We are under contract for 200 remtal units 0 down

All right everyone, I am back from Washington. We are live yet again, so welcome to the channel. If, uh, if you guys have missed me the last couple weeks, I have been traveling. We ran a huge event at the Robin Hood. It was absolutely epic. Uh, footage from that coming out very soon. In fact, there's a hard drive on its way, maybe in my mailbox right now, to get that editing project started. But good to see everyone again. Um, as always, leave comments on the, uh, on the thing. It should show up automatically on the screen now, so if I, if I program that right Uh, we'll see those there now, but I'm sharing a really cool thing today. Uh, almost zero down, $13 million deal. Uh, we're under contract for 280 units. 200 of those we signed for today, 80 of them yesterday. Uh, we have another few hundred in the hopper. Another year where we doubled the portfolio. This keeps happening, and I keep saying I'm gonna slow down, and then I never do because these opportunities are getting crazy. And the opportunity that's out there right now is the one that, uh, we are doing right here. I'm going to share how you can find deals like this because this is something that, uh, that you can 100% do if you have just a little bit of experience. As a reminder, if you don't have the experience, I started like 5 years ago. I didn't have it either. I do a few deals and suddenly you can do these deals. But if there's a time to do it, it is now. Let me share how this went down. Uh, Longview, Texas, 200 units. The prior operators do not have a manager or a management plan for this property. Uh, their management plan fell apart. They've been stuck at about 70% occupancy, so they have an underperforming property. The bank is looking at taking the property back. The owners are absolutely stuck. No one likes the situation. However, there is an ideal buyer, someone who buys in tertiary markets, who owns their own property management company in Texas that specializes in leasing up in tertiary markets in the wonderful state of Texas, and that is me. That does not mean that I am the coolest person of all time. It does not mean that I'm anything special. What it does mean is that we have positioned ourselves, and this is the magic here. I'm getting to the punchline in the intro. The way that you win these deals is you make yourself the most obvious buyer by far. There is no one else in the state of Texas who would be a better buyer for this property. And in fact, the bank realized that, and the buyer realized this. They're selling this for what they owe. The bank wants us to pay the loan down by $700,000. It is a $13 million property. transaction, which is roughly 5.5% down. Now, for this deal to cash flow day 1 at 70%, uh, loan-to-value and hit our numbers, we needed a little lower interest rate. They had 6.75%. It wasn't terrible. 6.25% is the magic number where it works. So we got a couple years of debt at 6.25%, and then it will creep up to 6.75% upon stabilization. I just want to point out how cool this is. There are deals out there right now. in markets all over the country. And I'm— this is not the only deal I'm doing like this where you can buy ultra low down. If you have a little bit of operating experience and a management plan that works for you, you can do deals like this. This came up because we're just a more logical operator. The bank's like, hey, instead of taking the property back, what if we just moved the debt to someone else? We de-risked by $700,000. They have a little bit of skin in the game. That's their minimum to feel like we're actually participating. And we go to work. Now, we allocated about $1.5 million for renovations on this project. We just did a partial interior inspection while we were between LOI and under contract. Uh, we did a partial interior— wow, I just realized on my camera my, um, my beard is getting wild. I need to, uh, I need to shave. Uh, note to self, I just got back from, uh, I just got back from a long trip. Uh, but the, um, the actual method, uh, that we did for this was simply reaching out, coming up with a solution to an existing problem. And that is the secret to all of real estate. You're just solving the current owner's problem. And if you owning the property solves their problem, you can move it to your bank account. Now, this deal was not on market. This went pre-market. So a broker lined it up, but someone had reached out to their broker and said, hey, we're stuck. Can you help us solve this? Because they know me, they were able to say, yes, I think we have the correct buyer. So Caleb and I are jumping in. We're taking on this project. It is going to go, I think, phenomenally. Million and a half in reno. Uh, we got into some of the units. They weren't as bad as we thought they were going to be. So we allocated $3 million. It is an insane deal. If we only ever get it to 85% occupancy, we way more than double the money. We like triple or quadruple the money. If we actually get it to the 95% occupancy I averaged throughout my entire portfolio, we're going to make a lot of money on this. And I'm talking about bringing a $13 million property to $18 to $19 million. There is a lot of meat on the bone, but you need to have the operating team to do this. Also in the chat, speaking of Texas buyers, PSA signed on the 14-unit in Houston. That's what I'm talking about. Elgin, uh, recently joined Multifamily Strategy. He was at the Robinhood event, went home, went right under contract in Houston. When I'm saying these deals are all over the country, I mean it, but especially in Texas where I'm