Epic Real Estate Investing - How to Buy a Multifamily Property with No Money (Jorge Abreu) | 1228

Episode Date: August 18, 2022

Learning about the real estate market is a never-ending process. There are so many ways to invest in the market and today you will learn about multifamily properties. Stay tuned and hear some interesting things from Matt’s guest, Jorge Abreu, who is a real state investor for more than 15 years! BUT BEFORE THAT, Matt goes around how the recession could affect the real estate market. Are you ready? Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Will the recession affect real estate? That's a question on many homeowners and real estate investors' minds. You know, rising inflation and interest rates are impacting everything from food and energy, the stock market, and employment. But will it affect real estate? Let's take a look. You ready? Let's go.

Welcome to the all-new, epic real estate investing show. The longest running real estate investing podcast on the interwebs, your source for how housing market updates, creative investing strategies, and everything else you need to retire early. Some audio may be pulled from our weekly videos and may require visual support. To get the full premium experience, check out Epic Real Estate's YouTube channel, epic rei.tv. If you want to make money in real estate, sit tight and stay tuned. If you want to go far, share this with a friend. If you want to go fast, go to r-e-I-Aase.com.

Here's Matt. All right, so by the time we're done, you're going to know how the recession could affect real estate and what there is for homeowners and real estate investors to do about it. So as you likely know, the housing market has experienced over 10 years of exceptional growth, where the median home price jumped an incredible 117% as of March 2022. So this rate of growth has only been outpaced by the home price growth in the decade before the Great Recession of 2007 to 2009, where home values rose. 121%. Home prices continue to rise, having reached an all-time high of $407,600 in May. Despite

signs of slowing demand thanks to rising mortgage rates, it seems nothing is stopping this red-hot market from soaring, but a recession might. No, although we're not technically in a recession as of this recording, several experts believe we are already in one, and the rest believe a recession is inevitable. And the impact of a recession, it can be felt across the entire economy, everywhere from employment to spending to stock market volatility, as we're all witnessing at the moment. With regard to the real estate market, we are seeing a slowing right now, but we've yet to see any sort of correction in the national median sales price. I mean, we're certainly seeing a pullback in the stock market, but historically speaking,

stock market and real estate crashes or even corrections aren't guaranteed to happen during a recession. In fact, falling prices are less common than you may think. Aside from the Great Recession and the recession, and the recession of 1990, home prices have remained steady or even risen during the last five recessions. High mortgage rates can deter people from buying, but as the recesses of the 80s and the 90s showed us when rates reached levels as high as 18%, demand nor prices didn't suffer much at all. It's demand and affordability that has more of an impact on the real estate market than anything else. In 1980, the median income was close to 45% of the median home price. And today, that

number sits right around 30 percent, suggesting real estate is less affordable today. And that's the best number for us to pay attention to if we're going to make any predictions about the housing market. Now, if I were a gambling man, and I am to some degree, I'd say a significant deceleration in the housing market is very likely, despite the surge in wages that we saw in 2021. You see, with wage growth still close to double the pre-pandemic rate, wages are still not keeping pace with inflation, home prices, or rent rates. it's pretty easy to see how the rising interest rates will cut deeply into the average person's affordability to purchase real estate. The trend is already showing that the demand for housing is

cooling, of which should it continue, we should see prices pull back to more affordable levels, but still, maybe not. And here's why. You see, although the demand is decelerating, it hasn't yet been enough to reverse the pricing. The number of closed sales, that's dipped, but the prices have yet to. And certainly we're seeing price reductions of homes that are for sale, but we're not yet seeing a reduction in the prices of homes that have actually sold. That's a big distinction, one that could mislead people about the current health of the real estate market if they overlook that detail. The decelerating demand? This is getting most of the headlines these days, but it's an incomplete picture unless the supply is also considered.

