BiggerPockets Real Estate Podcast - 212: Buying a 115-Unit Apartment Complex for No Cash Out of Pocket with Brian Murray

Episode Date: February 2, 2017

How much does it cost to buy a large apartment complex? Millions? Think again! On today’s episode of The BiggerPockets Podcast, we’re excited to welcome back Brian Murray to the show. Brian, who was last seen on episode 126, has done some pretty amazing things over the past several years — including purchasing a 115-unit property that cost him nothing out of pocket (and, in fact, he walked out of closing with a massive check!). Whether you are looking to buy one house or a 100-unit property, this podcast will inform, motivate, and inspire you to massive action. In This Episode We Cover: What Brian has been doing since his last episode The definition of “value-add” in real estate Different ways to add value to a property The story of how he turned an old motel into studio apartments How Brian gets his tenants and the kinds of screening he uses Why he focuses on keeping rents low The location of these rentals Why you should consider the “transient work force” Details on how he got this deal A discussion on raising money and working with partners Tips for finding properties How to handle agents and brokers The story of the 115-unit Section 8 apartment complex How a HUD contract crushed him Whether you should consider managing a HUD property or not How Brian sold the property for $3.2 million His advice for aspiring investors And SO much more! Links from the Show BiggerPockets Forums BP Podcast 126: From 0 to 400+ Units Through Value-Add Investing with Brian Murray How I Bought a 115-Unit Apartment Complex with NO CASH Path to Purchase Loopnet Jay Hinrich’s BiggerPockets Profile Bill Gulley’s BiggerPockets Profile Pioneer Woman Cookbook Books Mentioned in this Show Crushing It in Apartments and Commercial Real Estate by Brian H Murray The Book on Rental Property Investing by Brandon Turner The Obstacle Is the Way by Ryan Holiday Tweetable Topics: “It’s about the journey and I definitely don’t want to feel that I’m lock into something, like some arbitrary number.” (Tweet This!) “You don’t want to take on more debt than you can handle.” (Tweet This!) “If somebody says no, don’t give up. Try somebody else. Keep trying.” (Tweet This!) Connect with Brian Brian’s BiggerPockets Profile Brian’s LinkedIn Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show, 212. In the end, I found out there was $140,000 in this escrow account, and I actually ended up walking out of closing with a check, and I didn't put any cash into this deal at all. 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. 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 everybody? My name is Mindy Jensen. I am spilling in for Josh Jorkin, who is the host of the Bigger Pockets podcast with you as always. This is Mr. Brandon Turner. What's up, man? How's it going? I am doing so well right now. Like it's, uh, 2017 has been, uh, amazing. so far. It's only, you know, a few weeks in, but I'm really, really enjoying this year. How about you? I'm having a great year. Not, you know, real estate wise, but everything else is going great. I'm still in the Denver market, which is ridiculously hot. And I'm not able to buy those $1.50 properties like you are. Ridiculously hot, huh? That's what they say about me.

Exactly. Yeah. Brandon Turner, Denver market, same thing. Same thing. We're probably identical. What's your, what's your goal for the year? I mean, do you have a real estate goal for the year? I want to buy 10 properties, but I don't know how feasible that is because our market is so hot. I'm looking into other markets. I am currently taking money and doing some private loans with it. I'm doing some pretty low risk loans with some people that I know in my personal life. That's good. That's awesome.

I actually just did my first loan as well recently. I just did my first private loan and that was kind of fun. So it's kind of a cool thing. Just be getting money in the mail and like I don't have to worry about it. It is. It's really kind of fun. And the checks come like clockwork with this person because like I said, they're pretty low risk. That's awesome. That's awesome. Well, cool. Well, let's get to today's show. Today's show is actually one that I've been excited about for a while about doing Brian Murray, who was actually on the show back in episode 126. Is that right? That is correct. Yeah. So we talked to him like almost two years ago about his real estate. He does commercial properties, apartment complexes, some fun stuff like that. But I know the last couple of years he's really blown up, doesn't. some really big things.

And actually just recently wrote a book called Crushed and Commercial, was it, crush it in apartment complexes in commercial, something like that. Is this the book you're talking about, Brandon? You actually have a copy of it. I do. It's called crushing it in apartments and commercial real estate, how a small investor can make it big by Brian Murray,

available in Heartback and, what do you say, Kindle? Yeah, I think so. Well, that's a very good, that's a very good plug. He's going to love you for that. But no, it's, he's done some really, really cool stuff. And I actually just read a LinkedIn post. He wrote a big long LinkedIn blog post.

And he put it on bigger pockets as well about how he bought a 115 unit for like no money out of pocket. And then he got paid like, was it 80 grand to do it. I mean, it was crazy. Yes. Yes. He walked out of closing with a check as the buyer, which happens in zero percent of cases. Yeah. And so he actually, we spend a good chunk of today's podcast on that story.

We just got done recording with Brian. We spent a good chunk. just on that story because it's amazing how like just how deep we can go on one deal. I mean, I could spend five hours talking about that deal. So you guys will love it. Oh, yeah. He's got some really, really, really, really great tips. Yeah, he does.

So, but before we get to that, why don't we cover today's quick, quick tip? All right. That would have been close to synchronized. We were okay. We were all right until you made fun of it. All right. So today's quick tip, Mindy, you want to take it or you want me to explain it more? You probably know more than I do about it.

Well, I'm not sure. sure exactly how much I know about this one either. This is new. This just came out today, right? This is brand spanking new. Today or yet? It came out yesterday. This is the path to purchase estimator that we have created to help you on your path

to your first purchase or next purchase, depending on your level of experience. And you can find out more about it by going to biggerpockets.com slash ptp. I like it. And it walks you through. It asks you a little bit about your current savings, your current monthly savings rate where you live and gives you an estimate to how long it's going to take you to purchase your first rental property if you keep that up. There you go.

So you can kind of estimate some kind of cool stuff. It's just very simple little tool, but I really like it a lot. It kind of gives you a timeline for your life. So very cool. Again, you can get that at biggerpockets.com forward slash ptp, like path to purchase. Correct. All right. You ever head out on a trip, lock your door, and think, cool, my most valuable asset is now doing absolutely nothing.

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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. Today's guest is Brian Murray. Brian acquired his first property in 2007.

Without raising any outside capital, Brian bootstrapped his way from a newbie investor to founder and CEO of Washington Street Properties, a commercial real estate investment and property management company, been ranked on the Inc 500,000 list of the nation's fastest growing private companies three years in a row. That's pretty awesome. Wow. Like we said earlier, he is also the author of a new book, and he is one of the smartest guys that I know in terms of buying apartment complexes and commercial real estate. So excited if you guys to hear the interview with him. Why don't we welcome him in?

All right, Mr. Brian Murray. How are you doing? Welcome back to the show. Great. Thanks for having me, guys. Excited to be here. I'm super excited to talk to you today. Mindy gets very, very excited.

The feeling is mutual. I do. Yeah, I love talking to you guys. And I'm like the biggest fan of bigger pockets. So very excited to be on the show again. Well, that's awesome. I was really excited to hear your show. Show 126 was the last time Brian was on with us.

And his story is just really, really amazing. He had this fabulous 50,000 square foot office building that he turned around from like day one. You cash flowed that from day one. You cut $40,000 in like two minutes. Was it when you asked the guy to, you asked the guy how to turn on the boiler or how to turn on the thermostat and then he left? Something like that. Invited to leave. Do you still own that building, Brian?

