Speaker 1: Coach, the energy out there felt different. What changed for
Speaker 1: the team today?
Speaker 2: It was the new game day scratches from the California
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Speaker 3: Everything.
Speaker 2: Those games sent the team's energy through the roof.
Speaker 1: Are you saying it was the off field play that
Speaker 1: made the difference on the field.
Speaker 2: Hey, little play makes your day, and today it made
Speaker 2: the game.
Speaker 4: That's all for now, coach, one more question play the
Speaker 4: new Los Angeles Chargers, San Francisco forty nine ers and
Speaker 4: Los Angeles Rams scratchers from the California Lottery. A little
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Speaker 4: eighteen years or older to purchase late or claim.
Speaker 5: All right, guys, welcome to our special edition of YouTube series.
Speaker 6: This is what we call open enrollment for anybody's not familiar.
Speaker 5: So the open enrollment started but eyl University.
Speaker 6: You know, we tried to take the best.
Speaker 5: Elements of formal education and take away the stuff that's
Speaker 5: not needed, but keep some of the good stuff because
Speaker 5: there are some good structures in place.
Speaker 6: So when going to college, if you ever went to college,
Speaker 6: you know that.
Speaker 7: They have like open every every fall and sometimes in
Speaker 7: in the spring semester to like somebody's joining that's new.
Speaker 6: Yeah.
Speaker 5: So what the open enrollment is for college is that
Speaker 5: it's like once you become a freshman or one year,
Speaker 5: when you become a new student, it's like orientation kind
Speaker 5: of type.
Speaker 7: They bring you into the the auditorium or they bring
Speaker 7: you into the large space and everybody sits down and
Speaker 7: they'll tell you about what the whole college.
Speaker 3: That's what we're doing here, this is what.
Speaker 5: We have, this is all the benefits. This is where
Speaker 5: the swimming pool is. We went to some good schools. Man,
Speaker 5: that's what they that's what they give you. But Julian,
Speaker 5: Julian did we went.
Speaker 7: To stand that's all right, Yeah I didn't.
Speaker 5: So so we said that'd be a dope idea for
Speaker 5: Eyo University. Instead of like giving them a sales pitch
Speaker 5: of why you should join Eyo University once a once
Speaker 5: a month, we'll just give an open class to the
Speaker 5: public and it's like an open insight into what we
Speaker 5: actually do do on Eyo or University on a weekly basis.
Speaker 5: So every week we have a guest professor that comes
Speaker 5: in and teaches a class and some classes on real estate,
Speaker 5: some classes are on stock, some classes on credit, legal structure.
Speaker 5: How to set up an LLC Wills Trust all kinds
Speaker 5: of different stuff. So the last Wednesday of every single
Speaker 5: month we do this and this on our YouTube channel
Speaker 5: so everybody can actually see it that we also put
Speaker 5: it on podcasts outlets everybody can hear it. And the
Speaker 5: theory behind it is that if you have a good product,
Speaker 5: you should be able to show it.
Speaker 6: Shouldn't be like a secretest.
Speaker 5: Like, no, you have to join it, and nobody's ever
Speaker 5: going to know what happens behind these doors except for
Speaker 5: the members.
Speaker 6: It's not like a secret society.
Speaker 3: Yeah, nobody's pulling the trust me.
Speaker 6: So that's what we're doing, and we pick a different
Speaker 6: topic every month.
Speaker 5: So the biggest episode I believe so far this year.
Speaker 7: Right, it's close, it's close. It's almost at ninety thousand.
Speaker 7: Nikki did crazy? I mean we have has been crazy.
Speaker 5: Was Julian Gordon. So episode just came out a few
Speaker 5: weeks ago. But Julian, if you didn't.
Speaker 6: Watch the episode, a watch the episode first and foremost.
Speaker 5: But he talked about real estate but from a multi
Speaker 5: family home perspective. So the episode was really dope, and
Speaker 5: we talked about a lot of different things, whether it's
Speaker 5: FAJ loans two or three K loans.
Speaker 6: Section eight Housing for Landlords.
Speaker 3: Gave a new perspective on gentrification.
Speaker 5: Gentrification, which is, yes, the philosophy of investing, hurdles that
Speaker 5: stop people from investing went through a whole through a
Speaker 5: whole gambit of it. So after that, a lot of
Speaker 5: people have like questions, right that always happens with like
Speaker 5: real popular episodes where they see it, but it's like, well,
Speaker 5: he didn't talk about this, what about this?
Speaker 6: So what if we did this a little different than
Speaker 6: doing this and doing that.
Speaker 5: So we thought it would be a perfect time to
Speaker 5: have a follow up conversation about real estate, multi family home,
Speaker 5: real estate investing to be specific. And that's what we're
Speaker 5: gonna do today. So before I throw it to Julian,
Speaker 5: I'll just give a quick rundown of Eyo University what
Speaker 5: it actually is. So, Eyo University is the community that
Speaker 5: we built with over twelve thousand students, and it really
Speaker 5: is a community because we have a lot of different
Speaker 5: things that We have a movie club, we have a
Speaker 5: book club, We have accountability groups with you know, people
Speaker 5: that actually hold themselves accountable for reaching their goals. We
Speaker 5: have international divisions when the UK right now. So we're
Speaker 5: gonna meet shut out to scoll it. We're going to
Speaker 5: meet up with some international earners from the UK this
Speaker 5: week actually at our networking event, and then maybe something
Speaker 5: to do afterwards as well.
Speaker 6: So that's a real strong situation. We have our.
Speaker 5: Investment arm which we added this year. It was extremely important.
Speaker 5: Shout out to Lawrence. So Lawrence teaches an investment class
Speaker 5: every Monday.
Speaker 7: And every and shout out to Chris has been part
Speaker 7: of the investment group. That's a that's a powerful addition
Speaker 7: in itself.
Speaker 5: Yeah, that one, that's crazy. That's worth the rights of
Speaker 5: a mission right there. And then I do my monthly
Speaker 5: financial planning calls.
Speaker 3: That alone is worth the admission.
Speaker 7: Those are I said, for every single one of them,
Speaker 7: we're talking about two hours of Q and A about
Speaker 7: person I mean a lot of people are talking about
Speaker 7: personal questions, but they kind of relate to the entire group.
Speaker 7: So it's incredible to say I learned by.
Speaker 5: Just being in infinity groups where the earnest actually have
Speaker 5: groups for themselves. And then MG the mortgage guy, his
Speaker 5: Homeboy's Blueprint. He does bi weekly real estate calls.
Speaker 3: Break bread.
Speaker 5: Yeah, so it's so much stuff that's in there. It's
Speaker 5: really it's a hands on education. A lot of time
Speaker 5: people ask like, what's different between that and the podcast
Speaker 5: and the podcast is you're learning from people educating you
Speaker 5: through their experiences and talking y University is a hands
Speaker 5: on experience where you're actually working with other people in
Speaker 5: the community. Zoom calls question and answers things of that nature.