based, there's a lot of opportunities. So this deal is happening right now. It is a very creative deal, which means the multiple is going to be very high. What we are offering investors is going to be pretty insane. I'll give all the details as soon as we officially finish filing for our 506. I believe we're going to do a 506, might be . I'll talk to the team. It's not a very big raise. what it is. I don't need a lot of people, so we're likely filing a 506 on this. I'll probably take it out with a total of 5 or 6 total people at an average, average investment of, uh, probably $400,000. That's probably about right. Maybe up to 10 people at $250,000. Either way, um, this will not be a very hard raise. This, uh, the one thing with it is they want to get this done yesterday. Uh, they want to get this thing closed on September 15th. So, uh, this Friday I'm going out to the property, um, and we are doing our, uh, we are doing our due diligence. We have the cash we need to close this. However, I would like to have our reno cash in the bank account at the start of the transaction, uh, which gives me less than 30 days to bring in $2 million into the accounts. However, we did the right thing. We came up with the deal first. We lined up a debt product that is absolutely ludicrous. It's with a bank and it's still creative finance. Don't limit yourself by creative finances only for— I can't qualify for a bank. There's a million ways to get creative. We got creative on the debt, creating a ridiculous opportunity. That ridiculous opportunity, uh, is now going to let us multiply money. Now that we're on the capital raise, all we have to do is call friends and say, hey guys, we have a deal that makes a ton of money. Does anyone else like real estate and also want to make a ton of money? Capital raising is not that hard if you do it in order. This is deal, then debt, then equity. I say it all the time. This is what it looks like in practice. Simultaneously, we are over in Abilene. We own— and this goes to my original point. If you guys are joining right now, we're talking deal debt equity and we're talking how to make yourself the most obvious buyer for a property. Abilene, Texas, 80-unit senior living LIHTC property. Guess what I have in Abilene currently that I already own? 100% occupied, 100% at-market rent, or Or at least what I'm allowed to rent for LIHTC. So all the way maximum rent. We have a property, 80 units, senior living, LIHTC, 55+. Not talking assisted, just 55+. There's one other LIHTC 80-unit senior living building. We're under contract for it. The debt product we got quoted is going to come in around 5.1% to 5.3% interest. I'm going to share some numbers with you guys. They're kind of crazy. We purchased the 80-unit earlier this year. We bought it for $4.2 million. It appraised for $13.1 million yesterday. In fact, it appraised by so much more than we bought it for, the bank contested the appraisal and wants the appraiser to go back out there and take a second look at it. I think what they're going to do is adjust it back down to about $8.4. I don't think they're going to let us say that the value more than doubled, uh, but safe to say it is really cool. To buy a deal and instantly be told, um, we believe it's worth $9 million more than you just bought it for. Off-market. No, that one was on-market. That was on-market, available to anyone in Abilene, Texas, which is a relatively hot market that sat on market for about 4 months. Anyone or their sister could have just hopped on CREXi, found that deal, picked up the phone, negotiated it. What is the difference? They just wanted someone who had a little bit of LIHTC experience. I happen to have a 76 an hour and a half away that is LIHTC. I have that little 44-unit in Stephenville that's senior living. What did I do over the course of 5 years? I positioned myself as the most ready, able, and willing buyer. I am the most obvious buyer for that property. I do 55+. If you look at my 55+ in Stephenville, guess what the occupancy is? 100%. That deal is worth unbelievably more than we bought it for. I bought that 44-unit for $1.8 million. Very conservatively, it's worth $4 million today. Bring that to the table. Look at what I've done. I just bought a deal that's this size. I also do 55+. We know LIHTC. We know how to lease this. We know 55+. I'm already a neighboring city, or, you know, an hour and a half away. It's not neighboring, but you get the point. It's nearby. I'm local. That's the, that's the secret sauce. You just do deals and you build your resume. It's like any other job. It's like any other business. You build the skills, you become more valuable. Uh, where did this start though? I love that Elgin's in the chat. Uh, Elgin is out of Houston. It's a perfect example. So Elgin, uh, welcome to, uh, welcome to live. And, uh, we're just gonna go, uh, talk about how cool you are. Uh, Elgin already has single-family investments. He's looking at a 14-plex. He has other deals in the hopper. Elgin is putting himself in striking distance. I see deals like this in the Houston area all the time. Now, is Elgin the most obvious buyer right now today if there was an 80-unit LIHTC project in Houston? No, not quite yet. He could probably swing it, but he's not the most obvious buyer. There's more competitive buyers in the Houston area, but you do a few of those And you land one 50-unit the next year, and all of a sudden here you are 3 years into this and you're the most obvious buyer for an 80-unit in your market. It doesn't take that long. But this is a real thing that a lot of people do. And so really fun, really fun. Also, Sean