I do still own that building. Actually, we have that. That was my first property, and it's remained our company's headquarters. So we work out of there. That's awesome. That's awesome. And, of course, people, if they've not listened to that show, go to biggerpockets. com slash show 1-2-6.

That was definitely one of my favorite episodes we've done, which is, you know, why we wanted you back today. So you still got that property. That's cool. What else you've been up to in the last, like, a couple of years? What was 126? We're on like, what are we today? 212. So it's been, it's been, yeah.

Yeah, it's been a while. Yeah. So what have you been doing since then? Oh, staying busy. You know, still doing deals. That first one kind of set the tone. And I still looking for those value add deals, still trying to turn properties around.

You know, valuations have gotten higher since the last time I was on the show. So it's even more important for me to find those deals where I can add value. Can I ask a quick, for those people who maybe didn't listen to show or maybe are newer to the Bigger Pockets podcast, what does that even mean when we're talking about value add? So what I do is I go out there and I look carefully for property. that show, that give me clues that there's a way for me to go in there and improve things. And when I say add value, it basically means to increase the value of the property by boosting

that property's net operating income. So you have to either look at the top line and say, hey, I can bring in more rental income or you're looking at expenses and saying, hey, I can, I can cut expenses here. And either one of those is going to boost your net operating income. And if you have a plan in place before you actually buy the property and then you can execute on it, you can immediately boost the value that property. And a lot of your listeners love to follow your Burr strategy. Basically, I do the same thing, but I do it with commercial properties and I do it with larger apartment complexes. That's awesome. That's awesome.

Yeah. And Burr, like it is very, very similar, right? You're buying properties. You're rehabbing them, you know, fixing them up. You're renting them out, getting them stabilized. And then you sometimes refinance, sometimes sell, depends on what you're doing with the property. But you get that long-term financing supposedly. And then you just sit back and do it over and over and over again.

It's kind of what I modeled that entire kind of, I don't know about a system because it's not like a system, but that kind of philosophy. It's basically modeled off how commercial investors do it because they're doing it all the time. Yeah, absolutely. And that's exactly what I'm doing. I'm primarily a buy and hold investor. I follow that, you know, pretty religiously. although I have, I just sold one of my larger properties. And, you know, we could dig into that a little bit more.

But, you know, for the most part, I really, I'm a big fan of building those little streams of income to kind of grow that river. So, you know, I try to hang on to them, boost the value, refinance, pull that, take that cash and me invest it in other properties. That's awesome. So, Brian, what are some of your favorite ways to add value to a property? Wow. It's a really long list. You know, some of them are big and some of them are little. You know, you find all kinds of things.

A lot of times it's not always complicated either. It could be really easy. You could look at a property and just looking at the front of it, there might be trash out there. You know, a lot of times there's a lot of cosmetic things you can do right out of the gate to make it show better, lease it up, and make the tenants happy. But, you know, on the other end of the spectrum, you can completely change the use of a property. A property might be valued in on the market for its original use, and then you can step in and change it into something else. You can do that with a piece of a property or the whole thing. So you might take, for instance, and I've done this a few times, you might take storage space and then fix it up and lease it out as office space or turn a storage space into an extra apartment unit.

And then on the other end of the spectrum, you know, one of the deals we did was to go in buy a distressed hotel. and we actually converted that into studio apartments. So we changed the entire use. So, you know, valuations on apartments have gone up. And so we've had to be creative. And that's an example of how we're creative. I made a passing reference to that on the last time I was on the show because it was a new deal. But, you know, we wrapped that up since the last time I was on the show and it's fully leased up.

And it's been a great project. So let me ask about that. So you're talking about you got an old motel. How many units were there? 48. Okay. And then you turned them. in the studio apartments.

Yeah, absolutely. So I want to hear more about that, yeah. Sure. Yeah, it was a hotel. I was in a lot of distress, 48 rooms, you know, and it was in a great location, but there were a bunch of new hotels

that had been built recently right by the local interstate. And that drew a lot of traffic away, and they had a lot of trouble renting out the rooms in the hotel. So it actually went into foreclosure, the owner negotiated an arrangement with the bank to terminate that foreclosure and sell it to us. And then we went in.

It was vacant and we had to go in. And each unit we had to add a small kitchenette. We combined a few of the rooms to turn them into one bedrooms, but most of them we kept as studio apartments. That's fascinating because I see those from time of time. I see like old rundown motels and I'm like, man, that would be cool to take that and just turn it into an actual rental. But my biggest fear with that has always been the quality of tenants I feel like I would get. I feel like I'd get guys that are very transitional in life and don't know how to pay anything and living on cash only. Is that the case or do you get decent people in there?

We screen pretty carefully. And this was actually a fairly modern, nice building. You know, it wasn't, you know, don't picture it as a rundown motel. It was a two-story hotel. It had been refurbished less than 10 years ago. And we were able to attract some pretty nice. apartments or apartment renters, I think one of the challenges that we faced for anybody that looks at doing something like that, normally when you change the use on a property, you have to be

careful about the code implications. So when you change the use on a property, what it'll do is bump you up to a new standard in terms of code. So a lot of times that change in use, you have to meet the same criteria that you would if you constructed new. So for example, when we made this change, part of the building wasn't sprinkler. We had to go in and sprinkler that. We had to convert some of the units into handicapped accessible units and meet the same numbers that we would have had to meet if we had built a new apartment complex. So that's just one little clue for people who are going out to, you know, you have to research that type of thing. You may incur some additional costs that you wouldn't incur if you went into an old apartment complex and just

improve those apartments. Do you furnish those apartments or do you offer them just as a plain old empty room that somebody rents out? We have a combination. We only have a handful that we keep furnished. What we do is we actually rent them on a month to month basis and that's worked really well. Made it very appealing for kind of people that are part of that traveling workforce or more transient workforce. But we get a lot of kind of blue collar workers, a lot of professionals just starting out. It's a popular place for people who are renting their first apartment and just moving out, out of home. And yeah, we screen everybody pretty carefully, but we keep rents low. We rents low. We rent studio apartments for as little as $4.95 a month, all utilities included. And that's

really cheap for the market. But what that does is it allows us to attract a lot of applications and screen out most of the renters that aren't desirable. So even though the rents are low, Even though it's a converted hotel, it's a nice place to live. And it's a good community of people. That's cool. For those people who couldn't see the video, by the way, Mindy, like, her jaw hit the floor when you said four or something. Because she's like, that's how much like her latte cost this morning at Starbucks. I mean, where was this?

Yeah, where was this at? Where was this located? This is Watertown, New York, upstate New York. Okay, cool. I love that story. I think that's very cool. And I like that tip also of, like, it's not a bad idea to keep rents a little bit low. So you get a lot of applicants, especially on that type of property where you, where you might attract the wrong kind of tenant, you know, potentially if you were, I don't know, if you were just trying to get competitive and trying to get the highest amount possible, you know, you might have four guys apply and three of them might be terrible where you get 100 people to apply.

