[00:00:00] In a suburb outside of Chicago with a thousand dollars down and the owner held the paper on the rest. Now what I mean by held the paper on the rest was he financed the rest of that deal. Now I tell that story because there’s a power in knowledge, right? There’s a power in the knowledge, but in the execution of the knowledge. So on. Why are you today to grasp whatever you can grasp and see how this is going to benefit you and help you grow your real estate investing business. We’re really gonna focus on multifamily. I want to do a little housekeeping first though. So go, grab yourself a journal, grab some paper or something to take some notes with. I’m a big note taker, and I really feel that by you taking notes. What happens is you retain more information, you’ll grasp more and more things that you’ll be able to go and utilize. So I’m the kind of guy who would go to a seminar and I would walk in, I have two notepads in my hand. One of those notepads. I would just take notes as the speaker or the presenter was getting ideas and getting thoughts. I just write down notes. And the other note pad was for me to take notes that I was immediately going to implement. So as soon as I go back to my office, I would start to implement those 15 or 25 things that I had on that list. Actually my staff that worked for me at the time was a little distraught with me sometimes. Cause I’d come back into the office and I’d have all these notes and ideas and things that I wanted to start to change. What, as a direct result of those types of activities, I grew my business year after year. So I want to teach you some things today that are going to help you in your multifamily career. This webinar’s designed for the brand new investor, somebody who is just coming into real estate, somebody who’s raised their hand and said, Hey, I want to be a real estate investor. And oh, by the way, what’s this multifamily thing what’s apartment investing all about. And how can I scale my business as a result of that? That this is who we’ve designed this for. It’s also designed for the investor who might already be in an asset class. That asset class could be single family. You might be a fix and flip investor. You might be a buy and hold investor, or you could be in another asset class. Totally. You have to tell you a quick story. This past week we were in Tampa. Doing some due diligence, taking a look and doing a physical inspection on a 40 unit apartment building. We’re buying. And my partner, who I was there with is sitting at the bar one evening and he’s talking to a guy next to him and he finds out that the gentleman next to him has Autumn’s 90 properties in Philadelphia, all single family homes. And he has no idea what multifamily investing is. So it’s interesting to me that this product class as in demand, as it is today, as sexy as it is as an asset class to be involved with. People out there still don’t know about what it is. So hopefully we’re going to educate you here a little bit today about this. So before we get started, let me ask you this. How many of you here tonight? They. That I’m going to try and sell you something at the end of this. Go ahead. Raise your hand. It’s okay. I don’t want you to be disappointed. So just let me tell you that I’m going to do that. What I keep doing tonight is I can’t give you 30 years of experience in 90 minutes. But what I can tell you is that if you hang in there with me for the next 90 minutes, that you’re going to gain a real clarity on what you can do with your multifamily business or your real estate investing business and how you can grow it and scale it, and it’ll benefit you. I’m going to teach you strategies. I’m going to teach you some techniques that you can actually implement some sound principles. You’ll be able to walk away with. From this event and actually go out and execute. Probably we’ve been by a multifamily property. Be tomorrow morning. If that’s what you want me to do. So how many people here would actually like to walk away and be able to buy a multifamily apartment deal right away. Okay. One problem is, like I said, I can’t teach you everything that I know from 30 years of experience in 90 minutes. A lot of information, a lot of techniques and strategies today. A lot of data that you need to learn. But I’m going to also talk to you about a three-day event that I’m going to be. Hosting in September. And at the end, we’ll talk about that. But if I give you enough information tonight, My guess is that you’ll want to come to that. My guess is that you’re wanting to do. More information, more knowledge and take the next step. Little Henry Ford said some real, some role. Someone’s waiting. You know what, some people will want to some wrong and that’s okay. You know what? You’re still gonna get a ton of information that’s going to help you. And what I can tell you is that this and my three-day event is going to be a lot different than some of the other seminars or events that you may have been to. You may have been to something last week or last month where they said, oh, we’re going to do a bunch of information. And it wound up being fluffing height. And that’s not what I’m going to do for you here tonight. I’m going to teach you some things that will actually change the course of your business. First thing I want to do is I want to do a little exercise. So I want you to pull out a piece of paper from that notepad that you went and got. And I want you to write down the answer to these questions, but what is, if you look at your life today, personally, what’s the biggest challenge that you face in your own life? Is it. A physical challenge. Is it a a knowledge challenge? Is it a financial challenge? What is that challenge? And you know what, we’re not going to collect these. I’m not going to ask you to answer in front of everybody. Write it down. I want you to look at it and know what it is. The next question is, how about your professional challenge? What’s the biggest professional challenge that you may be facing today in your life?

[00:05:36] Your job, your career. Do you like it? Do you want to get out of the rat race? How about your biggest financial challenge? Are you where you’d like to be.

[00:05:47] Yeah. What’s your name or the lien com. Is that where you would like it to be. As if it’s not all of this is easily changed. So I want you to write those answers down and it doesn’t matter what they are, but just put that on the side because we’re going to come back to this. Paper a couple of times throughout this event. But I really believe clarity brings us to a point of making a change or taking charge of our life and making some type of a directional change in our life.

