How to self Manage over 100 Rentals - Matt Hawkins and Christian Osgood

Hello, YouTube. We are back. I am with Matt, the Lumberjack Landlord, one of our favorite people. He helped us navigate the bank thing. Matt, I haven't updated you yet. I'm ready for the bank loan. We did it for you.

All right, you silly creative finance guys, just you silly creative finance guys just printing money over there.

Well, the good news is this is our first actual I know outside of selling a property, we exited seller financing. We bought for $2 million creative finance. We refinanced at 3.41. We did 55% LTV because we've owned it for like 20 minutes. But, but we actually got to pull capital out. We had a solid exit. We actually got to do it. So that was a lot of that was immediately after our last video with you where you walked us through banks. We did the thing that you said. We called, we called— oh man, I wrote it down. But you've walked through this and we'll talk about this in the video. But like you told us who to call and Cody made that call, which is why I'm blanking on her title. But we called the right manager. What was the title?

Senior lender. Yeah.

Senior lender. Yes, exactly who it was. Yeah. Her answer when we called was, I don't know how you found me, but I'm exactly the person you need to talk to. Right. It was like magic. So we talked to her. She got us set up. We went through that. She streamlined the system. It still took us forever. Yes. If you're a bank, try underwriting someone who only has 12 seller finance loans.

Absolutely. Like, that's where it was. You talk— I wanted to get you to the right person that had the power to say yes or no. But knew that as soon as you got somebody that said, I'll consider it, I knew you guys were in for a ride because it's nothing like creative financing.

It was brutal. Banks suck. I don't know how you do what you do. That is miserable. I like my strategy for acquisition more.

Better understood. I mean, here's the thing. I think you hit the nail on the head, which is you guys have been super successful. With, you know, creative financing and seller-based financing, you've been off the charts good at that. And the banks are far more difficult to deal with. But you saw what it took to get into the— onto the bank side. Since you and I have last spoken, I've done my first creative finance deal.

Oh, I want to hear about this. We are— you're telling us how hard it was to do. And then our buddy in Rhode Island pulled off two massive ones and I was like, oh, I got to tell Matt we're doing it. But you've done your own. Okay, so let's— by the way, YouTube, today we're going to be talking about self-managing a whole boatload of rentals. However, we're going to get there when we get there. Matt, talk about your seller finance deal. What happened? How big? What were the terms? I want all the deets.

Yeah, I mean, this is a rounding error to you guys and quite frankly, a rounding error to me. But I had to get my feet wet somehow. And so basically, you know, one of my things is networking. Talking to a lot of people, pressing the flesh, you know, having conversation, make sure that everybody knows who I am. I have a digital business card that I'm just like, hey, everything about me is on there. My buy box, you know, what exactly I buy, how I buy it, all the descriptions on there, the way to get in touch with me with email, my cell phone, every way to get in touch with me is right here on my digital business card. I just say, can I just tap your phone? Tap their phone, they read it, they see everything about me. In this particular case, kind of a fun story, I had just put a seller, an off-market deal under agreement. So I put a 5-unit off-market deal under agreement. We negotiated back and forth and I finally got to a number that was, you know, doable and that made sense. And I went to go drop off a check at his attorney. And so I looked up his attorney to find out where his address was and I started seeing what his practice was. And he is kind of a, you know, attorney to the stars where I'm from, like some of the bigger names and certainly landlord-wise. But he also does bankruptcy and structured filings. So when I went in, I just said, hey, you know, nice to meet you. Here's the deposit check for that other building. He's like, okay, great, thanks. And like most attorneys, get out of my office. But I said, hey, real quick second, wanted to just talk to you about something. I actually am in the market. I like to try and buy assets like what you're probably dealing with when you have a bankruptcy or a financing restructure or something along those lines. I'm actually a far better option than the bank because I can get really creative. I can make sure that those users and those, and those folks that live in their home, I can make sure that they don't have to leave their home and I can give them access to all of the equity that they have in their house. And he's like, really? I said, yep. I said, if you have 5 minutes, I'm happy to take you through it. And so he said, yep, I got 10. Go ahead. So I sat down, went through it with him for 10 minutes. I showed him how I could get a bank to buy the first 50% of that mortgage, how the sellers could then give me a note on 40%, and how I could then give them a cash infusion and get 10% of the overall deal into their pockets. So we did that. We actually only did 3 meetings. And in that third meeting, we were actually signing the closing papers and I got a built-in tenant. I gave them a 10-year leaseback with a 3.5% rent raise built in every year.

Oh, that is a solid deal. So you did a blend of just about everything. A little. Yeah. So low money down, 10%, which is— which is— that is the sweet spot for Cody. It's much easier to multiply 10% down than it is 25. Heck yeah, for sure. Just mathematically much, much, much easier.

Yeah.

Then you have a blend of bank and you're the bank puppet master. So that makes sense. That's skills you already have. And then they seller financed 40%.

Yeah. So what we were looking for was, you know, this was when rates were in the high 6s, low 7s. But the way that I pitched it to the bank was you're in a phenomenal position because you get first position at only 50% equity. Mm-hmm. That's speaking bank right there, because normally they're getting first position in an asset, but they're 80% or 90% or 97% or 96.5% equity. That's a bad position for the bank to be in. The market corrects 10%, somebody says it's not worth it anymore, I'm just going to stop paying my mortgage. When you can get the bank in at 50%, they're thrilled. And so we were able to do a deal where I got debt right around 7% on that 50%. However, on the 40%, I told them the only way that this deal makes sense is if I can get a blended rate that's under 5%. And so they basically took paper on 40% of the debt. They took paper on that at a little over 2%.

Oh, that is so good.

So, but the best part was they take that paper at a little over 2%. I give them 10% down on the house. So I'm looking at all my returns adjusted based on, like you said, 10% instead of 20%. The key to this is because they have that note at such a low— at such a low margin or such a low rate, it actually gives my blended rate right around 4.5% is my blended rate, a little over 4, like 4.7 or 4.75 is my blended rate. But even better is, like I said, the 10-year leaseback. The 10-year leaseback with an escalator as far as rents go. So this is something where year 1, I don't make a ton of money. I think year 1 I might make $4,000 or $5,000. But year 2, you know, year 2 and year 3 and year 4 and every year I make more and more and more because with what that increases, the cost of anything else around it won't be— won't go up that much. And it's basically triple net. They pay for everything.

Oh, what a phenomenal deal.

Nice deal. It was a nice, nice first one to get creative with.