Clark, I meant to— by the way, Sean, I just saw Sean just joined the chat. I have a whole bunch of people who I know. Sean, I owe you a text actually. I will text you right after this. I had a thought that I wanted to run past you. Um, so, uh, Sean, also welcome to the chat. I'm seeing all my friends here today. Uh, but, um, and by the way, if you guys have any questions, you can drop them in the chat as well. But, uh, the point of today's video, uh, first of all, I'm back. I'm in Texas. The lives are back on. This will happen every single week. If you are brand new, you're seeing the channel for the first time, I'm Christian. I've bought over 600 units. I'll end this year over 1,000 doors. And door count is not what it's all about. Um, however, each and every one of those doors Save 26 of them that I'm almost done solving the problems on, um, are cash flow positive. We're doing really, really well in this portfolio. Uh, we have a massive income, uh, and we've done it with a lot of creativity, not just creative finance, though 70% of my deals have some creative finance. We've done this through creative equity structures, finding the deal, then the debt, then equity. This is exactly what it looks like. Um, if you're curious, uh, we are going to be hosting a webinar immediately, um, at the top of the hour. So we're like 40 minutes out. I'm going to host the webinar from this room. So you'll see me right here. Going over deal, debt, equity, the models that work for this, how to buy with creative finance, how to buy with creative equity. It'll be multifamilystrategy.com/workshop, which I'll drop in the chat here. multifamilystrategy.com/workshop. I'm like 90% sure that's what the URL is. My tech team, uh, It helps if I spell it right. There we go. Dropping that in chat everywhere. Um, but you guys are more than welcome to join that. There'll be about a 90-minute presentation on, uh, the actual backstory, how we built this. Uh, you can literally copy the strategy, but it's basically the roadmap. If you're already in the mentorship and you're watching this, uh, we cover this all the time. You're still invited, but we cover it all the time. Um, uh, you guys should check that out though. There'll be 90 minutes starting at the top of the hour. Would love to see you guys there. I think we still have some spots open. We had a lot of registrations for this week, so check it out. If it lets you sign up, then I still have spots open. If not, then we've already maxed the amount that Zoom will let us do. I think we're maxed at 500 people. I think we might actually be relatively close to that cap today. That being said, that's deal debt equity. That is how that works. Let me see if we have anything in the chat here. Chris Rich has one under contract in— okay. Oh, another person who I need to talk to. This is awesome. Chris Rich was also at the Robinhood event this weekend. Again, footage coming out from that because it was so much fun. Um, I'll be sharing not all of— if you didn't make it, you don't get to see all of them. Uh, but, uh, I'll be sharing some of these select— you guys will actually see some of the presentation there. I'll have that on my YouTube channel, uh, here at Multifamily Strategy very shortly. Um, however, Chris Rich was at the event, Elgin was at the event. The 2 of them are already under contract. Uh, since then, Garrison didn't make it to the event. He was about to. He had a, he had a family thing come up. He's under contract. Phil Toth was at the event. Phil went under contract for a deal at the event. Cody Davis was one of our speakers at the event. He closed a deal while at the event. Uh, if you're seeing a pattern here, this works. It works in red states, blue states, big city, small city. Houston's huge. Elgin's doing a deal there. Longview is not huge. I'm doing a deal there. Washington State is a very blue state. Texas is like a purpley reddish leaning state. Uh, the big cities are definitely blue. You can do this in any political environment. Maybe, maybe a little bit harder in New York, but for the most part, you can do this in any political market. You can do this in any size market. Uh, if you have more than 1,000 people to rent to, you can make it happen. In fact, the Robinhood is in a town of 950 people. And we still make it happen. That resort is up 50%. That's an amazing increase of income from last year. It's in a tiny little town in the middle of nowhere. Good deals are all over the place. I'm gonna close on this. If you guys have any questions, seriously ask them. They'll pop up on the on the screen here and love, love, love, love sharing them when you are doing deals. And you're looking for opportunities, I just want to point this out. The reason that I'm buying so much this year is not a coincidence. Oh, there we go. Sorry, my screen died. The reason that we are buying so much this year is not a coincidence. The opportunity is very, very unique. So many people overbought, way overpaid in 2020, 2021. This YouTube channel started when we were talking about guys, people are doing bad deals. debt market is not going to last. Uh, this whole thing— and it wasn't— that wasn't like a magical crystal ball. That was 3% interest in your underwriting for long-term projections is an insane thing to think that we would keep forever, uh, when we in fact didn't. A lot of the pain we're seeing in the market is people who are used to making money over an 11-year real estate run. They thought it would last forever, which it never does. Those deals are coming onto the market right now. The opportunity very specifically There are more deals that I am