A Q&A event with questions answered by some of the top multifamily syndicators, questions such as getting started or making the next step to up your game and much much more!
Speakers:
Feras Moussa
Powell Chee
Garrison Gilbert
VIDEO TRANSCRIPTION
00:00
and we’re recording what is this this is
00:03
multi-family masters live what is
00:05
multi-family masters live myself my two
00:07
business partners our entire team
00:10
my name is garrison gilbert my business
00:12
partners ferris moosa palchi
00:14
bethany smith quoi kyle mitchell
00:17
chris collins leone tran and a few other
00:19
people
00:20
we put together multi-family masters
00:22
because we want to help you buy
00:24
apartment buildings we want to spread
00:26
the knowledge
00:28
tons of free content a very diverse
00:31
group of people that come from all
00:33
different angles
00:34
um some of us came through corporate
00:36
america some people such as myself have
00:38
done nothing but
00:39
real estate since college um and we all
00:42
came together and formed
00:44
multifamilymasters.com
00:45
we have 70 plus meetups across the globe
00:47
fantastic
00:48
we are a meet-up organization we have
00:53
a mastermind if you’re looking to learn
00:55
shared networking grow this business if
00:57
you’re looking to
00:58
have a team of people who are doing it
01:01
been there done that and doing it every
01:03
day looking over your shoulder holding
01:05
you accountable
01:06
reach out to one of us um if you are not
01:10
a member of our facebook group
01:12
hop on facebook multifamilymasters.com
01:15
check it out we do this
01:16
every two weeks typically we have a
01:18
guest speaker come on
01:20
kick as much knowledge let me hit admit
01:22
all we have people waiting in the
01:24
waiting room
01:25
um i forget exactly where i was but we
01:28
do this every two weeks
01:30
um normally we have a guest speaker come
01:32
on here and just kick as much
01:33
knowledge as possible tonight we’re
01:34
going to do something a little bit
01:35
different
01:36
my two business partners ferris moosa
01:38
pao chi
01:39
and myself we own manage and control 3
01:42
000 plus apartments
01:44
we have come collectively probably 30
01:47
35 years worth of real estate experience
01:49
we know this business
01:51
inside and out i hope you can stump us
01:53
because tonight we’re going to do a q a
01:56
and just like just like everyone else in
01:58
this business we don’t know the answer
02:01
we know where to find the answer we have
02:03
awesome people around us we’re we’re
02:05
members of some of the biggest
02:06
mastermind groups in the country
02:08
we met each other speaking on a very
02:11
large stage in front of 700 plus people
02:14
several times we just became good
02:15
friends and we decided why not let’s
02:17
grow something big and here we are
02:20
if you catch this recording halfway
02:22
through if you catch this thing on
02:24
facebook
02:25
tomorrow the next day and you want to
02:26
catch it from the beginning check out
02:28
our youtube channel
02:29
multifamilymasters.com
02:31
and that’s all i got um a little bit
02:34
about me
02:34
25 20 years of experience real estate
02:37
1200 plus properties currently into 600
02:40
plus apartments
02:41
uh pal ferris feel free to take it away
02:44
my man
02:45
awesome awesome thanks thanks garrison
02:48
that’s that’s great
02:49
hey i just uh for me my name is powell
02:51
chi um i live in los angeles
02:53
and let’s see you know real estate
02:56
investor
02:57
entrepreneur i like to say entrepreneur
02:59
but i still do have my day job so i
03:01
i like to i have several different side
03:03
hustles and things like that but
03:04
i did still do my day job do all my
03:06
investing around my day job
03:09
i began investing multi-family in 2017
03:12
bought a 40 unit building in
03:14
indianapolis still have that property
03:17
and that was my first one
03:20
since then had probably i jv’d on
03:22
another one and then syndicated in five
03:24
other deals so i’ve been i think in
03:26
seven
03:26
total deals as a general partner as an
03:29
owner
03:29
um in multi-family and i don’t know i
03:32
could say that most recently my exciting
03:34
news is that i got another deal under
03:36
contract right now
03:37
and just did the due diligence for it
03:39
it’s not as multi-family it’s a
03:40
self-storage
03:41
facility so a little different asset
03:43
class
03:44
some similarities and things like that
03:46
but um yeah working on that right now
03:48
and trying to get that one closed
03:49
so um but yeah go ahead first
03:54
all right thanks pal so hello everyone
03:57
so for those of you that don’t know me
03:59
my name is ferris mussa i have a company
04:00
called disrupt
04:01
equity and basically we are a company
04:04
that buys
04:05
you know multi-family assets usually cb
04:07
kind of space and
04:08
we have properties throughout texas and
04:10
georgia currently we’re about
04:12
1500 units we’ve had three deals go full
04:15
full cycle as well and we are vertically
04:17
integrated we have
04:18
disrupt management our in-house
04:19
management company that also does
04:21
third-party management
04:22
that has about 2 000 units under
04:24
management as well so
04:25
definitely love multifamily know all
04:28
aspects of it and you know we’re looking
04:29
to continue to buy continue to grow
04:31
across the board so
04:32
with that said as powell and garrison
04:35
kind of let up right we are here for you
04:36
all right
04:37
networking is a really important part of
04:38
this this whole industry as well as just
04:41
getting educated
04:42
and you know i think there’s a lot of
04:43
education that happens
04:45
right but it might not be pretty
04:48
applicable to you right there may be
04:49
someone that’s talking about debt
04:51
and maybe you have a specific question
04:53
about debt right and so we figured
04:55
rather than bringing on
04:56
kind of someone to you know teach and
04:57
educate we decided you know what let’s
04:59
just go ahead and just do an
05:00
open q and a so to me q and a’s are fun
05:03
right they’re all they get me thinking i
05:04
kind of start to learn how other people
05:06
think
05:06
and you know always happy to try to add
05:08
value so i think that’s kind of why me
05:09
garrison and powell are here
05:11
and we are happy to to help answer your
05:13
question
05:15
so if people have questions let me go
05:16
ahead and ask them in the chat and i’ll
05:18
go ahead and um you know
05:19
maybe moderate and ask them and hey
05:22
frank christianity long time no see man
05:25
just looking at the audience huh hey
05:28
what’s going on ferris how are you
05:29
good
05:32
so yeah we are this is kind of like an
05:36
open and open thing
05:38
right here so feel free to ask your
05:39
questions right right now we’re we just
05:41
kind of left this really open so
05:43
and if people want to ask a question
05:44
that they’re nervous to ask in front of
05:45
everyone you can send it to me directly
05:47
privately and i won’t say who asked it
05:52
right okay i have a question guys
05:56
all right trina you’re up go for it from
05:59
long beach so i have a question um
06:01
someone have that much funds um i’m an
06:03
engineer
06:04
my background and i’m okay with numbers
06:07
but i don’t have any practical
06:08
experience with underwriting details how
06:10
would i be attractive to somebody who’s
06:12
done this before
06:14
how can i get practice with underwriting
06:17
so
06:17
okay i heard two different questions in
06:19
there let me just reframe it and you
06:20
tell me which one you really were asking
06:22
one of the questions i heard was how can
06:24
i be attractive someone how can i help
06:26
add value to a partnership
06:29
the other question is how can i learn to
06:30
underwrite and i guess which one of
06:32
those two were you wondering
06:35
both all right pal
06:38
garrison you guys want to answer one of
06:39
them i’m happy to answer one or both of
06:41
you
06:41
yeah let me take the uh sort of the
06:43
value one um just because i
06:45
answered this question just just about a
06:47
day ago um well
06:49
for me okay this is just kind of where
06:51
i’m coming from trina
06:52
when you’re looking at multi-family it
06:54
is a it is a team sport so there’s a lot
06:56
of different roles that you can take in
06:57
it
06:58
and the three major roles are really
07:01
the acquisition side so really there’s
07:04
going to be somebody who’s got to find
07:05
the deal right he’s got to be somebody
07:06
who finds the deal
07:08
underwrites the deal does the due
07:09
diligence puts it under contract
07:12
has some earnest money to put down
07:13
things like that you got there’s
07:14
somebody that has to do that or a team
07:16
of people need to do that
07:17
right there’s somebody that needs to do
07:19
the second part which is the capital
07:21
right and bringing the money
07:22
to do the deal right so either you have
07:24
money or you can raise capital
07:26
or you know your your network as uh you
07:28
have a network of people that you can
07:30
raise capital from
07:32
and the third part is the operations
07:34
it’s really some