Yeah. Well, and one thing we ran into early, and a lot of this was because we didn't have a track record. So when we were looking at bank deals early, the main thing that a bank would tell us, even on a blended deal— yeah, but we would find deals where it's 50% seller finance, 50% bank, and the bank goes, you have to have skin in the game. I'm curious, right? You've played the game as long as you have and you have the track record.

Yeah.

Could they have done 50% and would the bank still take that? Or does the bank need to see that 10% down?

No, the bank has to see that money in there. Yeah. No, I'm not finding— I think the only way to get that zero down where it's basically, you know, not hitting your credit, not hitting your credentials, you know, not hitting anything to do with you. No, no, no reference checks. I think that the only way to do that is pure creative financing. And so that for me, I've not found one of those yet. Would love to, because obviously then you can overpay for the asset, especially if they're willing to take less, you know, on the rate. And most people that aren't in the business every single day actually think, wow, 5%, that's actually a really good rate. I agree.

Yeah, that's— I remember when we used to take 5, 6%, and this is back when interest rates were 3. People are like, you guys are insane. Yeah, look at this.

Now kind of worked out.

Yeah. Like now it's 7, 8. So yeah, I love my long-term expensive debt that is now cheap.

Yeah. I mean, that's the thing is, you know, I looked at it and it's like, if I can just get that blended rate below 5, then that's a, that's a number I can live with for a long time. But, you know, we all know that the turnover, you know, turnover is what cost us money. So I've got the tenant there. They've lived there for 30 years. They're not going to leave. I've got a tenant for the next 10 years. They're not going anywhere. And every year I make more money on that deal. And more importantly, I got them access to all of the capital in their asset so they could take a breath. You know, they're retirees and now they can take a breath.

That's awesome. It's cool. Transitioning to today's topic, you manage a ton of units and you self-manage. Cody and I pseudo self-manage about 200 units because we own our portfolio. We own a property management company and I manage my team, but my team does take a whole lot off me. The, the leasing— I've never shown a unit in my life, save one condo when I first got started. Some of the— like, I don't even know how some of our rent collection stuff gets filed in our system. Cody does, and my head of property management does. So I have multiple people who know each thing, but like we self-influence, we don't self-manage. You have— what do you have now rental-wise? 100? 135. There we go. 135 rentals. You self-manage all of them?

I do.

How do you do that? Why do you do that? Talk to us about self-management.

Sure. So how do I do that? I'm really talented. I'm just kidding. I have a lot of processes in place. You know, we have a lot of processes, checklists. Everything really has been, you know, essentially had a system brought to it. My background is in executive leadership in the real world. And so the way that I've fixed many companies is understanding who wants to be on board and who doesn't, and then essentially creating a process and a workflow for every single job what the responsibilities are, what the tasks are, and then what the steps are before it can go to the next step. And so really it's a matter of just creating a perfect process with checkboxes and process documents and things like that where it's very fluid. And so it's this step, then this step, then this step, then this step. And it's very simple. And so when it comes to, we just for the first time because of my daughter's health last year, we just for the first time started using agents. And all these agents, you know, they're like, well, yeah, we take a month's rent. No, not interested. I will give you the rentals as they come up, but I'm only paying you by the hour. And so I got them to contract for $30 an hour, and they were happy with that because they said, listen, you're going to spend maybe 15 hours tops renting out a unit between getting them the lease and doing background checks and answering questions and doing showings and doing an open house and all of that stuff. It's 10 to 15 hours. So I dropped my cost from $2,000 or $1,500 for a unit down to about $300 or $400 for a unit. So that was one of the big things that we taught. But what I actually now, you know, what we have coming out in our course is really just teaching people, whether local or remote, you can become your own property manager. And it's really just teaching them the skill sets that are needed to be able to manage something that big, which is it all comes down to really creating a system that allows for the workflows to occur in a natural form, but where there's checks and balances. And anywhere along the way, if something doesn't come into, you know, something doesn't fit like credit score, or if something doesn't fit like income, it's something where we can instantly disqualify. And so it's been one of those neat things for us too, because we get a lot more people. You'd be surprised how many people want to apply to a unit that's free to apply to. So I get 5x the number of volume that any of my other competitors get because I don't require them to pay for the application.

Oh, that's interesting.

Yeah. So the way that we do that is we basically ask for 3 things up front. We ask for their, we ask for their credit score and we ask for their income. And then we ask for one other thing, which I won't disclose, but we ask for those 2 things and one other. But those two things that we ask for, if they meet those criteria, they get a showing. That way we know we're largely— we're basically showing it to only qualified people that meet our metric. And because we have a property management system, once you're qualified for one of our units, we know essentially what you can afford. And so as other units come available, we have a built-in list of who we can mail on those units and just do that via email or group text message. So that's why our vacancy rate is still, you know, 98%, 98% no vacancy. So we're doing really, really well with only 2% vacant units. And that's because it's wintertime and we took some back and we're rehabbing them and then we'll release them back out to the wild.

So as you're building your teams and your processes and your systems, how much of the leasing does Matt personally— how involved are you? How much of your personal time does it take to self-manage that many units?

We probably do. So back office, my wife Ashley, she's probably about 20 hours a week. Yeah, but that's much more finance. So it's rents, reminder of rents, you know, reaching out to, you know, different contractors as an issue or two may occur. But largely for us with our property management system, it's as simple as a click dropdown box. We have somebody set up as a vendor in the system. We can assign that task to them. So it's not even a phone call anymore. It's not even a text message anymore. It's literally we get an alert that something came in the system, dropdown, select, it automatically gets sent to them. So we are—

And are those contractors on retainer for you? Are they, do they work exclusively for you? Are they with—

They are all 1099s. None of them exclusively work for us.

Wow.

Yep. Yep.

Something else.

Yeah, it makes it— it, you know, one of the things that we talk about a lot is that property management is right for some people, but notice, just recognize what the cost is, right? And the cost is it's typically going to keep 50% of your actual income. So you can have half as many units if you manage them yourself to make the same nut. The key is, is understanding processes, understanding, having systems in place that allow you to— I can manage my entire company right from my phone, so I don't even need to be in front of a laptop. I have— we have all of our leases. So you ask the question how much time I actually spend. Once the agent has done all the showings, they have a link that they get where they fill out the link. I actually just go to an email box and I look at the link and I'm like, yep, they're good. Yep, they're good. Yep, they're good. And then it's just as simple as notifying them, hey, if you're— you've been approved for the unit, it's first come, first serve. Let me know. And they then will email back, yeah, we would love to take it. And we have given them instruction, which is, you know, Venmo or PayPal or Cash App or whatever they want to do, or ACH bank payment. Set that up, get us the deposit, and we'll actually send over a link or we'll send over an e-sign doc for their lease. We send them the lease. They were able to read through the lease, which we really kind of, you know, bring it down to only a few pages. Our lease is only about 6 pages. So we send them that lease. It's all there in electronic signature. They can literally tap, click, accept. Done. And then I just take that when we get it back and I just put it in the archive in a file. And we have a file with all of our leases in it as well as individual files for each unit. And then we attach that to their record in the document management system or in the property management system and we're done. So I can do it all right from my phone.