seeing right now in our market than I've ever seen in my career. I worked for CoStar for 5 years before I started buying over the last 5 years. I've been doing this for more than a decade. My first purchase myself as a rental was in 2016. So I've owned for a decade. I've been in this industry for a decade. I've seen quite a dramatic shift in market cycles in that time. Here's what I've consistently seen. Market cycles do not last forever. We are in one right now where buyers have more leverage than you realize, especially experienced buyers. Now, if you're listening to this and you're like, well, wait, I'm, I am a buyer, but I'm not an experienced buyer yet. Do what Chris does. Do what Elgin does. Do what Phil's doing. Uh, there's a, there's a ton of deals that are going under contract right now in the mentorship. Do what I'm doing. Uh, do what Caleb's doing. I can list names forever. Do the first deal and you're gonna be more qualified to do the second deal. Do the second deal, every broker and their sister is going to be calling you being like, oh wait, you're transacting in our market. We need to know who you are. You do, you do 3 deals. Here's what I found very consistently, which you can easily do in a year. If you do 3 transactions, you have enough volume where banks are gonna want to go after you. Brokers are gonna want to come after you. Every owner in town is gonna want to meet you. You will suddenly find you have more pipeline than you know what to do with. I've seen this happen a lot of times. I've been coaching multifamily strategy for 5 years. It's realistically just how this works. A question I'm going to highlight here, how do real estate agents make money in a seller-financed deal? The exact same way that they make money on a not seller-financed deal. Now, when a broker signs a listing agreement with an owner, they're agreeing to a fee for finding a willing buyer for the property. So if I am— let's just say I'm an owner and we negotiate a We'll call it a 5% fee on a 50-unit building. You find a buyer, we accept the contract, seller financed, the broker gets paid out of that. Now typically it would be out of— it'd be from the seller at the sale. Usually it would come out of the down payment. There's not a lot of zero-down seller finance. I've done it before. I actually did— actually both the deals I did 100% seller financed were without a broker. So this was a non-issue. However, if you do zero-down seller finance, typically The buyer is going to just pay the broker's fees. That's usually what's negotiated. But if I'm a seller and I got absolutely everything I wanted and the buyer doesn't want to pay the fees, I'm more than happy to write a check to a broker. That being said, usually it's done out of the down payment. If let's say I have $200,000 of debt on a $1 million property, I'm a seller. I go to sell the property. I list it with a broker. I would probably make the down payment. $300,000. That gives me $100,000 to pay the commissions, any fees that I have associated with the property, and it clears the existing debt on the property. I can hold a contract for the rest of it. That would be often how the down payment is actually calculated. A very common way to handle that. Excellent question. Um, so they'll make money the exact same way they usually do. However, if there is absolutely no money from the uh, from the, uh, buyer at closing to pay the broker. It would have to come from the seller. That's why that's usually negotiated in the contract. But again, rarely comes up. Generally speaking, the broker's gonna get paid like they always get paid. If we have no other questions, how cool is this? I just love— I love seeing this in the chat. Chris Rich, good friend. I have his AirPods. He left them at the Robinhood, so I'll be seeing him very shortly. Uh, Chris has one under contract in OKC, which by the way, watch out for my management company. Uh, we are, we are coming to OKC here probably next year. Uh, Brazos Asset Management, which is funny because Brazos to my knowledge doesn't run through OKC, but that's okay, that's okay. It made sense, uh, with our original geography. Uh, Elgin, boom, PSA signed on the 14th unit in Houston. That's what I like to see on a live that's had like A maximum attendance of 15 people. It's really fun to see 2, 3 of them all going under contract for deals. I do love to see this. This is something that I find very, very, very fun. But if we have no other questions, I do have an awesome in the chat here from Liam. Liam, good to see you, man. I'm going to recap on this upcoming webinar. It's in the chat here, but multifamilystrategy.com/webinar. That's going to be at the top of the hour. That's in 30 minutes. Again, if you're in the mentorship, we cover a lot of this all the time. If you want a refresher, you're welcome to join. But for the most part, we cover a lot of this. If you are not in the mentorship and you're trying to figure out how would I do this same creative thing, how do I buy deals low to no money down? I'm going to go over 4 main topics. We're going to go, what are we actually trying to accomplish? What makes a deal a deal? How do you use creative finance and what are these strategies? We're definitely going to talk about seller financing in there. And I'm going to talk about creative equity. I have used seller financing on about 70% of my deals. I've used creative equity on all but one of my deals. Creative equity, I think, is the tool that people don't talk about enough, honestly, because I think it's not clickable enough. Creative finance, people are like, oh, I love this. I've seen Pace