zero money down, seller financed. 4.25% interest rate. And like, what is it? It's a resort.

And Christian started spearheading that. I love fishing, hiking. Again, when he said where the resort was, I'm like, this could be the next thing. Uh, what we're always trying to do is learn from people who've done something we've never done. This sounded like the next thing. It's not a huge jump from multifamily. Never change your business model. Yeah, but this sounded like a natural next step.

We've mastered the long-term rental games, we have some cash flow, Now I'd like to point out that he was a little bit off because he said zero down. He wasn't wrong with zero down, he just forgot all the other zeros in front of it and then the 1. So it ended up being $1 million down, 4.5% interest. However, other than that, he was spot on. Very close, very close, just $1 million off.

Yes, but only one, one significant digit, which was the, uh, 1 that was several zeros away. Um, let's see here. What is your average down payment percentage for your seller finance deals? 10.

10. We have, uh, our lowest is 4.5.

Yep, 4.5% down.

Our highest is what, like just, just over 20? Mine was close to 30.

Oh, that was 6 bucks.

Oh, you're right, that was a little bit.

I did a lot of money down percentage-wise for a very small deal purchase price. Yes. Um, which property website can I find good deals, mostly seller financing?

Probably not going to find it on a website But your ability to make good seller finance deals is the creativity behind it. LoopNet is the deal graveyard, and CREXi is a slightly better version of the deal graveyard. That's where deals go to die. So if you want to get creative and just look at a website of a whole bunch of dead deals, you can go on there.

We buy a lot that's on LoopNet though. About 50% of our deals have been posted to LoopNet. Uh, the magic thing there is a lot of people don't ever go after them.

Creativity.

Like, they just don't creatively think about the deals on LoopNet.

They just try and beat up the price.

And so if you're on LoopNet beating up price like everyone else, you're going to get nowhere. Uh, the cool thing with those LoopNet crutchy sites where it's been listed, that means usually the brokers try to shop it around to their sphere off market before posting it. Yeah. So it's been shopped around, no, no takers. They'll usually sit there a while. And when it's been on market for a while, an owner may be willing to rethink their approach, which is why you can call someone. Um, a lot of the properties that we've purchased have been on market for 200 days or more.

And not that we haven't done it a lot faster, but yeah, our best deal we ever bought, shy of this deal— we still have to execute on this next week— but shy of this, the 38-plex was on the market for 13 years.

It was a little bit more than 200 days.

It's a lot of days. That was— it made us 7 figures each.

Uh, do we have any other questions? Oh yes, we do. Um, from Andy also, how would I approach an owner I'm trying to get coffee with who haven't responded to me? I'm not trying to get blocked, so I'm not sure how to pursue. I've been blocked before. I've been blocked by the same guy.

Yeah, I, I was like, Christian, he won't block you, and then he blocked Christian. Some people are just gonna block you. He texted me back once though. Yeah, be yourself, reach out. It's either gonna work or it's not.

Leave them a voicemail. Don't, don't be overly detailed. I, I I personally hate listening to long voicemails, so just keep it simple. Hey, Sandy, had a quick question for you, wanted to connect, give me a call back, here's my number.

Yeah, don't be a Cardone sales guy. Cardone's great, sales guys are not. No. Yeah, if you haven't heard them, call up the company and then, then you'll understand what not to do.

Comment, comment. To clarify, it's a coffee meeting to learn, but not— they're just an owner in the area I'm interested in.

Uh, please clarify your question. There's that last one there.

Oh, from Andy?

Uh, from, uh, from GX. Okay. The more energy you put in will eventually pay back. They are a great example. Thank you.

Oh, we appreciate that.

Maybe it is Andy's last one. All right. From Andy. Yes. Clarify, it's a coffee meeting to learn, Not buy. They're just an owner in the area I'm interested in. We'll just call them up, say, hey, I'm trying to figure out how to do this. You've played a game I've never played before, and I'm curious how I could do something similar. You know, just be honest, be transparent. It's one thing to be honest, it's another thing to be transparent up front. Just let them know what you want.

Very few people do that. That is the difference between owner and seller. The way that you think of them going into that meeting is completely different. That is one of the most common Things that we get as feedback. People get through their first meeting, they go, I don't have a deal. I'm like, I already know what you did wrong. You went to that meeting thinking of them as someone who's going to sell you something.

That's just not what it is.

We don't call sellers, we call owners. I've still never asked anyone to sell a property before.

