Multifamily Legacy Podcast

Sometimes, it only takes one deal to become super wealthy in the multifamily space. Today, we’re talking about Pillar 5 - The Secrets to Getting Your Deals Accepted, part of the Six Pillars to Profits series. How can you masterfully try to get your deals accepted? I share tips and tricks to get brokers to believe in your deals. I’m teaching you how to make sexy cashflow. Topics on Today’s Episode: Broker Mentality: Most brokers are motivated by Hip Pocket National Bank; they’re trying to make a paycheck, but work for free until you close Create relationships with brokers and migrate your way to their short list Notify brokers when you close a deal, and operate from a place of integrity Site Inspection: Do a fact-finding mission; go visit the dirt to and talk to property manager and maintenance person What to include in and how to submit a letter of intent (LOI) packet to broker Take time to build your team, and be willing to be a partner and share profits; don’t get greedy Bios and credibility kit point out that you’re a big deal; we’re good at what we do Create version of Proof of Funds for broker # of Business vs. calendar days to use in Purchase and Sale Agreement (PSA) Don’t rush into deals, speed kills; don’t suffer from shiny object syndrome Purchaser’s performance is conditioned upon purchase approval of required items and information Make sure they receive everything and sign off on it before starting inspection Get deals accepted by seeking price guidance from broker during Call for Offers Best and Final: I want this deal! Put finishing touches on deal via price and earnest money changes; be professional when providing additional information Links and Resources Mentioned: 064: The Six Pillars to Profits: Pillar 4 – The Secret of Getting Deal Flow 005: How to Get Your Offers Accepted By Brokers Kahuna Boardroom Kahuna Investments - Our Process Robert Kiyosaki Colors Quotes: “You don’t have to do a crap ton of volume to be like super wealthy in multifamily investing. All you need is one deal.” Corey Peterson “I’m teaching you how to make sexy cashflow.” Corey Peterson “Most brokers are motivated by...Hip Pocket National Bank.” Corey Peterson “I owe it to my investors to do this work. I do not rush into deals. You shouldn’t, too. There’s plenty of deals out there for us all.” Corey Peterson Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.

In the multifamily space, we don’t have to go out much or spend a lot of money on marketing to find leads. Finding a deal can be difficult, but deal flow is all about getting brokers to know, like, and trust you. We’re going to talk about how to get deal flow or potential deals into your system. Pillar 4 - Secrets to Getting Massive Deal Flow is a lot easier than most people realize. Topics on Today’s Episode: Expect to have to look at hundreds of deals to find one great deal Find and get deals by building relationships with brokers Don’t skip any steps when qualifying, verifying, and validating property details Take this to heart: Look at deals through your investor’s eyes Money motivates brokers; they work for free until you close Brokers find buyers by putting listings on LoopNet (trash can of all deals) How to Get Massive Deal Flow Formula: Go to LoopNet.com Search for apartments to find brokers in specific areas Subscribe to every broker’s list Get brokers to know you and put you on their short list Analyze apartment deals that brokers give you Call broker to explain why something is/isn’t a deal Links and Resources Mentioned: Kahuna Cashflow Calculator 063: The Six Pillars to Profits: Pillar 3 – Secret to Analyzing Phat Deals LoopNet   Quotes: “If you do not look at deals through your investor’s eyes, you’re doing it wrong. You cannot screw your money.” Corey Peterson “I’m going to burst everybody’s bubble...you’ve got to look at like at 100 deals...to find a great deal.” Corey Peterson “One deal set me free for the rest of my life.” Corey Peterson “Brokers want to help you, if they think you can close and get them a paycheck.” Corey Peterson Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.  