With more than a decade of dramatically reduced home builds, coupled by four straight months of declining builder confidence, the limited housing supply for, sale, that could keep the market propped up for some time. Even if a recession were to last multiple years, that's how out of balance the supply and demand dynamic is. With all that said, though, this time could be different. Because the Federal Reserve usually lowers interest rates during recession to help make the cost of borrowing more affordable and spur more economic activity, particularly within the housing market. But that's not an option today, considering the feds move to aggressively raise rates to combat skyrocketing inflation after the pandemic-related

recession. The continued increase in energy, gas, and food costs is weighing and will continue to weigh on consumers, making housing less and less affordable than it already is for most people. Further, a recession, which is usually marked by high unemployment, could cause people to list their homes as they lose their jobs or relocate for new ones. This could also lead to higher rates of foreclosure, which would add to inventory levels, of which should translate to a reversal in prices. But despite the recent murmurs of the foreclosure tsunami that's headed our way, it's not even wetting our toes at the moment compared to pre-pandemic rates of foreclosure. The experts, the media, the Twitter warriors are all calling for a housing crash, but it's

unlikely that we'll see a massive drop in values like we did during the Great Recession. Rather, certain markets that are overpriced for the median income of the area are more likely to see prices slump for a while, and others are likely to see demand and price growth continue, maybe just at slower rates. So what are home buyers and real estate investors to do amid an imminent recession? Well, it depends. Are you a long-time investor, or are you a speculator trying to time the market? You know, if you're a speculator, it's realistic to think there will be a window of opportunity in the near future to pick up cheaper property. So selling now to buy back in later, whether, you know, six months or 18 months from now, could prove profitable.

But will it be profitable enough for the effort involved and the risk of timing it wrong? Investors and homeowners that are worried about losing value in their real estate should find comfort in just taking a deep breath and shifting to a long-term focus. You know, despite corrections and crashes of the past, real estate values have always rebounded, not to mention exceeding previous highs. As of right this very moment, we're at an all-time high. So what that means is if you purchased real estate a month ago or before, you're in the black, regardless of mortgage rates, inflation, or a pending recession,

whatever pullback we do see in real estate prices will likely be minor and short-lived due to the gross lack of inventory. In fact, if you have a long-term vision for real estate based on the supply and demand dynamic in the market where we have many more people than we have houses, and it will be that way despite a recession for a very long time, there's little logic to justify pulling back on your own investing activity, as it's very likely that real estate investors swim easily through this economic turmoil, while those sitting on the sidelines playing it safe trying to wait this thing out, drown. If you'd like to dive deeper into

what it takes to find off-market real estate deals and purchase them without the need of expensive bank financing, you'll probably like what I've put up for you over at rei-a-aise.com. Take a look, and if you like what you see, just answer a few questions about you and your ambitions and then pick a time for us to hop on the phone. We'll brainstorm some ideas about you winning in real estate during a recession, regardless of how long it may last. Thanks for sitting tight while we pay our light bill. We'll be back right after this. Boarding for flight 246 to Toronto is delayed 50 minutes. What?

Sounds like Ojo time. Play Ojo? Great idea. Feel the fun with all the latest slots in live casino games and with no wagering requirements. What you win is yours to keep. Grooving. Hey, I won! We'll begin when passenger Fisher is done celebrating. 19 plus Ontario only. Please play responsibly. Concerned by your gambling or that if someone close you, call 1-8665-3-1-2-6000 or visitcomex Ontario.ca. Ever hear someone say, I have too much money?

Me neither. Let's get you some more. Back to the show. We're going to talk about how to invest in multifamily properties. We don't do that very much here, but I know a lot of you are interested. I've heard it and I've seen it. And so, you know what? I think it's a good time to start talking about it.

We'll even cover how you can do it with no money. That's my favorite way to do real estate. So we're going to cover that today with our special guest. My guest has been investing in real estate for over 15 years now. He started in single family, small multifamily properties and eventually working his way up to large one out of plus unit multifamily building. And before entering into those large buildings, he had home. sales over 200 single-family properties. He fixed and flipped over 150 also and developed and

completed several new development projects over $20 million in ground up construction. Got a ton of experience. And he also started and built a construction company bringing in over $30 million in yearly revenue and growing. He's now an active and passive, full-time multifamily real estate investor and his company, Elevate Hurley has 5,812 doors. And 32,000,000,000. And 325,000, million dollars under management. So those assets are located throughout Texas, Oklahoma, Georgia, and South Dakota. And now he dedicates a big portion of his time, helping others follow in his foot steps to duplicate his results. So please help me welcome to the show, Mr. Jorge, a brave. All right, welcome to the actual estate investing show. Thank you, Matt. Nice to meet you. I see that we've got a ton of mutual friends, although it's our first time ever meeting. So I wanted to talk to you about that. And I'm curious, as I know a lot of people here that watch this show, you know, they're getting their start or they're looking for ways to get in and get their start. Did you start with multifamily?

