EP 604 – Next Level Income In Multifamily Real Estate With Chris Larsen

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This is the no Closers show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for pennies on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close notes, Scott Carson.

Hey, not Nation. Once again, thank you for tuning in for this episode. We are honored to have my buddy Chris Larson from Next Level Income joining us on today. Chris is an amazing investor who does and approaches things from an engineering mindset and has really done a great job systematizing and building amazing processes in place to help his business grow. And he's got a passion for helping other real estate investors out there take their income to the next level. So think you'll enjoy this episode? Make sure you stick around cause Chris will make it available for you to be able to grab his book at no cost. And I'm sure you'll enjoy it like I have. So stay tuned and we'll see at the top. Good morning, good afternoon, good evening everybody. Welcome to this episode of the no Closer Show. As always, Scott Carson. Excited to be here with you today. I'm even more jacked up to have a buddy of mine join me all the way from Asheville, North Carolina. This guy is a rock star, longtime real estate investor, a spent some time in the notes space just absolutely delivering some goods out to people out there. He's also a fellow podcaster. But this guy is just doing some amazing things, really taking people to the whole Next Level when it comes to income. So I'm excited to have our good buddy Christopher Larson kicking butt and taking names, joining us from Nashville this morning. Good morning, Chris. How's it going, bud?

Scott, Good morning. I'm psyched to be here.

Yeah, man, glad to have it. You've done some amazing things. So for our listeners who weren't familiar with you, take a couple minutes or take a couple seconds, however long, and tell us a little bit of your background and what you're focused on.

Yes, Scott, thanks for the opportunity. I've been an investor for over 20 years. I bought my first property at age 21. I was investing in the stock market before that, bought pools of distressed debt like we were talking about before the show. I've always wanted to be an investor, but really it came down to freedom. I was in college, I went to Virginia Tech. I was studying engineering, but really what I loved was racing bicycles and I wanted to be a professional Cyclist. I trained with Lance Armstrong. I trained at the Olympic Training Center. My best friend was my roommate. He was my training partner. And between my freshman and sophomore years, he died of a massive brain hemorrhage. And I put my head down and I basically just poured my heart and soul into racing for the next year. And I had a breakthrough. I was a category one, which is basically the level you need to be to take out a professional license. I was winning a ton of regional races. I was traveling nationally. And Labor Day weekend came around, and it was my friend's memorial race. And I won in dominant fashion. And by all accounts, I should have been thrilled. I came across the line. And not only was I not happy, I felt no emotion. A week later, I decided to quit racing. I couldn't figure out why this sport and this life that I loved and was so passionate about didn't make me happy. And I got back to school and was probably a little depressed. And I took a step back and tried to figure out what I wanted to do and a good family friend. I talk about this in my book, which if your audience wants, they can go to our website, NextLevelIncome.com and click on the book link and get a copy. It kind of goes a little bit deeper into it. But I had a family friend that introduced me to cycling. He also introduced me to investing. Roth IRA compounded interest. And I was day trading in the stock market. I was making like $5,000 a month in college, but I was also losing money from time to time. And there was one morning, it was about 3am I hadn't slept, and I was thinking about a trade, and I thought, man, is this really how I want to live my life? I was chasing was freedom. And what I realized was that wasn't being an investor, that wasn't freedom. And I started looking into other options. I read as many books as I can get my hands on. I read over 250 books on investing, real estate, all different things. And I decided that real estate was a good fit for what I wanted to do. If at age 21, I bought my first investment property, did a house hack, I rented out the rooms, bought the place next door, bought another, bought another, bought another, had a portfolio of properties. I didn't have a lot of money. My family didn't have a ton of money. So I then went out and found a career that I could make a lot of money. I spent 15 years in the medical device space, and I put as much money as I could into these real estate investments and ultimately over the past six, seven years transitioned exclusively into commercial real estate, specifically multifamily. We've been syndicating those deals for about five years now. And now my goal is to help others, through education and opportunities, achieve financial independence as well.