[00:06:14] Let me ask you this. Have you ever been doing an event like this real estate event? Any type of a training event? Maybe you have maybe haven’t, but here’s what I want to tell you. I’m not a performer. I’m not an actor. I’m not, I’m a real estate investor. Just like you. I roll my sleeves up every day. I’m in the trenches. Matter of fact, we’re just buying a 40 unit apartment building right now. Like I said, we just came back from Dan and due diligence on Monday and Tuesday this week. I didn’t just read a book or hear somebody talk about this and think while be a great idea to go teach people this. I’m actually doing the same work as you are. I’m actually looking for people who want to get busy in the multifamily business and be successful and even create strategic partnerships. I actually have some coaching clients that I work with that we have created some partnerships and they are doing really well as a result of that. So we’ll talk about them a little bit at the end. But I want to tell you my story and how I got involved in the multifamily business and how I got involved in real estate. I started out in real estate sales and actually before that I had a general contracting business and. Woke up one morning, I was burnt out. I couldn’t do it anymore. I had grown a contracting business pretty large. And I was still in the field, banging nails, plus trying to do everything else at that point in my life. I didn’t know how to delegate and I didn’t know how to utilize other systems and processes. So I decided to sell the company. I sold the company and took a year off. And during the next year, what I did was I did a couple of fix and flips. And this is a long before that was sexy. Today we call the house hacking, you live in the house, you fix it up while you live there, then you sell it and go do the next one. Back then. It wasn’t like it is today. It’s a chic thing to do. But along the way, doing those couple of house hacks. I met a real estate agent who was really successful. And I went to him and I said, Hey, Todd. I would really like to go into real estate business and he said, Mike, I think you’d be great in, I think that you have the great skills and the ability to stay in touch with people and follow up. And you’re a good sales guy. I said, great. So I went into the business. And what I did was I had asked Todd, I said, Hey, can I follow you? And can I shadow your team? And he said, no, he goes, I’ll do one better than that. I’m gonna make you a cassette tape. Now I’m dating myself because I don’t know that we could find something today to make a cassette tape on. Much less, listen to one. But I listened to that cassette tape over and over again. Actually I probably wore it out. But what I did was I took those fundamentals, those little lessons that he taught me and I went into the real estate business. And my first nine months in the business, I sold 78 houses. I was Remax rookie of the year, that year. I went on to build a team selling 125 homes a year. Why did I do that? Because I know that success leaves clues. And if you follow successful people who have done things before you, you can be successful too. So I took those skills, those same, that same philosophy. And I went into the multifamily business seeing in 2005, I saw the market starting to shift and soften and a number that there were going to be some problems in the market. And that I would have to do something to increase my business in my activity. What I did was I said, I always want him to be in the apartment business. Because when I was in the construction business, I did a lot of work for inland real estate. And I knew the model. I understood private equity, and you want to know what this is. See private equity, you raise funds, private equity from individuals. You marry it with a great real estate deal. You stay in the middle and as long as everything goes everybody does well. In 2005, I syndicated my first small 11 unit apartment building. I went on over the next 30 months to raise $18 million. I bought $60 million worth of real estate. It was 4,000 apartments in five states and I built a property management company managing 7,500 units. Now I tell you this because I made some mistakes along the way. Some of those mistakes where I grew way too fast. So let me tell you this. It’s very easy in the multifamily business to scale your business. And to grow there very fast, but don’t do it. Take your time. Rome wasn’t built in a day. I was under capitalized. I didn’t raise enough money for the projects that we had and I was over leveraged. Yeah. I bought $60 million worth of real estate. On 15% down. I was 85% loan to value on that. I don’t know who was more at fault. Me for taking the money or the thanks for giving it to me. But what happened was I imploded? 2008 came around, we saw the worst economic crisis the country’s ever seen. And I failed. I came off of the rails. What’s interesting is that a lot of people always talk about their success, but I’m going to share some of my failures with you. So you see the lessons that I learned from them. So 2008 rolls around I’m over capitalized. Under-capitalized over leverage grew too fast, very unstable, and I’m not paying attention to the details. I’m not listing the people around me saying, Hey, watch out for this and look at this. And I don’t like this. And what happened was my company started to experience a cashflow crisis. And as a result of that, I had some properties that I couldn’t pay the bills on, or the mortgage is on because there’s a big thing in multifamily called occupancy. And if your occupancy is not up. It causes your net operating income. The cashflow that comes in to not be able to pay the bills. And that’s what happened on a few of my properties. I had been involved in recessions in the past and I thought, Hey, you know what? This is going to last a short time. There’ll be a small correction. We’ll be able to mitigate our way through this while that wasn’t exactly true. Was it. 2008, lasted seven or eight years with a 40% correction in the marketplace. I couldn’t pay my bills. I started moving money back and forth between companies from profitable to non-profitable companies. At the counsel of my legal my legal counsel and my countable. They both said, Hey, you could go ahead and do that. Just leave a paper trail when the market bounces back, go ahead and put the money back. So I thought, great few months. We’ll weather. This storm. We’ll be okay. That wasn’t the case. I wound up being charged on wire fraud and mail fraud charges and sentenced to 10 years in federal prison because I didn’t disclose what I was doing to my investors. So what they said was that I didn’t provide enough data for my investors. I understand that today. I didn’t understand it at the time. And if I would have, I might’ve done something different, but I go to prison. I think my life is over. What I do while I’m gone though, is I re-engineer myself. So I go to college. I get a bachelor’s degree in theology. I write two books, two home study courses, one called exit plan, your complete guide to multifamily investing and why you need an exit plan before you buy. And one on property management, I teach multi-family investing and property management in prison for five years. I write an ethics course. I teach ethics for five years in prison. I’m on an outreach program. We go into the community. I tell my story about 40 different times in the marketplace. And I talked to small business owners, major corporations, and I talked to a local college students. I meet a professor at the university of Minnesota. We go on to write a paper together. We co-authored a paper that got published this year in the business journal of ethics.

[00:13:53] Okay. That paper gets caught at the collegiate level today for forensic accounting. And sales and marketing classes. Now, what I’ve done is I’ve taken that, all that knowledge, all that experience from all those years. And I put it on a platform to bring a coaching and training service to you. That’s going to help you grow your business, not make the same mistakes I made and live a balanced, more comfortable lifestyle. Is it, wouldn’t that be a good place for you to spend your time, to pay attention to the things that really matter for you in life? Let’s talk about why the multifamily opportunity is so important today. There’s a higher sales price in multifamily today than there’s been in a long time. Multifamily is the darling of the industry. We have a lot of supply train, supply chain constraints and material costs that have caused pricing on everything in the world to go out. It’s leading it easier in most markets to raise rent today. So as interest rates start to creep in. And PR and value start to increase. Multi-family can be your hedge against that inflation. It can provide a cashflow for you. It can provide an alternative access to capital for you. It can increase. You can add value to it and you’ll create stable income and stable returns from the scalability of it. Multi-family is a place that you can really put some faith and trust in, in today’s environment. And what’s really interesting is I actually thought that this might only last another year or two years, but I’ve been reading some reports lately from some. Economists and some, People who’ve been in the industry for a long time. And they have said that they think that this is actually going to carry on for the next five or six years. Look at what the country has done to keep the country running. I think that we’re in a position where we might not see, We were, we might not see some of those challenges happen. So I say multi-families at time today to buy because. No matter how high it gets, there’s always an opportunity out there where you could add value and increase rents. Let me talk about increasing rents real quick for a minute, because I think this is really important. If we look nationally right now, national rent growth is above 5%. But there are markets around the country that make a lot of sense. Even deeper than that. Like I’m in, I’m working in the Florida market from between Orlando and the Tampa market. Going south of there and that market alone over the last 12 months has increased 20% in it’s a rent increase. Now can you imagine as a multifamily investor buying an apartment building where you can add value, increase the value of the property. Put a new tenant in that property and run that property. Increase the rent and grow your cashflow over the next several years. Wouldn’t that make sense to you to be involved in this space? Let me ask you what you desire. I’ve worked with a lot of real estate investors over the years. I’ve been in the business 30 years, I’ve worked with a buyers, sellers and real estate investors. I’ve coached a number of people, hundreds actually. And there always seems to be one of five desires. If not all five, you either want to get financial security and independence for yourself. You want to grow more cashflow? Everybody wants more cash. You want to get out of the, out of your job, get out of the rat race. You would like to spend more time with your family or you want more control of your future? Now, what I’d like you to do is grab that paper that we did that exercise on a little bit ago and write down which one of these makes sense for you in your life. Which one right now in your life, do you want to be do you, is the reason you want to take advantage of multifamily? And, what, if it’s all five of these good for you, because it should be all five of these, because these should all be drivers. Want to drive you into the multifamily space.

