BiggerPockets Real Estate Podcast - How to Find Financial Freedom with Small Multifamily Rentals

Episode Date: August 19, 2023

Small multifamily investing is one of the fastest ways to reach financial freedom through real estate. With just a few multifamily rental properties, you can create passive income streams that’ll allow you to retire from your W2 job, go full-time into real estate investing, or have enough money to do whatever you want, whenever you want. Don’t think it’s still possible? Dave Meyer, multifamily investor and VP of Data and Analytics at BiggerPockets, may change your mind.  Dave started investing in real estate by buying a couple of small multifamily rentals within a block of each other. He lived in one of the units while renting out the others, allowing him to live for free and collect some sizable cash flow. Now, years later, Dave is collecting around $5,000 per MONTH from just these two properties. And if you invest in small multifamily rentals, you could experience the same cash flow!  If you want to invest like the experts and use the tools and calculators from this episode, sign up for BiggerPockets Pro and use code “FAMILYPOD20” for a discount!  In This Episode We Cover: How to achieve financial freedom by investing in SMALL multifamily real estate The four MAJOR benefits small multifamily boasts and why you’ll want to get in NOW The financial freedom formula and calculating out how much you REALLY need Financing your small multifamily rentals using loans and creative financing  How to use the BiggerPockets Rental Property Calculator to calculate cash flow, cash-on-cash return, and long-term profit  The dangers you MUST look out for before investing in ANY multifamily deal  And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Rental Property Calculator Rent Estimator DealMachine ListSource Grab the Small Multifamily Slides and Worksheet: Slides Worksheet Already Pro? Check Out Pro Exclusive Videos! Sign Up for a BiggerPockets Bootcamp Hear Dave on The “On The Market” Podcast Wherever You Listen to Podcasts: BiggerPockets Apple Podcasts Spotify Dave's BiggerPockets Profile Dave's Instagram Book Mentioned in the Show: Real Estate by the Numbers by J Scott & Dave Meyer The Multifamily Millionaire by Brandon Turner Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-q3-1 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast. Hey, what's going on, everyone? This is Dave Meyer, and I am popping in here because I have a very special episode of the podcast for you today. I'm going to be sharing a presentation I did recently on the benefits of investing, specifically in small multifamily assets and how that is really, in my opinion, basically this sweet spot to building long-term wealth. We're going to talk about this during the presentation, but I think

obviously single family homes are great and so is large multifamily. But for newer investors, I really think that small multifamily is a way to scale your portfolio quickly without taking on too much risk. You get the benefit of residential financing, which comes with a lower interest rate and often means that you can put down less money. So there's all these incredible benefits to small multifamily investing. This is actually how I got started. And I really think it is a great way to get started.

but even if you already own a couple of properties, if you're an active investor, I think you're going to learn a ton from this episode because I'm not just talking about small multifamily. I'm also going to talk about analyzing deals and I'll show you some of the tools that anyone can use on bigger pockets to help you analyze these types of deals, offer with confidence, and build out a portfolio that meets all of your financial goals. So that's what we're going to get into today. If, as I'm going through the membership, you find a lot of value in the tools and resources that I'm going to talk about that we offer at Bigger Pockets. And I'm quite confident that you will because millions of people are Bigger Pockets members and we have tens of thousands

of pro members who are all successfully investing in real estate. So if you do want to take advantage of the full suite of services the pro membership does have to offer for watching this YouTube video, you can use the code of YT Family 20. That's YT like YouTube, Family 20. And you're going to get 20% off your first year of the pro annual subscription, and you can use these tools as literally tens of thousands of other people have done to start building long-term wealth and achieving financial independence. I have an uncomfortable question for you. If your rent collection drop to 80% next month, how long would your cash flow hold up? What about 70% for the next three months? Would your cash reserves cover it? I talk all the time about scenario planning. Smart

investors don't just model the upside. They also pressure test the downside. This is even more important in a down market. And that's why I like Stessa's stress test report. It lets you model different rent collection scenarios, adjust expense assumptions, and instantly compare the results to your real bank balances. It's one of 12 professional grade reports inside Stessa Pro. Try it for yourself. Visit stessa.com slash mkTG slash bigger pockets and get six months of Stessa Pro for free because it's better to discover your risk in a report than in a recession. A lot of property managers think their job is answering tenant emails and coordinating repairs. That's not the job. The job of a property manager is protecting and growing your operating

income and earning your trust while they do it. And that comes down to three numbers, occupancy, delinquency, and net promoter score. If those numbers slip, your income slips and your trust slips too. And most PMs don't hold themselves to performance standards. They focus on activity, not outcomes. Mind is different. They obsess over the metrics that actually grow your cash flow. Go to mine.co slash show me to see how mine performs and get a month of management for free. Because if you're going to hire a property manager,

hire one that manages your investment like an investment. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of, of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10. The portfolio features 4,700 single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought after

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small multifamily is just such a great way to invest in real estate. If you can't tell, I'm super excited to share this with you all. So let's just jump right into it. Hey, everyone, welcome to today's webinar, how to buy small multifamily properties. My name's Dave Meyer. I'm going to be your host today walking you through this really exciting webinar that's going to help you figure out how to achieve financial freedom or really pursue any financial goals that you have through the power of real estate, specifically buying small,

multifamily properties. So welcome all of you for being here. This is a big step. If you're new to real estate, congratulations on even just attending is a big step in your journey towards financial freedom. So thank you all for coming. We're going to have a lot of fun today. At least, you know, I think this is a lot of fun. And I'm excited to share everything I've learned over my 12-year real estate investing career with all of you today. Before we jump into today's topic. I do want to address the elephant in the room because this is something I hear about quite frequently and it's something that's worth addressing. Can you still even invest in real estate today? I know that's probably on a lot of your minds, right? The answer, though, is yes.

And I know that seems like a very definitive answer, but I spend all day looking at different asset classes, looking at different types of investments, and I still believe, and to my core, I truly, truly believe that real estate offers the greatest chance to build long-term wealth out of any asset class. That includes crypto, that includes stock market, because it is proven. People, millions of people have been using real estate to build wealth and to find financial freedom over the last several decades. Bigger Pockets has been helping literally hundreds of thousands, if not millions of people find financial freedom through real estate. I know it's possible because I've lived it and I've seen thousands of people.

do it as well. So the answer is yes. And we're going to talk about one of the best strategies for real estate investing that, in my opinion, works in pretty much any type of market conditions. So right now, now is the time to sharpen your acts, to learn the skills that you need to be a successful real estate investor. We're going to talk all about this over the course of today's webinar. But the things that you need to know are not hard. They require work. But all you need to do is learn a system. It's just a process that has been proven that thousands of people have done before that you can learn. I'm going to teach it to you today, that you can learn, apply to your own life and reach those financial goals that you're looking for. So if you're wondering exactly who belongs

at this webinar, the answer I think is pretty much anyone. But if you're wondering if this is the right webinar for you, here are the four types of audiences that I think this webinar is perfectly suited for. First, if you don't know anything about real estate investing and you're just getting ready to dip your toe in the water, don't know exactly what you want to do, don't know what strategy you're considering. Today's webinar is going to be perfect for you. Maybe you're already looking to buy your first small multifamily investment. You know that this asset class is something that you're interested in, but you just don't know where to start. Great. We're going to address that today. Third, maybe you've done single family deals or you have a primary residence that you're thinking about

renting out or you already have rent, but you've heard about small multifamily. You're interested, and now you want to learn more, we got something for you. And lastly, if you're already investing in multifamily, but you need a way to streamline your business, remember I just said this is all about processes. We're going to talk a lot about processes that are going to help you scale your business and reach that financial goal that you are striving for. One thing of housekeeping, we do have a free worksheet for you to follow along. So go to biggerpockets.com slash multi-work. worksheet that is completely free. It's going to help you remember things that I talk about. We're going to cover a lot of really important materials today. So you can write down everything.

