Real Estate Investing – Page 31

Access Michael’s Ultimate Guide to Buying Apartment Buildings with Private Money

Register for Michael’s Free Master Class: How to Do Your First Apartment Deal

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even without Experience or Cash by Michael Blank

Financial Independence Retire Early Movement

Brandon Turner on BiggerPockets

BiggerPockets on YouTube

Think and Grow Rich by Napoleon Hill

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki

Garrett at Nighthawk Equity

MB 231: Lessons of a Master Multifamily Deal Finder – With Garrett Lynch

September 14, 2020/in Real Estate Investing/by Garrett Lynch

2020 has been a tough year for finding deals—even for us. In fact, the Nighthawk Equity team is currently in the process of closing on our first and only deal of the year (so far). But that’s not for lack of trying! So, what are we looking for in a deal right now? How have we changed our underwriting criteria in the age of COVID? And how do we recover from the disappointment of losing a deal?

Garrett Lynch is the Director of Acquisitions at Nighthawk Equity, the investing arm of the Michael Blank organization. Garrett has been in the multifamily space since 2011, cofounding a firm that grew from zero to 3,400 units before successfully exiting that venture. Since taking on his role with us at Nighthawk in 2018, Garrett has built a portfolio that includes at 218-unit property in Little Rock, Arkansas a 276-unit in Huntsville, Alabama, and a 130-unit deal in Atlanta, Georgia.

On this episode of Apartment Building Investing, Garrett joins me to explain how his strategy for finding multifamily deals has evolved over the years and what we look for in a deal at Nighthawk Equity. He describes what he does to build rapport with brokers and stay in touch, sharing how strong broker relationships helped us land our current deal in Atlanta. Listen in for Garrett’s insight on recovering from the disappointment of losing a deal and learn how to adjust your underwriting to find good multifamily deals in the COVID era.

Key Takeaways

How Garrett’s strategy for finding deals has evolved over the years

Look for best price per door in D class neighborhoods early on
More granular on underwriting today, focus on B and C class

How we dialed in our criteria for deals at Nighthawk Equity

Look at capacity on equity raise and debt structure
Gradual progression on size of deals
Choose value-add properties in certain markets

The benefits of collocating deals in just a few markets

Share resources (e.g.: staff)
Hit several properties in one trip

How we select markets at Nighthawk Equity

Resources available to operate and steady dealflow
Population, job and overall economic growth

How Garrett builds rapport with brokers

Stand out by responding whether like deal or not
Meet in person and check in regularly, share successes

How Garrett recovers from the disappointment of losing a deal

Channel hurt into next quest
Commit to process

How we landed our current deal in Atlanta

Follow up with broker re: deal another investor won
Unobstructed shot when that deal fell apart

Garrett’s system for staying in touch with brokers

Put regular check-ins on calendar (target markets of interest)
Come with thoughtful questions re: specific deals
Reach out when land deal in their market to build demand

How we have adjusted our underwriting at Nighthawk in the COVID era

Tailor underwriting around few available debt products
Set natural market appreciation at ZERO for Year 1
Create cushion of 0.5% on reversionary cap rate
Cash reserves minimum of 10% of total spent on deal
Research tenant demographic to ensure cashflow from Day 1

Connect with Garrett Lynch

Resources

Submit a Deal to the Michael Blank Deal Desk

Access Michael’s Syndicated Deal Analyzer

National Multi Housing Council

LoopNet

CREXi

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

Michael’s First Deal Maker Award Recipients

MB 230: Don’t Wait for a Crisis to Get Your Priorities Straight!

September 7, 2020/in Real Estate Investing/by Garrett Lynch

If you knew you only had six months to live, what would you do differently? Who would you spend time with? Who would you reconcile with? How would you spend your days?

On this episode of Apartment Building Investing, I’m describing the health crisis that landed me in the ER at the end of July. I explain how the experience forced me to rethink my priorities and reaffirmed my mission to help people to achieve financial freedom through multifamily investing!

