Did you ever want to know how large apartment complexes work?? You will be surprised how simplified the process can be, it still takes a lot of work, but it’s not as hard as many would believe…
Feras Moussa goes through the details of one of his large apartment complexes in Atlanta, and Kyle Mitchell goes through the ins & outs of one of his larger deals in Phoenix.
VIDEO TRANSCRIPTION
00:00
right we like for this to be you know
00:01
really educational plus a networking
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piece of it
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and so kind of for this one and most of
00:07
these right usually it’s about 45
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minutes or so presentation
00:10
and then we’ll do about 15 20 minutes q
00:12
a if it makes sense but really the fun
00:13
is at the end of it right whenever we do
00:15
breakouts and so we’ll break everyone
00:16
out it’s a small group try to try to do
00:18
kind of five to eight people and maybe
00:20
do one or two of those really to give
00:22
you a chance to meet someone new
00:23
learn something new right and maybe
00:25
build a potential partnership just
00:26
because multi-family is all about
00:27
partners
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and i stress that to everybody right i
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mean it’s really you know and i came
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from the tech world i used to work at
00:33
microsoft and
00:34
i wish i was better about relationships
00:37
you know previously right it wasn’t as
00:39
applicable but
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in multifamily it’s all about who you
00:41
know build relationships get to know
00:43
people and that’s really why a lot of us
00:44
are you
00:45
are up here right now and so um you know
00:48
with that said right
00:49
you know we’ll go ahead i’ll do the kind
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of the first half kyle will kind of do
00:52
the end and then after that right we
00:53
want to open up the q a so
00:55
if you have questions go ahead and put
00:56
them into the comments as we go through
00:58
the presentation
00:59
and then at the end of it right we can
01:00
kind of open it up and we’ll all do q a
01:04
so with that said i’m going to go ahead
01:06
and share my screen
01:07
and then i will kind of give a talk so
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let’s see
01:12
actually give me one second let me
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share screen
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so i need to okay
01:33
all right you guys see the presentation
01:36
yep working at paris
01:37
all right so for those who don’t know
01:39
you’re watching a multi-family master’s
01:40
presentation so hopefully that’s obvious
01:42
right but really for my my half the
01:45
presentation
01:46
kind of first thing i guess before i
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kick off you know kyle and i we were
01:50
both candid guys right kyle i think
01:52
you’d probably say you’re fairly candid
01:53
too you know we want to just be candid
01:55
with you all talk about things and but
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please if you’re going to make any poor
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life decisions definitely talk to a
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professional
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we’re not professionals in terms of cpas
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and attorneys or any of that stuff
02:05
but really i wanted to talk about you
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know a deal that we did
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in atlanta this deal went full cycle
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last uh
02:12
september right and kind of told you
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guys a little bit the story about the
02:15
end to end right
02:16
this is from kind of how we found it how
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he bought it and what happened with it
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that’s kind of the first deal then i’m
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also going to go through another deal
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that we’re doing right now that we’re
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still you know we’re
02:24
we’re not sold or i’m nearing the finish
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line but again i think it’s a good case
02:28
study right in terms of
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just learning a lot about what to kind
02:32
of look for in terms of a deal and kind
02:33
of how that process works so this deal
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used to be called laurel mills right we
02:38
called it
02:38
we obviously renamed it wood’s a decatur
02:40
why
02:41
decatur is a good part of atlanta right
02:43
at least knowing as a kind of an
02:44
improving part of atlanta
02:46
we wanted to kind of tap into that name
02:48
recognition
02:49
right and again you can see these
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pictures the property looks fantastic
02:52
from these angles right like you know
02:54
these are the best angles the broker
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could find
02:56
and there wasn’t many pictures inside
02:57
the thing and i’ll show you guys why
02:59
right you know this was a deal that
03:01
essentially i had ran the numbers
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and i’m going to be kind of quick right
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in the interest of keeping it time so
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definitely feel free to save your
03:07
questions but
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you know this deal was a deal we found
03:11
and
03:11
underwritten the numbers made sense the
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pricing was good
03:15
and you know we figured hey it’s worth
03:16
getting out there right it was our first
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deal in atlanta
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we wanted to get into a deal that we
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knew we could home run meaning
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we just did our part right the deal
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would perform
03:26
you know and that’s different than a
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traditional value idea or maybe you’re
03:29
hoping for rents to push
03:30
this was a deal that needed a lot of
03:31
work and we knew that ultimately the bug
03:33
stopped with us right we had to grind it
03:35
out
03:35
work through the rehab and get it done
03:37
and so as you guys can see you know this
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was the first on site i still remember
03:40
it because
03:40
i had just come from disney like a
03:43
couple days prior
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and then you know kind of flew out to
03:45
atlanta and you know rainy day and you
03:48
can see this property i mean
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had potholes that literally i could lay
03:51
inside of in a car could probably drive
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over me no questions asked right it was
03:54
really a dilapidated deal and you know
03:57
but the numbers work right and so you
03:59
kind of get out there like
04:00
all right this still needs a little bit
04:01
more work than i thought i did right
04:03
whenever i first saw it
04:04
and again this is before i had offered
04:06
on it but then again you know we had
04:08
modeled it out right
04:10
but once we got on site we had to kind
04:12
of revisit what we model
04:13
and so really you know it’s about
04:15
working a budget and i like to say this
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business is hard but it’s really
04:18
ultimately a numbers
04:19
systems and process business right and
04:22
so make sure your performer your budget
04:24
your analysis makes sense
04:26
so i’m just i think initially i had
04:27
modeled four hundred thousand dollars
04:28
right on the initial very first version
04:30
of this uh
04:31
kind of deal well we ended up really
04:33
modeling at nine hundred thousand
04:35
and honestly in hindsight this is a deal
04:36
that we could have probably put two
04:37
million dollars into also
04:39
but 900 000 was kind of the number that
04:40
we had pegged and worked through
04:42
we adjusted our purchase price down from
04:44
4.2 million to 3.8 million right
04:46
it’s a 99 unit property so for those of
04:48
you that can do the math it’s about 39
04:50
000 a door which is pretty cheap right
04:52
it’s a couple of years ago and that’s
04:54
what we offered
04:55
right and i guess before i hop over i’ll
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tell you guys really quickly so
04:58
we had offered on the deal and us
05:00
another group we knew were actually kind
05:01
of the contenders and
05:03
ultimately you know we got the deal why
05:06
we we were persistent with a broker
05:08
right we came out there we saw it
05:10
and then you know you build a rapport
05:11
with the broker and so you know i talked
05:14
about i’m like ben this deal will work i
05:15
promise you let’s go get it done
05:17
and so we get out there right we get our
05:18
offer accepted
05:20
and you know this is the picture at the
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end of the day now the beginning
05:24
of the day ben’s face was a lot more red
05:25
than it was now right he got out there
05:27
and heading
05:27
you know the deal was not what he was
05:29
expecting right i had already seen the
05:31
deal
05:32
he was getting out things like oh boy
05:33
what are we getting ourselves into right
05:35
it was a rough deal i mean you know we
05:36
knew we had to reposition the deal
05:38
we knew we had to kind of do a lot of
05:40
cleanup a lot of deferred maintenance
05:41
and it had down units and so
05:43
for this deal right it had nine down
05:46
units
05:46
it was a situation where the owner
05:48
should have never owned a
05:50
multi-family ever right they didn’t know
05:52
what they were doing
05:53
it was self-managed it was just a mess
05:55
right heads in bed situation
05:57
a lot of deferred maintenance didn’t
05:59
really know what was going on
06:01
and we knew that right and we did our
06:02
due diligence and i’ll kind of talk that
06:04
here in a minute
06:05
but you know we knew that we would have
06:06
to go in
06:08
clean out the property and reposition it
06:10
right but i told them don’t worry i
06:12
promise you this deal will make us money
06:14
right and so by the end of it you know
06:15
once he kind of got over the bad the