[00:18:00] So as we go through this, the one thing I want you to keep in mind is exit plan. I have spent hundreds of thousands of dollars over the years on coaching and training books and tapes seminars. And I’ve been involved with. And some really great trainers. I talked about Robert Allen 30 years ago, right? Great trainer. Great teacher got me started in real estate. But what nobody talks about is exiting. When you exit a property, that’s where you maximize your cashflow. I want you to keep the end in mind. I read Stephen Covey’s book seven habits of highly effective people. A number of years ago. And chapter two in that book states keep the end in mind. And for some reason that always stuck with me just like success leaves, clues. There’s some basics that we grab onto that you should grab onto, huge about mindset as we go through some of this. But exit plan will keep you focused on maximizing your profit. And you need to have an exit plan in place before you ever get to a closing table. Exit plan talks about how do we buy the property? How do we fix it up? What’s the capital improvement budget going to be. What’s the time around that going to be? How do we close on the property? How do we operate it? There’s all kinds of components that go into exit planning. And what I want to do is I’m going to teach you all those as we go through. I have a coaching client that I’ve been working with. And again, an interesting conversation with him about a month ago, and here’s what he said. He goes, man, I would really like to leave my W2 job. I said, great. I said, do you have a plan to do that? And he says, not really. I said how do you expect to achieve a goal? If you don’t have a plan, would you agree with me that you need to have a plan in place in order to achieve a goal? And if you have a good solid plan and execute on that plan, you could probably achieve it. Would you agree with that? Okay. Good. So what I’d like to S what I’d like you to look at is what I told him. I said, how much money do you need to leave your job? And he says I make 150,000 a year, but I think my wife had, let me leave. If I was at about 200,000 a year, she’d feel secure about that. I said, great. I said, did you know that as a multifamily sponsor now? What I want to teach you here is that. When you take a piece of real estate and you’re going to do a syndication where you’re going to be a sponsor on a deal, a syndication just means that you’re bringing different people together to fund. An operator real estate. A piece of real estate, a multiunit, when multiunit property costs. A few million dollars today. A lot of people don’t do that on their own. They bring partnerships together. They create strategic alliances. So when I told them was, I said, as a sponsor, as the developer, the person who’s putting all these components together. You’re allowed to pay yourself a fee. If he could be somewhere between one and 3% of the purchase price, depending on how much the purchase price is. He said, okay. I said, so look, let’s say you bought a $5 million property. And you put a 3% acquisition fee on it. And $5 million property is very reasonable. 30 units at $140,000 per door. Okay. That’s a very realistic number in most markets today. But that 3% acquisition fee for that sponsor or that development fee. Is $150,000. So I said, do you think your wife would let you leave your job for that? And he said it’d be close. I could probably start to have the conversation. I said great. Because I just want you to know that the cashflow, after all the bills in the mortgage is paid from their property is $49,000 a year. Just the first year. I said, now you’re at $199,000 for the first year. Do you think your wife would let you leave your job? And he laughed and he goes, yeah, I think she might, for that kind of money, I said, great. I said, so let’s develop a plan, which we did. We designed a plan for him to work on it. And I just want you to know, I talked to him the other night. And he has a 225 unit apartment complex under contract. Put some strategic partnerships together to do that. And it’s about a $30 million deal. And now. I don’t talk about numbers that big to scare anybody away. But I’m just giving you an example. You see a lot of people start a lot smaller. I did when I got in the business. So we’ll teach the small multifamily also, but I just, I always liked to expand people’s minds. I say this, the mind’s like a rubber band. The more you stretch it, it’ll never go back to its original lasting city. And that’s what you want. Let’s stretch your mind and get you thinking bigger, because if you’re thinking about multi-family, this is a place for you to spend some time. See wealth isn’t created overnight. It takes time. It takes patience and perseverance. I had a client one time. I was probably in the real estate business about three years and I walk into a client’s house and he says, Man Moraski, you are so tenacious. And I have no idea what the word meant. So when I S I said, very graciously, I said, Hey, thanks. I appreciate that. I went home, grabbed the dictionary, looked it up. And I said, oh, that is me at somebody who keeps following up and doing it over and over again. And that’s what I did. That’s why I sold as many houses as I did. That’s why I raised as much money as I did, because I just kept going and going, like the Eveready battery, but, or button, I should say. Three topics we’re going to cover tonight. So we’re going to cover multifamily, investing, understanding, multifamily investing. So there’s a lot of theory. There’s a lot of language. There’s a lot of. Things behind multifamily investing that you’ll want to know. We’re going to talk about multifamily acquisitions. How do we actually go? And. Execute on buying a multifamily deal and then also property management or the operation side of it. How do we do the property management, the fundamentals behind it? Now, like I said, there is absolutely no way I can give you everything that I know or everything to cover those topics in the next few minutes. You’re going to want it. Come to the three-day event when we’re done with this. And all’s I’m asking is that if I do a deep enough dive tonight to give you enough information, To make you a little bit more hungry for more, when you come to the three-day. So it’s going to be an event that we’re going to do an even deeper dive than what we’ll cover tonight. And let’s talk about why multifamily. The first time I heard multifamily, I was, I always thought that multifamily properties were owned by big institutions, insurance companies and hedge funds and teacher pension funds. What, actually, a lot of small people own a lot of small. Investors own multifamily also, but the thing I want you to know is there’s a lot of different asset classes to look at. In the real estate space.

[00:25:02] When we talk about commercial. Commercial is office buildings, retail. Industrial manufacturing. There’s a lot in that space. All the principles and techniques that I’ll teach, you could do any one of those asset classes. Here’s what I always suggest to people is pick one. Stick with it because that’s the asset class. That you really get good at. And I’ll talk to you about. Market rate rent or workforce housing as they call it today. That’s really where I spent my time and I always suggest people spend their time there. But when we look at multifamily, let’s look at the, just multifamily itself and what’s inside that bucket. You’ve got senior housing. You’ve got assisted living. Do you know, big those two product categories are getting today. You still have baby boomers that are turning 65, 10,000 a day for the next six years. So do you see how, just that demographic alone? In the senior and the assisted living is a huge market right now. There’s tax credit deals, affordable housing. Student and medical housing. I had investor client one time that. He loved the medical housing and here was his model. So understand this. Because this could be a place you want to spend your time. But he bought apartment buildings. Six to 12 unit buildings that were in areas around medical teaching hospitals. Now he did that because he only rented two graduate students or. People in their last two years of their graduate program to be a doctor. There were never home. There were at the hospital 18 hours a day. So his maintenance costs were very low. He always had a good tenant. They always signed a two year lease. There’s models that people use that they really like their self storage is mobile homes. And then there’s what I really like. Market rate rent. Workforce housing. What I want you to look at it is if you’re a single family investor or you’ve been in single family investing, I want to talk about the economies of scale around that you see the economies of scale is if you want to own 10 units, let’s just use the number 10, because I think that a small 10 unit apartment building. That makes sense. But let’s say you own 10 single family houses. What do you have? You’ve got 10 roofs. Time furnaces. And these are all houses that I’ve personally owned. You’ve got 10 hot water heaters. You’ve got 10 mortgages. You got 10 insurance payments. You’ve got 10 driveways. You have issues. That are come multiple because they’re scattered now, Rodney, if you have a tenant who lives in a house of yours, And they’re not paying rent. And let’s say that your mortgage payment is $1,500 a month. You don’t have somebody that lives there, or you have somebody who lives there and they’re not paying. And you have to pay that. $1,500 mortgage payment out of your pocket every month. That can become painful. Now this becomes math over an emotion, right? So take a look that that mortgage payment, all those roofs, all those furnaces, hot water heaters. What if you have 10 repairs you have to go do on Saturday. Listen, multiply that out a hundred. A thousand. Now, what is your life? Start to look like. If you’re running around doing repairs and collecting rents. But if you have one building one 10 unit building, you have one roof. You have one furnace, one hot water heater. Like I said, this becomes math over emotion. Multifamily your expenses are traditionally a third less than they are in the operations of a single fan of single family homes, because they’re all in one place. Multifamily gives you the ability to create cashflow, get you out of the rat race and create that longterm wealth to keep you out of the rat race. You may be asking, how do I do that? Aren’t there other asset classes. I think there’s a lot of asset classes that you could be involved with, there are stocks and there’s bonds, what can you really create the economies of scale with stocks and bonds? Here’s what I always tell people. I say, Hey, look, you can go buy a million dollars worth of Google stock. But to do that, you made a million dollars. You ever buy a million dollar piece of real estate and you only need $250,000 to do them. And that you don’t even have to have all your own money. You can bring partners in and you can do it together and still take advantage of a lot of benefits.

[00:29:48] So I’ve been in the real estate business for a while and I was on this thing, this foreclosure. Okay.

