BiggerPockets Real Estate Podcast - 205: Snowballing from Single Family Houses to Apartment Complexes with Jered Sturm

Episode Date: December 15, 2016

How does one transition from doing simple houses to more complex deals? That’s the topic on today’s episode of the BiggerPockets Podcast, where we sit down once again with Jered Sturm, a real estate investor from the Midwest who’s made the transition from doing all his own work on single family houses to purchasing larger properties. In this episode, we dig in deep on the purchase of his newest 42-unit apartment complex and the unique “value-add” ideas he discovered that made this property a home run! In This Episode We Cover: A quick recap on how Jered got started in this game What market is he in and how it changed over the last couple of years Why he moved his investing from Cincinnati to Atlanta How he uses partnerships to manage different markets Tips for funding using other people’s money The goal that led to using syndication Self-fulfillment rather than just buying more The importance of figuring out your “why“ How he has the discipline to not spend their quadrupled income Why you should separate out the “business income” How he found his 42-unit apartment complex Tips on managing cold calling  What criteria was he looking for The advantages of having dedicated water lines for the units The beauty of adding value to properties What exactly a resident manager is Why building structures made the difference in their business How he financed this multifamily deal Using the BRRRR strategy on large multifamily And SO much more! Links from the Show BP Podcast 124: Building a Real Estate Empire At a Young Age with Jered Sturm BiggerPockets Forums BiggerPockets Webinar BiggerPockets Podcast What Sets Apart Successful Real Estate Investors From Those Who Fail, Quit, or Never Get Started? (blog) BP Podcast 108: Building a $350 Million Real Estate Empire Using the 10X Rule with Grant Cardone BP Podcast 060: From 0 to 68 Rental Units in Just Four Years with Serge Shukhat Buildium BiggerPockets Bookstore Books Mentioned in this Show The Book on Rental Property Investing  by Brandon Turner The Book on Managing Rental Properties by Brandon Turner and Heather Turner Traction by Gino Wickman E-Myth Revisited by Michael E. Gerber Tweetable Topics: “Self fulfillment is how can you be the best you can be while also helping others be the best they can be.” (Tweet This!) “We’ve over prepared for the future, and even though we’re still pretty small, we’re running like a large company.” (Tweet This!) “Management makes or break the investment.” (Tweet This!) Connect with Jered Jered’s BiggerPockets Profile Jered’s BiggerPockets Author Profile Jered’s Company Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets Podcast Show. Oh, no, wait, I can't take this from you, Brandon. Why don't you take this one? Oh, you're a good guy. All right, this is the Bigger Pockets Podcast Show, 205. Our first house we bought for $14,500. We did the Burr Strategy on it. We rolled into the next few.

We rolled into the next few. And five years later, we bought a $2 million apartment building. And we don't have any other outside income. We use the real estate money to snowball. You're listening to Bigger Pockets Radio. simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place.

Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everyone? This is Dave Meyer, guest host of the Bigger Pockets podcast here with my co-host, Mr. Brandon Turner. What's going on, man? Hey, pretty good. You did that almost as good as Mindy did it last week. I know.

There's a lot of big shoes to fill. First Josh, then Mindy. Yeah, I know. There's a lot of pressure here. I know, you are. Well, I'm super excited to have you as the host today. Josh is out with some family medical issues, emergency, I guess. So the next today's show and next week's show, we got you and me hanging out here.

So everybody keep Josh and your good thoughts and prayers and all that and his family. And he'll be back shortly. So we can handle this. You and I. We got this, right? I think we got this going pretty well. So what's going on? How was your Thanksgiving?

It was good. I went to Minnesota, hung out with the family. You know, that's always fun. What about you? I went back to Providence where my sister lives, and it was great. Lots of food, good family. But back to work now. There you go, back to work.

Yeah. And, of course, every time I go home to Minnesota, my sister's got five kids. And so all out of the age of five, well, five, four, three, two, and one. And so you can imagine every time I go there to hang out with those kids, I get sick. Every time. So, like, it's just like kids are like, I did bring Rosie. She did not get sick, surprisingly, but I did. Wow, strong immune system.

You're raising it well. Yeah, yeah. So I got a good old cold going. So, you know, whatever, it happens. Well, welcome back. We're glad to have you back. And hopefully we can take this podcast down. Yeah, I think we can.

This was a really good show. We just got down interviewing our guests today. Fantastic show. We're talking with Jared Stern. I hope I'm saying his last name right. We actually had him on the show back at, what was that, number 12, I think back, what, year and a half, two years ago almost now. And at the time, that was one of our more popular shows of all time, because he was only like 24, 25 when he got, like, I mean, when he was on the show.

I mean, he was just crushing it back then. But back then, he was doing all his own work himself. You know, if people want to listen to that show, they can go back and listen at biggerpockets.com slash show 124. But he was doing everything himself with his partners, but all the labor, all the fixing up, everything like that. But today his business is quite a bit different. and they've really made some huge turns in their business, which are pretty cool. It's awesome. I mean, it's a really inspiring story to hear just how successful he's been over the last couple of years.

And I was shocked to hear that he was 26 years old. I mean, aside from maybe Scott Trench, who works at Bicker Pockets, he is the most mature 26-year-old I've ever talked to. Yeah, he gets it. Got a great perspective on not only real estate, but life and giving back to the community. And it's just a really interesting guy. I think you're going to really enjoy this show. And I especially loved his discussion.

Towards the end of the show, we talked about how he negotiated on this big apartment complex purchase with the commercial loan department of this bank. He negotiated like every single aspect, ended up getting $100,000 off his down payment, basically. Negotiated away 100 grand. Amazing. That's an unbelievable story. I mean, I can't believe he actually succeeded at that. I know.

Pull him in on future negotiations. I know. I know. Clearly very good at it. Yeah. Next time I need a bank loan, I'm going to have him come. and pretend it to be neat. Fantastic. Anyway, well, you'll listen to that in just a minute, but before we get to the actual show,

we had a couple quick housekeeping things to get up. So first of all, let's get to today's quick. All right, today's quick tip is if you are ready to really dig into any particular subject, go to the Bigger Pockets guides. You can go to BiggerPockets.com, and under the education tab, just click on guides. There you can see the ultimate beginner's guide, of course, very, very, popular, how to rent your house, how to start wholesaling. If you're new to real estate, this is an excellent way to really dig in on a particular topic and sort of get your bearings

before digging into other aspects of the business. Yeah, and they're really expensive, though, aren't they? Oh, they are extremely free. They are as free as they get. They are as free as they get. Yeah, free guides. So, yeah. So go check those out. You have no reason not to. And they are right there on biggerpockets.com. There you go. There you go. All right. Well, good deal. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed, sponsored job posts help you stand out and hire the right people quickly. Your job post

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slash landlord insurance. Steadily, Landlord insurance designed for the modern investor. We all joke that rentals are passive, but if you're spending nights matching receipts or guessing what a property earned last month, that's not passive at all. Baselaine fixes that part of landlording, the financial chaos. Their banking and AI bookkeeping system automatically tags every transaction, updates cash flow insights in real time, and builds the reports you need for tax season. You can even automate transfers and move money around without paying wire fees. It's just cleaner. Sign up at baselane.com. BP and get a $100 bonus. Base lane is a financial technology company and not a bank. Banking services provided by Threadbank member FDIC. So let's get into the show. Like I said earlier, Jared Sturm. He is amazing. Him and his partners are doing some really awesome things out there in the

Midwest and moving actually. They're investing over to another city as well, which we talk about. But Jared, like I said, young guy crushing it in real estate. We're really excited to bring you guys to interview with him today. So let's just jump right into it. Awesome. All right, Jared, welcome to the show again. How you doing? Doing great. I'm happy to be back. It's been, I guess, almost two years, but I'm happy to join you guys again. Very cool. Very cool. Have you on, man? Yeah, yeah, this should be fun.