06:17
initial shock i like to say
06:18
right you know he’s smiling in that
06:20
picture and so um you know we got it
06:22
done
06:22
so with that said right what was our
06:25
business plan right
06:26
what’s going to go through that so
06:27
here’s what we did this is actually what
06:29
we presented to our investors right
06:31
10 percent cash from cash we expected to
06:33
double about five years nine hundred
06:34
thousand dollars of improvements
06:36
right we knew and i’ll show you here in
06:38
a second we knew that this deal was in
06:40
the path of success right
06:41
as people like to say we’re walking that
06:43
line right where you kind of have the
06:44
bad side of the street in the good side
06:46
of the street
06:46
and so we knew things were improving our
06:49
purchase price is really good and we
06:50
knew if we can get it done
06:52
the deal would work right and again the
06:54
deal across the street was occupied had
06:55
a waiting list right so we knew that
06:57
there’s demand in the area
06:59
and so you guys take a look so this is
07:01
in east atlanta right decatur is really
07:03
to the north
07:04
we’re kind of on the outskirts right but
07:06
if you see you know we’re
07:08
we are we’re we’re i guess i didn’t
07:11
carry through we are right there like
07:13
where that red hash mark is right you
07:14
can kind of see that red dot
07:16
and so right across the street from us
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fully occupied there was a new
07:18
development that went in after we got
07:20
under contract
07:21
more importantly though that property up
07:23
near the walmart
07:24
right it was purchased vacant and what
07:27
happened is the per the owner bought it
07:29
forty thousand a door which is about the
07:30
same price as us
07:31
but he put another forty thousand
07:32
dollars a door into it so his cost basis
07:35
was eighty thousand
07:36
but you know the brokers we knew were
07:38
trying to sell that for a hundred and
07:39
ten a door
07:40
so we knew that there was opportunity to
07:42
work there right someone had already
07:43
proven
07:44
that’s the high-end remodel we didn’t do
07:46
that right and that’s actually
07:47
ultimately whenever we sold it
07:49
right the person that bought it is
07:50
looking to do that next step right
07:52
but again we could see that there was
07:53
opportunity here and you know we’re
07:55
anchored by them all
07:56
this is pre-covered days whenever you
07:58
want it to probably be an air mall
07:59
probably not so much anymore right
08:01
and again you know here’s the
08:02
characteristics right the other thing i
08:04
liked about this deal
08:05
it’s all two and three bedroom units i
08:07
love properties that are two and threes
08:09
more than i like the properties that are
08:10
eighty percent
08:11
and so you know the asset was good the
08:14
floor plans were good
08:15
you know had a lot of the things that
08:17
make an attractive property
08:19
right and so again that’s a little bit
08:22
about it and you know the interiors are
08:23
pretty basic this is probably the nicest
08:25
interior
08:26
right they had you know the washer dryer
08:28
hookups had breezeways that were
08:30
disgusting that we redid all the
08:31
flooring uh repainted cleaned them up
08:34
nine units for it online or so we’re
08:36
offline and i want to tell a story so
08:38
the reason these nine units are offline
08:41
right
08:41
this property one of the buildings was
08:43
on a hill and essentially the building
08:46
right
08:46
the back half of it was lower than the
08:48
front half and what happened is that the
08:50
back half because it was lower it had to
08:52
actually basically had a
08:53
pump that was pumping sewage into you
08:56
know into the city
08:57
sewage now these previous owners
09:00
they obviously the thing had failed and
09:01
had backed up into the units and they
09:03
ripped it out to the stone and had been
09:04
offline for who knows how many years
09:06
well guess what we get out there we get
09:09
someone out there to inspect it
09:11
i think we had budgeted a hundred
09:12
thousand dollars to redo this whole
09:13
thing
09:14
it ends up being a thirty thousand
09:16
dollar fix to be able to get nine units
09:18
online
09:19
and you know if you really kind of do
09:20
the math we made our
09:22
return back almost immediately but
09:24
what’s funny is about these owners right
09:26
this is where
09:27
having a quality owner makes a
09:29
difference they had you know once we had
09:31
the professionals out there right they
09:32
got down there
09:33
there was only one pump down there
09:35
there’s always supposed to be two
09:37
so if one fails the siren goes off and
09:39
the other one is still going right
09:40
so you don’t have to worry about the
09:41
backup and you know in a failure case
09:44
the other situation too is not only
09:47
was there one pump down there it was a
09:48
residential crate pump
09:50
not a commercial grade pump for 30 000
09:52
we got two pumps down there got all the
09:54
electrical redone
09:56
you know and got it professionally set
09:58
up for us
09:59
and so again it was just almost a
10:01
no-brainer and you’re like seriously
10:02
spend thirty thousand dollars get nine
10:04
units online each of these nine unions
10:06
for making almost a thousand dollars
10:07
right
10:07
three months we made all of our money
10:09
back and now we’re purely in the green
10:10
so
10:11
kind of a no-brainer on that and then on
10:12
top of that we did do a lot of property
10:14
updates
10:16
and so again this property had a pool
10:18
the pool had been
10:19
offline for many many years it did not
10:22
have a playground so our plan was get
10:23
the pool online
10:25
and you know get the playground added in
10:27
dog park right again turn it into
10:29
a family-friendly place
10:32
so again this is kind of you can see
10:34
ourselves comps right that that’s the
10:36
blue was us and that property the red is
10:38
a
10:38
one that was down the street that got
10:39
bought vacant whereas at least we
10:41
weren’t vacant right so our sell price
10:43
was very attractive
10:44
you know and again rent comps we knew
10:46
that we had a runway there right
10:49
i’m not going to dwell too long this is
10:50
ultimately what we presented to
10:51
investors right
10:53
and maybe the money slide is really this
10:55
one right here’s what we’re expecting
10:56
we told investors no cash flow year one
10:58
we expected that we knew it was a
11:00
reposition
11:01
we knew we’re gonna have to get
11:02
occupancy down and ultimately i’ll tell
11:04
you guys a little bit of the story here
11:05
on the next slide
11:07
right but then we knew after that we’d
11:08
be cash flowing and probably able to do
11:09
a good
11:10
refi and so that’s kind of a little bit
11:12
of an example of what we thought
11:14
right we thought essentially over the
11:16
five years investors would get you know
11:17
about a little over a double
11:19
of their money and so here’s kind of the
11:22
before and after
11:23
right here and this is really a classic
11:26
and then the after is one of the down
11:27
news that we got online and we started
11:29
to do this upgrade throughout the
11:30
property
11:31
now ultimately right with this property
11:33
right here’s another one
11:34
before and after right the pool was
11:36
beautiful it actually looked really good
11:37
it’s right next to the clubhouse
11:39
and you know kind of continuing on i
11:41
guess i’ll show you this slide
11:43
same thing we had these potholes all
11:45
over the place i mean it was disgusting
11:47
right again we spent what do we spend
11:50
i think we spent about 30 thousand
11:51
dollars on parking lot right one thing i
11:53
recommend to everybody
11:54
if you’re buying a parking lot seal and
11:56
stripe it that’s that’s 10 grand of work
11:59
it gives it that black coating right we
12:00
also have to do a lot of patchwork but
12:02
sewing and striping can really do a big
12:04
difference to a property
12:06
right now with this property right we
12:08
knew
12:09
we were gonna have to clean it out so
12:11
you know we basically went from 78 that
12:13
percent
12:14
to 55 but really we got down to 40 net
12:17
all in right at one point
12:18
going to 40 occupancy is scary you’re
12:21
operating in the red
12:23
now what made this deal difficult was
12:26
the fact that our lender was a terrible
12:28
lender right we use the bridge lender
12:29
for those who don’t know
12:30
in multi-family you have two different
12:32
types of big lending right you have
12:34
agency debt which is your fanny freddie
12:36
nice long-term debt
12:38
and you have bridge debt now agency debt
12:40
only works for nicer properties that are
12:42
stabilized you know
12:44
better occupancy whereas this deal was a
12:46
complete turnaround so it’s kind of like
12:48
your hard money lender
12:49
and the problem with bridge debt is the
12:50
wild wild west there’s not a lot of
12:52
regulations not a lot of rules
12:54
we had a bridge lender that was
12:55
essentially a loan to own shop that we
12:56
found afterwards
12:57
they were making it extremely painful to
12:59
pull out any money because all of our
13:01
rehab money was sitting with the lender
13:03
right you have to get approval from them
13:05
they said it was one of the best
13:06
turnarounds they’ve ever seen but they
13:07
also essentially made it impossible to
13:08
get money out so
13:09
that was the real pain point that’s
13:11
something we learned will never make
13:12
that mistake again
13:14
but again you know you worked through
13:15
this right brought on security to help
13:17
clean it up again that’s what got us
13:18
down to 40 percent push trends
13:20
collections we tripled our collections
13:22
in four months that i mean that’s not a
13:23
joke i literally pulled up the 12 t12 in
13:25
four months
13:26
we tripled how much money we were
13:28
collecting and ultimately we ended up
13:30
selling that deal
13:31
right for our investors and this is net
13:33
to investor in 18 months they made about
13:34
80
13:35
return right very very strong returns on
13:37
a deal like this but
13:38
you know there’s a riskier deal right
13:40
and i tell people every deal needs to be
13:42
risk adjusted
13:43
so for deal we’re doing a lot more rehab
13:44
a lot more risk they need to bet on us
13:46
well they should get rewarded more than
13:48
a deal that might be stabilized
13:49
performing really well
13:51
and kind of working out and so kind of
13:54
the final number
13:54
right we raise only 1.1 million dollars
13:57
on this deal 3.9
13:58
million dollar purchase price sales
14:00
price of 7 million profited about two
14:02
million
14:03
now you know the deal you know we lost
14:06
all of our great all of our hairs on
14:08
this deal though right
14:08
still was really painful and what’s
14:10
funny is that we had this deal under
14:12
contract to sell
14:14
and the buyer ended up so that pool that
14:17
i told you guys about right
14:18
well one thing to learn is that even
14:20
though you get the pool online you think
14:22
you did everything right