07:35
somebody needs to be the decision maker
07:37
who’s going to decide of
07:38
you know who’s good at budgeting project
07:41
management
07:42
and who’s going to be on this deal for
07:44
five to seven
07:45
however long you know however many years
07:47
you own this deal for right maybe 10
07:49
maybe longer
07:50
um and somebody has to make those
07:52
decisions and be able to you know
07:54
be good at that right and you know
07:56
because they’re going to be the ones
07:57
that everybody’s counting on to to make
07:58
their returns so
07:59
you want to add value in one of those
08:01
three areas acquisitions
08:03
you know there are certain parts of
08:04
there the acquisition side that you can
08:05
add value in
08:07
a second part is you know the capital
08:08
side if you can raise money
08:10
that’s going to be important and the
08:11
third part is really on the on the
08:13
operation side now
08:14
i’ll tell you if it’s me and my and
08:17
where i see most of people come in
08:19
at is either the front two so either the
08:21
acquisition side either you’re good at
08:23
finding deals
08:23
or helping somebody get a deal under
08:25
contract or secondly you can provide
08:28
or you can you have a network where you
08:29
can raise capital really
08:31
to me the third side is a little bit
08:33
more selective and it’s there’s not as
08:35
many openings really for that position
08:37
if you just say
08:38
really i’m good at project management
08:39
and construction and things like that
08:41
it i would tell you honestly in my my
08:44
experience
08:44
there’s not as many there’s just not as
08:46
many opportunities for those for that
08:47
one
08:48
yeah and it’s ultimately about adding
08:49
value right so to recap all the
08:51
different
08:51
roles in any partnership right there is
08:54
sourcing the deal
08:55
there is you know putting the deal
08:58
together there is raising equity there
09:00
is providing the balance sheet there is
09:02
you know helping uh get to closing
09:04
whether it’s
09:05
hard money and you know some of those
09:07
mechanics then there
09:08
is kind of the operation side right it’s
09:11
asset management there could be
09:12
construction management
09:14
and you know kind of helping shepherd
09:16
then so those are probably the main
09:17
roles that we typically see people get
09:19
involved in and then maybe to answer the
09:21
other question right which is how to get
09:23
a good underwriting right my feedback to
09:25
you all is
09:26
you know i mean go understand the basics
09:28
and go put together your own spreadsheet
09:30
i did that many many years ago
09:32
so you can truly understand how all the
09:33
numbers play together
09:35
right from that then you can start to
09:37
understand how different things impact
09:39
different things and honestly it’s an
09:40
experience thing
09:41
there’s a lot of sheets out there and
09:42
you know there’s a lot of ways to get
09:43
educated we
09:44
i think we’ve done we’ve done one
09:46
presentation on underwriting and then
09:48
you know we have investor academy.net
09:50
that we launched as well people
09:52
kind of go through and understand what
09:53
that looks like but you know
09:55
it’s none of it is hard but it’s just a
09:57
lot of math and numbers kind of go
09:59
together and understanding what
10:00
risk there is and what’s not and so you
10:02
know my feedback is go try it a little
10:04
bit then ask us the specific questions
10:05
hey whenever you underwrite x y and z
10:07
happens how do you think about that
10:09
right that’s the really interesting me
10:10
but you first you gotta just know the
10:12
basics
10:13
all right let’s keep going then um
10:16
let’s see hey paris uh hey ferris this
10:19
is a jake patel
10:20
i i have a follow-up question on the
10:22
second part of that uh you guys
10:23
mentioned about the raising fund
10:25
uh my question is uh i’m looking into
10:28
becoming uh
10:29
kp in one of the key principle uh what
10:32
are the advantages and these
10:34
risks in becoming a kp yeah so for those
10:37
who don’t know being kp means key
10:38
principle
10:39
what it really means is basically
10:41
probably jen guess in your situation
10:43
you know you might be helping with the
10:45
balance sheet right and you’re basically
10:46
getting what we call the fanny card or
10:48
freddie card
10:49
and so long story short a lot of people
10:52
want to get a fanny freddie card so next
10:53
whenever you go do a feigning freddie
10:54
loan
10:55
whenever they ask have you done a deal
10:56
before you can say yes right
10:58
and you know that’s great it’s good to
11:01
get involved in a deal but i think
11:03
one thing people gloss over is you are
11:05
attaching yourself to that deal
11:07
don’t go be a kp on a deal that you
11:09
don’t think is going to perform
11:11
right because guess what if you ever if
11:13
that deal doesn’t work out if it ever
11:14
defaults and ever fails
11:16
you’re going to have to say yes i have
11:17
defaulted or i’ve you know
11:19
had a deal go bankrupt but you’re never
11:20
going to be able to do a fanny credit
11:21
deal again and i know i say never you
11:23
know maybe never is never but
11:24
my point is it’s a bad mark so the risk
11:26
is ultimately that that deal doesn’t
11:28
perform
11:28
and it showers your track record right
11:31
that’s the big risk
11:33
okay so is that is that mean that i
11:34
should ask for jp
11:36
uh shares uh for the team i mean
11:39
that’s all in negotiation right okay so
11:42
some people
11:43
you know can carry the deal themselves
11:45
and i’ll give you example if i
11:46
if i had a deal that i can close
11:47
entirely myself right why would i bring
11:49
someone in to be a kp and give them gp
11:51
you know i lose something for nothing
11:53
right arguably
11:54
and so you know it’s more a lot of times
11:57
we’ll bring people in as a favor
11:58
you know maybe for free quote-unquote
12:00
but you know if we’re giving up
12:00
something then it has to add value
12:02
ultimately right
12:05
so yeah all right let’s keep going then
12:09
um so one question from anthony what are
12:11
your thoughts of
12:12
investing in tertiary markets 40 000
12:14
population
12:16
um i guess i’ll answer that one because
12:17
we’ve done we’ve had deals in beaumont
12:19
texas
12:19
about an hour east of houston we like
12:21
tertiary markets right there are some
12:23
downsides to
12:24
the tertiary markets namely you have
12:26
fewer vendor pools fewer
12:28
you know a job pool in general right but
12:31
i mean you can buy
12:32
good deals good price points right and
12:34
that’s really ultimately where you can
12:35
find true
12:36
value ideals right uh and i mean by that
12:39
it’s like direct to seller
12:41
type of situations right we’re same
12:43
person’s owner for 20 30 years
12:44
usually in a primary market those
12:46
markets are so hot that people tend to
12:48
cycle deals but in tertiary markets i’ve
12:50
seen it just kind of
12:51
or you can find those types of
12:52
opportunities so i mean ultimately
12:54
you know a deal can be had anywhere
12:56
right even if you’re buying in
12:58
you know name your city right
13:01
even uh detroit i mean you know you can
13:03
still find opportunities there it’s
13:04
ultimately about the right
13:05
price points and the right level of risk
13:10
all right let’s see so next question i’m
13:11
gonna ask this one to
13:13
garrison if you’ve got a hundred
13:14
thousand to invest and can probably get
13:16
another 500 000 from others
13:18
what size of a deal would you go after
13:20
unit size in dollar amounts
13:23
75 units minimum probably 100 units
13:26
minimum i’m going to look somewhere in
13:27
the southeast corridor
13:29
florida georgia hot markets good markets
13:32
ferris is in a lot of those markets
13:34
actually
13:35
um but i’m going to look for something
13:36
like that and really if i have that kind
13:39
of money
13:39
i’m probably not going to use that money
13:41
for a deal because i’m going to go raise
13:42
capital from
13:43
other people opm um that’s what i would
13:47
do
13:48
something in this situation he’s saying
13:49
he can raise 500 000 from others so
13:51
okay 600 000 total right and 100 100 is
13:55
his right
13:56
yeah the 100 is his the 100 that’s yours
13:59
i would let that sit in your back pocket
14:00
save that for a rainy day
14:02
um the other 500 i would go look for a a
14:05
deal and i would take that 500 and
14:06
probably raise another couple million on
14:08
top of it
14:09
if you can’t yeah if you can’t that’s
14:10
going to get you into about a two
14:11
million dollar deal
14:12
right yeah if you want to know a price
14:14
point then unit sizes are irrelevant
14:16
right it’s ultimately
14:17
you know leveraged you’re not gonna be
14:18
able to get above 2 million yeah so if
14:20
you don’t go raise capital from other
14:21
people 2 million
14:22
deal 100 000 a door you’re looking at 20
14:25
apartments or so but i want to be at
14:26
that 100 unit
14:28
mark or something like that so i’m gonna
14:29
have to raise more capital so that means
14:30
i’m gonna have to
14:31
align myself with other people and