[00:29:57] And I thought. Wow. Here’s a four unit apartment building, not far from my office. It’s in foreclosure. Let me see if I can buy it. It’s scheduled to go to the auction in two weeks, but the seller still thinks that we can buy it on short sale. If you don’t know is where the bank will take less. And get out of the property for less than what the house is worth or what’s owed on the property. So that’s what they call a short sale. This for you in apartment buildings in foreclosure and the owner is showing me through, it’s pretty beat up. It’s rundown. Really hasn’t taken a lot of care of it, but as we walk through, It’s vacant all except for one piece of furniture and the downstairs living room. And on that, it’s a bookshelf and on it, there’s three sets of tapes and books, Carleton sheets, Dave dot. Godell and Ron will grant all three pretty prominent real estate investors, coaches, and trainers. And I say, Hey, would you be interested in selling those. And before I ever even finished getting it out of my mouth. He goes no way. He goes, as soon as this is over, as soon as I’m done with this, I’m going to go ahead. I’m going to listen to all this. I’m going to read all this material I’m going to, I’m going to start doing real estate investing. And start to build an empire for myself. And I thought to myself, I thought, that’s classic, right? Here’s a guy. Who’s got these things right at his fingertips. He can’t even save his own home from foreclosure and he’s going to do it later. Why don’t we do that a lot in our own life. Don’t we like put things off and say, we’re going to get things tomorrow or put things till next week. And we just never get started. I don’t know what he ever did. I don’t know if he ever went into the real estate business. I don’t know if he ever made a Fort. A fortune. But I do know that if you get started after tonight, that you’re going to be a step ahead of him because you’re not going to wait. An execution really becomes important. The better we execute. And my job is to help you execute the more successful you’re going to be. So let’s start talking about understanding multifamily. I think that in the multifamily business, there’s an awful lot that we need to understand. You always looked at it like this. If you ever walk into a restaurant, you sit down, you open it up. There’s five or six pages of things to choose from. And maybe decide. Gosh, what do I want to eat? It’s the same thing with multifamily. We talked about all those asset classes. We talked about all those different ways that you can go, but how do you really get into it? And where do you start? I think the first place we have to start is with our mindset. There’s roadblocks and there’s myths that we all, that all become part of us that may be ingrained in us, might be part of our DNA. And until we overcome those. We really have a tendency to not learn very well or not move forward. But, a lot of people will say, Hey, I don’t have the knowledge about multifamily. Where you can go get the knowledge, you can get the knowledge. You can become a sponge, you can absorb it. It can become part of you. And then you can execute. People say I can’t find a deal. There are group deals out there, even in a market when it’s hot, like it is now. You just need to know where to look. I’m going to teach you different systems and strategies, how to buy real estate deals on market and off market, how to negotiate the best opportunity for yourself and how to successfully operate that deal. You just need to know what systems are put in place. Here’s how I look at it. I look at it like I’m fishing. I’ll put five lines in the water touch, multiple fish. I just don’t want my lines to get tangled up. So that I can bring those properties in. People will say I’ll never close on a big deal. I didn’t think I’d ever closed on a 200 unit apartment complex either. And before I knew what I was closing 300 and 400 unit apartment complexes. And that happens pretty quick because the first one, and then beyond that, it becomes a breeds. People will think I need a real estate license and you don’t to be an investor to do this type of real estate investing. And. Multifamily ownership and operations. You don’t need a real estate license. Now your friends and family might say, it’s not going to work. And then it’s not going to work for you. And you can buy into that. Or you can say, yes, I am. I remember years ago, Zig Ziglar, a motivational speaker used to talk about all these crabs being in a bucket. And that one crab trying to climb up the side to get out. And the other one, plumbed. Down just as he gets to the top. That’s why our family and our friends want to do to us. Sometimes they want to pull us down and keep us down. So I’m just going to encourage you. Don’t let that happen. Move forward. Make a decision for yourself. Make a decision to go to the three day to get all the information that you can get to grow your business. And I don’t have the money, you know what, Hey, I want to say that if you don’t have money, people that have money, you’re going to be fine. You don’t. You can bring people together, create strategic alliances and partnerships. So one of the first places we’re going to start in understanding a multifamily is understanding product types and market classes.

[00:35:04] See products and markets are classified the same way. Our classified. Now he’s asked people, I say, Hey, do you know your ABCs? Cause they’re classifying a, B, C, and D your eight class property. Is a newer property, maybe 15 years old. It’s going to have upgrades. It’s going to have a lot of amenities. It’ll have a higher rents. And as an owner, it has a lower cap rate typically, and a cap rate we’re going to talk about on the next slide. But that low cap rate causes the price to be high. Product, but some of the advantages with that product, that A-class product is you might not have a lot of repairs for the next 10 years. So a little bit, he maintenance some unit turnovers, things like that. But those then we look at a B class product and one, when I built a buying strategy, I built a buying strategy around B class products. That’s that work workforce housing, those are probably late eighties. 1990 till now. Or newer product, they might have some of the upgrades that you’ll find in the bigger ones, but it’s a lot of opportunity. Where you can buy those, you can upgrade them. You can push them into the next product class. Here’s what you have to watch out for. And we’ll talk about this in traps later on, but you have to watch out for those market trends. So in the sub market is the sub market a, B or C. You’re not going to find a declasse product in an A-class market. But you might find a B class product in any class market, and you can make that B class product in eight class. Which by creating that value. You create profitability, you maximize your profit. This is where the exit planning and knowing that exit comes into place now language in terms, there’s a lot of things that we need to talk about. And on the next slide, I’m going to cover a bunch of them. How do we source deals? Let me give you one technique right now. When I was real estate. I sold 78 houses that first year, because I was not afraid to pick up the phone. I did a lot of things that most people won’t do. And that’s what I encouraged my coaching clients to do is. Do things that other people won’t do. So go to the courthouse, grab the tax records. Find people property that you want to buy in a certain subdivision in a certain sub market, in a neighborhood. And. When you do that, find the owners that don’t. Live in state. No out of state owners, that own property in your market are usually the best owners to start. Those are usually the ones that want to sell their property. But don’t know how to do it. And you show up at the right time. So that’s one system. I have a number of systems that we’re putting in place, teach you how to put in place. That don’t cost a lot of money and maybe don’t cost any money, but we’ll help you scale your business. Contracts become really important. I’m going to teach you everything from a letter of intent. To the contract and how to put that all together and how to negotiate the best real estate purchase for you and then funding. How do I finance that? What’s the funding look like? Not just from the bank and the debt side. But also from the private equity side, or maybe I need a bridge loan, maybe I can do government financing. How about my interest rate? What makes sense? What doesn’t make sense. And then traps. We’re going to cover that in a little bit. And due diligence. Hey. What is the property that you bought really look like? I’m doing the due diligence right now on a property that we bought a 40 unit. We went down and we did a physical due diligence. I actually went and was able to take a drive through that property at different times of the day, including at night when it was dark out and see what was going on. I was pleasantly surprised. Nor loitering, nobody hanging out. No things going on that. That I wouldn’t want to be part of as an owner of that property, which was really important. But then there’s the financial due diligence and the piece where you start to compare the leases. With rent roll. We’ll get into teaches you. Or tells you who lives in the property, the rents that are coming in, what their security deposit is. So we’re going to cover all of these things and how all of these work to your interests. But here’s what I found in the due diligence today. That the owner wasn’t reporting about $8,000 worth of income on an annual basis. So that was like found money that adds to the cashflow. Those are the types of things you look for and I’ll teach you how to find in your due diligence process. And then of course, exit planning. I always tell people, no, what. Where are you going to maximize your profit? Before you ever even buy the dealer clothes on? So we do underwriting and we put all the numbers into a spreadsheet that tell us what our returns going to be. Over a 10-year period. I look at that and somewhere in that 10-year period is a sweet spot where you’re going to maximize your capital, whether you should do some type of an exit. It doesn’t mean that you’re going to sell the property. Doesn’t mean you’re going to get out of it. What it does mean is that you’re going to get some profit out of the property at that point. And then there was operations.