Today, I’m going to share some stories about what I did wrong to prevent you from making the same mistakes. Pillar 3 - Secret to Analyzing Phat Deals is often the point where most new investors fail. They make bad assumptions and become too aggressive. They over promise themselves and their investors. That’s a recipe for failure, not success. It can get you into a lot of trouble. I know because I have failed time and time again, but I try to not make the same mistakes. Topics on Today’s Episode: Pitfalls of broker packets with an offer memorandum (OM); peel back layers to find accurate information to analyze a deal and make assumptions Select software (Kahuna Cashflow Calculator) to underwrite and analyze deals Most people speed and drive numbers too fast; they overestimate what they can do - be conservative and learn to say, “No” Data and due diligence identify if it’s a deal or not, don’t buy based on emotions; utilize Do Not Exceed bids Rules of Thumb to Underwrite Properties on Per-door Basis: Raised salaries by $1,285; invest in your people Increased online advertising and promotion by $200 Budgeted $800-900 for upkeep and maintenance Office admin bumped up $150 Get an insurance agent to give you a quote Verify utilities by obtaining costs for the past three months Underwrite cost of taxes going up due to new purchase price CapEx: Determine reserves and make adjustments Underwrite with 25% down; amortize at 25 years, not 30 Never underwrite property with higher than 94% occupancy Always underwrite concessions at 3% Ultimate Underwiring Goal: Under promise, over deliver   Links and Resources Mentioned: Kahuna CashflowCalculator Robert Kiyosaki (Author of Rich Dad Poor Dad) Quotes: “They over promise to the people that matter most - that’s your investor, that’s the money. When you do that, it’s a recipe for failure.” Corey Peterson “Your experience is the sum of two things: All your successes and, I think more importantly, all your failures.” Corey Peterson “If you look at underwriting and analyzing deals from the right perspective, it will give you a key to be super successful.” Corey Peterson “When we really, really want something, we try to make it work.” Corey Peterson Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.

Let’s continue our journey with the Six Pillars to Profits series. Today, I’m going to talk about Pillar 2 - Secret Language of Apartments. The multifamily world uses a different jargon than the single-family space.   You need to be able to learn and understand the multifamily language to make you feel, sound, and appear credible and confident. So, I’m going to share with you some “magic” words that you need to use when talking to brokers, managers, and banks.     Topics on Today’s Episode:   Being new and no BS; don’t fake it until you make it Gross Scheduled Rents: Annual income of property where all rentable space was rented or collected Vacancy: Represents amount of income lost from unoccupied units Concession: Copying a unit (i.e., a 12-month lease with the first month free) Credit Loss: Non-paying tenant Residential Utility Billback System (RUBS): Income received from billing back your portion of water, sewer, or trash Total Income: Referred to as capital improvement, CapEx, rehab money, or cost per door to identify how much much money needs to be set aside for property CapEx Reserves: Money a bank requires to hold back for capital improvements Net Operating Income (NOI): Your income minus your expenses number or cap rate that determines value of property Pro Forma: Assumed forecasted or information presented in advance; financial statements of actual statement, if underlying assumptions hold true Operating Memorandum (OM): Sales brochure brokers prepare to sell property Acquisition Fee (Acfee): Fee that sponsors take for putting together a deal Call to Offers: Deadline date to make offers on a property Best in Final/Final at Best: You may not have the best and strongest offer, but you want to get through all the other offers Pricing Guidance: Information needed to get into the best in final Debt Coverage Ratio (DCR): Measure of cash flow available to pay current debt obligations; states net operating income as multiple of debt obligations due Deferred Maintenance: Dollar figure when owner or operator avoids regular upkeep of a property or it starts to need work Due Diligence: Inspection period of doing physical and financial inspections Letter of Intent (LOI): Included when submitting an offer for a property Make-readies: Rental unit that becomes vacant; it’s a make-ready until it’s cleaned up and becomes rent-ready Plays: Momentum Play: Stabilized property is taken to make micro repositionings or minor improvements Occupancy Play: Unstable property with a high vacancy percentage Repositioning Play: Low occupancy and a lot of rehab to bring property to a fresh, new standard   Links and Resources Mentioned:   Why the Rich Get Richer: The Secrets to Cash-Flowing Apartments Kahuna Cashflow Calculator   Quotes:   “When you’re talking with brokers, with lenders, with banks, you want to appear and look confident, that you know your stuff.” Corey Peterson   “One of the easiest ways to make some additional income is to install and start a RUBS program. We do that on almost every property.” Corey Peterson   “What Wall Street loves is a nice steady rising income. If you can accomplish that and then also have no deferred maintenance at the property...that’s called an easy button.” Corey Peterson   “When you master it, things really start to change. Brokers will start to look at you differently because you are becoming a master of the verbiage.” Corey Peterson   Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes.   Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.