Listen in for insight on how to get clarity in your life and take on the challenge to get your affairs in order and start living your best life NOW.

Key Takeaways

My recent experience with a health crisis

Heart attack on July 28, 2020
100% blockage in main artery

How the health emergency forced me to rethink my priorities

Value health and family above all else
Affirmed mission (financial freedom with multifamily)

My advice on getting your affairs in order NOW

Set up revocable trust and life insurance
Structure entities so controlled by trust
Document where to find important info

Two powerful exercises for getting clarity in your life

6 months to live
Perfect Day

Resources

Deal Maker Live

Dave Ramsey

Michael’s Financial Freedom Hall of Fame

Garrett Sutton

Brandon Turner

The Miracle Morning: The 6 Habits That Will Transform Your Life Before 8AM by Hal Elrod

MB 229: Commit, Don’t Quit 3 Feet from Gold! – With David Acosta

August 31, 2020/in Real Estate Investing/by Garrett Lynch

We’re told that our goals have to be time-bound. That we have to give ourselves a deadline if we want to achieve. The problem with that is too many of us quit three feet from gold, as the saying goes. But how do you stay committed when a year has gone by and you still don’t have your first multifamily deal?

David Acosta was a mentoring student in The Michael Blank Investor Incubator. With no money and no background in investing, David leveraged his mentor, Drew Kniffin, and our Deal Maker’s Mastermind investor network to partner on his first venture, a 220-unit deal orchestrated by Ben Risser’s team. Six months later, David closed on a 48-unit deal in Lexington, KY, this time serving as lead syndicator!

On this episode of Apartment Building Investing, David joins me to discuss how he did his first multifamily deal—without any money or previous real estate experience. He explains how having a mentor helped him build confidence and stay committed when his first deal took a few months longer than expected. Listen in for David’s insight on partnering with others to earn credibility and learn why it’s crucial to commit to the outcome you want, not the timeline.

Key Takeaways

What prompted David’s interest in multifamily investing

Background in restaurants, wanted to control time
Real estate investing research led to TMB course

What made David think he could skip SFH investing

Mentor to look over shoulder through process
Took course to get educated + build confidence

Why David felt having a mentor was the right choice for him

No background in real estate (shorten timeline)
Invest in education to be taken seriously

David’s frustration with missing his 12-month goal

Deflating to fall short, temptation to walk away
Mentor encouraged to commit to goal vs. timeline

How David finally found his first deal

Connect with others in Deal Maker Mastermind
Partner as GP with another investor’s team

How the Law of the First Deal worked for David

Competitive advantage in closing second deal
Had confidence to serve as lead syndicator

What’s next for David as a real estate investor

Build out team, efficiencies in processes
Scale and grow business from there

David’s advice for aspiring multifamily investors

Develop persistence to commit to outcome
Get educated and consider hiring mentor
Join an ecosystem, JV to build track record

Connect with David Acosta

Acosta Capital

David on LinkedIn

David on Instagram

Resources

Check Out Michael’s First Deal Maker Profiles

Explore Michael’s Products & Programs

Connect with Other Investors in the Deal Maker’s Mastermind

Ed Hermsen on Apartment Building Investing EP225

Drew Kniffin at Nighthawk Equity

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probable, to Inevitable by Hal Elrod

Ben Risser on Apartment Building Investing EP102

MB 228: What’s Working Now to Get Deals Done – With Drew Whitson & the Michael Blank Mentoring Team

August 24, 2020/in Real Estate Investing/by Garrett Lynch

Despite the disruption of COVID-19, multifamily investors are still doing deals. The question is, HOW? What’s working right now to get deals done? What isn’t? What are real people doing to find success in today’s market environment?