Speaker 5: So that is the main difference. It is fastly growing
Speaker 5: and there's something that we're should be proud of. So
Speaker 5: what we're doing is, since it will be my birthday
Speaker 5: on Sunday seas yes, choice birthday is actually next Thursday,
Speaker 5: but since since it is my birthday on Sunday, we're
Speaker 5: gonna run a flash shale for my birthday from now
Speaker 5: from the time this video comes out to Sunday to
Speaker 5: the end of Sunday because that will be the official
Speaker 5: end of my birthday, so that's like four days pretty much,
Speaker 5: I think. And that will be sixty five percent off
Speaker 5: sixty five percent off the annual tuition. So you can
Speaker 5: go to e y l university dot com take advantage
Speaker 5: of my d Day sale. Not President sal.
Speaker 3: They're gonna be like, what's your cash, We'll get to
Speaker 3: that later.
Speaker 6: We're not doing the President We're not doing the President sale.
Speaker 5: We're doing the chairman sale.
Speaker 3: That I like that. I like that.
Speaker 6: So yeah you can, you can.
Speaker 5: You can go there and then sign up and become
Speaker 5: an earner if you would like. But without further ado.
Speaker 5: The man of the hour, Julian Gordon. Always a pleasure
Speaker 5: when we connect. Invest Fest made Magic happen. Been on
Speaker 5: pretty much every possible corner of the E y L universe.
Speaker 5: And you've been on Ranting Gym, been on Ash Cash
Speaker 5: and Show, in Wealth Wealth Show, You've been on ear
Speaker 5: your Lisia, You've been on invest Fest stage.
Speaker 6: Yeah. Man, now you're on YouTube?
Speaker 3: Is it is? It? Is it chaining day for joy?
Speaker 3: You might have to y we'll get to that later.
Speaker 8: Watching the Kanye movie.
Speaker 3: All the newest member of.
Speaker 5: The You've conquered the e L Universe. But yeah, brother,
Speaker 5: the floor is yours. I know, I'm in for a
Speaker 5: lot of information, a lot of gyms. So we're going
Speaker 5: to go through you know, Julian has to put together presentation.
Speaker 5: We're gonna go through that and then we'll ask them
Speaker 5: some questions, probably at the end and yeah, man, strapping
Speaker 5: your seatbelts block out all the noise and getting ready
Speaker 5: to learn fact.
Speaker 8: That's the goal. That's the goal. And so I just
Speaker 8: want to celebrate you both or building what you built
Speaker 8: and really keying in on the eyl University part. You know,
Speaker 8: we're in this day and age right now where we're
Speaker 8: in this influx between liberal arts education, which was pushed
Speaker 8: on us very hard as children up until now. And
Speaker 8: I think what we're ushering in is what I call
Speaker 8: liberation arts education. So liberal arts education, it will cost you,
Speaker 8: and this is why so many people in our community
Speaker 8: have so much student debt. But liberation arts education is
Speaker 8: what frees you. And so when you compare what we're
Speaker 8: charging for liberation arts education in EYL University in comparison
Speaker 8: to the amount of debt that people are in for
Speaker 8: liberal arts education, learning about Shakespeare, Shakespeare is not helping
Speaker 8: me live and succeed in today's world. It's a fraction
Speaker 8: of the cost. And so but you know a lot
Speaker 8: of people are jaded because of how much they spent
Speaker 8: on liberal arts education that they don't want to invest
Speaker 8: in themselves anymore afterwards. But I know I've spent more
Speaker 8: money investing in myself through courses coaches consultants after college
Speaker 8: than I did even to pay for college. Literally over
Speaker 8: six figures. I've invested in myself. And when I look
Speaker 8: at other people who are successful on the network and
Speaker 8: including yourselves, it's the same exact pattern, Like, we don't
Speaker 8: stop investing in ourselves because we are the asset. That's
Speaker 8: what people don't realize. We're acquiring assets, but we actually
Speaker 8: are the asset. And so to the degree that you
Speaker 8: develop yourself, the more successful you end up becoming in
Speaker 8: the world. So thank you for building out this arm
Speaker 8: and expanding it beyond the podcast and giving me this
Speaker 8: platform to share more about multi family real estate. I
Speaker 8: went through the three hundred and eighty three comments on
Speaker 8: the video and I saw a lot of them there,
Speaker 8: and I was like, I was like, Okay, these are
Speaker 8: the things that we need to cover. Obviously, we can
Speaker 8: only cover so much in hours time. So I prepared
Speaker 8: this presentation to go deeper on multi family real estate investing.
Speaker 8: So this is like part two of the actual podcast.
Speaker 8: All right, cool, So let me share my screen and
Speaker 8: firm when you can see it. Yeah, let's see can
Speaker 8: you see it?
Speaker 3: Yeah? Yeah, we got you, We got it? All right?
Speaker 5: Cool?
Speaker 8: So Rashad title this how to Master Multi Family real
Speaker 8: Estate Investing, and we're going to go in I got
Speaker 8: I'm going to give you the agenda in just a second,
Speaker 8: but just to know that I'm credible, we want to
Speaker 8: show this on the podcast because obviously I wasn't sharing
Speaker 8: a screen or doing a presentation. This is more formal.
Speaker 8: This is my actual real estate portfolio at this moment
Speaker 8: in time. It's thirty eight apartments, fifteen point nine percent
Speaker 8: cash on cash return, one point three million dollars in appreciation,
Speaker 8: thirty seven thousand dollars a monthly recurring revenue and rents,
Speaker 8: and five point two million dollars in value. My journey
Speaker 8: started in Brooklyn, New York, with this triplex here in
Speaker 8: May of twenty thirteen. And since that moment in time,
Speaker 8: I've not paid a housing expense, not a mortgage, not
Speaker 8: a rent payment, nothing, no utilities, all because of this
Speaker 8: one single decision to buy a multipaymer real estate. And
Speaker 8: like I always say, I went from paying expensive rent
Speaker 8: in Brooklyn to being paid expensive rent in Brooklyn off
Speaker 8: of this one single decision. And so from there, obviously
Speaker 8: Brooklyn is the prices in Brooklyn are pretty crazy so
Speaker 8: I started investing from a distance. So I found the
Speaker 8: New Orleans market and wanted to be a contribution there.
Speaker 8: I also invested in my hometown from California while living
Speaker 8: in Brooklyn, and I continue to expand my portfolio so
Speaker 8: much in New Orleans that I actually moved there for
Speaker 8: a period of time and then expanded it even further
Speaker 8: into Baton Ruge. So this is my real estate portfolio
Speaker 8: at this moment in time. This is just my private portfolio.
Speaker 8: I'm also the lead investor in for black real estate funds,
Speaker 8: and so when you add up my proportional ownership of
Speaker 8: those funds as well, I'm moving towards one hundred doors
Speaker 8: very soon, and that's going to be one of our
Speaker 8: metrics at EYL is one hundred What did you say,
Speaker 8: one hundred doors?
Speaker 3: What was it? Oh no, No, that's a new club.
Speaker 6: That's a new clubs a thousand ships, that's.
Speaker 7: It, you know, like Jay at the forty forty club,
Speaker 7: and so yeah, yeah, yeah, well yeah, we have to
Speaker 7: create our own situation.
Speaker 8: Exactly exactly, so it doesn't all all have to be private.