Just hasn't come up. Yeah, I offered to sell you my ownership in the 12th.

Yeah, I've never asked anyone to sell me a property. It just never got around to that. Off-road tracks. There's a $4 million resort in Stanley, Idaho, 12 cabins, main house.

I have no idea how I'd even do a deal, but shoot us a message with deal specifics if you want to on Instagram. We can hop on a Zoom call and look at those. Those are super fun deals, but we don't have enough inputs. The main thing is if you have the deal, you gotta assess the income and then you gotta put together the debt package, and the debt could just be seller financed. But you need to figure out the debt now that you've got the deal. If you love the deal, you want to buy it, it makes good money, and it's just the one that you want to buy, you have to figure out the debt next.

And he said, what's the worst that happens? The broker hangs up on you. Well, make sure he doesn't hang up on you. You want to make sure that he believes that you're ready, uh, able, and willing to buy. So you're gonna ask just a few questions. The shotgun version of these questions are, first of all, you ask, is it still available? So many people skip that. Next, ask them something general about the area the property's in. You want to just get them talking. Break the ice, ask him what he doesn't like about that property. Why is it still on market? You're trying to figure out what are the downsides. And then you're going to ask how the bank is going to look at that particular property, because that will let you know, are there deferred maintenance? Are there bad books? But if you go through those first 4 questions, that's enough to start building credibility with a broker.

And then, uh, last question we've got, have you seen more results in— oh, we got a whole bunch coming in. More results from owners or brokers? I found more from owners. I am a broker, and so I guess by default all of my opportunities have come from brokers because I am a broker. However, you're not a broker. Most of my deals came from owners, and everything I know has come from property owners. That's the bottom line. So I would meet with the owners because if the brokers knew how to play the game at this level, they would own at this level. And there's a lot of brokers that do own real estate.

You just got to meet them. Uh, Caden Sims: Christian, I heard you own a brokerage. Cody and I own that together. Yes, we split everything. Uh, could you talk about that and what the value is for you? So for us, and in Washington State, and actually in most but not all states, I don't believe, you have to be a licensed brokerage to do property management activities.

And we're a management firm for our stuff and for a little bit of third party, which is why we did that. We're not actively recruiting. We're not trying to be the next RE/MAX.

That's not our goal. Yeah, so as far as brokerage activity, no benefit. As far as property management, a ton of benefit. And so that is what that is. It's a property management company. We do have a designated broker that has to head those up. His name is Brandon Vuklich. If you're in Washington, he's one of the best brokers I've ever met.

He is phenomenal. If you need a real estate agent, he's your guy. We're licensed, but we refer all our stuff to him. We just referred a $900,000 deal to him that closes next week because we don't want to rep that stuff. We want the professionals to do it. Yeah.

So, um, that's the only benefit is I guess I get to sit in the same office with my favorite broker.

Um, it's pretty fun. Yeah.

If you guys are in Washington or doing deals in Washington, uh, you want to call him Brandon. Spelled phonetically. I'm not gonna try that on the call because I might mess it up. It's live, it's there forever. I know, Brad's gonna watch you and then get mad at me. Uh, let's see here.

Um, I'd love to look at, uh, the deal if you're looking for a partner. We don't openly partner. We let people sail on their own ship next to ours, but we're done letting people get on our ship.

But happy to walk through deals with you if you have something that you need help looking at, or you're part of our mentorship, that we can actually do that on Every Tuesday we look at it as a group. Deal Deep Dives are every Tuesday. Happy to get you through, um, through your deals. Do you ask your sellers if they own the property outright? Owners?

Yes.

Do you ask your sellers— autocorrect— owners? So what it should say is, do you ask owners if they own the property outright so seller financing is a good option? A lot of my sellers want the, uh, quick cash and don't want the residual drip. I don't ask if they own it outright, um, one That's public record. It's actually pretty easy to look up.

Yeah. Um, so you can find that out without asking.

Don't ask questions that you can get answers to. Um, how— because yeah, if someone asked me if I have debt on it, I'd be like, okay, you didn't do your homework. Um, that's a red flag for me. However, there's also the wrong question because you don't really want to know what's the debt. You want to know, can they sell or finance? And so if I want to know if they could sell or finance, I'm going to ask them, will you be open to holding the contract? I'm going to ask them the direct question to get the direct answer. I wouldn't beat around the bush on it. That's a much gentler question than, what do you owe?

That just sounds so personal. Yeah. And the time that I did ask someone what they owed, they lied to me.