14:23
well we couldn’t get a pool permit for
14:25
that pool because essentially they
14:26
wouldn’t grandfather us
14:28
in on that property because the new
14:30
regulations require you to have a
14:32
restroom that’s accessible
14:34
right we didn’t have the budget to set
14:35
that up now we told the next buyer
14:38
that’s why we couldn’t get online and he
14:40
ended up going to the county
14:41
to ask them hey is this actually you
14:43
know the story and so
14:45
that was the mistake because that county
14:47
dekalb county
14:48
is extremely notorious for finding
14:51
people
14:51
right just really they’re really
14:52
aggressive about trying to essentially
14:55
you know a big money grab right the hero
14:56
properties for sale
14:58
and they try to go out there and cash on
14:59
it and so he ended up basically
15:01
they heard from him because he asked
15:03
that question two days later three days
15:05
later we had
15:06
an army of inspectors to send they gave
15:07
us 110 violations
15:09
on a property that we made the rough
15:12
deal in the area
15:13
really looked good and so that’s kind of
15:15
how they treated us
15:16
and ultimately we had to settle with the
15:18
county because they knew we were going
15:20
to have to settle before we ended up
15:21
going to closing
15:22
and so you know that cost us another 50
15:24
grand and what’s funny is three days
15:26
later they came out and gave us the same
15:28
110 citations it was ridiculous it’s uh
15:31
yeah i mean that county is just uh full
15:33
of it and so anyways you get an attorney
15:35
involved and
15:36
you know there’s pain in this business
15:37
right and not everything is easy but
15:40
i guess hopefully that gives people a
15:42
taste of what to look for right
15:44
especially on your first deal i highly
15:45
recommend pick the first deal that you
15:48
know you can perform on and don’t
15:49
overextend yourself right don’t do a big
15:51
heavy lift if that’s not something you
15:53
know how to do or comfortable with or
15:54
know someone that can help with
15:56
right but you really want to produce i
15:58
like to basically say what we do as
16:00
syndicators or operators
16:01
we’re looking to constantly reduce risk
16:04
across the board
16:05
right from the the macroeconomics we
16:07
liked atlanta so i guess the story of us
16:09
getting to atlanta
16:10
we’re in texas we were feeling like
16:12
we’re starting to get priced out of
16:13
texas we couldn’t find deals at
16:14
attractive price points
16:15
atlanta was the next city that we knew
16:17
the market was good right
16:19
job growth population growth and
16:21
ultimately the price per unit the
16:23
pricing for assets
16:24
relative to the rent is really
16:25
attractive so that’s why we got into
16:27
atlanta but as our first deal we knew we
16:28
had to perform
16:30
and so you know i recommend people look
16:32
for all these things that are constantly
16:33
reducing risk
16:34
up until really okay the dealer process
16:36
trade is doing exactly what we need to
16:38
do
16:38
we just know our business plan is pretty
16:40
clear go from here to here
16:42
we’re not having to tread our own path i
16:44
don’t like to be a trailblazer whenever
16:45
it comes to you know my investors money
16:47
right
16:48
i want to figure out the clearest path
16:49
to kind of perform and do our part
16:52
so that’s still number one
16:55
and i guess we’re gonna say something
16:57
kyle oh i i didn’t know
16:58
did you have a deal number two or i have
17:00
one more to kind of go through okay
17:02
yeah a different kind of play but also
17:03
similar in some ways
17:05
awesome so i wanted to kind of help just
17:06
again we’re trying to do different case
17:08
studies that’s why i’m blowing through
17:09
these and we’ll pause at the end of your
17:10
questions
17:11
after kyle does his part as well so
17:14
next one right this is a deal that we
17:15
own currently we
17:17
we’re probably going to sell this deal
17:19
here in the next two months right and so
17:21
um
17:21
but it kind of showcases again another
17:23
type of deal and so this was a deal had
17:25
30 down units right so once we did the
17:27
10 we knew we could do more
17:28
and you know this is a combination of
17:30
fire units flood units
17:32
needed um kind of uh like water drainage
17:35
issues things like that
17:36
but it was a deal phenomenal location
17:39
really nice
17:40
upgrades and the previous owners had
17:42
upgraded ninety percent of the water
17:43
heaters ninety percent of the ac
17:44
and all this is stuff we found while
17:46
we’re walking the property and whenever
17:47
we do diligence right
17:49
and so again you can kind of see these
17:51
are actual slides right that we had put
17:52
together for the day
17:54
17 of what we expected right we’re
17:55
looking about 110
17:57
in six years right but we knew our
17:58
location was phenomenal
18:00
i like to say there’s very few starbucks
18:02
in all of south atlanta
18:03
this deal is like caddy or right across
18:06
the highway from starbucks so
18:07
it was literally we knew this area
18:09
because that was the only starbucks we’d
18:10
ever go to for those who don’t know i’m
18:11
a big starbucks guy
18:13
um you know and again it’s one of the
18:15
biggest developments in all of south
18:16
southwest atlanta right
18:18
camp creek marketplace i mean there’s a
18:20
lot there lowe’s target bj’s
18:21
you name it it’s there and the previous
18:23
owners had done essentially they bought
18:25
they buy these properties that are
18:27
super dilapidated they do the initial
18:29
heavy lift right
18:30
and then there’s just a lot of meat on
18:31
the bone and from their side i think
18:33
they had four huge projects going on and
18:35
they were just cash trapped right so
18:36
they need to make an exit
18:37
and so that was ultimately our plan and
18:39
then on top of that right the real icing
18:41
on the cake
18:42
is that it was already approved for the
18:43
faa noise reduction program so
18:45
for those that don’t know atlanta has
18:47
the largest airport in the world
18:49
and they already have a grant this is
18:51
free money we’re not having to pay it
18:52
back
18:53
we’re basically the airport as part of
18:55
expansion they were replacing
18:57
all of the windows front doors and
18:59
sliding grass doors
19:00
for all properties that got approved and
19:03
approval is a process they make sure
19:05
that you know
19:06
you’re safe and compliant and no leaks
19:08
and all this other stuff yeah this work
19:10
but
19:10
they’re doing this heavy heavy upgrade
19:12
of the property for free
19:14
and it’s nice as an owner to show up at
19:15
a property see a crew of 20 guys out
19:17
there working on your property
19:18
for eight months and it doesn’t cost me
19:20
a dollar right outside of just making
19:22
improvements that they make me do
19:23
anyways to their property
19:25
and so we knew we had all these things
19:26
lined up where we got to get the down
19:28
needs online
19:29
worked at fa noise reduction program
19:31
push friends right
19:32
and so again that’s what we looked for
19:35
right so this is a
19:36
property 152 units right you can see the
19:38
upgrades looked really nice this
19:40
property is a market leader
19:41
top rents in the market and we’re still
19:43
the top and we we leased up
19:45
insane and we’re at 98.6 lease today
19:50
right so again what i was showing people
19:51
earlier i like the slide a lot because
19:53
the question really people ask is
19:54
how do you find a good deal right and
19:57
ultimately again you’re trying to reduce
19:58
your risk you’re trying to find
19:59
something that makes sense financially
20:01
so on this property right the previous
20:03
owners have put 2.7 million dollars into
20:04
it
20:05
and i literally had this slide on my
20:06
investor presentation right
20:08
ninety percent of them were new hvac 90
20:10
new water heaters
20:11
new siding new rails and balconies and
20:13
fifty percent of units were upgraded
20:15
nicely that’s what the previous owner
20:16
had done
20:17
on top of that right then the the
20:20
airport was going to put two million
20:21
dollars into the property for us
20:23
improving all you know the windows the
20:25
doors all that and then we were putting
20:27
in another million dollars to get those
20:28
30 units online
20:29
so if you really do the math right 2.7
20:32
plus 2 plus 1
20:33
six million dollars improvements on a
20:35
property that we’re buying for nine
20:36
right and so i mean phenomenal right in
20:39
terms of that’s just all stuff
20:40
and within the past two three years i
20:42
got done to the property
20:44
and again we’re that star in the bottom
20:46
right so look at where we are right
20:48
really really good area in terms of just
20:50
a lot going on
20:52
a lot of traffic and they’ve they’ve
20:53
expanded that road right in front of us
20:54
as well now so
20:56
you know it’s a deal that did well and
20:58
so again i’m just kind of blowing
21:00
through this because i just want people
21:01
to get visibility which is kind of some
21:03
of the things
21:03
one thing if you’re not so in texas i’m
21:05
going to say this to people this is
21:06
actually a learning exercise for people
21:08
so texas it’s really popular to do solar
21:10
screens it’s like the thing
21:12
right what are solar screens it’s the
21:13
blackout blind uh screens that you put
21:16
on your windows
21:17
so that way you don’t see the stuff
21:18
behind it right because at an apartment
21:20
one of the worst things
21:21
you see all the broken blinds and all
21:23
this other stuff and so instead in texas
21:25
really probably put solar screens it
21:27
blocks it out
21:28
and it gives the property a uniform look
21:30
it’s not really a thing in atlanta we’re
21:32
the guys that started doing that atlanta
21:33
and it’s slowly starting to pick up
21:35
right and i know kyle can probably talk
21:37
about arizona arizona likes their crazy
21:38
colors and stuff too
21:39
right but some of these trends you know
21:41
you can apply them from one market to
21:42
the other and it’s helpful and so this
21:44
kind of talks about a little bit about
21:45
what we’re doing
21:47
right and you know 30 down units right
21:49
you got to have
21:50
a good contractors and team and on this
21:52
deal we had another partner who
21:54
has a construction company really sharp
21:56
guy oliver helped us
21:58
tremendously on this deal had made it
21:59
really really almost
22:01
you know a walk in the park for some
22:03
aspects right property had no amenities
22:05
and it was lawsuit waiting to happen
22:07
they had a break-eating playground that
22:08
we ripped out day one
22:10
um laundry was a huge mess right roof
22:12
have caved in the airport project
22:14
staff challenges right we have a lot of
22:16
things going on and ultimately what’s
22:17
funny is that we ended up
22:19
the previous property i showed you guys
22:20
we sold that property that manager we
22:22
brought onto this
22:22
he’s been a rock star at that right and
22:25
again you can see this is
22:26
as of april so now we’re even