Well, now you got your choice. Exactly. Absolutely. And a lot of people immediately assume that they're going to, whatever rent they set is how they're going to screen their tenants and what types of tenants are going to attract. And that's not necessarily the case. We want to always offer the best value for our renters. And by setting a lower rent, rather than having it target just maybe less desirable renters, it actually also can appeal to people who could afford to pay more, but are attracted

by that ability to rent a nice place for less. And that gives us an advantage over the competition. Yeah. And one more thing just throw in there. I know, Mindy, you have a question too. Sorry, just cut you off. Well, I was going to say, like, you mentioned the traveling workforce thing earlier. Like, and I think that's something that a lot of investors don't really think about.

But there is a huge amount of people who are traveling nurses or, I mean, nurses, doctors, construction workers. I just talked to somebody from our local hospital recently. And the guy said he's visiting, well, he's not from the hospital. He's working at the hospital. I guess they're building, like, a new wing. And so there's, like, hundreds of employees in our area for the next year and a half that are going to be building this massive hospital. Where are they staying? They're driving an hour and a half from, like, Tacoma.

down to my area. And I'm, because he's like, there's just nowhere to go. There's no furnished areas, like furnished houses or studios that we can stay in. Absolutely. And any place,

there's large construction projects going on. You know, those, a lot of times that work is awarded to contractors from outside of the area. And sometimes it's a two year long, three year long project. Those people need a place to stay. So in a lot of times,

they could be great employees or great tenants, excuse me. Yeah, I agree. Yeah. This is a strategy that I've seen up in, Cheyenne, Wyoming is another area that I'm looking at because I live in the Denver area and it's just ridiculously hot here. And Cheyenne is a lot more affordable.

And they've got a lot of transient. I don't know if transient is the right word. It does sound kind of negative. But I think it is. Yeah. You know, nurses don't want to live there forever, but it pays really well to be a traveling nurse. So they go in and they work their three month shift and then they're gone. Wyoming winters are kind of brutal.

So I don't know that you would know anything about that up in Watertown. New York. What is it like nine today? I wish I didn't know anything about that. Okay, let's go back to this hotel turned apartment building. Let's talk about numbers on that. What did you buy it for? What did you rehab it for?

Average cost per unit. Yeah, we paid $1.2 million for that. Worked a little bit of creative financing into that deal. The seller knew that we were going to go through a large conversion project. We actually put a credit in the contract where they kicked back. $100,000 toward the conversion. And then we secured a construction loan for financing of the conversion. It cost us about $400,000 to make all the changes we needed to to come into compliance with code and, you know, re-outfit them all as apartments. So the net price we paid was about

1.1 million plus the 400,000s through about 1.5 million. And it appraised at $2 million. So we had a nice value add there. And, you know, it came in right as projected. We had involved an architect to help us project because it was a pretty big project. And we GC a lot of our projects, but this one was large enough that we worked with a GC and hired it out. And that really allowed us to get a lot closer on our numbers. And overall, I think it was a really successful project. We were really happy with that.

That's cool. That's cool. did you bring other investors in or was it just your company, your own money that did this project? Or do you raise money? Did not raise money. We have actually never raised money. We do all of our projects right from my first project. I haven't raised money.

I still haven't done it. I try to do whatever I can not to do that. There's a lot of reasons for that. But one of the biggest ones is even though I've been doing this for coming up on 10 years now, I still plow everything back into my projects and growing the, company and improving our properties. And when you raise money from other investors and you bring in partners, most of the time they want their money back. They're looking for a return. And, you know, the model that I use, I don't necessarily want to have that exit planned up front. I like to buy

and hold. I don't necessarily want to promise a specific return to somebody else because whenever there's a decision to be made, I always err on the side of putting more money into those properties and improving them as opposed to pulling it out. And, you know, that's just something that's worked for me. And, you know, I completely respect that other people have different approaches that work for them. And, and that's just not the route we've chosen to take. Well, I think that brings up a really, really good point about, you know, whether it's raising money or just working with partners. You know, I do a fair amount of partnership stuff. But, like, it's so true that if your, if your end game doesn't align with, with the other people that you're working on a project with, it just creates drama later on

in conflict. So if you are going to partner with someone, you better know that their end game is exactly the same as yours, or at least they're flexible in making it there. Exactly. Yeah, you don't want to take a profit right now. You want to leave it in there and grow the company and use that kind of exponential growth. But somebody who's like, no, I want my 10% or 15% return. Give it to me now.

Right. Yeah. Exactly. And the situation changes. And it's hard when you've made promises to investors because I, I, I, know a lot of people that do it that way. And I know there's benefits to that, but, you know, problems arise as well. So you just have to think about that. Situations can change. Maybe, maybe according to the plan, there was money to take out, things don't always go as planned. And

this gives me more flexibility. That said, it's a cap on our growth. Right. So we've managed to grow about 35 to 40 percent every year since I started this thing. That's becoming more of a challenge the larger we get without raising any outside capital. So, but that's, but that's, It's been okay. Like, that's a tradeoff that I can live with and I'm pretty happy with it. And it's not like there's like this like finish line that you have to get, you have to be a billionaire. So therefore you have to abide by these rules. You know, I mean, like if you're happy doing it and keep doing it.

I think that's great. Absolutely. Absolutely. I mean, and you know, the more, the more I do this, the more that's what it's about. It's about having fun. It's about the journey. And I don't definitely don't feel like I'm locked into something, you know, some arbitrary number. Yeah.

I just want to jump in and say something about partnerships. You know, if you were going to partner, I see a lot of people questioning this on, writing this question on the forums. They'll say, how do I structure this partnership? It has to be what works for you too. The only people that it has to work for are you too, but you need to really write it down and make sure that everybody's on the same page because maybe down the road, Brian does want to take some money.

You need to know what your investors are looking for if you do choose to partner. But I'm like you. I don't really like to partner. I like to do it all myself because then I'm the boss. Yeah. I agree. I agree. Well, one last question on that project.

Real quick about the financing again. You mentioned the, you got a construction loan for the rehab part of it. I'm assuming you probably got another loan for the actual purchase. Did that all get refinanced later? Or do you have two loans right now? How is that structured? I got them from the same bank.

So they actually took the construction loan and rolled it into the original loan. And so those two got combined. And so now I'm carrying one mortgage on it. I did not, that particular property, I didn't refy. Okay. So you just combine the loans. And that's just another cool thing about commercial real estate is the lenders are, I mean, imagine going to your Bank of America and be like, hey, I got a mortgage on this house and

this house. Can you just put those together? You know, I got a first and second line. You know, it's just everything gets more complicated. But yeah, commercial lender is a little more flexible, at least in creative. So that's cool. Absolutely. Very cool.

Well, last question on that deal, and you might have mentioned this already. How did you find that? I don't know if you said that. You know that a broker brought it to me. So we find deals in a lot of different ways. We've got great relationships with all the area of brokers. I would say that probably one third of our deals right now come from brokers, and two thirds of them come from our own efforts and directly approaching property owners. Okay, so if you're talking or could you talk to our listeners right now, people that are here, like how should they, if they want to get involved with commercial real estate, whether it's apartments or, you know, turning a motel or hotel into a thing, you know, where do they begin looking? I mean, do they go get an agent right now, go get a commercial agent? Do they just go on LoopNet and start looking? What do you recommend?

