This 22-Year-Old Owns 100+ Rentals—Here’s How He Did It (And Why You Haven’t)

You will buy deals if you're around people who are buying deals.

Absolutely.

And they know that you are trying to buy deals. Welcome to the On Meeting Podcast with a return guest, Caleb Hommel. Caleb, how's it going, man?

First time on the channel, new guest. Glad to be here. Yeah.

One of the first mentees I ever had in real estate. This kid has a lot of rentals and it's not because I'm awesome, it's because he's awesome. We're going to talk about what Caleb does differently and why this 22-year-old likely owns a lot more real estate than you do. Caleb, how many rentals are you at today?

Dude, I don't even know. Like 113, I think.

113 rentals. How many under contract for at the moment?

One big deal, 76 units. So pushing 200 after we close this one.

We're recording this end of February. This guy is going to have multiple hundred units by the end of this year. Yeah. What's the goal for this year, by the way? Do you, do you have like a specific target of what you want to acquire?

$30 million worth.

There we go. Well, I know you're doing 6.5 right now, so dude, super excited for this episode. We're going to go over some of the key takeaways of what Caleb is doing differently than other people. I really want to focus on one thing. Caleb, on many levels, would be one of the least qualified people to buy real estate in that—

I love saying that.

I do, because it's a big difference. If you're sitting here and you have a 9 to 5 and say you're making $75,000 to $150,000, you're making an average salary, you got a good job. You're ahead of where Caleb was.

Yeah. Didn't actually have a job. So you could say average salary, you could say any salary, it really doesn't matter. Exactly. If you have a college degree, you're ahead of where Caleb was. If you stayed in college for more than 6 months, if you have more than $1,000 in your bank account, you're starting ahead of Caleb. If you have an above a 10th grade high school education, if you have any friends or family who have money, starting ahead of Caleb.

So what is different about Caleb that allows him to buy more real estate than you? Because it's not qualifications, it's not money, it's not access to capital. I don't think it's any individual personality thing, except for maybe work ethic, which we can get into. But I really want to dive into what makes Caleb different and why should you be able to do the same thing or even more than he's doing. So we dive right in. Caleb, first of all, I just wanted to start, for those who haven't seen Caleb on the channel, a common guest. He's one of my most common real estate partners. Me and him do a lot of business together as well as run a company called Funnel Stacking, which absolutely crushes it in sales and marketing. This kid is super intelligent, super, super, super hardworking, but the real estate success is just unreal. 22 years old. My first question is, where are you finding these deals? Like how are you coming up with so much real estate so consistently?

Yeah, it's from a combination of places. So when I got started, I went the ignorant route of in 2021 and 2022, interest rates were at a high 4.15%. On the high end of when I was getting started. So why would anybody seller finance to a kid? So I called over 1,000 brokers when I got started, then realized, hey, this is probably beating my head against the wall a little too much, getting burned out. And it just didn't result in a ton of success. Resulted in 28 units. Awesome. Over the moon about that. Didn't result in anything big. And it was like, gosh, what do I change? And then obviously the market shifts drastically. Interest rates essentially triple overnight. Had to make a bigger change there. My whole thought process, as rudimentary as this is, is if sales volume is dropping by 70, 80% on multifamily deals. Yeah. If there's a good deal out there, it's not getting listed with a broker. And so I was like, okay, I have to go direct to owner. Started buying in Stephenville, Texas, tertiary market outside the DFW Metroplex. Love it. Met every owner in town, actually moved there, lived in my own apartment complex, met every owner in town except one guy who still has not met me or got back to me to this day. In my first 6 weeks there, I Very generously, really, it was like 3 or 4 weeks. So went broker, owner.

That's super interesting, by the way. I wanna pause on that really quick. So you met basically every owner in town in 6 weeks.

Mm-hmm.

I think that is an abnormal thing that a lot of people are not doing.

I agree.

That is very interesting. How much work was it for you to meet all the owners, to map out all of the base relationships that set up this market?