You can reference them back later. And personally, I find that when I write things down, I remember them better the first time. So that's the idea behind this. You can go check that out. Again, biggerpockets.com slash multi-worksheet, totally free. So go check that out. What are we talking about today? I know we've talked a little bit about this already, but we're talking about using specifically duplexes, triplexes, and fourplexes to find financial freedom. And why just two, three or four units? That's important. We're going to talk about that later.

But that's what I consider small multifamily properties, something that is either a duplex, triplex or fourplex. And it is, in my opinion, the best way to get started pursuing that financial freedom, which is really what we're here to talk about, right? Like we want to use duplexes. We want to use small multifamily to achieve something, right? Like no one wants to buy a duplex or a triplex just for the sake of buying it. I don't think anyone growing up was like, oh, I can't wait to be a landlord.

What really motivates me people and me and why I think, I'm guessing why most of you are here today is because there's something more. There's something more about your life that you want to pursue. And financial freedom is the key to unlocking that. And this is going to mean something different to all of us. To me, it's a lot about travel. It's about being able to go on adventures and spend time with my friends and family. To you, it might be about spending more time at the faith organization or giving back or whatever it is that you want to do. I don't think it's because you really just love owning property. It's because what rental property investing, specifically small multifamily investing can unlock for you is so very powerful.

It's the freedom that we all yearn for. Personally, I believe it's the freedom we all deserve. And so that's what we're going to talk about today, how to use these simple strategies and processes to get you to that financial freedom that you want. We're going to cover a lot today. So I won't get into too much of this right now, but we're going to go through gifts. I'll tell you a little bit about myself and bigger pockets and why I am qualified to lead this webinar right now. And then we're going to get into the processes that you can follow to achieve the financial

freedom, get to that unit count that you're looking for, the passive income that you're looking for. We're going to get into all that today. We're also going to give you some tools. And we have a ton of bonuses to give away at the end of the webinar. So definitely stick around to the end because you're going to want all of this free stuff that we're giving away. Honestly, it's worth hundreds, if not thousands of dollars. So just for watching this webinar, we're giving it away. So you might as well check that out. So at the end of the day, why you're here is because you're going to be you're going to understand by the end of this webinar, the detailed process. Again, I'm going to talk a lot about that today. It's about process and systems. The detailed process for finding, analyzing, and buying, of course,

small multifamily properties to help you achieve your financial goals. I hope that sounds good to you guys because that, to me, is super motivating. All you have to do is learn a little bit of a process, and you can be on your way to achieving your financial goals by the end in the next hour, hour and 15 minutes. Oh, we also have some bonuses before we jump into that. You can, we're again, like I said, we're going to give those away at the end. So stick around to the end. We have a deal finding master class. We have a low money down class.

We have discounts on some of our books and products. You're going to want to check that out. So stick around to the end. If you don't know who Bigger Pockets is and you just happen to be on this webinar or maybe you know us through the podcast and nothing else, bigger pockets is a one-stop shop for real estate investors. We have blogs, forums. You might be familiar with our podcast. It's super popular. We have webinars. And most of these tools, honestly, are free. And they are designed. All of them are designed to help you

use real estate to pursue your own financial goals. That is why I work full time at Bigger Pockets, if you don't know me, why I and my colleagues at Bigger Pockets go to work every day. That is what motivates us is to help you find your financial freedom. Every employee at Bigger Pockets pretty much is pursuing financial freedom through real estate. I am a success story of Bigger Pockets, and that's why we're so passionate about sharing our knowledge, processes with all of you. Here are three things that have Bigger Pockets.

We truly believe, and I think, and I hope you internalize as we talk through this today. Number one, real estate works when you work it. This is not a get rich, quick scheme. No matter what, some people on Instagram or on YouTube might tell you, Real estate is not a quick get quick. Oh, wow, I can't say that. It is not a get rich quick scheme. And no one's going to hand you passive income or financial freedom. If it was easy and it was that easy, everyone would do it. You have to put work into it. So that is one thing to remember. Real estate works when you work it.

And the second thing we believe is that it's actually pretty simple. So while it's going to take some work, this is not complicated. There are no, there's no calculus. There's no difficult math here. The systems I'm going to show you today are relatively simple. All you need to do is practice and get good at them and implement them. And you're going to be well on your way to financial freedom. Lastly, anyone can do this. This is something that we believe. But actually, it's more than something we believe.

It's something that we know because we've seen it so many times. Bigger Pockets has been around for 18 years now. I've worked there for six and a half. And I've seen thousands, thousands of people who knew, nothing about real estate, just like you might be feeling right now. Maybe you are experienced, but people who have started from no knowledge of real estate and have come out financially free. So we know that everyone here can do this. About me and why I'm here leading this, my name is Dave Meyer. I've been a real estate investor for 12 years. I started when I was

23 years old right out of college. About six years ago, I was really interested in working full time in real estate. I had been working in software, got a job at bigger pockets. I've had a a bunch of different roles there. But now I am the vice president of data and analytics. I do have a master's degree in business analytics, so that makes sense. And I do all sorts of things of bigger pockets. I do internal data. But in top of that, the thing that I am super passionate about in addition to educating people on webinars is I'm the host of our newest podcast called On the market, where we give out all sorts of information about data, trends, and news that impact the world of real estate investing. So you should definitely check that out. It's a lot. It's

super cool. You can find on Apple, Spotify, YouTube, any of that. I also, if you haven't figured out already, I'm sort of into data and analysis and deal analysis, which we'll talk about in a little bit. So I have a new book with Jay Scott on deal analysis. And most importantly, I was once a newbie to real estate investing just like you. It was 12 years ago. I had no idea what I was doing, but I got into small multifamily investing right off the bat and it has been absolutely life-changing. I want to share that all with you today. Also, if you follow me on Instagram, you probably know that I am a sandwich enthusiast. You can follow me on Instagram where I'm giving out data about real estate investing,

about personal finance, about the economy all the time. You can find me at the data deli. All right. In addition to all those things I just said, mostly I'm a real estate investor. That's what I'm super passionate about. And that's why I'm here today. My first deal was actually a small multifamily. This is why this topic of this webinar is so near and dear to my heart is because this

changed my life. And I know that it can change yours as well. And I'm super excited to share this with you. I bought this property. This is the actual property I bought in Denver. Man, the grass looks pretty bad. I took this picture when I was re-landscaping. But it looked better. I swear, what I was actually done with this project. But it was four units in Denver, Colorado. And I did actually sell it a couple years ago, but before I did, it was, I was generating $2,500 a month in cash flow, which is incredible. The only reason I sold it is because I had a bunch of partners on this deal, which we're going to talk about in a little bit. And we were just ready to part ways. It actually worked out really great for everyone, but that's how I got started. My second deal was also a small

multifamily. I house hacked in this one. So if you see those three small windows on the second floor there, I lived there for several years while being the landlord taking care of this property. And it was actually just down the block from this other one that I was just showing you. They were one block apart. So I was able to manage all seven of those units while I was working at bigger pockets in grad school. It was an amazing learning experience. Still own this one.

