How to “Start from Zero” in Today’s Multifamily Market w/Andrew Cushman and Matt Faircloth - Transcripts

September 13, 2022

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The multifamily real estate market seemed almost impenetrable over the past two years. Unless you had millions in dry powder, ready to overpay for a huge apartment complex, there was a low chance you’d be making any money in the multifamily industry. This gave the big buyers an unfair advantage, while smaller investors struggled to put almost anything under contract. The tables have started to turn as interest rates rise, repricing becomes the norm, and multifamily buyers start fleeing the closing table. It’s now your time to shine, small-scale investors. As large buyers begin to fear a housing market crash, you can swoop up the spoils that could benefit you for years to come. But, before you do so, you’ll need to understand how exactly multifamily investing works. Back again on the show are Andrew Cushman and Matt Faircloth, two multifamily masters in their own rights. They’ve become real estate veterans after over a decade worth of investing experience. Now, they’re here to share some beginner steps and tips on how you can get into the world of multifamily real estate, regardless of your experience, knowledge, or bank account size. These steps are simplistic at a high level, but doing them correctly could help you beat out the competition for years to come. The only question is, are you ready to start? In This Episode We Cover: Why today’s “fearful” multifamily market is a great opportunity for new investors  Evaluating your goals, skillset, and advantages before you step into the multifamily market The biggest mistakes new investors make when choosing a real estate market How to get deals sent directly to you and build up a network of top-tier brokers Building your real estate dream team that’ll allow you to scale with far less headache Raising private capital and using other people’s money to grow your real estate empire  And So Much More! Links from the Show BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast Get Your Ticket for BPCon 2022 Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area David's BiggerPockets Profile David's Instagram BiggerPockets Podcast 571 BiggerPockets Podcast 586 BiggerPockets Podcast 634 BiggerPockets Podcast 279 Harvard Joint Center for Housing Studies Crexi Loopnet Berkadia Cushman and Wakefield CBRE Marcus and Milichap Colliers Books Mentioned in the Show: Long-Distance Real Estate Investing by David Greene Raising Private Capital by Matt Faircloth Connect with Matt & Andrew: Andrew's BiggerPockets Profile Matt's BiggerPockets Profile Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-661 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Transcript

this is the bigger

pockets podcast show 6 61 and also finally understand that fear is going to be a real factor for no matter what in the market is, there's never gonna be this, no problem market that, that there's never gonna, there's nothing in your way and it's completely clear and there's no, the deals are cheap and the money is free and whatnot. That's utopia. Real estate, not gonna happen, don't wait for utopia real estate to happen. Just find a way to make deals work today and be conservative enough that it's, it's gonna be the deals will work out. Uh and if you hold long enough and you do the correct business plan, as Andrew said, uh it will eventually profit if you hold for the long term, what's going on? Everyone, this is David Greene, your host of the bigger pockets real estate podcast. Coming to you live from Scottsdale, Arizona where I am checking out investment property and hanging with a couple of my buddies, having a little getaway for the David Green team and the one brokerage leadership and we have an amazing episode for you today. I brought back my good friends Andrew Cushman and matt Faircloth to talk some more multi family masterclass wonderfulness and they did not disappoint. This is an episode you will listen to more than once because it is so freaking good. Basically we had them on a previous show and it went so well that everyone said, hey, if I want to get started in this right now, what do I need to know. So we brought back Andrew and matt to say if you were starting right now from zero from scratch with no experience but knowing what you know now what would you do and they did not disappoint. This is a fantastic epic.

So where we cover everything from where to find deals, how to underwrite deals, how to choose your market, how to operate the property, how to build a brand, how to communicate with brokers, how to collect acquisition fees, when not to collect them, everything that you could possibly need to know to get started. We cover in today's episode, you're going to

love this.

Okay next up, let's hear from today's show

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before we bring in Andrew and matt. A quick word from bigger pockets of today's quick dip. Go back and listen to episode 5 71. This is when I had these two on last and they gave such a good performance that we brought them back for a follow up. So when you get done listening to this, go back and listen to episode 5 71 furthermore. If you've got questions that you would like to ask, come to bigger pockets conference in october it's gonna be in san Diego. You should bring all the questions that you can possibly think of and hit us with them. We should be on stage or you could have opportunity to talk to me and the other bigger pockets personalities. It's gonna be a blast. Make sure you get your tickets and I will see you there. All right onto today's interview. Andrew matt.

Welcome back to the bigger pockets podcast. It's nice to see you two again and we have a fun episode planned for the day. How are you? Each of you doing Fantastic. David, Thanks for having us again.

Yeah, I'm excellent families. Good business is good. Got my espresso and there's a swell on the way.

All right. So in today's show, we are going to be taught, talking about if I had to start from Zero, if I was just getting started in multi family today, what would I do? Which is really cool because we're hitting the point of how would you get started? But it's coming from the perspective of very experienced investors with a whole bunch of knowledge in their brain. It's kind of like that idea where people say, would you rather know what you know now or have to go back to where you were in high school and you're like, I want to know what I know now when I was in high school, right? But you, that's not ever the option. You can't do both. But in today's episode, it's like you can. So this is gonna be like being in high school and having a future person show up at your high school, Step out of their spaceship and say, here's everything that you should do to become rich and multi family. So let's start with you matt step one. What's the first thing that you would do if you were starting from zero, I'm sorry, I'm still fantasizing on talking to my younger self in high school David. But um but but getting beyond that um I, what I would start with is I think too many people start with doing a deal and I think those that are just getting started a multi family or real estate investing in general, they're out there just trying to find a deal like, okay, I just wanna get going, let me go and evaluate a duplex.

And to be honest, The mat that that started investing in real estate 17 years ago did that. I looked at the land deal that I looked at a single family home that I looked at whatever come across my plate and I think that what I would do if I with, if matt were to start again today would be to evaluate my goals, my skills, what I bring to the table, what am I great at and how can I manifest those greatness is through real estate? Um You know what unfair advantages that I had do I have over the other person that's starting uh as well in this business. So I would kind of take personal inventory and also take a realistic goal set. I mean, listen, I get it, we all want to make a billion dollars next next week. I got it, but set realistic achievable goals for what you can do, what you can really tackle and maybe ideal is a good goal for the first year, ideal, maybe two. Um, but set those goals and take personal inventory. That's what I recommend. And that's what I would do if I were starting again. I love that. That's something I've noticed just this pattern in real estate investing in general, that whenever I have something of value today, a lot of equity and property, really good cash flow in a property options to do a cash out refinance or something. It's almost always from a decision I made somewhere between 3-5 years ago.

That's just the way it works. Like what everything I'm buying right now will benefit future, David in five years, tremendously. It's like every time I buy a house, I'm just loving future me, it's not gonna do a ton for me right off the bat, but it will later. And I think that's a tough thing to swallow because who wants to work off of a five year time frame when you're being told, get into real estate investing is going to change your life and you're like, oh, I wanna lose weight right now type of thing. But that's not really how the asset classes designed. What about you? Andrew, do you agree with that point? And then, is that the same thing that you would do if you were starting off?