Not really any work at all. It was kind of like something you could do while you're watching Netflix at night or YouTube at night, whatever you do then. Is you just pull up your computer, grab a spreadsheet or open some software if you subscribe to any. And it's like, okay, what owners own multifamily in my town? If you don't own software to find these, takes another 15 minutes total maybe. So really just banged it out then, met with every owner. Really was just a phone call or a text and until they answered. Some people picked up first try. A lot of people took 3 or 4. I think that's where a lot of people get discouraged if they don't get a yes on the first ask. It's like you've actually been in the car. When we met those 2 ladies, I was trying to buy a 12-plex in town. She said no about 8 times on the phone before I got her to sit down for coffee on one phone call. And I think a lot of people just say no and they're like, oh dang, okay, I'm defeated. And they just give up.

I probably would've given up before the 8th. No, but the funny thing is that worked. We did have that meeting. We did talk about their building and there is a price they were willing to part with it at. It wasn't what we would've bought it for, but guess who's in the running for that 12-plex now? Whenever they're like, hey, it actually is time to get rid of this.

Oh, I promise you I'll get the first call.

Yeah, I absolutely believe that.

Granted, with where I'm scaling, 12 might be a little small, but I promise you I'll get the first call.

Well, you know, and the nice thing is it's in a town that you follow. You already have 95 rentals on, you're under contract for another 76. Of course, if a great deal for a 12 comes up in that town, we'll do it. You're right though, 12 now is too small for you to join to like jump to another market and buy a rental. It would never make sense.

Absolutely.

It would never make sense. But I mean, I guess if it was like for a dollar somewhere, but you know what I mean?

For free. Yeah.

Yeah. A free property possibly, but you have built so much in this market and it's been what, 18 months?

What? November, I moved there November 4th, 2023, cuz that's the day I got baptized. Cuz we drove from, you and I drove from El Paso to Stephenville, Texas.

We started that trip from San Diego.

Yeah.

I go from San Diego, played pickleball in Arizona, pickleball in New Mexico, pickleball in New Mexico. Did the baptism in El Paso, my family, and then moved over to Dallas. You dropped in the market. 6 weeks in, you map out everyone, a year and a half-ish. Like, yeah, you could say that you're going to be over 150 units in this market. You are one of, I know you're not the biggest, but you're one of the biggest players in that town.

Yeah.

It's not a big town. It's also not a small town.

Correct.

It is a mid-sized college town in a primo area in Texas. Mm-hmm. Beautiful town.

I actually saw one of the owners, I was down there getting coffee with a guy I made a connection with who's like a dear friend, family member essentially. Now we were getting coffee. There's another owner I've tried to buy actually. He has like a really interesting 10-plex. I saw him in the coffee shop. He's like, I hear you're buying everything now. I'm like, I don't know about that, but buying a little bit more. Yeah. Yeah. I think I've probably like 4x'd him in unit count by now.

At least it is the amazing thing is how fast you've gone. So how are you turning these? So you met everyone really quickly. How are you turning meetings into deals? Like, because that is a fast turnaround on a relationship. It's not like everyone's going to you saying like, oh my gosh, we met at the perfect time. I'm selling right now.

Right.

What is the transition point from hello, this is coffee to wow, I'm finding like a new deal here every 2 to 4 months?

Yeah, I think it'd be really, um, a disservice to say it's more complicated than it actually is. It's just talking about what you're doing. Like first and foremost, I've given this advice out to a handful of people. And it's pretty simple advice. It's like you're always talking about what you're doing with everybody around. If you're getting into real estate, you're just telling everybody who you are and what you do. And it's not an arrogant way. It's you're coming off in a humble way. Like, not like you're not faking it. It's just like, hey, here's what I do. I buy apartment buildings, whatever. I'm trying to buy apartment buildings. You're just transparent and honest about that. And then if you're, if people know who you are, they know, like, and trust you. And it's like, oh, this guy has like, it's easier when you've proven concept. This guy's done it before. Okay, I heard of an opportunity. Have you checked out this building? Or, hey, like I had, I don't know if you remember this, there was a $5 million self-storage deal I got to look at down there. Yeah. And I actually passed on it because it wasn't the opportunity where I wanted to take my business. But it's like, I got that opportunity because I talked about it. It's not that complicated, but it's talking about it. And then you have a question, reach out to the owners you build relationships with. There's a guy, Bo, I, um, we haven't partnered on anything. He's never sold me anything either, but I've asked him a ton of questions about buildings for sale in town. One. Super class A student housing deal. I was like, hey, I see this is listed. Have you looked at it? Oh yeah, those contractors have crossed everybody in town. Don't touch it. Okay. Or I learned to stay away, but it's just talking about what you're doing and not being afraid to ask questions and not being afraid of a no.