And it is generating about $2,500 a month in cash flow, which is a ton of money. So hopefully you can see that these small multifamily, just seven units, if I had kept the other one, generating $5,000 a month in cash flow. I know everyone out there would be excited to have. that level of cash flow. Of course, this takes time. This takes effort. But I just want to show you that it doesn't take that much to get to financial freedom if you find the right deals and you learn the right process. Well, I got ahead of myself. So it doesn't take that many small, the family properties to achieve financial freedom. That is entirely what I want to convey right now

is that did those seven units get me to financial freedom? Not exactly. You know, that's $5,000 a month is not exactly where I want to get to, but I quit my job in 2014. I was trying to figure out what to do, and it allowed me to go on a trip and to figure out what I wanted to do. It actually paid for my graduate school. I got all of my graduate school paid while I was going through because of these properties. It allows me to take risk. And because I learned the systems that I was doing over time, it has allowed me to actually achieve financial freedom, not just these two properties, but over time, it has gotten me there. It just takes the right properties, just takes the right properties and systems and one other thing. Time. It does take time. You're going to have to invest

some effort into this. You're not going to get 50 units in small multifamilies in your first year, but if you put an effort over the next couple of years, you definitely could get there. So let's just talk for a minute about why specifically small multifamily properties are such a powerful wealth building tool. First reason is cash flow. Listen, multifamily properties are built for investors. No developer builds a multifamily specifically for someone's dream home. That's typically not, at least in the U.S., what someone's dream home is. These are meant for investors and they are meant as investments. So they are designed to generate more cash flow and they generally do. So I think multifamily, if you're a cash flow investor, as a lot of people are, especially in the beginning, you probably want to

be. Multifamily is a great, great way to generate cash flow. They tend to generate cash flow. They tend to generate better cash flow numbers than single families. Second, and this is super, super important, is residential financing. So at the top of the show, I mentioned that we were specifically talking about duplexes, triplexes, and quadplexes. And this residential financing piece is exactly why. If you buy something that is four units or less, it is considered a residential property and you can get a residential loan. This means that you're going to maybe be able to put down less money. it means you're going to get a better interest rate, which means your properties are cheaper. And it is going to be a whole lot easier on you just in general to get a loan.

You're probably not going to have a balloon payment at the end of your property. So there's all sorts of reasons this is super beneficial, especially just when you're getting started. But you can basically get a regular mortgage. Third, there is just less competition. And recently the market has been relatively competitive. And so you see more competition in areas where there are more competition. in areas where there are more buyers.

80% of homes that are bought are just by people looking for shelter, looking for their home. And so single-family homes have by far the most competition. Small multifamily is less competition because it's people like you and me. It's investors who are looking for that. On the other side, you also have competition for the big properties, you know, BlackRock, these private equity firms or even just regular syndicators you find on bigger pockets are all competing for these 30, 50, 100 unit deals. But the small multifamily is a perfect niche for people who are getting started where there is not as much competition as in the single family space or in the large commercial space.

Lastly, house hacking. I absolutely love house hacking. I did it for several years. If you don't know what this means, it just means that you live in a property that you're also renting out. So in the context of small multifamilies, you can buy a duplex and rent out the other side or you can do what I did, rent out a triplex, live in one. and rent out two others or you can do it in a quad as well. And the reason I love this is one, again, residential financing. You can get owner occupant financing if you are house hacking, which in some cases

means you can put as little as 3.5% down on an FHA loan. We'll talk about that more in just a minute. But it also lowers your interest rate. Owner occupants loans get lower interest rates, which is super important. So these are four reasons that I think small multifamily are so valuable. You get more cash flow. You get better loans. There's less competition.

And you are going to learn a lot. That's actually one thing I meant to mention about house hacking that I love is that if you live on the property, you are going to learn so, so much about property management that it's going to help you for the rest of your investing career. Even if you want to hire a property manager in the future, you're still going to get so much out of living in that property and being the property manager, even if just for a year or two, that you are going to be such a better real estate investor for the rest of your career. I think it's super, super valuable.

So hopefully I've convinced you that this is a great asset class. I personally love small multifamily. It's still probably the thing I try to invest in most. So how can these small multifamilies, duplexes, triplexes, and quads give you financial freedom? Well, ask yourself, how much, what is financial freedom? It's different for everyone. But what do you actually need to pay your bills? What do you actually need to be financially free in the most basic sense to pay all of your bills? Is it $5,000? And you know, I think that's a, a pretty good number, I think, for most people. For me, it was about $5,000. I said I'm not financially free at $5,000 because I want more than just paying my bills. But just think about this is like the level one financial freedom to get to the point where you can pay all of your bills with passive income.

If you could get just $100 in cash flow per unit, which really isn't that good, all you would need is 50 units. And I know that sounds like a lot, but once you learn a system, it's really not that much. What about if you could generate $2,200 a unit, then all you need is $25. If you're buying quads or you're buying fours, that's only six or seven different properties. You buy one a year that gets $200 per unit, then you're financially free. If you're thinking I want to do it faster than five or seven years, I understand you can try and do that. But think about how different your life would be, even just going slowly and conservatively, starting right now, if you put in a dedicated effort,

for five to seven years, just $200 bucks per unit, that's not even that hard. You can get to financial freedom and it's really not that challenging. And the thing that I think is really important about these small multifamilies is it's actually a stepping stone to get to an even more important and more, you know, powerful wealth building tool, which is large multifamily investments. I invest in large multifamily properties right now, not as an operator, but as an investor. So a lot of people go and buy 300 units and they need investors and I invest a lot of these. But I learned how to underwrite these deals and I learned how to pick good deals because I understand how property management works.

I understand what dealing with tenants and multifamilies is like. And if you want to either be an LP in syndications like I am or maybe you want to buy and actually operate these ones, learning the ropes on these small multifamilies is an incredibly, it's a lower, risk an easier way to get into this line of investing and to learn as much as possible. Like if someone came to me and was like, hey, I want to, I'm buying 100 units, will you invest? I've never bought a multifamily deal. I'm probably not going to do that. But if someone came to me and said, hey, I've been investing in small multifamilies for the last

five years and now I'm ready to take the jump to a 50 unit, I would listen. I would listen to that person because they have learned over time how to make their systems work. and that's what I as an investor really care about. So one question I get often when talking about this thing is where do you actually find these deals, right? Because deals are always hard to come by. That makes sense, right? Because all the good ones, the obvious ones are going to get snapped up.

So as an investor, you might need to put in a little bit of work. But we can talk about this. There are plenty of places to find deals. Every experienced investor I know is still finding deals right now in any type of environment. So the first one, I know, is going to be controversial. but the MLS, you can find deals on the MLS. It is 100% true. So many people overlook the power of just getting a real estate agent.

I talk to investors and they're like, oh, there are no deals on the MLS. I'm like, well, have you talked to an agent? And they'll say, no, but I heard that there's no deals. What do you doing? You got to actually go and try before you can make that determination. So you can find a good investor-friendly agent who understands what you're looking for on bigger pockets. That's completely for free.

BiggerPockets.com slash agent or ask people in your community for a good investor-friendly agent. But the trick is to find an agent that really understands investing, ideally someone who invests themselves. So I understand some of you might be early agents and you might not like what I'm about to say. But if you're a new investor, you're trying to learn your market, find an investor who is experienced, find one who is responsive. Find someone who when you ask the question, where would you invest has a thoughtful answer. That's not. not just like, oh, anywhere in Denver is good. You don't want to hear that. You want to know the details about what neighborhoods are seeing infrastructure investment or where rents are going up

the fastest. You want to look for those tidbits of information with an agent and they are likely to be able to help you find a deal even on the MLS is 100% true. The second trick I have for the MLS is look for value ad opportunity. So one thing I really like to do is look for zone. favorability. So for example, maybe you find a single family home that can be turned into a multifamily. Or maybe you find a duplex that can be that has a basement that's unfinished and you can turn it into a triplex. Those types of things, you have to look at the zoning are really huge opportunities for investors. And most people are too lazy to figure that out. So that's something I love to do. You can also just look for opportunities where maybe it's a duplex and there's again an

unfinished basement and you can add a third bedroom or a fourth bedroom, that's going to increase your rent and make it a better deal. So look for those hidden potential opportunities. Most people, again, most people who are looking on the MLS are not thinking about this as an investment. They're thinking about it as their primary home. You have to think about it as an investor and find those hidden opportunities. If you can't find something on the MLS, which might be true for some people, you can go off market. Driving for deals is probably the best way to go off market. I've done this successfully in the past. And basically what it means is going around a neighborhood and finding all the properties

that you would like to buy. And then you just contact the owners and see if they're willing to sell it. You know, this is a numbers game. You know, if you send out a thousand letters or if you call a thousand potential sellers, you might get 20 of them to respond to you. Maybe five of them will entertain an offer that you can analyze. And maybe you'll close on one, but you'll probably get a really good deal because, again, real estate works when you work it.