14:33
that’s what multi-family masters in this
14:35
this networking in the breakout rooms
14:36
and surrounding yourself with good
14:38
people
14:38
and and uh networking in this business
14:40
is all about
14:42
so i agree i would say you know just
14:44
something i do really quick at back of
14:45
the napkin and i think
14:46
it helped me when i started was like
14:48
when you know what amount you have so if
14:50
you know
14:50
like 500 000 is probably your amount
14:52
there just free
14:53
then i divide that by i divide that
14:56
number by
14:57
0.4 okay and that’s because i generally
15:00
see like
15:01
hey you’re going to need to put down 20
15:04
towards at least 20 percent towards the
15:06
down payment and then you need to have
15:07
some money for the construction or any
15:09
kind of capex really so
15:11
i generally use a 0.4 is what i use um
15:14
and just to say like that’ll give me an
15:15
idea of what my top-end
15:17
max would be for buying a property and
15:19
for that one it would be like
15:20
1.25 million to have enough
15:23
for both the capex and the down payment
15:25
so that’s what i would shoot for
15:27
something like a property that’s yeah
15:29
it’s not point four’s too conservative
15:30
because you should be able to get some
15:31
of that vacancy loan if it’s a decent
15:33
deal so but yeah
15:34
you know it very really varies but
15:35
that’s a good way to look at it right
15:37
um but garrison brought up a good point
15:39
that i kind of want to reiterate
15:41
right i mean let’s even let’s just say
15:42
it is a 1.5 million
15:44
property right and you know let’s say
15:47
right now
15:47
the on the low end right you can get
15:49
deals for 50 000 to get it that’s a 30
15:51
unit property
15:52
all right back to garrison’s point how
15:53
about you find two other friends that
15:54
can do the same thing
15:56
right you guys get a 90 unit property
15:58
problem with a 30 in a property as
15:59
bethenny can attest to
16:01
right it doesn’t scale as well so it’s
16:03
kind of that weird
16:04
mix between not having full-time
16:06
dedicated staff and needing to rely on
16:08
kind of staff augmentation from property
16:10
management companies right and so
16:12
you know i highly recommend getting a
16:14
little bit bigger right we have
16:15
we have a 90 unit deal one person in one
16:18
person out it works well that deal’s a
16:19
killer right
16:20
you know maybe you can get away with 85
16:22
80. but anything smaller
16:24
your your staff is going to eat all your
16:26
costs right and so it doesn’t make sense
16:28
to really
16:29
have full-time staff for smaller but
16:30
then at the same time you know
16:33
you’re you’re not having kind of
16:34
economies of scale
16:37
all right let’s keep going then so
16:39
here’s a really important question
16:40
how can i get invited to one of
16:42
garrison’s parties
16:44
is that seriously is that seriously a
16:46
question mark yeah
16:48
mark tessa hey mark you know what shoot
16:50
me a private message i’m having a huge
16:52
party next weekend a bartender big dj
16:55
i invited pal ferris and bethany they
16:56
all said no i invited wassam he said no
17:00
there’s a couple dudes on this call that
17:01
are coming couple girls in the fall that
17:03
are coming
17:03
anton matli’s coming he doesn’t know it
17:06
yet
17:06
but he’s coming hey that’s amazing
17:10
that’s the only reason why i’m here i
17:11
just wanted to be invited to one of
17:12
those
17:13
amazing parties seriously this is the
17:15
only way to get the invite i mean anyone
17:16
that’s been there has been to one of
17:17
these mfm lives or
17:19
there are nobody so we’ll call it all in
17:21
all seriousness man if you want to party
17:22
this weekend shoot me a private message
17:24
my cell phone is 4-1
17:25
just kidding i’m not going to give that
17:26
out on here message my man
17:29
well no i’ve been uh you know i’ve been
17:31
trying to get in touch with you
17:32
and i figured probably better to get
17:35
into one of these uh
17:36
uh zoom me um but
17:40
yeah i’m just beginning i’m just trying
17:42
to uh get the courage to get out there
17:44
and
17:44
invest in something i’ve had some
17:46
opportunities in the past
17:48
uh and they seemed a little bit shady it
17:50
was a
17:51
an opportunity to invest in somebody
17:53
else that
17:55
is kind of uh reverse
17:58
um i guess hard money loaning so he’s
18:02
going around getting
18:03
money from people and then he’s paying
18:04
you a percentage on the
18:06
uh investment that you’re making yeah i
18:08
just didn’t know him well
18:10
but um you know i have some friends that
18:12
want to put together some money and we
18:14
just uh
18:14
i’m the only one that is being proactive
18:17
and trying to uh
18:18
take the first steps i guess where’s
18:20
your home market at
18:23
well i live in baltimore maryland so oh
18:25
you better come over this guy’s next
18:27
door man easy easy
18:28
invite to your party uh so i have uh
18:30
here man
18:31
i’ve done a few flips i uh invested in a
18:34
um
18:35
um that’s how i started and then i
18:37
invested in
18:38
um just a town home as a rental
18:41
and ended up just getting rid of that
18:42
after a few years um
18:44
taking a little break and trying to
18:47
get into one of these multi-family deals
18:50
i think it would be
18:51
it would be great but i just want to
18:52
learn a little more that’s all
18:54
come hang out this weekend seriously
18:55
shoot me a private message i’ll look for
18:57
it tonight
18:58
yeah that’ll be awesome yep i’m having a
19:00
great gatsby party you gotta dress up
19:01
you gotta look a little fancy though
19:03
oh halloween or just like a black tie i
19:06
don’t know
19:06
halloween man all right we expect to see
19:08
you guys post a picture of you guys in
19:09
outfits
19:10
all right absolutely hold on i have a
19:13
question for powell
19:15
why the hell are you rocking a white
19:16
claw t-shirt man
19:18
man like we were talking before and i i
19:20
got these t-shirts for free so i’m just
19:22
like hey man it’s a
19:23
t-shirt for free that’s what i get so
19:25
that’s why i rolled the white cloth i
19:26
don’t even drink so i mean i drink a
19:28
little bit so
19:29
um but he’ll rep anybody that’ll give
19:31
him a t-shirt all right yeah you got me
19:32
a t-shirt i’ll
19:33
wear your t-shirt man it’s easy to watch
19:35
it’s easy to buy
19:36
uh pal’s loyalty i see yeah this is
19:39
where like anton you know
19:40
get him ten shirts
19:44
all right uh let’s see if going so this
19:46
next question is for pal
19:47
tell us about self storage deal how why
19:50
did you transition to it from
19:51
multi-family
19:52
what did underwriting process look like
19:54
all right let’s try to keep it brief
19:56
because there’s like 20 other questions
19:57
now
19:57
yeah sure sure i’ll keep it brief and
19:59
everything if you if you want more
20:00
information just feel free to reach out
20:02
to me you can reach out to me directly
20:03
and everything but
20:04
um so uh basically
20:08
i was i knew i wasn’t going to buy any
20:09
multi-family me personally i was like
20:10
i’m not going to buy any multi-family
20:12
once covet hit
20:12
for at least six months so i knew that
20:14
well i was like okay what am i going to
20:16
do during six months so i learned
20:18
basically my secondary asset class it
20:20
was it always been self storage
20:21
so i i learned and poured a lot more
20:24
time into it
20:24
got some coaching uh did the whole thing
20:27
about you know learning it learning how
20:28
to underwrite it and everything
20:30
and then went out and sourced deals and
20:32
basically found one right
20:34
so that that’s the reason why i just
20:36
knew i wasn’t going to buy any
20:37
multi-family during this time
20:39
um now for uh let’s see i guess the
20:43
other question was how do i
20:44
let’s see underwrite it i would tell you
20:46
one of the major things that’s
20:48
different with with self storage and
20:50
multifamily is that
20:51
self storage looks at square uh square
20:54
footage
20:54
rentable square footage per person in a
20:58
geographic area so like a three mile or
21:00
a five mile radius
21:02
right that’s really one of the most
21:03
important things to know so what’s
21:05
what that means is like how much
21:06
competition do you have
21:08
right and so you need to know that uh
21:10
because you can find an off market deal
21:13
or something nobody knows about
21:14
but truthfully if there’s a ton of
21:16
competition there it may not be as good
21:17
of a deal as you think whereas in
21:18
multifamily
21:19
you got that inside track on a on a you
21:22
know
21:22
direct to seller thing that could be
21:24
great and you know nobody else knows
21:26
about it and you know that you’re gonna
21:27
you’re gonna close on it could be a
21:28
great deal
21:29
but in in self storage it’s not really
21:31
the same really so
21:33
knowing that rentable square foot per
21:36
person
21:36
in that area that specific geographic
21:38
area five mile three mile radius is
21:40
super important
21:42
hey pal ferris question for you two real
21:44
quick do you want to do a breakdown