So what do we go back? You know, a lot of people listen to the show today. The Bigger Pockets podcast today is getting well over 100,000 listens per episode, if not 120, 30, 150. I mean, we've grown quite a bit since you were last on the show. So a lot of those people listening today have never actually heard your previous show. So can you give us just a recap of who you are, how you got started, and, you know, kind of how you got into this game? Yeah.

So I got my start in real estate at 17. where I kind of dipped my toe and I started as a handyman for a local real estate investor working on his rentals, just doing pretty much whatever he needed done. I learned the interest in real estate and got my interest sparked through doing that. Use the skills that I learned as a handyman, developed them into a construction company that I started with my brother that we ran through college and doing the construction on other people's homes, kitchens, bathrooms, additions. That allowed us to save up some capital as we went through college. And right as we graduated, we did not go get W2 jobs. What we decided to do was roll those funds from the construction company

that we had saved up into buying single family houses that were really distressed and use our skills in contracting to start fixing those up. So we did quite a few single family houses, then started to do duplexes, and then we got a five unit, and then slowly have made our way up to apartment complex with the most recent purchase of a 42 unit. And that is our goal to continue in the multifanilies. That's awesome. That's awesome. That's great, man. So can you tell me a little bit about what market you're in and how it's changed over the last couple of years? Yeah. So we started in Cincinnati, Ohio. And that's where I'm born and raised, started the company there. And our portfolio is still in Cincinnati, Ohio. But then about two years ago, we made the decision that we would probably

we start buying larger Maltese and doing that through syndications. So we wanted to open it up into a market that's strong cash flow, as well as a market that has more potential for growth than Cincinnati does. So we made the decision to move down to the Atlanta market as well. So now we're playing in two markets, the Atlanta market and surrounding, as well as the Cincinnati, Ohio, and surrounding. But most of our experience and a lot of the stories you'll probably hear from my past is the Cincinnati market. So what is it about the Cincinnati market that made you feel there wasn't a lot of room for growth?

And what are you seeing in Atlanta that has got you so excited? A simple answer would just be net migration. So Cincinnati does have larger corporations like Procter & Gamble GE headquartered here. But as far as the net migration goes, it's stagnant. There's just people aren't coming in where down in Atlanta, the quality of life, but the cost of living is still very good. And so just like Texas, you're getting a lot of people coming in. Corporations are headquartering there. Jobs are located there, which is pulling in the millennial generation.

And as we all know, they're tending to rent more. So the apartment complex model lent to the Atlanta market. Not to say that Cincinnati isn't, it's just a different market and lends more possibilities for growth than Cincinnati does, but Cincinnati has stronger cash flow. So it's just really what our investors are looking for. Okay. Okay. So I think that's fascinating that you chose a different market,

Because that's something I've been thinking about doing as well, getting away from my little, you know, Great Harbor Washington market and getting elsewhere, right? So I mean, having this, like, reoccurring, like, fear lately of what if a tsunami came and wiped out everything that I have? But I probably should diversify a little bit, you know. I mean, some of my houses aren't a hill, but most of them are down in the flat area. So, all right, so how did you decide? I mean, what made you, there's a lot of good cities that have growth that have, you know, movement in them. What made you choose Atlanta and said that's the one I'm going to?

Or was it just, it was available, there was a deal there? Well, no, we haven't purchased anything there. Okay. And the answer behind that would be more so on my brother, who's my business partner. His formal education, he did the construction with me, but his formal education is economics with a focus in real estate. So he's the one that will do more of the market analysis and dig into those net migration numbers and sub-markets within them.

And we saw that, you know, those numbers of the cost of living comparing to the quality of life and all his data that he put together, we put a pin in the map and said, let's shoot for Atlanta. There was other options around in Texas and were a lot of good options, but we decided that that market would fit us best. Okay, okay, that makes sense.

And so you guys are planning to go moving forward from now, you're going to start looking at Atlanta primarily. Is that what you were saying? No, so just sourcing both markets. One of my partners is still in Cincinnati and able to oversee, you know, whatever we're doing here. And then I, myself and my other partner,

I went ahead and moved down to the Atlanta market. Oh, I see you actually moved. You actually moved there. I've either missed that or we glossed over it. But all right, so you moved to Atlanta. You're going to start looking there, but you're also keeping the old thing going. So that kind of begs a question. You mentioned partners.

Can you kind of give us a recap? How does your business work? How does it structure? Just you and your brother, you have other people involved? So there's three partners total, and we're equal partners in our business. But there's myself, my brother, and then a third guy named Coleman. So in the syndication business that we're focused on now, the roles are kind of split up where I'm sales and marketing dealing with the investors and bringing on the equity. And then my brother, his formal education is real estate economics.

So he's doing acquisitions, market analysis and things like that. Coleman, his background is in accounting. He's a CPA. So he does asset management and the financials behind the company. It makes sense. When you're talking about syndication, I think this is a question we get on bigger pockets. all the time is how do you even go about starting something like that finding people who want to buy deals networking finding financing for these kind of deals where did you even start transitioning

from using your own capital to trying to use other people's capital yeah well it's new to us even so kind of looking back at our story of starting in the single families then slowly getting into duplexes then the small maltese and then going into larger stuff that you know i kind of glazed over it it sounded like a quick process, but really it was five years of full-time, a lot of work, grinding it out. It's not, it wasn't easy in any, any fashion. And all of that was done with our own capital. And we did that for a couple reasons, but mostly because how we viewed capital was that is money that someone traded their time to earn. So we wanted to prove our own concept with our own money and prove we could do it before we ever went out and said, hey, everyone, you know,

are you interested in investing in our company? So how did we get to that point? It was slow and methodical. We knew that's where we wanted to end up. But just to go out and say, I would love to own, you know, 100 unit plus apartment complexes and who wants to give me money, it never would have been successful. So it was a five-year grind to get to that point to feel like we were worthy of even asking for it. That's really interesting because I feel like a lot of people want to start with syndication and then eventually go to using their own capital and sort of being on their own and more independent.

