BiggerPockets Real Estate Podcast - 436: Going into Multifamily When You’re Fairly New to Real Estate with Jamie Gruber

Episode Date: January 21, 2021

There’s a limiting belief that many people have: “I can’t do this thing because I have no experience”. Jamie Gruber disagreed with this line of thinking. Even with no multifamily experience, Jamie decided he wanted to be a multifamily investor. So what did he do? He started the Multifamily and More meetup to network with existing multifamily investors. This didn’t mean that Jamie had no experience in real estate, he had a small portfolio of single family homes that he started to landlord by accident. Even with no experience in the multifamily space he was interested in, he was able to secure a deal with a member of his network. Now with 21 chapters and 10,000+ members, Multifamily and More has become a big part of the multifamily investing community. It grew because, as Jamie describes, he added value, stayed consistent with meetings and postings, and built an online community that could network and interact (even during COVID). Jamie gives his tips on starting a lasting community, how to navigate meetups during COVID lockdowns, finding the best partners for multifamily deals, and the importance of cash reserves when buying a property. Many single family investors want to transition to multifamily, if you’re part of that demographic, join Multifamily and More! In This Episode We Cover: Turning your primary residence into a profitable investment instead of selling The importance of having cash reserves available when doing deals How to break through single family investing and start growing a multifamily portfolio What a business partner needs to see in you before they can offer you deals, money, or experience The difference between financing residential deals and financing multifamily deals Why you need to have a good operating agreement when partnering on deals And SO much more! Links from the Show BiggerPockets Forums David's Instagram Brandon's Instagram BiggerPockets Podcast BiggerPockets Podcast 266: How We Used a Partnership to Buy 900 Units with Jake and Gino Meetup.com Gobundance Emerge Zoom BiggerPockets Podcast 226: From “D-Student” to $400,000 in Annual Rental Property Cash Flow with David Osborn  Check the full show notes here: https://www.biggerpockets.com/show436 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 436. You think about that. People say, like, well, I don't have credibility to start a meetup. I can't be the expert. It's like, you don't need to be the expert. Like, you know, you need to be maybe a chapter ahead, right? So you could be a chapter ahead of somebody and add value to them. And that's all we were.

We had a business plan for multifamily that we could show brokers. Most people in the room didn't have that. Month two, my partner, who's the spreadsheet guy, did a deal analysis. Well, guess what? Three syndicators showed up. 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 to one? It's Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Green. David, welcome to the show, man. How's life? How's life? Awesome. Had a great weekend. I'm looking at houses again for myself. So I was out this weekend looking at places to house hack in the hills of the Bay Area and going through all those emotions again about buying a property and getting all excited. I was out in Hawaii looking at condos and I put one under contract out in your neck of the woods. And I'm looking at probably three or four more right now. So I'm like a kid in the candy

store once I can start buying real estate again. That's awesome, man. I'm excited for you. Yeah. Once you have a place, you can come out every week. You can come out every Monday for our podcast recordings. We typically record on Mondays. I don't think you will, but that would be, that'd be funny. Well, we have some technical difficulties today. And so it's so frustrating. I might take that five-hour flight over trying to figure out this thing. This recording person.

I don't think it's a bad idea. Or we just, like, cram, like, nine weeks of recordings every nine weeks and just do them all in, like, a two-day period, which is actually kind of a cool idea to batch. But anyway, today's show has nothing to do with that whatsoever. So today's show is a really fun episode with a buddy of ours, names Jamie Gruber. So, Jamie is a real estate investor in the mission. area who went very quickly from like single family to some duplexes to a multi like larger multifamily or midsize you could call them midsize apartment complexes and that's really what today's journey

the story is about is how you don't have to stay small forever you can scale up pretty quickly if you use the right tool specifically he talks a lot about networking because he ain't I know it's like a cliche term networking but the way that he does it is very unique and something that you could start implementing today so listen for all of that today. Especially I love his, he said this phrase on the show. You're going to hear it later. And we didn't really dive into it, but you're going to hear this theme throughout Jamie's life. He said this, be intentional, get educated, and then take action. Like those three things. Be intentional about what you want. Get educated about that thing and then take action.

And I just, I love that that reoccurring theme is through every area of his life. You're going to hear that and how you can apply that to yours as well. Now, before we get to the interview, though, let's get to today's quick tip. My quick tip today is called 14. banks today. Now, let me expand on that. Jamie tells us this story today in the podcast you're going to hear about how he called 14 banks to get good financing. And the lesson he's trying to teach here and that I'm going to just, you know, tell you

right now, spoiler alert, is that sometimes the best loans don't come until call number 10, 11, 12, 13. And now 14 is an arbitrary number. I'm just having fun with it. But the point is, don't just accept one loan. If you're trying to get started in real estate, don't just accept one lender. Don't just assume you're going to talk to one bank. talk to a bunch of them.

I know you've done that as well, David, in your life because different lenders have different products. Yeah, there was a point in my life. I showed up to work. I got my stuff done. And then I literally just Googled every bank I could find in Arizona and just made a huge spreadsheet and just started emailing them all, calling them all.

Like every day for hours at a time, that's what I would do because if you want to buy real estate, that's what it takes. And then through that process, you start to figure out, oh, credit unions are much different than banks. That's why these people are. are offering me things that these people aren't.

And that's what you got to do. But you usually only got to do it once. Once you figured out how to find the right institution, you can just, what's the example that we use? It's like you're wandering the desert and you find a well. Night's no to go right to that one well, but you're wandering around with that little, you know, the piece of wood that they hold. Yeah.

What's it called? The wishing stick or whatever. I don't know. Like the- Yeah, you're wondering around like an idiot with one of those things. Whatever the name of that thing is called, let us know on Instagram at David Green 24 or beardy Brandon. There you go. What's that name of that stupid stick? It's like they walk around. It doesn't actually, it's a witching, witching stick. Is that what it's called? I wish I knew. It was in like every cartoon or movie we ever saw as kids. Whatever. Anyway, I have an uncomfortable

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Stessa Pro for free because it's better to discover your risk in a report than in a recession. Most investors spend all their time talking about their high-level returns. But that's not the number that actually matters. What actually matters is what you keep after taxes, and that's where multifamily real estate quietly stands out. With built-in advantages like depreciation, the right deals can generate steady cash flow while reducing the tax drag. Bam Capital structures its multifamily investments around those funds.

fundamentals, pairing tax efficiency with disciplined operators and a long-term approach. This isn't about chasing hype or guessing market timing. It's about building durable, tax-aware wealth over time. Learn more at biggerpockets.com slash bam. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand-new construction homes, 10% below market value, in the best markets across the country, without making real estate your second job. That's exactly what rent to retirement does. They're a full-service, turnkey investment company, handling everything for you. In some cases, investors get 50 to 75% of

our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. With that said, let's get to this interview with Jamie. Jamie, Jamie is an awesome dude. You're going to love this interview. I'm excited to introduce you to our buddy, Jamie Gruber. Here he is. Jamie, welcome to the Bigger Pockets podcast, man. It is an honor to have you here. How are you doing? I'm doing great, man. It's an incredible to be here. I've been a longtime fan, so to be here is sort of a, sort of a coup for me. I appreciate it, guys. Thanks, man. So tell us where are you at in the world? So I live now currently in, or just north of Ann Arbor, Michigan. I'm an East Coast guy by birth, I guess. So I lived in New York. I grew up in New York, lived in Boston for a number of years and moved here. here about three years ago. So Midwest. Okay, the Midwest. Yeah. And I think I met you in person,

didn't I, in Detroit when I was driving through, right? You did. You did. You came up here. You dropped this big, big to-do, like, I'm here. Everyone come see me and everyone came and saw you. Yeah, you know, that's, that's simply how it goes. Just like, you know, coming to a city and I want to do a meetup. And I'm like, who's the meetup people? And you're the meet up guy. We're going to talk about that a little bit later today. That's right. But it's just, it's so fun to be able to like when you go travel to the city to meet the real estate investors in that city like who's doing business here who's doing deals and again one of the guys you and I just hit it off really well there and so now you're on the podcast we're talking about your journey and you have not been doing

this for 50 years you don't have 10,000 units but you got a really cool thing going and so I want to kind to dig into like first of all what do you do for a living and then how did you get from that into the idea of buying real estate sure yeah so my my day job is I'm in the insurance world insurance claims I call myself a claims executive which just simply means I'm in an equity position right. So I get stock options, all that stuff, the golden handcuffs, as they call them. Right. So that's what I've done for almost 21 years now, right out of college. And I've been with the same company ever since moved around a little bit, as I mentioned, New York to Boston to Michigan, taking different positions, bigger positions or whatever the case may be. And really, you know,