Yeah, I do. And I actually got a couple things added. So David, what you were saying, I call that current self and future self, right? Like if I've got something, if I've got something amazing from cheesecake factory and you know, I'm like, hey, I could save half of this for tomorrow and like, you know, future self is going to be really happy with me if I do that for a number of reasons. Um, so I actually frame a lot of things exactly how you just said to, you know, current self and future self and many times it might not feel great for current self, but future self is going to look back and thank you, right? So, so I do frame things a lot in that way. And then I also would step back and say, okay, if I were starting today, um, you know, there's a piece of advice out there that probably 99.873% of bigger pockets listeners know and can recite, and that's Warren Buffett says by when everybody else is fearful and sell when everybody else is greedy, right? So guess what? Right now, people are getting really fearful. But when you, the problem with that advice is everybody can recite it, but very few people can actually do it. But what we, because what we do is we confuse fear with reasons, oh, well, interest rates might be doing this and I don't know what prices are gonna do, blah, blah, blah, blah, blah and those are rational justifications and those are true things, but that's also what makes it so that, you know, one can actually put that advice into work. And so what you have to do if I was starting today and it is a much more scary environment than if I was starting five years ago, there's no denying that are much more uncertain, I should say, is not say, well, I'm just gonna wait a couple years and see how it shakes out because then you're gonna miss everything.

But to buy when other people are fearful, you just have to adapt a strategy to the market and pick the right strategies and look towards, alright, our price is going to be down 10% a year from now. Maybe none of us really knows. But if I'm looking at future self, my future benefits, looking 57, 10 years down the road, if I pick the right asset in the right market, I'm going to benefit when I get there. And probably even in in the interim, therefore, if I focus on that and learn to focus on that, you know, those, that mindset, then that gives you the ability to buy when others are fearful. And I think that's the first step right now, is with the current, is to tune out the market and so on. You know, the noise address the fact that, yes, there are some real uncertainties, but factor those things in and, and move forward. Um, so you know, that's kind of the first thing I do in terms of mindset and then, you know, matt mentioned goals and deciding, you know, you know who you're going to be, you know, are you looking, I would decide, okay, am I going to uh build the stack method and just, am, am I going to go for a four plex and then go to a 10 and then go to a 20 do this with just my own money or and build a portfolio that I can manage and live off of? Or am I gonna try to build a business? Am I gonna try to get to 2000 units and I'm gonna try to hire people. Am I gonna syndicate, just put, you know, figure out what the end goal is there and then start working backwards

and I just add on to that and I think that that's a week extending that further, but that you and I took two different paths, uh, you've gotten to know each other fairly well. And I was that guy buying a single family home duplex, whatever and kind of scaled up through the space, which is certainly one way to get started um, because some would say a four family, five family attend family or whatever, that's still multi family, it doesn't have to be 100 units to be a multi family. Um, and you can scale that way or as you said, you can go and swing for the fences and maybe join somebody else's team um, or become a part of a larger conglomerate that's taking down bigger deals, but there's no right answer. They're both ways to get in and ways to get going. Um, start small and people that are starting small, if you tell them, listen, a good goal is to double your portfolio every time you do a deal, just double up, double up, double up, double up and you'll grow real fast that way or go and take down bigger deals and maybe don't get the lion's share in the beginning. Um, but you'll get a, you'll get at least a foot in and you can say you were part of a transaction that took down 100 unit 200 unit multi family and slowly scale and build your own team with, with the lessons you learned there a couple of things that came to mind when you were talking there Andrew is the first is uh, the batman story oddly enough. So if you read the comic books and batman, they're a little different than the movies. But batman sort of motivation was, he was very afraid when he was young and bats were his phobia, he got, he got afraid of him. So rather than letting that fear control him. He said, I want to harness this and make my enemies as afraid of me as I was of bats and that's why he took on this identity of batman and in the comic books he was much more known for using like terror kind of tactics. They weren't just he fights better and he has cool gadgets, he would hit you in the darkness, he would make noises that would make you afraid. He wanted the criminals to be afraid and that kind of speaks to the power of harnessing fear as you were talking.

I thought you know, we always ask people what sets apart the successful investors from those that give up fail or never get started And I think what no one said but is really good is your ability to harness fear because opportunities only come when everyone else is scared at least the best opportunities come in that point, right? And if you can't learn to operate in fear you're probably never gonna make a lot of traction like the best deals I've ever bought where when I first got started, 2009 10 11 hindsight. Everybody says I wish I could go back to that point. No you don't man, nobody was buying houses at that point, everyone is calling me a fool. And I think the other time is right now I've ramped up and I bought a lot and I'm getting a lot of backlash. You're buying too early. You needed to wait, we have a huge recession coming, you shouldn't be buying and who knows they may be right, but very well also may be that because I bought now the market's gonna run up when interest rates come back down and the economy starts to do better and you look really good. But either way you gotta be able to operate in that spirit of uncertainty because if you think about when everything is best, when the deal is the most ideal, everybody in the market felt good, it would be like black friday, that's when the tv or the playstation or whatever is at the very best price, it's ever gonna be okay. But how many people actually get that amazing big screen tv or that playstation when they're lined up with every other psycho on black friday, right? Your odds of landing it are so small when you're in the big pool of people that are rushing in. So I think that's such good advice for someone who's getting started, is understand you're gonna be afraid, it's normal to be afraid and you've got to harness that fear rather than wait for it to be gone because if you wait, you're gonna find yourself lined up on black friday with a huge mob of people around you and probably getting stepped on.

So you, you know that the second point is, you know, once I've got my mind set figured out and once I've decided what my end goal is um you know, am I buying small properties, my buying big properties is that the business is my own portfolio is picking a market and you know, you say uh and and so the first thing I would do and I've read this is go read your book right. Long distance real estate investing. It is geared towards single family, but the same principles apply to multi family. Um and so you know, so I'd read that book and in being okay, cool, I can invest anywhere long distance, let's pick a state crap, there's 50 of them right now what they like, there's a lot to choose from. So what I would do is I would go to the Harvard Joint Center for Housing Studies website and there is a beautiful map on there that shows migration trends by county across the entire United States, both net and then um and then in inbound and it colored codes it and you can see all of the counties in the U. S. That have the strongest population growth there. The darkest blue, I would go select markets that are in that dark blue color because the number one fun positive, fundamental for multi family. The strongest tailwind, which David, you've recently clarified the tailwind is the one that pushes you forward and helps you out, right? Um The strongest tailwind is population growth people moving to an area that ensures your multi family success almost more than anything else. So I would go to that website and pick markets that are blue and start there and then narrow down say well, okay. Um hey the florida panhandle uh is dark blue and you know, I kind of like visiting the beaches there.