That's awesome. Chris. All of us go through a transition lives trying to figure out who we want to be when we grow up. I think a lot of people out there right now are feeling the same thing. Am I doing something that's going to make sense long term? Am I accomplishing all the goals that I want? And a lot of us are like, what you were talking about, you're going through things, you get to be at the pinnacle. Like, is this really what I want to do? At the point when you get reached that peak, when you're winning the race, figuratively speaking, there for you, you talk about buying debt and then also being in the multifamily commercial space. Let's dive into that for our listeners out there because there's so much of our listeners are looking at that space. I'm glad. We'll talk about some of your debt purchases here in a little bit here. But where do you think the market is going? Let's start first with that, the multifamily market. And I know we don't have a glass ball to look at. We can't see the future. We can look a little bit back at the history. But where do you think the multifamily space is going to go with everything happening in the market these days?

Chris that's a good question. So at the core, I'm a demographics guy. Scott and again, probably everything I talk about I go through in detail in my books. I'm an engineer, I'm a data guy. I was reading stuff and one of the books I read was by Harry S. Dent. And some people think he's crazy. He comes up with these predictions. But if you read about Harry S. Dent, he's a demographics guy, he talks about these big demographic trends. And I look at it like tidal shifts. So if you know the tide's coming in, you know the tide's going out, you might not know where the waves are going to hit if you're a surfer, but you know when to go out and go surfing. And that's how I look at it. So I was looking at demographics and that's what led me into the medical device space. I knew the baby boomers were going to need surgery. And then I started looking, okay, where are these people going to move? I was in D.C. after I graduated from Virginia Tech, I ended up getting my MBA in finance portfolio management. My wife and I now wife and I moved up to the D.C. area to start our careers. And I said, man, people are moving to the Southeast. So my wife and I moved to North Carolina. I moved to Asheville. Not only for the quality of life, for the demographics. So when I was doing an analysis of my portfolio back in my early mid-30s, I came across the multifamily space. And I. And I saw the same things with the millennials that I was seeing with the baby boomers. So really what I look at is where are we going this next decade? I'll tell you, I can't predict what the rest of this year is going to look like. Scott. I could tell you what our collection rates are per property and go through that. But what the next three, six, nine months holds, I don't know. Here's what I know. I know the trends and the fundamentals of the multifamily space aren't changing over the next 10 years. We still need 350,000 new units per year just to keep up with demand. We need about 4 million new units this decade to meet demand. So that's not changing. I think actually what's happening now is going to put a strain on supply. And we're seeing that. We're seeing units being pulled off or new projects being pulled off the market. We're seeing homeowners are delinquent on their rents in record numbers going back, and that means that more people are going to rent. I'm not happy about that, but that's a fundamental. That's not going to change going forward. So I think short term, there's certainly going to be some unique opportunities for people that got a little overextended. So if you're looking to acquire a property and you have cash to deploy, I think that's going to be a good time. Because if you believe in the long term fundamentals, that's not changing.

Totally agree with everything you're saying there. It'd definitely be needed, especially when you're looking at what, 10% of all homeowners are in forbearance agreement right now. And before this all happened, 1 in 10Americans are already a month behind to their mortgage before this happened. Yeah, that's a scary thing. And so, yeah, we're gonna need the affordable housing. I don't think it's just gonna be the multifamily thing. That's gonna be the mobile home park aspect of things. People are Gonna have to downsize or figure out where to go. And you're right. It's not just where you're at and where I'm at nationwide, there's a huge need for housing that's affordability, multifamily, things like that. The one thing I am a little concerned about in that space, as we've seen, is I think multifamily obviously has been a peak. It's been the most aggressive asset class, hesitate to say, but almost the most overpriced aspect of things because you get a lot of people moving into it, I think overpaying for assets with the idea that they're going to cash out of it in two to three years. And you and I, but you're shaking your hand, agreeing exactly with me on that. You've got to be in that long term, knowing when the tide's coming and going out. I love that analogy. So there's going to be some opportunities, people that a over leverage the property, overpaid for it, that you can pick up on the debt side in 12 to 24 months for the most part. I think you'd agree to that, huh?