Don’t believe everything that all those information gurus out there teach about multifamily real estate and investing. A lot of them start by showing you how to find a deal. I believe that’s totally wrong and the worst place to start. The ability to raise capital is much more powerful, valuable, and vital to deals. This is the first episode of my six-part series called, The Six Pillars to Profits. Pillar 1 is Secrets to Raising Private Money. If you are able to raise capital, deals will find you. I’m going to teach you a different way to raise capital that has worked very well for me. Topics on Today’s Episode: Corleone Method: If you will find money, deals will come find you; money is always patient and negotiates out of strength Money is made in the money by procuring capital at the right cost Avatars: People who have money, and who they are; they who have the money make all the rules Look for people who are looking for a solid return; do less volume Majority of people’s wealth (i.e. dumb money) is in a 401(k) or self-directed IRA; most people don’t know they can invest in real estate with their IRA Investors want exuberant returns via big risks and low expectations; people don’t want to take big risks and hate the ups and downs of the stock market People like me know how to find great deals on properties that become little factories that write checks and spit out profits Always sell based on income; raise rents and keep expenses tight to create more income and value If you want to raise money, the first people to ask are your friends and family Create an opening “Who am I?” statement for different environments/audiences Selling the Story: Tell a story or have a conversation and end it with, “How’s the market treating you?” Schedule a meeting and have them complete an accredited investor form Bring your Credibility Kit that has a high-end brochure describing your process 506(b) Rules: Raising money is all about relationships; make sure you serve that capital well because that money in return will serve you Links and Resources Mentioned: Kahuna Investments Kahuna Boardroom Cashflow HQ Raising Private Money Course Edward Jones The Godfather   Quotes: “The ability to raise capital is so much more powerful, it’s so much more valuable, and it’s vital to deals. If you are able to raise capital, deals will come find you.” Corey Peterson “I used to really think that the money was made in real estate. That’s just not true. The true capital, the money is made in the money.” Corey Peterson “There’s more money out there than you’ll ever know. The one thing I learned...is how much stupid money is out there, and it is searching for people like us.” Corey Peterson “They will then become your friends. They’ll give you money. They’ll give you referrals. They’ll give you their friend’s friends. It’s something that you should really just cherish.” Corey Peterson   Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.  

Have you always had an interest and pull toward real estate? Want to know how to parlay that into passive cash flow? Want to be financially free? Are you intrigued by legacy wealth? Then, you’ve come to the right place! Today, my guest is Ed Lemus, one of my students who has experienced success. During his real estate journey, Ed became interested in our multifamily content. He attended the Kahuna Boardroom and listened to this podcast. As a result, he has done some amazing things. Topics on Today’s Episode: Kahuna Boardroom focuses on raising capital, finding deals, and operations Finding capital isn’t easy for most people; how Ed raised more than half a million Create and use a high-quality marketing packet to spark people’s interest Never ask people for money, only ask them who they know; ask them to look at your information Share your property pitch and overall strategy; ease their concerns by scheduling a conference call to answer all their questions Follow-up on potential investors’ capex; set up expectations - deliver on exactly what and how you said was going to happen Investors wait for a payment; if that happens, ask them for a referral Become the supplier of deals and grower of money; cash flows from people who can't make it work or grow to people who can Stock Market Roller Coaster Ride: Most people want something steady instead Who’s an avatar? Be clear on who is a profile investor - not those looking for crazy returns, but those looking for consistent and solid returns Share the message and tell your story; “By the way…” Biggest Takeaway from Kahuna Boardroom: Find someone that you know and trust doing what you want to do; copy or partner with them Links and Resources Mentioned: Ed Lemus’s Email Kahuna Boardroom Podio Zoom GoToMeeting The Slight Edge Why the Rich Get Richer   Quotes: “I stalked you for a little while on your podcast and just started to immerse myself in the whole multifamily space and learn a little bit more about it.” Ed Lemus “Rule #1 is never ask people for money. Only ask them who they know. In other words, ask them to look at your information.” Corey Peterson “I always say the right people will come into your deals, and the wrong ones will repel themselves.” Corey Peterson “Here I come with my cape and everything to solve the problem for them. It's really become where it makes me feel great, where it's more of a service that I'm providing.” Ed Lemus Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.