So I mean, what you did is very, very, very similar to us owning our own property management company, except I have a lot more W-2s and you have a lot more 1099s.

Yes. Well, the thing for the flexibility is for W-2s, you have to pay them every week.

Yep.

Yeah, or at least exactly, or at least every other week you have to pay them for all those hours. And so for me, really the only thing that we're outsourcing is, you know, certainly from like fix-its and, you know, maintenance and things like that. And yeah, I mean, you can do that if you set it up properly, you know, a lot of landlords can manage that stuff on their own.

That is absolutely true. And that's the nice thing with the systems, whether you do it 1099 or W-2 or a mix of both. I mean, essentially that was one of the big decisions Cody and I made. It's like we want to be able to choose our pricing. There's some bills like I have a fixed price for that I charge myself for my buildings, but when we're doing a major project like our 38-plex, I gave myself a discount because I can do that. I'm like, well, I'm not going to bleed my building dry, right, in property management before I can afford it. And as the rents got up, it, it pushed more to property management until we got to a point where I could hire another employee.

Absolutely. Yeah.

And we move them in. And with the, uh, with the resort deal that we did, um, Dion told us to buy that resort, so we did. He told us to buy it zero down. We bought it a million down. I don't know if we did it the way Dion recommended. But, uh, that, uh, that resort came with 7 employees. Yeah. And they were on a model called work camping where we provide the site that they live. They're all in, uh, mobiles or RVs. We own a whole hill behind the resort, but they're— they all live on site. They have a fixed price for 12 hours a week of we just pay you for your site plus 12 hours a week of work.

Nice.

Then they can work additional hours, but those are at a higher price, and that's— that then you fall more into the traditional W-2. But we had this hybrid model of like, okay, let's fix some of our pricing, let's make sure that our people are on site. And that model worked well for that type of thing. Like, I wouldn't— I wouldn't 1099 people for a live on-site sort of job. That wouldn't make sense.

Sure, sure.

Sure. But you take all these pieces and you just add systems. So it's like, okay, we can outsource this to some other management company or we can build the company around what the project needs. That's exactly what you—

absolutely.

You don't want to show units, so you found a way to have agents do it for you. And the appropriate way to do everything with an agent is use them as an agent. They're 1099, easy. Yeah, invoicing.

Exactly. Exactly. And so we get an invoice, it's tied to a property. And for us, you know, we actually had You know, they like to take extended vacations. They're taking an extended vacation now. It's 3 weeks. We still got everything into the— to a generalized email box. I'm able to review all the people that apply for anything online, and then I set them all up for Saturday for an hour and a half where I'll go meet 6 or 8 people for an hour and a half on Saturday. Out of that, I'll have at least half of them that want it. And then it's just a matter of who's the fastest to close. 'Cause once they hit the criteria, the rest of it doesn't really matter to me. So it allows us to really flexibly run the business. But most importantly, with systems and processes around those systems are utilized, you can drastically reduce the cost of maintenance and management. And that's how pretty much every deal that we do has over a 20% return. It's because our cost basis a large part of it, you know, is vastly reduced over what your other options are in the market.

Yeah. Well, and Dion, as far as how you actually build these out and how you structure this, this is something where Dion and I don't usually agree on. Do you own most of your properties personally or in LLCs?

Neither. In a trust.

Okay. There you go. Okay. Yeah. Is it all just— it's all in the same trust?

It is. Yeah. Yeah. The way that we do it is we do— we have a low deductible or a high deductible. And in our high deductible, we actually ensure that the cost per property is pretty low. But in an incident when we're decent at construction, it can make that stuff happen pretty quick. Yeah, it's just a no-brainer. Just no-brainer for us. We just as soon have the $25,000 deductible. You know, and so that's what we do. And so if it's 5 or 10 grand, we'll take the hit ourselves. The difference in the premium is, is that we're playing the premium game. You know, my premium is, you know, $60,000 a year. It's $120,000 if I have a normal $3,000 or $2,000 deductible. I only have to go one year and that takes care of a lot of problems. And we've gone 5, thankfully. But yeah, we have it in a trust that way. It's kind of bidirectional between my wife and myself, then also taking care of our kids. And then we just have our insurance and an umbrella policy over that. And that more than covers us. You know, that is a great structure.

We, we have to use LLCs because we have capital partners. We have different capital partners.

Yeah, for sure. Yeah. I mean, for you guys, that's the definition of an LLC structure. You know, you have capital partners, you encode your partners, you need to make sure that you have protection from anything stupid somebody else might do. And for me, it's solely blamed on either myself or my wife because my kids aren't allowed to sign for anything. So yeah, so for us, it's one of those things where that liability is on us and we know that from an LLC perspective, it doesn't really make sense. As we continue to build the business, there are scenarios where an LLC will make sense and we'll actually— we'll basically do it that way for sure.

And that's one of the difficulties if you're doing the LLC route and this ties back to the property management, I promise there's a point. Yeah, but when you're in property management in most, if not all states— I know it's true for Washington— to be a property management company, you have to be a licensed brokerage. You have to have a designated broker and the whole nine yards. You're allowed to self-manage, but we have a difficult thing of if we wanted to straight self-manage every LLC as its own, and if we wanted to put an employee there who managed a lot of them, they would either have to be some other 1099 entity, which would immediately make them a property manager.

Yep.

Or we have to do a W-2 for 14 different companies and every company needs to hire them to work with them direct. I can guarantee you that you do not want to run the same person as a W-2 in 14 different LLCs. No, that is idiotic. Oh, so we got stuck in the paperwork. Yeah, because if you buy—

oh, sweet Lord.

Yeah, you own it all personally. Like, for you, you're like, okay, if I wanted to hire an employee, they can work for the trust, right? And there's a catch-all for the portfolio. If you are someone who plays the game like Cody and I do, your options become a little bit limited because you either need to find 1099 contractors and bill direct to each individual LLC which is a pain but doable.

Yep.

You need to hire a third-party property manager and then all your problems are solved. But you don't have the level of control that we have.

And cost.

And cost. And that's the biggest control there is. Is can you control your cost? My costs are fixed because I decide my cost. I am paying me and my team. But your structure depends very heavily on your strategy. If you are buying in different LLCs with different partners, your only real options are third-party manager, 1099 everything and invoice correctly, right? Or you have to start your own property management company. I mean, those are, those are your three options the way we play it.