Speaker 8: You can actually acquire doors proportionally through real estate funds
Speaker 8: like the buy back Baton Ruge Fund that me and
Speaker 8: my brother Anthony Kimball developed out in Baton Ruge, so
Speaker 8: Keevin Wade. So while I'm proud of my own personal portfolio,
Speaker 8: what I'm even more proud about is the students that
Speaker 8: I've helped accomplish this same exact goal and closing on
Speaker 8: their first multi family home. These are to my students
Speaker 8: who have closed on properties all over the country, and
Speaker 8: I couldn't have done this without MG the Mortgage Guy.
Speaker 8: I actually call him MG the Mortgage God because the
Speaker 8: terms that he brings to the table, nobody can mess
Speaker 8: with him. And so he has literally been responsible for
Speaker 8: helping half of my students close on their properties all
Speaker 8: across the country, and so our collaboration is getting stronger.
Speaker 8: We wish he could be here, but I think he's
Speaker 8: on his flight to London as we speak, and so
Speaker 8: as of this moment in time, actually I need to
Speaker 8: update this. Excuse me. As of this moment in time,
Speaker 8: Multipi Family Movement has helped two hundred and seventy five
Speaker 8: people close on multi family homes all across the country.
Speaker 8: That puts US at about sixty eight thousand if the
Speaker 8: average price is two hundred and fifty thousand. That puts
Speaker 8: us at about sixty eight thousand, but I think the
Speaker 8: average price is more around three hundred, So that's more
Speaker 8: like eighty two million dollars worth a real estate acquire
Speaker 8: That's hold.
Speaker 7: Let's just take a seat them to acknowledge that. That's incredible,
Speaker 7: my brother, congratulations on that and shout out to MG.
Speaker 8: Appreciate that man. And this is just in two and
Speaker 8: a half years, and Matt and I intend to double
Speaker 8: that over the course of the next twelve months, and
Speaker 8: so eighty two million dollars in real estate. After that,
Speaker 8: we actually are going for a billion dollars in real
Speaker 8: estate acquired by black folks, by earners, by multi family
Speaker 8: movement members. And so this is this is our goal.
Speaker 8: And we've learned a lot in the past two and
Speaker 8: a half years and we're just getting started. So this
Speaker 8: is a long, long journey. Real estate is a long
Speaker 8: term game, and so this is what we're focused on.
Speaker 8: And so that's ten million dollars in average rents that
Speaker 8: our members are collecting, and after principal interest taxes, insurance capecs,
Speaker 8: or payers of a vacancy rate, that's about three million
Speaker 8: dollars coming into our community every single month as positive
Speaker 8: cash flow for the rest of their lives as long
Speaker 8: as they hold these assets. So this is what we're
Speaker 8: really proud of, and this is the larger mission and
Speaker 8: vision beyond our own private portfolios. And so a lot
Speaker 8: of people think that financing is the part that makes
Speaker 8: acquiring real estate hard, and that's actually the easiest part.
Speaker 8: It's actually finding the deals, and we're going to go
Speaker 8: into that a little bit deeper on this particular presentation.
Speaker 8: But for those who believe that financing is an issue,
Speaker 8: Matt and I put together this list of one hundred
Speaker 8: and forty seven down payment assistant programs organized by state
Speaker 8: that you can go grab and get. You literally just
Speaker 8: look at your state and see if there's any down
Speaker 8: payment assistant programs there. Some of them are five thousand
Speaker 8: dollars grants. Some of them are if you take a
Speaker 8: landlord class, they'll roll your closing costs into your loan.
Speaker 8: And so you can text get free to eight four
Speaker 8: four nine oh one three two three nine. That's get
Speaker 8: free to eight four four nine oh one three two
Speaker 8: three nine. That's they earn your leisure texting messaging system
Speaker 8: and we'll send you that list of down payment assistant programs,
Speaker 8: just so that we can get financing off the table,
Speaker 8: especially when we're talking about financing your first property. Once
Speaker 8: you're getting into rehabs and new construction and things of
Speaker 8: that nature, there's different forms of financing, but for that
Speaker 8: first property, there are all kinds of programs out there
Speaker 8: to support you. Of course, in the podcast, we talked
Speaker 8: about NAKA FHA and of course the v A loan.
Speaker 8: All right, So with that aside, here's what I'm going
Speaker 8: to cover in this particular presentation. One, how to master
Speaker 8: multifamily real Estate. We're going to go over real estate
Speaker 8: real talk. I needed you very familiar with the vocabulary
Speaker 8: that we use as real estate investors. If you don't
Speaker 8: understand this vocabulary and these equations, you're going to be lost.
Speaker 8: And so this is different than mine a single family home,
Speaker 8: and there are key numbers, equations and vocabulary wories that
Speaker 8: you need to understand if you're going to be a
Speaker 8: real estate investor. The next is your real estate rolodex.
Speaker 8: We're going to talk about all the relationships.
Speaker 3: That you need.
Speaker 8: We don't find deals on truly a Zilo or redfin.
Speaker 8: We find deals through relationship they're called off market deals
Speaker 8: or pocket deals. And so my last eight acquisitions have
Speaker 8: never hit truly a ZILO redfin or MLS right. And
Speaker 8: we don't want that because when many people are seeing
Speaker 8: a property right, and this property is listed on the website,
Speaker 8: that increases demand. And when demand goes up, what happens
Speaker 8: to price? Price goes up? Right, And then we're actually
Speaker 8: want to do an actual deal analysis. I know on
Speaker 8: the podcast I talked about the twenty three numbers that
Speaker 8: you need to know to evaluate a real estate deal.
Speaker 8: We're actually going to walk through a deal analysis on
Speaker 8: a property that I just found in New Orleans. All right,
Speaker 8: So that's the framework for our conversation today. So real
Speaker 8: estate real talk. There are some keywords for keywords that
Speaker 8: I need you to understand. The vocabulary list is a
Speaker 8: lot longer than this, but I need you to understand
Speaker 8: what I mean by multifamily. I need you to understand
Speaker 8: what rent mortgage freedom is, because that's the goal. I
Speaker 8: want you to understand what it means to buy right,
Speaker 8: not just go buy anything. And then I need you
Speaker 8: to understand what cash on cash return is and how
Speaker 8: to run the numbers. Now, there are many different words
Speaker 8: in multifamily real estate, valuable vocabulary is what we call it,
Speaker 8: and we won't be able to go into all of
Speaker 8: this at this moment in time, but if you just
Speaker 8: look at it, ARV, back end, DTI, A refly or
Speaker 8: another word for refis rebuy, because that's really what you're doing,
Speaker 8: cash on, cash return, cash out, refly capex CMA compared
Speaker 8: toive market analysis, debt service coverage ratio, DTI, front end, DTI,
Speaker 8: he loock LTV, op x PM my repair reserves, tax deduction,
Speaker 8: tax reduction or tax savings, what a point means when
Speaker 8: you're getting finance and vacancy rate. These are some of
Speaker 8: the key vocabulary words that you need to be aware of.