22:28
significantly higher but if you take a
22:30
look right
22:31
month over month we’re collecting more
22:32
and more and more and i think
22:34
as of last month i think we hit 138 000
22:37
right so going from 80 to 138 is a very
22:40
big difference in collections
22:44
right and so moving forward right we’re
22:46
stabilized now
22:47
what does stabilize mean right lenders
22:49
want a property that is stabilized
22:51
meaning
22:51
90 for 90. for 90 days it’s been 90
22:55
or more occupied so we’re there and you
22:58
know that’s a bov from a broker if you
22:59
can’t see it but essentially
23:01
you know they expect it to sell between
23:02
90 to 98 000
23:04
per unit right so i think that’s
23:06
probably you know we’re still exploring
23:08
all options
23:09
but for a deal that we bought for 59 000
23:11
a door we put about 7 000
23:13
into it so our cost basis is 66 000
23:16
per unit you know our exit is probably
23:19
going to be 9 you know 90 plus
23:21
and so again it’s it’s that’s what you
23:23
look for right
23:24
how do you as an owner buy a property
23:26
you can go in
23:28
make upgrades push the income and
23:30
ultimately
23:31
get yourself in a position to cash flow
23:33
refi
23:34
do a supplemental or sell the deal right
23:37
so
23:38
that’s maybe my two deals that i wanted
23:39
to go through and
23:41
i guess i kind of have this slide for
23:43
people but you know that’s me
23:45
my email address feel free to reach out
23:47
to me email me if you have any questions
23:48
and kyle
23:49
i’m going to go ahead and do collab on
23:50
there but kyle that’s his as well
23:52
yeah awesome no that was great stuff for
23:54
him to go from beginning at the end
23:56
i think that’s worked for people you
23:57
know again this is recorded so we’ll put
23:58
this up in the group
23:59
if you guys have questions but i was
24:01
really trying not to pigeonhole
24:02
any one thing but i want people to see
24:04
the story because ultimately these
24:05
properties you need to figure out what
24:07
the story is it needs to be a plan that
24:09
is feasible because that’s what you need
24:10
to work towards and that’s what your
24:11
investors need to
24:12
see and understand as well and i think
24:15
it’s good to hear from
24:16
like early ones that you did as well and
24:18
everything to the later ones that you
24:19
did just last
24:20
last year so that that’s awesome later
24:23
on
24:24
keep typing questions in there we’re
24:26
going to hold off on the questions in
24:27
terms of asking
24:28
ferris any of those questions we’ll get
24:29
to them at the end but we’re going to go
24:30
ahead and move to
24:32
kyle right now so uh kyle um
24:36
come on and uh go ahead and give
24:37
yourself an introduction as well
24:39
before you go ahead and talk about your
24:44
deal
24:46
oh i can’t hear you kyle you’re on mute
24:51
all right aren’t you a professional
24:52
podcaster here aren’t you the first
24:54
thing
24:54
you know you know much better
24:57
about me i just kind of just just
25:00
stumbled through it
25:01
who is this kyle guy you guys have come
25:02
on um okay well
25:04
i’m kyle mitchell and uh i’m also part
25:06
of the leadership group here at
25:07
multifamily masters
25:09
i remember i was at powell’s second meet
25:11
up ever so i wasn’t there for the first
25:13
one but i was there for the second
25:15
um and been going to his meetups ever
25:16
since but uh i run uh the long beach
25:19
chapter out here in southern california
25:20
we also have a chapter in phoenix that
25:22
we uh
25:23
fly out to and have uh we we mainly
25:26
invest in the arizona market so we’ve
25:28
got property in phoenix and in tucson
25:30
and uh much like ferris we invest in
25:33
value add
25:34
class b and c type assets so i know
25:37
we’re kind of short on time so i’m going
25:38
to breeze through this as much as pos
25:40
quickly as possible but i always like to
25:42
start with kind of where i
25:43
came from in my background just to show
25:45
people who out that who are out there
25:47
that have any doubts that it can get
25:48
done you know when i first went to
25:50
powell’s meetup
25:51
and they were talking about buying you
25:52
know multi-million dollar businesses and
25:55
in apartments i just thought to myself
25:57
there’s no way this could actually be
25:58
possible
25:59
and i’m here to tell you that it is
26:01
definitely possible
26:02
and i just like to take people through
26:04
kind of my journey of how i got this
26:06
first deal that i’m going to talk about
26:07
it’s a 42 unit in tucson
26:09
it was the first deal that we did and
26:11
that was last may
26:12
and um just for clarification this is
26:15
not a full cycle deal however it’s
26:17
currently under contract and we’re
26:19
supposed to close in september so
26:21
hopefully it does get full cycle but i’m
26:23
definitely happy to
26:24
be able to show everybody you know how
26:26
we got it to that point so
26:28
i signed up for a coaching program in
26:30
december 2017
26:32
and i’m not going to read through all of
26:33
this but um essentially it took us 18
26:36
months to do our first deal
26:38
so it didn’t happen overnight uh it was
26:40
a lot of hard work but
26:41
uh over through consistency and sticking
26:44
to our plan
26:45
we were able to get it done um but you
26:47
know essentially we start our investor
26:49
database
26:50
in january 2018 and luckily we did not
26:53
close until may of 2019 because we
26:56
really would not have been ready to
26:57
raise a million dollars for our first
26:59
deal
26:59
if we would have gotten it earlier um 11
27:02
months after we started
27:04
investing in real estate or looking into
27:06
multifamily and when i say me
27:08
we it’s my wife and i uh i left to do
27:11
this full time i had been looking for a
27:12
career change
27:13
and i immediately fell in love with
27:17
multi-family i was a
27:18
general manager and a regional manager
27:20
for a golf management company
27:22
and everything we do in the property
27:23
management world for golf courses
27:25
you also do for apartments and so it
27:27
just spoke to me i fell in love with it
27:30
we’re about building systems operating
27:32
properties managing people
27:33
driving income controlling expenses and
27:35
that’s what you do in multifamily so
27:37
i left 11 months later and went full
27:39
time and uh here we are today so
27:42
um this property that i’m going to talk
27:45
about
27:45
here let me see
27:50
is um a 42 unit in tucson arizona
27:53
and uh i’m going to walk you through the
27:55
process of even how we found it so
27:57
when we first started looking into
28:00
multi-family
28:01
we i definitely knew it was something i
28:03
was going to leave my job for so it’s a
28:04
lot different than other people where
28:06
they may want this as a side gig or as a
28:09
you know
28:10
just to build some passive income i knew
28:11
100 this was something i was going to do
28:13
full time so my plan was to position
28:15
ourselves
28:16
to position myself to leave uh my job
28:20
so i used to call brokers i have a list
28:22
of 56 brokers actually called them all
28:24
today
28:24
and every other week i would call them
28:26
just to check in see how we’re doing
28:28
and uh build a relationship with them
28:30
and see if they have any deals on the
28:32
market
28:32
so uh we used to drive seven and a half
28:37
hours eight hours on a monthly basis my
28:39
wife and i we’d leave it two in the
28:40
morning 2 30 in the morning
28:42
get home at 12 a.m the next day on one
28:44
of those drives
28:46
you can see the little uh bubbles here
28:47
this is exactly how the conversation
28:49
went with the broker
28:50
but we were driving out and uh he asked
28:53
me if i want to come see a property that
28:54
he literally just got the keys to
28:56
and uh from that we ended up getting
28:59
this exact property under contract we
29:01
were meeting our
29:02
property management company out there
29:04
already so we got to tour this property
29:06
and then since we were out there we also
29:08
took comps with our property management
29:10
company
29:12
and here’s the property and when uh when
29:14
you first look at it you’re like no way
29:16
do i want this property i actually
29:17
showed my partners it and they’re like
29:19
oh man this is just not it was kind of
29:21
like ferris’s story
29:22
uh with ben when he first saw the
29:24
properties was not interested in it at
29:26
all
29:26
um i had the same reaction so i
29:28
understand how ben was feeling or
29:29
ferrous maybe but you know when you
29:32
first look at the property it’s not
29:34
appealing it’s got sliding glass doors
29:37
it’s an old motel style
29:39
but knowing the market the market has a
29:41
lot of these
29:42
right in that area um and the other
29:44
thing that i absolutely loved and
29:46
it’s in one of the slides but when we
29:48
got here i called the number on the sign
29:50
right here and it was disconnected
29:52
this property was not being uh marketed
29:54
online at all
29:55
and so the only possible way to actually
29:57
rent up a unit here was to call the
29:59
property management company
30:01
ask them if they had any units available
30:03
and then
30:04
that property management company would
30:06
have told them about one of their
30:08
properties which is this one
30:10
um about available units so it’s very
30:12
difficult to rent up it was an
30:13
out-of-state buyer
30:14
california buyer and much like ferris
30:16
mentioned
30:17
this person should not have been buying
30:19
multi-family they didn’t know what they
30:21
were doing
30:21
very hands-off and they were just
30:23
letting the property management company
30:25
essentially run it to the ground so um
30:28
as you can see
30:28
this has got well it’s kind of tough to
30:30
see but this has got sliding glass doors
30:32
in there
30:33
which is just not very safe or even from
30:35
a privacy standpoint that’s one of the
30:37
things that we changed that i’ll show
30:38
you later on
30:41
another photo of the property
30:44
just a ton of deferred maintenance not a
30:46
lot of management
30:48
a couple of down units and um not
30:52
pushing rents or managing it
30:54
this is uh some of the interiors very
30:56
basic we actually love
30:57
the the wood uh ceilings on the top on
31:00
the top floor there but this is what
31:01
every unit looked like essentially
31:04
from a classic standpoint
31:10
all right so the opportunity i already
31:12
mentioned zero advertising this
31:14
the property management company that
31:15
they were using was a single family
31:17
home provider and if you know anything
31:19
about single family home property
31:20
management companies
31:22
you know anytime you have a service call
31:23
or anything like that they charge you
31:24
per
31:25
per visit um a flat fee plus whatever
31:28
the cost of travel is
31:29
plus whatever the cost of the fix is um
31:32
and so that can get pretty pricey and
31:34
their their
31:35
um expenses as you’ll see later were
31:37
above 60 percent
31:38
um so that was another opportunity we
31:42
wanted to put a
31:43
full-time or a third-party property