And so if you put in the work, you're likely to find better deals. So just an example of how this works. A couple years ago, I went to this community planning meeting. Those are great ways to find out what's happening in a city, by the way. Went to this community planning meeting found out that a park was being built in a neighborhood. I already was kind of interested in Denver. They were shutting down the street, turning into this amazing park. And I was like, man, I got to get in that neighborhood.

So I biked around. I like to bike for dollars because I just, I like biking, first of all. but I think you go slower, you get to get the sense of the neighborhood a little better. So I wrote down a bunch of properties that I was interested. I wound up calling a few people, got someone to accept an offer, and I actually wound up living in that house for three years while the park was under construction. No one wanted to live there on the construction. I was willing to live there, saw the value go through the roof.

Now I'm renting it out, making great cash flow and the equity in that property has gone out a ton. But if I had just waited until the park was done and someone was willing to sell and it was obvious, I would have paid like 200 grand more for that property. So this is just an example of if you put in that extra work, you're going to be able to find deals. Another trick that Brandon Turner actually talks about that I think is a really good trick is going on Craigslist and Facebook. And find out who is listing properties in your neighborhood and contact them. Those are the property owners. You know, if there's someone with a duplex who is listing both sides or just one,

just go see if they're willing to sell. And you have to be, you know, professional about it. You have to know your numbers, which we're going to talk about a little bit, but you can approach these sellers and potential sellers and see if they're ready to sell their property. It's another great way to find deals. We also have a marketplace on bigger pockets completely for free. People are posting off market and on market deals there. So you can go check that out. And direct mail, which is similar to driving for deals.

It's basically you find the owner of a property and send them pieces of mail. There's a website called Deal Machine. I'm not affiliated with them at all, but it's a super useful tool. I also have this tool called List Source, again, not affiliated with them and just want to show you how this works. But basically, you can build a list of potential owner. So if you wanted to pick a geography, you could say, like, let's say we want to just look at area code. And we wanted to just look at Colorado, for example. I don't know, 303, that's the Denver area code.

So we just wanted anyone who has that 303. You can look at the type of property that it is. You can check which mortgages. So maybe you just want people who own for cash if you're looking for seller financing. That's a really good way to do it. Or you can look at the demographics of the area. You can see if anything's in foreclosure. So you just build a list like this.

I'm not going to actually go through it right now. It's not the main point of this webinar. but you can go through, build a list. You have to purchase this, so I'm not going to actually do it right now. But then you just mail these people. You can say, I want every duplex, every triplex, every quadplex in Denver. I'm going to send every single one of them a piece of mail. And again, this is a number of scam.

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and then we have to talk about how do you finance that? So just as an overview, we're going to talk about finding the deal, financing the deal, then analyzing the deal. Those are the three steps that you need to be able to do. So we've talked about the first one. let's talk about financing a duplex, triplex, or fourplex. The first one I've already talked about a little bit, which is an FHA loan. This is an opportunity to put as little as 3.5% down, but it is an owner-occupied loan.

So you have to live in the property for at least a year. But think about that. You can get a quadplex. You can buy four units and put as little as 3.5% down. This is traditionally done as a house hack, right? because you have to be living in a property. And so this is an extremely, extremely good way for people who don't have a lot of capital to put into their first deal to get into small multifamily investing.

Highly recommend looking into an FHA loan. Second is conventional. This is, you know, when you put down, it's just a regular mortgage, right? You put down 20%. Normally when you're an investor, if you're not going to live in the property, you have to put down 25 or maybe 30% on a loan. But again, it is still a residential loan and you're going to get a pretty good interest rate and pretty good terms, no balloon payments or anything like that

and a conventional mortgage. So that's really good. Next, partnerships. I love partnerships and people overlook this all the time. Everyone wants to own 100% of their first deal, but I got to tell you something. Most investors do not get started that way. And a lot of experienced investors still look for partnerships on many or even all of their deals. I'll tell you, my first deal, I showed you that quadplex. I was waiting tables. I had no money. I literally all the money I had was in my bedside table. And I found a deal and I found a great deal that was going to cash flow. And I convinced three other people to go in on it with me. So we're each going to put in a quarter of the down payment. But I didn't have that. It was like $26,000. I did not have anywhere. I didn't have

$2,600. So there was no way I was going to be able to do that. Luckily, I brought on even one more partner and I got a family member to lend me that $26,000 with 6% interest. So it was another loan I had to pay off. But that got me into my first deal. And sure, yeah, I would love to have owned 100% of that deal. I'd probably still own that, be making $2,500 a month. But it got me into real estate. It made me a ton of money, by the way. It got me into real estate. I learned the ropes. And I think it is such a valuable tool with partnerships. Still today, I do most of my deals with partnerships. So don't overlook this. If you need, help getting into your first deal, find someone who is willing to put in the money and you're willing to put in the time. Next is seller financing. This is when someone who owns a property

free and clear, they don't have any mortgage or loan against it, is willing to sell you the property, but instead of getting a lump sum, they're willing to take monthly payments in exchange for the property. So think of it as like if you were to sell your uncle, your car, right? right? And you owned the car free and clear. You didn't have a loan again. And your uncle said, you know, I don't have the 10 grand for this car, but I'll pay you a thousand bucks a month with some interest. Say, okay, that's pretty good. So that's basically what it is. He would get the deed to the car. He would own the car. But if he stopped making payments, there's recourse for me to get it back. That's the exact same thing with seller financing. And if you're wondering why someone would do that,

it's because they want passive income just like you or me. Imagine you're, you know, 50, 60s, 70 is getting ready to retire and you own this property for 30 years, you don't need to own it. You're not going to live there anymore. You're ready to move, but you want some income every single month. So maybe you sell it to an investor and say, send me a check for $1,000. Send me a check for $2,000 every single month with some interest on it and you can have this property. So that's a great way. Again, if you don't have a lot of cash to get into these types of deals.

The last is Burr investing. There's so much information about Burr. actually one of the discounts and giveaways we have today, if you wind up going pro today, we have a discount for that too, is a class on Burr investing. I won't get too much into it, but what Burr means is basically it's like flipping a house, but instead of at the end of the renovation selling it, you just keep it and rent it out. So you find a fixer-upper, you fix it up, you rent it out for a higher price, and then you refinance, which allows you to pull your money out of that deal, and then recycle it into another one.

So say you only had 100 grand, that's a lot of money, but say you had 100 grand and you want to build this huge portfolio, you can buy one property, invest that money into it, rehab it, get that cash flow going, and then you can refinance and take out some of that money and put it into your next deal. It's a way of just keep using the same amount of money time and time again to get into that deal. If you want to learn more about that on bigger pockets, we have books, we have all sorts of information about Burr that you can check out. But another really good way, if you don't have a ton of capital and want to build a 50 unit, 100 unit portfolio, that you can start doing that.

So that's step two of the process. So hopefully right now you already understand what you have some idea, right, of how you are going to get leads? Like how are you going to find properties? Are you going to find an agent? Are you going to drive for dollars? You're going to go on Facebook. You can do all three of those, but you need to have deal flow coming in so that you're

looking at a lot of properties. Next, by now, you should have at least some idea of how you're going to finance this, right? So maybe you're thinking, oh, I'm going to house hack. So an FHA loan could be a great option for me. Or I don't have money. I'm going to look for a partner who's going to help me with my down payment. And then we're going to get a conventional mortgage. You don't have to have it all figured out right now.

You just have to have an idea of what you want to do to get to the next step. And the next step to me is the most important. Obviously, I'm a data analyst. So I think it's the most important. but pretty much every real estate investor agrees that deal analysis is the single most important part of being a real estate investor. After all, you have to be able to run the numbers and know when a deal is good so you can take advantage of good opportunities and you have to know when a deal is bad, maybe even more important, so you don't waste your money on opportunities that are not so good.