And I've asked that once and they were really uncomfortable and I had to mega backtrack. Uh, that was actually that, uh, poor Orchard, uh, fourplex that we did. I asked that question and that's how I learned that's the wrong question.

Yeah.

Bad question.

Yeah.

Sometimes you guys just gotta learn by asking. Mistakes are fine as long as you don't repeat them. Uh, how long did it take you to get the math down? Um, I'll speak for myself really quick, but, uh, for me it probably took me a few months, but really it was as soon as I did my first deal. Yeah, it all made sense. It was all in theory until you actually execute. So, um, I got a rental calculator, I used it for 2 months, I found my first deal, I bought it, and then I learned it. Cody's kind of a math genius. I'm actually curious your answer on this question.

Well, real estate math is super simple. So you have income less expenses equals cash flow. And those are the only inputs you need. Everyone wonders what's the IRR, what's the cap rate. That's irrelevant. You can figure out how to buy and how to never lose it. You keep it super simple and you can learn it overnight because almost everybody that's watching this— I don't, I can't say everybody because I can't guarantee that, but almost everybody here knows how to do subtraction. And if they can't do it on a piece of paper, they can do it with a calculator. And that's all you need. Income less expense equals cash flow. And so it didn't take very long at all. Granted, I can do a lot of that. I can long divide in my head. I can just see it. So I can do a lot of the calculations in my head and it doesn't usually take super long. However, the actual real estate math is not complicated.

If you can't do it in your head, you can do it on this. Addition, subtraction, multiplication, division. Those are the options. That is all you need. There is no long formulas in this whole thing. It is basic math. Um, let's see here. Actually, a lot of questions going in, so I'm gonna start rapid firing here. Let's go. How long did it take— you know, that's what I just read. Uh, scrolling down one more time from Lucas. Uh, what are some of the things you learned, uh, strategy-wise from, uh, billionaire owner?

Oh my goodness, so many things. Uh, there's some stuff I'm not qualified to talk about on this yet. Because I haven't mastered it. However, we'll go over the simple stuff. We did a one-pager exercise. Yeah, I love this. I've mapped out my story with the circle drill. You got relatable points, goals, significance. Well, the one-pager is your financial page. It is the, the goal of it, and I did this and it allowed me to rearrange my pieces with people that were much smarter than me, but I mapped out all of my financials, all the debts, all the incomes, the cash flows, cash Not a lot of that yet. We're working on it. And all the real estate. And so I mapped it out all on one page, all the companies and all the partners. And I put it in front of someone who's a lot smarter than me. And they told me what I should do. I just— you map it out on one page, super simple. Anybody can read through it in a couple minutes. And then you give it to someone who's smarter than you and you ask for advice on rearranging your pieces. That's it. And that in itself was so simple and it worked. Worked very well. When I looked at it, I was like, oh, this is what we should do. And that's how Christian and I find a lot of our little tweaks in our system and our business models, just taking little bits and pieces from the resort owner, what he shared with us, and applying it. And it just simplifies everything. What we've found, and I found this since I've been living here, is that you can simplify stuff way more than you think. And when you can keep it super simple on growth mode, Makes it a lot easier to stabilize.

That's it. Yeah. Little takeaways go a long way. The biggest thing that I got from you sharing all that you learned is if you can just simplify things down into that one page and take a few actionable steps of like, okay, what are the 3 steps I need to get from where I'm at to where I want to be? Now you just have 3 things to focus on. It's not this big nebulous, like, what is our path from here to there?

It's just—

and now that said, yeah. It's do 3 things. It's like, oh, okay, that's easy. I can always do 3 things.

Yeah. And there's some more stuff to that story that I can't share yet because I can't articulate it simple. And if I can't make it simple, it means I don't know it all the way. So I'm working on that with legal team. One day it will be on this channel, but not today. Yeah.

I said we're going to rapid fire. Then you asked a really good question that takes some time.

Uh, where do you apply for lifetime membership?

Uh, themultifamilystrategy.com. The word the was needed because I could not find another URL that worked. And we don't add steps. True story. Uh, learning aside, uh, can you talk?

All right.

I can, can you talk? Yeah, I can as well. Can you talk about how much time is required depending on deal sizes and such? I assume that means from start to finish to close. Yeah.

Yeah, I mean, when I got started, I started getting licensed and learning about all of this stuff in January 2019. October of 2019, I bought my first 12-plex. Some case studies: Caleb and Chuck started 9 months ago and they bought their seller-financed 10-plex. They had no knowledge and absolutely no resources. Takes about a year to play the game. That's about what I think. If you've got money, takes less time.