You kind of said you started with single family moved your way up, right? And I'm wondering why you did. I went all in on the single family, you know, started doing it full time, not about 15 years ago. And I wanted the scale. I wanted to do very high volume and grow the company. And I kept hitting some brick walls with the single family and doing that. You know, one of them was finding other contractors, and that's why I brought that in-house. And that helped for a bit, but I was only able to do so many.

So when I got reduced to multifamily syndications and kind of blew my mind, because before that, I thought, okay, well, these investors that are buying these apartments, I mean, they're. they must be coming in with millions of dollars. But then when somebody explained to me, where you can syndicate that and you can bring in other investors to come partner with you and purchase properties that way, I will soul. Got it. Cool.

I've had up to 300 single families at one point, a lot less now. Maybe it's kind of the same thing that you had was you're thinking like, why, you've got all these properties, look at a multifamily, just a bunch of properties under one roof. Like it seemed like it was an easy transition. It seemed like it was going to be easy for me. And I got my ass handed to me on my very first deal. So it was more than just a bunch of single family houses under one big roof, right?

And so if I were to do it all over again, I know what I would do. You were going to make that transition all over again. What would you do? My first one wasn't that is either. It was 37 units. And because of that size, we weren't able to have. have the on-site staff. So I had to be buried hands-on.

I learned a lot from the process, but I would start with a hundred plus units. I know it sounds like a lot, especially if you're coming from single family, but just the fact that you can have the on-site staff and with 100 and maybe 80 units, but like I said, about 100 units,

you can support one in and one out. So, you know, somebody for maintenance and then somebody for DC and that's managing. the property. That's definitely one change I would do. Got it. Yeah. So 100 years. Just start with 100 years. You would start bigger. You know, the first one was Australia, you think a hundred would be easier? Or it was just, they're both equally a struggle, so you might have a little big.

Yeah. I mean, it's a lot of the same amount of work. And honestly, I think the smaller units is more work. I see. Yeah, I mean, you've got to manage on the bigger units are managing the staff versus actually managing the property. And there are some property managers that will manage still smaller ones, but it becomes hard to profitops sometimes. Yeah, I learned that part way. Yeah. Also, I learned to, well, what my lesson would have been was,

and I didn't necessarily experience this on single families, but on the multifamily, when it comes to rehab, just come up with your budget and double it is how it came up for me. You got a plan to double it because, We just got one thing after another, one surprise after another and got nickel and dined all the way to we're like, wow, we went right through that budget. We needed a whole brand new one. Yeah, that's all we've gone harder now with the supply chain issue. Yeah, I bet.

I think of the supply chain other the market. What do you see in the real estate market and where are you directing your attention right now? You know, there's still very high demand for housing in general. we're able to increase our rents on most of our property right now with quite a bit of ease. I don't think that's going to last. It's definitely the last that the rate it's been going.

I mean, we've been adding probably 15 to 20% rent increases on our portfolio. So we're definitely not projecting not on any new acquisitions that we're looking at. But the farthest thing has been dealing with the debt and what the market has done to financing these deals. You know, it was before you get really attractive loans. Now they tighten up quite a bit, so we're having to get a little more creative on our capital stacked

and the amount of money we're having to bring to deals is increasing. But I still think there's good deals out there. I think there's going to be more popping up. There's going to be possibly with these adjustable rates. some operators getting into trouble and needing to sell. What are some of the creative ways you are using two funder deals right now since it's have increased? Bringing in private equity, we've got some institutional money that we've got relationships with and using that to kind of fill that gap between the common equity, the debt,

and just putting in that institution in the middle. Got it. So to stay congruent with the show, if someone wanted to get started and multifamily, and they were short on funds, what would be the best approach or the most effective approach for them to take? The thing that surprised me about multifamily, I didn't know that getting into it was it's really, especially the syndication, multi-combing syndications, it's a team game. Like, there's a lot of partnerships going on. Most of our deals, we've got some.

partners in there, whether they brought us the deal or maybe they'd helped us with some of the equity and whatnot. So if you're starting out, I would say, you need to pick what you ready to do at. If it's finding deals, then go out there, find some multi-baby-day deals. And if you bring that to another operator, they can pretty much do everything from there. You know, they can sign a loan. They can, we can, you know, we'll sign a loan. we'll bring the equity, we'll do everything else if you can bring this a deal.