Speaker 8: We won't be able to cover all of these. This
Speaker 8: is that's just a webinar in and of itself, So
Speaker 8: we're just going to lock in on the four that
Speaker 8: I mentioned earlier. Okay, so when I'm talking about MULTICAMMI
Speaker 8: real estate, what exactly am I talking about. I'm not
Speaker 8: talking about those sixty unit building that you see when
Speaker 8: you drive down the freeway, as some of you are
Speaker 8: actually renting right now. I'm talking about two family, three family,
Speaker 8: or four family homes Okay, these are also known as duplexes, triplexis,
Speaker 8: or four plexes. There's only two point six million of
Speaker 8: them in the entire United States, and then we make
Speaker 8: up about eighteen percent of the entire rental supply. Okay,
Speaker 8: so we're looking for a very specific, rare asset. But
Speaker 8: this is one of the most powerful assets that you
Speaker 8: can have in your family's name. Now, what's powerful about
Speaker 8: two family, three family, and four family homes is that
Speaker 8: they fall under the same residential guidelines as single family
Speaker 8: homes when it comes to financing. So the same exact
Speaker 8: lender that you would go to for a single family
Speaker 8: home is the same exact lender you would go to
Speaker 8: for a two family, three family, or four family home.
Speaker 8: Same thirty year fixed rate, same interest rate. Right, And
Speaker 8: so that's what's powerful about this particular asset class. And
Speaker 8: so we're looking for something that's very specific and very
Speaker 8: rare when it comes to quantity. Right now, if you
Speaker 8: buy a triplex or a four plex in the right way,
Speaker 8: you can typically achieve rent mortgage freedom with your first purchase.
Speaker 8: If you buy duplex, you won't achieve rent mortage freedom.
Speaker 8: And I'm going to explain what written for mortgage freedom
Speaker 8: means in just a second, because while you live in
Speaker 8: one side for free, the other side, the rents from
Speaker 8: the other side won't cover principal interest, taxes, insurance CAPEX,
Speaker 8: or pairs of vacancy rate. So you'll still have money
Speaker 8: coming out of your pocket even though you acquire a
Speaker 8: multi family. But if you buy a triplex like I
Speaker 8: did in Brooklyn, or a four plex, you can typically
Speaker 8: achieve wrinten mortgage freedom and get rid of your house
Speaker 8: expense forever right through your first acquisition. And so that's
Speaker 8: why this play is so important. Now I've only found
Speaker 8: free ways that you can get rid of your house
Speaker 8: and expense forever. I don't care how high your income is.
Speaker 8: I don't care where you work, I don't care how
Speaker 8: much you saved. There's only three ways to get rid
Speaker 8: of your house and expense forever, and that is to
Speaker 8: live in a tent, go to jail because jail is free.
Speaker 8: You're not paying anything while you're there except your your
Speaker 8: life is wasting a way. And then number three is
Speaker 8: buy multi family real estate. These are the only three
Speaker 8: ways that I know that you can actually live for
Speaker 8: free forever. Some people say, well, Julian if you die.
Speaker 8: Even if you die, you got to play for a
Speaker 8: plot of land, right, your burial applot. So even if
Speaker 8: you die, you have to pay for real estate. And
Speaker 8: so I've only found one way that will get rid
Speaker 8: of your house and expense forever, and that is multifamily
Speaker 8: real estate, all right, And so that is the goal
Speaker 8: because if we can do this one thing, it'll literally
Speaker 8: change the financial trajectory of your life. So what is
Speaker 8: rent and mortgage freedom? This is our second vocabulary word. Right,
Speaker 8: we talked about what multi family means in this conversation.
Speaker 8: Now what is rent mortar freedom? Rent and mortgage freedom
Speaker 8: is a result of buying multi family real estate, which
Speaker 8: has cash flow that eliminates your house and expense forever.
Speaker 3: Right.
Speaker 8: So for mo most Americans, their housing expense takes up
Speaker 8: about one third of the money that comes into their household,
Speaker 8: so that's thirty five percent of their income. So if
Speaker 8: you have three thousand dollars a month coming in from
Speaker 8: your job, about one thousand dollars a month is going
Speaker 8: out towards housing. And we know that rents are continuing
Speaker 8: to rise. So imagine, with one single decision, literally one
Speaker 8: single decision, you get rid of your house and expense forever.
Speaker 8: I'm not asking you to pick the right stock, I'm
Speaker 8: not asking you to pick the right cryptocurrency, I'm not
Speaker 8: asking you to buy the right NFT. All I'm asking
Speaker 8: you to do is one thing, which is to buy
Speaker 8: a multi family home. If we can do that and
Speaker 8: get rid of your housing expense forever and get you
Speaker 8: to wrint mortgage freedom, it will literally free up everything
Speaker 8: for you. This one thing, single thing, will do that.
Speaker 8: It'll allow you to travel more, It'll allow you to
Speaker 8: save more, it allow you to invest more, it allows
Speaker 8: you to retire early. If we just do this one thing,
Speaker 8: everything in your life will change.
Speaker 3: Right.
Speaker 8: And why this is so powerful because everybody thinks that
Speaker 8: million dollars becoming a millionaire is the target. This is
Speaker 8: so powerful because literally try and rashad if we get
Speaker 8: rid of a one thousand dollars housing expence, whether that's
Speaker 8: rent or mortgage interest, right, and we invested one thousand
Speaker 8: dollars every single month at six percent annually, which is
Speaker 8: very conservative. One thousand dollars a month invested at six
Speaker 8: percent annually for thirty years is one million, fifteen five
Speaker 8: hundred and ninety dollars. So This is actually a guaranteed
Speaker 8: pathway for you to become a cash based millionaire, not
Speaker 8: just an equity millionaire, meaning that there's equity in your home,
Speaker 8: literally to have over a million dollars in cash if
Speaker 8: we can literally just get rid of this housing expence forever.
Speaker 8: And so that is the focus I tell people all
Speaker 8: the time. Real estate is not a get rich quick scheme, right,
Speaker 8: This is a get rich guaranteed system over time. And
Speaker 8: it has been proven. It's then the number one subscription
Speaker 8: model in the entire world, better than Netflix, better than
Speaker 8: Amazon Prime. It has been here since the beginning of time.
Speaker 8: When you think about when you think about the feudal system,
Speaker 8: and the feudal system, kings gave land to lords and
Speaker 8: exchange for loyalty. Kings gave land to lords and exchange
Speaker 8: for loyalty. So where do you think the word landlord
Speaker 8: came from. It came from the feudal system, and that
Speaker 8: was a long time ago. And so this business model
Speaker 8: has been proven. I can't guarantee that Apple, Tesla or
Speaker 8: Google are going to be around a thousand years from now,
Speaker 8: but as long as there are human beings on the
Speaker 8: face of this planet, and we continue to have population growth,
Speaker 8: multi families. Real estate will still be here and it
Speaker 8: will be more valuable than ever. Even if people go
Speaker 8: decide to live in the metaverse. Guess what, your body,
Speaker 8: Your physical body will still need a place to live, right,
Speaker 8: So it doesn't matter what happens. This piece of real
Speaker 8: estate is powerful. And when you think about it, Jeff Bezos,
Speaker 8: Bill Gates, what are they buying right now? They are
Speaker 8: two of the greatest land owners in the entire country.
Speaker 8: God's first gift to man before life was land, and
Speaker 8: so there is something valuable about land. And this is
Speaker 8: why we as what I call children of God, have
Speaker 8: to come and reclaim it. So the next vocabulary word
Speaker 8: that you need to understand, because we don't just want
Speaker 8: you to go out there after this webinar and just
Speaker 8: start buying real estate, because you can buy wrong and
Speaker 8: you can get caught up and all of a sudden
Speaker 8: you put your proud post in the Facebook group, Hey
Speaker 8: I bought, and then one year later you don't have
Speaker 8: the home because you bought wrong right, And so we
Speaker 8: want to make sure that you buy right, meaning that
Speaker 8: this asset stays in your family for the rest of
Speaker 8: your life. And so I want to give you the
Speaker 8: criteria for criteria for what it means to buy right right.