Yeah, once you find your deal and you put in your offer Just in case I misunderstand the question, 60 to 90 days. 60 to 90 days is a normal close thing from where you find it and you close it. Off-road treks. Yeah, you can see all the information about the property via something like PropStream, BatchStream. Oh, it's a comment, but that's true. There are other systems like, oh yeah, like BatchStream and PropStream that are just fantastic.

We just put it out there for free. Google Maps, you can do it for free. You don't have to pay. If you've got money, that's great. But if you've got money, you may not have to sell or finance.

Use the resources you've got.

What else we got?

I see let's go. Uh, have you guys looked into already using Energy Star appliances? Also opinions on green financing for LEED projects.

We'll likely do more of that as we get more into stabilization mode, but you're one build—

LEED certified stuff is usually on some big buildings. We have a lot of mid-sized stuff and we've picked up a lot of our inventory when we started was 1950s. So we're, we're dealing with stuff like Zinsco panels, which have a habit of combusting. We're doing renovations on like old stuff, so LEED certification is a ways off on some of those. On some of our newer stuff that we'll be buying through the next year or two, 100% yes. There's a lot of questions. I know, I love this, just keeps coming. Uh, from, uh, Caden— oh, earlier in here Caden asked, I, I skipped over it, um, But he asked, are we still looking for a person to help us run the maintenance and cleaning for the Robin Hood?

We got that filled. Perfect.

Yeah, the owners filled that.

The— they've got some great people here. It's not officially hired. They're not moved in, moved in, but they've been here for a while and that is happening. We need more people in Moses Lake though. MPMapplications@outlook.com if you want to move, get free housing, and learn this strategy. We'll throw you into the mentorship for free and we'll, uh, pay you to help us out.

Yes, we need help with, uh, it's like the property management basics. So it's showing units, it's helping us actually manage some of our contractors.

It will be a simple job. It may not be easy all the time, but you'll learn exactly how to run an empire like this, and we'll teach you how to build your own.

Yeah, we really need that position.

It's Yeah, we'll throw in free housing.

Yes, I will pay for where you live. Um, do you guys shoot for a rough cash-on-cash return, 12, 15, 20%? For me, my absolute minimum is 8% is where I look at it. If my cash— now, if I'm raising other capital, this means my personal return on the capital in the deal is 8%. So if you're bringing in partners and other debt, that number has to be high enough numbers that your return is 8%.

Gavin asked if I could repeat that email again. Do it. I can. MPMapplications@outlook.com. MPM, like multifamily property management.

Very creative on our, uh, on our name there.

We were going to do MFPM, but that could be misinterpreted by some companies, so we did MPM. But yes, MPMapplications@outlook Yeah, and if you want to shoot us a video or don't, but yeah, send us a message.

Where do you find the best hard money deals? Hard money deals, you know, you find the deal first and then you find the hard money is the short answer to that. But the easiest thing to do is hit your network and ask for referrals because nothing beats a referral from someone who you already know and trust. If you don't have a hard money person in your pocket, Talk to somebody who does. Other than that, I would Google— I'd literally just Google hard money and the area that you're buying. The companies that want to place capital there are actually paying the SEO there.

Yeah.

And so if I want to do hard money in Moses Lake and I type in hard money Moses Lake, those top few companies want to place money there.

All right, we got some more comments in the chat here. And again, if you're new to this channel on Instagram— sorry, I'm looking both ways— but if you're new here, we'd appreciate if you subscribe on our YouTube channel. That helps us out a lot. Seller financing tips. I know that it will be the case by case, but after all your experience, you should have a framework of what would be most common winning terms. Well, the winning terms is what everybody wants to do. So the seller financing tips, and really just put it out there what your goal is, learn about what their goals are and what their goals were. It's not just about where they're at and where they want to go, but it's where they came from. So if you can map out where they came from, where they're at, what was significant when they actually hit their original goals, and then share your pieces to your story. That connection is what will determine your terms on the deal. It's not the actual deal that determines the actual deal. It, it's your connection. And when there's trust, when they like you, when they want to lift you up— every person I bought from wants to lift me up, maybe outside of one. My first one, but we did go water skiing together, so I mean, we're friends, but it's not all the same because I didn't have the strategy back then. If you can work with people that want to give you a boost up, returns will come.

Um, the kid asked, what information would you like us to send to the MPM?