Um All right, well let's check that out, right? Um or you know, it's, it's a very in, you know florida as everyone knows no income tax, very business friendly. So you start narrowing it down from there and I joked about, you know, visiting the beaches. But again, you know, what are your goals? How easy is it to get there? Right? So people ask me all the time Andrew, how do you invest in the southeast and live in California? There are like five direct flights a day to Atlanta from southern California? It's a 4.5 hour nonstop flight. I can, something pops up urgent. I can literally be there the next day. No problem.

Even though it's a couple 1000 miles away. So that, that's, that's the next thing I would do is pick that market and, and you know, or or multiple markets. Right. Because you may, you know, you want to get it down to a short list that you're probably going to eliminate a few from and then start asking those questions. Um is it easy to get to, is one of those markets a market that you already know really well. Right? So for example, you know, maybe you used to live in Dallas and now you live in, you know Washington state and Dallas shows up as one of those high potential markets when you look at that map, well that's another positive factor for maybe why you should pick Dallas, you know, you already kind of know the market or maybe you, You've got an aunt or a cousin or family members that still live there and they can be your initial work for free boots on the ground. So there's a lot, those are the things that I would do to pick a market. And again, that, that, that dovetails with what, you know, what my goals are. If I'm just trying to build up 20 units and I can drive to them once a week and check on them. Then, you know, I'm probably gonna be in my own backyard. But you know, if, if I'm looking to build a larger portfolio and just really go where the returns are, those are the, those are the 1st 1st few things that I would do.

And then once they've narrowed that down to maybe a short list of three or four larger metro's, I'd really start diving into what are the economic drivers, uh, is, you know, are there, are they things that are our favorite going forward or things that might be on the decline going forward. And also I would be looking for economic diversity very, you know, 11 kind of newbie trap to watch out for is you'll see towns that have great economic numbers. But then you find out it's because one plant got built there three years ago and it like doubled the population and doubled the workforce. But guess what if that plant shuts down or scales back down then all of a sudden you're going in the other direction. So you wanna have a diverse workforce. I would look for counties and cities that have high education, medical facilities, transportation, logistics, tech, all of those things that are growing are favored by the current uh political environment like anything green energy. You know, we just got a whole other slew of tax benefits for that kind of stuff and and pick markets that that that that check all those boxes and and then then move on to the next step. Next steps and man, I know you probably have a few other things to add to that. So I'll pause and hand off to you. You

said all the good things already and

oh I did. Well there you go.

No, no, no. Uh that's everything I just said. Amazing underscore a few things that he said that I want to just highlight for our standards when we look at markets. Um Yes. Population. But as Andrew also said population is why people that, you know that's a good leading indicator. You gotta go to, why people move to markets used to be just for jobs, right? Um Now some people can work remote. Uh, a lot of like blue collar middle income folks can't work remote, but there's some folks that can, and so lifestyle becomes a factor, right? So let's say for example, I'll pick a market. Asheville north Carolina is a fun place to live. There is hiking, there's all kinds of beer breweries and all kinds of fun.

Now, maybe a prior you moved to Asheville because there was a job there. But now, Well I can work 50% remote. So I'm going to go and pick a job that allows me to work from home so I can enjoy the lifestyle uh, that a certain city like Asheville or like, you know, pick any number of cities that have a good lifestyle benefit. And also a growing economy uh, may have as well. So that becomes a factor too for us. Uh, job diversity as you said, you know, not certainly not one plant, but we also look at the industries that are driving a city. So, uh, if there is a city that you like, but it's, you know driven by 50% the oil and gas industry are driven by 50% auto. Well, let's, let's look what happened to Detroit that was driven a ton by by the automotive industry. Um, you know, once that industry dries up or starts to move, relocate to other places that really affects that town. So for, for my company, for the duroc group, we won't invest in a city. Uh if there is more than 20% of that economy driven by a certain industry because if the recession hits it's not going to hit everything across the board it's gonna hit certain industries more than others. And I don't have a crystal ball.

So I can't predict when any recession would look like I can take a guess. But if I invest in a city that is diverse, the recession is certainly not going to affect that every industry the same. Uh It might affect some more than others and even hit that city a little bit more than others. But there's other industries that won't be hit as hard and if if that markets diverse then it's certainly going to get blended out a little bit better. Alright. Andrew to follow up to what matt just said what is the biggest mistake people look out for when they're choosing their market,

The biggest mistake to watch out for And it's really really common and candidly I made this myself when I started out so everybody listening, please don't make the same mistake I made do not pick a market because it's cheap, It is often very cheap for a very good reason. And again I've said this before, I could probably get a t shirt now but you know the grass is greenest over the septic tank and if if you you know when I look back over the decade of plus of doing this the best, the best returns and with the least amount of headache were in the mid price range kind of the C plus to a minus not the stuff where well I can buy this 1975 property in in podunk Iowa for 30,000 door. Why would I go pay you know, 100 and 30 adore outside of Atlanta for the property in the same age? Well because in Atlanta you've got a huge diverse, you know, job market, you've got population growth, you've got much higher rents. There's all kinds of reasons so don't be seduced by the siren call of cheap markets.

I just just a back up there and it's it's it's so well said because you gotta realize unless you really are the only buyer for a market, like if you whisper to sellers here, hey, I want to buy your property. Okay great. Let's work it out And there's no other competition then. Yeah, it's kind of, you set your price. Um, but if there are multiple buyers for any property or if it's a property on a free market, the markets wanted to determine the price. And if a property is only selling for 30 K. A. Door, that means that's the, that is the absolute most of that that seller could get for that property. And that should be some people view it as an opportunity. And unless you have insider information like the winds of change are coming through that market and, and that property is gonna be the next Hoboken New Jersey or the next savannah Georgia or the next something amazing or the next austin texas, right? Um, then you're really gambling probably with other people's money and that's not a good thing to do. So I, I agree with you that that that there is a reason why cheap properties are cheap and you got, you can't be enamored by, oh the price is low will likely the rents are going to be low, the economy is going to be weak.

Make the list of the reasons why that properties, the properties low priced. Um, I will just agree with you. And also I'll have one more factor on the big the mistake people make on, on properties and that is, they go and start making offers too soon without like building their backstory of why the market's amazing because if you've never heard of, never been to not sure too much about Al Albuquerque New Mexico but you start bidding on properties there and you get so cursed as to land a deal, then you gotta go tell your investors why Albuquerque New Mexico is amazing. And if you don't have that data and you don't have a property manager lined up and you don't have who your closing attorney is going to be. Um, and have the data in place on how you're going to build a business plan around a deal, You know, going in early and making offers before you've really established your presence and build your, build your foundation is I think yet another, it's up there with buying properties because they're cheap. That's yet another mistake, David. Alright, moving on. Let's say that someone is ready to start looking at properties and thank you Matt for mentioning there that writing offers too early is a pretty big mistake. I would agree with that. Usually when you first get into a market or at least when I do the first several I buy are usually not great. Usually with hindsight, they end up being just kind of like an average wasn't usually terrible. But even doing my best, I end up with a mediocre deal.