Speaker 8: So buy and right means that one, there's at least
Speaker 8: twelve percent cash on cash return right. And this is important,
Speaker 8: This is really important that you know how to calculate that.
Speaker 8: Most people do not know how to calculate that, even
Speaker 8: real estate agents. For those of you who have passed
Speaker 8: on your decision making to an empowered real estate agent
Speaker 8: to make decisions for you, my question to you is,
Speaker 8: why would you allow a real estate agent who does
Speaker 8: not have the wealth that you desire to make the
Speaker 8: biggest financial decision of your life. Why would you allow
Speaker 8: a real estate agent who does not have the wealth
Speaker 8: that you desire and does not own any multi family
Speaker 8: real estate to make the biggest financial decision of your life.
Speaker 8: You cannot be pushed around persuaded. Oh yeah, well, you
Speaker 8: know the market is. You got to move quick, You
Speaker 8: got to make aggressive offer. Okay, what's your balance sheet?
Speaker 8: Ask your real estate what their balance sheet is, Ask
Speaker 8: them how many doors if they own? Right, You are
Speaker 8: responsible for this decision and it is up to you
Speaker 8: to evaluate the deal, and then it's up to your
Speaker 8: real estate agent to execute the deal. But you have
Speaker 8: to be the most educated in this process. Cash on
Speaker 8: cash return, the most important number in multicamming real estate
Speaker 8: investing is not on the real estate exam family. It
Speaker 8: is not on the realist. Not teach this, okay. Real
Speaker 8: estate agents come to me to learn about multicammy real
Speaker 8: estate investing so that they can one build their own
Speaker 8: portfolio and to serve investor clients like myself who buy
Speaker 8: multiple properties every year.
Speaker 3: Right.
Speaker 8: The next criteria for buying right means that the cash
Speaker 8: flow is at least at least three hundred dollars per
Speaker 8: duor if it's any less than that, then it's really
Speaker 8: not worth it. So three hundred dollars per dor if
Speaker 8: you buy a four plex, that's twelve hundred dollars in
Speaker 8: cash flow from a particular property. Now that can cover
Speaker 8: your two car notes, that can that can cover a mortgage,
Speaker 8: that can cover a cell phone, build, restaurant, groceries, insurances
Speaker 8: that you have to pay. We want it to have
Speaker 8: significant impact and eliminate your other expenses that are leaving
Speaker 8: your household every single month. Right. The next criteria for
Speaker 8: buying right means that there's immediate equity. Immediate equity means
Speaker 8: that you locked in the contract at three hundred one
Speaker 8: thousand dollars, but it appraises at three hundred and twenty
Speaker 8: five thousand dollars. That means you're stepping into twenty five
Speaker 8: thousand dollars of equity immediately right out the gates. And
Speaker 8: then the fourth criteria is that there's definite appreciation potential.
Speaker 8: Definite appreciation potential meaning that based on the thirty three
Speaker 8: signs of gentrification, we cover some of them in the podcast,
Speaker 8: so go back and watch that based on the thirty
Speaker 8: three signs of gentrification, that you've found a property that
Speaker 8: is in a neighborhood with ten to fifteen signs of
Speaker 8: gentrification and it's moving towards thirty three. You never want
Speaker 8: to buy a neighborhood that has all thirty three signs
Speaker 8: of gentrification because now you're buying at the peak. If
Speaker 8: you buy a neighborhood that has ten to fifteen and
Speaker 8: is moving upward, then you know you're going to benefit
Speaker 8: from that appreciation. So when I bought in Brooklyn, New York,
Speaker 8: right and bedsty it was called do or Die bed Stock.
Speaker 8: It was called Crookland and Crookland or do or Die
Speaker 8: bed Stit had ten to fifteen signs of gentrification, and
Speaker 8: I saw what was happening, and it was coming.
Speaker 6: What did jay Z say?
Speaker 8: I should have bought Dumbo? Dumbo?
Speaker 6: Right?
Speaker 8: I saw the wave coming from Manhattan to Dumbo, to
Speaker 8: Fort Greene to Stuyvesant Heights to Bedstock. And now that
Speaker 8: wave is all the way out in East New York,
Speaker 8: going towards JFK. And what has happened to my equity
Speaker 8: as a result of me getting to ride that wave?
Speaker 8: My equity on that property has gone up by four
Speaker 8: hundred thousand dollars in eight years. That's fifty thousand dollars
Speaker 8: a year in appreciation for me doing nothing. Some of
Speaker 8: you at this moment in time, I don't even earn
Speaker 8: fifty thousand dollars a year. I earned that passively, just
Speaker 8: because I bought right. That's why it's really important for
Speaker 8: you to be able to understand and see what the
Speaker 8: thirty three signs of gentrification are, identify them, and find
Speaker 8: properties that are in that zone of ten to fifteen
Speaker 8: with upward trend. All right, So I'm going to give
Speaker 8: you an example of another property that I bought bought
Speaker 8: right because I have all the appraisals and everything right
Speaker 8: here for you as evidence. So I bought this property
Speaker 8: in Oakland, California, in my hometown, in November twenty seventeen,
Speaker 8: for four hundred and eighty thousand dollars. Okay, it immediately
Speaker 8: appraised while under contract. A appraisal was required by the
Speaker 8: lender and it a praised at five hundred and five
Speaker 8: thousand dollars. What that means is that the seller's agent
Speaker 8: made a mistake. The sellers agent didn't do their due
Speaker 8: diligence and as a result, they underpriced the property. Right,
Speaker 8: so I'm stepping into twenty five thousand dollars in equity
Speaker 8: right out to the gates. So I'm already up. I've
Speaker 8: already won. Okay, it's not cash, right, it's equity and
Speaker 8: the property, but my net worth has increased. So from there,
Speaker 8: this property, because of the great rents in Oakland, it
Speaker 8: definitely appreciate. I mean cash flows at over twelve percent.
Speaker 8: And then twenty seven months later, when I went to
Speaker 8: refinance as the interest rates dropped in February twenty twenty one,
Speaker 8: the property appraised at seven hundred and ten thousand dollars.
Speaker 8: So because I bought right, I'm up two hundred and
Speaker 8: thirty thousand dollars in twenty seven months with no major repairs.
Speaker 8: The only prepair we had to do in Oakland was
Speaker 8: a sewer lateral because that was required, and that was
Speaker 8: about six thousand dollars that was required by the new
Speaker 8: buyer of the property. And that's for all the properties
Speaker 8: bought in Oakland in the Bay Area during a certain
Speaker 8: time period. Okay, so that's a major win. That's almost
Speaker 8: a quarter million dollars in appreciation in twenty seven months. Okay,
Speaker 8: So this is the power of buying right. And something
Speaker 8: about this property. Guess what, y'all, I've never set foot
Speaker 8: innes this property. I have never set footn this property.