Well, I think brokers are a great place to start and most people gravitate to them when they're new and LoopNet's a great resource. One of the things that's really cool about Loopnet is. net is a lot of the brokers and property owners will post their financials right on the listing. And if you're brand new and you're trying to learn this stuff, what a great resource in terms of cracking open a document and walking through it and seeing how they're doing their financials. Now, what is normally posted is something called pro forma financials, which is sort of the rosy picture. But still, it's a great educational resource. And as you learn more, you definitely want to start to. create other sources of leads for your properties. And the most success that we've had has been

directly approaching property owners. And I know that's something that a lot of people are intimidated by, but they really shouldn't be how you received when you do that. It really is all in how you approach somebody. And I think if you go up to a property owner and you let them know that you have an interest in their property, that you like their property, what you don't, what you don't want to do is go up to a property owner and say, your property's a mess. You clearly not take care of it. It's a disaster. Like, you really should sell it, although it's not really worth anything.

But, you know, I'd buy it from you if you want to get it. You know, what's a better way to say that is you say, you know, I can see the opportunity in your property. I think you've got a great property. These are the reasons why I'm interested in it. And, you know, are you willing to sell? And if you're not, you know, would you mind keeping me in mind? and can I give you my phone number and call me when the day comes, you know, and I'd be, I'd be interested in talking to you about it. And most people are a little bit flattered or they're

at least receptive. And if they're not, you know, they're jerks and don't worry about it. It's not you. Okay. For those of you not watching on the video podcast, I just threw up my arms because this tip also works for residential. There's a house around the corner for me. It is the worst. I can't believe it's still standing house. There's holes everywhere. It's filled with crap. It's the most awful house ever. And sometimes their mailbox just kind of flaps open. And sometimes there's a postcard on the top that says, hey, your house is a dump and I can't get in touch with you. And you need to call me because I want to buy it. Don't be rude. Those people are not going to want to sell you their house. They don't want to sell their house anyway because they're hoarders and that's

where they keep all their stuff. But they're not going to want to sell their house. When you tell them, you blame them for not being able to get in touch with them. And you tell you, tell them what a crap hole they have. They should already know that because they don't even live there anymore. Absolutely. And, you know, they own the property. They probably know a lot more about it than you do. So to try to convince them that it's not a good property or that it's, it's not worth much,

it doesn't, it's not genuine. You know, they, obviously you're interested in purchasing it and people can tell and they're going to respond much better if you're just honest and say, I do see potential here. I like your property. And just be very straightforward with them. And most people are receptive to that. that and we'll at least take your phone number and, you know, give you a call if and when they decide they want to sell.

Exactly. Exactly. You can catch more flies with honey than with vinegar. Oh, look at that. Mindy coming in with the, what do you call that a quip or a, I don't know. Is that a proverb? A proverb, I don't know. I don't know.

I like it. Anyway. Ancient Chinese proverb. Yeah. No. And, you know, although I'm very excited when they send those because then mine sounds so much better, my letter that says, you know, I've talked to the, the. the mailman, and I've asked the mailman about the property.

He's like, oh, yeah, they live up in the next town over now, and her name's this and his name's that. And so now I just send them a letter that says, hey, if you're ever thinking about selling, I'd love to buy, let's talk. Just very nice, because they still come by and pick up all that crappy mail at that dump of a house. I'm sorry, moving on. Some of my best deals ever have been the result of that phone call that just,

to come seemingly out of nowhere, but not really, but you had reached out to that owner at some point, sometimes it was years ago. And what I try to do is once I establish contact, once twice a year, gently reach out, you don't want to be pushy, just say, hey, you know, just so you know, I'm still interested. Has there been any change on your part? You know, is it something you want to explore? And if they say no, just respect that, you know, accept it and wait. And it'll come them into. The property that I mentioned that I sold not too long ago, you know, that was the result of that exact same approach. Well, let's talk about that then. Let's shift gears and head over to that property. So you sold the property, but did you tell us about that property buying it on

the last episode? Do you want to tell us the whole story beginning to end? Yeah, no, I didn't, I didn't really get into that. I don't think on the last podcast, but. I'd love to hear the story. Is that the one from LinkedIn? I read a blog post of yours on LinkedIn recently. Is that that story? Yes, it was. Okay, good. I definitely want to cover this. This is amazing. Yeah, can you put that in the show notes? Because that was a really great article. That I will. Yeah, that's awesome.

The call came, you know, it was a 115 unit, scattered site HUD project, six buildings. You know, I had always looked at these buildings and said, wow, I really liked the location. They were Class C apartments, which is what I like and seemed to have some upside potential. When I reached out to the owner, I did not know they, they were Section 8, but they were HUD section 8. And I let them know. I said, hey, I'd really be interested in purchasing these if you ever want to sell. And they said no.

And I tried again six months later. And they said no. And I tried again and again and again and again. And it was about three years, I think, after the first time I reached out, they called me and said, we'd like to sell. I had never gotten into an in-depth conversation with them at all. And I still didn't know they were, this was Section 8 until I actually sat down with them and we started going through it. And he said, well, yeah, it's Section 8, but our contract with HUD is all set to expire.

And, you know, you can do what you want. And so my plan was to buy these and convert it into market rate housing. And I was pretty excited about that. Could I jump in real quick? So why would you want to, I mean, did Section 8 pay a lot less? Is that what you're saying in your area than normal? Or you just don't want to Section 8 tenants? It's not that I don't want Section 8 tenants.

And actually, HUD pays really well. I think at the time it was that I was comfortable with market rate housing. I didn't really understand HUD or what it was about. And I've since learned a lot more about it. We'll get into that. But, you know, I knew it was different. I knew there was different regulation. we have had tenants in our market rate housing who had HUD vouchers.

And so I had just a little bit of familiarity. I knew there was administrative issue, you know, burden that came with that. And anything that requires us to work with the government, in my experience, hasn't gone particularly well. No, come on. They're here to help you, Brian. Yeah. So, you know, my immediate thought was, hey, I could see, I knew how.

to manage market rate housing. I knew what the local demand was. I knew this location. I knew the neighborhood. I knew everything about it. And I felt with a high degree of confidence that I could create value here by converting it. And I knew, you know, I did negotiate a great deal.

And I ended up getting just a fantastic price on these. So basically what happened is they provided me with financials to go through on this property. And as I went through the financials, I could see that something was wrong. The income was way lower than you would expect on a property like this. So on the rental side, that was set by HUD and it was, it produced strong revenue. But the expense side was exceptionally inflated. And I started to dig around because I couldn't figure out, you know, that the staffing was was way too high, all the expenses were super, super high. And this is one of the advantages of being a local investor, right? I know a lot of people. I started asking around, I started asking contractors.

I tried to find out who was doing work at this property and digging, digging, eventually I found a contractor who was a painting contractor who trusted us and had worked with us. And I said, listen, you know, I'm looking at buying this property. I'd like to know, you know, what your experience has been there? What's going on? And we got into it a little bit and finally he let me know. He's like, well, this is what's going on. He's like the maintenance staff there, they directly buy large quantities of paint.

And then they turn around and ask us to include paint with our bids when they give us work to do the paint. And I was like, what do they do that for? Like what's going on? And it's, well, they take the paint home and then they sell it or they use it for themselves. I was like, are you kidding me? I was like, I couldn't even believe they were hiring a painter because they have this huge maintenance staff. There's really no reason to be outsourcing paint to begin with, let alone, no, theft, right?

So getting into it, you know, he told me he's, he had a strong suspicion. And by this point, I did as well, that this was the tip of an iceberg, that there were a lot of serious problems going on at this property. And, you know, I'm a value at investor. So my eyes are lighting up. I'm like, wow, this is, this is great. You know, there's, there's all this stuff at the property. That's fantastic.