21:45
session right now and then come back and
21:47
continue with the q and a mix it up a
21:48
little bit or you want to keep on going
21:49
with this we have 105 people on here
21:51
right now this is a good night that’s a
21:52
good question
21:53
no here let’s do three more questions
21:54
i’ll do a 10 minute breakout and then
21:56
we’ll bring people back how about that
21:58
all right we’ll do we’ll do a six minute
21:59
breakdown in three minutes how’s that
22:01
i’ll negotiate with you all right let’s
22:03
see so uh
22:05
i didn’t quite understand this question
22:06
in cal what is the impact of the gig
22:08
slash independent on
22:09
the real estate field i guess it means
22:13
there’s a there’s a debate going on
22:14
between converting gig employees that
22:16
are doing
22:17
uh driving for lyft uber uber eats
22:21
and all these companies out there that
22:23
are doing good work
22:24
that are getting converted into
22:26
employees
22:27
and there’s a fight now from dry you
22:30
know lyft and uber and all these guys
22:31
saying no let’s put a new prop in there
22:32
that says
22:33
our drivers and our employees or our
22:36
workers
22:37
are exempted so i don’t know at least
22:39
that’s the debate that’s going on in
22:40
california on a big employee yeah then
22:42
but i guess i’d understand the question
22:43
though in cal i think it says it’s just
22:44
cal but i think it means california
22:46
what is the impact um yeah i mean it
22:48
just it
22:49
it’s no different than any job growth
22:50
right i mean if they’re making more
22:51
money they have money to spend
22:54
um let’s keep going all right here’s
22:57
probably a good question
22:59
to ask from bethany that we can kind of
23:00
wrap up with which is for each of you
23:02
what does underwriting process look like
23:04
for you
23:05
do you do some complicated formula right
23:07
away for each deal or
23:09
you find or is there a simple back of
23:10
the napkin equation you use
23:12
for each of you what’s on your christmas
23:13
list all right
23:17
um who wants to go first or i’ll go
23:18
first
23:20
go for it all right so for us
23:23
you know i do do an initial sniff test
23:25
right and really my very simple sniff
23:27
test it’s
23:27
very similar to what you guys do in the
23:29
residential space right
23:31
where if you came from residential
23:33
there’s the one percent rule so for me
23:34
if i’m buying an apartment complex and
23:36
let’s say the broker tells me you know
23:38
i run the math the broker wants 90 000 a
23:40
door for it right
23:41
that deal is not renting on average or i
23:44
can get it to
23:45
above 900 right one percent of 90 000
23:48
then i mean it’s probably not going to
23:50
cash flow right and that’s a very high
23:51
level rule of thumb
23:52
but i mean a perfect example came in
23:54
today and over the weekend from a deal
23:56
that brokers pushing my way
23:57
and they want 115 000 a door for it but
24:00
the average rent in place is like 900
24:02
right that’s a big spread i know that
24:04
deal unless i can miraculously get the
24:06
rents closer to 1200
24:07
i don’t think it’s gonna work right
24:08
that’s my very preliminary background uh
24:10
back in the napkin
24:12
now once i kind of do that then i
24:13
quickly go through and you know run it
24:15
through our pipeline for any deal that
24:16
makes sense
24:17
we have a team of we have a pretty
24:19
robust pipeline we keep track of every
24:20
single deal
24:21
hey real quick real quick ferris i hit
24:23
that button a little bit quick for the
24:24
uh breakout rooms we’re coming right
24:26
back we’re gonna continue with the q a
24:28
this is only three four minutes and
24:29
we’ll be right back
24:35
all right filtering back in here huh
24:40
let’s see how many people we lost after
24:42
the breakout rooms
24:44
i just kind of want to mix it up a
24:45
little bit this time into a breakout
24:47
room halfway through
24:48
just because we’re all about meet-ups
24:50
and meeting people and networking
24:52
yeah that was good i met a couple people
24:54
that i i
24:55
didn’t get a chance to meet before so
24:57
you scared nine people away garrison we
24:59
were at like 99 people
25:01
i think we’re at 102 is when i when i
25:03
hit the click maybe yeah yeah
25:04
i’m cool with that whatever oh god
25:07
awesome what’d you guys think of the
25:08
networking portion
25:09
meet anyone interesting yeah it’s good
25:13
good people they’re always great love
25:15
them awesome yeah
25:17
and we’ll do again at the end as well
25:18
right we’re just gonna we wanted to
25:19
break it up a little bit
25:20
and with uh with our structure so we’ll
25:22
do it again at the end and get a chance
25:23
to meet some other people but
25:25
you know that’s that’s great part of it
25:26
is you’ve got to get a chance to network
25:28
with people you don’t know
25:29
pass your information back and forth uh
25:31
find out who’s investing in your area
25:33
things like that
25:34
yeah so uh from here on out we’ll do
25:36
another q a session
25:37
um and then we’ll do another small
25:39
breakdown session and i’ll let this
25:40
channel open for everybody and anybody
25:42
who wants to
25:43
hang out and just talk and get to know
25:45
one another and uh
25:46
just since we’re halfway through if
25:47
you’re watching this on facebook live
25:49
and you want to be part of this
25:50
thing in the networking portion of it
25:52
make sure you hit the the
25:54
link in the comments below hit the zoom
25:56
link register
25:57
we do this every two weeks we are
25:59
multifamilymasters.com if you’re not a
26:01
member of our facebook page
26:03
hit the little search bar up top type in
26:06
multifamilymasters.com and join that
26:07
facebook group i saw today we just hit
26:09
5800 members
26:11
our immediate goal was 10 000. our
26:13
long-term goal is 50 000.
26:16
um multifamily masters mastermind if
26:19
you’re interested in learning sharing
26:20
networking growing this business
26:22
there’s a lot of people on this call who
26:24
i saw that are on our mastermind
26:26
um we’re all about holding you
26:28
accountable we’re all about
26:30
teaching you the ins and outs of this
26:32
business simply because we want to
26:33
partner with you
26:34
and we want to partner with people who
26:36
know what they’re doing so if you think
26:37
you’re going to be good at go finding
26:38
deals or analyzing deals or doing
26:40
whatever you can do to add value to us
26:43
we want to partner with you reach out to
26:44
ferris power myself
26:46
bethany um et cetera et cetera et cetera
26:49
let’s rock and roll go ahead
26:54
so then um i guess let’s so the other
26:56
part of bethany’s question that we
26:57
didn’t answer is what’s on your
26:58
christmas list
26:59
for me getting another deal under
27:02
contract we’ve been looking at a lot of
27:04
deals making a lot of offers just right
27:05
now
27:06
the market’s kind of weird um we’re
27:07
looking at a lot nicer deals right the
27:09
price points between c and dates have
27:10
really
27:11
compressed and you know you can get i’d
27:14
rather pay up another 15 000 for a much
27:15
nicer asset maybe a little bit less
27:17
return but much
27:18
better long-term outlook so that’s on my
27:20
christmas list
27:23
i like that related he wants that
27:27
i want a bb gun you you want a bb gun
27:30
yep i just want a bb gun i’ll get your
27:35
is that jeff greenberg i think i hear
27:36
jeff greenberg
27:38
that’s why garrison has glasses that was
27:41
that wasn’t me okay jeff hey jeff i uh i
27:44
invited you into the
27:46
multi-family masters mastermind group
27:47
and you still haven’t accepted it
27:49
oh yeah what’s up when did i’ll have to
27:52
take a look and uh see
27:54
i don’t know that i’ve seen that he’ll
27:55
put you on his calendar don’t worry
27:58
you’re on this calendar my calendar pal
28:01
what’s on your
28:02
uh christmas list my man christmas gift
28:04
what can i get you
28:05
you know what i just saw this thing and
28:07
it’s kind of a weird thing but it’s like
28:09
there’s this back brace that i was like
28:11
i want to get like this back brace
28:13
and it’s like it has this belt on it it
28:15
was like 60 bucks and i was like
28:17
i kind of want to get this back right so
28:18
this has this magnetic thing that
28:20
supposed to help your you know your
28:21
posture
28:22
and your blood flow and everything so i
28:23
was like kind of looks kind of cool also
28:26
i was like when i when i closed my deal
28:27
i was like i’m going to get that thing
28:29
you know that’s just this is where
28:30
bethany’s taking notes so you know what
28:31
it gets for christmas
28:33
house is a lot easier than mine bethany
28:35
yeah yeah
28:38
all right bethany bethany smith what do
28:40
you want you’re part of our team what do
28:41
you want for christmas
28:44
uh stabilized binoculars so i can whale
28:47
watch and stuff
28:49
but they’re stabilized what kind of
28:51
price point are we looking at may i have
28:54
like a 150 200 bucks done send me the
28:57
link
28:58
nice if anyone wants christmas gifts
29:00
send them to garrison
29:01
on amazon he’ll take it he’ll get them