started investing real estate in, I guess, 2005, but didn't really intentionally invest in real estate until 2017. So a bit of a gap between the two. I was an accidental landlord to start and really got intentional about it. it recently. Asked in the landlord. How that happened? So 2005, for those that that are old enough to remember investing or buying pre 2008, like, you know, I'm getting this promotion at work. I've got a car. I've got to buy the house. So found a house in this town in upstate New York, Elmira, New York, if anybody that knows where that is, it's nowhere. It's a small town. And I remember it was $142,000 to buy this beautiful home. And I got to the phone with the bank. And the bank was like, yeah, hey, look, this is what we're going to do. We're going to take 20% as like a

like a home equity line or home equity loan and put that down and then the other 80% will put in a traditional mortgage and you're going to avoid PMI. I was like, yeah, yeah, man, avoid PMI. No idea what PMI was. But I financed the entire thing. So I bought $140,000 house with no money out of pocket. In fact, I think I got cash back at closing somehow. And, you know, within a year of that, I doubled down and said, hey, you know what? I keep hearing about people refinancing and I refied out to the new value of $149 and it gave me 100% financing for that as well. So life was going great. I had this house. It's 2005, 2006, got the job. What's going to happen? Two, three years, it'll be worth double. I'll sell it. And here we go, right? So that's the house I live. That's exactly it. So 2008 rolls around. I actually get a promotion. I moved to Boston. And the one thing I couldn't do at that point was sell my house. And I even had a relocation package, which gave me a $25,000 loss on sale provision. Like in other words, if you sell the house for 25,000 less than you bought it for, we'll pay that difference. Go ahead and move. Couldn't get a rid of it. Could not sell the house for the life of me. So what's the next thing you do? You put a renter in

there. Yeah. The good thing at that time was this hydraulic fracturing, well, good, depending on how you feel about it, I guess, but this natural gas mining thing was starting to explode. It was big in Pennsylvania. This town is right on the Pennsylvania border. Companies were moving in, expecting New York to leak to allow it. So my rent was like hundreds of dollars more than my expenses. I was like, yeah, it's pretty cool. I'm making a couple hundred bucks a month. I've got this house. somebody else is paying the debt off, it's all good. But then a couple years later, as things dragged on or whatever with the state, they decided, you know what, we're not going to allow this fracking, hydraulic fracturing thing to come into New York. So the Halliburtons and Exxons or whoever the world

moved out. And my rents went south. So my rent went down to about maybe a little bit more, like 50 bucks more than what I was paying in mortgage taxes and insurance. So I was making no money probably, you know, anything, something happened. I was spending money. Right. So it was, it became an albatross. It became a problem for me. Like, man, this house, this, this burdensome house. I can't stand this thing. It was what it was. So fast forward now, I'm kind of accelerating my career. I'm taking these different roles within the organization to achieve what I'm doing now, this equity level job. It's kind of the top of it, right? And along the way, I'm traveling 45 weeks a year. I'm on a plane, you know, taking that job because nobody else

would do it, right? Whatever I could do to kind of advance my career. And I start to feel this lacking fulfillment with this approach. Like I feel and think that the job I want is going to get me the moment. But somewhere in there, looking back now, I was starting to lose a little bit of traction with my desire to kind of continue to do what I was doing. So I read again at 24, I read it once, and it kind of made sense, but didn't really do anything with it. I read Rich Dad, Poor Dad. And I'm like, oh, man, like all those years, all those years, and now I get it. So I read that book. And then it was like, all right, well, hey, I got this property. Let me just sort of like refi, make this thing an asset, not only physically, but mentally, like in my mind making an asset versus this

albatross. And I did that and then we actively started sourcing additional purchase at that point, made a couple more after that. So that's cool, man. And so at the time, when did you get from New York then to, like was that in 08 is when you moved to Michigan? Late 08. No, no, no, no, no. I moved from New York to Boston and 08. I moved from Boston to Michigan in 2017. I see. Okay. And so like by the time when you move there, what was, I guess, what was your next purchase. Where'd you go from? Yeah, the one house. Now you're intentional about it. Yeah, I'm in Boston. And, you know, I'm listening to this podcast you may have heard about called Bigger Pockets, learning all about about real estate investing. And it was just, it just, it made sense to me. It was fascinating to me. I'm reading. I'm diving. And what a lot of people do when they start getting into the real estate investing world. I go to a local Ria meeting in the Boston area. And it was great. Got to, you know, met some people, learn some things. But the one thing that became clear for me was like, man, it's hard to invest in this area. Just prices are high.

cash flow is low. All of the things I had learned on the BP podcast didn't seem possible there. But I have this house in New York, right? I have this house in upstate New York. It's where I'm from. I have family back in that area. So I decide, you know what, hey, let me look there because it's way more affordable. Rents are pretty good. I can get, we talk about one, two percent rule. I can get two, three, four percent rule in some of these markets. And I found a couple of distressed duplexes. I had heard of the burr method by that point. And I decided, you know what, perfect. I'm going to, I'm going to do that. I'm going to burr these two properties. Got them under contract and purchased them. I think together I purchased them for 170 combined. And that was

kind of the first intentional purchase of real estate. And I did that late 2016, got the promotion to move to Michigan in January 2017. So I literally closed in mid-January, 2017, while living in Boston, and then moved to Michigan about three weeks later. And now I got these properties a flight away in New York versus a four-hour drive-away in New York. So yeah, yeah, a couple of things to point out here real quick. First of all, the fact that you chose New York, I think that's so smart in that, we talk a lot about unfair advantages. Like when you were looking at where to invest, you had people there. You understood that area. You knew that market. And you're like, hey, that's going to be my market. Now, just one thing we encourage on the show a lot of times is if, like, where do you

have your unfair advantage? I hate the question, like, what's the best market to invest in? I'm like, the best market to invest in is like the market where you have a team, like, where you have, where the numbers make sense, which is most markets, you can find something that makes sense there and where you have a team. So that's, so how did those duplexes go? So duplexes, we purchased them. You know, we learned a ton. I'll say that. Meaning, like, we did all right with them. We still own them. We refied out of them and essentially executed the plan. Maybe not exactly, but for the most part, we executed the plan. But they were great. You know, we had a sewer pipe go. You know, that costs a little bit of money. And it's funny,

you talk about the experience you get, the first property, the one in New York that I moved from and had to keep sewer pipe went. So I learned that's about a $5,000 deal, right? First estimate for this sewer pipe on this new property was 18 grand. Well, thankfully, with the experience of the first sewer pipe, it was like, ah, it seems a little steep to me. So got enough estimates. to get this at, I think it was like 6,500 or something like that that we had to replace for. So, but again, not knowing without having done that first property. I think that's something that I learned like, man, you just got to do that deal. You got to do that first deal.

You're going to lose. No doubt about it. At some point, you're going to lose on that first deal. But man, the stuff you gain, the knowledge you gain, the information you gain, understanding what the zoning commission will do if you have flaking paint on your house. I had no idea, right? Like how aggressively they come after you to paint the house, how much a sewer pipe is, all of that stuff.

So the lessons from that first property really served us in, I guess, optimizing or mitigating expense on those two duplexes as we went through the burr process with those. Yeah, that's really cool. So one of the things you want to make sure when you're getting started, because like you're saying, Jamie, you probably are going to lose money or time or whatever in the beginning. But you don't want it to be a knockout blow. You don't want to end up to where you've lost all your capital. You can't get financing and you're out of the game.

Did you do anything specific to mitigate that risk? Sounds like you were kind of mature walking into it knowing this isn't. going to be a home run. How did you make sure that it wasn't something that took you out of the game completely? So we had cash reserves that we lined up ahead of time. So we made sure we had cash reserves. The other thing I did, I don't know if it's the right thing or not, but we put a, we had a lot of equity in our home in Boston. The market there was incredible. So we took out a line of credit. We didn't really use it per se, but we took it out just in case something happened. We had access to that. But the cash reserve part was probably the biggest piece for me.