Yeah. The other option you can have too is you can actually have a separate LLC that the management company is in and then you can bill it to— so you can have the person work for that LLC and then bill it to the other LLCs as a service.

Yes, though as soon as that service is its own LLC, that service has to be a legal property management company.

Correct.

Is why Cody and I own a brokerage with one broker. Um, I actually— well, technically have two brokers. Cody's still licensed. I, I officially retired. My license expired on the 17th. I am out. Yeah, no, I never had a goal of being a broker. I, I did it to get a project I was working on. Sure. I did a few deals just to say I did them. Just, just I had the license. I was like, what the heck? I know how to do a deal. I'm going to, I'm going to write up a deal for a friend and see what it feels like. But that is, that's how you structure it. Matt did a very good job of you. And this is way cooler than Cody in my story, but you actually own all of your stuff.

I do.

That is, that is different. Cody and I—

with banks, with banks, like you have different— you have nicer partners that want to hang out with you. I just work with banks.

And I have a buyout for each and every one of those partners. So we can— we will eliminate them all. It's structured like that. All the buyouts, all the partners that we bring on have a fixed rate buyout in a fixed period of time, just like debt would be. My partnerships have balloons.

Yeah. Yeah, that makes— I mean, makes sense.

Yeah. If you're wondering who's winning, you're no fun at the party anymore.

Pop.

Yeah, exactly. And then what happens is you give them a big check and if you have a project you're raising capital for, That is the easiest time to raise capital. It's like you hand them a check for $200,000. Hey, I heard a rumor you're liquid about $200,000.

Yeah. Any chance you got money you might want to put to work?

Yeah. If you return the capital. And that is the huge if, because I've seen too many people not return the capital, especially recently when the market shifts and everyone thought that this game was easy. I'm seeing a lot more people not return the capital.

Heck yeah.

So step 1, successfully exit your partners and give them the money. Uh, the fun thing is if you do that, you never really have to give the money back because they almost always want to replace it with you. That's just— sure, they're like, oh, you did what you said you'd do, let's do it again.

Uh, yeah, this is making me so much money and going so well, I don't have to do anything, I like this model.

Yeah, I, I have heard one of, one of our original bad mentors was like, the genius of the model is they always want to place it with you so you never have to give the money back. However, what he did is he just never gave the money back and never paid them off and fled the state.

Yeah, that is, that is a career-limiting move. It is a—

yeah, hard to scale from that, especially when you've done that twice in your career. Um, progressively harder. And then he crashed his plane, and then— yeah, uh, bad, bad things that happen to, to bad operators. But if, if you always pay off your debts on time and you build your brand around my signature is bond. If my name's on it, it's going to happen. And then it happens again and again and again.

That's right.

The fun thing is your exits are a lot less stressful because when you have that one time where something doesn't go the way you planned, you can communicate that and you renegotiate or figure out stuff. Whereas if you're someone who just doesn't do what they say, like when you're in trouble, you're done. You're out, you lose, game over. There's not much else to it.

Yeah. And that's the thing is, you know, your reputation is the most important thing, you know. So for us, we've gotten, you know, 3 offers in the last 6 months, 7 months to do a big JV, joint venture. And I'm not interested, just not my fit, not my, not how I do things. I like the buck stopping with me and me being able to affect change and Hey, this is a $5,000 repair. Okay, let's— we got to do it.

Yeah.

Is there a better way? Yeah, there probably is a cheaper way that's not better. So we're just going to do it the right way and be done with it because I'm on to the next. We just got to get it fixed, get it done and be on our way and make sure the tenant's taken care of.

I think between the two of us, you have the better model. It's one, it's simpler. It takes more time to acquire. However, yes, yes, your, your risk is lower because You have a whole bunch of partners. People are way more— people are the hardest part of the industry. Like, business is easy until you add people. We have a lot of people, which means life events come up for people where they call and they go, I need to be cashed out on a 5-year note. We've had that happen twice, 6 months in. Oh my gosh, I need money. Then you have the decision of, can I afford to do the right thing? How do I do the right thing? And we've always cashed them out early. We found a way. We brought in new capital. That's stressful. The other thing is we have about the same unit count if you count our resort. I mean, we're— I don't know where I'm at. I'm going to say I'm at like 125. I'm in the ballpark.

Okay.

But I don't own that. It's 50/50 with me and Cody. So right there, I own half of what Matt owns. And then I have buyouts for other partners, which means I own a fraction of the fraction that I own. So while we look all big and fancy online, I'll be the first to say Matt's, Matt's 135 is 4 times the 135 that we have because you built it slowly, you built it steadily, you built it right, and you controlled every step of it.

I appreciate you saying that. I think that velocity, right, you guys are heading— you guys are absolutely— your velocity is far stronger. You know, I think that this is why I like doing this stuff with you guys, especially. We do stuff differently. And so there's always stuff to learn. You got your first bank deal. I got my first seller finance deal, you know, with, with without it being just a pure bank transaction. And I think that, you know, our penchant, our iron sharpens iron. And I think that, you know, we all want to get better. You know, ideally, you know, I've put myself in a position where my bank can call me and say, we have this $25 million or $20 million asset that we want you to take it over. I'm going to say yes, thank you. And because they're going to just want to make sure that an operator is there. So one of the things that I really talk a lot about is I'm not a real estate investor, I'm a real estate operator. And when you're an operator, that takes all of the questions away. And that's the thing that so many small landlords don't understand. They're so quick to put it with a property management firm. Be an operator, because when you can be an operator, you're having different conversations with your bank. You're having a different conversation with your contractor. Listen, you can absolutely get rich by being arm's length with every facet of your business. And you can— it's going to be more challenging to do that over the next 5 years. But the people that win the big time, the Sam Zells, the guys like, you know, the massive, massive guys. And I don't even want to get— I don't want to get to 1,000 units. I wanted to get to a number where it wasn't even a number. It was, I want my next deal to be a great deal. That's all I care about. The next deal just has to be great. And so I say no to a lot more deals now than I did even 6 months ago, just because the debt structure doesn't work. But people, this is what we really teach, is recognizing, you know, a house that can be value-add, you know, recognizing that you can manage it yourself if you have proper systems in place. And that's what we've already built out and made successful. So yeah, I appreciate the compliment, but like I said, I stand in awe and wonder of you guys because I have zero deals that took zero credit. You know, I have zero deals that took zero down payment. And that's a skill and really important to how you guys built your business. And so I think what's really funny is we're kind of heading back, you know, I'm going the different direction that you're already in and you're trying to come the other direction that I'm already in. And that's what's going to make our businesses that much stronger because we're going to be diversified. We're going to have that many more relationships. We're going to have that many more people that we can kind of pull on and say, I don't want this partner in this deal. I want you as the partner in this deal. And I think that that is— that level of flexibility is how you get to elite as investors and how you actually get to a point where honestly, it's more money than I ever imagined. And I can imagine a lot of money.