Same thing with if you're really good at raising equity or you think you might have a network that PITDAF into, you can bring that to other operators or syndicators and let them know, hey look, I think I can raise a million dollars or $2 million. How can I help you on a deal? So that would be one way to get a deal without any money, right? right your own name is really no different than than single family when it comes to that right it doesn't take any money to find

a deal and have a deal there's certainly no shortage of funds that are willing to participate in it right not much yeah I mean I wouldn't say I hear a lot of people say you know find a deal and the money will come yeah I say I've been saying it for 15 years okay so

yeah I think to assert that I think to a certain extent, right? You need to plant those scenes and have those relationships, obviously. That's the only part of them in the skip-old. I do see some syndicators kind of skip over that and think, oh, if I get a deal, you know, it's just going to come. Well, I'm not saying it's just going to start falling out of the sky, right? Right. I mean, if you have a deal that makes money, then there's a lot of people out there with money that want to make money that don't have deals, right? And so I got to go share your people of somebody.

But it takes a little bit of time to, at least with us, to feel comfortable with that person and going to a partnership with them. So all I would say is, you know, start cleaning and see before you even have that deal. Well, if I had a deal and we just met, can I just wholesale it to you? Like I wholesale a single family? Not really. I haven't bought one multi-family apartment from a wholesaler. You can't do that? You're saying you can't do that?

You can't, but it's a lot harder with multifamily. the contracts are not simple. The terms that you're agreeing to vary quite a bit. So things would have to align pretty well. And a lot of the times, it's weird. They say they're both sending a deal, but they don't even have it or a contract.

They just, they know somebody that knows somebody. I'm not talking about that guy. I'm talking about the one that does have a contract. So if you do have it of a contract and it's going to make you money, then that's, you could. You could. It could if you set it up right.

Absolutely. Absolutely. Absolutely. So let's talk about what a deal is because really what the caveat there, when I say frequently and I say ad nauseum, that if you find the deal, the money will bind you, all right? But then I always follow it up with if you can't find the money, there's one for one or two reasons. Either you didn't share it with enough people or two is not a deal, right? Correct. Right. I mean, I've never had a deal that was going to make money with that. Had equity or was cash flow nicely that there wasn't money available for it.

I'd have to believe it. You shared it with enough people, even if it wasn't you or anything, that you do a little bit more investing on who you're buying it from. There's plenty of people out there that were ready. I mean, there's people watching on this channel right now. They're like, how do I get it? How do I get it? How do I get in? You got to have a deal and try to make it happen, right? So that's my concept. You have to share it with enough people or it's not a deal.

But I know with multifamily. There are another, more variables that constitute what a deal is. Like for a single family, I just need to get at a low price or I need to have a great cash flow position. I can typically buy the money with no problem. But it's, as you were alluding probably, that it's not that simple with multifamily. So what makes a multifamily property a good deal? Yeah. Yeah.

You took some of the stuff I was going to say right there, you know, single family is pretty straight forward. If it's a good deal or not, they did the comps and they get to buy what you're buying for and what you need to put into it. And it's a deal or it's not. And multifamily, there's so many different variables, like you said, that you can pull on and play with on the high level, make something look like a deal. But once you dig into the underwriting and the assumptions that are being used for those projections, that's where it gets tricky. Because, I mean, you change an exit capery and you can take a horrible deal and make it look like a good deal. you put some rate growth that isn't feasible into your underwriting. It looks like a good deal, but it's not really.

So it's all on the assumptions that are made on the pro forma. And if those are realistic assumptions, and then the returns that it's spitting out are in line with what you're looking for for your investors. So we're usually looking for 16% or above on the IRA. And most of our deals, we're going to protect them five years out. Right. Correct.