And it wasn't like we had tens and tens of thousands of dollars in the bank ready for this. But we had enough to cover what we felt would be some of the issues that could pop up based on what we solve the property and what we learned from the first one. I think that's worth pointing out that there is a what I would call a false sense of security that comes from thinking I have a lot of equity in a property. I'll hear people say, well, if the value drops, I've got this big cushion. It doesn't really mean anything in practical terms what your equity is. Can you make the payment is all that really matters. And cash reserves are so much more important when it comes to can you service that debt than this imaginary equity that can come and it can go. Equity only matters when

you're selling a house. If you drop beneath what you owe, you're in trouble. But even if you gain equity, it doesn't mean anything to you unless you're selling. So being able to service that payment, I just wish more people understood. You solve most of the things that can go wrong with real estate by having reserves. That's like the best piece of advice. Would you agree that that's why you felt confident enough to go in there and make that move and start your education? 100%. You have a cushion. I've got something to fall back and I had a wife. One kid at that time. You know, the stakes are higher. It's not just me. I lose. I move back to a one bedroom apartment and it's over, right? So the stakes were higher and I wanted to make sure I had the right cushion for it. And to your point, I think debt is such an important thing to research and to find

the right debt for you. Like, we'll talk after this. I went into multifamily and how debt has been good and bad in that space for me. But specific to this property, are those two properties in that town, it's a small town, college town, 20,000 people. But I call 14 banks. And I can't remember if it's revisionist history, if it was bank number 14 that I called or like 12 or 13, but it was late in the game. It wasn't like the first three calls that I made. It was eight, nine, 10, 12, 12 bank that said, hey, we've got this portfolio product actually where, you know, we'll do this financing at this term.

And it served what I needed for those properties. You know what I mean? Like it gave me everything I needed for those properties. I didn't need a ton of cash down. Like their closing costs were much lower than if I went with a bank that was going traditional Fannie Freddie. I was building a relationship with this bank as well. So when we refied, we went right back to them and we got terms that we really could

endure. So to your point, that town is a college town. in COVID has not done great. And that portfolio for us has been like, you know, we're eke and buy. We're doing okay, but we can buy on it right now. But the debt, the fact that we got good debt on it is what's, to your point, allowing us to make the payment through this time. And we're starting to see it come back, thankfully now, knock on wood.

But yeah, debt is so important. I learned that lesson big time with those two properties. What have you seen being those properties are in New York? I know I've seen in the news a lot, like New York shutting down evictions and not allowing this and that. And like they've kind of led the charge on the 10. And let's help tenants, which is good and bad, maybe, depends on who you talk to and in what position. But what have you seen, I guess, over the last year? What have your tenants then? Have they been

paying rent? What's life been like there? They have. We had one tenant that negotiated down, like for three months, we negotiated like a $100 or $200 less rent than she normally would pay because she was impacted by COVID. That was early on. That was probably April, May, June of 2020. So we did, we dealt with that. But I mean, for me, we screen our tenants well up front. I think my wife does all of this stuff. So we screen our tenants well up front. You know, we use brokers in the area that have relationships with tenants that they've placed before. People want to pay, you know, in most markets. Like, there's your professional tenants out there, no doubt. Knock on what again, we haven't come across one yet, but our tenants have paid, they have. The bigger struggle is finding

contractors to care some work in that area, but tenants have been pretty good. There's a couple tenant laws out there. I think California has one similar. It's like capping your your increase in rent that you can, you know, apply every year or whatever. And even that, the cap's like, 5% or something like that. I mean, it's, it's, some people look at that and they get out of the market. To me, it's almost like, all right, well, it's kind of like thinning the hurt a little bit. So it might be a place to look when somebody says, yeah, we're capping it at 5%. It's like, yeah, but I'm not going to raise rents more than probably 3% a year at this point.

So it doesn't really hurt me, but I get that the feel of it makes people run the other, run the other direction. And again, it's what it signals that the state is going to do in the future. They're going to get more and more tenant friendly. But we've been okay. We've been doing okay with our tenant base. I think screening's important. 100%.

So you bought it. couple duplexes there. And then what did you learn after those deals? That two, two buildings with four units is a lot of work. So, and I'd listen, again, bigger pockets. I'd listen to some podcasts in the past about multifamily, but they were really intimidating. Words like syndication, words like capital raising and all that stuff. It was just like, whoa, that's another person's game. Isn't that funny? I talk about that all the time. Yeah, we're going to get agency debt. Oh, that sounds really cool. You know, a Fannie Mae loan. there's a ton of ways the multifamily can be made to sound very, very intimidating. It can. And it's like anything else. Like when you hear one thing, your mind automatically goes to,

oh my God, what else don't I know? Right? There's got to be so much more. It's like, well, no, you didn't know that. You didn't know that agency debt was Fannie Freddie debt. And now you know that. So now the next thing you'll learn will, we'll slap you in the face. You'll go, okay, I know that now. So anyway, so I learned about multifamily. I learned that you could do it without the syndication model. Because again, that's just felt intimidating to me in that moment. And at this point, I'm in Michigan. So I'm living here. We're managing our properties back in New York. We have five units. I'm feeling like the big dog at the Ria meeting because most people had none. And I just, you know, I do what I do whenever I get interested in something. I get,

I get intentional. I get educated and then I take action. So got educated by finding, actually, I think I heard him on your podcast, Jake and Gino, love Jake and Gino. The guys are great. Learned a ton from Gino on, you know, what it is to buy multifamily, what it is to buy mom and pop multifamily and how to kind of go about that. And all of a sudden, the 10 or 12 or 14 unit building didn't sound so intimidating. So the next step was, okay, I want to go this route. I found a partner, somebody that I met through a mastermind that I had joined. We had very, very similar ambitions, goals, a completely opposite or complementary skill sets. Like I'm more, you know, the outgoing, I'll go network, I'll do all of that. He's more,

give me a spreadsheet in a dark room in a basement and I'm happy kind of guy. So we compliment each other really, really well, but found a partner that we could offset each other's weaknesses, if you will, and we started looking for multifamily. And that proved much, much harder than we thought it would because, you know, multifamily, the structure around multifamily, like the multifamily broker or agent is a very different beast, not in a bad way, but just a very different beast than your residential agent, right? You go to a residential agent, you got a buyer's agent, you got a seller's agent, you know, one's working with you, one's working with the seller. Maybe you, maybe they're, they're doing dual agency, but, but in the multifamily,

family world. Like, brokers own the game. They have four people that buy from them. And that's who they're going to continue to go to. So by the time you see a deal, it's been filtered through two, three different lists if you're new to the game. And that was a big learning for me going into that space. Here's the truth about passive investing. If the strategy isn't right on day one, the returns won't save it. Multi-family real estate offers structural advantages. Many investors are overlooking, including depreciation that can help offset taxable income while cash flow continues. BAMCAP builds its investment with that reality in mind. They are focused on solid operators, tax efficiency, and long-term performance. For investors who want real estate exposure without

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to get a free proposal and see your potential tax savings. What else have you found, you know, we're going to get into your multifamily here in a second, but what else have you found challenging jumping from like the small deals into the larger multifamily? Definitely, like I said, the broker piece was the biggest thing. And that's where we created a meetup to get around that. I'll explain that in just a minute here.

But the biggest thing was that, you know, there's a mindset component to it as well. I think that goes into it. So I think people just get intimidated, like I said before about, and I did by, okay, wow, this big multifamily. Oh my God. How much money, a million dollars? That's a million bucks. How am I going to spend a million dollars on a property? So I think it's honestly more just limiting beliefs and mindset more than anything. And then tactically, definitely for us, it was more the broker side of things. Just trying to find brokers that would take you seriously when you're what you think is experienced. Hey, I got five doors, right? But

you're not multifamily experienced. So trying to break through with them can be difficult. That was my biggest, my biggest challenge. So how do you overcome that? You know, you got to take, you got to take action, right? Like I wanted to be a multifamily investor. That was what I wanted to do. So the traditional route was we put together a business plan. We went and had lunch with brokers, paid for lunch.

They were blown away by the business plan, which was great. Oh, wow, most people are tire kickers. They don't even bring us this. They just come and say, yeah, I don't know. I'd like to buy a small apartment building. So the brokers that we met with would say all the right things and tell us, yeah, hey, great, I'm clear on your criteria. I'll send you guys stuff as it comes up.

But then we wouldn't get that. We would either get something that's way outside our criteria or we'd get the thing that I just saw on LoopNet the other day. Like, no, you're not sending me that. I see that. That's there. Like, I've already looked at that. That's not a good deal for us to invest in.

So my partner and I were talking about this. Like, well, what do we do here? Because we want to get, we want to break into this market. I've gone to some meetups. I didn't love the meetup. Some of them were more like the meetup was the business, more than the meetup was a value ad. I ran into that quite a bit.

actually. So, and we looked and saw like, I bet one guy that was in multifamily at one meetup, like one guy had lunch with them and then nothing kind of came of it. But of the 40 people there, there was one other guy who had interested in multifamily. Everybody else wants to wholesale or flip or whatever, which is great. So for us, it was like, look, there's no multifamily meetups around here. So one or two things. Either someone's tried it and nobody wants to go to a multifamily meetup, so it's failed. Or no one's done it yet. So we put together a meetup and we actually called it multifamily and more because we were like, wow, if it fails on the multifamily, we got more. We could talk about more stuff. We can get it to other things and not let the

meetup die in the first month. So look, we put it out on meetup.com. We created a little Facebook group, but nobody was in there at that point. And first meetup, we had a friend of ours loaned us a conference room in a local office. And we had like 15 people show up and all of them were there for multifamily. So again, we didn't have any multifamily property at this point. but it was for us just a way of kind of creating a community and what we thought was, hey, let's create ourselves as a face in this market around multi-fam. Let's be known for that. That'll, we can get brokers to take us seriously or whatever the case may be.