31:44
management company who had experience in
31:46
multi-family
31:47
and we wanted to put a part-time
31:49
maintenance person out there so that
31:51
they didn’t we didn’t have to do service
31:53
calls
31:54
no increases on rent for over 16 years
31:56
on some of these units so
31:59
three hundred dollars was the lowest
32:00
rent out there so someone was paying
32:01
three hundred dollars for a one bedroom
32:03
apartment out there and you look at that
32:06
and i was
32:07
i was drooling at that rent roll because
32:08
there was so much opportunity there
32:11
uh true value add which is another thing
32:13
especially now this was a year ago year
32:15
and a half ago
32:16
there’s not a lot of true value add out
32:18
there a lot of people say that there’s a
32:20
value-add opportunity
32:21
you need to look a little bit further
32:23
into that because value-add can mean
32:25
something as simple as you know charging
32:27
rubs
32:28
or increasing rubs by ten or twenty
32:30
dollars so is it a true value add a lot
32:32
of the properties in our
32:33
market phoenix and tucson are second
32:35
third fourth generation
32:37
value ads which means you know an
32:39
owner’s already added a lot of value to
32:42
the property and now he’s flipping it to
32:43
the next person to add value
32:45
and the more that happens the more risk
32:47
you take on because there’s only so much
32:49
that you can push the rents
32:51
so it’s something to be careful of for
32:52
sure surrounding properties started the
32:55
value-add phase so we knew this area was
32:58
starting to build up there was some new
32:59
construction
33:00
there’s the number one elementary school
33:02
in all of arizona
33:03
walking distance from our property so we
33:05
like this sub market
33:07
and then the owner had just installed
33:09
solar on there and
33:10
the reason why that’s important is
33:12
because they had installed it
33:14
two months prior and so the t12 did not
33:17
reflect
33:17
any of those savings at that point but
33:19
we knew we could underwrite some of
33:21
those savings
33:22
and essentially offer a little bit
33:23
higher than some of the other
33:25
competition that wasn’t underwriting for
33:26
that
33:27
on the t12 it was showing without solar
33:29
so that was um
33:31
something we did created with our
33:32
underwriting
33:34
so the business plan was to do interior
33:37
upgrades um
33:38
change out the doors which actually is
33:40
the biggest thing that we did that was
33:42
the biggest risk
33:43
and also the biggest reward it
33:45
completely changed the look of the
33:46
property
33:47
it also changed the safety side of the
33:49
property
33:50
and those doors were two grand a unit
33:53
which we ended up only putting in about
33:55
four grand a unit total
33:56
so to put in half of what we were
33:58
planning to do into
34:00
just the doors was a big risk and it
34:03
ended up
34:04
paying off a lot of the other stuff was
34:07
really fixing to
34:08
deferred maintenance a lot of things
34:10
that just had not been done over the
34:11
years of this person
34:13
purchasing this property just not
34:15
keeping it up right we had to
34:17
redo the uh railings because they were
34:19
not safe they were very loose the
34:20
insurance company actually made us do
34:22
that
34:22
no paint um a lot of things like that
34:26
let’s see what else here
34:31
and then advertise i think advertising
34:32
was the biggest thing it just was not
34:34
being advertised
34:35
and by simply just advertising it even
34:37
on craigslist which is actually our
34:38
biggest lead generator for this property
34:41
um we can’t we’re at 97 to 100
34:45
uh occupied the entire time and we’re
34:47
pushing rents
34:48
i think now for the seventh time which
34:50
i’ll talk about a little bit later
34:53
so here’s the business plan by the
34:55
numbers we plan to put 335 000
34:58
into it we actually only used 170 000 of
35:01
the upgrades
35:02
because we were willing to pivot and
35:05
keep an eye on
35:06
our budget so i think a lot of the times
35:09
when people are doing value-add they
35:10
just go in they get their stuff done
35:12
they
35:13
they follow the plan but they don’t ever
35:14
take a look at where they’re currently
35:16
at
35:17
and how they can pivot and adjust and
35:18
the business plan is a living breathing
35:20
thing
35:20
and you need to be able to monitor it
35:23
day in day out week
35:24
week in week out and adjust on the fly
35:27
and what we found is that
35:29
we didn’t need to spend money on certain
35:31
things that we thought we would to get
35:32
the rents
35:33
and in some cases we actually spent less
35:35
and so because of that we were able to
35:37
save quite a bit on a lot of the
35:39
budget and upgrades that we were going
35:41
to end up doing
35:43
as you can see there studio average
35:45
rents are 409
35:46
we are now charging 579 and again we’re
35:50
97
35:51
occupied right now one bedroom’s 493
35:55
um and that’s utilities included now
35:58
we’re charging 715 for the one bedrooms
36:00
plus 38 rubs so huge increase there
36:04
uh expense ratio was 67 we know that
36:07
in the arizona market you can get
36:10
expense ratios down to at least 40
36:12
percent
36:12
for certain uh stabilized properties and
36:15
you ask why that is i know rule of thumb
36:17
is 50 but go back and understand your
36:19
market certain markets are different
36:21
than others
36:21
there are certain properties that
36:22
operate in the 30s in arizona
36:25
insurance is very low in arizona not a
36:28
lot of natural disasters
36:30
um taxes is very low and the increase on
36:33
taxes is only five
36:34
percent year over year right whereas in
36:36
some other
36:37
markets they could double upon purchase
36:40
that’s not something that can happen in
36:41
the arizona market
36:42
and then a lot of you know um what is it
36:46
called
36:47
landscaping you can do the dry scape so
36:49
you can save on some utilities and water
36:51
and things like that and and um
36:54
landscaping costs in general so
36:56
you can actually get your expenses down
36:57
to the 30 40
36:59
uh ratio so that was kind of our plan
37:02
right there
37:03
um a little bit about the sub market i
37:05
already talked about it a little bit but
37:07
um
37:07
it’s next to a whole foods it’s got
37:09
starbucks on both sides of the property
37:11
it’s walking distance to the number one
37:14
elementary school
37:15
in arizona and there was new
37:16
construction that was starting
37:18
um just right next to the whole foods as
37:20
well so we knew we were in a growing sub
37:22
market
37:23
i mentioned earlier there were a lot of
37:25
properties that were purchased just
37:26
around it that were starting the value
37:28
add phase
37:28
so we knew we were in a really good
37:30
position there and we purchased this at
37:32
39k a door
37:33
now in the sub market i mean you can’t
37:35
even find stuff for 60 a door
37:37
this is just 13 14 months ago
37:41
so this is the rebranding of the
37:42
property so this is now called midtown
37:44
on second
37:45
it was called uh townhouse east when we
37:47
first caught it
37:49
and these are not town homes by any
37:51
means and it’s not even on the east side
37:53
of
37:53
tucson so just in that alone just the
37:56
way they were branding the property just
37:58
was not done very well so we re-ran it
38:01
in midtown on second
38:02
my wife chose those colors and whether
38:04
you like it or not
38:05
it has worked extremely well and i think
38:07
it looks fantastic
38:09
um and so we painted the entire thing we
38:12
branded it
38:13
um and as you can see on this slide
38:16
there’s a better look at it the biggest
38:18
thing we did was change out sliding
38:20
glass doors for those
38:21
wood panel doors it does still have a
38:23
lot of glass but we covered those up
38:25
with blinds and people absolutely love
38:27
it
38:29
these are actually a mix of studios in
38:31
one bedroom so i saw a question earlier
38:33
on what do you prefer initially when we
38:36
were going in the arizona market i had
38:38
the same bias as many people do
38:40
more two bedrooms is better and our
38:42
other property in phoenix is more
38:43
predominantly two-bedroom 75 percent
38:46
but it really depends on the market and
38:48
the demand
38:49
i would buy this property again all day
38:51
long studios and one beds it’s two miles
38:53
east of the
38:54
school a um afu and in arizona
38:58
we cannot keep the studios or one
39:00
bedrooms from being rented i mean we’re
39:02
a hundred percent
39:03
at all of our properties um on the
39:06
studios and one beds so it really just
39:08
depends on the sub market
39:09
and uh the general area and the market
39:11
itself so i wouldn’t say shy away from
39:13
that definitely do your due diligence
39:15
and look into it but
39:17
at one point i was shy of buying
39:19
anything with studios and one beds but
39:20
in our market i would buy those all day
39:22
right now
39:23
the demand is extremely high for those
39:26
and this is the interiors here so um we
39:30
resurfaced the countertops we painted
39:32
them a different color we added some
39:33
flooring
39:34
um and that was basically it that
39:37
backsplash right there cost 35
39:39
you can get it at home depot it’s a
39:42
stick on
39:43
right but it makes the kitchen look a
39:46
lot better
39:47
now you can’t have it in anywhere that
39:49
gets moist or has water but for 35
39:51
dollars
39:53
we’ll put that in all day and it makes
39:55
the kitchen look uh
39:56
pretty solid the other thing that we did
39:58
that was uh not part of the business
40:00
plan actually
40:01
originally was after we got stabilized
40:05
about three or four months in we were
40:06
seeing rent growth
40:08
triple quadruple what we were initially
40:11
uh planning
40:12
so we actually called our broker our
40:14
rule of thumb and business plan is
40:15
always to list the
40:17
property with the broker we bought it
40:19
from unless
40:20
that broker is not a competent broker
40:24
okay and it goes a little further into
40:25
that but so we plan on
40:28
selling this property with uh our broker
40:30
that we bought from
40:31
so we called them to the property said
40:32
hey look these are the interior
40:33
renovations we’re doing here’s the
40:35
exterior it’s all done
40:36
what do you think we should do how can
40:38
we position this best for sale if we
40:40
were considering it
40:42
and he said i think you should implement
40:43
a premium unit
40:45
and see what you can get for rents on
40:46
that
40:48
like i mentioned earlier there was about
40:50
almost two hundred thousand dollars
40:52
that we didn’t spend or 150 000 we
40:54
didn’t spend on interior renovations
40:56
um so we said okay let’s try a premium
40:59
unit see what we can get
41:00
so we did this unit here
41:03
and the only thing we did was stainless
41:06
steel appliances that is a glass
41:08
background
41:08
uh backsplash there painted the cabinets
41:12
flight and then we added the accent
41:13
while they’re on the left
41:14
so that cost us about 1200 additional
41:18