But then after you learn the market a little bit, that's when the good deals start to come. So I would say go in light for the first one that you're gonna do, you don't want to spend all your money. You don't want to go in super huge. You don't wanna have this huge big vision. The first deal just go in knowing like I'm putting the boat in the water and I'm waiting to see where the leaks come, but they're gonna be somewhere. So I'm not going to start with a battleship. What would you say? Uh Andrew you started last time. So that will start with you first on this one when you're ready to start looking at properties. What would you be doing if you're starting today from zero, I would go and buy myself an airplane ticket and go to that market and actually physically go look at the market. I cannot tell you David how many people I've met that are like, I can't seem to get a deal. And here's the market that I picked.

And I'm looking at all these opportunities and nothing just seems to add up. And I said, well, how many times you've physically been to the market? I've never been there. You know, And I mean, I get it. It's like, well, how do you know what the good neighborhoods bad where you could get duped by everybody. You don't even know what the real opportunities are, where the construction is happening, where developments happening. So go to the market brokers are going to take you way more seriously. If you look him dead in the eye and, and you know, buy him a cup of coffee or whatever and talk about what your goals are. Talk about what your plans are, what your resources are, what you can bring. Um, they're going to remember you. And as opposed to just somebody that sent him an email saying, Hey, send me deals, you know. Um, so I would physically go to the market as my first move, once I've, once, I feel like I'm qualified to start making offers.

And I've, and I've picked the market and I've done my research and built my back story, then I would go to the market and do tons of homework, lots of window shopping and made, we toured some apartment buildings do what they, what they call a secret shop where you just go and show up and maybe pretend like you want to move there. I think I'd love to look at a two bedroom apartment for me and my wife or whatever. Or maybe don't, maybe just tell them you're interested in investing there and they'll probably tell you they'll probably show you around anyway. Um, So do everything you can to get into that market, like the back of your hand.

Yeah, I 100% agree with that. Um and there's, there's so many good reasons to do that. And then, you know, I would also add in that, you know, you hear people, you know, how's it going? I can't find a deal. How many of you looked at three. Okay, So start, you know, go into it with the mindset of looking at deals as like dating. You're gonna have lots and lots and lots that don't work out. But those ones that don't work out help you better realize and appreciate the one that really does, right? I don't, I, you know, all the dating apps came out after I got married. So I can't keep straight, like if sweeping if you swipe left or right is good. I think swiping left is bad. Um but you're gonna want to swipe left on probably 1000 deals before you swipe right on one and because the majority of them aren't going to work, but the more you look at that don't work the better you're going to spot the one that does.

So go into it with the mindset of, I am analyzing this deal to to educate myself on the market, to educate myself on the state of of operations, to give myself material to have better conversations with brokers and if I get lucky, I might get a deal out of this. That's the approach to have is you're looking at deals with those other things as your main goals because really you can't directly control whether or not you're gonna win, win a deal, but you can control your approach to it and how many that you look at and eventually you will get the one that works. So how would I actually go out and find those deals? I would go look at the mls for my chosen market. I would go to a website called cracks E C R E X I, Everyone's heard of Loop net go there and really you're not looking for hot deals on those places, you're looking for listing. So you can start figure out who to call to start relationships. Then also go to the big broker website and sign up for their email blast for those markets right, Acadia, Cushman and Wakefield C. B. R. E. Marcus and Millichap collier's go join their mailing list so that you get everything that they process in that market. Again, it's going to be the listed stuff, but you're doing that to learn the market and figure out who to start relationships with.

Another thing I would do is those big brokerage houses I just mentioned are awesome. But In my experience, many of our best deals come from the smaller local and regional brokers, right? The ones who only cover one market, uh, those guys might not have the volume of a Cushman and Wakefield or Marcus and Millichap, but they dig up, they do tend to dig up really good deals and on the flip side they may not have the volume, but they're probably also not sending that deal to a mailing list of 50,000 investors. So you can, you build a relationship in, in in track record with a local or regional broker um, that can have a lot of benefits. So, I highly recommend figuring out who they are and you're gonna do that just by keeping, you might, you said go to the market right? You're gonna, you're gonna find out that's how you find out who those people are. You know, you're not gonna see them on headlines, you know, on biz now or the Atlanta Chronicle or whatever, you're gonna kind of have to talk to people and mingle and that's how you find those out and those are some of the most uh most valuable, um, you know, sources and then, you know, like I mentioned, call and talk to those brokers when you're looking at those 1000 bad deals. Don't say that this doesn't work left. This doesn't work left, right, No call the broker said, hey, thanks for sending this to me. Um I took a look at it and it looks like a great asset and a great market. But unfortunately it doesn't work for me because it's in a flood zone or the crime rate was too high or you know, whatever that reason is, that shows that you're a legitimate buyer who took the time to look at it and give them feedback. The number one way to annoy brokers is to just not, not not respond and not call them back right, Call them and tell them no, they appreciate that because now they know they don't have to follow up with you.

So if I was starting off today, I would make a very strong point to always when, especially the little things, if I say I'm gonna do something, do it. If I say, hey, thanks for sending this deal, I'll get back to you in two days. I'll get back to them in two days. Um, so, you know, in in, in in regards of screening those properties, like, okay. Andrew great. How do I look at these 1000 deals? What do I do? Um we cover that in super detail and I think it was episode 2 79 where we went through that whole screening process. Um So God go go Reese listen to that. But you're gonna check for parameters like the population growth and crime and flood zones and all those kind of things. Um But those are those that that's what I would do in terms of finding, you know, looking at properties in in in in finding deals.

David just to underscore something Andrew said, I have somebody taught me a mantra a while ago that if you take a broker seriously, they will return the favor, you know? Um yeah, although their their deal maybe like double the price on what you can pay for it right? Although it's it's in the worst part of town with lots of crime and you know, it's it's it's like 10 ft under the floodplain level and everything like that. Take it seriously, give them feedback. You know, don't throw rocks at it. So it's overpriced. I mean send me an off market deal, you know now um take because it's their livelihood and and I think that people forget that that this is that this broker is feeding their family on that deal and they hope that somebody will buy it. Um And they're trying they're not trying to just slip somebody a bad deal. They're trying to market a deal that's on their plate. That's that they're trying to push it is what it is, it's their livelihood too. And if you show them respect, they'll do the same. Well the brokers in multi family are usually representing the sellers.