Yeah, that's— that was weird for Cody and I being our first ever bank loan. And Cody's 22, so his first ever bank loan was $2 million. He took the cash out. Cody has never shopped for his own clothes before. He's literally like, he's never had any money. We've rolled everything, rolled everything, real estate and every dollar we roll, like we raise money for a 38 and make some money. We take the cash flow and we use it as our own down payment where Cody and I will just go out and buy a string of duplexes or a triplex, and then we'll buy another big deal and we'll take the cash flow and we'll just go buy stuff. So we own some stuff, just Cody and I, and then we had to buy out our partners on 38. So we own that one, just the two of us with no capital partners. Nice. But like, as you're moving these pieces around, you do get to a point where it's just like, wow, this is a lot of money. We've just never held it. This is the first time in our short investing career where we pulled the cash out and I was like, oh shoot, there's, there's no one to pay off. I have no incoming balloons. Yeah, I have nothing except for a small duplex that I'm buying. Cody's just liquid. Cody's like, oh my gosh, I can shop for clothes. I can stop wearing sandals to every investor meeting. So just totally different cycle than, than you are right now, Matt. But it's— we're just at that point where it's like Wow.

Yeah.

You know, it's like, wow, I could write myself a $50,000 check because there's too much money in the reserve account. Like, yeah, that's a good place to be.

It's an amazing place to be. And that's the other thing too, is it's like, you know, I made the money and rolled it and rolled it and did as many as I could as fast as I could, so long as they were great deals. And the longer that you roll, the longer that you continue to reinvest, the bigger the balloon gets for you, not just for your investors, but the bigger the balloon gets for you. And so now the great position that we're in is we refi. So we knew, we knew what was coming in this market. We expected this market. And so about 13, 14, about 15 months ago when the rates were crazy low, we said we're going to refi as much of our portfolio as we possibly can. And so we have about 40 mortgages. And so we rolled 9, then we rolled 10, then we rolled 4. And so we got 24 at sub-4 money.

Oh, goodness.

Yeah. And because I created the product with my bank, it's 30-year fixed rate debt, fully amortized, fully amortized.

Oh, are you going to ever refi those or are you going to hit a point where you roll it all the way down and just say, screw it, I'm done with that.

Yeah, I don't think it— I don't think it makes sense. I mean, if rates— if somehow I had some, you know, miracle happen where somebody says I can get you to 3%, okay, I'd probably take 3%. I think the key, though, is, is that when we refi those 23, I think it was 23, and then actually I think we did another few more. So it was like maybe 26, 27 of them. And then the other 13 were either commercial where we couldn't get the 30-year fixed rate debt. Or they were properties that we were just buying with that same product. But we bought in the fives or low six, I think, on one we just did, or mid-six. And so, but we pulled seven figures twice.

And so that's kind of still good.

Yeah. Yeah. I mean, you open up your bank account and you've like, holy cow, got seven figures in the account and I didn't sell anything. I didn't sell anything.

That's, that is the key.

I kept the game.

That's how you know you're a good operator.

I kept— thank you. Yeah. And that's— and you're exactly right. That's how you know you're a great operator. So we spent through that first million to grow the portfolio, our first 7 figures, well into the 7 figures. We spent through that. But then the next 7 figures, we did very strategic and important deals, but we still haven't even come close to spending through that. And so that's just sitting there in reserves because I watch too many crisis videos and crash channels that, you know, I'm concerned that my entire portfolio is going to evaporate into thin air, you know, because these people weren't around in '08 and don't really know how it works. I remember '08. I lived through it. I invested through it. I've been investing since 2001 or 2000. I remember exactly what it was like. It was a nightmare and it went really bad really fast. And we've made a lot of the corrections that we needed to make to ensure that wasn't going to be an issue for us kind of moving forward. And so, yeah, now we're really excited about all the things that we have kind of going forward, but it's the self-management model. So we keep a whole lot more of our dollars in-house. It's the operator model. So when we have a conversation with the bank, they're talking to the portfolio, you know, and that's something that's really critical to them. They're giving out their money and now there's a higher risk profile attached to every, attached to every dollar that they're going to, you know, get lend out. And so for me, I'm in an ideal situation where they're actually calling me saying, do you have any other coming projects? Because they know my risk profile. They know that it's low. They know that I can, you know, operate through a deal. They know that I can do a big construction project or a small construction project. And people don't have to do all those things, but you have to do one or two of them and you have to make sure your bank knows, because if they do, you're going to be the person. Banks only make money when they lend it out.

Yep.

So if they're not lending out money, they're not making money or as much as they should. They have dead— what's called dead money on the sidelines. So this puts people in a position where you need to put yourself in a position where you can prove to your bank or to your lending institution, A, that they're small enough that they care because they're local, they're in the community, of the community, for the community. But also they know who you are because you are— you are the operator. That's how you get and create massive wealth and riches in doing this, and not just a nice number that allows you to retire earlier.

Yeah, well, 100% agree on that. And then I'm really excited for this because we're, we're headed into the next pullback, and we are not a channel that does the, the market's crashing, please click my link. Um, but I mean, we're coming off what, like an 11, 12-year run of just like Any idiot can throw money in and make money.

Yeah, 12 years. Yeah.

I'm seeing a lot of people, especially in the flipping space. I've had people come to me and go like, we just stopped doing the math. Like, I don't, I don't even want to know what I'm losing anymore. We're just trying to sell out of everything. And that, that is awful. That's a terrible place to be. I am excited for a lot of the online gurus and a lot of the people who've just been buying and, oh, look how easy it is to buy real estate. They're going to get hammered in a down market.

Yeah.

If you're buying for appreciation and you've always— it's just like, how? We buy for both. We buy based on cash flow.

Yes.

In appreciating areas. Because to be fair, you multiply the money in appreciation. Like, appreciation is where you're going to make most of your money. But you only get to realize that if you can hold the damn asset.

Right.

Oh, shoot. YouTube's going to hate me now. I said a swear word. Well, we said the word sell. Sell is a 4-letter word.