and we’re getting 90 more in rent for
41:20
that property
41:21
okay so we’re basically making up our
41:24
roi and that is
41:25
we make that up in less than a year and
41:27
a half and what that does to the noi if
41:29
you guys know
41:30
um it just multiplies it so we started
41:34
doing these we did
41:35
six of them and we rented them out each
41:37
in less than a week
41:39
and so at that point we asked our broker
41:41
what do you think we should do and so we
41:43
listed it for sale
41:44
um and we are under contract currently
41:47
for the price
41:48
that we wanted it in year six and it’s
41:50
been 15 months
41:52
so you know it doesn’t look fancy this
41:55
is a studio here
41:56
but you know this studio rents for less
41:58
than 600
41:59
a month so and then in tucson you know
42:02
that’s
42:03
you know that’s one of the reasons why
42:05
we love this market is because the cost
42:07
of living is so cheap
42:08
i mean the unemployment alone you know
42:10
the extra 600 a week
42:12
covers this in one week
42:15
so the challenge is i always like to
42:16
talk about challenges that we have
42:18
because no deal is perfect as ferris
42:20
mentioned
42:20
there’s always headaches and hiccups and
42:23
so
42:24
um a lot of the things on our first
42:26
deals their first deal
42:27
um that went wrong was the lender and at
42:30
closing
42:30
you don’t know what you don’t know and i
42:32
think one of the biggest things and the
42:33
biggest reasons why you want to partner
42:35
with someone
42:36
who’s been there before is on the
42:37
lending side of it there are so many
42:39
unknowns with the lender
42:41
they control the deal because they are
42:42
lending you 70 to 80
42:44
of the deal so they can pull out they
42:46
can change terms at any time that they
42:48
really want
42:48
and so you know we communicated a couple
42:51
of things to the lender
42:53
we did not have it in writing they
42:55
changed their mind we actually had to
42:56
switch lenders last minute
42:58
it was very stressful we only had 29
43:00
days to close
43:01
and we ended up closing last day we
43:03
ended up getting a huge discount on the
43:05
on the interest rate however i would not
43:07
want to go through that again
43:08
where um we just did not have a backup
43:12
plan really number one and understand
43:14
the entire lending environment from a to
43:15
z
43:16
uh when changing out those doors to the
43:18
solid wood doors we didn’t think about
43:20
the blind so we actually had to spend a
43:22
little bit
43:22
more money on the blinds because
43:24
everyone could see through with those
43:26
doors that there were no blinds on there
43:27
because the windows were so big
43:29
and that was a challenge also because we
43:31
had to go back in and disturb the
43:32
residents with another
43:34
notice that we were going to go into
43:35
their units and so one of the things you
43:37
want to take into consideration when
43:38
you’re doing value-add is
43:40
how much are you going to be disturbing
43:41
the the residents
43:43
how often and what are the things you
43:45
can do to mitigate that how can you do
43:47
it all in one one shot versus
43:49
in this case we were painting redoing
43:52
railings changing outdoors
43:54
and then doing the blinds and we all did
43:56
them at separate times so at four
43:57
different times
43:58
we were actually disturbing the
43:59
residents and it was one thing that we
44:01
had to
44:02
you know calm the residents down in a
44:04
bit this is their place of of living
44:05
right they live there every day this is
44:07
this is their home and so it’s something
44:09
to take into consideration
44:11
uh won’t go into all these we did have a
44:13
death on the property
44:14
um not a fun thing um at all to deal
44:17
with
44:18
uh he was actually in the property while
44:20
we were painting the property while i
44:22
was on property
44:23
we actually didn’t know because the
44:25
whole property was covered up and
44:27
painted you can’t smell that at that
44:28
point and a couple days later
44:31
he we found him in his unit and so
44:33
obviously that was a challenge
44:35
um kobit 19 has been a challenge
44:38
we’ve worked our way through around it
44:40
but the biggest challenge
44:42
upon sale has been the pre-payment
44:44
penalty and i really want to touch on
44:46
this
44:46
we did a yield maintenance prepayment
44:48
penalty and i think a lot of people over
44:50
the last five years have done yield
44:52
maintenance because you get a 30 to 40
44:54
basis point discount
44:55
in your interest rate and most people
44:58
think about what the returns look like
45:00
today
45:00
not five years from now when you have to
45:02
deal with it so they kick the can
45:04
down the road so we have to do an
45:06
assumption on this deal
45:08
in march our prepayment penalty was 150
45:10
000
45:11
today our prepayment penalty is 375 000
45:14
because with yield maintenance the lower
45:17
the rates
45:18
go the more your prepayment penalty is
45:21
um because essentially yield maintenance
45:22
prepayment penalty is
45:24
paying back all the interest for the
45:26
life of your loan
45:28
so it was a challenge right if we want
45:30
to sell it we can’t do
45:32
a straight um sale because we can’t
45:34
afford to have a four hundred thousand
45:35
dollar prepayment penalty on a 42 unit
45:38
1.65 million dollar purchase it’s 25
45:41
um it’s 40 of the loan um
45:45
so we have to do an assumption which
45:47
means the buyer has to put down
45:49
about 45 percent on this
45:52
it’s it not interest only there’s zero
45:55
interest only so we’ve got about a year
45:56
and a half left on interest only so
45:58
you’ve got to find the perfect buyer in
45:59
this situation
46:01
right now we have them but it was a
46:03
challenge for sure
46:04
to find the right person and we still
46:07
don’t know if we’ll get to the closing
46:08
table and it’s all going to come down to
46:10
this loan essentially because the
46:11
proceeds are very
46:12
limited and during covet if anything
46:15
dips at all then it could really
46:17
screw up the loan so be careful on the
46:19
loan that you sign
46:21
and don’t just think about the entrance
46:25
of getting it closed also think about
46:27
the exit because it can certainly hurt
46:28
you and you may
46:29
you know you may need to hold on to a
46:31
property for five
46:33
six years longer than you anticipated
46:35
because of that yield maintenance
46:36
pre-payment penalty so
46:37
either put it in your plans or you know
46:40
do do another loan right now we look at
46:42
freddie mac floater loans
46:43
it’s a one percent pre or lockout so you
46:46
can’t sell it within one year
46:47
and then after that’s a one percent
46:49
prepayment penalty and i love that
46:51
because
46:51
it’s predictable or go with a step down
46:54
where that’s also predictable
46:56
you may have to pay a couple points more
46:58
but at least you can
46:59
underwrite for it and predict it because
47:01
with the yield maintenance it’s not
47:02
possible
47:03
to understand what that payment is going
47:05
to be even in year five because it
47:06
depends on where the interest rates are
47:09
okay and then sorry i know i’m going
47:11
long here so kick me off pal if i’m
47:13
going too long
47:14
but here are the results i’m almost done
47:16
um all exterior was done within 90 days
47:19
we only spent 170 of the 335 actually
47:22
kate
47:22
spent spencer renovations uh rents on
47:25
upgraded units right now we’re achieving
47:27
year four projected rents
47:29
and the premiums that we did were at
47:31
above year six projected rents
47:34
okay so we’re getting 10 increase on
47:37
upgraded units
47:38
um on projected year one rents and 42 on
47:41
in place rents
47:43
and then for the premium units 22
47:45
increase on projected year one rents
47:47
55 increase on in-place rents
47:52
um do i have one more yes so uh
47:55
currently under contract
47:56
for uh above this year six uh sales
47:59
projected we raised a million in equity
48:02
purchase price is 1.65 it’s under
48:04
contract right now for 2.82
48:06
so about a 900k profit in 15 months
48:09
um and so that’s kind of what we’re
48:11
looking at and hoping to get
48:13
if it doesn’t go through in the sale
48:14
we’re still plenty fine we’re well above
48:16
projections and cash flowing heavily
48:19
i did see a question earlier about why
48:21
we just
48:22
why ferris decided to sell the reason
48:24
why we decided to sell
48:25
and we did take a vote with all our
48:27
investors we got 100 vote
48:29
it’s about for us taking a look at the
48:32
velocity of our investors money right
48:34
now there’s a lot of trapped equity
48:36
because you’re only getting paid for
48:37
what you put into the deal
48:39
you can’t get that equity out unless you
48:41
sell and so
48:42
right now we have the opportunity to
48:44
triple our investors money
48:46
obviously depends on the projections on
48:48
the next deal um
48:50
and selling it at this but triple our
48:51
investors money in the same time frame
48:54
versus doubling
48:55
and so when we find that out and we did
48:57
the math it makes sense to sell here
48:59
get our investors into another deal we
49:01
can add more value
49:02
and then get them a 3x instead of 2x in
49:05
the same timeframe
49:06
so um that’s that’s my presentation
49:11
awesome that was that was great i mean
49:13
it was great but both you guys i think
49:14
you guys both added tons of value inside
49:16
of there but when it talks about like a
49:17
deal from the very beginning to the very
49:19
end
49:19
and especially these being early deals
49:21
that you guys have done
49:22
i think there’s a great amount of great
49:24
amount of info that everybody could
49:26
learn from
49:26
now we did have a ton of questions i
49:29
think we’re going to have a hard time
49:30
getting to all of them
49:31
um but we are going to ask them in sort
49:34
of a bethany’s going to help me ask them
49:35
in in
49:36
a quick fashion so ferris and and uh and
49:39
kyle if you could just answer them in
49:40
sort of a quick fashion
49:42
anything that we don’t get what we’re
49:43
going to try to do is um
49:45
we’re going to try to add some of these
49:46
questions onto our facebook group where
49:49
you know we after the when we post the
49:51
recording of things and that way
49:53
ferris and both kyle are obviously very
49:55
active in our
49:56
in our facebook group so they can answer
49:58
a lot of these questions inside of there
50:00
too as well
50:00
so um but bethany uh
50:04
are you ready for question number one
50:06
yeah we have
50:07
um a couple i’ll group them together a
50:09
little bit and
50:10
and both of the you know questions
50:13
lightning around it kyle let’s do it
50:15
yeah all right all right
50:16
so um managing work remotely is one
50:19
that’s come up a few times from david
50:20
merriger
50:21
and uh tim yuzuboff um
50:25
finding contractors and property
50:27
managers and particularly how
50:28
how does what does that process look
50:29
like how do you how do you vet them how
50:31
do you make those relationships
50:33
um in a new market biggest thing is