So that was the plan. That's cool. I like that. I was reading this weekend and I put it on my Instagram, Beardy Brandon, if you want to follow me. I put up my Instagram story, this like five-page section from Tim Ferriss's book, The Tools of Titans. And Tools of Titans is kind of like a summary of a lot of his podcast guests, but then also like he pulls out just like these like lessons.

and things that throughout the book. Anyway, and there's a whole section on, I can't remember what was called, basically being a category king or like creating your own category. And what he basically said is rather than being like,

like following what everyone else does, you just kind of create your own category and you become the thing. And even jokes in there about how like the term lifestyle design, he invented that term in the four hour work week and then that became a thing that everybody knows.

And it may be a lot too because like, we did that with Burr and House Hackin. Like we coined those terms to have bigger pockets. and they became things because there were categories that didn't really have names they didn't have a thing

you did the same thing with multifamily there you're like looking around you're like well there's a lot of meetups and if I just go start a meetup I'm gonna be one of a hundred other meetups in the area or on thousands

online of meetups how can I be different how can I be the only one in a category so you created a brand new category of multifamily meetups and you're like I'm we're the best

multifamily meetup because you're the only one multi like I'm sure there's now more right so I love that from a marketing aspect is if you can do that We did that with our real estate fund. I raised a lot of money in our fund. We don't have just a fund.

We have a cash growth fund. What's a cash growth fund? It's a fund that gives you cash flow starting from day one and long-term appreciation options through forced equity. Now, that's a term I invented cash growth. It didn't exist before I put that word together. I put a little trademark on it now. And it's like, hey, that's my term.

But now of some people are like, oh, he's got a cash growth fund. Like rather than taking two sentences or a paragraph to explain what we do, I'm now like the category king of that category. Oh, this is what we do. we do syndicating properties that provide cash flow from day one and appreciation options. You know, so it's from a marketing standpoint, I love that. So let's dig into that a little bit because, again, I think you're a very good marketer and you understand this stuff.

So what did that multifamily and more meet up? Like, what does that done for you? Where is it at today? I'm guessing I brought you leads at some point. Oh, boy. So I've done two multifamily deals and we're working on our third right now, actually. And all of it has come from our community or our communities. So, yeah, it started out as, okay, hey, we wanted to go.

in there and we want to, we want to, you know, be the face of multifamily, so we'll be taken seriously. And every month it kind of grew and we adapted like, hey, this isn't the right location. Let's go to this location. Ah, this isn't quite the right location either. Let's go to this location and that what the content was and, you know, at those meetups and how it flowed and all of that, like, we feel have perfected it. And I can get into that if we have time. But yeah, from there, people in masterminds that I was a part of, because I'm a big believer in being part of communities that are of like-minded people. So we're all, we've talked, we're all part of abundance, right? Like, that's a community that, that's a community that,

resonates with me. So guys and gals and masterminds that I was a part of said, hey, I'm in multifamily. Like, there's no meetups in my area too. Like, how did you do it? How did you create it? So I literally wrote like a two-page document of like every step. Like, here's what I did on meetup. Step by step. Here's how I got people to come to Facebook. Here's how I created my meetup. Here's how I found a venue and just kind of wrote it all out. And we started creating chapters. Like nothing official. Just like, yeah, hey, let's do a chapter here and a chapter there. And we had three or four of them at that point and started growing it out, you know, growing it, growing it, I should say. Today we have 21 chapters, about 10,000 members across the Facebook groups.

And yeah, we're in all corners of the country. But to that point, the third month of our first meetup, a couple came to us, a married couple, and said, hey, look, we love what you're doing here. We've got this eight unit under contract. There's actually 16 units, this two eight unit buildings in a community, like any interest in kind of partnering up and buying this thing. And that ended up being our first deal. Then later on, we bought another deal with the guy and gal who run our Cleveland group. So, so yeah. So the meetup itself, the brand. and the multifamily and more experience, if you will, has been huge for me. So once you got rolling with your meetup, what do you feel like you did well that made your sort

past the competition and made it more attractive for people to join and be contributing to? There's a few things. So I think the things I did well were that we were consistent. So here's what I'll say. I think that when you create a meetup or when you're starting out in the networking space, like the first thing you have to do is set the intention to add value. That wasn't my intention going in. My intention going in was to get brokers to help me, right? Like, that was my intention. So we went to our first meetup. Again, mind you, we had no multifamily. Here we are the

multifamily meetup people. And we figured out how to be credible in that space. But the first thing I learned was, man, when we go into these meetups and we seek to add value, huge. That's a big, big piece of what we need in order to attract the kind of people that we want in our universe. And then the second thing, I thought we did really, really good job of building our online presence. So for me, you know, a meetup is a meetup. And they were a, a billion of them on meetup.com, where you meet once a month, you go out, you see people, and then you come home. Even if you're running that meetup, that's the exposure you get to them. But I've heard, and I've learned this from a few different people that, you know, I think it takes

like, six or seven interactions with somebody for them to know, I can trust you enough, for them to invest with you, partner with you, or whatever it is you're trying to do to accelerate your real estate investing career. Well, if I'm only going to go to a meetup every month, it's going to take me six, seven, eight months if I go consistently and the same people are there, for me to find the kind of people that I know like and trust, and for those people to know I can trust me, for me to go through with my real estate. So I'm already, you know, seven, eight months out from the people I need in my world if all I do is a monthly meetup. So the other piece to this was how do we build a community? So where we started people out on meetup,

we would move them over to our Facebook group and really pour into them there with virtual meetups. Brandon, you were a guest at one point on our virtual meetup where, you know, people who don't normally have access to you on a webinar would have access to you to ask you questions. Incredible value add for a lot of folks. We had a ton of people show up for that. So building our brand online and leveraging the Facebook group as a community has been, I think, the biggest piece of our success. Like, we're really good. There are, I think there are 10 million Facebook groups and there's 1.5 billion people in Facebook groups right now. So to stand out, you've got to be good in those Facebook groups, period. You can't be run of the mill.

You can't do what everybody else does. You've got to be intentional, involved, consistent, engaged. you've got to delete and remove people when they're when they're hurting the group you have to look at it like it's your home and this is a party and people are coming into your home that you're that you're hosting and if somebody ran into your home and said hey five percent interest no experience needed i'll give you 100 percent financing meet me in the bathroom right like you wouldn't you wouldn't hang out with that for you'd want them get out of my house but you see it all the time pm me if you want this that and the other like we kick that riffraff out and we make it about the community i think that is by far the biggest piece of what has made our brand success That same thing is what made bigger pockets, bigger pockets today. If you look back 10, 15 years of Josh, like when he first started bigger pockets, it was like, I mean, he got threatened to be sued by multiple, like many people who just got angry. People like threatening him like, you know, come to his house and beat him up, like all sorts of stuff because he would kick people out for violating the rules. And he's like, you guys, this is my house. This is my thing. Like, we want a safe space that you're not going to get pitched.

You're not going to get felt like every time you come to the site, you're just going to be like, hey, join my, you know, $50,000 training course. or whatever, the thing they're trying to sell or I can get you, you know, yeah, the private loan stuff, the wholesale stuff. Like, there's a time and place for marketing and for and for dealmaking. And my guess is that somewhere in your meetup, you have a place that you somehow allow people to work together, at least like in the networking. We do. Oh, absolutely.

Yeah. Yeah. And so, you know, it's just, it's about being respectful of that. So when you go to a situation like you're on the Bigger Pockets forums or you're in your, your Facebook group, knowing what the rules are for the thing is so important. And then also if you're going to start your own, which I think everyone should definitely consider doing is how can you be the leader of a community? By doing that, yeah, you have to be that strict, you have to have those strict guidelines and rules. Otherwise, it just becomes one of the many other Facebook groups that I've been part of that just, you leave because they just be overrun with spam.