Well, and that's the nice thing. So we started this out saying that you have absolutely, like the starting point was no experience, no money, no friends, no education in real estate. Like your ground floor is zero. Oh, it's starting at level zero. So what you did instead and what anyone can do is you just took the knowledge of everyone who's already done what you're trying to do.

Yeah.

That's it in a nutshell. You went, hey, there's this guy who knows all these contractors. This guy's built this, this person has a 12-plex, they have a, this person has 150 units and this person has 2 units. It doesn't matter who it is. They're ahead of me. What do they already know about this market? So now you have their contractors, you started your own PM company with me.

Yeah.

In that market.

Mm-hmm.

By the way, talking about what you're doing, PM Texas, you guys have multifamily. Anybody call us?

Shameless plug, North Central Texas, uh, multifamily. We'd love to manage your building. Uh, shoot Christian a DM, shoot me a DM. We'd be happy to talk.

The way that you went about this though, the contractors, the vendors, the electricians, the, the people who service our laundry machines, we get to choose the best of the best from other people's experience.

Exactly.

That is how you moved forward so quickly.

Yeah.

It wasn't inexperience, it just wasn't your experience you were using.

No, exactly. And it's not like if, unless you're an AI or tech, Everybody's probably done what you're looking to do. Even then, somebody's probably done what you're looking to do. Real estate, the oldest game in the book since before they, like Native Americans were in America, they had real estate. Everybody's had real estate. Real estate's been in Europe forever. It's been as long as humans have been around, it's been here. It's not a new game. Sure, there are new techniques, new clauses, whatever. It's an age-old game and just learning how other people have played it is pretty much the easiest way to get going. Yep.

Learn from those who have done the thing that you want to do. Replicate and then you condense the time of their 50-year career into Caleb's 22 years old, over 100 units and soon to be over 200 units. If you do what you're trying to do this year, that's going to be well over 300 units.

Yeah. Ideally get to like 4.

That's a lot of acquisition. That's a lot of acquisition. Let's talk scaling and growing pains. So right now you left high school, you've started a sales and marketing company that is absolutely killing, absolutely killing., you have a PM company that is, in my opinion, really well built, really well built. Yeah.

You helped out that, so you can say that.

Well, it's not my first time building it, but we built a company together that is structured in a way where we are able to take out complex deals. Yes. We're able to fix bookkeeping problems, maintenance problems. We can, we can solve problems with the company and we can do so for other owners.

Correct.

That's a baller company. That's cool, cool, cool business. We have a lot of acquisitions going on. Mm-hmm. How do you balance all of that? That is a ton of stuff happening all the time. And my experience in business, it's not, oh, it just all magically works all the time.

I wish.

Uh, in fact, usually when stuff doesn't work at all, doesn't work at the exact same time.

Correct.

Like this week. Facts. How do you manage that when you have a sales and marketing team, you have setters and closers over here, you have a marketing team creating an offer, you're launching PM in Waco, Texas, you are buying a deal in Stephenville, and you have 3 clients that are running webinars for their upcoming events all happening at the same week outside of the fires that come up in any of those businesses. How do you block that time to do that many things?

How do I block time? I wake up from like 3 to 5:00 AM, so I like, I know we are polar opposites on this. You enjoy going to bed a little bit later, waking up later. I prefer waking up before this, well before the sun's up. So I just get up and I think you start out with just what is the highest and most critical task, and then you just work your way down the food chain. If it's like, hey, this is a giant opportunity, super, like super critical, like then we're going to move pieces around. But if it's like, hey, this is just like a regular task, we're probably going to just keep going and get to that when we get to it. But it's just blocking it out. If it's super important, super critical, we're gonna start there and work our way down.