Yeah. I mean, I think at the end of the day, I think that's exactly right. I think that, you know, you want to be able to hold the asset. In order to hold the asset, you need good debt structure and good income and long-term fixed rate debt. Yeah, good debt. That's where it comes down to that good debt structure. So many people that are in those first 10 mortgages sacrifice house hack, get a 4-unit, get a 3-unit, get a 2-unit house hack. That deal alone, I've seen where I helped a 25-year-old buy a 4-plex about a year and a half ago with $8,000 down. He lives there for free. He makes $1,000 a month. And forget about the fact that the asset's worth about $60,000 more than what he paid for it. That part doesn't even matter. What really matters is he's living there for free and he makes about $1,000 a month. When he moves out to do his next hack, He's going to be making $2,200, $2,300 a month. That's a crazy number. That is a crazy number to be making that kind of money at 25 years old, just with a— with your first house hack. And you had to live somewhere anyway. So I think a lot of people, you know, a lot of times they're just like, well, I'll get my single-family home and then I'll start investing. You can do that. You're just taking the hard way. And promise you, there is a duplex that you could absolutely make do with instead of a single-family house. There is a duplex that you could make do with that wouldn't impact your life at all. And that would be putting you in a position where instead of paying $2,300 a month, you're likely paying $500 a month and you're banking that remainder of that money every single month to then do it again and again and again and again. So I don't know. I think that— I think that there's a lot of opportunity coming for guys like us because we pay attention to the numbers. We have good debt. And, you know, we really understand what's going on in the market. Yeah. If the market goes down 20%, everybody thinks I'm going to have my head in my hands. I'm going to be crying. You kidding me? I'm going to be crying tears of joy.

Yeah.

Market goes down 20%. Does it hurt you? Nope. Does it hurt me? Nope. It gives us a buying opportunity and one that we can use with the cash that we have literally sitting there on the sidelines. It's a no-brainer.

Yeah, well, we're heavy on Class C and Class B properties, that's slightly under market rent.

Yep. Us as well.

In a down economy, where are those people going to go? Rents don't pull back. Even in 2008, rents don't pull back. But if they did, they'll pull back to where they already are. And we bought on long-term, cash-flowing, fixed-rate, non-recourse debt.

Yeah. How do you—

how do you implode?

With that, you don't. That's— but they'll hate that answer. They hate that answer. They, you know, I literally had one of these crash, crash video guys tell me that he and the other guys that know the market's going to crash, that they're laughing at me. Mortgage broker, agent, mortgage broker, renter, owner, renter. Who wins? Stop, guys. Just stop. Like the math I can explain to you, but it doesn't mean that you're going to get it. At the end of the day, we are structured in a way that we're not bulletproof, but we don't have to outrun the bear. We only have to outrun them. And that's not going to be hard because we have capital structures that are in our favor. Banks are interested in us not failing, and our investors are interested in us not failing, whether it's you or me. Right. And they're willing to look at things and say, you know, look at all these big, huge funds that have stopped paying their people every month with their residuals and their annuities. I mean, this is going to happen a lot of the bigger stuff because again, an A will move to B, a B will move to C, but a C will not move to D. Yeah. So C's stay put, B's largely stay put, and A's downgrade to B's. So the only thing that leaves is what the vacancy rates are that you're looking at. They're in big multifamily that's brand new, that was overpriced for $2,800 for a one-bedroom, as an example.

Yep.

That's the stuff that goes and sits on rent and they're like, look, rents are down. Yeah, because they're not renting out the $2,800 unit anymore. My cost— their cost basis is $2,200. My cost basis is $1,000. I'm renting out at $1,800 and I'm tickled pink, you know.

Well, and then your quality of tenant tends to go up because the people who absolutely are higher income had better jobs, had the nicer spaces, could afford the Class A. Something happens where they go down to Class B. The odds of them being a non-pay, is just basically zero. It doesn't happen, but your quality of tenant goes up.

Absolutely it does. Yeah. I think the interesting thing for me is, you know, a lot of new landlords get all giddy over the fact that they see somebody with an 800 credit score apply. What's really funny is because those 800— I actually like 800 credit scores about as much as I like 500 credit scores.

Really?

I find them to be far more demanding and obnoxious when they're asking for something. Thing. I like real people. I like people with high 6s, all in the 7s. They're all good with me. They recognize that I— when I make a call to get an appliance guy out there, it's not going to be in 17 minutes, it's not going to be in 4 hours, it's likely not going to be the same day. It might be a couple of days, and that's what it's going to take to get them out and then assess and etc., etc. And so what's really interesting about that is that, yeah, my experience has been people in the 800s as renters stay. So you should stay in those big, huge complexes because they're just like, well, you know, I was wondering about— there's a broken brick out there. Yeah. Uh-huh. It— you mean the one like tucked underneath the stairs? Yeah. Okay. Like, that's something where it's like, we have that stuff on the list, but we want to handle mission-critical, life and safety, and then things that are, you know, actually in the purview and something like that. It's one of those things where it's like, yeah, we'll eventually get to it. But we're not going to get— that's not something we're rearranging schedules to get to. Yeah, I find that typically when somebody is an 800 credit score, typically they expect perfection. And you can only get that level of perfection in a brand new unit.

That makes sense to me. We got a call once for someone had not one but two spiders in their unit. They're like, we need an exterminator. There's two spiders and they were both big. And I'm afraid that there's more. I'm like, bugs are not cool. And there's a lot of landlords that just don't deal with bug issues. So I don't want to downplay or sound like Cody and I go like, haha, you have roaches.

Spiders are different. Like a spider or two spiders is different.

One or two spiders in a unit. My house is small, but it's a decent house in a decent area. I can, I can go around the house and I can find one or two spiders. I mean, that would not be hard to do. Move the fish tank, guarantee you there's a big old wolf spider back there somewhere, probably. And it just is. We're in Washington, we have a lot of spiders. It's winter, they all move inside.

No spider even wants to be cold.

Yeah, it's just like facts. Uh, I, I would— I'd be curious to see if that's one of our high credit score people.

I'd be willing to bet you that it is like this is just one of the things that, you know, I've learned over 22 years of landlording. I've had as many problems from 800 credit score tenants as I have from before we had a minimum, the 5, the high 5s, low 6s. I've had just as many problems, just as many problems on both sides.

So many nuggets, so many gold nuggets.

And the, and the 8s are far more likely to have an attorney.

Oh, you're going to be getting a letter from my attorney.

That's fine. I got 10. Pick which one you want me to talk to. Go for it.

Yeah. Oh, man, you're so much more established. We only have 2. Got it.

What's really funny is I was saying this to my wife. I said, I'm a little concerned. And she said, what about? And I said, we have more attorneys than we do that we use than we have realtors that we use. That I don't like at all. And what I found was, is we kind of had like You know, we've only done 9 evictions over 22 years.

Wow.

