Once you get a multifamily deal under contract, the clock starts ticking. You have limited time to raise capital, so it’s super-important that you’ve already built relationships with potential investors and have a database to call on. But how do you transition from simply talking to people about the opportunity to invest with you to building a formal pipeline of truly interested investors?

Kyle Mitchell is Managing Partner at Limitless Estates, a multifamily firm investing in the Phoenix and Tucson markets. He started investing in single-family in 2015, building a $1M portfolio of nine properties in Illinois, Ohio and Arkansas, before quitting his W-2 job to pursue multifamily in 2018. Within two months of going all-in on apartment buildings, Kyle landed a 42-unit deal, and he is currently negotiating a $15M 128-unit deal. Kyle is also the host of the Passive Income Through Multifamily Real Estate Investing Podcast.

Today, Kyle joins me to explain his decision to quit his 9-to-5 before he had a multifamily deal, discussing the benefits of going full-time and the way he got brokers to take him seriously. He shares the details of his first multifamily syndication, describing how he raised $1M in 60 days and why he had to switch lenders late in the process. Listen in for Kyle’s advice around finding a mentor and building your team—and get his blueprint for building an investor database for multifamily syndications!

Key Takeaways

Why Kyle quit his job before he had a multifamily deal

• Savings and wife’s income made possible to go all-in
• Accelerate progress after 10 months building pipeline

How Kyle and his wife’s goals were in alignment

• Already investing in SFH, did SDA course together
• Goal to become entrepreneurs + control time

Kyle’s insight on the benefits of going full-time

• Ability to visit markets more often
• Brokers take more seriously

How Kyle got brokers to take him seriously

• Build relationships over 6 months (persistence)
• Meetup, newsletter and podcast
• Mentorship and coaching

Kyle’s first multifamily deal

• 42-unit property near U of A in Tuscon
• Mismanaged by SFH property manager

When Kyle started raising money

• Building investor list for 10 months before
• Webinar after signed, $1M raise in 60 days

How Kyle built his investor database

• Leads from podcast, newsletter + meetup
• One-on-one meetings to determine interest

How Kyle overcame objections re: lack of track record

• Professional experience in management
• Real estate license and SFH portfolio
• Coaches, education, mentors + partners

Kyle’s insight on the Law of the First Deal

• LOI for second property within 3 weeks
• $15M 128-unit deal with same partners

Kyle’s advice for aspiring multifamily investors

1. Double number of investors
2. Always be raising money
3. Be transparent with lender
4. Set up team in advance

Kyle’s blueprint for following in his footsteps

• Find mentor that fits goals
• Define goals + take action
• Build partnerships

Connect with Kyle

Limitless Estates

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Adding value to a multifamily property is what allows us to raise rents and earn a solid ROI. But how do we choose a contractor? As owners, how active should we be in managing the construction itself? What is the property manager’s role in a construction project? How do we know what amenities work in a particular market—and what they’re worth to renters?

Ira Singer is the Principal at Mosaic Construction, a design-build industry leader based in Northbrook, Illinois. Mosaic provides best-in-class renovation, remodeling and building services for multifamily, residential and commercial property owners and managers. Marc Rutzen is the CEO of Enodo, a machine learning platform that analyzes multifamily investments and calculates the ROI on value-add amenities.

Today, Ira and Marc join me to discuss the ins and outs of doing a value-add multifamily deal. Ira explains how the owner, property manager and contractor work together on a large-scale construction project, sharing the integral role communication plays in the process. Marc describes how amenity pricing varies by market and weighs in on the trend to offer services like pet daycare and credit card payments. Listen in for insight around making value-add choices that will allow you to increase rents, decrease operating costs, and boost your ROI overall!

Key Takeaways

The role a construction company plays in acquiring property

• Site visit, bring architect if necessary
• Discuss scope of work + lend eye as ‘building inspector’

The owner’s role in overseeing a construction project

• Review daily updates (photos + written explanation)
• Make important decisions

The property manager’s role in a construction project

• Provide access and notify residents
• Communicate with onsite project manager

How to approach large-scale value-add projects

1. Empty building for full unit makeovers
2. Two-day refresh of occupied units

Ira’s advice on hiring and managing a contractor

• Develop relationship with construction partner
• Monitor progress with strong communication

What construction gone wrong looks like

• Failed inspections
• Poor communication, execution

Ira’s insight around how to increase ROI

• Pay attention to building envelope
• Solid roof, gutters, windows and doors

Ira’s tips for reducing expenses on a property

• Maintenance-free siding and windows
• Efficient HVAC system, insulation in attics