I do. And with my partners, we've looked at similar trends and actually about 912 months ago, we started looking at A class properties because we said, okay, hey, there's a pullback. And again, you can watch these trends. I mean, I talk about in my book going back to the savings and loan crisis in the early 90s, watching both my parents lose their jobs, I lost my internship coming out of 2000. I was there in the Great Recession. You can see these trends in real estate. My partners and I, we looked at that and said, hey, what if we looked at some higher quality properties? What I mean by that is properties with residents that have more stable occupations, they have higher income, they're not going to suffer as much in a downturn. So I think you have to be selective within the space. So you say multifamily. Well, what are you talking about? Are you talking about class C properties? You talking about affordable housing? You're talking about subsidized properties? Are you talking about luxury properties? I've always been a fan of B A minus in that space, although we have properties going back into the 70s that have been built. So I think you definitely have to be selective. We've seen cap rate compression on the lower end of that scale. And you certainly see people that are overpaying. They just want to get a deal done. They think they can raise rent 7% annually and hit their Numbers, you're not going to be able to do that this year, I don't think.

No, the whole race is the rent aspect of things I think is right. I think you're going to be looking to, to maintain it. If not, you'll make some sort of give in a little bit, help out your intensive wallet there for you. What are you seeing across your properties right now? Just look at where it's at right now. What kind of rates are you, are you seeing people in the high 90s still? Percent collections? Are you seeing a little bit more of leniency on that stuff? How's that kind of working out for you right now in your properties?

Yeah, great question. So if we look Nationally, we're seeing mid-80s or collections and typically if you go back a year, you're seeing like high 80s is your typical collection. So they're off a little bit. If you look at our portfolio, the properties that I own, we have about 1200 units total. In the properties that we own going back to 1974, all the way up to 2014. The properties built in the 70s or early 80s, we're seeing collections in the high 80s. That segment is 88, 89% collections April and May. So solid, not fantastic. The properties that are more on the B plus A minus side, those collections are essentially unchanged. So we're talking about 97, 98, 99%.

Wow, that's phenomenal. That's really good. What's the geographic makeup of your units? Is it all there roughly around where you're located or spread out a little bit?

Good question. So again I stated I moved to the Southeast on purpose to follow these demographic trends. I like the Southeast from a multifamily space. I've owned properties in Texas and South Carolina, North Carolina, Georgia, my partner's Kentucky, Tennessee. But right now our portfolio is mainly based in the greater Atlanta market as well as North Carolina. So we're talking about Raleigh, Charlotte, Atlanta. There's 30 some different sub markets in that MSA. And the Raleigh in Charlotte properties are doing quite well. They've been very stable and the Carolinas haven't been hit that hard by the COVID 19 situation. Obviously Georgia's already open, South Carolina's open. North Carolina just moved into phase two. So I'm hopeful that we're going to keep moving through this in a positive fashion. But certainly there's going to be some short term effects.

Definitely. Now let's talk a little bit. Let's talk about some of your note past dabbling or past being a note Investor on stuff like that. What kind of those deals made up over the multifamily single family, what kind of breakdown were there?

My partner and I, we were buying pools of distressed debt from banks and his group was working them out. I was funding and this was, I'm trying to think, I'd like to go back, I want to be accurate, but like 2014, 2015. So coming out of the Great Recession, as we were starting to see property prices start to climb, we were and probably very familiar with this. We were able to buy debt for sometimes 9 cents, 15 cents on the dollar. And towards the end of that we were looking at prices 25 cents on the dollar. So those were entirely single family seconds and most of those were non performing seconds that we were buying and working out. So I mean if you're buying for 10 cents on the dollar, Scott, I know you're very familiar with this space. You don't have to have a lot of them work out well to do very well. It was a profitable space. But around that same time I was starting to invest in the multifamily side and I made a decision to focus my active endeavors on the multifamily space at that time and I moved into a passive role with the distressed debt that we were buying.

Makes a lot of sense. Yeah, seconds we're going definitely very for pennies on the dollar. That market's obviously rebounded really strongly as the values have come over the last couple of years to the point where that's almost an overpriced segment in the debt space too. But for the most part, but hey, there's still opportunity out there in so many different ways. On the real estate side, where do you see with the investors that you're dealing with? What do you see are probably the three biggest things that they're looking for? For those that are looking to raise capital, looking to do syndication, especially with the different deals that you've done. What are some of the things, maybe the biggest obstacle, biggest questions that people are asking or looking to answer? And this is kind of a way for our listeners out there that are looking to raise capital for their first deal or a bigger project. What are some of the things that you'd recommend people talk about?