So we— but we had, we had property in 2 different areas. So we had a primary. Our big thing is primary and a backup for anything. So we had a primary and a backup in one area for attorneys, a primary and a backup in another area for attorneys. And it's because we don't want to be calling and trying to find that attorney when we have a problem. We would already have an established relationship with them. So we have those kind of attorneys and then we have one that we use for like land development stuff. So we have a primary and a backup for that. And so, and then we had another one that we actually use. It's a, we have a primary and a backup for closing attorneys. So that's kind of how we structure the business as a primary and a backup for anything. And that way, if one ever gives me the answer that I don't want to hear, I just go to the other attorney and just say, can you squeeze me in? Can you get me that time? So having that business model set up that way means that I can get response pretty quick on pretty much everything. But that's how you build out the business and manage it in a way that allows you to create those relationships, have those conversations. That way, as soon as an accident happens— I had somebody fake a slip and fall. I was able to get the right attorney that I wanted on the call literally within a half an hour. And it was a Saturday afternoon and I was able to get them on the call within a half an hour. I also talked to my insurance agent, which I have a primary and a backup for insurance as well. And then we have another company where we were primary and backup. So the key is being able— the response time in which we can react to things is much better than anybody else that we see in the business because we have a primary and a backup for anything, and we've already gone through the process of getting to know them, understanding their approach, and them— and knowing what they're going to require and need of us in order to take action.

That's a big mistake that people make, and that's part of the longevity of the game. Everything on our channel is about relationships, but it's like, yeah, you— like, we had one lawyer and they ended up being super lame, and I'm still waiting for a document that I ordered 11 months ago that he keeps telling me, oh, it's done, I just have to find it. And he's trying to have me pay a last bill for like $60 of stuff. I'm like, I'm not paying. I mean, it's only $60, but like, I'm just not paying you until I get my doc because heck yeah. He's like, well, the bill's for something else. I'm like, I get that, but I've already paid you for the documents. Like, you owe me a doc. I owe you some money. Like, let's, let's, let's make those two things coincide.

Yeah. You are never getting that doc if you pay that $60. You might still not get that doc. Yeah. And I wouldn't pay that $60.

Yeah. He's like, well, it's going to start accruing interest. I'm like, I'm okay with that. Yeah, because one, I'm not paying it, and then two, interest on $60.

Exactly. You can get me for your, for your 8.9% interest annually due on my $60. Yeah, I'll give you the $6 next year.

I'm gonna say I can cash flow it, but, uh, yeah, exactly. Yeah, that's the, uh, with lawyers, finding a good one is hard, and then when you find a good one that you add them to your arsenal, and we have a whole list like Who do we like? Who do we not like? And sometimes people that we love, they fall down the list, or sometimes people who've been difficult in the past, I need them for something and they come through and they move up the list. But you should have for everything— your lawyers, your accountants, your— I used, uh, I think it was your guy, was that Bob? Yeah, Bob Langworthy.

Yeah, sent him over to you guys. Is that working out? He—

I've only had him consult on one thing, but we did a special allocation partnership, which is way more technical than I recommend.

Very complex.

Very complex.

That is elite stuff.

Yeah, I had— basically we borrowed a lot of money at zero interest for 5 years, returned to principal. Okay. However, the trade for that was we're running a cost seg and they get— because they brought in all the capital, they get 100% of the depreciation. You could justify that to the IRS because that makes sense. We brought in no money. They coordinated all capital to buy real estate. They get the real estate. We operate the business for the business side. I get all the normal business write-offs. We get all the income. However, you have to be able to have a great lawyer to write a clear operating agreement for that because it has to be extremely explicit.

Tight. Very tight. Yep.

The original document from a different lawyer said allocations of capital can be done pro rata or non-pro rata per the group. I'm like, so basically do whatever the fuck you want. Was the contract like, that is not going to fly for the IRS.

You know, you are going to get audited and sued all with that one document.

Exactly. And that's when you know it's time to do a new lawyer. And then I had your EA, Bob.

Yeah.

Look over it and say, you can do it, you just need to rework it. And then I had my CPA look over it. But as you add people to your crew, yeah, you can have the CPA who knows your business.

Yep.

The EA who just knows tax law like no other.

That's true.

And two sets of lawyers get eyes on it so that when you're doing something super creative— well, you can't guarantee the IRS doesn't get you anyway, but Like if you're getting drastically creative.

Yeah, you drastically reduce the drag though.

That's exactly— that is how you mitigate risk and that is how you answer our two underwriting questions. How do you own it? How do you never lose it? If you can do that, you can buy it.

Yep. Yeah, I think, I think that that's dead on. You know, one of the things too that we'll offer for your viewers as well is I actually have a relationship with DIY Cost Seg.

Oh, nice.

DIY Cost Seg is only $500 for a cost segregation study.

That is a lot less than I pay.

I know. That's what I'm talking about. So use the code 1000LUMBER, 1000LUMBER. That will get you a free 15-minute consultation and it will get you a cost seg at $450 instead of $500.

Wow, that is fantastic. Yeah, I think I spent 7 grand on my cost seg for a 38-plex.

So for the 38-plex, they actually don't limit the number of units, but they will actually do a commercial one for $1,000. And my cost for, for the people that use my code is $900.

See, that actually saves a lot because when I ran that cost seg, I had $8,000 in my reserve account for that LLC.

Yeah. And here's what's really—

I have a lot more.

Yeah. And here's what's really interesting too, is that also that cost seg is done within 24 hours.

Oh, that's fantastic.

Yeah, it's not weeks and weeks and weeks. These guys have built an amazing business based on over 8,000 cost segregation studies where now it's completely— and it's all analytics. They actually review everything and it is absolutely bulletproof. I did both of my cost segs last year with it. I'm doing both of my cost segs this year with it. And the service was spectacular. But they'll even tell you if you call and set up a free call with them on, on Calendly, if you set up a call, they'll actually walk you through it and they'll say, yeah, this probably is going to benefit you a whole lot. Or yeah, I would do this. It's going to save you at least X. And how hard is it to save $450? Again, you're doing it one time for $450. It was worth its weight in gold to me, and that's why I share it with as many people as I can, because it absolutely changed my business with the return that I got last year. Changed my business.

Oh, that is— see, that's fantastic. And that's when you're like Cody and I, we run the resort, the wedding venue, the education, the property management. There's a lot of active income that has to be offset.

Correct.

That is where the cost segs make a lot of sense. It makes a lot of difference when you have millions that you have to write off.