So it sounds like you had the goal of becoming a syndication channel. Why was that your goal when you were starting out? Well, our goal was to buy large apartment complex. I don't know if syndication was always an option. but as we got closer to it, we saw the possibilities that it could give in growth. But even more so, it gives us a fulfillment that doing it on our own can't. So I wrote a blog for Bigger Pockets the other day that one of the reasons behind syndication for us was we're able to reach a level of self-fulfillment that I feel like is possible through syndication. So what I mean by that is could I reach my financial freedom on my own?

without raising money from equity investors? And the answer is yes. I live a pretty simple life. I'm a simple guy. So I'm only 26 now and I'm pretty close to that number already. So if I just took my foot off the gas and coasted to 30, I'm probably going to hit it because it's a pretty basic lifestyle that I enjoy. So why even bothered doing this syndication? It's just a lot of extra work. I've got to learn the whole business model. And the answer really is because I think financial success and like self-fulfillment or spiritual fulfillment, whatever you want to call it, is a very different thing. So for me, self-fulfillment or spiritual fulfillment is how can you be the best you can be while also helping others be the best they can be? And for me, I've found this niche in real estate

that I've had very good luck in and have proved myself over and over. And so I think I can help others who maybe don't have the channels to find the returns or even if it's just advice writing on the blog. I do it, you know, every two weeks I write a nice long blog to help others out. And that's really one of the reasons for syndication is because it gives us an ability of self-fulfillment more so than just, oh, we need money. I think that's a fascinating topic because, yeah, I mean, you don't need to, I've been thinking about my own life lately, but, like, I don't need to keep building bigger and better stuff. You don't need to go into 100 unit, 200 unit. Like, we don't need to do that. It kind of reminds me of, like, when we talked to Grant Cardone back on show 108, you know,

he talked a lot about that kind of same topic. You don't need to get richer and richer and richer, but it's not even about getting richer and richer and richer. It's about like, are you fulfilling your potential? Are you doing what you like to do? That self-fulfillment versus, hey, I've got my 30 properties. They're cash flowing. I'm going to sit down and just in coast.

I'm going to go work at McDonald's for the next 40 years of my life because I hit that goal, right? Interesting perspective, I guess. And I think, obviously, when you're just starting out, yeah, having that financial freedom goal, having a number there is great. It's important to know where you're getting. into, but that's not the goal of life to get to that point either, I don't think. Right. And to that point is, that's kind of like what is your why? You know, everyone always mentions that. What is your why? And mine has evolved over time drastically. In the beginning, like the first five, six properties,

it was like my why was because I need to eat and I need a roof over my head. And, you know, if you're thinking of like the hierarchy of human needs or Maslow's, I think it's called, like in the beginning, that was my why. Like I got to feed myself. I need a roof. And then the next one was like, oh, I want to set a foundation to start a family on. And it was like, okay, well, I have enough to do that. And then it was like, oh, well, no, I want financial freedom. Then I won't ever have to, you know, trade my time for money. And then I was like, okay, well, I can see that. You know, I'm not there yet, but I can see in the future, like, this is going to happen. This is very achievable. So it's like, well, my why then shifted into more of the self-fulfillment, helping others, and how can I do that?

How can I do that the best I can do it? And for me, that's real estate. So that's why I continue to push on. And that's why we're exploring this business model. That's great. That's awesome. All right. So let's go back a little bit and go back to the last show.

We talked to you a lot about how you got started, you know, how you found your first few deals with all that. At the time, I don't remember how many units you had. I think you had like 20 total units or something like that when we had you on. You mentioned now you bought an apartment complex. I definitely want to dig into that here in a minute. it. But can you kind of fill us in on like the last year and a half? So for those people who heard the last show, and if you haven't, go listen to it at biggerpockets.com.com slash show 124.

But for those who have heard that, what have you done in the last year and a half? What's changed in your business? Where have you taken it? What's that kind of look like? I mean, flipping and rentals, what have you been doing? Yeah. So at the end of 2014, we noticed prices climbing quickly in the Cincinnati market, or at least as we thought that was quickly, because we started back in the end of 2011. So we were used to low prices. That's like what we came into. And so we were thinking, oh, this is crazy. Who can pay this? So we thought, let's like jump on this trend upward and switch our strategy over to fix and flip. So our background in construction and contracting was a very easy transition into that. So we were pretty much fixing and flipping these rentals. We were just

holding onto them rather than selling them. So all we did was we did was we, up the purchase price into better retail areas. And we started flipping. And so in 2015, we just hit the ground running with flips. We did 17 flips that year and never had done any before. Our average sale price was 176,000. So we did just under, just right around $3 million in flips just in 2015 and then we were out. And the reason we did that is because the flips was just a way for us to make money to get that ultimate goal of apartment buildings. And so we made really good money. We were very hands-on in the flips, you know, even doing some of the work ourselves, obviously was 17 in a year. We couldn't do it all, but doing a lot of it. So it just pushed our margins greater and greater.

But then we took that money, the money from our rentals previously and then took the money from the flips and just kind of pushed all in again and bought just the apartment complex, which was just over $2 million with our own funds, which is, it was a lot for us. And it was just like a big pill to swallow, but we did it and we're excited to take that on. Wow. So basically you flipped your way into an apartment complex with your own money, which is something that people talk about all the time and I think is very, very cool. Yeah.

And in the last podcast, we had just started, when I recorded the last podcast, we had just started doing our flips. And one of the questions you asked was like, what sets apart the successful from those who quit? and my answer was like self-disciplined because at the time in that year in 2015 my net worth quadrupled I was making more money than I ever had in the previous 24 years of my life so that self-discipline to just be like we're not going to take any of it and literally all of it goes back into a apartment complex was something that was at the forefront of my mind so

that's why I answered that question then because it was like oh this could be nice to go use but now we just put it back to use and investments all right so let's let's dig out on that because most people would not have the discipline to do that, I would say. Most people, if they suddenly quadrupled their income, they would go out and buy a better house, a better car, they'd go buy that Tesla that they wanted. I'd be out of here. Yeah, it'd be like very different. Like, how does somebody...

Retired. Yeah, retired on Donna. You know, like I got all this money. So how did you guys, was it, do you think it helped to having the partnership? You guys were all in that same page there together, or are you just a really disciplined guy? A little bit of everything. I think all those points that you hit on. But it's hard to explain, but it almost felt like it wasn't ours to spend.

It was like, oh, no, this is the businesses. It's business money. And since the beginning, it's always been like that. All the rents come in and they go back into buying the next one. So it's kind of just how we've lived and we've learned to live that way. You know, we had talked about it. It said, you know, if we start taking money out of this thing and we start paying ourselves, it's going to be hard to go back.

You know, you get used to that lifestyle. So let's hold off as long as we possibly. can. And, you know, I have to give praise to, you know, our business partner, my business partner and my wife, because I'm not exaggerating when I said 100% went back in, 100% did, and they supported us through it. So, you know, my wife's a school teacher. We lived off that salary. And like I said, the life that I enjoy is pretty simple. So that I don't need more than that. So, yeah, it was a little bit of everything, a little bit of everything, but a lot of discipline and just, it always felt like, it's not ours to spend. We got to put it back.

in and this is the goal and just this is what we do. I think that's cool where you mentioned it's business income. When you can separate that in your mind, I think that's key, both for rental and for flipping. That's why I kind of recommend a lot of times even when people want to manage their own properties, that's great. But I would still like set aside money for property management and then just pay yourself a property management fee or whatever and then maybe give distributions at the end of the year or whatever. You know, just keeping that separate in your mind keeps it from this is just a hobby or this is just money coming in. I can go spend it how I want to, to keeping it very business-focused.