It's not like residential where you have your own agent who represents your interest and the seller has their own. So you have to realize they're being paid from proceeds that come from the seller. They have a relationship with the seller first. It's not necessarily a situation where they're supposed to be advocating for you. And just if there miss marketing and property, we would call it miss marketing from the buyer side. But from a seller sides they would say that they are cleverly marketing a property right there trying to get as much money as they can and actually get it sold. So that's why we tell people you've got to understand due diligence, especially if you're moving into the multi family space because you don't have that hand holder, you don't have that agent that theoretically is going to be looking out for you nearly as much they're expecting you to know what you're doing and to be doing your own due diligence. It's a different way of doing real estate. So i it's a waste of time to get angry and say oh this trailing 12 it's crap or oh this perform is garbage. Like just expect it's going to be garbage because the seller is the one paying them not you and the seller doesn't think it's garbage. The seller thinks it's amazing, they're like, wow, this is clever accounting, this is why I want you to be selling my house right to a buyer. We think it's unethical.

So put everything below the line, right? That's exactly right. Just rent, real estate taxes, those are all my income and expenses. That's it. Um I don't expect much from brokers aside from, but I still treat them with respect, but you still gotta run your own numbers and do your own analysis and do your own due diligence. And a lot of brokers can be very kind, but a lot of brokers can be kind to you and that that you you can end up getting duped and think that they represent you because they they act like they do, but actually don't, don't forget they actually represent really they represent the deal. They want the deal to close like their their their their their primary objective is to get the deal to closing above all else.

And it's also a bit of garbage in garbage out right. A lot of times the brokers can't get a straight story from the owner of the seller and they're doing everything they can to just get an honest listing and some not all sellers are forthright, even with their own brokers,

okay, moving on when it comes to building your team Andrew will start here with you, What is something that you would be doing right now, starting at year zero.

So, what I was doing, what I've been doing right now is the exact singing thing I did 10 or 12 years ago, is I went, I went through the process that we just described, I picked Atlanta, Okay. And I would still pick Atlanta today, by the way. It's just, everything is even more true now than it was back then. So All right, I'm I picked Atlanta. I'm looking at deals. Well, how am I going to manage these things? How am I gonna get loans on them? So, those are the next two pieces of the team of the year, of the team that I'll be working on, the 22 pieces of the business that I'll be working on simultaneously with looking deals. And they go, and if you do it right, it's very um synergistic. So, every time I'm looking at a deal, let's say, I just picked Atlanta and I'm just, I'm going all those websites, I'm starting to call brokers, but, you know, in the, in the context, here is I'm gonna use third party management, right? So, matt, you know, if you wanna, if you wanna talk talk more about self managing, you know, please jump in, it's, that's just the business choice. Again, it goes back to what your goals are, for me, it's third party management.

So, I picked Atlanta and now I'm like, okay I gotta figure out who's gonna manage these things when you're calling the brokers and you're giving them feedback on the deals that you're looking at. If it's a deal where there's at least some potential and you're gonna go in the you're ending the conversation with. All right, let me go back and do some more underwriting. I'll come back to you. Or maybe you're getting to the point. Finally, hey, I'm gonna put in the L. O. I. The question that you want to ask is if you were broker, if you were going to buy this yourself, who are the top two or three people you would hire to manage it for you and you write those companies and those names down. And then at the same time you you say, hey, Mr broker, um who is your favorite loan officer or lender to work within this space, add those people to your list. And over a pretty short period of time you're gonna, you build a substantive list of recommendations and referrals for management and lenders. Those are gonna be your two key because the money is made in operations, Right?

So your manager is an absolute key uh key player in the success of your business. And if you don't have a little lender that you can rely on to close, you're never going to get into business. So those are your, those to me, the two most important pieces of the team and you build that from referrals. So what I did and again, what exactly what I would do again today I would build that list and then I would take that list. I would go research on the internet, You know, what is the reputation of these property managers and these lenders, other stories of the lender backing out the last minute. Um do all the properties managed by this property management company, have you know, zero star reviews, all those kind of things narrow it down, then do phone interviews with them and then getting back to matt, what you started with when I narrowed that list down to two or three, I go to the market and have lunch or dinner with these people and do an extended casual interview and then I pick one and that process is what has led for us. We found all of our lenders that way referrals and narrowing it down. And then the property management company that today manages our entire portfolio is the first one we ever picked. And they've worked out phenomenally well because we took the time to go through that rather lengthy process uh to build the list, narrow it down in person interviews and they've been an amazing partner. So that is exactly what I would do today to figure out who's gonna manage for me and who's gonna lend for me. And I would do a similar process. Maybe not quite as thorough, but a similar process for your insurance broker, contract attorneys, contractors, all those kind of things and all those people.

Yeah, I think property managers are the key to any, any, any real estate asset property manager can make a mediocre deal. Really good um, by running it super efficiently. And they can also make a really good deal mediocre or worse, um, by taking your business plan and disregarding it and wrapping it around a tree and completely screwing everything up. So, and I've seen both. Right. Um, so I, I completely agree with you there a few notes on self management. Right. Um, anybody listening to this that has a goal set for going out and buying anything north of, say, 30 units should not consider self managing. Um, if you're going to start really small, like I said before, like, you know, double up every time you do a deal where you could start that equation at four units and maybe that's the house that you live in and then you do four, then eight, then 16, then you scale your team as you grow into larger assets. Um, at the roaster group, we got up to about 100 and 15 units managing ourselves. And then we get out of that, we self managing because we saw it as we saw where we were growing as a company that were growing into larger and larger assets. And I knew that self management was not something that was going to be able to keep up with the growth of our acquisitions, so we let it go.

That said self managing taught me so much as a landlord, um, as the property manager as a property owner, right? Um, so I learned just the human side of the business. I learned uh, interacting with people, strategies for collecting rent, lease, lease, releasing strategies, management strategies, how to handle maintenance and how to handle preventative maintenance, not just wait for the tenant to call and say, hey, there's a bunch of water coming from the ceiling in my kitchen, you know, like, yeah, I had to handle, I had to set those kind of preventative maintenance things up, but I still use those lessons in the larger multi family world that we're in now. So if there is a plan in the listeners goals to start small, I highly recommend manage self managing in the begin. So you can learn some of the ropes as you scale up a plan to hand that those reins over to somebody else eventually, but there's no better classroom than than self management in the beginning on small stuff.

Well said sir, it's almost like you've done this before. I

know it's almost like I've got the battle scars to show you and all the lessons I can teach you, you know, not you. But you know, just that, that I've learned that this business has taught me really, uh, in self management, that's why we have you to here to talk about what people need to know if they're starting from zero. You know, I didn't ask you guys this earlier, but I wanted to circle back to it briefly before we move on. If you could give me an answer when it comes to looking for deals, how much time would you put into every individual deal that crosses your plate with analyzing it? If you were starting with the knowledge you have now at 0, 17 hours, not just kidding. Um, 17 hours per deal. And I noticed that. No, no, no, no, no, no, no. It's, I don't need it. I'm just, it was, it was an opportunity for a cheesy joke and I walked through it. So, um, the, what we do is we do a phase one and phase two analysis. So there's a quick, you gotta determine some go no pogo points for a deal.