Do you have the right mindset to push through fear? Step outside of your comfort zone? Take massive action to build the life of your dreams? Then, forget about getting a college education. Get your broker’s license and become rich in real estate!     Just like today’s guest, Rod Khleif, who has the top ranked real estate podcast called, Lifetime Cashflow through Real Estate.    Topics on Today’s Episode: Psychology to Success: Success in anything is 80-90 percent your mindset and psychology, and only 10-15 percent of real estate information Logistics can cause you to crash and burn your cashflow portfolio Visualize to manifest what you want Goal Setting Process: Identify, clarify, implement, and achieve everything you want to do, be, or have: What you want What you want to learn Who you want to help Failure can be painful, but motivates you to never do something again I am…remain consistent with how you identify yourself Happiness comes from progress and growth, not the ultimate outcome Difference between success and fulfillment; focus on others rather than yourself   Morning Routine: Take one minute every day to be grateful for what you already have and what you want Links and Resources Mentioned: Rod Khleif’s Lifetime CashFlow through Real Estate Investing Podcast How to Create Lifetime Cashflow Through Multifamily Properties (text Rod to 41411 for free copy) Tony Robbins Jim Carrey Tells Oprah How He Visualized $10 Million Dollars How Walt Disney Took Influence From the 1964 World’s Fair to Create Epcot Elon Musk Grant Cardone Zig Ziglar Dale Carnegie Tim Ferriss The Miracle Morning Book   Quotes by Rod Khleif: “Success in anything is 80 to 90 percent your mindset and your psychology, and only 10 to 15 percent the real estate stuff we talk about on our podcast.” “Everything starts with gratitude.” “Don’t underestimate the power of visualization.” Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes.   Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.

Today, my special guests are Cory Boatright and Sean Terry, who were two of my partners from the very beginning on the University Crossings deal. This is the last part for the series regarding University Crossings. We share what went wrong, what went right, and how we overcame obstacles that are often part of multifamily transactions. Topics on Today’s Episode: Ups and downs of deal included asking for money from investors, stressful deadlines stressful, and people making excuses Learning curve on due diligence, occupancy, and other factors that affect loans Multifamily Investing Model: Deal must cash flow from point of acquisition Protect investor capital at all costs because of possible risk and intolerance involved in some deals Utilize Cash Flow Calculator to help analyze deals Property can look good on paper, but a site visit may change your outlook Fact-Finding Mission: Ask the right questions to determine a property’s potential Deals are not driven by price, but potential NOI and cash flow Offer Process: Get lead, do due diligence, visit property, and submit Letter of Intent (LOI); costs more, but makes you more apt to make the deal happen Closing delayed for various reasons - occupancy rate, seller coma, financing, etc. Create and present a marketing package that excites investors about property Investor’s Top Concerns: Is my money safe? How and when am I going to get my money back? Choose partners that you can trust and learn from; find commonality to find deals Links and Resources Mentioned: Coaching from Cory Boatright Real Estate Investing Profit Masters Sean Terry Kahuna Cashflow Calculator   Quotes: “We took it (University Crossings) on together, and we kicked it in its butt. But, it wasn’t without its ups and downs.” Corey Peterson “Your (Corey) model is it has to cash flow right from the point of acquisition.” Sean Terry “Protect investor capital at all costs.” Cory Boatright “The only way you’re going to increase occupancy is lower rents. If that’s the model, that’s not a good model.” Sean Terry Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.