Spam. Yeah, there's a lot of shares. I hate shares. I mean, I have a place, I guess, but whenever I see somebody share something that they posted elsewhere, and it depends on the, look, not be funny, look, not be funny. If it's you two in a Facebook group who are niche famous, well, it's beyond. You know, you're known in this face. Nitch famous. I've heard that somewhere. Maybe it was you. Maybe. But if it's you guys posting a share, well, that's a different kind of content. But, you know, regular Joe locally or whatever that shares something that they put everywhere

else. That's just, that's like sending somebody over with a flyer to your house, again, with that same reference and saying, hey, so-and-so sends his regards. Like, great, get out of here. Thanks. But there's no reason for you to be here. So that community is big. I'll give you a quick story on the point about about, about, you know,

like my community. So I think people are people first and investor second. So my, my content or the stuff that I put out there is often like, hey, what are the weekend plans for people? Or, hey, if you could be a food, what would it be? Stuff like people have fun with it, right? They comment and it creates community. That's my objective is to create community, not just an investor class, but community. So one guy stuck a deal in the in the group, but we have a space for that. Every Wednesday, here's a post, put your deal in the comments. Everybody can go find it, right? We put hashtags on it, really clean. Everybody dropped the deal in there. I deleted it. And I got that same thing. No,

death threats or anything. But, hey, look, you could put, you know, what you have for Thanksgiving dinner, but I can't put a deal there. I'm like, no, man, that's my brand. That's my community. This is what we do here. So I appreciate your deal, but there are a zillion other Facebook groups where you can drop that deal and people will find it if they want to. But what makes our community thrive is that we're people first before we're investors. That's so good. How did you navigate COVID during the meetups? Did you guys stop meeting? Do you go online? What did you do? Went online. So I actually took a course so I could learn how to how to have more effective of Zoom meetings, right? Because it was, it was like, again, I wanted to add value. So I went through

and I learned a bunch of stuff, little things like, like as simple as movement on a screen. Like everybody, you know, you start a Zoom meeting. We're all on Zoom right now. You just sort of sit here. Like, hey, what's going on? It's good to see it. But you can pipe music through Zoom. That's a good way to start a meet up off. You know, you can have people do things like, hey, what's on your desk that's important to you and have them show the screen? They're interacting, right? Their hands are moving. You know, they say like the camera adds 10 pounds. It also takes like 30% of your energy. It does. I say that all the time. Yeah, totally sure. So if you're like flashing like water bottles. It's all of a sudden you're watching a screen full of engagement instead

of a bunch of heads sitting there. So we did. We pivoted to virtual. And we were doing a component of virtual before. So we were a little bit ahead of our time. Not expecting COVID. There's no genius here. But it was another touch point for us. Like we meet every month in person and we meet virtually like second Wednesday and in person, fourth Wednesday of every month. Hey, Jamie, what's something on your desk right now that's meaningful? My stapler. I can staple my lip shut when my wife is telling me I'm talking. There you go. Okay. Okay. Good. All right, so let's go back to the real estate deals. I love the conversation in networking.

We could talk there all day, but I want to know more about these deals that you bought. So the first multifamily you got came from somebody in your group. What was that deal? So a 16 unit deal, we purchased it with traditional financing, if you will. So from a with a credit union. And when we bought it, I could get into this now or I can do it more on the deal. Deep dive is up to you. Well, you want to.

You said it. Let's go to the deal, deal deep dive. Thanks for bringing us there, Jamie. This is the part of the show where we dive deep. into one particular deal that you've done. Sure. So we've got a lot of Ds here. So let's go into it.

Number one. What kind of deal was this and where was it located? What type of property? 16 unit property. So two eight unit buildings, about two blocks for one another. And it's in a town called Pinkney, Michigan. So it's like a bedroom community to Ann Arbor.

People have heard of Ann Arbor because of the University of Michigan. So outside of Ann Arbor. And real quick, it's actually part of a 32 unit community that the sellers sold half to one seller at one point and half to another seller at another point. So we own 16 of the 32 and they're not next to each other. Like we own this one and this one and another person owns the other one next to us on one block and the other one next to us on the other block. So weird. How did you find this deal? So at the meetup, this couple, like I said, brought us the deal. We worked with them on the eight units that they had under contract and then worked on the other eight units with them as well.

Can we talk about this real quick? All right. I want to just bring up this point. It's interesting that they wanted to work with you, despite you having no multifamily account. experience. You've done, I mean, you've got the duplexes, right? And, yeah, and that house, but like, it's interesting how because you were the host of the meetup, you are the community organizer, you have a level of trust and credibility that just because you have the ability to organize people, people come to you and bring deals to you. And that fascinating? Like, it is. People who are, yeah, go ahead. The other part, too is, I'd be like, you think about that. People say, like, well, I don't have credibility to start a meet up. I can't be the expert. It's like, you don't need to be the

expert. Like, you know, you need to be maybe a chapter ahead, right? So you could be a chapter ahead of somebody and add value to them. And that's all we were. We had a business plan for multifamily that we could show brokers. Most people in the room didn't have that. Month two, my partner, who's the spreadsheet guy, did a deal analysis. Well, guess what? Three syndicators showed up. So my partner's sweat and bullets. Like, what am I going to do? But we turned it into a discussion, right? These syndicators helped my partner and me and everybody in the room kind of develop what this should look like. But yeah, you know, for those that are thinking like, oh, can I do this or whatever. I think there's two decisions you can make.

You can either be the knowledge. And in some aspects I am when it comes to, some level of multifamily that I have experience with or anything with mindset. I'm a mindset junkie in that regard. I can be the knowledge. So I can create content as the knowledge or I can broker the knowledge, which is what I do with my meetups. I bring in people that know a lot more than me and let them provide their knowledge to add value to the community.

All I'm doing is facilitating and brokering it at that point. That's so good. So good. I like that broker in the knowledge. That's pretty cool. Yeah, it's clever, right? Yeah, it's clever. I like that.

Probably the hidden value in what you're doing, Jamie, that maybe those who haven't gotten started, haven't realized it yet, is you're pulling back the curtains and you're letting people see into your life. It's that simple. When you go to a thing like this and you get to know somebody, you're removing all the elements of distrust by letting them get to know your personality,

which makes you more likable, which makes people want to work with you. It really is that simple. It's the introverted people like me who don't like meeting new people. It's expensive to be that way because my little circle of people that know me really, really like me.

They trust me a lot. We're very close. But everyone that looks at me from the outside says the same thing. A guy always looks angry. I don't really like. He's kind of scary. They're not going to bring me the deal is what I'm getting at. They're going to go right to Brandon and like, hey, Brandon, please take my money.

So for those people that like to meet with people or even if you don't, it's a good business skill to have is what I'm getting at. There's always a distrust with someone you don't know. And if you can remove that, it makes it much easier for people, the universe, whatever, to bring you those opportunities. I think, Brandon, didn't you get your first multifamily deal talking to people at church and just telling everybody what you wanted. Yeah, my first apartment was from an older couple at my church who I just was like, I want to buy an apartment someday. And they're like, weird, we have one. And then you're very charming. They probably liked you. They're like, hey, we can help this guy out. We can get him started in the game. Jamie, there was probably an element of that too that was happening

with you. Yep, absolutely. Well, you know, people probably heard that story of that first property. I don't know if I've ever actually said this is that first apartment where I mentioned to the people at church, I did not convince them to sell to me. I did not, when they first told me they had an apartment for sale. Like, I never tell the full story. But basically, I was like, oh, that's great. You have an apartment. Cool. Have a good day. And like, that was about it. Right. Like, I wasn't like, okay, sell me your property. Let me tell you. I'm going to make you this offer. I can do this. I was like, okay, that's, that's great. Oh, lucky you guys. And like, it took a year of them convincing me to buy their property, not the other way around. It took us a year to fit.

Because I had all these limiting beliefs of I'm only, you know, 24. I don't have any money. I don't know what I'm doing. I got no experience. And like one by one, the guy helped me work through it. Now, Why would he do that? Like, why would he fight to help me buy his property? Because he liked me. No, he liked and trust you. Yeah, he liked and trust me. Exactly.

Like, he knows, like, and trust. And you get those things. And people will fight to give you their deal oftentimes because they want, he wanted me to have it. I don't know. I think sometimes, like, people put people like us, like, you know, three of us and others who lead groups on a pedestals. Like, oh, they know what they're doing. They've always know what they're doing. I have no idea what I'm doing most.

I don't know what I'm doing half the time. Like, it's just like, I have a loud mouth and I talk. and people know like and trust me. And you, that though is enough. So get people to know I can trust you. Absolutely. And to that point too, like what you find is, you know, you start to, like I've been able to network with you and some of the bigger multifamily names out there.