Yeah, so there's a couple different directions we can take this, Scott. So when I talk to an investor, I kind of tell them what our goals are. Our goals are capital preservation, income and then appreciation, in that order. So we're looking for stable cash producing assets and we want to make sure that they have Low occupancy rates where they can break even. So like this property we just acquired last week, 55% breakeven occupancy. So very stable cash producing asset, low break even occupancy. When it comes to what investors are concerned about or where they're looking for, maybe why investors invest with us, they're looking for diversification, they're looking for stability in their portfolio. Again, I dive into this in my book. I talk about how if you can bring 20 to 30% of your portfolio into income producing real estate, this is why I call it the holy grail. A little sneak peek in the book is because you can increase the returns of your portfolio and decrease the risk. And my MBA is in portfolio management. I almost got a PhD in finance. I absolutely love it. And I talk about the Sharpe ratio. And I don't think a lot of investors really know that the ultra rich have about 30% of their assets in income producing real estate. And the reason is it's so stable it's producing cash. When the stock market's dropping 20, 30% like we saw in March, your properties are probably not dropping by 20 or 30%. Do properties go down in value? Sure they do, but they're more stable. And part of that is the illiquidity. So that's kind of the downside. Investors say, hey, when do I get my money back? How do I get my money back? That's a big concern for investors. So if you're an investor, I think you need to ask a few questions. You need to say, am I comfortable with the strategy overall? Am I comfortable with the market? Am I comfortable with the operator? That's really before you even look into the deal because you, you might see the best deal in the world in a market that is a one factory town that's been dying for 20 years. And you might be like, oh, it's 12% cash on cash. Well, if you can't sell that asset or people are moving and stop paying rents, that's not a good deal. So you always want to ask, when do you get your money back? The illiquidity is a benefit in terms of stability. It's also a detriment if you say, hey, I got to have my money back in 12, 24 months. The multifamily space may not be right for you. And if you're putting together deals and you're looking for investors, you need to make sure you educate them on that or you have some sort of provision to make sure that investors know when that's going to happen.

Yeah, those are totally. I love great nuggets. Hang on the nuggets. Therefore, actually I'm going to throw the whole.

Oh, I like that. I got to get one of those. It's like Breaking Bad, the character in the wheelchair. You know, I got a.

That's exactly, exactly.

Gotta go onto that.

But you said something that are really good. Somebody's looking in the multifamily. I mean, I think only the real estate investors. In the short term, we're talking fixing flips. It still should be 12 months or less. If people are looking to get in, get their money out in less than 12 months. I think it needs to be completely outside of the real estate side. We all know that deals, especially in today's market, you get hit with a right hook like we have the last 60 days. My phone and email's been filling up with hard money lenders asking, hey, will you buy my note? Will you buy my debt right now? Cause they know that those terms are gonna be, what have you guys been doing? And I know, I love your model. Hey, let's look at long term appreciation is the last thing that we want to be looking at. Unfortunately, a lot of people on the west coast are like, oh, we can guarantee appreciation, let's invest in appreciation. Go to the low cap rate and that's a death sentence.

I think at some point I've made that mistake.

We all have at some point. I think if you've been around longer than five years for the most part, with the trends and whether you talk about portfolio management, with the market being in such an increase upward trend over the last 12 years, I know that you're probably your spider sense of saying, hey, this can't stay as it is. What are some of the things that you guys, you and your partners have done? Okay, we know that the music's going to stop, that merry go round is going to stop at some point. What do we need to do to start preparing for that? Any things that you guys have planned or discussed and put in place to take advantage of opportunities?