Here I am negotiating a price on a property based on historical financials. And I'm looking at it going, this is, this is an easy fix, right? Fire the staff and replace them with some, you know, honest people. And so the more problems I found, the more excited I got. And the seller, he had told me, He said, you know, I think we've got some extra people here. I think there's problems. He's like, I think you've got room to make a lot of improvements.

And he knew that. Now, he wasn't local. And I do not think he understood the scope of what was going on. But the more research I did, I got really, really excited about this project. And, you know, I aggressively negotiated a deal with him because he clearly wanted to get rid of it. The financials were bad. So I decided to try to go after some creative financing options on this deal. A couple things I did.

One is I asked for some seller financing. I financed 75% of it with a bank, but then I asked a seller to give me a note for $500,000 in a second position on top of that. So my price that I negotiated for this deal was about $2.4 million. and 1.8 of that, 75% came from a bank, and then 500,000 came from the seller. I worked out a couple other concessions in the deal as well. One of the bigger ones was that I knew this was financed through HUD, and I knew, as with any national or major lender, that they have escrow accounts.

And so the large lenders, when they lend on a project like this, a lot of times that project is the primary collateral. There may not be any personal guarantees. And so the lenders want to protect themselves. So they force the borrower to put large amounts of money into escrow in case there's problems. That money gets set aside to fix things or take care of other expenses that might arise. And so this seller had escrow accounts, and I knew that, and I knew it was an older property. And so what I did is I asked for a credit at closing in the amount of their replacement reserve account, which is the account that gets set aside to replace anything that's failing at the property and make improvements to the property.

And the way I rationalize that with the seller, I said, this is an older property. you've got a lot of deferred maintenance here. The lender established how much money you should be putting into reserve every year to keep it up to date and take care of it. So anything that's accumulated in that account, I'd like it as a credit at closing so that I can take care of all these deferred maintenance issues. And I put a clause in there to that effect and they agreed to it. Did you know how much the reserve was at this time, the reserve account? I didn't. Okay.

I didn't. But from my experience, I knew it could be a significant amount of money. And also, I know that most sellers are so focused on that top line that when you put clauses in like this and you ask for these types of concessions, a lot of times they're really looked at secondary. So real quick, that's a tip I think that applies right to any real estate deal. People look at that top number. Like, what are you actually offering me? So if, I mean, if I have a choice between offering somebody 80,000 for a property or in this case, $800,000 for property, you know, so or, you know, or $85,000 and you pay $5,000 in closing costs, I'll generally do the $85, you pay $5 in closing costs. Because people like that top line number.

Like, they feel good about that. I got $85. They can break their family. And if they're really driven by that, you know, sometimes you can let them name their price or you can give on that top line. and then you name the terms. And there's a lot of power in that, right? You can really dramatically reduce the amount of cash you're putting in. And in the end, when you're looking at a deal,

you really want to get a good cash on cash return. So you're looking at how much cash you need to put in up front on your project. And then you're looking at how much cash it's going to throw off every year back to you. And if you put less cash into the deal up front, you're going to get a better return on that cash. Now, the challenge becomes knowing when to do that, right? You don't want to do that on a project that you can't identify ways to boost value because you don't want to take on more debt that you can handle.

And so you got to be careful about when you use it. On this deal, I was extremely confident that I could create a ton of equity right out of the gate. So I really pushed the boundaries of what I thought I could do. In the end, I found out there was $140,000 in this escrow account. And I actually ended up walking out of closing with a check. And I didn't put any cash into this deal at all, which is, which was crazy. And the other thing that I did, which worked well and I do this on every deal, actually mentioned this

tip in my last podcast, but I always try to work it so that closing is toward the beginning of the month. I don't want it on the first or the second because then people claim they paid rent and it's halfway in the mail or it gets confusing. But I try to get it on about the fifth, six, seven, so that the rent has been collected. And I make sure, and this is standard, you're not asking for anything unusual, but I make sure that clauses in the contract, that rent gets prorated. So what does that mean? That means if you close on say the fifth of the month, then you get at closing the rent that was collected from the sixth through the end of the month. And so in this case, that was $80,000. So $80,000 in prorated rent went into the operating account. So not only did I not have to come up

with any cash to close on this deal, I actually seated my operating account with $80,000. again, didn't have to put in any of my own money. And that very first day, we had let the seller know we weren't retaining the staff. So we ended up for this project, we did something that I don't normally do. Now, we outsourced the management. And I need to back, I need to back up a second for that piece of the story. But we were almost to closing. when I got a call from my attorney and closing was literally days away.

And he said, I just got off the phone with a seller's attorney. HUD sent them over a renewal to their HAP contract, which is the HUD contract for the property. And somebody at their company signed it and sent it back. Oh, no. And I was like, what are you talking about? You must be kidding. Like, that can't have happened. knew what I was planning to do. Why would they do that? So I called the seller. I was like,

what, what's going on? He said, it's true. You know, it went through our normal process. The contract came in. It got processed. Somebody signed it, sent it back. He's like, I'm sorry, you know, but it never occurred to anybody here that anybody wouldn't want to sign that because these contracts are like gold in the affordable housing world. And, you know, it's too late. How long was the contract for? How many? 20 years. Oh.

So you can't make it. You can't go outside Section 8 for 20 years now. Exactly. Exactly. I was floored. I actually thought the deal was done. I didn't think we'd ever make it to closing. So he said, you know, obviously, you know, this would give you grounds to cancel our contract if you need to, like, you know, let me know what you want to do.

So. Was there any opportunity? to cancel the HUD contract? Can you just call them up? And I mean, I know it's a government entity and nothing is easy. But that's exactly what the that's exactly what my first thought was. Right. So I basically, I started doing research right away. I started talking to people who knew what they were doing. I mean, I called for the next couple of days. I was like researching HUD the entire time. I mean, I called so many people. And what I learned was you don't overturn a HUD contract ever. you could employ a team of 8,000 lawyers for 10 years and, you know, you're not going to outspend

the government. They're not going to. There's nothing you can do. Like once a contract is signed, it's dropped into the mechanisms and it's all over. So is 20 years a normal length of time that when you first said they signed the contract, I thought that was going to be one year. Obviously, I'm not a HUD person. From what I understand, a lot of them are much shorter.

And in what I learned, the more I researched it was that this, while I was shocked and dismayed by this development, what I ended up being is learning is that people said, this really is a good thing. This contract is really valuable. The seller was right when he said this contract is gold in that world. The more people I talk to and educated myself, I realized he's right. It is valuable. Just not to me. And I didn't know what to do because the other thing I learned was that managing a HUD property is a lot different than managing market rate housing. There's all types of reporting requirements and restrictions and inspections and things that you have to have staff and management that knows what they're doing.

It's just not that easy. It would have been very difficult for us to step and do that. Now, I'm like the biggest proponent in the world of managing your own properties. I mean, I think it's really important, especially starting out to do that. The level of care that you can bring to a property, I think you dramatically improve the likelihood of success with your property if you manage it yourself and stay involved. But in this particular situation, I began to realize that taking on the management of 115 HUD units was not something I could dump on my team or do myself. It just would have crushed us. And so I was very fortunate that as I researched HUD, I encountered a person who I grew to know and respect, to know and respect who was very highly thought of in the affordable housing community.