Speaker 8: I bought it from a distance while living in Brooklyn,
Speaker 8: New York. I knew the neighborhood because I was from there,
Speaker 8: and I knew the numbers, and I had a great
Speaker 8: agent on the ground. So your money does not have
Speaker 8: to work in the same city as you do. When
Speaker 8: you learn real estate investing in a way that I
Speaker 8: teach it, your money does not have to work in
Speaker 8: the same city as you do. Some you own Amazon
Speaker 8: stock and never been to Seattle. Some you own ninety
Speaker 8: stock never been to Oregon. Right. So the same thing
Speaker 8: applies with real estate. When you understand what I'm teaching you, right,
Speaker 8: When you understand the real estate real talk, when you
Speaker 8: understand how to build a real estate roll decks, and
Speaker 8: when you understand how to run the numbers, you can
Speaker 8: invest anywhere without actually even going there. And so that's
Speaker 8: what opens the world for you, because a lot of
Speaker 8: people will limit their real estate search just what they
Speaker 8: see and what they drive by on a daily basis. Right,
Speaker 8: That's how I ended up expanding my portfolio in New Orleans, smaller,
Speaker 8: less expensive, less sexy market than Brooklyn. Right, I was
Speaker 8: comfortable with investing from a distance. If I was to
Speaker 8: invest in Brooklyn and try to build my portfolio there,
Speaker 8: saving up twenty five percent for a non onno occupied
Speaker 8: down payment on a million dollar property would have been
Speaker 8: required a quarter million dollars in cash, and that would
Speaker 8: have taken quite some time to save.
Speaker 3: Right.
Speaker 8: So those are some of the key vocabulary words the
Speaker 8: real talk that you need to know and it needs
Speaker 8: to be like it needs to become your new language.
Speaker 8: I know this is a secondary language for some of you,
Speaker 8: but you have to develop this language so that you
Speaker 8: can navigate this space. Right, anytime you're going into a
Speaker 8: new country, you have to learn the language. Rashad and
Speaker 8: Troy obviously they're in England, They're in London, so they
Speaker 8: speak English. But if they were to go to Paris, right,
Speaker 8: they would have to learn a little bit of French
Speaker 8: so that they could navigate that space properly. The same
Speaker 8: thing is with real estate investing, right. So those are
Speaker 8: our foundational pieces, right. The next thing we want to
Speaker 8: get into is your real estate rolodecks. A lot of
Speaker 8: people ask me all the time, Julian, where do you
Speaker 8: go to find multifamily real estate deals? What websites? And
Speaker 8: I look at them and I tell them I don't
Speaker 8: go to websites. As I said earlier, my last eight
Speaker 8: deals did not come from any website. They came from
Speaker 8: human beings. So a lot of you have the hookup
Speaker 8: at a store like foot Locker or Best Buyer, grocery
Speaker 8: store or some restaurant. How do you have that hookup?
Speaker 8: You got the hookup because somebody you know works there. Right,
Speaker 8: You've got the hookup through an individual, through a human being,
Speaker 8: and real estate operates in the same exact way we
Speaker 8: don't go to truly a zilo.
Speaker 3: Right.
Speaker 8: That's where multifamily real estate deals go to die. Any
Speaker 8: multi family real estate deal you see, in fact, I
Speaker 8: don't want to call it a deal. You have to
Speaker 8: understand the difference between a listing and a deal. Okay,
Speaker 8: everything that comes through the MLS are real estate listings.
Speaker 8: We are not looking for real estate listings. We are
Speaker 8: looking for real estate deals, all right, that's all we
Speaker 8: are looking for. Anybody can put out a listing and
Speaker 8: your agent, you're uneducated agent is going to say, hey,
Speaker 8: I found a real estate deal that you should look at.
Speaker 8: How this is what you should do? Ask them, how
Speaker 8: do you know what's the deal? And they won't be
Speaker 8: able to answer the question, Well, it just came a
Speaker 8: market and it looks like it's a good price and
Speaker 8: it's a great neighborhood. No, that does not make something
Speaker 8: a deal. And so when we go through running the
Speaker 8: numbers and we know the criteria for what it means
Speaker 8: to buy right, you're going to understand the difference between
Speaker 8: a real estate listing and a real estate deal. You
Speaker 8: do not want to buy a real estate listing in
Speaker 8: this market because you will be stuck because Guess what
Speaker 8: happens when interest rates go up. Guess what happens to
Speaker 8: the property values. Property values go down because less people
Speaker 8: want to buy with those higher interest rates. And so
Speaker 8: if you buy a listing in this market, you're going
Speaker 8: to be underwater as soon as interest rates go up.
Speaker 8: And you don't control interest rates, right, And so I
Speaker 8: want you to be very careful to make sure that
Speaker 8: you buy right in this particular market. In fact, Rihannomy
Speaker 8: did some research and they said that mass marketed listings
Speaker 8: regularly commanded thirty percent premium to off market deals. Mass
Speaker 8: marketed listings meaning listings that go on websites, command a
Speaker 8: thirty percent premium to off market deals. Right. So moving forward,
Speaker 8: what is really important for you to know is is
Speaker 8: what I call the four eyes of real estate, the
Speaker 8: four eyes of real estate, right, and that is having
Speaker 8: eyes for the market. Right. Having eyes for the market,
Speaker 8: how do you know if a market is expanding or contracting? Right,
Speaker 8: then you have to have eyes for the neighborhood. Right,
Speaker 8: This is where the thirty three signs of gentrification come from.
Speaker 8: So eyes for the market means that what do you
Speaker 8: see with your eyes when you walk into a market
Speaker 8: and what data are you looking for to know if
Speaker 8: that market is expanding and contracting? Then eyes for the
Speaker 8: neighborhood means what are the thirty three signs of gentrification?
Speaker 3: Right?
Speaker 8: What do you see? Do you see yoga studios? Do
Speaker 8: you see coffee shops? Do you see a Whole Foods?
Speaker 8: You see Trader Joe's, Do you see bike lanes? You
Speaker 8: see the white woman running in her Lulu women and
Speaker 8: with their ear pods in at nine pm? And what
Speaker 8: used to be called the hood? These are six signs
Speaker 8: of gentrification right. Then from there you have to have
Speaker 8: eyes for the property. This is really key because a
Speaker 8: lot of people spend time going to open houses and
Speaker 8: things of that nature. They spend time going to open
Speaker 8: houses and things of that nature, but they don't actually
Speaker 8: know what they're looking for. Because HGTV is the one
Speaker 8: that has shaped their perspective on real estate. Right, AHGTV
Speaker 8: will teach you to look at real estate for the
Speaker 8: esthetics and the beauty, but I'm teaching you to look
Speaker 8: at real estate for the asset and the business that
Speaker 8: it is. So when I go into a property, there's
Speaker 8: a tool here in the multi company movement, real estate
Speaker 8: investor workbook, and it is the property value Assessment. And
Speaker 8: in this I have forty signs of hidden value and
Speaker 8: thirty signs of hidden costs. I'm not looking for granted countertops.
Speaker 8: I'm not looking for steamless still appliances with your buzzworths
Speaker 8: from HGTV. I'm looking for this hidden value and hidden costs.
Speaker 8: An example of hidden value would be a livable addict
Speaker 8: or basement or an extra bedroom that did not get
Speaker 8: counted because it actually didn't have a window.