Take a quick selfie video, shoot us over who you are, what you want to do, and we already know what we want you to do, but tell us what you're looking for. Our goal is if anybody's working for us, we help buy real estate. Hannah, who was our first, uh, MPM hire, she's also part owner. Yeah, one of my favorite people. She got 10% of this resort for free because she's going to help us out here, and she has done good by us on the management side. And so we're going to keep giving her percentages of resorts as we keep buying more vineyards, as we keep scaling. But this deal puts her over $1 million of real estate. She'll be a millionaire in the next 2 years. You know, that, that's our goal. If you're just looking for a job and free housing, it's not for you. So shoot over what you want to do. We'll educate you on how to play the game. We'll give you free housing and, uh, we'll show you a new market, how to manage assets at that level, because then you can do it on your own. Yeah.

If you have a— Hannah's the one who's reviewing all of them. If you have a resume, attach it. If you were sending it to me, I don't care. Um, but for her, she does like to see your experience. So if you have a simple resume, put that in there.

And, um, We'll go from there. Hey, Caden Sims just asked the same question here, so that's good.

Excellent. Um, from Jon Snow— that's a familiar name— what is your strategy to keep your properties if unemployment skyrockets and occupancy falls again?

Cash flow. Yep, we can lower our rents, and our rents are already way below market.

So if market drops, which by the way Rent does not drop in a down market. It hasn't done that significantly since, uh, 1920s where it only dropped 18%. Um, so if you deal with a lot of non-pays, last time the government backstopped that with housing authority.

Mikey asked if it's the gun show.

Might be. Uh, they just— if we need a broker's license, you covered that earlier, and then GX answered for us, no need for broker's license. Just go buy an investment property. Do it. Yep. What are some great questions to ask during a meeting? Well, it depends on what your meeting's on, but assuming that you're referring to the meeting where we're talking to owners of real estate, your basic questions are going to be, how did you get to where you're at? Or how did you buy this particular property? Depending on the reason for your call, you're just going to talk to them about the pieces that got them to where they're at. What, what are their goals? You're gonna pretty much end on the question, or some iteration of the question, how in my position would you apply what you've done? Like, with the knowledge you've just given me, how do you recommend I move forward? And those are the best questions you can possibly ask. How'd you get here? And how would you have me move forward? And then go out and apply it, because that's how you get your next meeting, and that's how you actually do deals.

You—

that's how you build trust.

You want to build trust quickly? Get a little bit of info from someone, go apply it, and let them know how it changed your life.

Any remote opportunities to work for you?

Not yet. Everybody that works for the company is remote right now. We don't have any more positions that are remote.

Yes, I need, I need someone physically in Moses Lake. Uh, that is the only one thing that I do need. It's remote-ish in that you work from wherever, but you have to actually be—

Yeah, you work from a remote area. Yeah, it's not that—

No, it's great. Uh, Ryan White, um, a question. What, what's your overall reason for investing? Cash on cash, IRR, what's the go-to for investing?

I mean, cash on cash would be the biggest one, but TSCR matters more than anything. Yeah, your debt service coverage. If your debt costs 100, I want 200 in net income, 300 in net income. That's after operating expenses. Your debt coverage matters more than loan to value. It matters more than your IRR. Some people, some syndicators are going to say I'm dumb. For saying that. However, they don't own all their real estate and I do. So debt coverage matters more than IRR. If you're just trying to multiply your money over and over and over, sure, sell your deals, that's great. But the people that own real estate for long periods of time win more than people who sell. So if you can focus just on long-term debt, great location, great debt coverage, that is what we focus on.

From, uh, from Hot Shot C, This is a question I should ask Brandon, but if you're investing out of state and using third-party property manager, when is a good time to bring it in-house and start your own business? That is, I appreciate that you watched the video where Brandon talked about investing out of state. He is the master of doing that in our group.

We haven't invested out of state, but he owns a multimillion-dollar apartment complex in Boise.

I would, and this is just my advice, I would bring it in-house when you own enough in that market to make sense. For you to actually expand business there?