And I think that's the key to grow in any event of business. That's actually exactly what I do, because I self-manage as well. And I set aside what I would have to pay a property manager and pay myself that amount. So in the future, as I accumulate more properties, I plan to just shift that over to someone else. But that way, at least I know what's mine, what's the businesses, what can be reinvested, and what's going to need to be allocated for more professional management in the future. Yeah. And with the 42 unit, you know, we knew we were looking in that one to three million dollar price range and we were going to get leverage on it. But even with leverage, that's a

whole lot of money to, that was a lot of money for us to put down on that building. So one of the things that we did in preparation for buying this 42 unit building was try to get our ducks in a row so we could look better for banks. And we've worked with our primary lender is just a portfolio lender in the Cincinnati area. But one thing we did was we shifted our business accounts into their bank almost a year prior to purchasing this property because we were doing cash out refies on some of our previous rentals. And as most of the listeners might know, that's not a taxable event, so it doesn't show up on your tax returns. So what we were doing was we were letting them watch our finances go in and out, the flip money go in and out, you know, it would come back more.

It would go out, it would come back more. And so we were trying to, to give them more confidence in us than what we could produce on a tax return. And so we shifted all that over there. And that really, I think, helped us a lot get this financing for this deal because on paper, it might have been difficult to underwrite us for a $1.8 million loan. Yeah. Yeah, that's awesome. Can you tell us a little bit more about the 42 unit that you bought?

How did you find it? How was it? Well, you tell us a little bit about how it's financed. But can you tell us a little more details about that deal? Yeah. Yeah. I'll dig into it. So sourcing leads was different because the multifamily apartment industry kind of sits separate

from the one to four unit stuff. So it was new to us. And what I did to find leads was I built a list of all the brokers who had anything listed in Cincinnati. And then I also went to the auditor site and built a list of anyone who had bought a 20 unit or more in Cincinnati in the past 15 years. and then I scrounge to get phone numbers, and I called, I started out like, oh, I'm going to call 20 a day, and I would burn out because it would like, oh, just so many knows or, you know, just like, oh, yeah, sure, I'll let you know. So then I paired it down to I'll call three brokers and three owners, and that's what I just did every day, and I would add to the list, and then I would just rotate.

And so with this 42 unit, it was about three months into me looking for a deal. And of course, we looked at lots of them, but they just didn't pan out or our offers didn't stick. And three months in, I called one of the biggest brokers in Cincinnati does the most volume. And it just said, hey, I know we talked about a couple months ago and I want to see what's on your radar, what's coming up. And he said, actually, a deal that fits your criteria perfect is about to fall out a contract tomorrow officially. And I said, well, where's it at? I'll go look at it tomorrow. Can I meet you? We'll go there today. What do you got? Send me the financials. And so he sent it to me. And then the very next day, we went and looked at it. And like all real estate, big or small, we knew if it works, we need to be able to pull the trigger fast. So that was how we found the 42 unit was just through cold calling. And we saw opportunity in it that I think some of the other potential buyers missed. And we saw that opportunity by using our back. in management as well as our background in construction. And so I can kind of jump to that if you guys would like.

Oh, I mean, I think that's awesome. It's just kind of proof that you make your own luck. Like you could say you got really lucky that it was going to, it fell through the day after you were calling about it. But if you hadn't been calling, there's no way you would have known about that. So good for you for hustling like that and obviously found a great deal because of it.

I was just curious before you jump into the next part is, Can you tell me a little bit more about the criteria that you were using when you were making these cold calls? What were you asking the brokers for? And how did you go about developing that criteria that you were looking for? Yeah, that's a really good question. And one thing I did to help with that process was I put not all of the criteria, but most of the basic points into just a PDF that I could, after our phone call, I would just be like, oh, well, I'm going to send it to you just so you have it.

And so there were very basic bullet points. We're looking from 1 to 3 million C to B class properties and looking for a 7 cap and above is I think what it was at that time. And in the lower cap rates, we wanted a value add proposition, but we're looking for it in pretty much all of the deals. Something that the brokers mentioned that they don't always see that I wrote in there. And I think it's because of my construction background is I wrote a lot of things about the building, the structure itself. So I wanted pitched roofs. I didn't want flat roofs. I wanted something with PVC drain lines.

A brick exterior was preferred in vinyl windows. So they said normally they're not seeing that in the initial conversation. And I don't know if it helped, but it may have caught their attention just to say like, oh, this is different. So those were like the basic bullet points of it. And then we, of course, had more detailed stuff in our own underwriting. Yeah, I love that. I love that.

And I think there is a tremendous amount of value in being specific on things. Because, you know, like I think I've even said this on the podcast before, but somebody, I don't remember who was, once told me, like, when you're looking for a job, if you were to go tell all your family and friends, hey, guys, I'm looking for a job. Everyone would be like, well, good for you. But if you're like, hey, guys, I'm looking for an accounting job that is within 30-mile radius of Minneapolis, all of a sudden people start thinking, like, okay, how do I know anybody that's within 30 miles of Minneapolis? And people start using their heads, right?

So the more specific you are, it actually helps you because people start thinking, oh, do I know anything like that that can help this guy out? Because people want to help other people out naturally. And so when you can give them a specific way to do it, I think it's a fantastic situation. I love that. So what else were you looking for in the actual building? You said that you noticed some things that other investors probably didn't see. What were the things that you saw in this 42 unit that made you say, I got to jump on this deal? That's good question. Yeah, so from all on paper, this was a stabilized property. I think occupancy was hovering around 95%. So on paper, it was

stabilized. When we walked into the units, one of the first things that we noticed was this would be very easy to sub-meter the water. The previous landlord had just started to implement rubs, and so only a few of the residents were on it, but not all of them. And we walked in, and it was like, you literally can cut the pipe right here and just slide a meter in and as easy as that. So then we started to dig into that value-adad proposition and how we could play off of it. And another, something that came of that, if we were to sub-meter, we realized that there was washer and dryer hookups in every single individual apartment. And the previous owner said, oh, no, we don't do anything with washers and dryers because we don't want to pay for the water that they'll run one shirt

if it's in their unit. And so we said, okay, let's consider if we submeter the water, we'll then consider renting washers and dryers to each unit and charging for that further boosting our NOI. And because of that value add, another door opened up in our common area laundry rooms in the building would then be something that we didn't need anymore or we wouldn't want to have anymore because then it would incentivize, if you take it away, it incentivize the residents to rent your units. So those laundry rooms would then be empty rooms and there's two in each building. So we said, what can we do with those? And in our due diligence, we interviewed all of the residents and said, what would make your living experience better living here? And they said,

