Multifamily strategy wins - LIVE

because my laptop is charging. So coming down here, but we're talking, you know, we're almost closed out the year here. Going to talk about some multifamily strategy wins that we had this year. I'm really excited about. So first off, we closed $20 million of real estate off of the Facebook page. This is not me buying deals. This is other people raised a total of $20 million of capital where people have partnered together, people raised capital, people found equity partners. That community has grown from zero. We started that this year. It has about 1,400 active members, but it's been really fun to watch that evolve. So if you guys haven't checked it out, go to literally any of my Facebook videos. It's not in this live because I'm just going from my phone, but go to any of my past videos. There's a free link to the Facebook post or Facebook page. You guys can join that community for free. Just, just fill out the basic questionnaire. I'll approve you guys tonight. But that, that group has had deals found, fund, negotiate. It's been really fun to see that. We had about 40, I think we had 45 individuals. I think that's right. I'm going to look back at the number, but a little over 45 individuals in Multifamily Strategy this year purchased their first ever deal. Now, I'm not including anyone who's already done their second, third, fourth deal. There's a lot of transactions that happen, but throughout the year, we had almost 50 people purchase a first property. And these aren't like tiny houses. These are multifamily deals. Some of them are large deals. Largest deal done in the group was an 83-unit building, 83 units. There was one that was a 100+ unit mobile home park, but I don't know that I'm going to count that because it's not quite the same thing as multifamily. I mean, it is, but it isn't. I think I would say 110-unit mobile home park is still a smaller asset than an 83. Sorry, crying baby in the background. Other wins for multifamily strategy. I added one more member of the, of the multifamily strategy clan here at the house. I got a little baby boy here that just made an appearance running through the room. But that's— it's been an amazing year. Our good friend Marco, who's been in the mentorship for a while, he purchased his first 14-unit building in Jacksonville. That's an amazing transaction. Deals all over Georgia, New Jersey, New York, California, Washington, Oregon, Idaho, a lot in Arizona, a lot, lot in Texas, deals done in Oklahoma, deals done in Nebraska, and deals done in Ohio that come to mind immediately. Just really fun watching these things come up all over the place, watch this community grow. The course has gotten unbelievably better. I just added 20 new sections last night or 20 new modules. So there's a ton of new content in there in a nicer studio. So you want to check that out? I absolutely invite you to do that. And I personally bought a lot of real estate. I'll be closing on one more deal this year on the 30th, we'll be closing a 44-unit. And that will round out the portfolio as it, as it stands at around 300, or maybe a little bit over that total units going under contract for another 70-something to start off the next year. But we're going strong, building the business, making it happen. Really fun year. So if you have not had your win yet, First free way to do that is follow the channel. So of course do that. But also, second free way to do it, hop on that Facebook page. If you're not part of the mentorship yet, I strongly recommend you check it out. Information is one thing and information is free. But I think we all know if it was just information, that book you read, this YouTube channel, being part of BiggerPockets, like everyone in BiggerPockets would have 1,000 rentals if the information was all you needed. What I really worked on this year in particular is creating the community. And the actual step-by-step to go through and actually build your portfolio the way we did. So the multifamily strategy, we really took that as a guide from bringing people to one place to another. I think we did a good job bringing the information, the application, and the community all together in the same place that you have mentorship, you have community, and there's still not a lack of information. It's all on demand. So as per the use, as per the use, we're going to open up for questions. I'm guessing this will probably be a shorter one because I didn't come up with a super sexy title for this. And for some reason, if I hold the phone horizontally, I do tend to get less views, but I get different viewers. All Nighter is always here. I see in the comments he is already here. So All Nighter, let's go. Uh, for the rest of you, uh, we'll see if anyone else has a question. If not, this could be one of the shortest live updates we've ever done in the field. Um, I will share a little bit while we're waiting for questions. I'm gonna share a little bit about the 44. We've been under contract for this thing for about 5 months. Been a long process. A lot of work. A lot of work. We went through a ton of different steps, a ton of different iterations of getting this thing done. We went through multiple debt products, multiple lenders. It's a lot of math. LIHTC is not super easy. The way these programs work is relatively complicated. However, we have the financing officially