Or if a 20% annual return, pretty much double in investors' money in five years is kind of like our standard that we look for. So if a deal is hitting that and the assumptions are realistic, to me, it's a deal. Okay. when the deal comes to you and it looks good on paper, what are some of the more common ways that you discover to be the deal breakers as far as work by those assumptions? Yeah, yeah.

I mentioned some of those, so the exit cap rate, which is what's going to give you your value in itself, is one that's easy to adjust your rank growth, which I also mention your expenses at the same time. Right. Okay. You know, it's not after,

expenses. I think without your debt is going to play a big part. I talked about debt earlier. If you're putting you know, substance on your debt that you just can't get at the market right now, then obviously that doesn't exist. Those are probably the major ones. I mean,

there's a lot of other, you know. Well, then it's not too different than single family. Yeah. Right? Okay. Right. Cool.

We're talking about what constitutes of the deal, but how do we find one? So let's see. I got a couple that there. This is generit namé. Is that French? Oh, it's generic name. Got it.

It's to find multifamily deal. Best locations to buy multifamily deals. So how do you buy your deals? How do we find our deals? Okay, so I'll tell you how we find them, and some of that is our traffic record helps, the fact that we close a lot of deals and people know who we are in the multi-family space. So we get a lot of referrals.

A lot of referral from brokers, a lot of referrals from other investors. That's how we get the bulk of our stuff now. I will tell you at the beginning, we brought over a lot of the stuff from single family. We cold call. That's how we got our first two deals. We sent out letters. We didn't have a lot of success with that,

but I feel like we could have if you really want to argue something and just send it over and over and over. You could maybe have success with that. And then building both relationships is really the main ones. You know, there's other like maybe building relationship some of the vendors in the multi-family space, whether there's company managers, attorneys, they can also look for you some business. Got it.

And they asked about locations as well. Yeah. Are there some locations that are better than other right now? Yeah. I mean, absolutely, you know, especially with the market in softening, definitely want to be in a good, strong market with strong fundamentals that has population growth, that has, a job grow and I know I'm saying really generic stuff but I mean it's I think it's common sense and then landlord for all the states I mean I don't pay any attention to the others just too many variables that I can't control in the other states so we've got a lot of success

kind of I'll give you one tip here so we'll find a city that is experienced a lot of that growth, but it's really hot, right? The market's super hot, hard to find a good deal. Well, we try to go on the outstarts of that city and find the ones that are growing with it,

right from the expansion, and then get a good deal there. And we've got a lot of success with it. Sweet. East of Mississippi has the highest interest turns. What do you think? I would say, I don't know enough.

You know, I would have to look into it. I haven't looked too much into Mississippi. but I would be surprised. This is east of the ridder, right? This is the way I imagine she's saying. Thank you, good question, Jay. But you are in, well, you're in Georgia.

So are your Georgia properties doing better than your Texas properties? We exited that Georgia property and we did pretty darn dear. We doubled our, more than doubled our investors money in one year. So maybe that's right. We got one in South Carolina right now. That's doing really well as well. All right. Jay's got the tips.

Here's another question. This is a good one. It'll likely think about this, but this is probably even a bigger question with multifamily. How do you calculate the repair cost on multifamily without being there? Do you have a quick and dirty math formula or do you have to actually go there? Without being there. No, I definitely am able to guess to meet by looking at pictures.

And I'll tell you this, that the renovations on multi-family is a lot more straightforward than a single family. You know, you're looking at the same. Deferred maintenance-wise, you're looking at your roofs, your exterior walls, your concrete, foundation, glumming, electrical. So, I mean, it's the same stuff over and over and over. As far as a ballpark number and how to look at it roughly, I mean, we usually do somewhere between $5,000 per unit to $10,000 per unit, just depending on what condition it's in, how old it is. And essentially just a lightweight unit. and kind of multiply that across and that can get you pretty close.

For sure, with the interior units and then you just got to throw in some of that. Defermerements on the Stucle and Verminense and then some of the common area stuff and the shared utility stuff like that. Sweet. All right. So what do you most excited about right now heading into this unforeseen territory that we are with this market? I'm excited about the hate saying this. I mean, look, it's, we've been on such an up and up with this market, right? And we've been leaning a lot on our track record and relationships. But now with the market kind of turning, we're actually able to negotiate and really hunt some of these deals.