[00:40:15] Those operations. How do we run it? What systems and strategies do we have in place to run that property? Hey, do you know when you are leasing a property? I think there’s a thing called fair housing laws. And do you know that there’s certain things that you can’t do as an owner operator and that you have to be respectful of? Did you know that you could have a system in place that says when I deny a tenant, I have to send that tenant a lot. A letter of denial every time. Written as well as electronic. So these are systems that you need to put in place in the operation side. Like I said, you know what? I don’t have enough time to cover all these systems, all these strategies tonight, we’re going to talk about some highlights. I know at the three day though, we’re going to do a deep dive. You’re going to want to be there because I think that if you’re going to move forward in this space, that’s going to give you the opportunity to grasp more. And one more. When you agree with that though? Let’s start to look at the language right now. Multifamily real estate. Real estate is a language in its own, but when you get into the multifamily space, Do you know what effective gross income is? EGI they call it. Let me just talk about that real quick. How do we get there? Effective gross income comes because we’ve taken the gross income. Gross income is all of the units in your building. Rent it. So let’s say that 1,000 building is rented fully and a hundred percent at the market rate rent at your gross income. But now what happens is we have to take into account any vacancies. Or what the occupancy is. I like to try and talk in a. A little bit more positive way sometimes. But what that occupancy is, let’s say the occupancy is 90%. I mean it’s 10 people don’t live. Or one person doesn’t live in that 10 unit. So now you’re not collecting rent from that one unit. So the occupancy or you’re missing that one month rent. But did you know that when it talks about vacancy or we talk about occupancy that there’s two types. There’s physical and there’s economical. Physical. It’s pretty simple. Nobody wants their right apartments. Happy, and you’re not collecting rent, but loss to lease loss, to lease as a space where somebody might live there, but they’re not paying rent. So this might be an eviction situation or you might’ve given a concession or something like that. But that loss to lease is now you have someone in there. And you’re not collecting rent. So now you went from being physically occupied to economically occupied at 85% because you have that one unit. Now that’s not paying rent. They lived there and one that’s completely empty. So if that doesn’t make sense today, what I will do is at the one day, we’re going to go through an underwriting exercise. We’re going to do it by hand. We’re going to put it into a tool that I’ve built over the years. Teach you every line item in that tool and show you exactly how that drops down. But here’s what happens. You take that gross income. You take the occupancy or the vacancy out. Now you add in other income. Other income might be things like how much money you’re collecting from laundry facility, maybe parking that you’re charging for. Maybe there’s a ballet service or concierge service that you have in place. And you can charge for those amenities. Those amenities create extra income. So now you’ve come to that bottom line, which is EGI your effective, gross income. This is where we start, because now the expenses come out of that. Your expenses will look like things like landscaping and payroll and repairs and maintenance and items like that. Then your taxes come out and any management fees come out. Now you drop down to what’s called NOI your net operating income. That’s after everything has been paid, except for your debt service, your mortgage, back to the bank, your investors, profit, you make those payments and then you have what’s left over is cashflow. That’s your cash on cash return and real quick, do you know what the difference between ROI and IRR is? Let me tell you this, that IRR is a better place. To look from an investor standpoint. IRR is. Incorporate your time value of money into that return and shows you exactly how much better the property operates and how much more you make as an investor than just a simple IRR. As just a simple ROI. So I’m going to cover a lot more of that at the three day. Now let’s start talking about acquisitions. We need to have a lot of systems and strategies in place and not a lot, but enough for us to build a profitable platform. Better you want to have a buying system. When you look at a buying system, you want to know that what you’re working at is appealing. That it’s going to be profitable for you. You want to have a system, how to locate him source those off-market deals. You want to have a system in place, how to negotiate contracts and how to go to contract. There’s a thing right now in the marketplace that says when you buy an apartment building, Your money, your earnest money. When you put that down, goes heart. You know what that means. That means that money leaves your escrow account and goes to the sellers. And now all of a sudden that money belongs to the seller. How do you protect better? And this money so that if something goes wrong, if the deal’s not really what you thought it was, you get it back. There’s ways to do that. And we’ll talk about that. How do we fund in creative transaction? Remember that first real estate deal I bought that was creative or held the paper. In my book, exit plan. I talk about a 450 unit apartment building that I bought that we did. Order financing on and I only put $250,000 down on a $15 million purchase. Unbelievable creative financing deals. So we’re going to talk a lot about creative financing due diligence. And that exit planning. In one big piece in exit planning is what are your capital improvements going to be? And what’s the budget around that.

[00:46:38] How do we take a look at. The property we’re buying. And know that if I put X amount of dollars into it, Then I’m going to get X amount of return from it. And that’s all part of that exit plan. So when do we get out? When do we maximize? And then clumsy. You have to have a strategy in place for closing and how you’re going to take over the property. You don’t want to just go to closing, walk away and go, okay. Now what. You want to know that at closing while you’re at closing, the other owner is getting letters and notifications out to the tenants. That the properties changing hands. Then you want to be able to go to the property and put your notifications out. Say that you’re the new owner. So that has rent collection start to come in. You’re in the middle of those rent collections, not the old owner. And you’d be surprised how many times a tenant gets a brain lapse and says, oh, I forgot. But, what, if you have the right systems in place, you can avoid that. And we’re going to teach you that. We’re going to teach you some strategic partnerships also. So this is the first apartment building I ever bought. This is an 11 unit building and this is the picture of it from when I first bought it too. And I bought it because I got so excited. I couldn’t believe that I was actually going to buy this property and that the owner was going to sell it to me. And I was able to get the financing for. And here’s the story. I didn’t do any due diligence. I knew absolutely nothing about buying an apartment building. And this was my first shot at it. Let me tell you how I started to raise private equity. I put an ad in the newspaper, a small classified ad. For $45 that said real estate investors want it. My phone rang off the hook. Just from that he had, I raised about $500,000 in. And the first six months of syndicating real estate transactions. And I found an investor for this. I took the seller’s word. The seller said, Hey, you can raise the rent $75 a month. You should just go in and do the repairs, reseal the parking lot, put some exterior lights up, fix the balconies. Put some new doors up, fix the steel. Staircases and you’ll be fine. You’ll be able to raise those rents. I thought, wow. He wouldn’t steer me wrong. Little did I know he did steer me wrong. He wanted to sell, he was adult Weiner. I wanted to buy, I was way too excited and I wound up buying that apartment building. And to my dismay, I immediately became adult Weiner. All of a sudden I had this building. That none of what the seller told me would come true. Let me just tell you one thing. One thing is if I would’ve just called the police department and asked for a police report. I would’ve gotten a report that said, Hey, We have domestic dispute calls at that property 28 times a month. 28 times in February. It’s a perfect record sometimes. So I say that because that might’ve deterred me from buying their property, but there was a lot of things we had to deal with and we dealt with them. We ran that property for a couple of years and it was very profitable when we did sell it. But also we caught a good market. Here’s what it taught me. It taught me that I needed to have a buying strategy. It taught me that I couldn’t do what I wanted to do in the Chicago market that I had to go somewhere else and find a market that I could do what I wanted to do, which was be profitable. When I first started underwriting and evaluating properties. I really would know how to do that. And I certainly didn’t have a tool that you’re going to get a forward. With a S with a session, that’ll teach you how to use it, how to use that underwriting tool. But I didn’t have one at that time. So I go to look at abandoned student housing building. At an inner college, not far from my office and this we happen to be in DeKalb, Illinois. And I get there. I tour the building, I think, wow. This could be a good opportunity because I had the ability to either convert it back to student housing. Or to go ahead and make it a workforce housing project. I decided that on the way home, I would start to pencil it out. So the 45 minute drive from the building back to the office, I went through four yellow notepads told you I was a big note taker, right? But I went through those four yellow notepads and I started with the purchase price. And I started with, this is how much money I think I have to put into it to create. Something that’s livable for students or for families to come. I’m in LA and I put that money in and then I figured what would it cost me to operate it? How much money will I spend? Estimated in garbage removal and landscaping and upgrades and repairs and maintenance and management. And I started to estimate some numbers and started to pencil those out over 10 years. And I started to take the income and then increased the income. At 3% a year and the profitability and the building up 3% a year and the expense is up 2% a year. And then the tax is up one up 2% a year. And I took all those numbers and I ran it out over 10 years and I looked at what the net operating income was. And I looked at what the returns would be and what I’d be able to satisfy the debt service. And here’s what I figured out by the time we pulled in the office parking lot. I threw the last yellow notepad on the floor. And I said, this deal doesn’t work. It caused me to pick up the phone, call my broker. I said, Hey, Ryan. We need to build a buying strategy. I need to know that when I go into an apartment building, That I’m going to buy something. That’s going to be eye appealing, something that I’m going to like that I’m going to enjoy. That’s going to help me. Want to be an owner? So these are the types of properties are starting to look at. I started to look at garden. Our market rate, rent, garden style apartments, two to three stories. I really like things that have pitched roofs that have some brick. They have some front composure. That had interior hallways into your apartments. I’m not a big flat or a fan.