Yes, certainly. And that's an excellent question. And so a couple different things. So we are moving away from bridge debt. We're looking at, there's a few kind of rules, if you will. I think it's important to have debt that lines up with your expected hold of the property. So the last property we just acquired here in the past week and a half, ten year debt with a projected seven year hold. So we are looking at making sure that we have some flexibility and it's actually a stage process. We could even say, hey, we have kind of plan A, is it a four to five year period period? Plan B is at a seven year period. And then plan C would be, hey, the market's not great during either of those periods. We got to go out towards the end of this debt. So we're putting in longer term debt. That's on top of what I already discussed, Scott, of looking at properties that are more stable. Because I think right now if you're buying a value add property and you got to turn that resident base and increase rents, 2, 300 bucks to get where you need to be in a short period of time, you're going to see some drag on that and that's going to really prevent that appreciation. It's also going to hurt your cash flow because if you have to operate at say 93, 95% occupancy to hit your say 7% pro forma cash return and now you're at 90%, well, you're probably not losing money. But that deal that you're not having to make any improvements on is probably outperforming the deal that you're making all these improvements on. So you have a deal that's higher risk and lower returns. That's kind of the opposite of what you want in my opinion. I'd say if I'm going to take more risk, I want higher returns, I want more risk and lower returns. We're looking at more stable deals, we're looking at longer term debt. And we're also educating investors and saying, hey listen, Scott, if you're interested in this deal and it's going to project 12%, are you comfortable if we only did 6%? That's a good question to ask yourself. If you say, hey listen, I can't deal with that, that's not going to work for me. Then you have to understand that we're operating in a slightly different environment. Cap rates may expand going forward. Appreciation may drop a little bit. Cash may be a little bit lower than expected. So it's always important. And if an investor says, I'm not comfortable with that, that's okay, just might not be a good fit for them at this time.

I love that. It's like a tune for going off of listening to things. But that's the thing is so many people, they get into it with the new puppy investor. I'm so excited. I'm excited, oh, we got a deal, we'd get it done. You said earlier on like, hey, I gotta get a Deal done. And that is like the worst type of take your time, make sure it's a good deal, not a dud, as we always like to say out there. Has there been any mistakes along the way? I'm sure there has been, but any deals that have kind of when you think of duds or stuff that you're like, ah, crap, I shouldn't have done that. Anything that stands out in your past, Chris, because we've all got them.

Oh, yeah. Oh, yeah. And that's. Listen. That's part of. In the medical device space, I train reps, manage a team. One of the things I enjoy is you teach people. And one of the best ways to teach people is to tell them your mistakes so they don't make the same mistakes. I was buying properties in the late 90s, early 2000s, and I say I timed the market perfectly. And what I mean is, I put my first property on the market to sell, and I watched the Property values drop 30% while it was on the market. I was like, man, if I could have pulled the trigger or a lever at that time and liquidated everything, I literally would have timed the market perfectly. It was the end of 2007. I waited too long. So that's one thing. Don't get greedy. There's a great saying, it's not Rockefeller, so I'll come back to that. But it may be Templeton. But he said, my secret was I always sold a little bit before the top and I bought a little bit before the bottom. And that's why I talk about the title shifts. You don't have to time it perfectly. And don't try to time it perfectly. Going to get run over by the steamroller if you try to pick up that last penny. So that's the first lesson. Go with the flow, but have a plan. Always be selling and buying on your own timeline when it comes to. Let's talk about the multifamily space. So the worst deal, the worst deal I was in, I was actually an lp. I was a limited partner, a passive investor in a deal. And we bought it in Houston around 2013. Oil was hot. Things were getting off, off the charts. And it's about the same as we are right now. Oil prices dropped, the economy in Houston tank. Then the hurricane came through that property. We had a management issue. We had pulled some money out. So then we had a capital call here. We got an investment that's not performing well. And then the operators call me and say, hey, you need to send us a check so we can keep Operating this deal. So what are the lessons again? You need to prepare for these things. So one, don't get over leveraged. So we had a little bit too much leverage on that property. Two, keep a close eye on management. And three, it goes back to one of the things I said a few minutes ago, which is be comfortable in the market you're in. If you're in a market like Houston was at the time, it wasn't as diverse as it is right now. Then if that one sector of the economy or let's say you buy a multifamily or a student housing deal in a property and Obama now there's no students in the property because of COVID 19. That's a big risk. So you have to be comfortable with those things. And that's something I tell investors. I say, listen, I'm always going to invest in these deals alongside you. So this is what I look for. I always walk through that with people. So again, the converse of the things we look for is you can make mistakes by not doing that. Don't over leverage. Make sure you're buying in diverse economies and make sure you keep a close eye on operations and management.