29:03
for you guys so
29:05
i’m going jv agreements for anyone who
29:07
wants to buy christmas gifts with me
29:11
all right let’s see let’s keep going
29:13
then so um
29:14
all right next question uh how are you
29:18
all able to discover your best off
29:19
market deals
29:20
all right i’m gonna answer this one
29:22
because i want to say something i think
29:24
off market
29:25
is totally
29:28
um hey mark i think uh you’re getting
29:32
some feedback
29:34
i invited this guy to my halloween party
29:36
and here he goes
29:37
[Laughter]
29:38
all right let me keep going so basically
29:40
everyone talks about off-market deals
29:42
like it’s the best thing since sliced
29:43
bread
29:43
to me that’s really nonsense almost
29:45
every deal that is of
29:47
and i’m just talking about bigger deals
29:48
right so let me caveat 80 units and
29:50
above
29:50
anything 80 units and above is going to
29:52
go through a broker right
29:54
right now it’s a hot market as a seller
29:56
it’d be
29:57
irresponsible for me not to use a broker
30:00
right because they are going to get your
30:01
top dollar and their fee is miniscule
30:03
terms whether what they can get you they
30:04
know who’s buying who’s not right
30:06
now that said there is such a thing
30:10
as essentially or you’re getting the
30:12
first look from the broker right so
30:14
it’s not being blasted to the full
30:16
market right
30:17
but the brokers may be going to a
30:19
handful of people and showing them a
30:21
deal
30:22
now you know we’ve sold a deal that way
30:25
we have another deal right now that
30:26
we’re selling that way right where we
30:27
told the broker hey
30:28
here’s our price point get your best
30:30
guys and let’s see if we get a deal done
30:31
right where they’re going to go through
30:32
and give you that referral so you want
30:34
to be on the broker’s shortlist is what
30:36
they call it right
30:37
that said to give an example of a deal
30:39
that we did
30:40
do something like that on we had a deal
30:42
in atlanta that we were buying
30:44
and we were doing due diligence on site
30:46
before we left
30:47
we asked the broker what else do you
30:49
have coming up right and he said well i
30:51
have another deal
30:52
that we got the exclusive on that we’re
30:53
going to market in four weeks right they
30:55
were still doing all the stuff
30:56
but he gave us you know he mentioned it
30:58
right he told us about it we went
31:00
if i remember before we flew back to
31:01
houston on our way back to the airport
31:03
we stopped by the property
31:04
toward it you know drove it and on that
31:06
airplane flight back we underwrote the
31:08
deal and we were like this is a good
31:10
deal
31:10
right and basically we were the only
31:11
ones to see that deal and that’s a
31:13
beautiful deal i mean we’re still in it
31:15
today i love that deal right so
31:16
it’s it’s talking to them at the right
31:20
time
31:20
right place and i mean literally even
31:22
brokers that i know really well if i
31:24
call them on the right day
31:25
the right time they’re going to remember
31:27
oh this deal just blew up hey it’s a
31:28
good fit for ferris
31:29
right so situations like that that you
31:31
try to create
31:33
thanks no problem let’s keep going then
31:37
um
31:37
we have a deal under contract 295 doors
31:39
southern illinois
31:41
the deal is going sideways because they
31:42
have the appraisal the as is value is
31:45
good the appraiser
31:46
screwed the stabilized value what he did
31:48
was average the current in place for
31:50
rents and put the occupancy at 90
31:52
he also put the stabilized cap at 10.5
31:54
wow what can we do to
31:56
challenge this uh the most recent lease
31:58
is 125 above the average rent he used
32:01
honestly a couple of things i mean this
32:03
is where a
32:05
talk to the lender and say the
32:06
suppressor’s logic doesn’t make sense
32:07
because you’re right if
32:08
the recent leases are higher and that
32:10
cap sounds way too high
32:12
you could definitely challenge it this
32:13
is where having a good mortgage broker
32:15
helps as well right that’s part of their
32:17
role
32:17
to work closely with the appraiser and
32:19
figure out and kind of figure out where
32:21
it’s going to land before it before it
32:22
officially lands that way so that way
32:23
you can kind of influence them right and
32:25
so
32:25
really think through that and figure out
32:27
your team but i mean my feedback to you
32:28
is yeah
32:29
either find another lender with a
32:30
different appraiser or talk to the
32:32
lender that you have and talk through it
32:34
without a project that doesn’t sound
32:35
right
32:37
um let’s see another question i spoke to
32:40
a lender
32:41
for a multi-family today in addition to
32:43
the down payment which could be thirty
32:44
percent
32:45
often lenders want liquid cash of up to
32:47
twenty percent of purchase price
32:48
this means we need over fifty percent of
32:50
the property value in cash
32:52
this is in addition to reserves put per
32:54
unit
32:55
that seems like a lot of cash needed we
32:57
were looking for a 1.5 2 million
32:59
property but didn’t expect to need
33:00
almost 1 million cash to do this
33:02
does this sound right how much cash
33:04
should we expect
33:05
all in for a purchase of a commercial
33:08
real estate
33:09
do you guys want to answer that one or
33:11
want me to is anton still on here let
33:13
antoine answer that
33:16
i’m old all right anytime you want to
33:18
answer that one
33:19
sure uh obviously it all depends on the
33:22
property
33:24
right every property is a little bit
33:25
different but
33:27
for that size of a deal uh it’s only
33:30
unusual that the
33:32
post closing liquidity requirement is at
33:34
20 percent usually it’s around 10
33:36
percent
33:38
so the question is why did they require
33:41
this
33:42
is it such a hairy deal or are the
33:44
sponsors relatively weak from a balance
33:47
sheet perspective
33:49
but as a general rule you should expect
33:51
10 percent of
33:52
liquidity post-closing after your down
33:54
payment and
33:56
all your closing costs yeah so so
33:59
antonio’s points post closing
34:01
and again you can have other guys that
34:02
sign on the deal with you
34:04
right they can bring that to the table
34:06
so just keep that in mind that’s how we
34:08
do real quick i’ll throw a plug out
34:10
there for antoine
34:11
um anyone who is looking for a
34:13
multi-family lender if you’re doing a
34:15
decent sized deal one two million
34:16
dollars or more
34:18
definitely reach out to anton he’s who i
34:20
would use for all of my financing great
34:22
guy wealth of knowledge
34:23
one hundred and ten percent and john
34:26
garrison
34:26
anton feel free to put your website your
34:29
contact information anything you need in
34:30
the chat below
34:31
uh hopefully these guys don’t blow up
34:33
your phone or blow you up just with uh
34:35
generic questions but if you have a
34:37
serious deal and you’re looking for some
34:38
serious financing
34:39
this dude is a wealth of information and
34:42
not the stereotype but he does fit the
34:44
stereotype of being a swiss banker so
34:45
we’ll leave it at that
34:49
all right uh let’s see uh um next
34:52
question
34:53
as there are more syndicators and lps
34:55
becoming more sophisticated
34:56
do you expect fees and gp back in
34:59
percentages to compress
35:00
is there an advantage for a gp to lower
35:02
fees ahead of others
35:05
um i’ll answer that one really quickly
35:06
do i expect it to compress
35:08
probably not because at the end of the
35:09
day being a gp there’s a lot of work
35:11
needed a lot of partners there just
35:12
needs to be enough there
35:13
otherwise people won’t do it right but
35:16
that said a good gp
35:17
and i’ll be the first to say this you
35:19
know if a deal is not going to work out
35:21
i’d be the first one to give up my
35:23
equity position to make sure you’re
35:24
investing full
35:25
right if you’re a good gdp for the long
35:26
run it’s all about making sure your
35:28
investors
35:29
are whole and more importantly make
35:30
money right and so
35:32
you know if that if that requires giving
35:34
up you know a piece of your pie
35:36
by all means right you should be in it
35:37
for the long haul right you know i tell
35:39
you i’m not in it to do one or two deals
35:41
i’m in it to do 100 deals
35:42
how do i maintain that track record that
35:44
trust and so
35:45
but i guess it’s all gp specific so not
35:47
every gp has that philosophy i’m
35:49
guessing so
35:50
um let’s keep going
35:53
um and i kind of answered the off market
35:56
question
35:57
um question is i guess to me ferris do
36:00
you guys do 506 b
36:02
506 c or both uh the answer is we’ve
36:04
done both
36:05
right for those that don’t know 506 b
36:07
means that you can take accredited and
36:09
sophisticated investors
36:10
right and they can self-accredit that’s
36:13
an important point i’ll say why
36:14
because the 506 c offerings means that i
36:17
can only take
36:18
accredited investors and
36:21
they have to do third party
36:23
accreditation so meeting an investor