On this episode of Apartment Building Investing, I’m handing the mic over to Drew Whitson to moderate a discussion with our mentoring team, Todd Dexheimer, Brad Tacia, Phil Capron and Matt Brawner, on what’s working now to get deals done. We explain how our mentoring students are leveraging the COVID pause to build relationships and how the balance of power has shifted among syndicator, buyer and broker in recent months.

We go on to explore the benefit of a strong relationship with your property manager and how underwriting has changed in light of the pandemic. Listen in for insight into what makes multifamily the strongest asset class in real estate and learn the ONE thing our most successful students are doing right now to get deals done.

Key Takeaways

What Matt’s most successful students have done in 2020

Leverage pause in market (Seinfeld time)
Use time to build relationships with brokers

What Phil’s students are doing to acquire multifamily properties

Worry about ‘making it to next meal’
Figure out how to become viable buyer

Todd’s advice on how to talk to investors right now

Continue to educate and keep investors informed
Overcommunicate to build relationships

How Brad is coaching his students around underwriting

Network with mortgage broker re: what’s changed
Modify SDAs to ensure accurate underwriting

How running a property management firm informs Matt’s underwriting

Understanding of street rent and how units operate over time
Haven’t cut back on rents but less aggressive with rent bumps

How underwriting has changed in light of the COVID pandemic

Build in more time for rent growth
Consider changes in rental laws by market

What makes multifamily the strongest asset class in real estate

Performs well through economic disruption
Lockdown led to desire for nicer apartment

The one thing our most successful students are doing right now

Willing to make mistakes by doing
Get out there and build relationships
Analyze deals (still numbers game)
Willing to partner to gain experience
Take consistent action every day

Connect with Drew, Todd, Brad, Phil & Matt

Resources

Pillars of Wealth Creation Podcast

Review the Podcast on iTunes

MB 227: The State of Multifamily

August 18, 2020/in Real Estate Investing/by Garrett Lynch

Our world is in upheaval. Between COVID-19 and the current riots, nothing feels normal. And this has a lot of investors asking, is now the right time to pursue multifamily?

On this episode of Apartment Building Investing, I’m sharing my keynote address from Deal Maker Live 2020 on the current state of multifamily. I describe how multifamily is weathering the storm, explaining why it’s actually EASIER to raise money right now and why now IS the right time to invest in apartment buildings.

Listen in for insight around how to adjust your underwriting in the current economic environment and get my advice on what you SHOULD be doing right now to achieve financial freedom!

Key Takeaways

How multifamily is performing right now

Similar to 2008, deep quiet under storm
Collections surprisingly consistent

Why it’s easier to raise money in the current economic environment

Investors frustrated with volatility of stock market
Opening to discuss multifamily as alternative

When it’s the best time to invest in multifamily

Never going to be perfect time
Start working toward financial freedom NOW

How investors should adjust their tactics right now

Be smart about underwriting (↑ reserves, ↓ rent growth)
Avoid hard deposit, incorporate financing contingencies

What multifamily investors SHOULD be doing right now

Stay calm and stay the course
Remember your WHY
Keep momentum going

Resources

Join Michael’s Deal Maker’s Mastermind

MB 226: How to Protect Your Wealth in a Crisis – With Russell Gray

August 10, 2020/in Real Estate Investing/by Garrett Lynch

The black swan event financial pundits predicted has arrived in the form of the Coronavirus pandemic. But how, exactly, will the crisis play out in the markets? What does it mean for us as real estate investors? And what can we do to understand the changing reality, protect our wealth, and even capitalize on hidden opportunities?

Russell Gray is the cohost of The Real Estate Guys Radio Show, a podcast and platform dedicated to helping investors stay focused, motivated and informed. A financial strategist with 30-plus years of experience in business, investing, mortgage lending and financial services, Russell provides unique and practical insights that support entrepreneurial investors in growing and protecting their wealth through real estate and real asset investing. He is also the coauthor of Equity Happens: Building Lifelong Wealth with Real Estate.