And one thing that I have found that people tend to not be good at, like employee tends to not be good at, is how fast can you go from concept to implementation?

I think that's the biggest differentiator I've seen.

Yeah. Where it's like, okay, I think we need to be running this marketing. Okay, what steps can I take to get this marketing campaign going? I can talk to this person to get this going. I can influence this. I like things where it's like, hey, we have an idea instead of spending, you know, okay, let's bring this up in next week's meeting and talk about how to implement it. Now. One thing that I've seen you do really well that I try to implement in every single company that I have is we have a great idea. How fast can we ship this? Can I get this? Can we get this done today? We had some marketing ideas for PM. It's like, okay, it's, I think when we brought it up, it was like 10:30 in the morning. I'm like, okay, we should be able to reach out to reps. If we can get an assigned rep for this marketing funnel, we should be able to get paid marketing online by the end of today. It took an extra day, but in what would take a normal company 2 weeks to actually go through the meetings and the process and the planning to do, we have a live version in 2 days and then we're tweaking the live version.

And I think it comes down to like setting expectations, right? And like I've heard a story about a guy who was told he needed to flip 150 homes in his first year. The guy actually said 15, but he heard 150 or like on a text and he went out and he flipped 150 homes when the expert and everybody is blown away. They're like, this is not normal. Yeah. And when you set the expectation somewhere where you should be in pursuing excellence, you're gonna at least, you're gonna meet that expectation or rise very close to it. But if you're like, hey, this is gonna take 2 weeks to get out, this is gonna take a month to get outta this funnel, whatever, you're gonna wait that month. But setting the expectation, hey, this needs to be done by end of day today, or it takes to tomorrow. Okay, cool. You save 2 weeks and that's how you keep moving ahead and keep getting ahead of everybody else.

Do you know what I've, I've taken some of that strategy with, uh, with, with multifamily strategy or, or We coach people on buying creative deals, loading up money down. Right. I found that when we do the same thing, like same exact education, same course, same mentorship, same deliverable, like everything, like I'm all in on this coaching people. When I run a, like a challenge or an event that says, hey, our target is for you to buy a deal in the next 90 days. What happens is an astronomically larger amount of people buy a deal in 90 days. Yes. Not because I'm doing anything different. The product's still excellent. We teach the same thing. Mm-hmm. But the mindset is this should take me 90 days. Now granted, we'll coach people a lot longer than that, but we saw a lot of people transact in 90 days. Right. Only because that was the challenge. And so that was what we coached to was, hey, uh, my goal is everyone who's listening today buys a deal in the next 90 days. Now the framework is, oh, oh, I gotta get working. 'Cause now I, correct. Now I need to meet the people and I need to do this.

And you're taking different levels of action. You're taking different actions when you look at like, If it's, uh, it'll happen when it happens, you're gonna look at your tasks on your day. And if you, you might, it's gonna feel a lot more comfortable to be stuck in a low value task. You know what to do, you know how to do them. Be like, oh crap, I've got 3 months. I need to go do the hardest task on my calendar first and push myself forward. The cold calls I'm uncomfortable with, the asking this person for funds, whatever, the things that are really uncomfortable, you're just gonna gravitate towards those cuz you're like, I have a timeline and I have a clock. When there's no clock, you're gonna gravitate towards what's comfortable and what's easy.

Now, so, so we've established you have a lot going on at the same time and you've done a very good job managing having a lot going on. Going back to our, our primary topic, like why you have so much real estate while you have the, the sales and marketing, while you have the property management company, you're consistently doing acquisition. What does the team generally look like to be able to acquire, lease up, move in? Like what is the infrastructure that you had to build? So that you're not doing everything all the time. Cause there's no way you could be managing all of that yourself.

And that's something I'm really, I'm going through in real time. It's delegation to the right people and slotting in the right people. It's sometimes you need an A player at every spot. Ideally you'd have an A player at every spot. You need A players driving the ship and you need at least Bs behind them is kind of what I found. If you had As in the whole car, that's awesome. Yeah. But what it looks like—

that takes time though. That takes some weeding out.