Morby talk about this online. This is super cool. Creative equity is, I think, in many cases, the secret sauce. I think people are just scared of the word equity. If you know how to put the 2 pieces together, here's the magic here. Every property is purchased with money. It's all purchased in cash. It's just not always your cash. Sometimes it's the seller's cash. Sometimes it's the bank's cash. Sometimes it's your investor's cash. Sometimes it's a second position loan. Sometimes it's your money. It can be earned. It can be borrowed. But every deal is closed 100% with money. The money may or may not be made up, but Every deal is closed with cash. So you need to structure the deal that makes money. You find the best debt product that is applicable. If you can get creative on the equity, the rest of the money, guess what you've done between debt and equity? You have 100% of the money. If you have 100% an opportunity and you have 100% of the cash for the opportunity, you've done something really cool. You figured out how to close the deal and now you own the real estate. It is actually that simple. People try to overcomplicate it. From Elgin here with a straightforward Texas PSA. How quickly do you need, um, to have a lawyer review the deal on a PSA? Usually, usually if we're doing review and there's actual notes to push back and forth, it usually takes a work week to get done. I'll send it to them, they'll take a few days, they'll get it back to the seller, the seller will take a few days. And so I would expect it would take 7 days or so. To get done. Uh, now the PSA for this one, we've been kicking this around for 3 weeks and there's been 4 terms that have just been back and forth, back and forth, back and forth. It took a long time. I also want to point out it's a $13 million deal using creative finance from the bank and a small capital raise on a stupidly tight timeline, closing in less than 30 days from when we go into contract. That's hard to pull off correctly. So the contract has to be Really, really specific. In your case, you said a straightforward Texas PNA— PSA. Mine's not a straightforward Texas PSA. It's a very custom PSA. On a straightforward Texas PSA, it's usually pretty quick. It shouldn't take you 3 weeks to negotiate, usually about a week or so. Just be communicative with the broker and the sellers. As long as everyone's moving the ball forward, it's usually fine if it takes a little bit of time. And Liam, when you were starting out— of course, I put my camera right in front of this, so excuse me, I'm gonna get around it here. When you were starting out, did a large percentage of your time go to meeting owners? I love the idea of meeting owners, but I have a full-time job. So when I started, started, I had a full-time job. I would say 50% of my time went to meeting owners, 50% was with brokers. It was almost a perfect split. Meeting owners usually means I'm grabbing coffee on a Saturday. That's a pretty normal thing to do with owners. Grabbing coffee on a Saturday, normal thing to do with owners. Sorry, that was title calling me. I have a refinance coming up I need to figure out. The owner meeting was really, really helpful. Here's what I found from them. They gave me the lawyers to work with and not to work with. They gave me the PMs to work with and not work with. They gave me the best contractors. They told me who to avoid. Uh, I learned a lot from meeting the owners. I did it with a full-time job. Um, it was a lot of Saturday meetings, occasionally an evening meeting in the work week. Um, it's not about trying to meet 100 owners in a week. Nothing like that. You're trying to allocate time while you're building and establishing yourself in the market. You can meet a lot of the owners in a market through the course of a month or so. I would set aside a month of like, hey, this month On Saturdays, I am going to try to grab coffee with a couple people every weekend. You can easily knock out 6 to 8 different owner meetings. You're going to learn a lot about your market. You're going to get opportunity to more deals. I absolutely love doing it and it's actually quite fun. If you're a coffee drinker, it's great. At the same time, most people find their first deal from brokers. The owner relationships take more time to develop. So what usually happens if you're doing both at about a 50/50 split, You're probably going to close your first and second deal with a broker, but the relationships that you're building with owners is going to carry you a lot farther in the long run. Those usually take 3 to 6 months to really end up organically turning into a transaction. So you get a little bit of momentum going and all of a sudden the owner thing's paying off and the brokers are calling you and you've built your entire pipeline. So I would balance them. But if you feel like the owner thing is going a little bit slow, it is completely normal. You're building a relationship. You're not going to build a strong, lasting relationship in one owner meeting. In most cases, brokers are more transactional, so your odds of getting a transaction are higher. Hope that helps. And that's what we have time for because I have to call this title company back because I would like to lower my cost of debt significantly, which I can do. So I will see y'all in about 25 minutes. If you would like to again, it's multifamilystrategy.com. If you guys want to join that webinar, I'll be hosting it here at the top of the hour. Other than that, you guys have a fantastic week. I am 100% back, so I am in Texas, and the Wednesdays are back. So I'll see you guys on the next episode. Adios.