more storage. So we said, all right, well, there's our opportunity on the laundry rooms. So we ended up building storage units in those laundry rooms and running those out for $25 a month in addition. So these value ads were something that we saw because of our background in construction as well as our background in management that other people just looked at it and said, oh, it's stabilized. You know, the rents are at market rent, so there's nothing we can do. And we just dug a little bit deeper. And I hope to be able to recreate this kind of deal over and over in future stuff. But this one is going to be, if everything goes exactly as planned, which is. So far it is, you know, we'll be able to refi at the end of year two and pull 100% of our money back

out just from those minor tweaks. The main one being the water, but those submeters only cost us, I think it was $189 per unit installed. And they're read through Wi-Fi and a company can read them at their offices and then send out the billing and do all the collections and everything. So we don't even have to deal with anything. So, yeah, I love that. I love this topic. We talked about this a long time ago back on, I don't even know what show was 60-something with Serge Shukot, because he did a very similar strategy. So we'll link to that in the show notes at biggerpockets.com slash show 2.5, a link to that episode. But I want to dig in on that a little bit. So you mentioned rubs, which for those people who are not familiar with, it's the way of metering separately each unit and building each tenant for what they actually use on the water.

Now, do you, in that property, are you submetering, like, are you, I should say, are you metering just like the hot water and then pro-rating it based on that? or do you meter all the water? I mean, is it completely separate for each unit? Do you know what I mean? I've heard people do in both ways. Yeah, so that's kind of what I meant when our background and our experience in plumbing, we walked in and we were like, this entire unit has its own dedicated water line. So we're submetered on cold and hot and it has its own hot water heater.

So at this point, we don't pay any water where before the water bill was $29,000. So that swing in NOI makes a huge impact. Huge, yeah. And we feared, you know, what will that do if you make the residents pay that? And one thing we're doing is we're keeping the rent stagnant for the first two years, you know, no rent increases in that. But we met with some other investors in the area who had done it and asking, you know, what will happen, how did it go? And one thing we really liked about it is water consumption as a whole for the property goes down 30% when you submeter. So you're decreasing your expenses as the landlord X, but you're only increasing your residence expenses, you know, 70% of X. So it doesn't have as big of an impact. Now, we've already completed all the submeters, and we didn't lose a single tenant over it. So we made them aware of it. We were slowly putting them in, and we said they'll go active at this date, and everyone seemed to understand. And we kind of pitched it

or framed it as now you have the opportunity to, you know, save money. If you want to, you use less will affect you positively. That's amazing. That's really fantastic. I mentioned back in the show 60, which was like two and a half years ago, I would love to do that in my apartment complex. The reason I didn't is because the water lines are so convoluted in there. So like, you know, the hot water. I mean, the hot water is separate. The cold water, though, is just, you know, the upstairs will share with the downstairs on the same cold line. So I couldn't separate it. Now, like I said earlier, I could do it just on the hot water and just monitor hot water usage and then bill them proportionally based on that, but it felt a little weird to do it, and I just, I never did it. But I took my triplex

last month and I just, we sent out a letter to everybody and said, hey, by the way, you guys are now responsible for your own water sewer garbage. Nobody left. Nobody cared. I mean, it added like $100 a month to their bills, but nobody said a word. I mean, nothing. They just took it. Like, and I'm like, why didn't I do that years ago on that property? Like, it just, it makes, a lot of sense. Now, what, do you remember what the average water bill, or do you know what the average water bill for those tenants is now? Like, what are they paying? Basically, what do their rent go up in their heads? We're expecting about $45.

Per month per unit, like they'll be paying. Okay, and you didn't lose any, but yeah, I think that's phenomenal. I love that. Well, are they getting any increased convenience by actually having the laundry units or the washer and dryer in their units? Of course, yeah. I mean, the way we picked, the way we framed the washer and dryers is we sent out a flyer saying this is an option now, and it wasn't about, hey, look at this.

look at this fancy dryer that you could own. It was like, let's talk about all the negatives of coin laundry, you know, waiting, you go in there and someone else left their laundry in there, and so you can't use it, or, you know, you have to stay home and time your laundry to be able to get it. So we focused on the negatives of coin laundry to start pitching the washers and dryers. But right, that's right where we are currently in the value add process. So we've already done the submeter of the water, and now we're just implementing, like, just this week starting to do those washers and dryers. That's awesome, man. I would gladly trade

$45 to have a washer and dryer in my own unit. I mean, I treat my washing machine as my hamper and my dryer as my closet, basically. So having it right next to my bedroom would be really ideal. Yeah, that's awesome. I totally, I think that was probably one of the biggest keys there was giving people laundry. Yeah, because I mean, I would do the same thing. If I didn't have a lot, if I had to go to a laundry center and go use coin up laundry and all that drum involved with that, and somebody were like, hey, no, for 45 bucks a month, you can have it in your unit. It's a no-brainer to me, yeah, easily. So, yeah, that's awesome.

That's awesome. All right. So speaking of the washer and dryers, like, I mean, are you, did you just provide every unit with one? Or how did that work? Yeah, so just from what you guys just said, I want to clarify. So the submetering of the water happened, and we expected their bills to be about $45. And then on top of that, they have the option to rent a washer and dryer.

Sure, yeah, yeah. It's not like, hey, we submetered your water and now everybody gets a washer and dryer. So they are paying their water, which now gives us the opportunity to rent them, an additional washer and dryer. But they can buy a washer and dryer of their own as well, right? Right. Yeah, yeah. They have the options.

And even for the first while, we're going to leave the coin laundry in place. So it's not like, hey, look at all these changes. I hate this place and we're out of here. So we're leaving the coin laundry and giving them the option to rent these washers and dryers for, I think the price we decided on was $39 a month. And that's actually lower than the norm. The normal is more than that. But what we saw was the dryers and the common areas are actually taking a lot of electric

to run. So dropping our price on the rentals will actually shift the dryer electric use into the unit, which is on their meter. And so there was cost factored into that. So there's a decent amount of thought that went into it. But yeah, just to clarify, there's two costs on there. And we only buy those washers and dryers after someone has signed the lease addendum that says, yeah, I want it for a year. Very cool. I love that. I love that you, you know, there's so many ways that you added value in this thing.

Is there anything else you did besides the water and the storage rooms that you're renting out there? Anything else you did to either cut expenses or increase your income? Yeah, yeah. We didn't expect to have any rental increase, but our resident managers who is working there has pushed some of the lower, I think we were averaging right at 700 per unit rents, and she has pushed that up about $10 a unit, which we didn't even expect, but $10 a unit is significant. It's an eight cap is what it's trading at. So that valuation has a big effect, just even the $10 per unit. Other things we did, we put in LED lighting to drop utility expenses.