I just really enjoy that. So kind of looking forward to that. I've seen a lot of buyers drop off, a lot less buyers for some of the properties that we're going after. so I feel like now is the time to really get in at a good, low basis and then experience it on the way back up. Right, right. I'm noticing already in my office too. Well, I've been there. About six, eight weeks ago, just the conversations from sellers were different when they were just like,

my price or that way type conversations that I've experienced for so long. All of them are like, well, talk more about that creating the financing thing you got going on over there. Right? But there was used to be just they'd have like this to me on the phone and not wanting to hear anything. But yeah, I'm seeing that October of opportunity. We did a workshop on Saturday and at nine hours discussing how we're going to pivot in this new market and how the new plans we've got to make and how we're actually going to generate profits. And so there is the seat. Jay's got a question here.

And this is good. I think we kind of, we as real estate investors, when we're talking in publicly, we kind of take for granted. that everyone knows exactly what we're talking about, right? And I think we hear the word by cap rate thrown around all the time. So can you please explain compress cap rates? I'm not sure you mean what that means. So you have to educate me on that. Like Las Vegas is four or five units and bad numbers are trading at six caps.

So let's talk about what a cap rate is first, and then let's answer Jay's question specifically. Yeah. So cap rate is the way the values are determined in mostly family. So in any given market at any given time, you have the going cap rate in that market. And that's telling you essentially what that property from day one, how that property is performing. The higher the cap rate is going to be the lower the price, the lower the cap rate, the higher your price. Because you're going to take your net operating incomes and you're going to divide it by that cap rate.

A compressed cap rate means that they're shrinking and the values are going up. So we were getting a ton of compressed cap rates. People buying deals at 2% or 2 to 3%, which by that deal, that means that it's not really producing much of anything towards cat flow. So hopefully you've got a plan to add value, and that's how then you get a stabilized tap rate that's higher. But especially in the class scene.

So I'm not sure if everybody knows Class A, Class B, Class C, but your class thing is usually your 1980s and older properties, and then 1980 to 2000 is your Class B, and then 2000 to now is the Class A. Not that simple, but something like that. Usually your class simians have a higher cap rate than your class B's, but as the cap rates are getting compressed, the Class C was getting closer to Class B.

So that's why they're saying, you know, these bad neighbor are at a sixth half. I'm sure those are C class properties, maybe even D class properties. So those are the ones, you know, we've really started kind of staying away from now just because we feel like it's going to, it's going to end.

Because the cap rates start going up, call that an expansion. Yeah, I'm not sure if that explains it. Yeah, I may explain it pretty good. I get it. I understand now. So the C and B properties are kind of selling for the same rate, the same price. And you got a pretty much.

Pretty much. Okay. Yeah. So we're doing a lot of our class A now and some class B. We still got some, you know, I'll still go by class C. I just, I really want to get it at a little basis. Is it the neighborhood that makes the, uh, makes it a class C or the condition of the property? Right. So I split it up in two different ways. I consider there's different class of location and different class of property. Because you could have a.

class in poverty in a class B location, which actually is ideal, because I mean you can pour money into that class C and bring it up to a class B tradition-wise. That would be a good situation. Yeah. Cool.

All right. So, yes, explain it. Jay, you invited? Let's connect. I don't know any investor friends here locally. We're marketing here, so I'm trying to do deals here. I've been a long time since I've been able to do deals

on my whole backyard. So I moved here a few years ago. Then we started going on, but it's a different type of market. I have no problem to them in the Midwest. No problem in the South. It's competitive on the coast. In New York, Vegas, especially. Let's see.

She's asking, do you recommend staying out of Vegas? L.A. San Francisco, New York City. L.A. San Francisco, New York City, absolutely. I wouldn't touch it. Vegas is different. Let's touch it. That has the most convicting state-ren that you said yet, why wouldn't you touch it?

I mean, I mentioned land north-northy states that that's where we're focused. LA, San Francisco, New York are not land-northy. You want to stay there's, right? It's statewide rent control now. Yeah. Yeah. So Vegas has been a good market for multi-payman. I personally haven't done anything there.