He had been working on the redevelopment of another HUD project in the area. And after speaking with him, he agreed that his company would manage the project for us. And I was okay with that. So we decided to outsource the property management to his company. And because we were local, we did stay involved, did keep our eye on things. But we worked together. He revised my budget to be more accurate in terms based on his experience with HUD. And six months in, you know, his numbers were right on.

And it was a really dramatic transformation. I mean, we, the morning of closing, the seller stopped by to let the employees know that we weren't going to be keeping them on. And we had closing that afternoon. And the first thing we did was go over to the management office. And we saw that the employees who had been let go completely stripped the place there. They took everything. I mean, they took all the inventory, all the equipment. they took snowblowers, they took appliances, they took furniture, they took all the tenant records.

They left nothing, the computers, everything was gone. Was that supposed to be part of the sale? Absolutely. It was. So when we notified the seller what had happened, he was really upset. I mean, he didn't know they were going to do that. I wasn't surprised, but, you know, the new management company that we brought in, they were so professional and they got everything in order quickly and managed that property

well and we hit our numbers and six months in that that guy that I originally sat down with came to my office and he's like he explained that they wanted to redevelop that property. He was prepared to go out and secure funding from the state and other sources, tax credits and whatever was necessary to completely renovate these, refurbished all of the units top to bottom. And we ended up striking a deal. I agreed to sell it to them. And I felt pretty good about that. I don't like to sell properties.

But in this case, I didn't want to grow my company in the affordable housing space. I really trusted this guy and I respected his company and I liked what they wanted to do. they went out and raised $17 million to completely renovate all of these units. And I sold the property to them for $3.2 million. Wow. After six months? I put it under contract after six months. And it took them about a year to line all the financing up.

So we kept it under contract. It was actually more than a year. and it was a great deal for us, but it was a great deal for him. We actually, we hardly negotiated at all. I told him that I'd like to get a nine cap, a capitalization rate of 9%. And we based that on actuals for the first six months. We were hitting the budget exactly. And he agreed.

And we set the $3.2 million price. Over the year that it was under contract, I had other people come in and tell me they would pay us more, but I said, no, I, I, I, I, I wanted to sell to this buyer and respected what they were doing. And I didn't, you know, I, I ended up clearing more than a million dollars on this deal. And, you know, I, that's enough. I, I didn't, I didn't need to try to, to, to, to do anything different. And, and, you know, now, now, there's, there's, there's a lot nicer properties that are going to be in our community. And, you know, I feel pretty good about it. So how many units total was it again?

115. So you bought 115 units for no money out of pocket, which everyone says you can't do. You can't buy no money down. No, no. Negative 80,000. Oh, yeah, negative 80,000. You made money. You got paid to buy this property.

Then you made over the course of this six months, well, you know, yearish, give or take, you made like a million dollars. I mean, that's an amazing story. Yeah. Yeah. I mean, they don't all go that well. I wish they did. So it makes up for some of the ones that didn't go so well.

But yeah, I mean, I think, you know, I'm really happy with it. We did a 10, what's called a 1031 exchange, which means, I mean, all the proceeds of that sale went to a qualified intermediary and we're going to reinvest that in other properties. I didn't, you know, cash out and go on a trip or anything like that. Put it all in black. Now, it's my philosophy to keep reinvesting and it's fun and we love it. and we try to do the right thing with it. And, you know, the properties also, we ended up, we held it for, you know, that first six months,

then another more than almost $200,000 in profit on the operating of the properties. So it wasn't just the capital gain. The properties were profitable on top of that. So that helped my portfolio. That helped us do some other projects and helped us grow and, you know, not have to raise money from other investors. and still try to keep growing our company and our properties. I love it. That's fantastic.

So do you kind of my last question before we move on to the fire round, like, do you have any advice for people who are listening to this right now who want to get into this business, who want to start buying apartment complexes? You know, what kind of advice do you have based on looking the last, you know, decade of your investing? What can you offer them? Biggest thing is just, you know, don't, don't be intimidated. Don't think you can't do it.

You know, the more I've learned about commercial property and apartments, the more I realize that there's just so many myths out there about how complicated it is or about how difficult it is. It's weird. It's almost like there's this exclusive community that tries to make it seem more complex, more difficult, more unattainable than it actually is. And that's, you know, that's one of the biggest motivators I had to write my book. It's why I love to, I've got, you know, a lot of people I'm serving as a mentor for. I just try to get that word out. I love to write and share that message and help people out. I want people to know you can do this. I mean, if I can do it, you can do it. I'm just an ordinary person and, you know, I just keep chipping away at things

and you try hard enough and long enough and good things are going to happen. That's awesome. Really, really good advice. Well, hey. That's a good quote too. It is a quote. Yeah. There are two kinds of real estate investors. Those who have reviewed their insurance and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG

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here mindy you want to do the do you want to do the fire round sound effects with me are you ready for this yes all right here we go it's time for it's time for the fire round it's time for the fire round that was really good minnie i know i'm a little intimidated yeah all right so the fire round these questions come direct out of the bigger pockets forums and uh for those who don't No, Mindy is actually the sheriff of the forums. She's actually in there more than any person alive, except for maybe like Jay Hendrix. Is he in here longer? Is it Hinrichs?

Heinrichs? I always call him Heinrichs. He's been on the site longer than I have. Okay. Well, he won. And he's certainly typed way more words than I have. Same is Gilgully. Bill Golly also.

Yeah. Yeah, they win. Anyway. They do. Okay. All right. Let's get to these questions. Number one, from the forums.

So we've got a bigger pocket community member looking to buy commercial land through a private sale. The seller is not against financing it. And the seller is also willing to work a trade deal for some of his high-end toys like sports car motorcycles, etc. Interesting. Do you have any advice for things he should focus on? Well, you know, the first thing I do when I'm going to make a commercial investment is look at the cash flow. So my advice would be just to be make certain that you understand. understand the cash flow consequences of buying commercial land. So, you know, when you, when you buy

land, it's somewhat speculative. You're going to have to pay taxes on that. You're going to have to pay insurance. You're going to have immediately cash is going to start going out the door. And if it's vacant land, there's likely no income associated with that. Even if the seller finances it, you're going to, you have debt, right? So you're going to be making mortgage payments. So there's a lot of cash that's coming out of your pocket from day one and what's your end game? How long are you going to sit on it? How much money are you going to have to pay? My advice is to be cautious. If you're new to investing or you don't have a lot of cash flow coming from other properties, you haven't established a portfolio, I would say to be super cautious about buying land and I'm a big advocate

of buying properties that are going to put a little more cash in your pocket every month instead of ones that you're going to sit on and hope to win the lottery. Love it. That's a great answer. Yeah. Cool. All right, Mindy. Okay.

I found a really great deal, 92 units for $3.5 million, but I don't have the 25, I don't have the 20% down payment that the banks are going to want. Is there a way to get 100% financing? Well, I think we covered that in my story. you know, I think there's there's a variety of different ways to be creative and come up with that that extra financing. I don't have the specifics of the property. So, you know, how, what is that based on that assessment that this is a great deal? Are you sure that it really makes sense to get tried as secure? Even if you can get 100% financing, it's not always the right answer. You know,

so if the deal is good enough, if the numbers are that good, you're going to find that there's a lot more options. You can talk to other people to help you. You might be able to work out something with the seller. Generally, you can bridge that gap if the deal is good enough, but you just want to make sure the value's there. Cool. I like it. I like it. All right, next question. How hard is it to get financing when you have zero experience? It's kind of a build-off the last one. Say the person said a six to eight unit complex. Can they jump right into that or do they need to get experience in the small game first? I think you can jump right in. I'm. I'm not going to tell you that it's going to be easy to get the financing.