Yes, correct. And so what it looks like high level, you don't need a ton of cold calls for acquisition. We're not going for small single family homes. When you're playing on multifamily, 50 units plus, which is ideally what we're shooting for now, you're not going to cold call all over the place. If you're looking nationwide, yeah, you can have some VAs, whatever, doing it. But if you're looking in one state like we are with Texas, there's not unlimited 50-unit complexes out there like there are single-family homes for wholesalers. So it's actually dialing in, getting the right people, finding the deals. And I've got a few killers on top brokers that are just like guys who transact a lot in the Southwest. We're like, hey, I've got this deal, I've got this deal, I've got this deal. So I get sent these deals first and foremost, which is incredible. After that, and let's say we're in the capital raising phase, I do a lot of that myself still. I've got a lot of connections. We both do. So that's easy there. The hardest part is the asset management side and the property management side, actually taking care of the building once it's bought. Buying the building isn't that hard. No, buying buildings, that, that is in fact the easiest part. And you make the most money when you buy, which is awesome. Yeah. Like you, you, you win on your buy. But when you get to that property manager and that asset manager part, that's when teams are really built and the deals won or lost. So on the property management side, obviously Christian and I own the company together. We've got, A partners on that deal or on that venture that are just rock stars. Corey is what keeps our universe running most of the time. It feels like she's incredible. Yep.

Keeps us in compliance, everything.

Yep. On the asset management side, Christian and I are big parts of that. And Christian's wife, Dani, is nothing short of phenomenal on top of that as well. So it's, you can't do everything yourself. You can drive a lot for yourself and put reminders on people and keep people accountable, but you need to slot in the right players in the right slots.

I think you said something that is very true and I think every real estate investor who has bought multiple deals would say the exact same thing. Buying a deal is easy to do.

It's the easiest part.

A lot of people think, hey, I'm, I'm stuck on the buying and it's exclusively, no exceptions. It is a mental hurdle. There is something that you are personally stuck on. It is not that you're not finding deals. It's not that you're, it's usually something like, oh, I've just looked all over the internet and every deal posted is a bad deal. Correct. You're not offering on what's posted. That's asking. You're offering on where the deal works and you can write those every single week. I don't think you should shotgun offers, right? But find buildings that you want, have a real conversation, and find a place where it's like, hey, I believe this deal would work for me here. When you have a relationship with someone, you've talked about the deal and you think there's a reasonable chance they could accept it. We're probably throwing out 2 to 3 offers a month. We're not just zinging offers out.

I would say I'm probably a little bit more. Some of the deals I'm offering on don't even hit Christian's desk because they don't come to fruition. But I think it's, um, you're offering on deals, but there's also a fine line there between like shotgunning, like you said, and I wanted to hit on that. It's like you're not, you're not offering to offer, like, like, let's be clear on that. You're not offering on a $10 million deal for $5 million and be like, oh, I, I'm offering on deals. No, you're not. You're just wasting, you're wasting your time and you're wasting everyone's time.

You're burning every relationship you have.

Yes. And that's not gonna result in success. And I'm even, I'm careful to even offer on deals sometimes. There's a 4-pack of deals that I'm looking at that I don't think I'm gonna offer on, but I hate I hate not offering, or I don't want to put my time into the underwriting, and I hate wasting that broker's time because I want that relationship.

Dude, where's the 4-pack located?

Uh, we'll talk more after. It's, it's not worth it.

Oh, I, I love the branding of that though.

If it's in Waco, the Waco 4-pack, I would buy it if it's in Waco. It's not. Um, but it's even like that. It's like, I don't want to waste his time, but I also don't want to throw out a disrespectful offer. Yes. Of where it's going to work. Because if it's going to be disrespectful, it's not worth my time. It's not worth the broker's time. And even as much as they're encouraging me to do it, it's probably not still worth it.

What substitutes a respectful offer?

I think it's just getting clarity with the broker, um, on like, hey, what are they looking to do?

So for listed properties?