Like they're in my phone now. I mentioned Gino. I could call Gino with a question. So by being the lead of this and adding value, you start to attract these folks doing things at another level into your world and they become my mentors. They become people that I can rely upon when I need information. So that's the thing. You learn when you watch them do something, you go,

I had no idea. That's all it took. That's all I got to say. That's just there's, that happens so often in all of our lives. I'll admit this. A couple years ago, I didn't know that there was only like four kinds of business entities. You've got an S-Corp, a C-corp and L-L-C, maybe another one. I thought there was like 400. Just in the back of my head, I always assumed like, there's a billion ways. Like, how could I figure out which of the 400 to do? And you know, when you talk to CPAs, they're not the easiest to understand. And then one day we were talking and it clicked. I'm like, wait, that's all. There's only four things I got to learn. There's a couple differences between. I can't believe I spent this much time being that intimidated. So for everybody listening to these talks, we're not that much different than you. We just hear more stuff from people that have already done it and that information has passed long. Yeah, 100%. All right. Next question of the deal deep dive.

How much was the property? Would you pay for it? So we paid $7.55, $750,000 for the 16 units. All right. And how did you negotiate that price? So like I said, the eight unit was already negotiated ahead of time. We had a conversation with the owner. I'm trying to think of exactly how it took place, but I think we were at his lawyer's office.

We talked about the second building. He wanted a little bit more because those other two buildings I mentioned had sold in the meantime. So like he saw what his old neighbor got and said, ah, you know, I got to do a little bit better on the second building. So we found a price that we felt was was reasonable. But he locked in on the first one, older guy. He was unfortunately failing, had failing health as did his wife. So he was like, look, I gave you my word on the first building. It wasn't actually signed under contract, but he had essentially committed to the this price. We kind of went to the second building and said, yeah, hey, look, willing to pay up to X, which once you dollar kind of cost averaged them out, the two buildings together at 755,

it ended up being like $47,000 a door. It was well within our range of purchase at that point. So it was a pretty easy negotiation from that perspective. I would venture to say the fact that he liked you caused him to want to honor his word more and knew you. It's easy to break your word to a person on the other side of a transaction when there's two agents between you. That's not a human being, but it's different when you know that person and you're going to have to see them. That's why I always try to find ways to get myself into every transaction. Like, forget the agent. You're so smart.

I was just, so I'm looking to buy a house for myself right now. I'm looking at house hack. And I was telling my buyer's agent Johnny, who I have representing me, I want him talking to the other agent, but I want to be getting to know the seller. And he was, he was giving this really good description or this strategy to the listing agent that I had given him and said, hey, here's what we're going to do. And I was like, I told him, that's never going to work because that is way too much information to make it to the seller.

You think you're talking to the agent. You're not. The agent is a filter to get to the person who's the decision maker. And Brandon, you're so good at just like bypassing all that, getting through the firewall and getting right into their hard drive and like, poop, I'm just going to upload this right here. You're going to love me. And I just made myself $100,000. That's funny.

But yeah, that's exactly what you're trying to do. Yeah, 100%. A relationship. Relationships absolutely matter in this business. and to your point, right, our partners having gotten to know this guy in advance, did a great job of setting him up. And as a team, we kind of brought that home with, we did what we said, what we would do. We showed up when we said when we would show up. You know, we closed when we said we would close, right? All of that happened. And I think trust is a huge component of that.

That's a good tip. If you're trying to buy something, make yourself a person to the sellers on the other side, do whatever you can to make it personal to where there's an emotional connection. And they think if I don't do this deal or if I back out of this deal, it's going to affect another family as opposed to it's just I got to sign a paper saying I want to cancel the contract or whatever. Yeah, and that was a mistake I made as far as like the, I almost violated trust with this with this seller because when I met him and I'm talking to him, we had this idea of seller financing. Like, hey, maybe we could do this. And I pitched him on it. To your point, Brandon, I pitched him as opposed to listening to him and his needs. And he was fine. We didn't end up doing it.

It wasn't like a long drawn out thing. It was like a two minute awkwardness. But I could feel myself like, ugh, like I'm pitching this guy. Like I'm literally coming after him. Like, here's what it benefits you. Here's this. I just gave him like this buffet of benefits and didn't listen to him. And I've learned my lesson on that. Just, hey, what's his name? What does he have to have to get out of this? And then can I work within that. And if I can, great, then deals are made. Yeah, that's cool. All right. So how did you go about funding this property? So we put each $55,000 in. That was for down payment, closing, due diligence, as well as a reserve account. So four people bought the property. Me and my business partner and then this married couple, $55,000 each in. And, you know, that was cash. And my partner and I said,

Let's test some private money here because we really hadn't done that before. So we took like a $50,000 private money note from somebody in a mastermind, right, that would kind of invest with us and we gave them a guaranteed return. So we went that way with it, got a credit unit to finance it. And the terms were tough. They were like, it was like 20 years, 6% at that point. This is about late 2018, so two years ago at this point, 6% interest, 20 year financing. It wasn't the best financing, but like my partner Ben and I always say, but it got us our

first deal. So it was great financing in that regard. So that's how we did. That's how we funded it with some capital, some private money, and then just with traditional bank financing. All right. So it was 220 all in. Did that cover just the down payment, or did that cover some of your rehab cost you? It created the reserve account for rehab and everything else. Yeah, we had like a roof to put on and some other stuff that we wanted to do. So it gave us a reserve account. Okay. Awesome. So what did you do with it once you bought it? So we had a repositioning strategy where we thought we could get rents from an average of, I think it was 578. So the renters had

been there since like 99 to 2008 kind of thing, like had started their leases then. And they had not moved. Like their rents were the same from 1999 or 2008 or whatever the case would be. So tons of upside. So we saw it as, okay, 578 is the average rent. We think we can get average rent up to $700. And these are all one bedroom except for two, which the prior owner actually marketed still as one beds because he didn't want kids in there. He just wanted like quiet, tired people in there. So we only called them all one bed. So we're like, well, all right, there's two, two beds. There's a little bit of a find there and that we can move rents. So the first thing we did was we went in and we saw where we could again have value, right?

So it wasn't like, great, new owner, here's the new rent. It was what maintenance issue do you have, a faucet, a toilet, whatever, we'll take care of that, no problem. We went in and we cleaned up the common areas. We did some landscaping. We made the place look nice. And then we came to them with leases at that point. And our strategy was because there were zero leases in place to stagger So we did some three-month leases, some six-month leases, some nine-month leases, some 12-month leases, so that when they renewed for a year, we had leases staggered. We don't want to sign a bunch of 12-month leases in April. And then next April, the entire building comes up for renewal. So we staggered that a bit. Today, we are well-past $700 per door. In fact, we just rented a unit for 9-25 that was

previously rented when the guy lived there before, when we bought it for 575. And we had a, what we did was we set a price for current residents that we would move them all to. I think it was like 675. Every resident goes to 675 from wherever they are right now. And then new tenants, we brought it at market and we just kept testing it. 695, 725, 745, 745, 795, 850, 925. So it's kind of got up and up. But in August, before this 925 rent, we actually refinanced. The original partner said, hey, we're good. We kind of want to, we kind of want to go. So we refinanced and bought them out with the refi proceeds. And my partner and I owned the building. together now. But the refi was, you know, 25 years, 2.99% interest. I mean, we caught it at the right

time. So we got really, really good debt, which matters. Our debt went up like 300 grand, but our payment went down like 500 a month or something like that. So you had me thinking about that, Jamie, when you were discussing that the financing wasn't great is I realize it's easy to think that the loan and the house are the same thing. Okay, I'm buying a house and this is my payment. The house doesn't go anywhere, the loan can be changed. You can get into a deal with bad financing. In fact, I do that kind of frequently. Bad being like compared to the market. Okay, not like bad for me personally. This is a much higher interest rate than other people are paying. This is a five-year balloon payment situation. But I've secured an asset that I really like that I got under market value,

that cash flows, whatever. The financing can just be improved. The house does it change. Don't make the mistake if you're listening to this of thinking that your loan and the house are all one and the same. Yeah. The loan is a vehicle to get the property and it can be changed. I'm okay to go in at 7% interest, get the place stabilized and then refinance it into 3.875 or something like that. And I think there's a lot of people that hear, oh, 7% interest, I'll never do it or it only makes this much money and they just get stuck on that way of thinking because you did it exactly right. You did what you had to do to get your foot in the door. Then when your foot was in there, you wedge the rest of your leg in and you turned it into a really good deal. So I think that's a great

story. Yeah, no, thank you. We saw a really clear upside, right? This was a an obvious upside situation. Rents were severely low. And even now, we're probably sitting on, because we still have a lot of the original renters, 1,500 a month loss to lease, right? Like, as far as what the potential full leases, and that's not even at that 925, I don't know if we'll get that again. That might have been one renter we found, who knows. So that's not even projecting at that rent level, right? So, yeah, our loss to lease is still pretty good. It's still $1,500-ish conservatively per month. So, yeah, to your point, yet, securing the asset became, I don't want to say all we wanted, but we wanted to get decent. Is your priority.

it was a big priority. And we figured out some way, any way to get the property that was, that was tenable for us, that we could deal with it. Yeah. And financing is also largely dependent on the condition of the property at the time you're trying to get the financing or the condition of your own finances. So you can use financing, get worse financing on a property that's not as good, or even if you have credit issues or debt's income issues, whatever, when those improve, your financing options improve as well. Yeah. What I love about multifamily, too, commercial generally is that you can bring in the people that fill those gaps for you. You don't have a credit.