I had a lot of trouble getting financing. I did make a big purchase to get started, but my first property, I assumed the mortgage from the seller. And my second property, I got owner financing on. It wasn't until my third property that I got bank financing. So it's not easy. Even when I first assumed my first mortgage, one of my top priorities was to refinance that. I got nose for three years.

I got told noes so many times I almost gave up. It was like high school all over again. Yeah, exactly. Exactly. It's easy to get discouraged in that situation. I mean, it is. But, you know, a six unit, an eight unit, something like that, not as big of a stretch. The lending environment is a little more loose right now.

I think if the numbers work, I think you got a good chance. I think if you have a strong property, the banks know, their numbers, they're going to want to see that you can cover those mortgage payments with the rent. If you can produce the financials to show that this is a good investment, I think you've got a really good chance. But if somebody says no, don't give up, try somebody else. Keep trying. Love it.

Okay. Last question. You see a multifamily property that you're interested in on a website or the MLS, but not all of the information is there. Some of the bits of information that you need to start to start evaluating the property. Yeah. Sorry. Brain fart. Some of the information is there, but not everything. At what point do you ask the realtor or owner questions? Do you just call them up on the phone and start firing away? What are the important things you need to know before you can even start?

Well, I personally, I like to make sure I have some familiarity with the location, the market. it. You know, I, if it's not something that I'm immediately familiar with, I'll go on Google Maps. I'll walk the streets virtually. Look around, make sure it's something that I don't like to waste anybody's time. And then when I do reach out, I want to make absolutely certain I'm reaching out to whoever the right person is. So if it's seller listing it directly, I want to contact them directly. If it's a broker, I want to call the selling broker. I don't want to go through another broker because a broker on a property wants to keep their commission, they will actually treat me better and give me better service if I call them up and say, I'm an investor and I actually go right

out of my way to say, I am not a broker. And they love that. And it's interesting because, you know, they want to get a deal done with you when they find out you're not a broker. So I will call them up. I'll say, hi, my name is Brian Murray. You know, I'm a real estate investor. I am not a broker. I'd like to get some more information on this property and follow the proper channels. Go to whoever has that listing agreement and ask them directly for that information. And it should be provided. I love that. I love that tip also, like, you know, telling the broker, hey, I'm not, I'm not a broker.

I'm not competing with you. I'm not taking commission up this. This is your baby. You get all the money. I'm like, it's just like a subtle way of getting. And that works again with commercial or residential. I mean, we've, I don't know who it was. A couple weeks ago, we had a guest on who said that exact same thing.

and they were doing, you know, residential stuff, but saying, yeah, whenever I find it, look for a property, I always go to the, to the actual selling agent because then they get double the commission. They love that. Who doesn't like free money. Woo. All right. So let's, let's head over to the last segment of the show, which we lovingly refer to as our famous for. Famous for. Very nice.

I know I'm a professional singer too. You are, actually. You know, random, this is a random story, Mindy, but so, you know, I listen to a lot of music because I have a little girl and she really likes kids music. Even though she's like seven months old now, she really likes kids music. It calms her down every time. Like normal music, no, but kids music. Anyway, so I got Pandora going all the time and I got music playing this station. And one of the songs that come up is by Sesame Street, like old school Sesame Street.

And one of the ladies that sings on there, I swear, is you. I mean, like, she sounds identical to you. What's her name? I don't remember now. But anyway, if you guys are listening to this right now and you're like, you know, you like old school Sesame Street songs, listen for it and listen for Mindy. She is on that album. It's amazing.

I am old, but I'm not that old. Yeah. I remember Sesame Street when I was a kid. It was still on. Yeah. I'm a little bit up. Brandon, he's nine. I am nine and I'm just a bearded nine.

All right, moving on. Let's get to these questions. Number one, what is your favorite real estate related book besides your own? You know, the last time I was on, I shared now, I kind of repeat this. I really don't have one book that, you know, I find something valuable in every book, just like I find something valuable in every Bigger Pockets podcast. I've listened to them all. I take something from every single one.

So for this one, instead of, you know, I named my favorite last time, but instead of saying one specific to me, I thought, hey, when I meet with new investors and people come to me and ask for help. What's what's the book I've been recommending the most? And Brandon, you know, don't. That's my book. This might be the first time that Brandon hasn't mentioned that book first. I know. Book on investing in real estate with no and low money down. And I say that because it's all about overcoming those fears and those obstacles. And the biggest one is how can I afford it? How can I, you know, where I just don't understand where the money's going to come from. How can I do this?

And that seems to be the biggest mental hurdle that people have. So whenever somebody comes to me and they're asking me questions about that, I recommend your book, Brandon. And the strategies that are in there work with commercial too, right? So I expand upon some of them that are used more often in commercial in my own book. But I feel like your book is a great way to kind of like get people. started and break that, break that,

you know, get over that hurdle. I appreciate that. Thank you. That was the goal with Rednet. I wanted to give a good overview of a bunch of different creative strategies so people can then

dig in a little bit deeper and learn more. So cool. All right. What about, actually, no, Mindy, this is your question.

You get to ask it. Sorry, I was trying to steal it from you. Brian. Brian, what is your favorite business, non-real estate business book?

Okay, so read a ton of books. My answer changes like once a month. Yep. But my favorite one right now is called The Obstacle is the Way by Ryan Holiday. I'm right in the middle of that right now. Yeah. So love it.

Right. So again, same same theme, right? You just can't accomplish anything without overcoming so many obstacles and so many hurdles. And if you can just get the right mentality and the right approach, when something sets you back, try to find a way to look at it as an opportunity. and this book looks at obstacles from every different angle and how you can turn obstacles to your advantage and keep moving forward. And that's what it's all about. You know,

the subtitle is the timeless art of turning trials into triumph. And there's no place like real estate to put that to the test. That is very true. That is so true. Okay, Brian, what are some of your hobbies outside of real estate? Last time you said that real estate was your hobby. I get that. What are some things you do besides that?

You know, I like to travel, love to read, and I'm a runner. You know, I mentioned that last time, but my wife and I both run. Great way to, you know, think, process the day, either the day ahead if it's a morning run or what happened if it's in the afternoon. And I just love the piece of it and it's relaxing and healthy. And, you know, we love to run. We try to do at least a marathon every year. And keeps me from getting too fat too. So I probably run the total of a marathon over the course of a year.

I just started running. I ran two whole miles today. And I was counting every second. But I'm glad you enjoy it. I think real estate's kind of like a marathon. And when I first started doing real estate, I wasn't too far out of the corporate world. And I was way overweight. I was so unhealthy.

and when I first started, I couldn't run even a quarter of a mile and I was huffing and puffing, but then I would walk and I would run and I would walk. And I just kept at it and eventually got back into shape. And, you know, I kind of feel like real estate's the same way, right? Just keep plugging away. So it's kind of got some parallels. I love that. Very much so.