Yeah, that's definitely. Operations and management can eat you alive if you're not watching things really quick. The cat's away, the mice will definitely play.

Yeah. And it's, I mean that's where the rubber meets the road. So if you're not actually hands on operations yourself, you gotta be really, really confident in your operating partners.

What was one of the biggest learning curves or one of the best ways to learn? Cause going from a passive to an active investor in the multifamily side. Chris?

Yeah, so I think really going into it, I'm always a learner, so I'm always trying to figure out what are the pieces that make success. So I was looking for those pieces and saying, okay, if I was doing this myself, what would I do? How would I improve upon this? As an engineer, I'm always thinking, how do you iterate? How do you get to the next level, no pun intended, of performance, just pay attention. So that means looking at monthly financials, digging in. Again, I'm a numbers guy, so I would highly recommend if you're going to be a passive investor in the space that you have somebody if you're not comfortable that can look through those numbers for you. So you can kind of keep an eye and say, hey, is there something amiss? If you're one of our investors, my investors call me and say, hey, can you walk through this with me and you can call your operator and say, hey, or your syndicator and say, hey, can you walk me through what I'm seeing? As an owner in the deal, you deserve to see that. So that's number one, really understand what is going on and keeping an eye on those things and going into it, even if you're passive, think like an active investor. That's the biggest thing. Always be thinking like an active investor. And then the second thing is again, going back as an engineer, when we solve a problem, the first thing we do is we list our assumptions. So I'm always questioning assumptions. And you asked about this earlier, Scott, how is the market changing? What do we see going forward? I love multifamily. It says on the COVID of my book that it's the holy grail. And I think it's going to be for the near future. In five years, if we're talking again on this show, Scott, I may say, hey, things have changed. The fundamentals have changed and I'm willing to change with it. So what I mean by question the assumptions, I also mean stay humble. Be able to look in the mirror and say, am I right? Did I make a mistake? Am I wrong? It's okay to be wrong. It's not okay to be wrong and stick your head in the sand and continue to make bad choices based on wrong assumptions.

Such really good stuff out there. Definitely. Now what I always like to ask too is coming from the debt space into everything. We're going to see a lot of debt here. What kind of, you know, I'm doing this for my own pick my own brain here. Picking for you what's kind of your asset class. I mean, you talked about CBAs, parts of the country, like select the Southeast Conference, part of the United States and the major cities for the most part.

Yes, yes. Yeah. Strong area for sure.

Strong area, definitely. We talk in 100, 200 plus units. What's the kind of your property size that you're looking for as far as number of doors?

Yeah. So you get efficiencies as you move up the scale. So I think a lot of investors that are getting started don't make an assumption that, oh, you need to go like 10 units, 20 units, 50 units, 100 units, 150. You don't have to be sequential. If you know how to run a good deal and you look at where the efficiencies are, you can't cut a person in half. Well, I guess you could literally, but you can't cut a.

Does that Go back to Solomon and the Bible.

Yeah, right. Yeah, there you go, the Bible, man. There's a lot of good financial advice in there. So there's efficiencies that you start to achieve when you're around 150 units. So we are typically looking at deals like 150 plus units. And we're also looking at segments of the market where we have a competitive advantage. So we like to buy deals that are too big for some kind of. Not even mom and pops, but kind of like small mid market players. We just did a raise, we raised almost 20 million. So we know that we have firepower when it comes to some of these larger deals. Now here's the challenge. It's kind of like Babe Ruth. You get up and you're swinging for the fences, you're going to strike out more typically. So if you're going after some of these bigger deals, there's not as many players necessarily. But like we had six LOIs out early this year. Two came to fruition and then one pulled out when the interest rates tumbled and the market unraveled. So out of the first quarter we ended up with one deal even though we had six Lois out there. So that's why we efficiencies are where we target some of these bigger properties and then also competitive advantage. We're trying to focus on what we can really have a competitive advantage in.