You can bring in a partner with credit. It's very different from residential in that regard where you are what they're looking at, what the bank is looking at. They're looking at the asset in commercial and the team. Like, do they have all the components we need? I mean, within reason, you can't have 40 people on a 10 unit deal. But do you have all the components that you need? You have credit.

You have experience. And to that point, this group, this couple that came to us, I did have experience. I had five units. So I could list that first property that I hated way back well. gave me enough experience for the bank to say, okay, experiences in the equation now. So we're rolling. And since your goal with almost anything that you're buying is to improve its value in some way, in multifamily, that's usually improving the NOI,

if financing get better terms, which are based on the way that the property is performing is sort of a byproduct of what you're already doing. It's not a whole other thing of work you have to do. You already did it. Now, boom, just throw the cherry on top. Now when we refi, we get better terms because we made the property worth more and it's cash flowing harder. So, yeah, I noticed that financing,

seems incredibly easier for commercial in general than in residential. I think Brandon's probably sitting inside like, like, yes, because we know what it's like when I'm trying to, I told him trying to buy a house. There's like 38 mortgage statements that I have to get together and property tax things to show they're paid. And it's just absolute hell trying to get that done. You go to buy a property and it's like relatively painless when it's commercial. As long as you're honest on a personal financial statement to get you a long way. So yeah, absolutely. Well, thank you for sharing this. What lessons would you say you learn from this deal? So I think the first one was, you know, and I learned it thankfully before we did it, but we were ready to go in like rents are low, go. But, you know, the first lesson we learned early on was these are people first. Like this is their home. So going in with that softer approach of, hey, look, let's let's go in and take care of some issues. Let's get to know these folks before we all of a sudden Jack rents on them. We'll be very clear like, yeah, look, we're looking at if the rents are low, we're looking at what they're going to be if they ask and all of them asked. Great, new owner, how much more you charge of me? That was like the first thing they said when we opened the door.

But we brought them, you know, a little care package. We were good to them. So I think people first, add value first, in any component. We talked about that in networking, but I think it's just as important when you require an asset and there are people in it, right? It's an asset to you. It's home to them. So making sure that you add value to them, that was one big lesson.

The second one was, and I forget who I talked to, but it was an investor that I had a conversation with in advance, but just making sure you have a really, really, really good operating agreement. We did. We ended up having a good operating agreement. Our partnership dissolved very, very amicably. We agreed on a price. we, you know, we wish each other really well.

And it was never contentious. It was never bad. They're good people. We still keep in touch now. But the operating agreement, I think, was essential to that. And we were ready to go in with kind of a boilerplate off a Google operating agreement. And I forget who it was.

It was somebody in Gobundance. I forget who it was that I talked to. And he said, hey, look, so let me just run this scenario by you with your current operating agreement that you're about to sign. What if this, that and the other happens? Then what do you do? I'm like, I don't know. So he's like, maybe you want to upgrade, you know, find an attorney.

to get a good operating agreement in place. So I think that was another big learning for me. Yeah, there are things that you can skimp out on a little bit and there are things you should not. And I think that's a good one, especially if you're going with partners. Like, yeah,

operating agreements are something that's very, very important. It's just, it's all about managing expectations. Like operating agreement doesn't matter if everything goes perfect, like really much. But it matters when things go wrong,

which things always go wrong. So, yeah, we might as well call it an expectations agreement. Right. And that's why everyone that has one, has a good experience. It's not that the operating agreement was magic. It's that it forced expectations and conversations to be had about what they were brought up to the surface.

And that's really the key to good relationships. It's seriously just understanding what expectations you can have. Yeah, we didn't know these, our partners, right? Like, really, we got to know them, but, you know, we knew we shared values. They're high value people. They're very good people. And it wasn't the plan for us to buy them out after a year and a half. The plan was to refite, take the proceeds by another one. Well, we just bought the other eight units essentially. But for them, they had an opportunity and they wanted to run with it and it made sense for all of us to kind of go forward with it. But to your point, being clear on what our arrangement was, I think is key. That's good, man. Well, that was the end of the deal deep dive. Now, I want to move into the second

deal deep dive here. No, we won't go as deep. But I'm wondering, what was the next property? You bought another multifamily than it was larger, right? I did 22 units. It's not much larger. And that was with the folks that run our Cleveland multifamily and more chapter. So, yeah, this one, I don't have as much detail out. I'm a smaller partner in this deal because they needed, again, they needed a part of the team, right? They needed some liquidity. They needed some net worth. They needed that sort of thing. So I got in on that deal for a smaller percentage, you know, have my share in it. But we get a weekly update on what's going on. I'm actually able to be fairly passive with that. But it's a nice value at play. Again, I know this person. I have a lot of

people that come to us with, hey, can you sponsor this deal? But, you know, very, very selective with saying, no, I'll sponsor this deal because I know the person. I know the market. I know the asset. And that's what we got into with the set with the next deal. Cool. Where's that one located at just out of curiosity? Cleveland. Just outside of leave in Ohio. Yeah, about two hours for me. Very cool. All right, man.

This has been good. And we're slowly wrapping things up here. A couple of thoughts before we get out of here, though. And before we get into the famous four, I'm wondering who are, you know, leading both like the multifamily and more group. I know you're also leading a new, you have a new thing. We'll talk about a little bit later. What was it called the thing through GoBundance?

Oh, Emerge. Emerge. Yeah, we'll talk. Yeah, we can definitely talk more about that. And emerge is, you know, largely a goal-setting mindset thing. So I'm wondering if you have any advice for people who are thinking, you know, I don't set a lot of goals. I'm not a big goal setting person. I really want to take, I want something different on my life, though.

Like what's kind of like the process you tell people to go through who are just getting started with their real estate journey and they need some structure to that. Yeah. You have to have a vision. And it doesn't have to be perfect. And I would say to you take the how out of the vision. So many visions that I see are like, I'm going to have this, that and the other by investing in, you know, multifamily property. Like, no, now, take that part out. Take that out. Just, just what's your vision? You know, you got to be somewhat realistic, but at the same time, dream a little bit. Like, I'm going to own a

$5 million home in six months. Like, maybe not if you're not, you know, already in a position to buy that $5 million home. But if your goal is to live on the beach of, to live in Maui, you know, like you, Brandon, then put that in your vision, right? And every day, you should set that vision, look at it and then let it go. Forget about it after that. Just every day, recall it, but don't, don't dream all day. Now you got to take action. So the first thing is you have to have a vision. The second thing is you need to be able to outline your goals specifically. Like, what goals that you need to accomplish to achieve that vision? And I love breaking it down to now, kind of goal setting to the now. So in two years, I need to X. So this is my goal for two years.

So in one year to hit the two year, I got to do this. That's my goal. This quarter for this year, I got to do this month for this quarter to achieve that goal all the way down to, well, right now. What do I need to do? I need to open a Facebook. group so that I can start inviting people to create my, my community or whatever the case may be. So you got to have the vision that compels you. You got to have the goals that really kind of, that set the measure for you. And they need to be measurable. There's a big distinction between intentions and goals. Like, I want to be a better husband is an intention. But you can make that a goal. Like, I'm going to take my wife out on 26 dates this year.

Does it make you the best husband in the world? Maybe, maybe not. But it's the right, It's a goal. It's a measurable that you can track and look at consistently to get you toward that goal. And then thirdly, you have to have a mechanism by which you recall and look at your goals consistently and you plan out the next week, the next month or whatever the case may be. Every Sunday I sit down. My wife knows this. I leave for an hour or two. I go sit down and I look at my week. I look at, okay, what do I got to do this week to achieve this month's goals? What do I got to do this month then to achieve this quarter's goals? And I do that every week religiously to make sure that I'm, make sure I'm tracking in the right way.