36:24
can’t tell me he is accredited he has to
36:26
actually prove it to a third party
36:28
that then tells me to and the problem
36:30
with that is from our experience is
36:32
now i have guys that are worth 20 30
36:34
million dollars of cash sitting in the
36:36
bank account
36:36
and they can’t just show me that to
36:39
prove that they’re accredited right
36:40
they have to go through the hassle of
36:41
getting a third-party accreditation so
36:43
it adds a little bit more friction to
36:44
investors
36:45
we’ve done both what’s nice about a 506c
36:47
is you’re allowed to market it right
36:48
if i had a 506b offering right now i
36:51
can’t share that with you all right here
36:52
right now i have to have a pre-existing
36:54
relationship but in the 506 c i can
36:56
blast it i can get ads i can get a
36:58
billboard on the highway so
36:59
those are the differences it’s important
37:00
for you guys to all understand that
37:02
um let’s see uh
37:06
your next question um i thought you
37:08
needed to invest your money in the deal
37:09
to have skin in the game
37:11
that’s from david hutchins who wants to
37:12
answer that one
37:15
sometimes yes most of the time no
37:18
yeah and as an lp it’s good to ask the
37:21
gp are they investing what they’re
37:22
investing right
37:23
i do like the idea of having my gps if
37:26
i’m an investor
37:28
right i think it’s important for gps to
37:29
have skin in the game right and this is
37:31
where the deal structure also makes a
37:32
big difference right
37:33
are the investors making money before
37:35
the gp or not right understand that
37:39
and there’s and there’s ways to look at
37:40
and hide where your money’s coming from
37:42
a lot of times
37:43
gps will only put in part of their
37:45
acquisition fee so really it’s not any
37:47
of their real money but it looks like
37:49
it’s their real money so that kind of
37:50
might throw you for a loop a little bit
37:54
let’s keep going then um seller
37:57
financing questions can you speak on the
37:59
process
38:00
up to closing besides buyers and sellers
38:04
who else is typically involved in the
38:05
process example attorney
38:08
title company understanding it depends
38:10
on a number of factors
38:11
as the best response what are the
38:12
typical terms you’ve seen or heard
38:14
sellers agree to
38:15
all right there’s a lot of questions
38:16
there first question is who is typically
38:18
on your team garrison whenever you’re
38:21
buying
38:22
what what are the different roles and
38:24
people on your team
38:25
ah my team i have a guy named jeff who
38:28
is an absolute killer at analyzing deals
38:31
if he says no to it i’m out if he says
38:33
yes to it i trust him wholeheartedly
38:36
we have another guy named brent who is
38:38
specifically looking for deals and
38:40
contacting brokers
38:41
every day this dude is a machine on the
38:43
phone he loves to talk to brokers and
38:45
he’s done really well at it
38:47
um and then we have another two or three
38:48
guys on our team that are just strictly
38:50
making the deal happen we’re constantly
38:54
let me rephrase the question actually
38:55
what professionals not that those guys
38:57
aren’t professional but i mean outside
38:58
of the gp team right maybe it’s the
39:00
question i’m asking
39:01
all right go ahead you can answer it man
39:04
um so basically you know let’s talk
39:05
through right so usually you know if you
39:06
have a mortgage broker like antonio
39:08
mentioned
39:08
right you have an attorney right and you
39:10
have two different types of attorneys
39:12
right this is important
39:13
to know you typically have a syndication
39:14
attorney who’s making sure you’re doing
39:16
all the sec
39:16
paperwork compliant correctly etc and
39:19
then you have a contract attorney who’s
39:21
helping with the contract right
39:22
you have the psa you have lender
39:24
documents etc
39:25
a lot of times that attorney the same
39:27
attorney can do both but just understand
39:29
there’s two different roles
39:30
um and this is how you have an insurance
39:32
broker right who’s helping make sure you
39:34
get the insurance
39:34
you have your lender right a mortgage
39:36
broker is helping tell you who’s the
39:38
best lender options and what that looks
39:40
like and helping shepherd it
39:41
the lender is the person that’s actually
39:43
providing the money right
39:44
that’s an important part and the lender
39:46
has a bunch of their people too they
39:47
have their attorneys
39:48
they have the appraiser like we talked
39:49
about earlier lenders handling all that
39:51
right
39:52
the third-party reports etc um in
39:54
addition to that
39:56
you have your investors you have your
39:57
partners um
39:59
i think those are all the key roles i’m
40:00
trying to find missing anyone but that’s
40:02
that’s basically the gist of it
40:05
um let’s see uh here’s a question i paid
40:08
the earnest money to help a partner get
40:09
a deal under contract
40:10
i was added in the operating agreement
40:12
for the asset management team but now
40:13
i’m in a dispute with the manager
40:15
uh one they wrote me out of the deal but
40:18
it’s still my money in the escrow
40:20
account
40:20
of the title company the partner keeps
40:22
saying they will repay
40:24
but they haven’t how can i protect
40:25
myself i have the wire receipts that
40:27
show i wired the money into escrow can i
40:29
do something
40:30
so the title company can’t release the
40:32
escrow money until i release it
40:34
um i’m just going to have to say
40:37
you’re just gonna have to ask an
40:38
attorney honestly you know that that’s
40:41
kind of a tricky one
40:42
probably a pending lawsuit of some sort
40:44
right and i’m not sure if title
40:47
i don’t know if title company cares
40:48
where the money came from ultimately who
40:50
has
40:51
the permission to allow the rules or not
40:53
so sorry
40:55
um here’s a question jv versus
40:57
syndication
40:58
could any of you talk about the
41:00
structure you use
41:01
starting out pal you want to answer that
41:04
one sure
41:05
yeah sure i’ll kind of go through it a
41:07
little bit like when i started out
41:08
really was
41:09
the first one was by myself so i just
41:10
did one by myself because i really
41:11
wanted to make sure that i knew what i
41:13
was doing
41:14
and if i was anybody’s money that was at
41:16
risk then it was mine not not anybody
41:18
else’s right
41:19
but the second deal once i did that
41:21
pretty quickly i just started telling
41:22
people what i was doing the whole time
41:23
and then
41:24
i did a jv after that with about five
41:26
friends uh
41:27
five friends family that so
41:30
you know five six of us in that deal um
41:33
and
41:34
that’s kind of like the way that i
41:35
started out going then i went to
41:37
syndication so i went and became a
41:38
general partner on several different
41:40
syndications
41:42
um now i’ve kind of went back to
41:45
now i’m going to be doing more jv’s
41:48
so my plan is to do more jv’s and i’ll
41:51
tell you the reason why
41:52
is because really you got to look at
41:53
understand what your investor network is
41:55
like
41:55
right uh is your investor network made
41:58
up of a lot of passive investors and you
42:00
know then you could do a lot of
42:02
syndications because that’s what you’re
42:03
probably going to do or is it made up of
42:05
a different type of a
42:06
investor and so my type my network is
42:08
made up of a different type of person
42:10
as a person that’s probably has some
42:12
capital that they want to invest
42:14
but they’re also deeply interested in
42:16
gaining experience and being involved in
42:18
the deals
42:18
and that’s a little bit more people that
42:20
want to be on the jv side so
42:22
that’s just my network and that’s with
42:23
people that that i know
42:25
so i’m really kind of catering towards
42:27
what my uh
42:28
what my network is in terms of what the
42:30
structure i’m going to be using
42:33
all righty let’s keep going
42:36
next question after you’re three to five
42:39
year exit he usually ends up buying
42:41
uh being the buy the end buyers hedge
42:43
funds reach et cetera
42:44
no so this is a good question because
42:47
everyone always asks if the opportunity
42:48
is the opportunity
42:50
you know why don’t you hold it or you
42:51
know why would the next guy buy it right
42:53
and usually the assets that we’re
42:55
talking about which is cb
42:57
assets right yes there are some reits
42:59
that do those kinds of assets but
43:00
usually
43:01
institutional equity is looking for
43:03
nicer bigger deals right
43:05
now that said the opportunity is usually
43:08
a good operator
43:09
is not going to fully update everything
43:11
about a property right you got to leave
43:12
enough meat on the bone for the next guy
43:14
but we want to do is prove the value to
43:16
it right because really with any deal
43:18
right think about an apartment
43:20
think about a house how long can you
43:22
live in a house that you live in
43:24
before you decide you need to repaint or
43:26
you need to replace the flooring right
43:28
things happen over time right that