So that brings up the question. How do you actually do this? How do you analyze? A do you twoplex, triplex, or fourplex. Well, it's got to be super complicated, right? We, one, do this by hand. So I went to graduate school to get a master's degree. And only by doing that, am I able to analyze small multifamily properties? I learned all these complex techniques and it takes hours to do every time. I'm completely kidding, by the way, that was absolutely not true. I don't need any training at all because there are tools that help you do this. Everything is already been done before, guys. We're not reinventing the wheel. There are analysis tools that are going to help you know in honestly, in five minutes or less, whether a deal is good or not. And I know that sounds crazy. And at first,

it's going to take you longer. It might take you 30 minutes on your first analysis, then 25, then 20. But by the time you've run, let's say 25, maybe 30 deals, you're going to be doing this under five minutes. I promise you. It is super easy. Bigger. Pockets has these tools that are called our real estate investment calculators that are going to help you do this. And I am actually going to do this today. We're going to walk through a deal. I'm going to go find one on the internet. And we're going to do the analysis right here and show you exactly how this is done. And listen, this is the most empowering part of real estate investing. If you learn to be able to say, I know for sure that this is a good deal or this is not a good

deal, all the fear that you're feeling or you might be feeling, I should say, is going to dissipate because you will know the math behind each of these deals. And I just want to show you that I have been running deals constantly. I use this every day. Look at all these deals that I've been using. This is actually my tool of preference, even though I know how to do this by hand. I do know how to do this by hand, but I don't because I don't need to. I have a bigger Pockets Pro account and I can run as many calculator reports as I want. Okay, with that, let's get to the deal analysis. We're actually just going to jump right into this and I'm going to find a deal on

BiggerPockets.com and we're going to just walk through how to use the Bigger Pockets calculator. And I'm going to just switch my screens here. And while I'm doing that, I just want to make sure that you guys understand and I want to share, I should say, that I find that deal analysis and running these numbers is the most empowering part of real estate investing because it allows you to see that there are formulas. There is math behind each deal that tells you with a pretty high degree of confidence, whether you're going to make money, how much you're going to make, and you get to see the whole deal right in front of you. And of course, you have to put in good numbers and we're going

to talk all about that right now. But if you put in the right numbers and you use a tool like the calculator, it takes a lot of the fear. It takes a lot of the risk out of it. So I'm excited to show you guys this. All right. So I'm just coming here to the bigger pockets. Find a deal tab. I clicked on real estate listings and it brings up all these listings. And I'm going to go and sort by property type since we're talking about, we can do duplex. Let's look for a quadplex. That'll be fun. Let's do a bigger one. My first deal is a quadplex. So we'll talk about quadplex. All right. Ooh, this one looks nice right here. 400 for a quadplex. It looks like they're all two bed one bath in Des Moines. All right.

Right. I mean, that seems like a good one, but now I just want now. I love just scrolling. So now I'm going to just scroll and look at everything. But we have a limited amount of time. So I'm just going to do this. Let's just do this Des Moines, Iowa one. Let's go see what we have to say. So it tells us, this is great. It actually tells us the current rent each of these at 850. We can see what the cash on cash return is. But we're going to run the numbers ourselves to see what's really going on here. There's actually some pictures, which is nice. All right. It looks like you can use a little bit of work, but yeah, that carpet, whoa, big stain. All right. I like it. This is the kind of deal we kind of like, right? I mean, opportunity to add value. That's always what a real estate investor is looking for. So I'm going to quickly just actually screenshot this so that I have, oops, let me just do that again.

So I can put this into our calculator report. So now that I got our deal, I'm just going to copy and paste the address here because we're going to, That's the first step we're going to do. So then we come over here to our rental property calculator. You get the point of what I'm doing here, right? So that was when I was doing yesterday. So I'm just going to put this image here just so we have something. You can add as many images as you want.

So if you want to keep track of the properties that you're analyzing, which you should, I'm not going to do that now because we're going to, I don't want to run out of time, is you can do that. So that's it. Just put in property information, put an image. And now next, we're moving on to purchase. So what was the purchase price here? One, let's just round up.

We'll say that let's just assume that we can get it again for purchase price. Guys, I'm not doing a full analysis here. I want to show you how to do this. So if you have different assumptions and you're saying, oh, I think I can buy that for 5% over asking, you can go do that after this. My whole point is just to show you how this calculator works and the value that it provides. So I'm going to just assume we can get this for the purchase price. Closing costs.

Uh-oh, right? We don't know what this is going to cost, right? Well, luckily, Bigger Pockets has built in all these help tools that are going to help you analyze a deal. So I won't make you read all of this, but it says if unsure, 1.5% of the purchase price is a good number to begin with. So let's just use that. 1.5% of this would be about $2,400. Let's just round up. Let's just say $2,500 for closing costs.

Again, the way to actually know this is to go and talk to a lender. as we just talked about, step two of the process is learning about financing, talking to a lender, no cost way to learn this stuff. Let's just say that we're going to rehab this property a little bit. It actually looks like it's in pretty good shape, but let's say that rather than 165, let's say we could get it up to 190, you know, let's say we can add a little forced appreciation to this baby, you know, another 25 grand. And let's say that's going to cost us, I don't know, $12.50. Let's just say that, oh, not $125,000. $12,500.

So I'm making this up, guys. I just want to show you that all the things that you can do. But this probably makes sense. If you put about $12,000 into this, you probably could increase the value of the property a lot. And that's what we're going to do. Next, let's go to our loan detail. So again, if you want to do a house hack,

you can put as little as 3.5% down. You can learn more about what to put in this. Maybe you're making a cash purchase. But for me, as an investor, I typically put 25 or 30% down. So I'm just going to put 25% down. Right now I'm going to say the interest rate is about 5.5%. And I'm going to say points charged is zero.

And my loan term is 30. I love me a 30-year fixed rate mortgage. If you can lock in an interest rate, no worries about it. I absolutely love doing that. There are good times to get an adjustable rate mortgage. Not going to talk too much about that today. But I love that. So I'm going to just assume this is a 30-year fixed-rate mortgage

with 25% down. So I know I'm cruising through this, everyone, but this is how easy it is. This is why it takes me five minutes. And I know you'll have to think about this a little more than I am. But check this out. All I've put in is an address, which I copy and pasted. Same with this purchase price. I used an estimate for closing costs, A or V and repair costs. And now I'm just putting into basic loan information that you can find on the internet in like five minutes. So next we're going to get to income. And this one actually is a little bit trickier. And what we need to do is. is figure out what this can rent for. And if you're a BiggerPockets Pro member,

which I'm going to give you a code to a discount, and it's amazing value, honestly, it's crazy what we're giving away. You can get this tool that estimates rent for you. So I'm just going to do this. This was in Milwaukee. So I just come over here. It's under the tool section. You go Tools Rent Estimator.

So I just type in the address again. And it asks me what it is. Remember, so is the three, one, yeah, six. too. So they're two, three ones. So I'm going to search for this address. Do do, do, do. Awesome. So now we can see that the median rent in this area is $900 a month. Confidence here is high. It's not very high. So sometimes it is very high. So there is a shadow of doubt here. But the amazing thing about this tool is that it shows you the distribution of rent. So you can see that a lot, you know, the median here and the mode is probably around $944. We also see the distribution

that some people skew higher. If you want to actually look at some of the listings, you can see all the things that are going on down here. So over here, we're seeing things that are 950, 950, 1195, 1095. So actually, when I'm looking at these comps, I'm starting to think maybe I can get more than 900. A lot of these things, look, a 3-1 for 1055,

a 3-1 for 11-50, a 3-1 for 10-50. So using this 900 a month is a pretty much, modest conservative estimate. And I like that personally. I'm a conservative investor, especially in a market. I don't know. I'm not super familiar with Milwaukee. So I'm going to be conservative and say 900 bucks a month for each. So that is 1,800 bucks aside. So hopefully you see how useful this tool is. If you are analyzing a lot of deals as you should be and you want to figure out what rent is, all you need to do, you type in an information and it tells you with a high degree of confidence that this is going to rent for roughly 900 bucks to month. And, you know,