I would have to dig in a little further, but I do know other investors that are pretty active there. Sweet. All right. Well, cool. So in your business right now, what do you need more? What are you missing? What do I need most? How can we help? Maybe the community can help you. Yeah, I mean, we're always looking for co-GPs or partners that can bring equity to our deals. What's the co-GP? So in a multifamily syndication, yeah. You have general partners and limited partners.

So usually the ones bringing the equity are just limited partners, silent partners, in other words. and then your general partners, which are the active ones running a deal, general partners that can bring some equity to our deals. We've got a lot of deal flow, a lot in our pipeline, so we can always use help on the equity. Okay.

So if someone came in with some equity, what would they expect to receive a return? So we break it down a lot of different responsibilities, so we don't want somebody that's just going to bring equity for SEC that doesn't quite line up. with their rules and regulations. So we would want to see what else they bring to the table. When I say that, you know, it could be bringing maybe some of the earnest money

or being boots on the ground or playing some type of active role in the asset management of the property once we close on it. So it would just bury. I mean, I would say anywhere from 5% of the general partnership to, I don't know, maybe, you know, we would at least like to have 60%, so maybe 40% backs, depending on what they're bringing. 60, 40% what? Ownership, yeah. Okay.

So then your big role, you have a piece of ownership, but then you be responsible for the management and the production and how the property produces, right? Correct. Got it. Okay. Sweet. All right.

So let's make one more question. How would make at least a, 15 cap in Vegas because they're not found. They are created. So, yeah, what are you looking for? Like, what are the big opportunities you look for that you can increase the cap rate? Increasing the cap rate. There's so many ways, you know, to add value into a property. One is renovating the interior units and asking for more rent, you know, bringing the existing right up to the market rent. If it's under it, adding units, if there's any way to, you know, You don't take over, we take over office space before or units that are just being used for storage and put them back online.

We added carports and then funding for the parking spaces, implementing Internet and getting a profitiary from providing that Internet to our residents, lowering expenses, you know, figuring out ways to lower the expense and be more efficient with it. how big of an impact like, um, we're here all the time like vending machines or the laundry room adding storage facilities. Storage, yes.

Storage is a big one. You can figure out of way to our billboards on the roof. Uh, haven't the billboards. I know some properties that do have them. I would say laundry is, you need to make it friendly to your residents and then want them to use it and make sure to clean.

All this time I've been putting in. angry laundry rooms and that's why I lost. What do you mean friendly laundry room? Oh, man, I'm just thinking a lot of the class in problems. Like you don't want to be in the laundry room. It's just it's hot and it's ugly. So making it bit inviting and. Oh, safe.

Comfortable. Inviting, clean. Yeah. All right. Vending machines. Now? I think maybe the. depends on what class, maybe on class A and depending what's up of vending.

I think products you have. I would think parking and storage are probably your big of thing for your buck. Right. Those are pretty good and stuff that that's already getting done. Like I mentioned, internet, you know, your presidents are already paying for internet. You might as well help them. And you actually did it fast for you get the better deals for internet for cheaper than they can get on their own. So what about what clients is that?

Is that a profit center? It is. Woffer and dryers can definitely be. If you have the hookups and then you provide the equipment, having the hookups alone is also another eco. You can charge it just for having the hookups. And then if you supply the equipment, you can also charge for that.

So, yeah, that's a good one. Sweet. Well, all right, it's been a pleasure. If someone wanted to get in touch with you, what would be the best way for them to do that? Yeah, we have a ton of free content and information on our website. is Elevate C-I-G stands for commercial investment group. So elevate-C-I-G.com.

Right. And then if they want to go ahead and email me, Forge or George, J-O-R-T-E at ElevateC-G.com, and I can send them an email with a bunch of free content as well. Sweet. All righty. So, yeah, I've got a huge single-family creative finance audience here, but a lot of them asking questions about multifamily all the time.

And I just have to defer to the experts because, that, boy, you don't want no one with my advice on it. In fact, the advice I get going to help you. I'll probably be just fine. Anyway, all right. I appreciate you. It was nice meeting you. And let's do this again, all right?

Awesome. Thank you back. Yeah, take care. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them.

God loves you, and so do I. Health, peace, blessings, and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know, home, boy, we got the cash flow. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.