And obviously if it's in the market that I want to be in the neighborhood of the city that I want to be in. If it checks all the location boxes and checks the deal size boxes, then we do like a Phase one analysis that has to do with crime stats that has to do with comparison of the rents collected on site currently versus what we believe or know the market to be. Um, we do a google street view drive by just to make sure that there's not like a methadone clinic right across street. Um, we do just things that, you know what it is. Uh Andrew, I'm sure you'll agree with me on this one, I look for something that can be an absolute no automatically. I know flood zone is a no for you, Right? Andrew. So, but flood search would be one of Andrew's Phase one's. Uh and that's kind of like you want to poke a hole in the deal, poke a hole in the deal. I want to get the deal to a no. And if I can't get it to a new so through any of those things, then I'll then it goes to phase two, which we spend a lot more time on it. But that Phase one analysis can take anywhere between 30 minutes to an hour,

we're not too different. So that screening process that we talked about previously, that's a 15 minute deal, that's just, you know, that's checking your parameters. Boom, boom, boom, boom, boom. And you look just like matt said, we're looking for the reason, a hard reason to say no. If it passes screening and it goes to that Phase one kind of quick and dirty underwriting. Um that was episode 5 71 I think we went through that in real detail, that's about 45 minutes and then of course, if it passes that now you're gonna dive in deep and if it doesn't pass that you're done with it. The one caveat I would say is if you have the luxury of more time And your true goal is just to really learn the market then you might want to spend more time diving in deeper just for that purpose. But if you're trying to swipe left on that 1st 1000 deals, 15 minutes to screen it 45 to do a quick underwriting.

I love your point. Let me proof in the pudding Andrew how many, how many deals did your company underwrite last year in 2021 off the

Cuff 05 or 600 I think.

Yeah, it's the same with us. Right? So if I were to spend really 17 hours on 500, you know, I'd still be under running 2021 deals right now right? So you need, there needs to be a method to get to get a lot of these deals to nose because not every deal is going to work in that. So they're the this the the two, the two tiered approach I think is now necessary because just there's just certain criteria you have that are just not gonna get met. And so it's an easy way to, to disqualify. I love the point that the value in doing it when you're new and you're learning from doing it. But you hit a point where you are no longer learning by just doing whatever activity it is in your business. If you're a real estate agent. Sometimes going on a listing employment with a not very motivated seller is good because you get practice giving your listing presentation and you get feed back from someone and you learn to read people. But once you've got that stop going on appointments when the person is not motivated, you're looking for motivation. And so that's a very good point.

Like if you were starting from scratch, analyzing a deal can have some value for you cause stuff pops up, you might not have learned or you get better at it. Like everything in life is a skill. The more deals you analyze, the better you become at analyzing and the faster you can do it. But once you've got that skill down fine knows that was also a great point that you made matt, you're looking for a no that's a hard no and that's where you start. Let's get rid of all of that. I couldn't find anything wrong with it. Okay, I guess I got to dive a little deeper. Let's go into a little more granular detail shoot. I still couldn't find anything wrong with it. Now I gotta start to get excited about this. Let's go into the third step. So and do you remember what episode we did where we actually walk people through the process that we have when we're evaluating multi family property.

Like the three step or

Yeah it was I say the the quick the quick analysis, the 15 minute analysis that was I think 2 79 and then the quick and dirty 45 minute underwriting was 5 71. And then I don't recall what the episode was, where we went deeper into it.

So check out those if you want to see exactly like you start with what we call the Big Rocks and then you kind of scale down and when you get to the stand, if you still can't find anything wrong with that deal, that's where it's time to start moving forward. All right. And before the next section of our show, let's hear from today's show

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Okay, another part of running a successful business is building your brand. So I think Andrew you're up first on this one. What are some things that you would keep in mind if you were starting over with building your brand?

So, so I'm ancient. I started this before, all the social media stuff, so, and matt is, the more the expert on that and literally wrote the book on, on raising money. So, um, but for building a brand, you know, I would say the key things one of the most important things that a lot of people don't consider when they think about building a brand. Like a lot of people think brands, okay, what's my logo gonna be my colors are gonna match. I got to wear the same shirt on every podcast, you know, all that kind of stuff, right? No part of your brand is how you communicate and and being consistent with that. You know, if you're gonna have investors, are you gonna give a monthly reports, quarterly reports, how are you know, what kind of data you're gonna give them? How are you going to do that? Um, you want part of your brand is, are you aggressive, are you conservative? Are you, you know, um, how how reliable are you in those little things and, and brand is not just instagram and facebook brand is your reputation in the market with the brokers, your reputation in the market with the lenders. So when, if I was starting off and I'm like, okay, I'm gonna build my brand, I want part of my brand to be when people think, okay, hey, that Andrew guy, he's new. But man, you know what, every time he says he's gonna call me, he does, and he gives me great feedback and you know, it just seems like a reliable guy.

You know, I'm gonna show him this deal. So I think I think of brand in terms of those things. Um and then that's kind of like the base and then matt, you're the expert on on how to kind of actually get that out there to the, to the public

Yeah, thank you. It's, it's um, and again, we're gonna use social media or, or any, any of those kinds of ways. You can't say, I'm not going to use social media. I've already got all my investors lined up so I don't need social media. Um, that's, that doesn't mean you don't need a brand. Uh, because as Andrew said a brand is really how the market views you and it's the things the market can expect from you and that market also means those that you do business with. And so it's important to sit down and think about like what I want the market to rely on me for. What are things that, what are the things that we stand for as a company and if you choose to use social media. Um, just like you don't have to say, hey, my brand means this and my, the things I stand for are these things just tell them without telling them. Tell them in as a part of your story, continue to talk. One of the things that's the things the rosary group stands for is transparency. And so we put that out regularly in our youtube and I'll tell any investor directly what's going on.

I put, we put the cameras on inside apartments that have been completely destroyed by tenants and stuff like that. So we talk about the good, the bad and the ugly of this business and that's transparency. Um, so that is something that you have to define on what it is you want to stand for in building your brand, then you gotta stay consistent. So if you decide I'm going to put this out on twitter or put instagram posts, out to build my brand to build my, to build the eyeballs that are watching for me, decide what you want to commit to on posts on social or articles you're gonna write for third party third party sites, um, or post, you're gonna do a bigger pockets, whatever it is and then stick to it. So pick your message that you're gonna have, that you're gonna stick to your brand and then make a commitment on the regular times, you're going to release those two whatever mediums that there are and and do it over and over and over and over and over and over and over again. I committed to myself years ago that I would do to you to to Youtube videos a week and I haven't stopped doing that for like nine years since we started our Youtube channel. Um, and it's just like religion, we just do it two times a week all the time and you can add other social media feeds onto that. So that's how you build a brand, whether you have a deal and by the way, the last last thing, don't wait to post on social about what you're doing until you have a deal. It's the biggest mistake. I see like you see people post a deal and it's like, man, I haven't heard from you in four months now. All of a sudden you're posting all over social media and now that you have a deal, I think that people see through that. And I think that if you're constantly want to be seen in your market as the one that knows a lot about real estate investing, then you should be posting with a deal or not.