What happens when you sign the dotted line and officially go under contract? That doesn’t mean it’s a done deal. You’re not out of the woods yet because there’s still a lot of moving parts to manage. Here’s part 2 of 3 regarding my University Crossings deal. I share what went wrong, what went right, and how I overcame obstacles that are often part of multifamily transactions. Topics on Today’s Episode: Receive required items/documents identified on Purchase and Sell Agreement (PSA)/Letter of Intent (LOI) from seller Seller’s Coma: Seller is unmotivated to give you details due to poor record keeping or they’re trying to hide something Establish site visit and physical inspection to rate/asses property’s major systems Give all vendors the same instructions; ask them for a fair and do-not-exceed bid 45 calendar days for due diligence and another 45 calendar days to close Perform financial audit of property’s current leases on file Engage a lender to get a loan for the property based on occupancy percentage; loan is in jeopardy and extension may be needed if percentage isn’t maintained Owner should never try to negotiate with a broker or seller; let others talk for you Lack of communication between all parties involved causes problems and delays; request phone conversation with seller to offer clarification Concessions may be necessary, even if something is not your fault; you’ll end up making that money and more back Lender isn’t ready because they did not process the loan to close on the property, which put me at risk of losing money Links and Resources Mentioned: Freddie Mac Fannie Mae Quotes: “Our due diligence does not start until they have delivered it...we have to sign off and say that they have delivered all items.” Corey Peterson “Do not think we’re stupid. We want you to be fair. We want you to be upfront, and we don’t want you to think that you’re just going to get rich off of us.” Corey Peterson “Negotiation - everybody goes in with a gun, but no one has any ammo.” Corey Peterson “We had leverage at this point, and leverage, my friend, is very, very vital to being a good operator.” Corey Peterson Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.

What happens in deals? There’s usually some bumps along the way. They don’t go perfectly, but they usually go on to close.    This is the first of a three-part series where I break down the details of what happened with my University Crossings deal. I share what went wrong, what went right, and how I overcame obstacles that are often part of multifamily transactions. Topics on Today’s Episode: How to find a deal? Broker relationships What to Look For: Numbers, stable cash-flowing properties that need little work Set a Goal: Increase occupancy or/and raise rents Manage costs when spending money; seek higher than average maintenance Use Residential Utility Billback System (RUBS) to its full potential Reduce office admin costs to save significant money Underwriting: Key to finding good deals is that you must be willing to do the work Site Visit: What surrounds the property? Who’s in the area? Is there much crime? Rookie investors make mistake of submitting offer before setting foot on property 90% of the game is to get brokers to know, like, and trust you Occupancy rates help determine financing options Do a CapEx budget (rehab money) per door Win bid by stacking/leveraging deals and submitting Letter of Intent (LOI) packet Ask broker for pricing guidance to get invited to “Best and Final” round Identify seller’s hot buttons: Price, surity of close, etc.; call broker to get the price you need to use to be competitive and win the deal Avoid agreements via email and seller’s purchase and sales contract; get them to sign your LOI to confirm that they agree to everything in your language My Challenge to You: Be in pursuit of both time and money via commercial and multifamily real estate; cash flow is the new sexy Links and Resources Mentioned: Kahuna Cashflow Calculator Freddie Mac Fannie Mae Quotes: “Underwriting: The key to finding good deals is you have to kiss a lot of frogs. You just got to be willing to do the work.” Corey Peterson “We go to the property, and we do a site visit. Things can go from good to bad quickly.” Corey Peterson “They’re not willing to go visit the dirt. You have to be really willing to visit the dirt...before you actually make an offer.” Corey Peterson “90% of the game is to get brokers to know, like, and trust you, and to be a part of your team.” Corey Peterson Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. Text the word MONEY to 408-500-1127 to get my free private money program and credibility kit for single family.