How amenity pricing varies by market

• Rooftop deck $32 nationally, $45 in Miami
• Pool $30 in Miami, $50 in Chicago

The trend toward offering services

• Pet daycare and dog walking
• Storage (e.g.: package lockers, bikes)
• Accepting credit card payments

Connect with Ira

Mosaic Construction

ira@mosaicconstruction.net

Connect with Marc

Enodo

marc@enodoinc.com

Resources

Deal Maker Live

Save Water Co

National Apartment Association

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Don’t think you have the time to start investing in multifamily? Anna Kelley is a wife and mother of 4 who worked a demanding full-time job AND built a real estate portfolio on the side, working 82 hours a week for nearly 5 years. She argues that sacrificing your time for a couple of years to buy yourself decades of financial freedom is well worth it. But you’ve got to be willing to take consistent action—even when it’s hard.

Anna is a seasoned real estate investor with a rental portfolio valued at $12.5M. She is also an Amazon bestselling author and sought-after speaker in the realm of buy-and-hold investing, creative financing, vacation rentals, women in real estate, and multifamily investing. Anna has coached several new investors through their first deal, and she is dedicated to educating others on the benefits of multifamily real estate investing.

Today, Anna joins me to discuss how she executed on a 5-year plan to quit her job with real estate investing. She shares her new emphasis on work-life balance, explaining how she is still working hard but making time to focus on her health and family. Anna also offers insight on why she struggled with the decision to quit her job and how that uncertainty inspired her to joint venture and scale up. Listen in for Anna’s advice around finding partners with complementary skills and learn how to MAKE the time to achieve financial freedom!

Key Takeaways

How Anna’s life has changed since quitting her job

• No less busy (12-hour days to close on 2 properties)
• 2-week vacation for first time in years

Anna’s new emphasis on work-life balance

• Consistent time for self-care + focus on health
• Slow, methodical growth of multifamily business

Why Anna questioned the decision to quit her job

• Background as financial advisor, predict recession
• Job at AIG ‘sole lifeboat’ for family through crash

How Anna got started investing in real estate

• Clients with most money = real estate investors
• Protectionary investments to cover expenses (2007)
• Bought small multifamily in 2008 with rest of 401(k)

Anna’s five-year plan to replace her income

• Refinance 12-units in 3 buildings already owned
• Line of credit + equity loan to buy foreclosures
• Research seller financing, buy 4-unit buildings

Anna’s decision to scale up to larger multifamily properties

• Reached goal to replace income ($5M in assets)
• Wanted 6 months of expenses for buildings + year of salary
• Met partners at event, found 73-unit off-market property

Anna’s investing advice for her younger self

• Still buy small properties for long-term stability
• Invest with others sooner, focus on finding deals

Anna’s strategic approach to syndicating deals

• Target properties in 2-hour radius where know market
• Expand to other markets once comfortable with process

Anna’s advice around joint venturing

• Find experienced investor with aligned goals
• Look for someone with complementary skill set

Anna’s insight for aspiring multifamily investors

• Be prepared for initial investment of time
• Got for it but be wise in who partner with

Anna’s response to the lack of time argument

• You make time for what’s really important
• 82 hours/week for 4 years with few breaks

How Anna got through the difficult times

• Change way you get there or timeline, not goal itself
• Develop resilience and do whatever it takes

Connect with Anna

Rei Mom

The 1031 Exchange is the best-known way to defer capital gains on the sale of a property. The problem for syndicators is getting ALL of your limited partners on board—which is next to impossible. So, what do you do if several LPs want to cash out but the rest are looking for an option to defer? The Deferred Sales Trust may just be the perfect solution.

Brett Swarts is the CEO of Capital Gains Tax Solutions, a firm dedicated to helping clients leverage the Deferred Sales Trust as a tool to overcome capital gains tax deferral limitations. He is also an experienced commercial real estate broker and investor, boasting $85M in closed transactions and a portfolio of multifamily, senior housing, retail, medical office and mixed-use properties. With more than 12 years of experience in the brokerage industry, Brett is committed to helping people create and preserve wealth and educating HNWI around capital gains tax deferral via the Deferred Sales Trust.

Today, Brett joins me to discuss the options we have for deferring taxes on the sale of a property, the 1031 Exchange and the Deferred Sales Trust. He shares the problems associated with the 1031, including the 180-day deadline, the pressure to buy a new property, and the challenge of getting all the investors in a syndication to agree. Brett goes on to explain the fundamentals of the Deferred Sales Trust as an alternative, describing how the process works and its benefits in terms of timelines and customizability. Listen in to understand the costs associated with the DST versus the 1031 Exchange and learn how to choose between the two—and avoid paying capital gains taxes!