People just, I didn't spend the time on this. I didn't learn this until joining Gobundance, which is why I'm like so passionate about this whole goal setting thing. And, you know, I did a webinar with David Osborne. For those that don't know, he's, you know, private jet millionaire, right? Like he's, you know, big, big millionaire, New York Times bestselling author and all that stuff. But we did this webinar where he went through his goal setting exercises. And I mean, I'm hosting it, but I'm just listening to this guy, give more and more information. And I just took a ton from it. But I just took a ton from it. but I think you have to be intentional.

I think you have to have a vision that compels you and you have to systematically have a habit that makes you recall your goals. But the vision, the vision has to be something you look at each morning. I do it with part of my morning routine. That's my vision. And then I'm done.

I'm on to action from that point on. And it's amazing how those visions start to kind of come true as you take that action over time, that little 1% change each day. It drives you there. Get a little excited about this. Sorry about that. Me too.

No, me too. This is good. This is great. This is great. All right. So, with that said, let's move over to the next and last time of the show. It's time for our Famous Four. This is the Famous Four.

It's the part of the show. We're asked the same four questions to every guest every week. But before we ask Jamie his questions, let's hear what's going on this week around the Bigger Pockets Podcast Network. Hey, what's up guys? It's Tony from the Real Estate Rookie Show. I just wrapped up one of the best episodes I've recorded if you're looking for motivation and inspiration on how to get started. Episode 47 of the Real Estate Rookie show with Andres, he shares his story. about how he immigrated from the Dominican Republic to America with only $500 in his pocket

and how he built a portfolio of seven units in less than a year. He's got a really cool story about how he's using other people's money, how he's managing his rehabs, how he's now transitioned into developing land. He's got a really cool story. So if you're interested in here and head over to Real Estate Rookie Show 47. All right. And that said, let's get to the famous four. Jamie, that's for you. Number one, favorite real estate related book. I struggled with one, so I'm going to give you two.

The first one is the best ever, what is it, the best ever apartment syndication book? Yeah, Joe Fairless. Yeah, great book because it's, yes, it's very tactical. Yes, it gets into syndication. It dumbs it down. But for me, like chapter three or so gets into thought leadership, right?

That's a big component of Joe's whole vision. In fact, I interviewed him on only that, on thought leadership, because it's such a compelling thing. So that's one. The other one, I think, for multifamily investors looking to jump from like that duplex to multifamily, I love wheelbauer profits. It just, it talks about the simplicity of the mom and pop model. So shout out to my boy, Gino. All right. Does Joe Fairless have like a best ever cookbook, best ever fitness book, best ever best ever comic book? Best ever undies, best ever everything. Yeah. I got to pair on right now.

They are comfortable. They are the best ever. All right. What is your favorite business book? Again, I don't like just one, so I'm going to give you two here. And I don't know if you call them business books, but the more mindset. The first one by far is outwitting the devil. A huge, huge fan of that, Napoleon Hill book. I don't know if you've heard of it. I have it, but I never finished it. I started it and never finished it.

Well, you need to finish. Not from, yeah, not from liking it. It was great. I just like somehow set it down and never picked it back up again. The devil got you not to read it. Devil got me not to read it. It was foundational for it. It was a outwitted me.

It's a weird read in the way it's laid out, but it's foundational for think and grow rich. So that was a big mindset book for me. The other one I've really gotten into biographies. And the one I read recently that I love is shoe dog by Phil Knight, the Nike story. So many business lessons you can glean from that, you know, go on for days. So I consider that a business book that's taught me quite a bit. When you read Outwitting the Devil, was anything like the screw tape letters by C.S. Lewis in format?

I don't know that language you just spoke. No. What is that? Different book. It's somewhat similar, David. I guess. Yeah. It's got a little bit more than.

the perspective of the opposition. You're getting into their head, so to speak. He interviews the devil in his own way. Like, he's actually speaking to the devil. So the book is written almost like an interview format. But yeah, he's, he's essentially understanding, not to give the whole book away, but like the devil's true crime, the devil, I say in air quotes. Like it doesn't have to be a religious thing. But the devil's true way of getting people. It's not like burning in hell over over killing or whatever. It's making them drift through life. It's like, suppressing desire, taking away intention. Yeah. And it was just a really, really well-laid-out book. And again, I think it sets up think and grow rich well.

Awesome. All right. So what are some of your hobbies? Yeah, I have a couple. It's funny. I feel like I do this a lot. So, but a couple hobbies. And it's a big football fan. My Buffalo Bills are actually good this year. So I'm excited about that. But I haven't watched a game in a few years. Are the bills still playing? I didn't even know they were still a team. I'm going to bypass that. I haven't watched a game in a few years because I have young kids and it just felt like a waste of three hours I could be spending with them. But the five-year-old is starting to watch. So I'm starting to watch again with him. So that hobby's back. The other one, I love spinning. And I have kind of a warped mind. Like you go spinning, not like sewing things, but go to a spin class. So I take the spin instructor's

quotes. I twist them to be a little bit less than what they're supposed to be. And I post them on Facebook all the time. People get a lot of joy out of it. It makes me, it makes me smile whenever I see him. Give us an example of one. Now we need to hear it. Oh, God. Yeah. All right. So in spinning, you have a resistance knob, right? So you have to turn the resistance knob. But the instructor may say something like, come on, reach down and turn that knob, I can see you. That just cracks me up. So I put that out on Facebook, you know, with a little innuendo. Yeah, people. Yeah, you, you make, you crack me up quite a bit. Too much. Sorry. Did I go all that's good. What's your, what's your handle of people want to follow you now and they want to read these? Uh, you can follow me on Instagram at

the Jamie Gruber. It's been a while because our spin studio has been closed down recently, but I'll start up again, hopefully mid-January. Fishigan opens up. But at the Jamie gruber everywhere you can find you can find those that's awesome all right last question for me what do you think separates successful real estate investors from those who give up fail or never get started i think it's a couple of things i think we and we mentioned it one is they don't have clearly defined goals which we go back to that vision and setting goals they just don't take the time to truly define their goals there's a stat and i did david said this in the webinar that i mentioned 95% of people don't set goals 95% of millionaires do right so there's a there's a clear distinction between you know if you're

and you're doing well, you have goals. That's one. The second one is, and I'm guilty of this, bigger pockets is a tremendous value as far as a podcast. But I think some people, when they listen to the podcast over and over, they hear the mistakes everybody makes and they make an endless checklist of go through a deal and make sure I don't make all these mistakes. And so they find one little, one little thing. It's like, oh, can't do this deal. And it's like, that's not a deal killer. It's just something you have to be mindful of. So doing a deal. And I don't say that flippantly, like just go buy something. Not at all. But, you know, write the numbers down. Make sure it pencils out and then with your best knowledge by the thing, understanding, like I said before,

you're probably going to lose on that first deal or you're going to lose at some point on that first deal. But you gain in knowledge, what you gain in knowledge and experience is, is exponential. Yeah, maybe there's an analogy of you're at the top of a hill. You want to go snowboarding. You're going to fall going down that hill. You're not going to have fun on your first time. You don't want to go to a black diamond. You don't want to die on your snowboard. But if you can figure out a way to mitigate the way that you're going to take those bumps, you'll learn snowboarding and then there's people that absolutely love it. That's a great analogy. Thank you. If I don't come up with them, then Bigger Pocket said that they're going to

replace me with like Drew Carey or Steve Harvey or one of those guys that bouncing around. Steve Harvey in here. There's a lot of pressure on me. All right. Thank you, Jamie. Last question on the podcast. That'd be an amazing episode. It would be. I don't see how that wouldn't be entertained. Yeah. If anybody knows Steve Harvey or Drew Carey, we will take either of them as a on the podcast. Thank you. The price is right. Yeah. Okay.

Let's see. Last question. Tell us where people can find out more about you. Yeah, so I mentioned a couple things. So for multifamily more, check us out on Instagram at Multifamily More. You can do that anywhere on YouTube, on Facebook, at Multifamily and More, but follow us on Instagram there. I mentioned, I'm really excited about this GoBundance and merge program.

For those that are familiar with Gobundance, it's the tribe of millionaires, right? I'm lucky to be a part of that tribe. But this is the first time that I think Gobundance has ever offered anything for somebody to become a millionaire as opposed to. having to be one first. So you can go to gobundice.com slash goals and there's a great webinar that I did with David. I mentioned already that you can watch and he goes through his goal setting exercise, which is he shows his book, all of his goal. I mean, it is really, really tactical. So gobundice.com slash goals. You can check it out there. That's awesome, man. Really appreciate it.

And look forward to you doing that and just provide so much value for people in all your communities. You got multiple communities here and you're awesome, man. So appreciate having you on the show today. Thank you. Yeah. Thanks for having me, guys. Thank you. David Green, you want to get us out of here? This is David Green for Brandon Cash Growth Turner. 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 height, you're in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com.

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