43:30
necessitate a
43:31
capex or capital injection right and so
43:35
if you think about a deal right the life
43:37
cycle is usually you’re putting money
43:38
into the deal you’re improving the
43:39
property
43:40
right you’re now getting better rents
43:41
your cash flowing etc but over time
43:44
right that asset is getting worse
43:45
condition
43:46
yes you can redirect some of the cash
43:48
flow into capex
43:49
right but it’s really economically it
43:51
doesn’t make as much sense as
43:53
at that point in time you usually make
43:54
an exit and the next guy can bring that
43:56
capital injection back into the deal
43:58
right do the other half etc so like we
44:00
have a deal we’re selling atlanta right
44:01
now
44:01
we upgraded like 55 60 of the units the
44:04
next buyer can see clearly what we did
44:06
if they do the same thing they can go
44:08
party
44:08
right they need to bring money into the
44:10
deal and approve it and it makes sense
44:11
for them it makes sense for us
44:12
everybody’s happy
44:15
um let’s keep going um
44:17
[Music]
44:20
people are saying network time was too
44:21
short breakout was awesome
44:23
look forward to connecting with you okay
44:27
um all right beth says it can’t be real
44:29
estate related sorry bethany
44:31
from my question earlier um omar asks
44:34
where are the true good deals
44:36
suddenly i’ve seen many deals coming in
44:37
my inbox but they are still expensive do
44:40
you think we
44:41
will really see an impact from
44:42
multi-family market price
44:44
later on due to the co-hidden current
44:46
situation
44:48
um where are the good deals that’s a
44:50
great question i wish
44:51
we all knew i mean i totally agree
44:54
i think right now things are really
44:56
expensive we haven’t bought a deal in a
44:58
year
44:58
right we’ve made more offers than
45:00
probably anybody i know and we’ve been
45:02
close to probably
45:03
and you know ultimately we have our line
45:06
and you know i got to make sure i buy
45:07
the right deal
45:08
there are people that are buying deals
45:10
maybe they’re good deals maybe they’re
45:11
overpaying right it’s hard to
45:14
to say right it’s very market specific
45:16
um
45:17
impact the multi-family market price i i
45:18
think there will be a subset
45:20
of deals that are not performing right
45:23
because if you think about if you have a
45:24
deal that’s already non-performing and
45:25
then you take another 10
45:26
haircut due to over delinquency you’re
45:29
really not performing right and you know
45:30
you may get to the point where you’re
45:31
not able to service the no
45:32
property’s bleeding you need to make an
45:34
exit there will be some of those deals
45:36
maybe not as much as we all thought
45:37
initially um
45:39
and that’s probably still a few months
45:40
out because even from like a legal
45:41
paperwork right
45:43
you got to go through the through the
45:44
phases of remorse right and there’s
45:46
multiple steps and phases or grief sorry
45:49
there’s multiple steps along the way
45:50
before it kind of gets to the end so
45:53
that’s that um david hudgins wants a
45:56
ferrari bethany i think garrison you
45:58
know
45:58
put on your card for that one um
46:02
yeah bethany said she’s not buying
46:03
sentences senator garrison
46:05
all right um let’s see any more
46:08
questions sorry
46:09
i’m flipping through questions to find
46:12
them
46:14
um how many deals do you underwrite for
46:18
each you buy
46:19
how many do you see in person for each
46:21
you buy
46:22
how you want to answer that one i would
46:24
say
46:25
i mean with multi-family it was it was
46:28
probably like
46:29
you know if you’re talking about all the
46:30
deals you see you know i mean like 100
46:32
at least like i mean and i didn’t get
46:35
any right
46:35
and so i always got like 100 at least
46:38
before you buy one right and then i
46:40
don’t know
46:40
with self storage if you’re asking me
46:42
specifically self storage
46:44
it was probably about 100 but it’s been
46:45
a little bit more i would say there’s
46:46
more traction
46:47
that i found in and self storage
46:53
all right i’d say yeah it’s very hard i
46:54
mean there’s a lot of deals to
46:56
underwrite
46:56
i mean i’m talking about yeah for for
46:58
every 50 deals you underwrite you maybe
47:00
make 10 offers and maybe gets you one
47:02
best and final and i only really
47:04
tour once i get into best and final so
47:05
that’s my thoughts
47:09
um let’s see
47:11
[Music]
47:12
uh do we have anybody who would be
47:14
interested to get on a deal as a kp
47:16
eight nine thirteen
47:17
sorry guys this is my daughter for those
47:19
who have never seen it
47:22
um hello for anyone that is interested
47:25
you can say hi to tim
47:26
uh let’s see what’s the largest deal you
47:29
guys have done and how much
47:31
um 20 million you know we’ve looked at
47:34
30 40 50 million dollar deals and have
47:36
not been
47:46
i mean powell garrison you guys want to
47:47
answer that i mean yeah the largest one
47:49
was
47:50
uh i mean dollar amount the largest was
47:53
17 million
47:54
um you know part of a j i’m part of a
47:57
general uh
47:58
syndication right so it’s not like it’s
48:00
not like i own a 17 million dollar
48:02
property right so you know i’m one
48:03
one part of the team here so 17 million
48:06
and that was a
48:08
208 unit but uh largest actual unit size
48:12
would be 200 and 236
48:14
and i was in phoenix so close to that
48:16
same amount dollar amount though
48:19
all right next question is from
48:22
anton uh uh when could we see the new
48:25
sorry it’s for anton when do we see the
48:27
new real estate law changes come through
48:29
if there is a change in presidency
48:36
uh um i need to answer that
48:40
yeah directed well i i wish
48:43
i knew how the laws are going to change
48:48
so is is the question more specific to a
48:51
particular
48:52
clause maybe i think they must rephrase
48:54
it how quickly do you think the laws
48:56
could change if there’s a new president
48:58
i think there’s there’s a direct
49:00
correlation between the presidency
49:01
change
49:02
and say 1031 exchanges right and that’s
49:05
that’s a big real estate
49:06
related tax law because i know that’s
49:08
probably yeah
49:09
yeah so uh i think it will
49:13
still take quite some time
49:16
to to get all that through right
49:19
obviously
49:20
if uh if uh
49:22
[Music]
49:24
president biden is is in the office next
49:28
year he definitely will push
49:30
for uh if uh go
49:33
after the 10 30 ones at least that’s
49:36
that’s what what initially is
49:37
is the case as as well as the capital
49:40
gains
49:42
taxes so i would expect that’s
49:45
definitely uh on the capital gains tax
49:49
i expected to deteriorate from where we
49:52
are today
49:53
uh i would also not be surprised if some
49:56
of the
49:57
the bonus depreciation that we have been
49:59
enjoying that that falls away
50:02
but uh how quickly is that coming
50:04
through who knows
50:05
right uh that’s that’s anyone’s guess
50:09
but uh i would definitely say just that
50:12
that is the 1031 and the capital gains
50:16
and the bonus depreciation these three
50:20
i fear or the the ones that are most at
50:22
risk
50:23
they’re on the chopping block um all
50:26
right
50:26
let’s keep going then thank you anton
50:29
for those of you still working w2 job
50:30
how much time are you able to contribute
50:32
to multi-family investing
50:34
um and hello ferris’s daughter she says
50:36
thank you um
50:37
i think maybe the answer to that
50:38
question is it ultimately depends on the
50:40
job right
50:41
there’s different types of jobs and you
50:43
know for me i mean that’s
50:44
working nights and days and putting in
50:46
the kind of effort right i think it
50:48
really varies on the job though right
50:49
some people have jobs that are behind
50:51
the computer some people don’t and so
50:53
it’s my answer to you is put in as much
50:56
as you can
50:56
in order to really move the needle in
50:58
this business though if you’re not
50:59
putting in
51:00
15 20 hours a week right you’re probably
51:03
not putting in enough time to really
51:05
make kind of actionable progress yeah i
51:08
mean i would say that
51:10
early on i learned that you got to get
51:11
up early at least for me i had to get up
51:13
early
51:13
right and so i’m not a morning person
51:16
but i’ve turned into a morning person
51:17
now i’m
51:18
now i love the morning but i used to be
51:20
a night person and try to do everything
51:22
at night but i
51:22
honestly changed that whole pattern
51:24
about four years ago and now
51:26
you got to get up early do your routine
51:28
and start cranking things out before
51:30
people really wake up and start
51:31
attending too many emails and stuff like
51:33
that so get really productive in the
51:34
morning
51:36
you know there are a lot of wasted hours
51:37
in the day there are 24 hours
51:39
utilize your time utilize that commute
51:42
to and from work
51:43
do what you have to do to surround
51:44
yourself with with people in this
51:46
business
51:46
plus just get the knowledge listen to
51:48
the podcasts