[00:52:52] And I say this because.

[00:52:55] It’s eye appealing. Here’s a big thing in your buying strategy. I like to buy product that has two bedrooms or greater. 65%, two bedroom or more. So two bedroom, three bedroom units. 65% or more. Buyers or investors have asked me a lot. Why do you do that? I said, because there’s more buyers in the marketplace that like that than others. But here’s what I can tell you about that is understand the sub-market you’re in because you could be in a self market that once one bedrooms, I almost bought an apartment building one time out in a sub-market of Dallas. That the broker said, Hey, here’s this building? It’s 80% one bedrooms. I said, no, I have no interest. He goes no. Mike, look at. Look at the market demographics. He says it’s transient. You’ve got your one bedrooms command more money per square foot than your two bedrooms do. And they rent for shorter periods of time. Your turnover’s cleaner. He goes, look at the expenses. So I had to look at something from a different lens, from a different vantage point. There’s sub-markets and inside those sub-markets are different product classes. So just knowing your own buying strategy, what’s negotiable and what’s, non-negotiable what you’ll work with. What you won’t work with. And you build that in your buying strategy.

[00:54:19] So when we talk about sourcing properties, the one thing I want to talk to you about is relationships. Real estate. Multifamily real estate is a relationship business. It becomes about who, And what how you can come together with those people, When I began my career as a real estate agent, nobody taught me the fundamental lesson of having a database. And to keep track of my clients or past clients or people I talk to. It took me a couple of years to grab to grasp a whole lot of that. See, I went into business. I was churn and burn, so I just talked to people. And when I talked to people, went out. If they weren’t going to do something, I went on. But this is a relationship business. We need to slow down. Step back, take a deep breath. And know who the sellers are. If you talk to a seller. And they’re not thinking of selling their building or their property today. But. Everybody’s life changes every 30, 60, and 90 days. So how do you stay in touch with them? Because they might’ve said something in a conversation that causes you to think. They’re probably going to sell next year. So you have to prospect, you have to build relationships. You have to have the techniques and systems in place to find those out of state owners. Those off-market properties that nobody’s paying attention to because there’s a lot of other property on the market. And when it’s a seller’s market and you find those off par. Market deals. You tend to start to find a better property for yourself.

[00:55:53] Other strategies to start talking about. Once you find the properties, I want you to think about the traps. Now, these are the things that you want to look at, that we all get caught up in and say, Hey, I like this property bought, does it really work well? How do you know before you ever even. Underwrite it or want to go to contract on it? If the property works well, you need to know what the household income is. So if I have a rental policy in place that says I’m going to rent to a tenant, Only who makes three times the amount of money as my rent. So here’s what that means. If my rent’s a thousand dollars, my tenant needs to make $36,000 a year. Or $3,000 a month. Simple math. So if I’m in a market where the household income average in that market is 28,000. Is that tenant going to be able to rent in my unit? No, but if it’s 40,000. They could probably rent there. Take that a step further. What if that rent is a thousand today, but I want a number to 1500. And in order for me to The rent the 1500. I need to know that the household income in that market is 4,540 5,000 a year. That average income in the area. Because if it’s not, if it’s only 36,000, I’m never going to be able to push my rents because I’ll never find the tenant to re-tenant that property. So think these things through this is the problem. One of the problems I made in my own business was that I didn’t think a lot of things through. And today it’s more about the thorough thinking. Another lesson is schools. Did you know, there’s a free website out there. Write this down. It’s called great schools.org. Great school is Donna or gives you a school rating. Between one and 10, it tells you whether this school is, one on the low side, 10 on the high side now. If I could buy a property on apple street where the schools are for, but I can buy a property over on banana street where the schools are six. Where am I better off buying the property?

[00:58:03] Probably on banana street because I’m banana street. I have the ability to raise rents, bring a better tenant then because of the school districts. We’ll talk about the rest of these traps at the three day and help you understand how they work into your buying strategy. The next step is underwriting. Underwriting’s important. We’re going to go through a institutional tool that we’ve created is probably it’s been being built for probably 20 years. It’s got all kinds of metrics and dynamics in it. And once you know how to use it, it’s not complicated anymore. I’ve taught people how to use it in 20 minutes and they can underwrite a deal. Whether or not it’s something that you should buy or not buy, but you put all the income in. You see when we underwrite, we’ll get. From a broker what’s called an OEM or an operating offering memorandum. They had an offering. Memorandum gives us all the income, all the expenses. We take those numbers. We put those numbers into our underwriting tool. And then we start to put some things in there, like some speculation. If I do this much in repairs, if I can raise the rent this much, if my exit cap rate. So cap rate. Let me talk about Camporee real quick. Cause I kinda missed that. A couple of slides back. The simple terminology for cap rate is that. If you were to go away and buy a property, all cash. And the cap rate was 5%. You’d make 5% in that all cash purchase year after year. That’d be your cashflow. Now. When you leverage it transaction. You make more than the cap rate. So that’s why leverage. Is really important, but you want calculated leverage. Your underwriting tool will help you determine that because you put some mortgage assumptions in, and then there’s the levers that you can pull in that underwriting tool, which means that. Hey, if I purchase the property for less money. If I can raise my rent a little bit more. If my exiting out of the property, when I go to sell it is this. And these metrics are in place being what I’ve paid for debt service and what the cashflow has been, or how I’ve grown. The cashflow. If these things check out. And when I underwrite a deal today, here’s what I want to see. I want to see a cash on cash return from my investor. At 8%. So I want you as my investor. If you invest passively in a deal of mine to earn 8%. That 8% you’d get on a quarterly basis. It’s an annual, it’s an annual rate on your amount invested in their property. But you also get an IRR that’s that internal rate of return. The internal rate of return takes into consideration. The time value of money. So it’s your Mt. Put in the expenses that come out, the appreciation, the value appreciation from what we’re doing to increase the profitability and over time, what does that all look like? Plus the deep appreciation indeed appreciation we haven’t even talked about yet, but it’s one of the gifts that we get from the government. Then we don’t get many of those, but that gift is as the value of the property continues to go up. On our end. The government devalues it. And there’s a spread in between that you get back as cash flow to you. So if these things start to check out on your underwriting tour, now you go to the next step, which is the call the broker, and have a broker call. And here’s the questions I want to know from the broker. Who’s the seller. Why are they selling? How long have they owned it? What have they done to it? What’s the future plan? And oh, by the way, please tell me what the whispered price is. Or please tell me what the seller will sell the property for and how much I can. Pick that property, buy that property for today. Now I can take that conversation, go back and look at my underwriting again. If I decide it’s a property I want to buy the first step is an LOI letter of intent. Your letter of intent will ultimately become your contract, your PSA, your purchase service agreement. Or purchase sales agreement. I’m sorry, that letter of intent belt, it lays out how much you’re going to pay for the property, how much earnest money you’re going to put down. How much time before you closed, how much time for inspections and due diligence you don’t the due diligence pieces. I’m going to ask the seller. To give me all of the books and records within seven days of going to contract. And then I have 21 days to do all the inspections to look at the leases, to look at the expenses. I was on the phone today, calling subcontractors that have worked for this seller to ask them about the property, what their thoughts were, what their feelings were about. It did what they see for the future. It gives me a good vision and a good aspect to be a good operator on how I’m going to run that property. And then my inspections and what’s the deal structure going to be? We’re going to talk a lot about deal structure about the different types of entities. Whether it’s an LP, a limited partnership or a joint venture, what a PPM is a private placement memorandum. So if you’re going to go out and syndicate a small apartment building and bring other partners in. That’s what you’ll need. So we’re going to talk about all of that structure. And if you’re just somebody who’s going to buy a few small buildings some four flats, some eight flats. You know what. Every one of these systems and techniques works into this, but I always tell people, Hey, it’s no harder to buy a hundred units than it is to buy 10. So after your first one, you really start to get accustomed to that. And, if we can help you scale, that’s what we’ll try and do. Due diligence.