Yes. Even like on CREXi, LoopNet, or a listed property, which is technically a deal that's being shopped around as I've gotten higher level in the game, that's something I've realized. So it's like, these could be listed and it's like, hey, what's their motivation? On our, like our last 26-unit we bought, um, over Trinity. Yeah. Um, it's like completely misunderstood was a waste of time. At first I was a burden. I was trying to go seller finance, seller finance, seller finance, creative finance, whatever. The guy just wanted to cash out of his dang deal. Yep. And so once I figured that out, completely changed the offer. I lowballed, quite frankly, it was a much lower offer, $300,000 to $450,000 lower on price, but that's what he wanted. So it's not all lowballs are a waste of time or disrespectful, but it's actually understanding motivation, understanding, hey, like, yes, at least, you know, if a broker tells you their floor's $1 million, their floor's probably $850,000 or $900,000. The broker obviously is incentivized by the seller. If they're a good agent, they know the power's in listing the deal, not the buyer. So it's understanding, hey, is this going to be a waste of time? I'm not shotgunning out offers that are 50% of asking. I'm actually giving an offer that's reasonable for them and makes sense for me.

And it— you nailed it on the head. I agree with this. It does not just look like lowballing on price. You bought a 25-unit where you won on terms. Correct. And the price was fine, but the terms were excellent.

15% down, 5% interest with a negative AMON part of that, 3.5% payments.

And then I moved to interest only. It's low payments. On a $2 million for 25 units right down the street, newer build. You bought the 26-unit for $1.6 million. Yeah. That is insane on a price per unit basis. And these are nice units.

I wonder what we give that price for right now.

Pay for, I best guess $26,000. I think $2.6 million. I think it would go for $100,000 a unit because they're a little smaller, but they're new. The roof is new. It has a full laundry facility, paved parking. I'd agree.

Decent area of town, proven a lot of upside rents.

It is a great deal is what, is what you did. And you did it by saying, hey, what if I gave you less price, but I didn't try to beat you up on terms? You understood the deal. You gave them an offer that, yeah, it was a lowball, but there was a reasonable chance that they could accept it.

Can I tell you about that deal too? I originally said 1.7 over the phone. They started writing it up at 1.7. I said, actually, I meant 1.6. I didn't mean 1.6. That's how we got it, Fred.

It would've been a great deal at 1.7.

And that's how we got it for 1.6.

I do believe that today there is a million dollars of equity. There's still lease-up to be done in that building. Correct. I believe we just signed two. I think there's 4 vacancies, but we've proven from $500 to what, $950?

Yep.

Average rent to $500 to we've leased a ton of these units at $950, which we've shown empirically. And you can take that to the bank. Look at, we didn't just do this once on a ton of these units. We've proven we can get $950 rents. The upside is now proven. It is not in theory, it's not a pro forma. It is, we are actively getting these rents for this building. It does in fact lease for this. The income is very, very close to double what it originally looked like when we purchased it. Therefore, the building is worth astronomically more than we paid for it. Correct. And Still a good deal and we paid for it. Yep. The income that we had justified the price that we purchased it for. And I'm going to add to this, the seller got exactly what they wanted. If I remember the story correctly, correct me if I'm wrong, they had a development that they were working on. Yeah.

A little industrial development. I think it was for their cattle if I remember correctly. They were actually the Stephenville's lot farmers, had some farm projects, was trying to develop some stuff and needed cash.

His core business wasn't multifamily.

No, he was able, this was his only multifamily asset.

He bought it for a good price. He had equity and he could use it on his core business and we were able to take a piece of his business for our core business at what I think is a great price. Yep. Everyone won 100% in this transaction except for the two non-paying tenants who got evicted shortly after. But outside of that, everyone won. Yep. Great deal. Perfect example. You just need to win on price or terms or ideally both.

Yeah. And it's like for a guy who, let's say his basis was like 1.4, 1.6 might've been a little disrespectful. Yes. And that's what constitutes like if it's disrespectful or respectful, it's like just understanding his, like, so their situation the best you can. You're not going to get their social security number, their bank info, but just understand their situation the best you can from the pieces you're given.