Yeah, but you know what, that's still not a bad, I mean, hey, 1 out of 6 in the first quarter is not a bad play at all. I mean it's a very happy, yeah, 14, 15%, 18% closing ratio. That's pretty good. I always tell new investors expect to have roughly about a 10% closing ratio from the offers you're putting out because you're going to either kill them for due diligence or financing or a variety of things. And so that's. I'm glad that you said that there because I think they should drive everything home because everybody makes offers a lot of times, especially starting off with they only make offers for the amount of capital they have in their bank account. A lot of times they're afraid to make multiple offers, thinking they're all going to get accepted. We know that's just not the case.

Oh man. When we started Scott, it took us almost a year. We started the process, my partner and I, October, November, and we closed our first deal in August. We were thrilled to get one deal done in the first year. We were thrilled. So yeah, I mean if you're starting out, set your expectations you're going to have to take a lot of cuts at the plate to get your first hit and that's okay. Yeah.

Now you're talking about raising $20 million in that. That's just accredited investors or you're doing a mixture. What kind of fund setup is that?

Yeah, so we operate under reg. D506B. So yeah, mostly if you ask me or you go to our website, it says accredited investors is who we work with. Now there is a provision. You can put about three dozen non accredited or sophisticated investors in these deals. So we do have a handful per deal. I would say, you know, maybe three or four sophisticated investors. I do say allow in per deal because if you call me and you say, hey, I meet kind of really close to meeting the minimums or even if you're accredited, you might not be allowed into our club. To be a good deal, you got to be a good fit. It's a team, it's a club, it's a team. We want to make sure that everybody's on the same page and we can raise the money so we're not trying to squeeze people in to something that's not a good fit for them.

What are some of the best ways that you guys have? If you don't mind sharing some of the best ways that you guys have raised capital or put yourself in front of the right people to fund these deals to be a part of it. Any tips you want to give our listeners out there?

Yeah, so it's. I mean, I wish there was like, if I had some magic tip that I'd say, hey, listen, here's how you can go from 0 to 20 million in your first deal.

That'd be a great class to tell right there.

If anybody out there has that, call me, I'm all ears. I mean, listen, I started. Here's the best tip I have, is really just build your network. And I read a book in college, I think it was called build your parachute before you jump something to that effect. And it was just about building your network. And it resonated with me. And Dale Carnegie had to win friends and influence people. And now I've had a lot of people help me along the way. I love to help people. I love to. I've got a couple of young guys here, young people here, because they're not all guys. I say guys from the Northeast, young individuals here in Asheville that I mentor. I kind of help give them some insight into different things. So I would say always be trying to build your network. And after you do that. Let people know what you do. I mean, if you're confident you're good at what you do, don't be afraid to let them know that. I wrote this book two years ago as an ebook, and I sent it to people, and I came across a company a few months ago that said, hey, we can publish your book in eight weeks, and even if you don't have one written, I was like, I wrote it and I sent it to them. And it's been really great when I found Scott, is that it shares a bit of my personal story. And I have friends that have known me for five, six, seven years or even longer that read it, and they're like, I didn't know that about you. And it's because I don't go around talking about my childhood or my personal struggles. And especially if you're successful, you don't talk about your failures, but it's important. So I would say build your network. Let people know what you do. And don't try to fit people in. Meet people where they are, and they'll come to you, and then just give as much. This is one of our first podcast guests. He talks about just give away as much value as you can. And that's what I've really focused on, is just trying to help as many people as I can. And it seems that if 1 out of 10 of those people I help comes back, like we were saying, that's a pretty good rate of return. That's not why I do it, but it just seems that that's the way the universe works.

Exactly. Love it, love it, love it. Chris, now, I got a really important question for you. Really probably the most important one that's been on my mind since I found out you went to Virginia Tech, you big hokey fan. Are you a Beamer Ball?

So, man, it's been a wild ride. I got there, and we were ranked 25th, and I met Michael Vick in a pet store. No jokes. True story. Watched him go to the Sugar Bowl. I was on the cycling team, so we actually used to sell as fundraisers. We'd sell pretzels and lemonades. I got to go to every game. You know, when I was in college, it was an awesome ride. And then we've kind of, you know, tumbled from there, so I'm looking forward to the day I can take my sons to a game and be proud again. So, yeah, I'm a fair weather fan. I'll admit it. I'm a fair weather fan. But, yeah, I do love the hokies man.