Speaker 3: Right.
Speaker 8: These are examples of hidden value that you can find
Speaker 8: in a property that can actually increase the rent to
Speaker 8: revenue that you get from that property because the listing
Speaker 8: agent missed out on adding that to the listing.
Speaker 3: Right.
Speaker 8: So when you're going and doing due diligence on a property,
Speaker 8: you should not look cute. The only people that should
Speaker 8: be looking fly at the open house is the real
Speaker 8: estate agent. Due diligence is dirty, meaning that you need
Speaker 8: to be in some old tennis shoes and some old
Speaker 8: sweats because you're gonna need to be on your hands
Speaker 8: and knees to look at the foundation. You're gonna have
Speaker 8: to climb up to the attic. You're gonna have to
Speaker 8: be able to see the roof. If you can, you're
Speaker 8: gonna have to wipe your hand on the dirty h
Speaker 8: VAC due diligence is dirty. And I can already know
Speaker 8: who's real in terms of real estate and who's not
Speaker 8: based on how they're dressed at the open house, right
Speaker 8: And so this is a key part of the process
Speaker 8: to be able to see this as a business and
Speaker 8: not for the esthetics. We're not looking at granted count
Speaker 8: of tops, we're not looking at stainless steal appliances. As
Speaker 8: I said at Investvest, why would you make a four
Speaker 8: hundred thousand dollars decision based on a fifteen hundred dollars
Speaker 8: detachable French door stainless stel refrigerator. That makes no sense.
Speaker 8: You can go get that refrigerator from Lows or home
Speaker 8: depot right now. If it's really about that refrigerator, right
Speaker 8: That refrigerator has no impact on the actual structural integrity
Speaker 8: of this asset that you are seeking to buy. We
Speaker 8: need to look at the things that are most important
Speaker 8: and that are actually most costly. Stameless granted countertops. It
Speaker 8: costs fifteen hundred dollars under mount sink for granted countertops Okay,
Speaker 8: so we don't make four hundred thousand dollars decisions based
Speaker 8: on fifteen hundred dollars fifteen hundred dollars things that AHGTV
Speaker 8: has lifted up and created buzzwords around. Right, So you
Speaker 8: have to understand how these shows are shaping the way
Speaker 8: you look at real estate. And literally, I tell people,
Speaker 8: you got to turn off AHGTV. You can only watch
Speaker 8: JGTV because they will literally tell you to do the
Speaker 8: opposite of what I'm teaching you to do when it
Speaker 8: comes to real estate investing. Screw to property Brothers. I'm
Speaker 8: your new property brother with an A, and I'm gonna
Speaker 8: keep it real with you about real estate.
Speaker 6: Right.
Speaker 8: So this is really key. I know some of you
Speaker 8: were fixated on these shows, but if you really want
Speaker 8: to get into real estate right now, and you want
Speaker 8: to be in MULTIFAMMI real estate in particular, then you
Speaker 8: have to change the lens through which you look at
Speaker 8: real estate. Finally, you have to have eyes for the deal. Right.
Speaker 8: Eyes for the deal means there's typically three ways to
Speaker 8: structure a deal based on the type of deal that
Speaker 8: you found, and you have to know which one is
Speaker 8: best based on the actual deal. All right. So the
Speaker 8: question then becomes how do I find off market deals? Well,
Speaker 8: I have off market deals coming to me every single
Speaker 8: day via Instagram, via Facebook, via Craigslist, via email, right
Speaker 8: via text message, friends sharing off market deals. And then
Speaker 8: these all come through human beings and relationships. Right, This
Speaker 8: is really key part of the equation. And so real
Speaker 8: estate is a contact sport. You have to be in
Speaker 8: contact with people and you have to be in contact
Speaker 8: with properties. We do not just find deals magically through
Speaker 8: a computer and through technology. It's through human relationships. And
Speaker 8: so to really win in this game and in this market,
Speaker 8: you actually have to build your real estate rolodex. You
Speaker 8: have to establish yourself as a personal brand and as
Speaker 8: a real estate investor. You can change I am one
Speaker 8: of the two most powerful words in the English language,
Speaker 8: and you can change your identity when you introduce yourself
Speaker 8: to people, say I'm a real estate investor and I'm
Speaker 8: looking for a property in this specific neighborhood at this
Speaker 8: price point that fits this criteria, and you start letting
Speaker 8: people know all over and all around you that this
Speaker 8: is exactly what you're looking for. And this is how
Speaker 8: you start to become a magnet t deals. People are
Speaker 8: literally sending me deals all the time because they know
Speaker 8: who I am, right, and so this becomes a personal
Speaker 8: branding exercise in addition to a research exercise for you
Speaker 8: to be able to attract off market deals to you
Speaker 8: regularly that don't hit truly at Zelo, Redfin or MLS.
Speaker 3: Right.
Speaker 8: So, let me share with you some of the relationships
Speaker 8: that you need in your real estate rolodex to succeed
Speaker 8: at doing that. So how do you make your map
Speaker 8: in New Orleans? I have a real estate relodex of
Speaker 8: about sixty six people that includes multiple real estate agents.
Speaker 8: That's a bar right there. Mostly you rely on one
Speaker 8: real estate agent you sign an exclusive agreement. Why would
Speaker 8: I limit my search for a deal to one agent
Speaker 8: in their eyes? Now it's just my eyes and their
Speaker 8: eyes looking for deals. I work with more real estate
Speaker 8: agents and cities like New Orleans, and whoever brings me
Speaker 8: the deal, that's who gets the commission. I'm not going
Speaker 8: to sign an exclusive agreement and then cut off my
Speaker 8: opportunity to find deals with another agent because I signed
Speaker 8: this exclusive deal. So you have to be very careful,
Speaker 8: and you have to stand in your power and your value.
Speaker 8: And an agent who truly understands that if I get
Speaker 8: to eat off of what I killed, Right, an agent
Speaker 8: who truly understands that will understand why you don't sign
Speaker 8: an exclusive deal with them.
Speaker 3: Right.
Speaker 8: So the first thing we need to set up is
Speaker 8: Zillow and truly alerts. And this is less about you
Speaker 8: finding a deal through those spaces, but it's more about
Speaker 8: awareness of what is happening in the market, right, just
Speaker 8: to make sure that inventory is coming to you so
Speaker 8: that you can actually compare what you are finding off
Speaker 8: market to what's actually happening on market. So that's one
Speaker 8: of the first steps, right. And then next is talking
Speaker 8: to owners. Are you somebody who is speaking to people?
Speaker 8: Are you quiet and reserve and introverting?
Speaker 6: Right?
Speaker 8: There are literally people who own several properties, but you
Speaker 8: would never know because you've never asked, and you haven't
Speaker 8: made real estate part of your identity.
Speaker 3: Right.
Speaker 8: You're seeking to get information, but in order to win
Speaker 8: in this game, it has to become part of your identity.