Yeah. I actually had a partner, uh, recently reach out who wanted to be bought out of an LLC. He had, again, it was an example of he was having troubles in an adjacent business. He had a, uh, a medical business that was hemorrhaging money. And so he is like, hey, I need some capital. I love this LLC. I love this partnership. Is there a way for me to have someone else buy in? And all of a sudden the relationships that he had, that I had, the people who we actually know got this offer to buy him out at a discount on an already performing piece of real estate. As an investor, that's not what I would've been expecting. But the relationships and moving the pieces around, like if you were that guy, if you were the 22-year-old who had that relationship, you would probably be that first call of, hey, I actually have someone who urgently needs some capital. We need a brand new partner on this. It's not, you know, you were looking to buy a building.

This is the type of opportunity that would be, okay, so that would come your way. Yeah.

Yeah. Someone would go, hey, if you can move the money. You can buy in at a discount right now to a cash flowing piece of real estate. Those are active things that come up.

Absolutely.

I don't think people realize how important the relationships really are. When we say relationships, like, oh man, I have to call all these owners, I have to do it. It's like get coffee, or if you're in Texas, probably barbecue. If you're in Stephenville, probably going to Hard Eight. You go out and you meet these people, you have these relationships that are meaningful. You don't know the opportunities that will come up. What I can tell you for sure, 100%, this, like bet millions of dollars on this, you will buy deals if you're around people who are buying deals.

Absolutely.

And they know that you are trying to buy deals.

And it, that just goes back to talking about it. It's not brain science, it's not rocket science, it's just talking about it. But then you have to be willing.

Brain science.

Yes. It's rocket surgery. 10th grade education. But it's like just putting in the work and you have to be willing to put in the work after the fact the opportunity comes your way. It's not just, hey, take this and you're done forever. It's like, no, it's only passive income in the way it's qualified. It's not really passive.

Of it all. I agree with that. As you are stabilizing, how are you on a high level? You're buying at a very fast rate. We mentioned on this one deal, there's still 4 units to lease. How are you keeping units leased and maintaining revenue while you are expanding as rapidly as you are? How do you split the attention appropriately?

Yeah, it's just, what are the objectives, right? If you're trying to scale rapidly and increase rents while keeping— if you don't care and you got a million bucks in the bank, you just up everybody's rent and everybody's going to leave and you're having a vacant building and you're probably going to lease up a little bit faster and get to that mark faster, but it's going to hemorrhage more money. If you're trying to, okay, how do I keep tenants here, stabilize and grow? It's going to be a different story. You're going to do incremental rent bumps. If it's like, hey, like if there's, say, around numbers, 10 tenants at $550, we want to get them to $1,000. Your options are either increment everybody to $750 or go 3 tenants to $1,000, which it, it, there are multiple, there's rights and wrongs to both. But if that's the goal, you just gotta look where the objectives are. And that's kind of what it comes down to. You don't want to completely butcher your portfolio and vacate it and just hemorrhage money. But at the same time, you can't just keep properties the same because you have debt products and you have timelines to meet. You have partnerships to fulfill and all these other things that are going forward. So it's kind of managing objective objectives while scaling your business at the same time.

I don't really like that. And just keeping those an easy thing that I've seen a few people do that's just amazing is just 3 colors. Just color code your events as like, hey, green tasks are income generating right now and they're critical. Like these are things that I can do right now that will directly translate to growing my business. Yellow would be things that I can do right now that further my business that might not immediately receive money or have an immediate return, but are a good long-term investment in the growth of my business. And then The red tasks are things that are administrative. You probably have to do them. They may be able to be offloaded. They are non-income generating tasks that while important, are not the first things that you do. But however you organize your calendar, getting the most critical things done regularly is where most people get stuck. It is easy to do the funnest, the funnest, the most fun activities. Absolutely. The most exciting or the easiest. Sometimes it's easier to take that coffee meeting than it is to focus on leasing your building.

And it's more comfortable for us mentally to do the things that are easiest.