On this episode of Apartment Building Investing, Russell joins me to share his take on the bigger story behind the pandemic, explaining how the government bailout will impact the value of the US dollar and its status as the world’s reserve currency. He walks us through the real estate strategies he likes right now, describing the benefit of investments that qualify as both REAL and ESSENTIAL. Listen in for Russel’s insight on protecting your wealth in a crisis and learn what YOU can do to adapt to the circumstances and thrive through a challenging time!

Key Takeaways

Russell’s take on the biggest story behind the Coronavirus

Debt crisis on horizon (more vulnerable now than 2008)
Potential for currency crisis as Fed continues to print $

Russell’s insight around the indicators that the dollar is weak

Dollar exhibits weakness against other currencies
All currencies exhibit weakness against precious metals

The consequences of the government’s Coronavirus bailout

High risk of inflation
Devaluation of dollar

How to protect your wealth from inflation, deflation and stagflation

Store in alternate form of liquidity like gold to preserve value
Invest in real assets (i.e.: real estate in resilient market)

Why now is a good time to be a real estate investor

Printing money favors debtor
Real estate = ultimate vehicle to short dollar

The right and wrong way to measure your net worth

Assets – liability = wrong way
Liquidity + positive cashflow = right way

What real estate strategies Russel likes right now

Things that are REAL and ESSENTIAL
Residential, energy, healthcare and distribution

Russell’s advice for investors taking a wait-and-see approach

Don’t wait for someone else to find best deals before you
Look for real estate (real asset) in resilient markets

Connect with Russell Gray

The Real Estate Guys

Email crisis@realestateguysradio.com for the Crisis Investing Webinar

Email silverseries@realestateguysradio.com for the Silver Series

Email preciousequity@realestateguysradio.com for the Precious Equity Tutorial

Resources

Reuters Article on the Dollar Index

Peter Schiff

Robert Kiyosaki

Ken McElroy

Equity Happens: Building Lifelong Wealth with Real Estate by Robert Helms and Russell Gray

FRED Index on the Purchasing Power of the Consumer Dollar

Jim Rohn

Chris Martenson at Peak Prosperity

MB 225: How to Stay Committed to Your Multifamily Goals – With Ed Hermsen

August 3, 2020/in Real Estate Investing/by Garrett Lynch

According to the Law of the First Deal, a multifamily investor who buys their first apartment building will do their second and third deals in rapid succession, achieving financial freedom in just a year or two. But there is an exception to every rule, and Ed Hermsen is the ONE investor I know who did his first deal—and then life got in the way. So, what can he teach us about keeping momentum and staying committed to our multifamily goals?

Ed grew a portfolio of single-family rentals while working as a mortgage loan officer in Fort Collins, Colorado. Five years ago, he started studying multifamily and eventually partnered with a close friend on a 22-unit deal in Pensacola, Florida. After revisiting his goal to retire by 50, Ed realized he needed to recommit to multifamily, and in the last two years, he has leveraged the partnership model to build a portfolio of 210 units and quit his job with real estate!

On this episode of Apartment Building Investing, Ed joins me to describe how a 9-to-5 in mortgage banking inspired his real estate investing career and share his secrets to successful multifamily investing with partners. He discusses what made him the sole exception to the Law of the First Deal, explaining why there’s a four-year gap between his first and second deal and what finally inspired him to get back in the game. Listen in for Ed’s insight on the value of accountability and learn what YOU can do to stay committed to your multifamily goals.