Well, cool. By the way, Maria was the name of the Westminster Street lady that sounds just a lot. like Mindy. So look for songs on Maria. Maria. You and Maria could be twin voices. It's amazing. So if...

Are you sure it's not her? It might be. If they bring back... Can you sing something? Yeah, I want you to sing like... I think what was a song? I think maybe the wheels on the bus or something like that. And it was like...

Feels on the bus. Go round and round, round, round and round. That's me. You caught me. I am also Maria from Sesame Street. I knew it. Have you ever seen Maria? from Sesame Street, we don't look at thing alike.

You don't, but all right. Last question from me. Brian, what do you believe sets apart? And this might be different than last time, or maybe it's the same answers you gave us to time. But what do you think sets apart those successful real estate investors from all those who give up, fail, or never get started? You know, last time I said grit and I stand by that.

But I would say that, you know, since that time, I mean, I've just met so many people. And, you know, one of the things I've noticed in terms of the people I sit down with who actually have some success in real estate and the ones that don't is just just a solid work ethic. So I'm going to, I'm going to this time, I'm going to add just hard work. Like, work hard. You know, that's going to make the difference. And it's, it's, there's a lot of people out there that have that work ethic and there's some that don't. And if you've got it, I think you're going to. dramatically improve your likelihood of success, you know, please don't go into real estate

looking at it as an entirely passive activity, not when you're first starting out. You know, you can do it that way, but you're going to improve your likelihood of success if you're hands on. You can start any business and be completely passive if you want to. You know, you can open a flower shop. You can have, you know, I was going to say you can open a sub shop, but you know, what? If you apply to Subway to open a franchise, they don't want absentee owners. Why? Because they fail. Right. So, you know, franchises are the perfect example. They want people who are hands-on and they know, statistically, you're much more likely to be successful. And it's the same thing in real estate. So work hard, you know, go about it in the right way. Real estate's a business just like any other.

and if you have that work ethic, it's going to dramatically improve your likelihood of success. Amazing answer. Absolutely. Well, cool. Well, Mindy, why don't you take us out with the last question? Okay, Brian, where can people find more about you? And this book? Well, you know, I'm on bigger pockets, so please reach out to me there.

I've been posting some blog posts on bigger pockets. I've posted the same ones on LinkedIn. You can reach me through either one. You know what? And I prefer bigger pockets. I'm going to say that because, you know what, I met some fantastic people through Bigger Pockets after the last time I was on the show. And I hope I can meet some more.

So it's just Bigger Pockets is an amazing thing. And I want people to use it. When I have a new investor come to talk to me, I give them one homework assignment. I said, listen to every single podcast on Bigger Pockets. Start with number one and don't come back and talk to me until you get to the last one. And that's how they get their Ph.D. in real estate. And so, yeah, reach out to me on bigger pockets. And I hope to hear from a lot of people. Well, and tell us real quick about the book. I mean, what is the book called? And what's it about? Book is called crushing it in apartments and commercial real estate, how a small investor can make it big. And that's what it's all about. It's for people who are either, you know, just getting started or even have some properties and want to go bigger. I try to.

to take everything I've learned, the mistakes I've made so that you don't have to make them, like explain everything I've learned to try to help people be successful in commercial real estate and apartments. So that was my motivation to do it. And I'm really excited that it's finally out. Awesome. Awesome. And they can get that from Amazon, I'm assuming? Absolutely. You got the print version and a Kindle version out as well. Perfect. Perfect. I can't wait to read it. I know Mindy got her copy right there, but I will read it as well. awesome always looking for a good real estate book so very cool well thank you brian so much for being on the show today uh this was fantastic i love diving just deep into the deals like we did today

i know i had a lot of fun with it absolutely hopefully you guys will have me back to talk about some more it's good stuff all right thank you sir we'll see you around thank you guys thank you brian yeah take care all right and that was an interview with brian murray episode the second episode with him again the first one was in episode 126 so if you want to go back and listen to that one now would be a good time to do it. You kind of hear the backwards story of how Brian got started. But yeah, I love that. Do you have fun with that, Mindy, today?

I did. Brian was such a great interview in episode 126. That was one of my favorite episodes about commercial real estate. And he gives such a good interview, so many tips. Like, I couldn't stop writing down all of his tips as I was listening to it the first time. Yeah, I agree. Tons of good stuff in there. And again, this is one of those shows I think I want to go back and listen to again.

And again, as I'm like, you know, getting discouraged when I'm like trying to buy a big property. This year I want to buy a 50-unit property. And it's, it's tough. Like Brian Eben said, you know, you've got to have that persistence. And it's a good show that, you know, just shows you when you push through, when you just keep finding ways to make it happen, you know, you'll eventually get there. Exactly. And his no money, low money, never ever pay a cent for anything out-of-pocket strategies. Yeah, that's a good one.

That's a pretty awesome story. Really, really great ideas. and I learned a lot from here. Like you said, I have to go back and listen to it because it's hard to take notes while you're talking to him. It is kind of hard to take notes while talking about you. All right, well, let's get out of here. Before we do, I want to ask a quick favor of everybody. Could you guys do us a favor?

And if you've not yet left us a review or rating in iTunes, please do so. We would love your, I guess, feedback there. You can leave comments. You can leave just a star, you know, five stars the best. Wink, wink, hint, nudge, and, you know, let the iTunes. And, you know, let the iTunes world know that we're legit and that we're not out there, you know, being crappy podcasters that were amazing podcasters. So do us that favor. Amazing, amazing, especially Mindy.

Yeah, leave a comment about, actually, that would be ideal. Leave a comment about how much you love Mindy guest hosting the podcast in iTunes. So Josh will see it. And then he'll have her back more often because Josh today, we didn't really talk about this earlier. Josh today is out like at some news station doing some like local news something. I don't know. He's a big deal. Yeah, he's a big deal, right?

Yeah. I have to try to convince him of that. Yeah. He owns Denver. He's almost going to be the mayor. Pretty much. Anyway, well, again, I think we better get out of here. I got lunch waiting.

I got a cassidy. My wife, for Christmas this year, I got my wife a cookbook on the Pioneer Woman cookbook. You don't know the Pioneer Woman? Yes, I do. Yeah, so she made these, what was it? What was it? Chicken, barbecue, pineapple, cassidias for dinner last night. They were incredible and I got leftovers today.

So I'm going to go into that. Your already incredible cook wife is now making you. It's amazing. All that I mean, it became Sidiya too. She is fantastic. And one quick thing, a little thing for the YouTubers out there, those are watching this on YouTube. Most of you guys haven't met my little girl yet. My wife just happened to walk in the room with little Rosie Liu.

So this for those on YouTube. Hi, Rosie. It's Rosie Lou. Hi. Can you say hello to the camera to 150,000 people? Oh, maybe not that many. Hi. 150,000 will turn in now.

Look at how cute. Yeah. Now everyone wants to go over to YouTube and watch the end of the video because she is adorable, isn't she? Yes, she is. Okay. All right. Here's Mama. Well, let's get out of here.

Mindy, you want to take us out? I do. Thank you so much for listening to the Bigger Pockets podcast. It has been a pleasure to co-host with you, Brandon. I'm sorry, I'm the host. You're the co-host. Yeah. Keep your role.

Know your role, Mindy. know your role. With you, as always, is Mr. Brandon Turner, the co-host. Okay, this is Mindy Jensen, signing off. 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.

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