51:50
scroll the facebook groups do the q and
51:52
a’s all of that kind of stuff
51:55
just get your mind mentally prepared to
51:58
really take this business to the next
52:00
level
52:02
and i think one other thing people
52:03
forget to talk about is
52:05
is your balance in life right if you
52:07
forget if you lose sight of your why
52:09
though
52:10
and you dedicate all given hours that
52:12
you possibly can to real estate or your
52:14
business or
52:15
job and lose sight of your family or
52:17
whatever your your why is
52:19
you know some people get lost in that
52:20
and they find i have a hard time
52:22
bringing that balance back in
52:24
for sure that’s awesome just for you
52:26
yeah for sure
52:29
all right let’s keep going then
52:32
um
52:36
i own a 20 i own 21 unit and single
52:38
family homes
52:39
how do you get over the hump to go after
52:41
bigger deals
52:42
who wants to answer that one however
52:46
i can take that one because i was in a
52:47
similar boat right you know i had to
52:49
have my first property really truthfully
52:51
i think when you want to go bigger you
52:53
need to partner with people
52:54
right i mean that’s that’s one thing
52:55
it’s really hard to take down
52:57
if you had to take down 100 unit by
52:59
yourself that’s tough
53:00
i mean you’ve got a lot to do so
53:04
it’s great to find somebody that has the
53:05
experience that maybe they’ve taken down
53:07
one or two of those
53:08
bigger units that you want to and then
53:10
you you’ve already provided you you have
53:11
some experience so you can bring some
53:13
experience to the table too
53:15
but you know um learn from them learn
53:17
from them what they’ve done
53:18
when why they’re going after a certain
53:20
property what they do to make it
53:21
successful and
53:22
and look for more partners that align
53:24
with you so to me honestly
53:25
to get over that hump you need you need
53:27
to partner with people or
53:28
you need to somehow come up with a lot
53:30
of money to find one how to do all your
53:31
on your own because that’s
53:32
but that’s going to be tough like if you
53:34
want to get 100 unit one on your own
53:37
um a lot of stuff involved in that so
53:40
that would be much
53:43
uh that i’ve done deals uh
53:46
with uh two partners i’ve done deals by
53:49
myself
53:50
syndicated deals by myself and i’ve done
53:52
it with five or six
53:53
people and i’ll tell you i’d never do
53:55
one by myself
53:57
i mean there’s you got you got too many
53:58
balls in the air too many things relying
54:01
on you
54:02
uh definitely if you want to step up
54:05
your game
54:05
find someone experience to help out and
54:08
and find a way to
54:09
to help them out and become a partner
54:12
with them do a couple deals with them
54:14
and then you’ll start being ready to
54:15
lead your own deals
54:18
you know to uh to pal and jeff’s
54:21
credit i agree 100 um
54:24
you know this is a very interesting
54:26
business everybody
54:27
in general everybody has a good attitude
54:29
everybody has a good mindset
54:31
everybody wants to help you three years
54:33
ago i knew nobody that had 30 or 50
54:35
apartments
54:37
now i have a huge rolodex with people
54:39
that own thousands of apartments that i
54:41
can partner with
54:42
um as a matter of fact ferris i think
54:44
ferris is coming with us we’re going to
54:45
jamaica in a couple weeks
54:47
with people that own hundreds and
54:48
thousands of apartments because it’s all
54:51
about surrounding yourself with those
54:52
people because you want to form those
54:53
bonds form those relationships
54:55
so you can partner up to scale your
54:57
business
55:01
all right totally agree it’s definitely
55:03
a team sport
55:05
let’s keep going um what book lecture
55:08
website i said i provided the biggest
55:10
learning curve for all for you all is
55:12
multi-family investing
55:15
um that’s a hard question to ask the
55:17
answer maybe if you don’t know anything
55:18
about real estate there’s a book called
55:20
the the millionaire real estate investor
55:22
i i like that book it does a good job
55:24
teaching people the basics of real
55:25
estate regardless if it’s multi-family
55:26
or not
55:27
from there you know also for me i listen
55:31
to a lot of podcasts and i’m a numbers
55:33
guy and i just kind of hopped in and
55:35
started playing with it and started just
55:36
getting familiar with it all right
55:38
um maybe that’s my answer
55:41
i would agree with you i would agree
55:42
with ferris is like when you’re trying
55:44
to do as much
55:44
as you can that is free i mean the
55:46
podcast to me were the best best way to
55:48
go
55:49
like you there’s so many podcasts that
55:51
you can consume really fast right you
55:53
put it on
55:53
i put it on two times speed right and
55:56
you just pour through them as
55:57
fast as you can and then listen and
55:59
learn and
56:00
i mean i think that’s the way to go and
56:02
there’s there’s certainly a ton of books
56:03
there’s you know
56:04
we try to provide value here at
56:05
multifamily masters as well you know
56:07
with
56:07
free free content and everything but um
56:10
yeah i think
56:11
that’s the way to go it’s like you have
56:13
a ton of different things in in podcasts
56:17
all right well let’s do another two
56:19
questions and we’ll do a breakout call
56:21
to wraps and i know we’re already past
56:22
the hour actually
56:23
um let’s see uh
56:29
what do you guys think of san diego
56:30
where the multiplying market cap rate is
56:32
low
56:33
what’s the best way in doing deals here
56:36
uh powell i’ll let you answer that one
56:37
san diego’s just uh
56:38
you know one volleyball one volleyball
56:41
away from you right so
56:43
sure sure i mean you know it’s hard to
56:47
i haven’t looked specifically in san
56:49
diego right but i i mean
56:51
you know i live in la and it’s when you
56:54
look the cap rates here are just
56:56
you know you’re not buying really cash
56:58
flow you’re not really buying cash flow
56:59
you know you’re kind of buying on
57:00
appreciation so if that’s what you want
57:02
to do
57:03
it’s probably going to be very similar
57:05
in san diego is that they don’t
57:06
cash flow as well as as properties in
57:09
other places
57:09
right so i would say truthfully also
57:13
you run the risk of a lot of california
57:14
laws they’re
57:16
they’re very heavy towards the tenant
57:17
and they’re moving that way even more
57:19
so even if you do buy something and you
57:21
do find something you’re going to be
57:23
under some strict laws that you’re not
57:24
going to be under
57:25
if you buy a place in arizona or texas
57:28
or florida and things like that
57:29
so that’s what i think of san diego
57:33
you know i mean it’s not it’s just uh
57:36
specifically san diego but it’s kind of
57:37
california in general i would say
57:41
all right and let’s do one last question
57:44
um
57:48
i guess i’ll just there’s only one
57:49
question left let’s hopefully get a
57:51
better one let’s do it
57:52
uh what are your thoughts on the urban
57:53
exodus short term
57:56
and long term um
57:59
i guess i’ll answer that one being in
58:01
houston right we obviously have the very
58:03
big sprawly city
58:05
and we have kind of the urban core
58:07
that’s been redeveloping right
58:09
i think the answer is for cities like
58:11
houston where
58:12
people like me grew up in the suburbs
58:14
right that was
58:16
where the better schools were et cetera
58:18
now you’re having guys like me that have
58:20
grown up in the suburbs all their life
58:21
wanting to do urban flight back into
58:23
city course right
58:24
um but that said people like me also
58:27
move back out to the suburbs you have
58:29
kids you know schooling
58:30
etc and so while it does give the
58:32
opportunity to gentrify
58:34
and kind of improve that urban decor
58:36
right i don’t know if it’s like
58:37
necessarily a one or the other right i
58:39
think if it could be both but that’s
58:41
okay
58:41
that’s maybe my answer
58:44
pal garrison you guys have anything to
58:46
add to that or let’s call it a wrapper
58:47
we can do that last breakout
58:48
let’s call it a wrap all right well then
58:51
that let’s call in our app so thank you
58:53
all for participating and joining
58:55
hopefully people got value from that
58:57
right again trying to do
58:59
educational things we want people to
59:00
grow people to learn people to succeed
59:02
so hopefully that was valuable
59:03
it was valuable let us know if you like
59:05
garrison’s glasses let us know
59:07
and you know that said we you know we’ll
59:10
go ahead and do the last breakout
59:11
and you know we’ll caught a wrap so
59:13
maybe garrus that last breakout you can
59:15
just leave it open people could stay on
59:16
as long as they want it we’ll call it
59:17
all right
59:18
yup i’m gonna let the breakout rooms
59:20
open we are multifamilymasters.com
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59:26
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59:28
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59:30
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