We renegotiated a lot of the operating expenses like landscaping or snow removal, things like that. The previous owner was pretty hands-off and left the resident manager to kind of handle it on her own. And that resulted in her seeking out some of like the, she didn't have, she didn't have vendors to go source to. So she would, if a toilet broke and she didn't know how to fix it or didn't know who could fix it, she would call Home Depot and get the Home Depot people to come and fix it. So we saw that that's a premium. You're paying the top dollar for those people and Home Depot's convenience. So we saw an opportunity to decrease maintenance, decrease other costs around the property,

like grass cutting. I think we took it from $6,800 a year down to almost $2,500 a year, just in landscaping. So things across the board, but the main value ads were in the submetering and what came from that. Yeah, that's cool. So you mentioned resident manager. For those people who don't know what that is, what is that? I mean, how does that work? Do you give free rent and what is that?

So the way we have that structured, well, first describe what it is. she lives on property and handles the day-to-day property management of that 42 unit and the leasing and any maintenance requests. And so at this point, we employ a full-time maintenance guy and she is a part-time resident manager. So the structure of it is she gets free rent plus a salary every single month. And then what we've decided to do since we're self-managing, have our own separate management company. One thing we implemented was our goal, was 93% economic occupancy. And anything over that 93% mark, she gets 15% of it.

So last month, she actually hit 100% economic occupancy, which seems like impossible in the multifamily industry. But she did it. So she gets 15% of any of the additional income over the 93% tier. And so what it did was it helped align our interests with her. And she loved it. So she got a nice bonus. I love that.

I've never heard of somebody doing a sort of performance-based bonus to a resident manager to incentivize them. You know, I've had a couple resident managers. You know, one was great. One was, you know, rough. But, yeah, I didn't do that at all in mind. I'm really, like, rethinking that now. I'm like, man, I should have probably done something like that. Because, yeah, the one guy that wasn't that great, like, I don't know, he didn't really care about who he put in there or how he put them in.

And it was really hard to manage that. And so how do you guys, I mean, how do you train this person or were they already pretty much trained how to do this? How do you get them to do what you want? So she, this was the resident manager that the previous owner was using. And when we sat down with her at an interviewer during our due diligence, the first thing we noticed is she had tremendous tenant relations. So everyone liked her, but she was also stern and able, you know, people didn't walk all over her, but she had good rapport with all of the tenants. And what she lacked was a system or some kind of structure. The previous owner kind of was just MIA and very passive. And what we had, from our other units was a very outlined system. We used Buildium. We've been running it for a while, so we knew how it all worked. And we actually have an operations manual, all typed out, systems, procedures, everything that we could just hand off to her. And then with a little bit of coaching and training, she picked it up, no problem. And with that direction, coupled with her tenant relations

and the relationship she has with all the residents, it was, she's perfect for the job. So we couldn't be happier, and those systems and procedures are very important. The point we're at right now, we have kind of developed those far past the 64 units that we're in because we're preparing to scale into even larger stuff. So it's running pretty seamlessly at this point because we've over-prepared for the future. And even though we're still pretty small, we're running like a large company. Yeah, I love that. Very, very cool. If you own a short-term rental, here's something worth knowing. Not all landlord policies are built for your type of property. And with holiday bookings, chilly weather, and higher guest turnover, having the right coverage is more important than ever.

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There's even a dedicated bill inbox for each property to keep everything organized. Ready to simplify your workflow, book your free demo at bill.com slash bigger pockets, and get a $100 Amazon gift card. That's bill.com slash bigger pockets. I want to have a quick question, just something kind of, I don't know, on left field a little bit, but you mentioned it earlier, and I wanted to make sure we touch them before we leave today. You mentioned when you were looking for this apartment complex,

you were like calling owners and you said, I just found phone numbers and I would call them. Do you have any tips for people listening? Because this is something that works for apartments or single family houses. How do you get somebody's phone number? If you look up their information on the county assessor's website, how do you get their phone number? So it's different everywhere. So I've had this question asked to me a lot of times. And in our county, if you have a rental property, you're required to register it.

And on the auditor's site, that registration page is uploaded. as a PDF. Well, part of that registration page is an emergency phone number. And so that's usually their phone number. So I don't think it's really supposed to be used for that, but that's how I get their phone numbers. But it's different everywhere. It's different everywhere. So like in Georgia, you know, when we're looking, it's different. I can't, I can't just snatch them off the auditor site like I do in Cincinnati. Yeah. But still, that's very cool. All right, sorry. I know that was just kind of a random topic question, but I want to make sure we got it. Okay. So last thing I want to cover, before we move on to the fire round is the finances behind this property.

I mean, you kind of mentioned them a few times now, but let's kind of nail that down. So what did you, what was the property listed at or what did you buy it for then? And what did you end up doing for down payment? What was your mortgage like? How does all that look? Okay, so that was a learning process in itself and a lot of money in our eyes. So we were nervous but excited. So what we did was we built this relationship, and I attribute it closing and going through a lot

to the relationship we have with our portfolio lender. Most of the business we've done and borrowing and banking has been through this one lender. They gave us our first shot. You can hear that story on the previous podcast. But we started with them. And the purchase price, we had it under contract for $2.15 million, I think. Yeah, $2.15 million. And we wanted to put 20% down.

But everywhere we went, they said, no, this is your first large one. You need 25% down. we'll give you 75 LTV. And I was pushing hard for 80 LTV, 20% down and ended up, make a long story short, I ended up going with the bank that we'd like and have built a long relationship with. And I got them to go to the 80% LTV, and we did that by negotiating the 5% difference. So from 75 to 80 LTV was $100,000 difference. And what I said was, I will open a CD at your bank, put $100,000.

thousand dollars into that CD lock it in for a year but then my money gets released after a year but you go to ADLTV that gave them the possibility to then go lend that $100,000 out so the board approved it so we got our ADLTV we get our $100,000 back in a year to go you know into the next deal or whatever we want to do with it that's amazing I've never heard that yeah the one thing with that they I don't know if they thought of it but we did we then had an asset in this CD that we could then secure a business line of credit against. So we actually what we did was we put 100,000 into the CD, and it's a very simple process since they have the CD at their bank,

but since they have the CD, it's very good collateral for them. So we opened a business line of credit against that CD, which they'll lend 90 LTV on CDs, and it's at 3%. So it's kind of like, oh, we can just get that money back right away if we need it. Now, we haven't used it. It's just sitting there, but it was kind of a no-brainer to get to that ADL TV. So we borrowed from them at a 4.25%. It was a 5-5 arm, but it's actually amortized over 25 years, which helped with our cash flow. And it's a 20-year term, so it just adjusts every five, but it won't expire until year 20. And then we also negotiated down the payoff period. So there's no payoff penalty after 12 months because we're shooting.

for a 24 refinance. So lots of terms in commercial. It's one of the reasons I love commercial is you can get creative on pretty much every level. And I really like getting creative on the financing and things like that. So that was the end result, but it worked out really well. And I think the day it closed, I was like, someone lent us $1.8 million. Are you kidding me? That's got to be a great feeling.