Um, you know, writing articles putting out concepts. Don't just wait till you have an opportunity to put it out because people are gonna see that they're gonna see that that's really just trying to sell and, and more all sizzle, no steak matt when it comes to OPM. What's something that you would definitely keep in mind starting from zero. Um, finding the OPM before you got the deal right Yet again, David, the biggest thing that people that makes the mistake that people make and that's social media post, but also emailing and phone making phone calls to prospective equity that may want to passively invest in your deal is the mistake they make, is putting that deal out there to their base. Once they've got a deal instead of instead engaging their base well ahead of the time that they have the deal and say, hey, let's talk about real estate investing. Let's talk about what capacity you may have and really formulating what, what equity capacity their database of potential investors may have before they go look at the opportunity. So many people I see, wait till the deal comes in, then they start soliciting equity. So the biggest tip for OPM um, is have those conversations as soon as you pick a market you should be, you should be talking to equity on top of that.

Yeah, that's right. I mean, the minute you decide you're going to go into this business, start telling people about it and start finding out who might be interested in your next deal. Um, Also try to raise money from pessimists because they don't expect it back. Uh, that, you know, that's definitely helped. No. Um, the reality, but I jest, but the truth of it is, is under promise and over deliver. Uh, you may not get a few people who invest in your deal. If you say, Hey, mine's a 14% return. And they're like, well all these other emails, I got to say 20% return. If you think it's going to be 16%,, give yourself a high probability of exceeding expectations and say, you know what, we gotta, we think this is a super solid 14 and know that, you know, you got an 80% chance of beating that. Um, so under promise over deliver matt. You touched on this earlier, no matter what be transparent if a deal is going bad, tell your investors about what's going bad and what your plan is to address it and how it might affect them.

Do not hide anything. Be fully transparent. And then, um, you know, the third thing is whatever you do, never go silent. If you go silent, everybody will assume often correctly that there's not a good reason for that. Um, so even if it's, man, I'm just so busy and all these great deals, they're all crushing it. Every, all my investors are making way more than we told them. I'm just too busy to write the report this quarter. Absolutely not. Never, ever miss your community. Like matt you said you have, you've done your youtube twice a week for nine years straight. That's how If I was getting started, I would approach my investor communications. They want, you want your investors to be like, Oh, it's the 26th of the month.

I'll be getting my updates today right. Because I have for the last seven years straight. Um, so those are the things I would, I would make sure that I under promise. Uh, so that I have a high probability of over delivering and I would be absolutely transparent and then be consistent and reliable and never, ever, ever go dark or go quiet

awesome. Okay. What about long term planning? If you guys were starting over from scratch, what would you keep in mind and Andrew will start with you on this one

matt kind of touched on it earlier And that's look beyond the first deal. You're not looking to get rich or, or you know retire on one deal. Your first deal is this the start of, of the business. Um, and you know, and even if you're just looking to hey do a few deals on your own, build your own portfolio. One deal is, is not gonna be it. That first deal is just the start. So begin with that end in mind and look at the first deal and the second deal as in the third deal as stepping stones or even, you know, building blocks um, in doing that and then you know, we don't have a lot of time to get into this. But you know, if I was starting out net right now a key thing is I would go educate myself big time on the debt markets, how they function. Commercial debt is very different than residential debt And I would go out and educate myself on how that works. What kind of loan options are available for the types of properties I'm looking at and how do you educate yourself podcast books but talk to lenders say, hey, I'm looking at this deal, here's my business plan for what kind of debt options are there? They will educate you. Um, and so I would do that and then and make sure that my, the debt that I choose fix fits my business plan for for that property.

Yeah, I I just go go further on. And by the way there's newsletters you can subscribe to. You don't have to become as smart as Andrew is that? No it's not possible. Um With regards to finance and debt and everything like that. There are newsletters you can read so for Neophytes like myself I read newsletters so I can be I can I can use were as smart as Andrew does that. He knows automatically about these things. All joking aside. Um Andrew and I probably read a lot of the same publications on these things and that so you don't have to become an expert on it. You just have to be plugged into the streams of data that are out there on finance. Ask any mortgage broker uh if they can give you access to some of the news letters and the reports that they get because there are a lot of times republic. Um And ask him ask a good mortgage broker will spend some time educ you on how debt works and how debt for multi family works because it's very different than debt for single family or small multi debt for multi gets a lot more complex and it's worth taking the time to get educated on next the money and multi family.

Yeah you get like a reasonable acquisition fee. And then I think that may be why some people are enamored with multi families because you get you can if you design the deal properly, get a little shot in the arm when you close. But let's be clear, we're not doing the deal for the acquisition fee. We're doing the deal to create long term wealth for our investors and for ourselves by joining them in the long game of this multi family project, which is manifested through asset management, which is bringing about the business plan that you've designed when you bought the property, multi family is not about the acquisition. It's not, it is about the long road. And if you play the multi family game, write the check. You'll get when the property sells or when, when, when you do a disposition years down the road will be multiples larger for you. If you do right by your investors, that check will be multiples larger than any acquisition for you could ever take in buying a deal. So do the deal for the back end and for doing right by your investors and and sticking your dismount nailing that. That business plan exactly which is achieved through the part of multi family ownership. Nobody wants to talk about everybody else talk about finding deal and funding deals. But really the money is an asset management.

Well said. And then that's a, that's another big difference from single family is multi family. The money is absolutely an asset management and you know, going back to what you said about the long term. I don't know if you remember but you and I were five or six years ago maybe even longer. We're sitting in the hallway at ago abundance event in some mountain town in january and you know, there was some, some challenging acquisitions and part of the conversation like man, when does this like really pay off because this is a lot of hard work and you know what, we're, where we land as well. We really pays off 5 to 7 years down the road when all the acquisition, the asset management pays off. So again, have that mindset going into it is

and you were right about that deal. You were right. And I remember, you know, Andrew said that it will pay off eventually with your right by investors and asset management properly and run a good business plan and it will pay off in the long run. And I had faith that you were right about that and you were and it's, it's, you do right by deals and run good, good management strategy and it's gonna hit

Right. And so, and, and so like the acquisition fees and the management fees, you're not gonna get wealthy off of that, that pays your bills until you've built a successful personal portfolio or successful multi family business. And then five plus you down the road, that's when it starts to really, really pay off. Um, you know, another, another, another thing I would say is, and I fallen prey to this probably, you know, probably maybe, I don't know, maybe matt you have or not, but don't compare yourself to others, right? I mean, I, I know I have a perfect example. I have a friend in texas who I had just bought a deal and he was in the loan broker loan business and he sat down like, hey, how are you doing this? And I kind of explained the whole syndication process and all of that. Right? And then the next thing I know he quits and you know, as of today, I think he's literally done six times as many units as I have. And it's hard for me to not be like, man, why haven't I done what he did? You know, like what the heck? Um, and don't get me wrong, And he's a, he's brilliant guy and I mean that's part of it.