[01:03:59] I wish I had time tonight to go into this with you. But there’s three pages. And those three pages talk about everything that we need, that I want from the seller, whether it’s physical things that I need to go look at. Physical inspection, roof inspections, interior, do the appliances work. Did the windows and doors work? How about the, either leaks under the sinks, do the faucets work. And while I’m doing that, I’m writing a construction report. I’m saying, Hey, you know what? When I buy this, I’m going to do new carpet and new floor coverings, new kitchen cabinets, new countertops, new sinks. And I walked through with some contractors and they get some pricing and some ideas. Here’s, what’s interesting. I want to take the leases. And I want to take the current leases and I want to compare them to the rent roll that the seller gave me, because I want to see what the seller rented, the place for what he’s collecting off the leases versus what the rent rule says. And what I really want to do is I want to look at the expenses and the income. 24 to 36 months back because that 24 to 36 months back is going to. Show you a good vision. I love the property. And how the property. So there’s unit floor plans, unit. Mix there’s construction type, all different things that you want to have. Hey what’s the repairs that the owner’s currently done. And what needs to be done. What what condition and age of the appliances in, how about the utility bills? What are those and how do those compare to the profit and loss statement that we got from the self. So these are all things that you look at. We teach you how to do the comparison. There’s a thing called a loss wash run report. And that loss run report is a report that comes from the insurance company and it says, Hey, were there any losses? Natural disaster or otherwise that the insurance company had to cover pay for it. And an apartment building one time that burned down. And as that apartment building burned down, the insurance company paid to rebuild it. But they also put into place a thing called loss to lease. And that was our last rent and that last rent kicked in and it paid the rent. Or those six units in that apartment or in that. In that building that burned down. That I wasn’t collecting. So make sure you have the right insurance product in place. If there’s no loss, as you tend to get a better insurance pricing, then when there are losses in a property. The next thing is financing. Once you go to contract on a property, you want to make sure you’ve got good financing in place. You want to make sure that you have a good relationship with a lender? Start that today. Don’t wait until you go to contract on a property, made sure that you have a good relationship with the lender in place. And here’s what I always tell people. Don’t worry about an interest rate. If an interest rate is a quarter percent higher with one lender. But you think the service is going to be better with that lender in the big picture, go for the service. Don’t worry about the interest rate. Make sure your loan to value is right. Remember I told you about my problems that I had early on in my business. Might loan to value. I was 85% loan to value on $60 million worth of real estate. Shouldn’t be in that place should have been 65 to 70% loan to value. So make sure that you’re putting enough. Earnest money down enough to posit down, to bring down your spread on the loan to value. Make sure you’ve got good. Long-terms you know, today. Most promotional properties are being amateurize over 30 years, which is different, residential. And we used to be amateurize over that period. But now commercial properties are being amateurize over that means that over 30 years worth of interest, if you paid it off, you’d pay this amount every month. Not only are they amateurize over 30 years, but you might see a balloon payment in 10 years. And the reason they do that is because they know that the interest rates going to change that you’re not going to keep that property for 10 years. And then you’re probably either going to refinance or get out of it before that period of time is up. Exit plan. We are going to cover this a lot at the three day.

[01:08:21] But as you’re planning. You need to have that in place before you ever get into your, before you ever close on your purchase, I, like I said, I’ve spent hundreds of thousands of dollars on coaching and training and flips and tapes over the years to always walk away with, that feeling like I was missing something. I read a book one time by sunsuit in the book was called the art of war and what he states in that book is continue to plan for the battles from the beginning. Knowing what the outcome will be. Never just show up the day of battle, expecting your, realize your game. So don’t go to closing thinking, everything and everything’s in place when it’s not make sure that everything’s in place long before closing. One technique I can teach you right now, is that. When you go to contract with that seller. Made sure that you have in place how the seller’s going to operate the property during the time before closing while he still owns it, that’ll be a big. A negotiating point for you. Exit planning teaches us how to maximize our profit when to liquidate or when to recapitalize, when to bring a partner in how to restructure that property or how to exchange out of it. So it’s always, it’s not always just selling the property, but there’s other forms of exiting. You want to develop some assumptions? You want to develop a threshold where you know that in a certain period of time, now I should get out. You want to plan those, your timeframes around it. You want to plan your capital improvements or your tenant changes over a period of time. And when I figure a camp X budget. I’m figuring that I’m going to start it on X month after I buy the property and be done with it at X month. And I’m going to do so many units throughout that time. That means I have to already have looked to make sure that I’m not renewing leases and that I can get people out and go in and rehab apartments. And we’re, I’m going to get my new tenant pool from. Make sure you have these things in place. These are all strategies that we help you build and help you with. One thing I like to talk about real quick is. Adding value. Always add value, not just to your building, but to the other people around, there’s two places we can spend our time and that’s what the shareholder or the stakeholders. The stakeholders that small business owner in the neighborhood, or the neighbor on the street, where by you doing curb appeal or beautification. It’s going to make the neighbor in the area feel better. Like you’re really doing something. Always remember this, write this down for yourself, develop some assumptions and think through these two issues. One is income and expense ratios. What are they? And how do they work in your interests? My income and expense ratios. I always knew that my landscaping was about 7% of my EGI. My effective, gross income. Remember, we talked about that early on. I was knew that my payroll was going to be about 9%. So these are numbers that you look at, you start to know. So that if you see something on a spreadsheet, oh, there’s an anomaly, that’s out of line, but you learn after time. And it’s really simple stuff. We just tend to complicate it sometimes. And then the second thing is your purchase and sales criteria. What is that? And how does that work in your interests? Okay. As some details. It’s some details for yourself. Get the expenses. Look at a T 12. Number of T. You’re trailing 12 months. That means that it could be from may to may, June, to June, August to August, or it could be a full year, December to January, january to December. And that’s your T 12 and you look at those numbers. One thing, write this down, keep this in mind for yourself when you’re doing some underwriting. What you want to do is take the T 12. And look at the expenses. Those are the numbers you want to put into your underwriting model. But you want to take a T3? The last trailing three months. And extrapolate that over a year on the income side. Because that’s more accurate. So you take the more accurate data on the income and the little bit, least amount a day or less accurate, it’s still accurate, but sometimes it will be off and you’ll find those mistakes as you go along. There’s a lot of other things there’s legal and accounting, common utilities. Landscaping, snow removal, property, insurance, and taxes. How do we look at those? How do we evaluate those? How do we perform our project? For the first year. All right, so I can give you all this knowledge. I know I’ve covered a ton of stuff. I can give you all this knowledge, all this information. But Webster said, execution is the carrying out of putting them into effect of a plan. An order or course of action. You have to execute. And this is the piece that with the right coaching, the right mentoring, you can execute properly. You can build your business based on the knowledge and it doesn’t even have to be all your own. Now. You know what? I’m in a partnership with some people there’s two people that know some things I don’t know. And they’re a little bit smarter than I am. And those things. But there’s things I know that they’re not, they don’t know. So that really comes together and that’s what we all do in life and in our business relationships, as we need to create those. Execution’s important. We need to have a vision. You need to make a decision. You need to be passionate about what you’re doing. Take action and build those relationships. Have a relentless pursuit of what you want to accomplish. One of the big pieces is relationships. Here’s what I always talk to people about. I say, Hey, you know what. I look at my life like this. I have four circles around me. Your first circle is me right in the middle. And then my inner circle that next outer circle are people who I want to spend time with, where I might travel with or come to my house on the weekend for a barbecue. But they’re my closest advisors that could be my real estate agent, like close attorney, like bird dogs might my my coach. The people that are in my life. That really want to help me succeed. And it’s the same thing for you. Who’s in your life that want to help you succeed and help you get to that next level. Then there’s the other two circles. Those people are a little bit further out, but they’re all people that need to be in your space and your relationship with them so that you can grow your business. So when you start to look at that, you strategically need to ask yourself, who’s not in my life, who I need to go meet. How do I go build that relationship? And these are all lessons that I’ll teach you and help you along with. Property management becomes the next piece, the operations did, there’s a difference between asset management and property management.