lined up, ready to go, ready to close. The partners are on board. We have a game plan on this thing. This will be the single nicest asset I've ever purchased. Really excited to see that thing happen. What a great way to end the year too. December 30th, got one day to spare. This is going to be good for me on a tax basis. It's one more thing that I'll have a cost segregation study on, which I'm very excited for. By the way, Oscar has a question here. You had a video where you mentioned that, I mentioned the debt hammer. Can you please explain that strategy of beginning to pay off debt? You mentioned using cash flow as one way to pay off each property. Yes. So here's how the debt hammer works. So Dave Ramsey talks about a debt snowball where you take your income, you start chunking down one debt. Well, the problem with chunking down a real estate debt over time is your risk goes up. The more you owe, if you lose the property, the more you have to lose. That's why lenders like a low loan-to-value. The less exposure you have on the property, the less risk you have. So what you do is you keep the property levered as much as you can. That's why I love interest-only debt. You keep as much leverage as the property can afford and continue to cash flow. For as long as you can while you save up all of that cash flow in a side account. You don't necessarily just spend it to keep growing. Once you've hit your goal, say it was $20,000 a month, once your cash flow is $20,000 a month, you take any excess, it goes to the side account that grows and grows and grows and grows. And when you have enough money to come in and pay in cash for your smallest debt, you pay off that mortgage. Now you have more cash flow. That you can start saving up. The fun thing is you keep the risk on the lender the whole time. All the debt's on the lender, the debt's on the lender, the debt's on the lender until, oh, there's no debt. It's almost impossible to lose a paid-off property. And if you have no debt, obviously one of your largest expenses disappears, which means your cash flow goes way up. If you're looking for a way to really just juice the numbers, that's the best strategy. It's the most bulletproof strategy. It's very hard to lose a paid-off portfolio. You also are very, very rich if you own a lot of real estate and have no debt. It is the most stable way one could ever buy real estate. Now, the discipline is can you stop buying and can you start paying down? People tend to love to keep scaling. I happen to have some very, very, very big goals. I have a lot of my mentors. I looked at their cash flow numbers now. Yeah, we can cash flow $100,000 a month. That's a lot of money. I'm about halfway there. Once I hit that, my buying is not going to stop. It's going to slow down from that point. I'm buying for the tax benefits. And so I'll have to buy a few buildings and cost seg them. They're going to be large buildings to offset some of the tax. For the rest of the portfolio, we're going to sideline the excess cash flow, invest it back into the properties. Every time we can pay off a loan in full, we'll start with the smallest, work our way up. I'll end up with a ton of paid off real estate in the event of catastrophic things happening in the business. It is really nice to have a lot of paid off assets with no loans on them. If you needed to pivot your piece, you can still turn equity into liquidity. The goal is you have enough cash flow where you never have to. Oscar also asked, when you get a cash-out refi, do you use the cash flow from your other properties to pay off the debt? You can, and you can also use the cash from a refi to pay off debt on another property. The nice thing with cash-out refis is it's just another liquidity. You're encumbering an asset that has enough cash flow to sustain the new debt that you're taking on. You can use that debt and use it to pay off another property in whole. And I'm not I'm not opposed to saying like, hey, I'm pretty close to eliminating a debt. What if I put a little bit more leverage on a property that's doing really well, that's bigger, and I completely paid off a whole bunch of duplexes, just eliminated the debt completely? That's consolidation of debt. I think that's a good way to do it. As long as you're putting the risk on the real estate and you're paying down your debt, where people get in trouble is they take that side account, they stack a bunch of cash, and they go like, boy, you know what? I can afford a McLaren now. I'm going to go drive that, or I can get my Ferrari. Don't do that. If your goal is to own a bunch of real estate, be financially free, get financial freedom first with debt, and then use the excess capital to eliminate the debt. Now you've used that as a tool, and when you're done with the tool, you throw it away so it can't burn you. I think it's the best strategy out there. Okay, those are our questions. We have a 9-minute live. Well, guys, for those joining, thanks for joining. It's been an amazing year for Multifamily Strategy. We're doing a ton more things. I have an app coming out soon. We're launching Multifamily 2.0, which by the way, if you are in the mentorship group, you may have noticed you got 20 notifications last night because I launched another 20 videos on how to buy real estate with no money. It's 20 different ways to structure your deals. It's absolutely