I mean the guy, he just knew like he just needed a little nudge and like bam he put the pieces together and, and knocked out the water and, and so it's good to look at people like that who are ahead of you as inspiration and say, okay, maybe I want to get there, but whatever you do don't compare. So why can't I do that? Because there's, there's always someone who's bigger, better, smarter, faster, prettier handsome, especially handsome for talking about me. But um, you know that, that to compare yourself and feel bad about, but rather look and say, okay, I want to be there and I'll get there someday. As long as I, as long as I stick with it. Uh and then of course always listen to bigger pockets and don't make snow angels and dog parks.

I don't know who's who's metaphors. I love more David's or Andrew's honestly, I mean maybe you put it to a vote, but both your metaphors actually like a book of jokes that I think that he reads before he comes on these podcasts, they're always like just like one liner dad joke that just hits and he never uses the same one twice. Like it's like 500 dad jokes for life or something and before Andrew goes on any podcast himself with five good ones. That's how I feel like like like it works. My analogies are always like, I've heard a few of them before. I've, I've heard the grass is greener over the septic tank before. So Andrew does recycle, He does recycle. So um going back to comparing yourself to others man, uh somebody gave me a good piece of wisdom, which is comparison is the thief of all joy. Um, and it's also the thief of a lot of education because if you look at that that person that you were talking about the mortgage broker that's now done like eight X more deals or whatever. Maybe it's about the phone call instead of like throwing shade at him and being like, man, how did you do then they must be doing something wrong or whatever. Come up. Hey, tell me, you know, let's collaborate or whatever and I'm sure you did that because I know that's something you that you would call them up and ask the question.

But to the listener, if you see somebody growing like crazy that you know personally and throwing lots of stuff on facebook or whatever about how all these acquisitions they're doing, have the courage to give them a call and say, hey, help me show me how you're doing that and most generous people in the world and most successful people are extremely generous are going to give you at least a couple of tips. Um, and, and, and take those and clean them and, and then go and pass them, go do more deals than they're doing. Uh all joking aside, just go and walk your own journey and don't worry about what the guy next to your gal next to you is walking. All right, let's sum up what you guys would be keeping in mind if you were getting started over right now. Number one, beginning with the end in mind, both with your business as a whole And on each deal, number two understand debt and how big of an impact it has on your success or failure and like Andrew mentioned remember that commercial debt and real residential debt are not the same under promise and over deliver. Always a good key to live life by in multi family, especially the money is truly made an operation. So don't just focus on acquisitions at the expense of operational excellence. The real payoff is 5 to 10 years down the road. So delay gratification, don't compare yourself with others, especially on social media. Like matt said, comparison is the thief of joy and I will add on that. It can also be the source of joy if you are comparing yourself to people who are not doing as good as you to feel good about yourself. That is just as bad because if you start to depend on, oh, I'm doing better than that person, then you're gonna feel like crap when someone comes along is doing better than you.

So leave both of them alone and just stay in your lane. Never do a deal. Just to get the acquisition fee, do great deals and the fees and profits will follow and I will follow up with that and say be careful of who you're doing your syndication with because there are other people out there that make their living off those acquisition fees and can be very tempted to stretch that deal past where the buttons on the pants are actually comfortable holding to get that money, especially if they're on tight times. And then finally stay tuned to bigger pockets where we teach you all this stuff for freaking free, can't be any better guys. This has been an awesome interview. I'll give each of you a chance to get a last comment in before I let you go matt. Let's start with you. Um, So David, everything you just said amazing. And one thing that I wanted to get out there earlier that I'd get a chance to say is that people that are listening may be listening to this and say, well, right now it's not the right time and I'm gonna wait for the right time to invest in real estate. Here's the deal. I shot a video on my Youtube channel in 2016 about the potential multi family real estate crash, okay. Um, that we are always trying to predict the future in the world.

But guess what? Everybody's crystal ball is broken, nobody knows what the future's gonna hold. Nobody knows there's gonna be a recession. If there's gonna be, this is gonna be that there's always the right time, find the right deal and find something that works in today's economy and give yourself a little bit a little conservatism's and a couple of outs and understand that there's always some, there's, there's gonna be a way for you to make it work in today's market and also finally understand that fear is going to be a real factor for no matter what in the market is, there's never gonna be this. No problem, Mark, that there's never gonna, there's nothing in your way and it's completely clear. And there's no competition. And the deals are cheap and the money is free and whatnot. That's utopia. Real estate not gonna happen. Don't wait for utopia. Real estate to happen. Just find a way to make deals work today and be conservative enough that it's it's going to the deals will work out.

Uh And if you hold long enough and you do the correct business plan, as Andrew said, uh it will eventually profit if you hold for the long term.

Yeah. You know what I would add to that is, you know, and we talked about this of, you know, taking the fear and turning it to your advantage. And then also it will it will and should never completely go away. You never want to get to the point where you're just like, oh, I'm gonna buy these deals and you don't give it any second thought, right? It's good. Once in a while, second guess yourself and wake up at three in the morning. You know, I'm gonna check those rent comps one more time. Um So especially if you're raising other, you know, using other people's money. And again, that fear doesn't drive you you're using it to make yourself a better business person. Um And then also keep in mind more so in my experience than any other type of real estate getting started in multi family is the hardest part. It gets easier. The more you do it and the bigger you get.

But the toughest part is the part that we just talked about finding your market, getting over that fear getting to know the market, making those phone calls, what kind of property we're gonna look at, How do I analyze them and actually just doing all of that unknown stuff once you get the first deal and then the second and the third, you have those relationships, you have those skills, you have that team, you have the funds, it gets easier and easier and easier. So, you know, I would, if I was starting today, I would just approach it with the mindset of knowing, okay, this first part is just gonna be grueling, but after that it's gonna get easier and easier.

Alright. Andrew matt, I really appreciate. This was a fantastic show, just like every single time that we guys have you on. It is a literal masterclass and multi family investing. So thank you very much for sharing your knowledge. I also want to say, I would say you know my opinion, multi family investing probably isn't the flavor of the month right now. I think short term rentals are kind of dominating in that space, but real estate is cyclical. It will have its day now is the time to be learning stuff arm yourself with knowledge because you're going to be seeing, especially in my opinion, the next 3 to 4 year, I think a lot more opportunity, multi family than what we've had in the last maybe 10 or so. So mark this bookmark this episode. Listen to it, arm yourself with information and be ready because opportunities will come. Thank you guys very much. This is a big green format Captain America Faircloth and Andrew hawkeye Cushman signing off.

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