50:35
referrals that’s maybe what i’ll say
50:36
because also we’ve done deep value ads
50:38
talk to people that are in that market
50:40
we even partnered with someone that was
50:41
already in that market just so we could
50:42
tap his rolodex right
50:44
and also that gc didn’t even work out so
50:45
we picked a different one but referrals
50:47
and just being out there right we like
50:48
atlanta because
50:49
i could do day trips i’m literally out
50:51
there six 6 30 a.m flight outs atlanta
50:54
8 7 p.m flight back same day so if prom
50:56
happens i get out there so
50:58
yeah same proximity is key i can fly
51:01
in an hour be out there in five to eight
51:03
hours depending if it’s phoenix or
51:05
tucson but we
51:06
we only look in those two markets we
51:07
spend four months picking our
51:09
property management company our
51:10
contractors we’re out there every other
51:12
week pre-covered
51:13
so it’s about being out there and
51:14
managing it and setting up the systems
51:16
up front so that you can manage them on
51:18
the back end don’t set up your systems
51:20
after the fact don’t figure it out after
51:22
the fact
51:22
but it really is about being in the
51:24
market and understanding it
51:26
okay awesome uh next from jason sao
51:29
how do you go about formulating the
51:30
budget if it’s your first property in
51:32
the market and no prior experience what
51:34
kind of tips or
51:35
recommendations would you give for that
51:37
yeah for us
51:38
we relied heavily on uh our property
51:41
management company obviously right but
51:42
also referrals just like ferris said we
51:44
had
51:45
other referrals of people who owned in
51:46
the in the market and we talked to them
51:48
we went and took a look at their
51:49
properties understood you know what type
51:52
of rehabs are doing
51:53
and uh also they they were able to
51:55
supply us with some of the quotes that
51:56
they got so really
51:57
leverage your your network um but also
52:00
our property management company
52:02
completely agree property management
52:03
company talk to people that are in that
52:05
market and
52:06
i mean guys it’s really not that over
52:08
hard don’t overthink it right
52:09
get out there get three bids you’ll know
52:11
roughly where things are going to fall
52:12
out
52:13
and the big thing is and this is
52:14
probably what i learned and probably
52:15
kyle’s learned this too
52:17
have a lot more buffer for these deeper
52:18
value ads having more buffer makes life
52:20
a lot easier
52:21
maybe it’s a little bit less return
52:23
because you have to raise more money but
52:24
it’s ultimately so much
52:25
easier and kind of better to have that
52:27
so
52:29
great okay um ferris did you happen to
52:31
answer the question about selling
52:33
early i think this is yeah so i mean i
52:35
think for us we were
52:36
so kyle mentioned yield maintenance
52:38
because this was an agency debt right
52:40
luckily for us we were in a bridge alone
52:42
so bridge has the benefit of being able
52:44
to make a nice exit where i don’t have
52:45
to pay this huge prepay penalty
52:47
we had two other deals that we have sold
52:48
that did that were agency we had to eat
52:50
the
52:50
huge amount of loss right yeah just to
52:53
basically pay the prepay penalty for
52:55
this deal we didn’t and we were sitting
52:56
on so much equity
52:58
right that ultimately i’m a believer in
53:00
if you’re sitting on a ton of equity
53:02
it’s probably better to sell take that
53:04
money and go put into three other deals
53:06
and so for us i mean it just didn’t make
53:07
sense yes we could have refined and
53:09
probably pulled out maybe close to 100
53:11
investor money
53:12
but that was a deal that really the next
53:14
the next buyer is gonna be able to do
53:15
more than we would right because if we
53:17
think about it we refi we weren’t gonna
53:19
do another reposition or as an expire
53:21
we took it to kind of a stabilized deal
53:23
well the next buyer can now try to do
53:25
that higher end finish
53:26
and so there’s more meat for him and it
53:28
makes it more attractive for him to pay
53:29
up a little bit more too
53:31
nice nice okay um ferris i think this is
53:34
in regard to your second property um i
53:37
think there’s
53:37
mention of a buffer chevelle freeman is
53:40
asking what is a buffer
53:41
probably in terms of the budget yeah
53:43
just the buff for any budget like we
53:44
literally
53:45
so one tip if you’re doing deep value
53:46
ads with your lender be vague
53:48
don’t tell them that you’re going to
53:49
replace 32 appliances say
53:51
interior upgrades don’t tell them you’re
53:53
going to do this and this and this
53:55
because they will try to hold your
53:56
feature the fire for each thing you tell
53:57
them
53:58
so be as big as you can get away with
53:59
like literally if i could i would tell a
54:01
lender i’m going to be 1000
54:02
of upgrades that’s all i’m going to say
54:05
and then they’re going to ask what kind
54:06
of upgrades i’m going to do some
54:07
500 000 interior 400 000 exterior you
54:09
know i kind of try to be as big as i can
54:11
and then on top of that though have a
54:13
big buffer that’s just really a slush
54:15
fun
54:15
right you can move things around okay
54:17
this money we were you know we ran under
54:19
budget on this but ran over budget on
54:21
this and this other thing happened we
54:22
want to do a little bit more here and
54:24
there
54:24
so and is there like a rule of thumb or
54:27
a percentage
54:28
per unit it depends on your type of deal
54:30
right like on a deep value add where you
54:32
have offline units you have a lot of
54:34
unknowns you need more buffer right
54:35
versus a stabilized deal you’re just
54:37
doing interior
54:38
upgrades right there’s a lot more a lot
54:39
less room for error
54:41
so i don’t have a good answer on that
54:43
but you should always have reserves
54:45
right on a you know on a 200 unit
54:47
property have two three hundred thousand
54:48
dollars of reserves
54:49
but that’s different than just buffering
54:51
your budget for upgrades and things
54:54
okay awesome how about um experience
54:57
with average length of tenancy for
54:58
studio one bed i know we kind of
55:00
covered both sides i mean
55:03
i like two three bedroom units right why
55:05
because it’s more family oriented
55:07
right guess what more family-oriented
55:09
properties you create a place that
55:10
people want to stay
55:11
and it’s a lot more work for two people
55:14
to move or three people to move or
55:15
two adults and two kids to move than it
55:18
is for an individual right
55:19
they have a lot more stuff there’s a lot
55:21
more hassle of moving right and
55:23
ultimately if you build a place that
55:25
if you you know not build but if you run
55:27
a place that people like
55:28
being at right they’re gonna stick there
55:30
and guess what your turn costs go down a
55:32
lot
55:32
because turn costs i mean you’re burning
55:34
one two three thousand dollars each time
55:35
someone moves out and someone moves in
55:37
well guess what if you keep them happy
55:39
right spend that money on them they’re
55:41
gonna stay there
55:41
and it’s just easier to do that with
55:43
more family oriented places so
55:45
just less transient
55:48
yeah for me when i first bought the
55:50
property that was one of my biggest
55:51
concerns to be honest with you
55:53
um and we’ve just not seen a lot of
55:55
turnover at our property i think it’s
55:56
one of the things that we got lucky on
55:58
for sure
55:58
but even in our phoenix property are
56:01
we’re 100 occupied in our
56:02
our one bedrooms and so it’s just a
56:05
matter of knowing you’re
56:06
knowing your market but the other thing
56:08
is is that we’re going to build in a
56:09
little bit more
56:10
delinquency we’re going to build in a
56:11
little bit more turnover because we know
56:13
that it is a more of a transient person
56:15
right
56:16
so it’s just about budgeting for it if
56:17
you know what’s coming
56:19
then you can you can maneuver around
56:21
them um
56:22
like fair said having a little bit extra
56:25
buffer in there makes things a lot
56:26
easier
56:27
and that’s just how we always look at is
56:29
okay if we’re going to have more
56:30
studios and one beds we’re going to have
56:32
more of a buffer on economic occupancy
56:34
than we would on something that’s
56:35
majority two and three beds that maybe
56:38
we have washer dryers in
56:39
and that we think more families are
56:40
gonna stay in so it’s about the
56:41
budgeting process and understanding your
56:43
risk
56:44
and then going from there okay awesome
56:47
uh next question from chevelle freeman
56:50
did you offer any type of concession to
56:52
the existing tenants when doing the
56:53
upgrades
56:55
for either of you is that something you
56:57
implemented for me no
56:59
i mean as you can see by my slides and
57:02
people were paying 300
57:04
a month you know these people are well
57:06
below market
57:07
now what we do is we try and communicate
57:09
to them as much as possible
57:11
and look they’re living in a property
57:13
that’s really dilapidated right now
57:15
not cared for and we’re going in there
57:17
and we’re putting in hundreds of
57:18
thousands of dollars to make it safer
57:20
cleaner and a better living place and so
57:22
i think it’s more about communication
57:24
you certainly don’t want to just go in
57:25
there and start ripping stuff out and
57:28
you know being a nuisance but as long as
57:31
you communicate
57:32
what the plan is and why you’re doing it
57:34
how it’s going to improve the property i
57:36
think
57:36
most people are going to want to see
57:39
that so no concessions for the current
57:41
residents
57:43
awesome okay uh ferris had have you sold
57:46
that second deal yet
57:47
no not so okay we will probably have an
57:50
offer here in the next couple weeks
57:52
it is up for sale anyone’s interested
57:55
feel free
57:58
all right next question from omid uh
58:00
with acquisition there are varying
58:01
strategies broker versus direct mail etc
58:04
what do you recommend for someone trying
58:05
to get their first deal on the 20 to 50
58:07
unit range
58:09
or first deal at all
58:13
i would say i would say find partners
58:16
try to do a bigger deal right like your
58:17
life
58:18
you know i mean kyle like bigger deals
58:20
are more enjoyable right maybe from an
58:22
ownership perspective right
58:24
and so i mean i would just say in
58:25
general right definitely try to go to 80
58:28
units or up right just so you have
58:29
full-time staff
58:30
um and it’s just about you know that
58:32
this business is a partnership business
58:34
right get out there talk to people
58:35
figure out
58:36
someone that has similar interests same
58:38
maybe point in life
58:39
looking to do the same things right but
58:41
ultimately it’s
58:42
really you know get to know your brokers
58:44
they control the gates to anything
58:46
even off-market deals are not really
58:47
off-market they’re still a broker
58:49
involved in some capacity
58:50
right and so really work those