So you said that you're planning on refi after two years. Are you going to roll that into another? similar property, take your wife on vacation, or what are you going to do with it? Probably rolled into another property. Me and my wife have done things on the side where we just moved into our fifth house in four years, so I've been doing living flips with her. And so we live comfortably off of that and her income, but if we do a refi, most likely it will go into a portion of the syndications down the road. So we still have a decent amount of money sitting on the sidelines prepared to invest in our own syndications, but through this refi,

it will just kind of build that pot up even more. That's awesome, man, especially because, I mean, nothing gives other outside investors more confidence than seeing that you're willing to put your own money into these deals and that you believe in it fully. I'm sure that's going to help your business a lot in the future. Yeah. Yeah. What do you think that property is going to be worth when you get it appraised in two years from now

to go with the refinance? I think we had to come in at like two points. 7-5, somewhere right in there. It was right at the break even where we would be returning 100% of our funds. And that's, you know, that's analyzing at the same cap rates, everything. So as long as the market cooperates for the next 18 months, we should be good. Yeah, that's awesome. That's very, very cool. Again, that's one of the reasons I love, yeah, apartment complexes because you can do fund things like that. I mean, essentially what you're doing is like the, you know, the birth strategy that we talk a lot about, the buy, rehab, rent, refinance, repeat. You're basically doing that on a large

scale. That's pretty much what value-added apartment complex investing is. So you can refinance it, pull the cash out, go do it again and again and again. And there's some fun creative financing with the commercial departments as you were talking about. Right. And you're dead on. It is the Burr strategy. And we've been doing the Burr strategy since the very beginning. So one point I wanted to, one of the reasons I wanted to do the podcast is because I want to inspire people to get started, but also bring a reality to it to real estate investments saying it's, you know, it hasn't been easy, but it's very possible for everyone. So I have not had a W-2 job. In five years, we went, our first house we bought for $14,500. We did the birth strategy on it. We rolled into the

next few. We rolled into the next few. And five years later, we bought a $2 million apartment building. And we don't have any other outside income. We use the real estate money to snowball. And that snowball, it feels like it's getting pretty big so I can anticipate the next five years being even better. And I just wanted to drive that home to all the people who are listening and thinking, oh, I can't do this or how would I ever do this? And it's like we did that only through real estate. We didn't, you know, we don't have side jobs where we're doctors, lawyers, and we don't have, we didn't have a ton of money to start. I started at 21 and now 26 and it has grown quickly. So by doing this podcast, I hope to inspire others while also being real about it, that it wasn't like, oh, yeah, I just bought this house and all of a sudden it was easy. And then we were buying a million dollar apartment complexes.

Yeah, no, I think that's cool. I think your story is awesome. Yeah. Every time we talk, I'm just blown away at like your ambition yet like how this is like not something. It's not like this is overly complicated stuff that nobody can do. I mean, anybody can do this if they just put their mind to it and, and you know, and work it. I mean, everything works if you work it. So I think that's awesome. Well, cool. Well, hey, why don't we shift gears here, start to wrap things up

and head on over to our world famous fire round. It's time for the fire round. The world's famous fire round, these questions come direct out of the bigger pockets forums. So let's get into this. Question number one. Let's see, what's a good one here? I like this one a lot.

If you were just starting out and only had $15,000 saved, how would you start? In today's market, if you're able to get bank financing, I would buy an inexpensive rental with leverage and sit on it for a year, getting some experience and figuring it out, seeing if you wanted to purchase more. So leverage is easier to get now, but $15,000 in at least the markets I'm in

can get you a decent little rental, single family. So that's how I would take it. All right. and as a former handyman, what is a skill that every real estate investor should know? And what is one that they should absolutely leave to the professionals? Oh, I love that. Hmm. Well, that's hard because we kind of took it to the extreme.

Like, we would, we, one of our five-unit apartment complex, we rewired out to the telephone pole and put in all new panels and replumbed it and everything. So we were kind of got to the stage of more than handyman and that was a huge part of our success. it was doing that stuff. But just as a handyman, learn how to cut a clean line with a paintbrush without some tape because you're going to paint a lot. So that would be for the handyman. But if you're going the next stage up, it might transition. Yeah.

The paint line thing that's very true. My wife did all that for years. I mean, she's probably done 100 miles of paint lines, you know, before we got her out of that side of the business. She was my lead paint line drawer. All right. Next question. How can somebody brand new get into apartment complexes? You know, you went that journey. You kind of snowballed into them. But how does somebody, if they wanted to do that as their first deal, how would you recommend them getting there? I wouldn't. I wouldn't recommend it being the first. I like the idea of building up some kind of track record before you enter in. So the only way I would say do it as your first is if you have enough money on your own to take that risk and learn and buy it without bringing in. and other people's money. So if you just have a lot of money and savings and you want to invest in a part of buildings,

go for it. If you don't kind of grow into it, because I think it could be too much risk and too much risk to bring other people in if you don't know what you're doing. All right. Good answer. Awesome.

So this one might be hard because you've been doing real estate your entire life. But if you weren't a real estate investor, what would you be doing? I like that. Not too hard. Back in high school, I really, really loved furniture building and woodworking.

So I was really good at doing that, and I always thought I would run a business, building furniture. And then, like, around 16, I think I went to IKEA for the first time. And I was like, there's no way I can compete with these people. So that idea got pushed out. So for enjoyment, I would be running like a custom woodworking shop. Awesome. That's cool. That's cool.

All right. Well, that was the World Famous Fire Round. Now let's wrap up the show by heading to the more famous. For. Question number one of The Famous Four, what is your favorite? And again, we asked you this last time, but you maybe have a different answer this time or, you know, maybe not. Number one, what's your favorite real estate book? So I hate to flatter you too much, but the book on managing rental properties, and let me say why, it's because I really believe that management makes or breaks the investment completely. So whether it's an apartment complex, whether it's a apartment complex,

whether it's a single family, you can drive those things into the ground with the wrong management. So the content in there is what will determine if your investment is successful or not. So specifically real estate, that's my suggestion. Wow, that's awesome. That's the book I'm managing rental properties. And I did not pay him to say that. Written by Brandon Turner and my beautiful, awesome, smart wife, Heather. And she does not teach you how to draw paint lines in there, but she does teach you how she manages all of our properties.

So anyway, pick it up BiggerPock.com. bookstore. All right. Wow, that was very flattering. Nobody's said that book yet, I don't think, so it makes me feel really good. That's awesome. What about a favorite business book? Not necessarily real estate, but is there anything that you like or would recommend to people listening? Yeah, so recently, with us growing and trying to scale to implement all these systems, I read traction recently. And it's a lot like e-myth, but for me, it resonated more of like I can I can implement this in our business, so I don't know who wrote it, but the book's title is traction, and I really enjoyed that for systems and procedures.

I don't know who wrote it either, but Josh Dorkin gave me that book right when I started here at your pocket. It's a great book. Yeah, my buddy Nathan Brooks is reading, like, obsessed with that book right now. And I've read like half of it. I haven't finished it. I need to get in there and finish it. But yeah, you're right.