if you buy this deal, you're ready to buy a deal, you might want to call some property managers in the area, just go on Craigslist, see what things are renting in that area, just to double check. But for your deal analysis, for trying to whittle down your funnel, this is an incredible tool that will help you. So let's just say 1800 bucks, which is exactly what we think it's going to be. Next, we have expenses. So property taxes, I think I saw that it was about 3,000. 500 in this area and insurance 200. So these are things that I just know. You can look at the property tax on any one of them. And then insurance, you know, insurance is kind of one of the harder ones to figure out. You can just Google what the average insurance is in your neighborhood,

and that can be super helpful. So let's actually just do that. Let's just do average homeowners insurance Milwaukee. Let's see what we got. Okay. The average cost of homeowners insurance. insurance is about 1370, but that's probably for a single family. So I'm actually going to double this for the duplex and make it 2740. That's doubling it. So I'm going to just do 2740 here for the annual insurance. If you want to talk to an insurance broker, of course you can do that. You'll get better at this. So repairs and maintenance. I like to say about 8% for repairs and maintenance, 150 a month. That seems about right. Vacancy. I do a 5% vacancy. Vacancy. rates right now are at all time lows. So I think this is conservative, but important to be conservative in

my mind, especially when you're first getting started. You don't want to get into a bad deal for your first deal, really, anytime. And I think that really comes down to being conservative when you're underwriting and analyzing your deals. Capital expenditures is another one that people really struggle with. I like to put about 8 to 10%. Let's just put 8% here as well. Again, you can make up your own. It depends on what the property is. But what capital expenditure is, is it's like a repair. pairs and maintenance, but it's for the big thing. So, like, think about every 20 to 30 years, you're going to need a new roof, or you're going to need a new boiler or a water heater, or maybe you want to renovate the whole thing. Capital expenditures is basically saving up for those big expenses.

And the reason we keep it separate is, one, because you want to probably keep it in a reserve account, and not take it out and use it for something else. You want to save it so when you have those big expenses, you have some capital there. And two, the IRS actually treats capital expenditures, more favorably. And so you want to keep track of that stuff. So I'm going to put 8% there. So totals for repair maintenance, capital expenditures, about 15% total. You might want to do more. You might want to do less. I don't know. Management fees, I'm going to put at zero because I want to encourage you all to self-manage your first deals. I think it's super important. I know this is a big debate in real estate investing, but I personally believe that self-managing

for the first couple of deals is super important because you learn so much. Once you've done it for a year or two, pass it off to a property manager. You're better off spending your time looking for deals, building systems like we're talking about. But at the beginning, I think it's super important and it will help with your cash flow as well. Next, we have to talk about utilities. And utilities is something personally I like to pass on to the tenants. And that's not possible with every property. It's not possible in every city. But in most places it is, if they're metered separately for electricity and gas and water, you can actually do that. And I highly encourage you to do this. It's better for everyone, right? Like, you don't have to guess what their usage is going to be.

And tenants just pay for what they actually use, which seems like the fairest system to me. And it's not a headache for you as a landlord. So I encourage that. And when I underwrite my deals, knowing that I'm going to do that, I usually put zero for electricity and gas. Water, I'm going to just put 25 percent because you usually have to pay a sewer fee as the owner. HOA, I personally hate HOAs. I know some people are not as afraid of them, but I don't like to invest in deals where there are HOAs. In fact, with my single family or short-term rental that I have, I specifically look for unincorporated towns. There's no HOA. And that's worked out great. So I'm not a huge fan. Some people are, but that's just me. So I'm going to do nothing. And then garbage,

you probably pay for it. Let's just say it's 25 bucks a month. So that's it. That is all we need to do. We have now put in everything we need to do as an investor to analyze a deal. And I know I went quickly, but I got to tell you, if I was doing this by myself and wasn't explaining this, I would have done this in like a third of the time. I probably would do it in four minutes. And that's super important, not because it's a speed game, but when you get a lot of deal flow coming in, which you need to do, you need to be talking to an aging, need to be driving for dollars,

those type of things. You might look at five, 10 deals a week, and you want to be able to do this relatively quickly. So that's what's important here. Okay, let's look at this deal. So if we did this deal, we'd be getting $150 a month, not bad. cash on cash return of 3%, which I know a lot of people are thinking, oh, that's not so good. But personally, I actually target three to five percent cash on cash return as long as it's

in a high appreciation area. Some people look for eight. I know like Brandon looks for eight. So this one might work for me. It might not work for Brandon. But that's actually not the end of this analysis, right? I'm glad this came out right here because one thing I want to stress to you, especially when you're looking at these types of deals, is there is a number at which any property works.

And so what we, with the inputs that we have used so far, it's a 3.1, 2% cash on cash return. For me, I might consider doing that. For you, you might not. That's okay. But you can also do something really cool here on the bigger pockets calculators, which is you can adjust your expectation. So let's say that instead of that $900 a month, which is, I think, pretty conservative, given the comps we looked at, let's just say that it's a thousand bucks a month. That's not so different.

We saw a lot of places that we're getting $1,000 for month. or we'll just do 1980 here. What about now? Okay, now it's a 6.2% return. So this is the time where you go and call a property manager and figure out how do I get, how do I get those $900 rents to $1,000 rents? Because then I can do this deal. Or maybe, you know, we made some just sort of like off the cuff assumptions about this

that if we put in $12,500, we can increase rent. Maybe that actually gets us. We saw a couple places that were $10.50, remember? Maybe we want to get up to the $10.50 range if we increase this. Now we're at 8%. All of a sudden, Brandon's buying this deal. So my point here is, one, the big recalculars are super helpful because you can adjust your expectations.

Maybe instead of raising rent, you just want to lower the purchase price. Maybe you're like, okay, I can live with that cash and cash return, but I actually think this is worth $155 instead of $1.65. Okay. Now it's a 7.5%. If you're trying to do this by hand, this would take forever. Like, I know how to do this by hand, and it would take a long time to make all of these adjustments. This is what's so great about the bigger pockets calculator.

And all of a sudden, I'm really liking this deal, 20% annualized return, which to me is what I really care about. I like cash flow, but I care more about the total annualized return. 20%, sign me up for that. That's not even with a lot of appreciation. So hopefully you can see why this is so helpful. In addition to just cash flow and annualized return, we also get all sorts of information. here about how our expenses break down, what our NOI is, cap rates, super expensive, important stuff. And I think this to me is what I really pay attention to is,

is what the long-term outlook is. I am inherently a long-term buy-and-hold investor. And so when I see things like a five-year, 20% annualized return, sign me up. Honestly, like I just picked a random deal off the internet, but sign me up for a 20% annualized return. Just so you know, the stock market returns about 7, 8, 9% per year. So that is almost triple that. And you're doing this just on a random deal that I just found off the internet. Before we break out of this, I just want to show you a couple more features of the calculators that are super helpful. If you just hit this share button, you can enable share report sharing and post your deal to the bigger pockets forum and get free input and feedback about your deal from investors on bigger pockets completely for free.

So if you're brand new and you're wondering, you want someone to help you check your numbers, check your deal, just go do this. You can hide the address. So no one can go steal it from you, although I don't think people in the bigger pockets community would do that, but you can go do that. You can also generate a PDF, which I think is super, super important here and something that people should be doing, which is generating a PDF so that if you want to go find a partner, right? When I first found a partner, I was like, hey, I have this deal. I think it's going to be good. and people are like, what are you talking about? Like, how much money am I going to make? What is the risk? And if I had this tool, it would have been so much more helpful.