Yeah, we brought it in-house in Moses Lake because we can control the rent comps better than a third party. Because the thing that's flip-flopped, and most people don't understand this, but it's super simple. In a stock market, everyone's looking at all the famous people that seem to be manipulating on insider data. Well, insiders make a lot of money in that, and it's illegal, but people do it. In real estate, outsiders control the market. The insiders, the people that have been there forever, are used to prices being where they're at. Outsiders come in like, this is a great deal, rents are too low for this valuable asset. So they're the ones that actually move the market. That's what we did in Moses Lake. Rents went up, but the quality of life that people got also went up because nobody in that town was fixing the properties. They're used to the stories from the '90s of this was the crack shack, we're never going to fix this. And we went in and we fixed it, and now it's a, it's a lot better, and it's getting even better. Like, it's going to be nicer than a lot of stuff that was built in the '80s, and this stuff was built in the '50s. So outsiders control the market in the real estate space, and when you start buying enough to make an impact, when you do little rent bumps, when you do your actual improvement projects, that's when we would take it to, um, in-house.

Another question: what are you netting monthly? Well, I'm not going to answer exactly what we're netting monthly just because that's in Bad taste.

It is more than 5 figures and a little less than 6. Yes.

Off-Road Tracks is based in Boise.

Woot!

That's the comment.

Woot!

Woot! Uh, do you recommend sticking to smaller deals for those who have an existing full-time job and family?

No.

Nope. It is actually exactly as hard, at least in my experience, exactly as hard to run a 12-plex as it is a duplex.

Duplex, almost no difference.

And a 38-plex. 38-plex is a little bit harder than a duplex, but not much harder than a 12-plex. Like, it's just not that much harder. As you get bigger buildings, they usually come with management. Um, so you get enough buildings, you can hire a professional property manager. You get a really big building, it comes with in-house management. Um, we're not there yet. The bigger you go, the easier it is to manage.

I spend a lot—

or so we've heard. Well, I mean, I spend a lot less time personally managing our portfolio today at 100 units than I did when we were at 50. That is true, by a lot. That's true. So, uh, scale helps because more cash flow buys you more management. Ta-da!

It's magic. Yeah.

Uh, does your, um, property manager that you give ownership to the resort, uh, post YouTube or Instagram videos? She doesn't, not yet, but one day. I, I want to share her on this channel more. She is baller. She's just a lot smarter than us.

Yeah, the reason we keep things so simple is, number one, if it's not repeatable, it's not really that cool. And I'm not smart enough to be super complex, so she is— she's brilliant. She is.

We're not.

Yeah, she's— well, I'm not. Everybody on the team's smarter than me. And by the way, if you're the smartest person in the room, you're in the wrong room.

So Christian, sorry.

Nope, that's okay.

You're in the wrong room. Cody Christian, my name is Steph. How can I buy multifamily USA? I'm Peruvian. I like a lot of your videos. Okay, do you actually live out of the States? I'm gonna guess so. Okay, he used the upside down question mark and he's Peruvian. So if he's from Peru and he uses the upside down question mark, I'm gonna guess yes.

Okay, well, I've never done that. However, I do know people that have moved from outside the states to the states. One of the first people that ever sold to me, it was the second person, uh, he moved from out of the states and he's built multi, multi, multi-eight-figure real estate portfolio over the last 20 years. So it may be in your best— and I don't know your situation at all, I don't know if you can do this because I haven't had to do it myself But it may make sense to move, but haven't been there, haven't done that.

So we have made it through the questions, and I am incredibly hungry, so I'm— we're gonna go get food. Yes, we are. Thank you all who—

I've seen a lot of the people in these comments here go all the way. Will Christian read every comment?

No, but I will. What we'll do is, uh, yeah, when we try to read every comment, I'm pretty, I'm pretty on top of it. And if you have a message where you want to message us offline, you can message me directly at Christian Osgood. I'll get to it within 24 hours.

Yeah. I'm still trying to get through mine.

I'm sorry, everybody. We're working on that.

Cody needs an executive assistant. I'm doing my best. How do you go about paying the secondary lender that helps pay the down payment? Okay. Okay. Fine. Last, last one. You pay them off with money.

I don't know why that's actually confusing for a lot of people, and I'm not saying confusing for you specifically, but you do have to pay them off with money. There's a few ways you can do that. You can earn the income, you can borrow the money, you can do it out of cash flow, which is kind of like earning it, or you can sell or refinance the property.

Accurate. I did a deal, I bought a 6-plex, 100% owner, and, uh, I needed money, so I sold out a little bit to Christian and used that money to pay off my down payment hard money.

Magic.

Free real estate.

All right, that's it. Like, subscribe, join us next week for your questions.

Kill the stream. We're done and we're out. We appreciate you. And if you're here, we appreciate you watching. If you haven't checked out our YouTube channel, we'd appreciate it. We're trying our best to grow that. Thanks. Wow, that was the