It's kind of like the E-Mith, just a little more in-depth, I feel like, of specifically do this, do this, where E-Meth was a little more theoretical on what. why you should do it. Right. Right. Yeah. Cool. All right. Number three. This is your question, Dave. You want me to ask you? No, no, I'm sure you know what it is, but we're going to make Dave ask you. What are your hobbies? I said you enjoy a simple lifestyle, but what do you do when you're not doing real estate? So I do enjoy a simple lifestyle, and part of that is the house. I said this is our, me and my wife's fifth house. This is the house that we're settling down in. So I bought a property on some land and we can't see anyone else. house around us. And so my fun time is just out playing in the woods, playing in the yard.

We have chickens and a garden. And so I enjoy being outside and comparing Cincinnati to the Atlanta weather. I'm enjoying that. And outside having fires, gardening, playing with the animals, cutting down trees. That's my fun time. That's cool. I like it. All right. My final question of the day. Jared, what do you believe sets apart successful investors from those who give up, fail, or never get started. Okay, so I write for the Bigger Pockets blog, and my most recent one was the title of it was that question. I read that post.

It was a fantastic post, which we'll like to in the show notes at biggerpockets.com, so I show 205. Yeah, please do, because it's too long for me to try to explain here on the podcast, but really what it boiled down to was lots of people answer that question in different ways, and they're all right. So it could be hustle or grit or perseverance. It could be metrics, tracking systems. All of them are right, but they come at different times to be the most important part of your business.

But all of them, as you build your business, are important throughout the life cycle. So maybe your beginning and hustle and grit is what will get you going. But then as you build your business, you have to add in different traits. So it could be you have hustle and grit and then you have to persevere through the chaos that hustle and grit creates. And then later on, you have to learn how to implement those systems. You know, I talked about our systems. It's not like day one we were even thinking of systems.

That would have just been nonsense because really all we were trying to figure out how to do was buy a house. So that's what we were focused on in the beginning. And what sets the successful part is a lot. It's a lot of things altogether. And if you go to that blog, you'll read the answers of all the other 200 guests and kind of my story behind each of those points. And the best answer I can give is it's a lot of things in combination. Fantastic.

Great. Fantastic. All right. Last question, man. Then we'll let you get out out of here. Where can people find out more about you? Bigger pockets is a good one. So I'm pretty active on there, helping out with the blog.

And then I try to stay on the forums. You can reach me there. Our company has a website, S&S Capital Group. So, Steven, Nancy Steven, Capital Group.com. And either of those will work great. and you'll find me there. I'll be happy to help anybody out. Again, that's why I do the podcast,

it's hopefully help people out. So feel free to reach out. I love it. I love it. Well, very great, man. Thanks for coming by. We'll have to check back in with you and hear how that syndication business is going

in a couple more months. Yeah. Hopefully we got something off the ground. Awesome. All right, Jared. See you around. All right. Thanks a lot, man.

All right, and that is our show with Jared Stern. Hope you guys enjoyed that. I know I definitely did. Like I said, at the beginning, that commercial loan negotiation topic. was just mind-blowing. I love that. I can't believe they were able to accomplish that. I mean, that's the difference between buying a 42-unit property and something a lot smaller.

He just in that seemingly small little thing was able to exponentially grow his real estate business. Yeah, yeah, huge like that. And I love that they're using, you know, the value-ad stuff. They're figuring all those creative ways to make more income and decrease their expenses. And I don't know, it really makes me like, I need to sit down and really look at my apartment and say, you know, Am I really maximizing my income the most I can? Or am I really cutting expenses where I should be? Or can I do more? Because I'm sure I can do more.

And Jared just proved that I'm sure we all could. Yeah, it's awesome. He's a great example of someone who has used his creativity and previous experience and brought it to his new business and really maximized it. I'm also really interested to follow up with him in a couple months and see how this syndication thing is going. I don't know. You know more about the podcast to me, but I think moving to a new market must be pretty tough. Yeah, oh my gosh, I'm sure it is. Like, I know my market really well. You know Denver really

well. And I know, you know, Western Washington, but like, yeah, if I already go jump into Atlanta or something like that, that's a big hurdle. Absolutely. I feel like he's smart to move down there, though. Like, if you go and walk around, ride your bike, you know, get a feel for the neighborhood, it would help. But we'll definitely have to maybe bring him back a third time and see how that goes. I think that would be cool. I also want to bring up one more point that you brought up during this show, I thought was fantastic. Was this idea of like, you know, he, I don't know. It wasn't that he, like, knew certain things.

It was like he took action. I don't remember the exact phrase you said earlier, but basically, like, it was like, I'm trying to remember exactly how you phrased it. But, yeah, anyway, it was basically like he just went out there and started doing things. Like, it was like, I'm going to go out there and just do this on day to day.

It's not like, I'm just going to let these deals fall on my lap, whatever, like wait for them to come. They just, they're there because I went from. The luck, right? You phrase that like luck, right? Yeah, yeah. How did you phrase that? Yeah, you make your own luck.

Yeah. Make your own luck, basically. Yeah. Because everyone's like, oh, he got lucky. This happens all the time in life. You're like, oh, you got lucky because this happened to you. But you have to put yourself in a position to get lucky. And he's a great example of that because someone was going to get that deal. And because he was calling people every single day.

It was him. And kudos to him because he found himself a really good one. Yeah, I totally agree. Yeah, I just love that topic of, yes, I mean, almost everything we do is luck. I mean, every deal I've ever got has a bit of luck involved. But it's there because I put myself in you're there. the exact same way, I know. Yeah, absolutely.

You put yourself in the situations, and you're going to get lucky. Definitely. Oh, cool. All right, well, let's get out of here, I guess. I don't know if you got anything else. People should leave us rating reviews in iTunes, of course. Yeah, please tell you. And subscribe to our channel.

If you're watching this on YouTube, make sure you click the subscribe button. That helps us out and you get to watch all the future videos. And I don't know, what else you got? That's about it. I think next time we'll be recording from the new Bigger Pockets Office, which is pretty exciting. We are moving tomorrow. so you'll have a new scenery for those of you watching on YouTube. That's awesome.

Last question before we get out of here. What are you watching these days on Netflix or on television? What's your show? What a Russian question. Have you ever watched the Americans? No. Oh, it's awesome. So it's this former FX show, or I think it's still going.

But they have it on Amazon Prime for free. It takes place in the 80s, and it's about these Russian spies who have, like, ingrained themselves into American life. It's awesome. I'm completely addicted and I've turned a couple people in the office onto it as well. What are you watching? I'll check that one out. What am I watching?

I started watching Westworld, a new HBO show. That was good. How is that? Yeah, it's fascinating to me. It's big. It's like a big world. And you know, a little bit sci-fi, a little bit Western. Yeah, it looks a little creepy.

A little creepy, yeah. A little creepy, but that's all right. And my wife has been obsessing over the Gilmore girls, you know, coming back. Obviously. I saw it. You're not watching that too. I'm not watching that, but I'm listening. down the days.

I've been hearing a lot of it in the background. All right. Well, let's get out of here. Sweet. All right. All right. For the Bigger Pockets podcast, my name is Brandon and Dave Meyer. Signing off.

Later. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the height, you're in the right place. Be sure to join the millions of others who have benefited for. from biggerpockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate podcast.

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