58:52
relationships right it’s about
58:53
calling the broker at the right time at
58:55
the right day while they’re the right
58:56
mood and that’s really a lot of what it
58:57
boils down to
58:59
yeah which is why i call brokers every
59:01
other week and some of them hate me for
59:02
it and other ones you know
59:04
i strike up a relationship with but uh
59:06
there’s no right or wrong way on how to
59:08
get your first deal
59:09
i agree with ferris the larger deals are
59:10
easier to manage our 42 unit even though
59:13
it’s done great
59:14
it takes more management on my end we
59:16
have more turnover with the part-time
59:18
staff because it’s part-time
59:20
um so those are just some of the things
59:21
you’re gonna have to be able to manage
59:23
but
59:23
bethany i think got her first deal with
59:25
direct mail
59:26
i got mine through a broker relationship
59:28
calling that person and befriending him
59:30
so there’s no right or wrong way but
59:32
what i would tell you is don’t
59:33
number one stay consistent on what you
59:35
do don’t give up you have to be
59:37
consistent
59:38
you can’t send two direct mail letters
59:39
and expect to have a deal
59:41
and have multiple ways how you’re trying
59:44
to source deals because in the market
59:46
like today
59:46
i don’t know if people know this but
59:48
since covig cap rates at least in
59:49
arizona
59:50
have actually compressed so the market’s
59:52
actually gotten more competitive during
59:54
covid
59:54
so if you only have one source of deal
59:56
flow you’re going to really struggle so
59:59
just get out there and then have as many
60:01
sources as possible
60:05
okay um let’s see can both of you speak
60:08
briefly to
60:09
the structure of financing and maybe
60:11
vetting
60:12
betting lenders so i saw there’s a
60:15
question for me about the loan so
60:17
both of the deals that i presented both
60:18
of those are bridge ones
60:20
right so bridge basically you can get
60:22
higher leverage right they’re really
60:24
meant to be for reposition deals right
60:26
not stabilized deals so we were doing
60:27
deep value-add
60:28
we had a lot of rehab and in both of
60:31
them right the lender holds on to a good
60:32
chunk of the rehab
60:33
and as i’ve grown i’ve learned i prefer
60:36
to actually have
60:37
lender hold less money from that first
60:39
deal that i learned right it’s just such
60:40
a pain remember they’re holding on to
60:42
most of it
60:42
because you’re at their mercy but in
60:44
general right the way it works the
60:45
lender holds on to a good chunk of the
60:47
money you do the upgrades
60:48
you prove to them you do the upgrades
60:49
you submit a request they send someone
60:50
out there to verify
60:52
and then they release that money to you
60:54
and so it’s part of the loan and it’s
60:56
kind of baked into the process
60:57
and so both of those are bridge loans
60:59
and you know like i said
61:01
both with both of we can make exits
61:03
without having to pay really big
61:04
penalties
61:06
yeah we’ve done agency down on both of
61:08
ours
61:10
and you know we had an issue on the
61:11
first deal with a mortgage broker and
61:14
through that relationship i we don’t use
61:16
that person anymore because
61:17
there was a lack of transparency and to
61:20
be honest after looking into it we were
61:22
being taken advantage of because it was
61:24
our first deal
61:24
and i think that can happen more often
61:26
not than not you just don’t know about
61:28
it so
61:28
you know ferris is right when he says
61:30
team up with someone i said it earlier
61:32
you need to have someone who’s gone
61:33
through the loan process
61:34
the stronger your team going into a loan
61:37
the more
61:38
uh the better of a deal you’re going to
61:40
get i think everyone talks about what
61:41
the absolute minimum the lender requires
61:43
but no one says
61:44
that is a minimum and so just having
61:47
barely enough net worth and liquidity
61:49
and just two years of experience you’re
61:51
going to get
61:53
you know a less than average and less
61:55
than beneficial
61:56
loan proceeds and so have a team out
61:58
there that can help you with that
62:00
and understand it from a to z but we do
62:02
use agency debt
62:03
we feel safer with it bridge loans is
62:05
something we’ve taken a look at
62:06
i wouldn’t use them in this environment
62:08
right now but those are more for heavy
62:10
value add we haven’t done those heavy
62:12
value ads yet
62:14
and kyle still doesn’t have that much
62:15
gray hair so yeah
62:17
it’s coming in lolita would tell you
62:19
differently i’ll tell you that
62:21
all right we’ve got about time for like
62:22
one last question for you both uh before
62:24
we get into our
62:24
breakout rooms and and then close up at
62:27
the top of the hour here so
62:29
go ahead go ahead trying to decide if i
62:31
should be selfish and ask my own
62:33
questions i have one for ferris yeah you
62:34
get to ask a question go for bethany
62:37
i’ll catch you later no no that’s okay
62:38
uh let’s see ray richie’s asking how do
62:41
you figure out what upgrades have the
62:42
highest roi
62:45
you you try right you try things go see
62:47
what others are doing
62:48
try it out yourself see what returns
62:51
you’re getting don’t go
62:52
go say i’m gonna go do a hundred of
62:53
these same things before you really try
62:55
one or two or three right it’s all
62:57
piecemeal
62:57
and it’s okay to change as you go right
63:00
and you gotta kind of it’s a balance
63:01
between do you have the budget
63:02
are you getting the returns and can you
63:03
do more of them or not right we have a
63:05
property where we have literally
63:06
i think three hundred thousand dollars
63:08
of interior upgrades that’s been sitting
63:09
for two years because we literally have
63:11
been not been able to get people
63:12
to move out like we’ve been pushing in
63:14
rents and pushing and like we made it a
63:15
lot nicer on the outside but it’s just
63:17
sitting there and so
63:18
that roi has been maybe infinite i guess
63:20
so
63:21
you know you have to try things so for
63:22
that we just start using the money on
63:24
other things to kind of improve
63:25
so yeah i mentioned it earlier your
63:27
business plan is a living breathing
63:29
thing and so it’s not set in stone so
63:31
you’re not gonna just say okay we’re
63:32
gonna spend seven grand a unit
63:33
and that’s all you’re gonna do and just
63:35
stick to that you need to try things do
63:37
we need to spend a little bit more to
63:38
get more rent
63:38
can we spend a little bit less do we
63:40
need to do something different
63:42
i mean you’re always constantly tweaking
63:43
things um just like we did with the
63:45
premium unit right that was not in the
63:47
budget
63:47
uh but we tried one and the roi was
63:50
fantastic
63:51
and because of that we went and did more
63:53
we didn’t do you know 510 at one time so
63:55
you need to test the market on certain
63:57
things and
63:59
as you get more acclimated with your
64:01
markets and have more experience
64:03
you’re going to feel more and more
64:04
confident about that business plan but
64:06
that’s why having the buffer in there
64:07
allows you for that flexibility if you
64:09
don’t
64:10
then you’re kind of limited to your
64:11
business plan and therefore you’re
64:13
you know your entire plan is it’s just
64:15
limited so always build in that little
64:17
buffer for some flexibility
64:20
awesome awesome awesome guys very cool
64:23
very cool so um
64:24
we appreciate that the q a i mean that
64:26
was that was awesome uh
64:27
we are going to move on right now to the
64:30
to uh sort of our last portion we’re
64:32
going to go to breakout rooms
64:34
uh the rooms will be kind of small so
64:35
feel free make sure you introduce
64:36
yourself it’s only going to be
64:38
probably about seven probably seven
64:39
eight minutes so give everybody a chance
64:41
to introduce himself tell you where
64:43
you’re from what you’re doing as far as
64:45
uh investing um and uh and definitely
64:48
pass your
64:48
your contact info back and forth as well
64:51
and before
64:52
you people hop off right thank you guys
64:53
for having on definitely
64:55
glad to have you on and um you know just
64:57
to recap right the next mfm live is in
64:59
two weeks from now
65:00
talking about asset protection right
65:02
learn to protect your wealth so
65:04
it should be a very informative topic
65:05
right a little different but it should
65:07
be really high value
65:08
and learn from you know a professional
65:10
so you know bradley with bradley
65:12
law is going to be speaking about asset
65:13
protection and so definitely look
65:15
forward to seeing you guys there
65:16
but otherwise we’ll see on the breakouts
65:18
okay do we want to come back after that
65:20
ferris or not
65:21
yeah we can try i mean it just yeah
65:22
something will start to fall off so i
65:23
wanted to kind of make sure we mentioned
65:24
it
65:25
okay perfect all right we’ll see in the
65:34
rooms
73:44
oh
73:58
so
74:32
jeff gamer that’s a very nice
74:35
room you’re in
74:43
yes he can’t hear me
74:55
okay just about just about everybody’s
74:57
coming back here
75:12
okay everybody back okay
75:16
uh just wanted to say thank you again uh
75:18
multifamily masters this is mfm live we
75:21
do this every two weeks
75:22
so our next one will be in two weeks on
75:25
monday
75:26
5 30 p.m pacific
75:29
um i don’t know what that time is for
75:32
everybody else’s time but
75:33
uh and again ferris what are we going to
75:37
be talking about that time
75:38
we’re going to be talking about asset
75:40
protection not asset management asset
75:42
protection right
75:43
how do you structure your businesses
75:45
your wealth all these things
75:47
to help kind of protect you in the case
75:50
of lawsuits or people coming after you
75:51
so it should be a really informative
75:53
topic i’m excited
75:54
i think it’s really i’ve been i’ve
75:55
listed a few of them and i think there’s
75:57
just so much to learn in that space i
75:58
think a lot of people
75:59
think of it after the fact so it’d be
76:01
good to kind of get ahead of that
76:02
absolutely and we did we did just put
76:05
out our newsletter so if you
76:06
if you we don’t have your contact
76:07
information you can send an email to
76:10
team multifamilymasters.com
76:13
that’s again team multifamilymasters.com
76:16
we can put you on our
76:17
newsletter list and we also do have our
76:20
mastermind which is starting up pretty
76:21
soon here so if you’re interested in
76:23
joining a mastermind for accountability
76:25
and having a tight group of people to
76:27
work with uh
76:28
feel free to reach us out uh reach out
76:31
to us on
76:32
at uh team multifamilymasters.com as
76:35
well
76:35
okay all right everybody thank you very
76:38
much
76:38
we’ll see you we’ll see you all in two
76:40
weeks okay take care everybody
76:42
thank you thank you thank you bye all
76:45
right
76:45
thank you everyone good night everyone
76:49
good night everybody everyone thank you
76:51
good night thank you