So if you're going to go out and raise money for a deal, bring them this spreadsheet that has all this information about what returns that they can expect, what assumptions you made in your underwriting, it will show them how much money and what type and quality of investment it can make. And that's going to help convince them if it's a good deal to invest in your deal. same thing goes for for financing. If you go to a bank and you want financing, bringing this type of information is going to be helpful to you. The last thing is maybe your significant other is not on board or a partner or someone who you want to convince this type of professional, visually

appealing analysis that breaks down step by step, how good or, you know, hopefully good your deal is, is going to be really helpful to you in your investing career. Okay. So that is the bigger pocket calculator and the third step in the process, right? So we talked about finding deals. We've talked about financing deals. And now we've talked about analyzing deals. Listen, everyone, if you are here, if you can do just those three things, you are going to achieve financial freedom. I promise you. Find deals. Finance them. Analyze them. That's all you need to do. I know it sounds complicated, but that's it. So now let's move on to the dangers to watch out for. Real estate investing, just like any type of investing does come with risks. So let's cover them. So you just are really clear

about what you might be getting yourself into and how to avoid some of the risks if you are able to. Number one, condition and location. This is a common one. People look for really cheap properties and assume that they are going to cash flow and appreciate like expensive properties. I'm sorry, but that is not how it works. You get what you pay for. So if you look for properties in good condition in good locations, they're going to cash flow better than the other ones. They're also going to be less headache in my opinion. I personally look for properties that are in good condition because I don't want to deal with the maintenance.

I don't want to deal with things that are falling apart. I have a full-time job and I just want to find properties that are in good location, good condition. Some people go the other way, but just be aware. Like you can go and buy, you can find great cash flow, great deals in less good locations, less good condition. But it's just more work. So it's just something you have to consider.

And there's a little more risk there. Second, multifamilies are more management. Just the human dynamics of it, there are multiple tenants living in properties. You know, I've had people who refuse to pick up their dogs poop, you know, and that pisses off the rest of the tenants, you know, and you have to sort of play counselor between them. And there's a little bit more work that you have to do than in single family homes. That's just the nature of it.

But I think the benefits outweigh it. But just be aware of that. Third, again, is you got to do your math. Just because it's a multifamily doesn't mean it's going to do well. You have to be able to run those numbers. You have to be able to analyze deals really, really well. As I just showed you, it's not that hard, but you have to be able to do it before you pull the trigger. And lastly, fear.

I mean, to be honest, fear is the biggest risk. And I understand. Like, I understand that there is fear. I was really afraid when I did my first deal. I still get like a little twinge of excitement and fear when I do a deal. But, you know, to me, the fear of investing doesn't even compare close to the fear of working a job that I hate or having financial insecurity for the rest of my life for 40 years. Those are the types of things personally. I am afraid of.

So I think the question is, what are you more afraid of? Are you afraid of getting into a deal and maybe having to figure out how to deal with a tenant or how to fix something that you've never fixed before? or are you afraid of spending your life doing something that you don't care about and insecure about money for the rest of your life? So to me, fear is a risk and it's something that you have to be cognizant of, but hopefully it's something that this type of information, these processes that are proven over and over again can help you overcome. Okay. So I know that if you were new to investing and it can feel like real estate investing is this huge decision and you're jumping off this cliff and there's all this risk and you're doing it. by yourself. But as you become a more experienced investor, you realize that investing is more like this. It's actually more like a hike. And better yet, it is a hike with your friends. Through bigger pockets, through your local community, you find a team. You're doing this together.

And I think most importantly, at least what gives me the most comfort about investing is that you're just following a system. You're using the tools and the processes that millions of people have used before and you're just learning to implement them yourself. And at Bigger Pockets, we're all about building those tools, helping you get the education that you need to go on this journey towards financial freedom that I hope is as motivating to you as it is to me. And this is not just theory. You know, I have walked this path myself. I have followed bigger pockets. I have followed the path of other great investors. And I honestly, I'm not making up stuff. I'm not some genius where I'm like inventing some new business model or something like that.

all I'm doing is learning to, all I've done is learn to implement the systems and processes that other people have done. And since working at bigger pockets over the last six or seven years, I have seen tens of thousands of people do the exact same thing. This is not just theory. It is a proven method that we have all seen done before. But here's what I know. That, you know, regardless of what your reason for being here is, here's what I know. Real estate investing works. And it can help you build. an incredible life, if that's you want to travel, if you want to spend more time with your friends and family, if you want to see your kids grow up, or maybe you just want to get rich,

all of these things I know real estate investing can help with. And our goal at Bigger Pockets, hopefully you've seen this through this webinar, is to help you reach your financial goals through real estate. That's what we are here for. We have tons of tools available to help you realize this. And we've been created some incredible tools in addition to all of our free tools that are designed to help you get there faster and with less pain. So that's what the pro membership is all about. I've given you guys a lot of information to take into account today. But I want to talk to you quickly about Bigger Pockets Pro and the tools that it offers.

It is truly, and I know I work there, but it is something I use almost every single day in my real estate investing. It is an essential, if not probably the most important part of my real estate investing tool, kit. I use the rent estimator. I use the calculators. I use the lease forms all the time. So I just want to talk to you. If you are ready to take action, this is a good option. If you're not, that's okay. If you're not ready to commit to real estate investing yet, don't go pro. But if you are ready to take that next step and to take action on your journey towards financial freedom, pro could be a really good tool for you. So if you bear with me

for a few minutes, let me just explain what it is. Okay, BiggerPockets Pro helps you analyze properties and get to your next deal faster. And the whole point of financial freedom is to get there faster, right? When I first started at Bigger Pockets, I had done one or two deals, I think, and I was sort of on this path for like 30 years to get to a good retirement. Like I was on a path for a good retirement, but I wanted it faster. Now, six years later, I am financially free. And that is what Bigger Pockets and Pro can do for you.

It can literally shave decades off your retirement age. You can do more deals. you do them faster. So let me just go over the features that can actually help you do this. First, we talked a little bit about the calculators. Of course, if you want to analyze deals by hand, you can do that. Go ahead. I'm happy to answer any questions for you about that, but it is time-consuming and, you know, you are prone to mistakes. Our calculators have gone through years of refinement to help you just figure out the most important part of any deals analysis. And if you go pro, you get unlimited access to those deal calculators.

Today, actually, we only talked about the rental one, but there's a flipping calculator, there's a burr calculator. There's a kind of other tools, depending on what strategies you pursue over the course of your investing career, we have something here. And the point here is that these calculators help you buy good deals, but they also help you avoid bad deals, which is equally, if not more important. Next, you get curated articles and video content. I make a lot of this myself.

but out all sorts of data analysis. We license data from some of the top providers in the world. It's super expensive. So most individuals can't get this kind of data by themselves. But as a Bigger Pockets Pro, you get access not only to the data, but my personal analysis of the data that can help you find markets and make really smart decisions. Super, super helpful.

We also have a way of showing people that you mean business. And I know this is like not as quantifiable or tangible, but so many people, Let me just give you an example. So many people reach out to me on Bigger Pockets and ask for help and mentorship. And one of my first questions to them is like, what have you done to actually start? Because a lot of people just want information and they're not ready to take that next step. But if people are actively in the game, I'm happy, happy to help. And the ProBadge is one of the ways to signal to our community at Bigger Pockets that you are serious,

that you are ready to take action and that you are taking action in pursuing your financial goals. People are much more likely to help you if you have some skin in the game and you're actually not just kicking the tires a little bit, seeing if this is right for you, you're actually in the game. If you are kicking the tires, that's totally fine. Don't get me wrong. I'm just saying like the pro badge does sort of differentiate people who are already doing it. Next, we have a lawyer approved lease documents. This is so helpful. When I first got started investing, I was spending thousands of dollars coming up with customized leases, which was so stupid. I mean, now on bigger pockets, all you do to do is click a button and you get all of the legal documents that you need

to be a landlord in any state. We update these every year so they keep up with current laws. It is a super helpful tool. Highly recommend using this. I swapped out all of my old leases for these leases. And if you are investing across multiple states and cities, this could be even more cost beneficial because you're getting them for every single state in the U.S. We also have perks and boot camps. I talked a little bit about boot camps, but they're 12-week programs designed to give you the accountability and information you need to get to your first deal, get to your next deal. The people who are going through this, you should read some of the testimonials.