Key Takeaways

Brett’s path to founding Capital Gains Tax Solutions

• Commercial broker for Marcus & Millichap
• Understanding of 1031 Exchange (tax efficient, preserve wealth)

The mechanics of the 1031 Exchange

• Send money from sale to QI company
• New property must close within 180 days

The penalty for not meeting 1031 deadlines

• QI company sends funds on Day 181
• Hit with tax on money received

The downside of the 1031 Exchange

• Pressure to buy, tendency to overpay
• Lower cap + higher interest rates
• Rapid rental appreciation
• Traveling depreciation schedule

The fundamentals of the Deferred Sales Trust

• Trust itself buys property and immediately sells
• Investors pay NO tax on funds in deferred state

How you use the funds in a Deferred Sales Trust

• Work with third-party trustee + financial advisor
• Put money into portfolio of liquid investments
• Up to 80% can be directed to syndication deals

The advantages of utilizing a Deferred Sales Trust

• Diversity across several deals, product types
• 10-year DST can be renewed (no fixed time frame)
• Starts new depreciation schedule
• 23-year track record, survived 14 IRS audits

What to do if your investors are divided re: a 1031 Exchange

• Defer part of entity with DST (cash out other LPs)
• Money in trust can be directed to next syndication

When to choose a 1031 Exchange vs. the DST

• 1031 maintains stepped-up basis (heirs sell tax free)
• DST better for ultra-HNWI to avoid 40% death tax

The costs associated with the 1031 and the DST

• 1031 = one-time fee of $750 to $1K
• DST = recurring fees for trustee + financial advisor

Connect with Brett

Capital Gains Tax Solutions

<a href= "https://www.youtube.com/channel/UCAykQNmIWZ0KARBeVWcQxUA" target= "_blank"…

‘Don’t be afraid. This is totally doable.’

Of all the people who are exposed to real estate on a regular basis, very few take action to become investors themselves. If awareness is not the problem, then what is? Why do so few real estate agents, for example, seek out opportunities to work with investors or partner to buy properties of their own? Why do so many of us attend REIA meetings month after month—without taking the next step?

Known as The Godfather of Real Estate, Bob Helms has been investing since 1957. He became a practicing broker in 1980 and spent 18 years working as a father-son team with his son, Robert, of Real Estate Guys fame. In his long and storied career, Bob has owned, managed, bought and sold hundreds of properties. He has been a top-producing agent, respected managing broker, and mentor to hundreds of leading agents and investors. Bob is a regular contributor to Real Estate Guys Radio and a featured speaker at the annual Summit at Sea. He is also the author of Be in the Top 1%: A Real Estate Agent’s Guide to Getting Rich in the Investment Property Niche.

Today, Bob joins me to discuss why agents don’t invest in real estate themselves, explaining how the lack of role models for realtors inspired him to write Be in the Top 1%. He describes how he became an accidental real estate investor and shares the story of Bob’s Big Boo-Boo, a 50-unit deal that he failed to optimize. Listen in for Bob’s insight around becoming an investment property specialist and learn how you can easily become an investor yourself—with the right education and a little self-belief!

Key Takeaways

How Bob became The Godfather of Real Estate

• Nicknamed by The Real Estate Guys
• Practicing broker for 40 years

Why agents don’t invest in real estate themselves

• Lack of successful role models
• Commercial agents < 7% of total

How Bob got into real estate investing

• Bought cabin in mountains as engineering student
• Worked as agent specializing in serving investors

What it was like to work with Robert as a father-son team

• Gave each other space to operate
• Both made significant contributions

What inspired Bob to write Be in the Top 1%

• Average agent makes $35K to $40K/year
• ‘Separated from opportunity’

The key to becoming an investment property specialist

• Understand language of investors, how they think
• Offer opportunity superior to what already doing

Bob’s top takeaways from Be in the Top 1%

• Investing easy to do with education
• Find coach to guide through process

How agents can best serve real estate investors

• Learn investment goals, help develop plan
• Proactively look for properties than align

Connect with Bob

The Real Estate Godfather

Bob on The Real Estate Guys

Be in the Top 1%: A Real Estate Agent’s Guide to Getting Rich in the Investment Property Niche by Bob Helms

Resources

The Real Estate…