324: Financially Free in Less Than 5 Years Through Apartment Investing With Michael Blank
Apr 4, 2019
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Experienced multifamily investor/educator Michael Blank shares insights on starting in multifamily investing, the law of the first deal, common terms, ideal properties, developing relationships with investors, negotiating tactics, and building wealth through multifamily deals. The episode covers key concepts like cash flow importance, value add strategies, revenue streams for syndicators, deal structuring, passive income through limited partnerships, and success stories in real estate investing.
Multifamily investing can lead to financial independence in five years.
Syndicators have multiple ways to make money in a deal, including acquisition fees and equity splits.
Investing in locations with growth potential and reasonable yields is crucial for syndicators.
Michael Blank recommends books like 'Raising Private Capital' for real estate education.
Deep dives
Understanding Syndications
Syndicators have various ways to make money in a deal, including acquisition fees, equity splits, asset management fees, and capital transaction fees. The split between general partners (GPs) and limited partners (LPs) is often determined by the return of the deal.
Types of Deals in Syndications
Syndicators can opt for value-add deals where profit is realized at the end but have little cash flow initially, or cash flow-focused deals that offer consistent returns and potential for value appreciation. The ideal scenario involves a stable cash-flowing value-add deal.
Handling CapEx in Syndications
When dealing with capital expenditures (CapEx), separate funds are usually raised and designated for specific improvements or renovations. If there is unutilized CapEx funds after stabilization, they can be considered for return or to reduce the invested principle based on the operating agreement.
Location Research in Syndications
Investing in locations with growth potential and reasonable yields is crucial for syndicators. Targeting areas like Jacksonville, Orlando, and Birmingham, known for demographic growth and profitability, is a strategic approach for long-distance syndication investments.
Real Estate Books Recommendations
Michael recommends 'Raising Private Capital' by Matt Faircloth, 'The One Thing' by Gary Keller, 'The Miracle Morning' by Hal Elrod as his favorite real estate and non-real estate books respectively. These books have had a significant impact on his real estate journey.
Multifaceted Team Structure
Michael describes his team structure where members work as partners without fixed salaries or hourly rates. The team operates virtually and includes contractors paid like partners for equity. Michael emphasizes the entrepreneurial spirit within the team.
Key to Success in Real Estate Syndication
Michael highlights that the key factor separating successful syndicators from those who fail is making a firm decision to take action and prioritize real estate goals. Making decisive choices and setting clear priorities leads to consistent progress and success in real estate endeavors.
Brandon and David interview Michael Blank, an experienced multifamily investor/educator, who breaks down the seemingly daunting process into super simple steps.
Don’t miss Michael’s advice on how to get started in the space, how “the law of the first deal” will increase your odds of success, and how multifamily investing can lead to financial independence in five years. You’ll also love learning common multifamily vocabulary, what an ideal property looks like, and how to develop relationships with potential investors.
Michael also shares incredible insight into how he built his empire, as well as his top two negotiating tactics and “three levers” to successfully negotiate a multifamily deal!
This is one of THE most informative shows we’ve ever done. Download it now!
In This Episode We Cover:
How he got started and why he recommends multifamily investing
Scaling his business despite running out of of time
What is “the law of the first deal”
The multiple ways syndicators make money in a deal
Common multifamily terms and what they mean
How to improve the value of a multifamily property
What an ideal deal looks like
Developing pre-existing relationships with potential investors
Why cash flow is so important in multifamily
His top two negotiating tactics
How he bought a 321-unit building, how he BRRRR-ed a multifamily building, and returned 96 percent of their investors’ capital in the process
His “three levers” to negotiate in a multi family deal