insane. I strongly recommend that you check that out. Marvin, oh, I got one here right before we head out here. Marvin, about to finish my first gut rehab on a duplex. I own and renovate in cash, all in around $150,000, worth $300,000. Love your thoughts on what to do. Okay, so first of all, good job. If it's worth about $300, hmm, I'd be interested for what it would rent for. What— here's what I did with my duplex. My first full gut one is my second one ever did. I did a full gut, I leased it, it was cash flowing $1,400 a month. I wanted to keep that forever. I even put it into long-term debt at 3 point— I think it was like 3.75% interest. It was right before rates went up. So I got— or there's— right as they started to go up. So it was like right as they started to tick up, they came all the way down to 2.99, they went up like a point, and then I locked in a rate. So I got really good debt on it. So I was like, man, I have a great debt product, I successfully finished the thing, I have $100,000 of equity, and I had an option to buy into a 12-plex with Cody for about $100,000. I sold it, I took the $100,000 profit, which is slightly smaller than your profit, I turned it into 12 units. 2 years later, we refinanced that building after putting a pitched roof on it, pulled out money, bought a 10-plex and a 12-plex. So in a total of 2.5 years-ish, I took a rehab duplex and I turned that into a 50% ownership of 24 apartment units. That made a lot more than $1,400 a month, a lot more, and hundreds of thousands of dollars more equity. And of course, more real estate, the more that appreciates. It's just, you know, it's a lot more real estate. So that's how I used mine. I wouldn't plan necessarily on doing the 1031 into a bigger asset. If you have cash flow, I like to lock it in, but I wouldn't be opposed to it, especially if it's in commercial. You have more control over the asset. If you got the appreciation, you can get a smooth exit. Just make sure you have a solid target of what to move into before you just 1031. I also have like 11 duplexes still, so you can always, you can always keep the duplex and just keep buying other stuff. That's the beauty of being able to buy with or without money. It's nice to use your own money. You don't need additional partners, but you can still close any opportunity you find. Shiloh, are you looking to spend your property? Are you looking to expand your property management to other states? Let me try this again. I'm reading off phone. What am I doing? Expanded property management in other areas of Texas like San Antonio? I will be. I will be. Not immediately. Right now we're as far south as Waco. We're working our way down to Austin next. I actually have a client who really wants us to take on a lot of business down there. We're just not there yet. I'm working down the 35. Next year I should be in Austin. The year after I should be in San Antonio. Here's what tends to happen though. Someone gets a bunch of business in San Antonio and they go like, hey, could you open up shop, you know, 6 months early and it's like, oh, we have an opportunity, let's do it. That's what happened with Waco. I wanted to open Waco early, maybe end of Q1 next year. There's an opportunity to manage 60 units there I couldn't turn down. So we speed up the timelines. But yeah, very soon we'll be in San Antonio. We'll go across Texas. I do believe we'll eventually expand to Oklahoma. I think it's an obvious play and I have a lot of ability to— I just have a lot of client potential out there, especially around OKC and Tulsa. So we'll probably be multi-state before the— before it gets too far with property management. My goal is to get it large enough where it has high value. There's a bunch of systems in place. We have great employees. The company no longer needs me, which would be great. That's just a passive income stream. If it's truly passive to the owner, it's worth a lot more, which means I probably do the thing that I did in Washington and I sell my job to someone else, to which I got paid a lot of money to sell my job. It's still amazing. Every month it's seller financed. I get a check every month for a job I used to have. That is crazy for me. I have that for the next 3 years. All right, guys. Oh, every time I say that, there's one more question. One more random question. What's going on with you and Cody? Don't see him here anymore. You guys split up now? Just on the YouTube channel. One of the big things that happened this year in January, I bought Cody out of Multifamily Strategy. He is still an employee. He's still on the mentee thing. And he's— me and him have a podcast that I'll be releasing here really soon that we just filmed. But yeah, Cody is still around. We still have a lot of business together, doing a 30-unit hotel conversion with him right now. We still have the Robinhood together. We trade around a few pieces every once in a while though, and that's what happened with Cody and I. If you want to get a little bit more of that story, by the way, I just launched a video on that. If you go back like 3 videos, it's called Our Partnership Imploded. It didn't actually implode, it just changed dramatically, and we'll share why in that video. So I encourage you guys to check that out. I have the full story there, and it's a, it's a fun one. All right, everyone, I will see you all on the next episode.