Gotta love the hokies that did a lunch pail box defense, you know, showing up on a regular basis. Although it is sad to see the defensive. The longtime defensive quarter. Just retired, didn't he? If I remember correctly.

Yeah. When I worked for State Farm, the agent I worked for was Frank Beamer's nephew. He was a team captain. Brendan Simonis. Great, great guy. I mean, great guy. Great family. The Beamers, I mean, that whole family, they're just fantastic people. Great work ethic. To me, that was a good fit for me, actually. I looked at uva, I looked at Duke, I looked at some other schools in that area. I'm from Maryland, but I got on that Virginia Tech campus and I saw the beauty of the mountains. And then just that, just that good, humble work ethic really resonates with me, and I just love it. You know, you go to the UVA games, they got their little blue blazers on and, you know, and they're making fun of you, and then you just. I mean, we won every year I was there, but one year we beat those guys. And I got a lot of friends from uva. But it's. I just think there's that humbleness and that, like you said, that lunch pail defense, man, it's something special.

Well, and that's the thing, I think, more so than anything else, there's a lot of analogies and similarities, I think, between that aspect of defense and successful real estate investors. You show up, you do your job, you do it the best of your abilities. You're constantly learning, you're there as a good team, you're networking. And I think about how especially Beamer handled the situation with the mass shooting that took place there on the campus years ago. I actually sent Beamer a letter. I've been to Blacksburg a couple times for my travels and sent him a letter. He actually responded back. I was very surprised that he actually sent back, wow, quick note to me, but just says that you show up, you're gonna have some great day. Some days you're gonna have your lunch handed to you. And if you're an investor out in the market, kind of getting your lunch handed to you right now, take some time. I think you gave some really great pointers without really talking about it. Educate yourself, read, learn what's going on in the market. Don't count on the highs or worry about the lows. Play somewhere in the middle and make sure you've got plan A, plan B, plan C, in case things don't always work out. For you. And that's a beautiful philosophy, beautiful business plan there, Chris.

Sharing that, that's so good, man. And for anybody that's struggling right now or that's taking some hits, I mean, what we've done in the past two, three months is really focused on the fundamentals. Just focused on putting out content, talking to investors, over communicating. So, yeah, educate yourself, focus on the fundamentals, focus on what you can control. There's going to be some sleepless nights, but try to focus on the positive.

Yeah, Chris, first of all, what's the best way for people again? I know you said it early on, want them to go to your website to get a copy, download your book or anything like that. What's the best way for them to get a copy of that book and learn more?

Yeah. So check us out nextlevelincome.com you can check out our podcast there, the Next Level Income show where we help you make more money, keep more money and grow your money. And we do that through opportunities to educate yourself and also opportunities to achieve financial independence through cash flow real estate. You can check out our book, Next Level Income and it's at the book link, so click on there. Your listeners today. Scott can get a free copy. Download it today and if you put your address in, I'll send you a copy as well.

That's awesome, man. We appreciate that so much there, Chris. Definitely. So, hey guys, Note nation. Listen what Kris talked about here. Shared some amazing nuggets out there. I know many people are wanting to up their game, going from the single family to the multifamily, going from the D class and a class and really helping you put some things together. Do what Kris did, learn, surround yourselves with great people and then really plan on being that. Make sure that deal works on an up and down aspect of things and that you're not trying to squeeze a dud into a deal or square peg into a round hole when it comes to buying real estate. So, Chris, thanks for coming on the no Clues show, man. We really appreciate having you today.

Scott, thank you. I love what you're doing here. You provide so much value for your audience. I really appreciate the opportunity.

Thanks, bud. We'll see you around. All right, guys, that's going to wrap it up for this episode. Go out, take some action, Download Chris's book, Next LevelIncome.com, click on the link and like you said, if you put your address in, you'll get something in the mail. That's a beautiful thing. I thought I was the only one doing that with my book. Who knows? That's a good thing to see out there, everybody. So go take some action, buddy, and we'll see you all at the top.

Bye.

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