They are getting grave reviews. Only pros get to go to the boot camp. So that is a really big factor in going pro. If you want to be part of one of our really important boot camps, you have to be part of one of our really important boot camps. You have to be pro. We also have all these perks. So some of the biggest software companies in real estate, NASFraiser, foreclosure.com, air DNA, if you're into short-term rentals, offer discounts to pro. So that can save you hundreds, if not thousands of dollars as well. I mean, all of these features are super helpful. Oh, the rent estimator too. I showed you a

little bit of that, but that is a super valuable tool because finding rent data, it's actually super hard and you know this is kind of my job but finding good accurate rent data is super hard and the rent estimator is a great tool for that but you know all these are features there are individual things that you're going to help you at different points in your real estate investing journey but there is just one overriding reason to consider pro it works i know that sounds simple but it really does work i have seen thousands of people over the course of my time at bigger Pockets use Bigger Pockets Pro to become financially free. Let me read you a testimonial from Aaron, who is a Bigger Pockets Pro member. He says, the Bigger Pockets Calculators are my go-to for analyzing

potential properties. There's no way I could analyze the volume of properties I do without being a pro member. I locked up my first three unit almost a year ago, and I'm now selling it for almost a $70,000 profit that will go towards something larger. The Bigger Pockets Calculators were a huge factor in making sure my numbers were right. That's amazing. That's exactly the power of pro that I hope you take away. Or Patrick says back in June, I intended one of your webinars right afterwards. I signed up for pro. In the next couple of weeks, I analyzed a bunch of deals. Eventually, I found a fourplex. I got it under contract three weeks later after signing up for pro. And a week later closed on another property that was six units. Big thank you to you and the entire team. Final quick tip, sign up for pro. I made my money back at the

closing table. So again, guys, if you're not ready to get into real estate, if you're still trying to figure out if this is right for you, pro is probably not right for you. You know, we don't want to take your money if you're not ready to get investing in real estate. It's simple as that. But if you are ready to get invested right now, you can use this code to save 20% on your pro annual membership. That is an incredible deal. It's going to help you out a lot. And pro, is going to help you get to that financial freedom. So the question is how much is Bigger Pockets Pro? I'm sure you've seen maybe you are, if you're interested in real estate investing,

you've probably seen on Instagram or YouTube, some of these other people who are selling courses or software, and it can literally cost $25,000. I've seen people who have paid some of the big names in real estate up to $100,000. You know what? They're giving you the same exact tools and the same information. They are just charging crazy amounts for it. But I told you at the beginning of this webinar, what Bigger Pockets believes.

And what Bigger Pockets believes is that anyone can be a real estate investor. And not just that anyone can. Everyone should pursue their own financial goals through real estate. That is something we firmly believe and we have priced our tools accordingly. Is it worse because it's cheap? Absolutely not. It is very good software. It is good information that is going to help you.

It's the same thing that anyone else might be giving you. we actually have way more and it's way, way cheaper. Most people don't have rent tools or lease forms. Maybe they have a calculator, but it's probably not as tested and vetted as ours, and ours only cost $390. And as I just said, we're giving you 20% off. So it actually costs $312. It's actually a great deal. And think about what kind of investment $312 is if you get even one deal.

You get one deal, pay for pro for the rest of your life. All you have to do is go to biggerpockets.com slash pro upgrade. You want to get access to the calculators, the rent tools, you get the badge, the lease forms, access to the boot camps. That's all you got to do. But in addition, we're also giving away a ton of cool stuff. Brandon Turner, very generously, is giving away multifamily millionaire, volume one, which is all about small multifamily investing.

So if you want to do this, why not go pro right now and get this free book that is literally all about small multifamily investing? That's a $45 value. We're going to give that to you for free. if you go pro today. We're also going to give you an investing with no or low money down workshop worth $200. David Green and Brandon Turner put this together.

It is so incredibly valuable. This is worth the price of pro and more, but we're giving it away for free. And one of my favorites, this might be the best out of all of the bonuses, finding great deals masterclass. I know a lot of people get hung up on how to find great deals. Brandon puts together an incredible list of ways that you, You can find good deals. This is going to get you a deal if you watch this.

We put the estimated value on this at $1,000. It's worth so much more if you get one deal. But we're giving it away for free. Again, also, boot camp access. Like we said, this is worth tens of thousands of dollars. I mean, most boot camps, most masterminds cost 20 grand, 30 grand, 50 grand. We are giving you access to these boot camps that just cost a couple hundred bucks if you go pro today. So all told, you're getting thousands of dollars in bonus.

Just go to biggerpockets.com slash pro upgrade. Hopefully it's a great tool for you. But you know what? If it's not, we give you your money back. So just go use it. I mean, we're 100% refund. We're not going to ask you any questions. Just email support at biggerpockets.com. If you don't love it, we're going to give you 100% back. It is not a big deal. So just go check it out. If you were ready to get started investing in real estate, this is a tool designed for your next step. So take that next step. If you found out, it's not for you, give you your money back. If it is right for you, good for you. You're going to be on the path for financial freedom.

Nothing would make us happier. Okay, well, let me leave you with some parting words from a very smart man, Jim Rome, who said, if you really want to do something, you'll find a way. If you don't, you'll find an excuse. And I think this is so true about so many people with financial freedom. You say, I can't find a deal. I can't find financing. But that's not true.

Have you actually adopted the systems that other real estate investors for decades? have been using to find deals, to find financing, to analyze deals. Have you done that yet? Because if you haven't, you're just finding an excuse. You will find a way. Everyone I know who commits themselves to real estate investing finds a way. So if I can leave you with any parting wisdom from this webinar, that's it. Start to take action. Go to a meetup. Find an agent. Analyze 50 deals in the next month and get really, really good at it. That's what you need to do. figure out what your next step is. Figure it out and go do it right now.

Right after this webinar, figure out what your next step. Is it finding an agent? Is it going pro? Is it posting in the forums? Go do it right now. All right. For being here, before we go, if you do want the slides, you can get them at biggerpockets.com slash multi slides.

And it is a bonus just for showing up. That costs nothing. Go do that. And again, before we go, if you want pro, ready to take that next step, go to biggerpockets.com slash pro upgrade. Oh, if you are already a pro and you want this bonuses, we're just giving out free stuff today. Just go to biggerpockets.com slash already pro. I think I wrote the wrong URLs there.

But it is biggerpockets.com slash already pro. You do have to be a pro annual just so you know to do that. So if you are pro monthly, you can go to Already Pro and upgrade to Pro Annual and get all the bonuses. But if you are pro annual, you can get all these amazing bonuses that we were just giving out. completely for free. That's what we do here at BiggerPockes. We're always giving away stuff of tremendous value for free because we want all of you to succeed in real estate investing. All right, that is it for me today. I hope you all enjoy this webinar, got something valuable out of it, are ready to take that next step in real estate investing. If I personally can be any more help to you in your journey, please hit me up on

Instagram where I'm at the Data Deli. You can also message me on Bigger Pockets. But good luck to you all. join the bigger pockets community, join this movement of people who are finding financial freedom through bigger pockets. It's going to change your life. It changed mine. Go out there and have some fun and pursue those goals. All right. I'll see you guys soon. All right. So that was my presentation for small multifamily investing. I hope you learned a lot here. As I said at the top, I just really think small multifamily is a great sweet spot for retail investors. You know, people who are trying to pursue financial freedom, maybe move up their retirement date a little bit. It just seems that there's a little bit less competition. You're not facing off against these big private equity firms. And at the

same time, it allows you to scale a bit faster than buying one property at a time. And especially during this time of high interest rates, getting into small multifamily, four units or fewer, allows you to take advantage of residential financing rates, which are often lower than commercial rate. So that is just an additional bonus. If you want to take advantage of the full suite of tools, the pro membership offers, like the calculator and the rent estimator tool that I showed during my presentation, we're giving you 20% off just for watching this YouTube video. Just use the coupon code YT Family 20 when you check out for your pro membership and you'll get 20% off your first year of the pro membership. You can find the link to upgrade below and we also wrote out the coupon there.

So don't forget to use that coupon. Thank you all so much for watching. I really hope you learn something. If you have any questions for me, make sure to put them in the comments below and I'll answer as many as I can. Thanks again, and I'll see you next time. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.