[01:15:20] Property management is taking care of the day-to-day operations, the functionality of the property. The tenants, the day-to-day things that happen when somebody moves out or somebody moves in. Asset management is overseeing the whole entity. Two separate issues, two different ways to look at things. But you need to know both sides, especially if you’re an owner-operator with a third party management company. Part of those operations are what tenant qualifying systems do you have built and in place? How about marketing systems? Showing strategies. How about rental processes? And when I talk about showing strategies, a 10 minute call you up and say, Hey, I’d like to see that property tonight. And most of us will jump in the car and go show it to when, in reality, what we should do. And what I learned to do over time was saying, I’m showing the property Tuesday at six or Saturday at nine. What time works better for you? Let’s see, I could be there Saturday and nine. Great. Do things on your tiny. Run those processes so that you live a balanced lifestyle and really spend time in what matters to you most. How about your rental processes? Do you have a process in place for move in, move out? We’re going to teach you all that. How about Lisa’s in attendance. I’ll give you a copy of a good lease. And some basic financial Principles on how to work then? How about software? Property management software. We’re going to talk about a lot of those things at the three-day. So you’re going to want to make sure, I heard a one time ago, Zig Ziglar, I’ve listened to motivational speakers for many years and Zig Ziglar used to talk about there not being enough life training skills, training in swimming. And for students and just basic things like balancing a checkbook and, there needs to be more of that. So this is some of that education will bring in some of those skills, some of their training and life skills. And you’re going to get a lot of that. Drill down deep at the three-day. So let’s recap a little bit. I know I’ve been going for a while and I hope you’re still hanging in there with me. Give me a couple of more minutes. Okay. If you have questions, you were like, you can reach me, reach out to me afterwards. I’ll answer those for you, but you didn’t need to direct them. My email. So that’s Mike. Get my core intentions.com and they’ll ShoreBank again at the end. But let’s recap. What’s the opportunity in multifamily. We talked about that and how that you. Offset the head or give you a hedge against the upcoming inflation that we’re going to experience. How do we exit plan? We talked about that and we’re going to really dive into what’s important. Replacing your income. How do you get you out of the rat race and build longterm wealth for yourself? We’ll talk about the economies of scale and understanding the different language in theory. And multi-family. And then how do we buy multi-family what’s the acquisition strategy, right? And I also talked about the preps. And what do I need to look at? How do we take population growth and job growth? And what that means in the dynamics of the property that you’re buying, but what does it mean for the sub market dynamics that you’re buying in? Now we’re going to cover all of that for three days. Contract financing, closing. Deeper dive on relationships and operations. So do you think that by dorm is three day, you’ll get a lot, one there’ll be able to help you grow to the next level. I hope to see you there. That’s for sure. Let me talk about that real quick. The three-day training event is going to be September 9th, 10th and 11th. It’s a Thursday, Friday and Saturday. And here’s why I did it that way. Because Sunday. The 12th is the first day of the NFL season. And I know there’s a lot of people that wouldn’t have wanted to come on Friday, Saturday, and Sunday. So ninth, 10th and 11th, Thursday, Friday, Saturday from nine to five each day. It’s going to be in Schomburg. Get the Schomburg Marriott, which is 20 minutes from O’Hare airport. If you’re flying in from out of town, if you’re local, you probably know where that is. And this event is live. And I want to tell you that the rump is only going to hold about 60 to 75 people. So make sure you get registered tonight for it. And if you’re not going to come to the live event and I understand. With the pandemic and coming out of that and some other things. Maybe some work constraints, it’s going to be virtual. So you’re going to be able to experience this online from the comfort of your home as well.

[01:19:37] I think that one of the great things that might’ve come out of this whole pandemic is now you don’t have to physically be somewhere. You can get this at home. Or you can get it on a podcast. So it’s going to be live or virtual. I don’t read you. What, when you register for this event, what that’s going to provide for you, it’s going to, when you come to the event, it’s going to give you some networking. You’re going to meet some other really great real estate investors. You’re going to have the power to maybe build some relationships and some strategic alliances. You’re going to get access to my database. I’m a huge connector. There’s that in the coaching call today with one of my clients. And he is really one of the things he needs to work on is building his employee base. He’s in the moving business staging and remembering business. And what he needs to do is find some movers. I know another guy, who’s a job placement guy who works with. Guys coming out of prison. And how they could be good employees for him. So I put those guys together. I put some other guys together on the funding side, and one of, one of my coaching clients has been able to find a lender that’s going to help him fund a really large piece of Buried alive. Multi-family dealings buying. We’re also going to get more education. You’re going to get that deep dive. You’re going to absorb it and be able to walk away and have the recording from it. So you can go back and listen to it. And again, those life skills. Okay. So you’re going to get a lot at the three-day. We know that it’s going to be a deep dive. Here’s what happens by now? I’m sure it’s some of these you’ve seen somebody already put a price up, throw a red line through it and say, and I’m going to discount it. I’m going to give you another 10% off. I’m not doing any of that. Okay. I told you from the beginning, I wasn’t going to fluff you up. I wasn’t going to give you a bunch of hype. This is one price. It’s $297 for the three day. For an education like this for three days. For all those hours of information and knowledge for getting my 30 years of experience. That. Sure. Some of us have probably spent that on a bad weekend. It’s less than a hundred dollars a day. So take advantage of this opportunity. I want you to get signed up because here’s what you’re going to get. You’re going to get a step-by-step blueprint. You’re a walk-out about right. That three-day. Interactive event. Have the ability to ask question. And let me tell you this I’m day two, there’s going to be a pill. There’s not going to just have me, but you’ll have some other people, but it’s going to be a deep dive into all those topics we talked about. No. Deals the traps, the underwriting, the due diligence. And really even talk about how to raise private equity. How do we structure. A good syndication. Exit planning and operations. All the things that we need to do to be good, successful. Owner-operators. I’m also going to give you a couple of free gifts. So for attending the three-day and being my guests there, you’re going to get a copy of my exit plan.

[01:22:39] You’re also going to get. A copy of my underwriting tool with a one hour class on how to use it and how that will benefit you. You’re going to get a copy of my due diligence worksheet, that sheet I put up, I said, there’s three more of these. All those tasks, all those items so that, thoroughly what you need to do in the due diligence process. Property management techniques. I’m going to give you a list of 55 techniques that a property manager does to run a successful property, to manage a tenant successfully. Not all in one day over the course of the life of the tenant. And then a sample of that letter of intent and a purchase sales agreement. You’ll get samples of that. You’ll be able to go back and I’m not an attorney and I’m not an accountant, but I’ll give you the data. You can go and have it looked at for your market, for your area, with your attorney, your accountant. And that way you’ll be able to have a leg. Solid to build your business on and have a good foundation.