Well, and that's the crazy thing, right, is that I wish I knew about them years ago because even when we weren't as big as we are now, it only takes you buying one property, maybe a couple of properties, and it makes sense to at least cost seg one of them. Yeah, especially if you have a W-2 on top of that. It just makes no sense to not do it because again, what's the cutoff? $450. What a cost segregation study does for those of you who don't know is it basically takes— right now when the bank is— when your tax guy is depreciating the asset, he's depreciating everything at 27.5 years.. So if you paid $100,000 for something, it's based on 100— it's based on 27.5 years. So it's a little over $3,000 a year. But what most people don't know is that about 80%— in most cases, about 80% of your costs of that $100,000, about 80% of it is actually able to be depreciated over 5, 7, or 10 years. So you can get the depreciation that much faster. And it makes sense to do that because you then are going to see that much of a reduction in your taxes over 5 years. And then you just do the next cost seg next year. The cool thing is you don't have to pay for that cost seg every year. You pay for it one time, just one time. So that's worth its weight in gold. And like I said, that was the biggest game changer for my business in the last 12 months, was having a cost segregation study that I could get for, you know, less than $500 and that I could literally see a massive return on year one.

Yep. That's exactly how we're running it. We're doing most of our buildings because we traded, we traded the depreciation on our largest purchase, which means you really got to ramp it up on the other ones to compensate.

Yeah. What are you seeing for lead times for cost segregation studies for the ones that you've ordered? 3, 4, 5 weeks?

A lot of them are 2 weeks.

2 weeks.

Okay, good. They're pretty fast turnover. They're really good. But they've been really helpful, like on the consulting side. We have a good group. I think we're using Cost Authority. Sounds like they're maybe a little bit pricier, but man, I have— I've loved the level of service. Yeah. And it's just some of these strategic, like, they'll, they'll go through your portfolio, they'll figure out what is your active income, what are you expecting to need to offset? Sure. They'll give you your estimates on everything before you run it. They'll say, this is probably about what you're going to save. This is what we're guessing the breakdown is. Yep. And then they'll tell you, okay, this year you're going to cost seg this, this, this, and this. The next year you're going to cost seg this and this.

Yep.

And then unless you buy— go to your host, unless you buy more real estate, I'm like, okay, well, I guess. And they'll tell us how much we need to buy. They're like, you need to buy another $2 million building. Okay, let's go.

Yeah. And that's, that's the key with having these. I think that that's what gets any beginner to, you know, to, to intermediate and or any, any intermediate to expert. This is one of the tools of the trade that people use because the tax system is in place. I'm just playing by the rules. You know, don't hate the player, hate the game. So we're just doing the best that we can.

Yep. And for those who are newer to investing, who've actually watched through more than an hour of this video, you're— first of all, you're insane. Second of all, if you haven't subscribed yet, what the heck's wrong with you? And third, third, and most importantly, if you set a goal of like, hey, I want to get to 10 units, I want to get to 100 units. Once you start playing the game, one of the first things you're going to learn is you actually can't stop playing. That's, that's the only rule. Once you start buying and you start playing, it's expand or get taxed. And like any business, you only have two modes. Either you're in decline or you're advancing. There's no such thing as stasis in your business. So if you're learning to play the game, just know that once you're in, you're in. You do in fact have to keep buying real estate or you lose a lot of the benefits of real estate over time. You gotta keep the cash flow though. You'll still be free.

I was gonna say, I mean, the nice thing is, is that— so that's true from a business perspective, but there's plenty of guys— I mean, I know a lot of them that I'm just waiting for them to say, yeah, I'm ready to give you my portfolio and this is what the price is going to be, you know. And so we've had those conversations and they, they just like it now and they're just like, I don't even look at what I pay for taxes, I just sign the return every year when they hand it to me because I know that I have like 10 times what I need live. Yeah. And so there's that nice piece. But yeah, I think early on, I think that's the thing though, is, is that most people, once you get your first, you know, 2, 3 under your belt, you're going to figure out, do I even like this? Maybe you do, maybe you don't. Do you like it enough to just give it over to a property manager and give up more than half your income? Maybe you do, maybe you don't. So there's a lot of different ways to play it. But I think that, yeah, if you really want to grow the business and you really want to make it your business, then yeah, you get on the ride and you're not getting off until you know that you're basically done and ready to start exiting and then hopefully calling me before you call Christian about doing a seller finance deal, you know?

Yeah. If you're trying to call— if you guys are trying to figure out something with the bank, even if you need to get creative with the bank, your, your, your bank stuff has a lot of creativity in it. Matt's written his own bank programs. I have. I think the rule there is they just have to be able to market whatever program you create to other people.

Correct. Yeah. And the key for them is they're getting access to a market that they weren't necessarily getting access to before. So it's meant millions of dollars in fees for them. It's been a brilliant move for them. And quite frankly, it's a much lower risk asset than any other deal that they're doing because they're putting it in capable people's hands. Because the only way that you can get some of these programs is by already having used your 10 Fannie Freddie loans. That's the way you do it.

It's just phenomenal.

Yeah, it's just— I mean, it's because then what does the bank know they're getting? They know they're getting a seasoned investor. They know they're getting a good operator, or at least one that's good enough to, you know, keep all the lights on and make money. And, you know, lastly is what's the likelihood that they're looking at your portfolio when they're giving you the approval of the loan so they can sit there and they can make all their bank assumptions that they want. And there's not anybody that they would likely turn down because cash flows on 10 units, because the time that it usually takes most people to get to 10 buildings, that usually takes a few years, you know, so you have a little bit of maturity when it comes to the actual seasoning of the portfolio as well. So it was just one of those things that I think the bank was really smart to work with me on. And I think that they— I think it's worked out really well for them. I know it's worked out well for me. Perfect.

Yeah. Yeah. If you guys have questions on bank loans, how to structure them, how to build the relationships, reach out to Matt. We'll wrap up because this has been a long video. I don't think anyone's going to watch this part, but if anyone's watching this part, for the, for the 2% of you guys who've made it here, congratulations, you won the prize. Uh, Matt, how do people, uh, find you? What's your channel? What's your details? What's the easiest way to get connected with you?

Yeah, Lumberjack Landlord on YouTube and on Instagram, where we talk and go through a lot of our properties and actually share our construction stories. Um, and then live streams we do every Sunday at 11:30 AM Eastern time. We just answer questions.

Perfect. If you guys have questions on the creative space, uh, every Wednesday at 3 Pacific, uh, we go live on, uh, on our channel. Cody's on vacation, his first vacation ever, uh, so Cody's gonna be out, but I'm here this week. But yeah, ask questions on the creative space, ask me. You want to get a bank loan, go to Matt. But Matt, I appreciate having you on. Good as always to see you here. And, um, yeah, we'll have you on again soon.

Sounds awesome, Christian. Look forward to it. Take care.