Multifamily real estate rule #31 - Momentum Matters

Hello, YouTube. We're on rule number 31, wrapping up the series. This will be one of the last 5 videos of this series before we announce our next Monday series, which I'm extremely excited for. However, this is a cool one. Momentum matters. This is really important, especially if you are getting started in real estate. You have to remember this. This is something Cody and I had to keep going back to when we started. When you get started in real estate, your first deal is in fact the hardest, and your second deal is roughly as hard as the first one, and it gets a lot easier from there. That's been my experience. I've heard that from a lot of people. But once you get started, all of this starts to come together. If you remember last week, I talked about the circle drill quite a bit in our communications series. Okay, so in momentum, your story gets better as you start actually achieving things. If you want to build excitement, it's a lot easier to make that phone call of, hey, I'm your property neighbor. I just bought a little property down the street from you. I want to get to know the other members of my community, want to get to know other owners. That's a lot more— or at least a lot less aggressive than, hey, I'm a prospective buyer in this market. I'm trying to get started. Well, it feels like you probably want something from me and you don't have a whole lot to offer. Doesn't mean that it's not going to work. It will work. If you meet 1 new owner a day in your market, 52 owners in a year, someone is going to help you get rolling. I absolutely promise you that. That being said, that first deal is gonna be hard. For Cody, it took 9 months from when he committed to buying real estate to when he first purchased one. He got close there at one point to giving up when a big deal fell apart. 22 units was gonna be his first deal, fell apart. That was almost it for Cody. However, he didn't give up. He closed a 12 and a bit later closed another 12, and then all of a sudden, 6-plex, 38-plex, another 6-plex, a 7-plex. We bought the resort. We bought a whole bunch of duplexes and triplexes. You can do this, but the momentum part really matters. As you add to your story, as you add to the circle drill new experiences, you have to become an excellent storyteller. And that momentum is going to carry you to the next thing. As we say earlier in these rules, the story is more important than the real estate. So your story will evolve as you move on, and as you progress, you're gonna get better and better. Now the other thing with momentum is you're going to gain other skills outside of just the communication side. You start with a duplex, you're going to learn how to run 2 units. Is that the same as running a 38-plex? No. However, it's running a lot of units the same way as you just ran 2. I'm sorry if this is just mind-blowing. If you've always been buying duplexes, or your strategy is, hey, I want to buy some small multifamily, running 38-plex isn't that much harder. If you go to post notice, it's probably going to take you a full hour as opposed to a couple seconds to post 2 notices. You're going to have more maintenance requests, which means you need to have a good property manager or you need to be good at property management. But overall, it's not that much different. As you get skills on one end of the spectrum, you apply them to the next. Now, if you scale to, say, you buy that 38-plex or that duplex in our hypothetical model here, you have 40 units. You're probably getting good property management help. If you have more help, you have more people. You have more people, well, now you're set to scale. So when you go from 40 to 80, it's not as big of a deal. For Cody and I, I started out with 4 units and my personal residence. Then I bought a 38-plex. Hard? Yes. Everything I bought after that was a whole bunch of 12s, 6s, 7s, triplexes. I bought a whole bunch of little real estate. None of that was harder than the 38, which was a huge project. We went to a resort that was new and that pushed me. But we've put in so many systems where I know how to employ for that. I know how to run the books on that. I know how to build the websites for that, how to market. If we go— and I should say when we go and buy our next resort or our next hospitality thing, talking about the possibility of a winery— when we do the next project, we've built skills. That allow us to quickly and effectively integrate. Now that huge learning curve of how do I run a resort— we're not perfect yet, but I know something about running a resort. I know something about marketing a resort. How do we build those relationships and what do we do? We're going to get better and better at this, but those skills are going to carry over. So what are the two things you get? You enhance your story, we're going to build you more connections. Huge. The other thing is you're going to gain skills that give you the confidence to move forward to your next opportunity. My favorite part about the real estate entrepreneurial game is that you just get to scale. It's, at least for me, like, I had a financial end goal, I met it, I retired from the 9-to-5, my wife retired from the 9-to-5. Cody never started the darn 9-to-5, he figured it out a little bit earlier than all of us. You get to just play the game at a consistently higher level. And that is why momentum matters. Where people get stuck is they get stuck in things like the BRRRR method. Now, there's nothing wrong with buy, rehab, rent, refinance, repeat. Put the money in, pull it back out, buy something next year. Problem with it is that one, you're only looking for unicorn deals, which is hard, especially in today's market. And two, you tend to move very, very slowly if you're limiting yourself by, people call it the buy box, and I hate that term. They're like, oh, I only buy in this box. Well, don't close yourself off to other opportunities. How do you buy it? How do you never lose it? And is it gonna be fun? If you can follow that, I mean, that's not really much of a buy box. That's very just an open-ended, what do you want to do? And then go out and do it. You limit yourself to one strategy like BRRRR, or, hey, I'm only going to syndicate because I don't want to use any of my own money ever. Well, there's a lot of problems with that. If you're never using your own money, you're going to be less risk-averse because it's just not your money. I've never met anyone who treats other people's money exactly like theirs if they have no skin in the game. As you start to invest yourself, you start to buy those properties, you get a different respect for, wow, this This is stressful. I understand what it is to be an investor in my own deal. So as you play this game, as you scale, you're gonna come in with a lot of momentum. Don't choose a strategy that is so limiting that you only buy one deal here and you wait a year, two years, three years, and buy your next deal. You're gonna lose steam if you can't carry yourself from one end to the other and build a story and start building your business, you're going to be stuck with a hobby or a very limited portfolio. And you're going to retire maybe a little bit early, but you're not going to get anywhere near your potential. The momentum absolutely matters. The one other piece is it also matters before you get your first deal. Keep pushing. When you make that first owner meeting, if you wait 3 weeks to do another owner meeting, you're gonna forget a lot of your takeaways. You're not gonna get a lot better. That repetition matters. You get that first meeting, awesome. Don't just stop there, book the next meeting. You have a great phone call with an owner, yes, I'm set for a meeting this week. Don't stop there, just book the next meeting too. You're already on fire, you're already pumped, you know you can do it, your confidence is at an all-time high. No matter where you are in this business, I can think of analogies all day, so I'll stop this video around here because I think this is— I've gotten the point out. What you want to do is have momentum in all things. If you have a success, immediately look for the next success. Grow, grow, grow, grow until you reach your goal. Then you're going to pull back and stabilize, pause for a moment, and then build momentum again. Craft the story, set the next targets, go achieve them. If you get a rhythm of this, you just get a rhythm of being successful. If you are consistently successful for an extended period of time, you're going to have way more success, way more money— not that that's everything, but that does help in business quite a bit— and you're going to have an adventure that is something that is worth telling, that you're really proud of. And that is the piece for me where I'm at in my cycle. I just want new adventures. The Robin Hood Village Resort waterfront, the orcas are down there right now, salmon are swimming up our stream. Beautiful cabins in the woods. That is a true adventure that most people don't get to do. We're going to have a lot more of these because we respect this rule that momentum matters. Don't kill your momentum, don't pause for extended periods of time, and don't limit yourself. Keep moving forward. This was helpful, which I hope it is. Like, subscribe, follow for more. We're almost done with this series, and in the next couple weeks we'll be announcing a brand new series that will be every single Monday.