Key Takeaways

How Ed got into real estate

Work in mortgage banking exposed to wealth-building potential
Bought SFH rental every year to build portfolio of 10

What inspired Ed to pursue financial freedom with multifamily

Never off clock, have to take calls (even on vacation)
Rely on real estate agents + economy for livelihood

Ed’s first multifamily deal

Friend found 22-unit in Pensacola, FL in 2015
Bought for $740K, valued at $1.5M now
No distributions first year (units in bad shape)
Challenge to manage vendors from afar

Ed’s second multifamily deal

Purchased 88-unit in Wyoming with 3 partners
Lead from attorney handling family dispute
Great loan from local bank, refinancing now

How Ed found his partners

Kids go to school together
Clients from mortgage business

Ed’s insight on building successful partnerships

Accountability and clear division of labor
Invest in attorney to do operating agreement

What made Ed the exception to the Law of the First Deal

Went back to buying fourplexes
Fell back into 9-to-5 routine

Ed’s advice around staying committed to your multifamily goals

Write down goals and revisit every morning
Build in accountability with mentor or coach

Ed’s latest multifamily deal

Bought 100-unit deal in Tulsa, OK with 2 partners
Establish relationships with local bank and realtor
Must follow housing authority rules

What’s next for Ed

Put 22-unit on market
Look for deals in Oklahoma
Learn more about syndications

Ed’s advice for aspiring multifamily investors

Build good team
Get educated on markets
Get first deal done

Connect with Ed Hermsen

Email edhermsen14114@gmail.com

Resources

Fellowship of Christian Athletes

Hal Elrod

The Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8AM) by Hal Elrod

The Ultimate Guide to Buying Apartment Buildings with Private Money

Syndicated Deal Analyzer

BiggerPockets

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probably, to Inevitable by Hal Elrod

Goldman Sachs Economic Outlooks

MB 224: Why Multifamily is a Better Bet Than the Stock Market – With Bruce Fraser

July 27, 2020/in Real Estate Investing/by Garrett Lynch

Investing in the financial markets is stressful, especially in a crisis. And even if you happen to be brilliant at options trading, $100K in the equity market will still only buy $100K in assets. On the other hand, investing $100K in multifamily will buy you a $500K asset—and earn you five times the return. Not to mention the fact that it’s essentially recession-proof!

Bruce Fraser is the Managing Partner at Elkhorn Capital Partners, a private equity firm that focuses on multifamily residential real estate in economically insulated submarkets. Prior to Elkhorn, Bruce ran a lucrative hedge fund, successfully navigating the financial crisis before his research led him to multifamily. In a few short years, Bruce has built a portfolio of 1,600 units, and he currently serves as a member of the Forbes Real Estate Council.

On this episode of Apartment Building Investing, Bruce joins me to explain what makes multifamily a better investment than the financial markets, especially through the COVID-19 crisis. He tells us about his first multifamily deal (as one of my early coaching students!), discussing the challenges he faced early on and describing how the Law of the First Deal impacted his real estate career. Listen in for Bruce’s insight on the advantage of choosing a niche in distressed assets and learn his aggressive but realistic approach to scaling a multifamily business.

Key Takeaways

What makes multifamily a better investment than the financial markets

S&P 500 = 2.5% average annual return over last 20 years
Multiplier effect ($100K buys $500K asset, earn $100K vs. $20K)

Bruce’s first multifamily deal as one of my early coaching students

134-unit property in Fort Worth
$5.7M acquisition (raise $2.1M)
Sold 14 months later for $7.9M

Bruce’s experience with the Law of the First Deal

Second deal under contract when first closed
Acquire 3 to 4 per year ever since

Why Bruce chose a niche in distressed situations

More control over occupancy growth than rent growth
Create much more substantive equity in short period

Why Bruce sought out coaching early on

Overcome uncertainty
Understand deal structure

Bruce’s approach to scaling a multifamily business

Manage time wisely (leverage third-party property manager)
Be aggressive but realistic

Bruce’s experience through the COVID crisis

Investors ready to buy and deals available
Biggest challenge = lending environment

Bruce’s goals over the next three years

Double portfolio to 2K to 3K units
Centralized position in handful of markets

Why multifamily is the best investment through the pandemic

Tax efficient distributions
Demand for apartments remains high
Protects against inflation

Connect with Bruce Fraser

Elkhorn Capital Partners

Email bruce@elkhornpartners.com

Resources