It's like, yeah, do—

would I rather go sell what I know I can do and make a bunch of money, or do I need to create the SOPs to outsource it to someone else? Yeah. What's going to be more comfortable slash more fun slash what I, what I naturally gravitate towards is probably going to be the more comfortable thing. The right option there is go spend 14 to 25 hours on SOPs so I can start hiring more people and systematize the process.

I absolutely love it. And we've had you on early, early, early in this podcast since then, and it's been some time, I think about a year since you were on. What is the most expensive lesson that you've learned so far personally in business, in real estate? What has been the most costly lesson that others can learn from you so that they can reduce their own stupid costs?

That's a really good question, tax. I think it goes back to no deal is better than a bad deal and just like not rushing through on a project and like no deal's better than a bad deal and raising enough money are still the two biggest lessons I've learned.

Talk about raising enough money. What does that, what does that look like in a deal?

So raising enough money, right? So you have your down payment. Being an ignorant 19-year-old when I got started in the game, it was like, okay, I have my down payment, I'm covered, I'm good. Closing costs and seller finance are low, whatever. I wasn't thinking about, okay, what's the condition of the units? How many, what, when I'm going to fully renovate these units, what does it look like? Not just doing it outta cash flow, but having a cushion to do that with. Now since we've transitioned to a lot of LIHTC properties, low-income housing tax credits, Section 42 of the tax code, it actually requires us to have a reserve because we have to renovate these units, which has kind of been a built-in, extra raise, if you say. Yeah.

It's been, it requires the things that you need.

It's been really awesome cuz you're buying nicer assets. They have the other people that did the same exact thing for the tax credits and we're doing the same thing after them, which is awesome. But when you don't raise enough money, what you do, if you don't have high income generating businesses, then you are putting on lines of credit. You're carrying a lot of additional stress. And when you're carrying additional stress, that's going to result in less sleep, which is going to result in worse performance, which is going to result in just a negative spiral downhill.

I have seen so many people fail on good deals. They bought at great price and it happens. They're cash flowing, but they never get ahead of the projects. And so a move out happens. They don't have the capital to renovate it. Their income goes down. They have this great deal and there's no money. What did it look like in your portfolio when you had, so I assume this is a deal that's happened.

Yeah.

You bought something, it's a good deal on paper, there's no reserve. What ended up happening in that deal?

Friction because of lack of communication for one. Being a 19-year-old that never really, like I had gone through hard things, never gone through a lot of like never started a business, never gone through business conflict. It was more of like a fear of just being like, hey, here's where we're at. We need more money. It was overfunding the account myself, unbalancing capital accounts, and leaving the frustrated investors. What I had to do is actually buy those investors out. And once that happens, you replenish the account, you finish the projects. And if everybody needs to put a little bit more, because real estate always costs more, I press one thing I can promise you is it'll always cost more no matter what. Putting a little bit more money, finish the project, the project's done, distributions start going back. To them how I structure my deals. Yeah. Makes everything so much easier getting a fresh set of partners in and just over-communicating the heck out of everything. Yeah. Has been recipes for success.

Yeah. That is a great lesson. And from a 22-year-old, that is an insane lesson to learn that young. It's like raise enough money so you can get through your project, have a reserve. It's not just, hey, I raised enough money to close a good deal. That's not how you win in real estate. Recipe for disaster. You need to hold it. You've implemented this at a really high level at a really young age, which is absolutely amazing. This has been awesome having you on, man. Thanks for having me back, dude. Absolutely. If you happen to be someone listening to this and you have a business that has a, like an offer, a community, a mentorship, Caleb runs one of the most amazing sales and marketing companies of all time. You guys run webinars, you guys are building a community. Plug for Caleb. That is our episode sponsor. Check out Funnel Stacking. Reach out to Caleb if you have an offer that you guys want to grow on.

On Instagram, that's @caleb.homel is the easiest way to reach me.

Caleb's story is amazing. I'm sure we're going to have him on again. A great friend of mine. I do a lot of business with this guy. Caleb, thanks for sharing some of your wisdom. This is why this kid probably owns more real estate than you do. A lot of lessons to learn from him. Hope you enjoyed the episode. We'll see you all on the next episode.