Speaker 8: And so I'll tell you that there is an elder
Speaker 8: in bat and Ruth who has built a sizeable portfolio
Speaker 8: thought that she was going to hand it down to
Speaker 8: her sons, but her sons no longer live in Baton Ruth,
Speaker 8: and so guess what she continuously every time she wants
Speaker 8: to release a property liquidate, she reaches out to myself,
Speaker 8: Anthony and Tevin and the Buyback bat and Ruth's fund,
Speaker 8: and we are able to acquire those properties. Right, So,
Speaker 8: you wouldn't know based on what she drives or how
Speaker 8: she looks that she's in the real estate game or
Speaker 8: has this massive portfolio. But because we are constantly talking
Speaker 8: to people and we are personal branding ourselves through the
Speaker 8: Internet and things of that nature, they see us as
Speaker 8: doing good in the community, and therefore deals come our
Speaker 8: way that never hit truly as Zillow or a Redfin
Speaker 8: or MLS. Okay, Third is real estate agents. Again, I
Speaker 8: told you major gim Is. We don't sign exclusive agreements
Speaker 8: with real estate agents saying you're my only agent, I'm
Speaker 8: only going to do a deal with you. Nope, I
Speaker 8: have multiple agents who are searching for real estate deals
Speaker 8: for me in the various markets that I'm in. Right,
Speaker 8: and you have to train your agents. If you do
Speaker 8: this right, you should be more educated than your real
Speaker 8: estate agent. My real estate agents they come and learn
Speaker 8: from me about multi county real estate, and I want
Speaker 8: them to learn why because the more educated that they are,
Speaker 8: they're less listings they'll send me, and the more deals
Speaker 8: that they'll send me, because they'll know what the criteria is,
Speaker 8: they'll know how to calculate cash on cash return. If
Speaker 8: we're going to cover in just a second, then foreclosures
Speaker 8: and auctions. You can google foreclosures and auctions buy your
Speaker 8: city or your county assessor's office, and it's different for
Speaker 8: every city, county, city or county, so you'll have to
Speaker 8: google that to find out when those auctions are right.
Speaker 8: And so this is this is difficult to do however,
Speaker 8: with FAHA because typically when you're buying from all or
Speaker 8: something like that is going to acquire all cash within
Speaker 8: I think forty eight to seventy two hours, you'll have
Speaker 8: to pay all cash. So this is not something of
Speaker 8: those of you who are first time buyers and trying
Speaker 8: to run this play. This is not something that will
Speaker 8: likely work for you.
Speaker 3: Okay.
Speaker 8: The next one is abandoned property. So this is called
Speaker 8: driving for dollars. And when you see grass not being cut,
Speaker 8: when you see mailboxes overrunning, when you see boarded up windows,
Speaker 8: you can actually do some research to find out who
Speaker 8: owns that property and see if you can get in
Speaker 8: contact with them. Now, some of you would be scared
Speaker 8: by a property that looks like this, Right, you'd be like, oh,
Speaker 8: I wouldn't know what to do with that. But every deal, absolutely,
Speaker 8: every deal has a number that works that is a
Speaker 8: win win for the seller and for you. Okay, every
Speaker 8: deal has a number. So we don't just look at
Speaker 8: something on the outside and say, oh, that's that's terrible.
Speaker 8: I don't know how I'd ever be able to do that.
Speaker 8: Every deal has a number, has a price that will
Speaker 8: work for you and that is worth it to the seller.
Speaker 8: And if you can get two people to agree on
Speaker 8: that price, then that's where opportunities come in.
Speaker 3: Right.
Speaker 8: People have to sell properties for various reasons.
Speaker 3: Right.
Speaker 8: They may be going through a lawsuit, they may be
Speaker 8: having health issues, they may have lost their job, they
Speaker 8: need to liquid they may be going through a divorce.
Speaker 8: Is that people sell properties, and when you find somebody
Speaker 8: at the right time dealing with the wrong reason, that's
Speaker 8: oftentimes when you can get a deal on a property.
Speaker 6: Okay.
Speaker 8: The other thing I encourage you to do is I
Speaker 8: encourage you to run around town. I encourage you to
Speaker 8: explore certain neighborhoods that you have just overlooked in your
Speaker 8: own city. You think you know your city. I'm from here,
Speaker 8: I've been here for ten years. But there's literally nooks
Speaker 8: and crannies in your own city that you may not
Speaker 8: be aware of. And so I encourage you to get
Speaker 8: off that freeway exit. I encourage you to run a
Speaker 8: different route than you ran when you jog the last
Speaker 8: time you went around. I encourage you to explore your
Speaker 8: entire city so that you almost as if you were
Speaker 8: in a helicopter, if we were in a helicopter together,
Speaker 8: you could actually point out what's happening in real estate
Speaker 8: all around your city, not just in the nooks that
Speaker 8: you're familiar with because you grew up there, you work there,
Speaker 8: you went to school there. No, I'm encourage you to
Speaker 8: go into all those neighborhoods that you have overlooked and
Speaker 8: think you know, but really don't know. The next is
Speaker 8: talking to contractors. Anytime you see a contractor's truck at
Speaker 8: hellos or home depot, or you see one parked in
Speaker 8: front of a house and you see them walking into
Speaker 8: their get their business card. Talk to them, what's going on?
Speaker 8: With this house, is it for sales that being rehabbed?
Speaker 8: Who's the owner, who's your boss, etc. Get information Again.
Speaker 8: The reason contractors are so important because they will tell you.
Speaker 8: But if they know that your investor, they'll tell you
Speaker 8: about deals because guess who's gonna get the work once
Speaker 8: you close on that deal? They will. So it's a
Speaker 8: form of business for them when they can find people
Speaker 8: who are willing to invest in properties that they can't
Speaker 8: afford themselves but can get paid for. Get paid when
Speaker 8: they're hired to do the work, all right. Next is
Speaker 8: finding a state sales. Right when things are going into
Speaker 8: probate and it's under a trustee and people liquidating assets,
Speaker 8: you can find estate sales. Open house signs is an
Speaker 8: obvious one that most people rely on. You see some
Speaker 8: balloons just going out. When you see some balloon, just
Speaker 8: pull over. You got five minutes. Go in, look at
Speaker 8: the property, See what's happening in the neighborhood. See what
Speaker 8: kind of interior design is going on to actually command
Speaker 8: the value that they're asking for. Talk to the agent
Speaker 8: that is there here, what the buyers are looking for.
Speaker 8: Getting the habit of just pulling over and running up
Speaker 8: in open houses, just to get familiar with what's happening
Speaker 8: in your market. Then of course they're telling your network.
Speaker 8: This is where the personal branding comes in, letting them
Speaker 8: know I have stepped into the identity that I am
Speaker 8: a real estate investor and letting the people around you know.
Speaker 8: Sometimes we kind of keep these things secret, and that
Speaker 8: cuts people off from sharing opportunities with us. This is
Speaker 8: the deal in Oakland that came to me through my
Speaker 8: little brother. Through my little brother, because he was aware
Speaker 8: of who I am and what I'm up to, he
Speaker 8: sent me a deal. He was in a position and
Speaker 8: we want to His friend had inherited this property from
Speaker 8: his uncle and was ready to sell it. The deal
Speaker 8: didn't end up working when I ran the numbers, but
Speaker 8: I got this from my little brother, right from my
Speaker 8: own sibling.
Speaker 3: All right.
Speaker 8: Then then UH A real estate investor meetings. So there's
Speaker 8: all kinds of real estate investor meetups. You can go
Speaker 8: to what is it meetup dot com, or you can
Speaker 8: just type ARII real Estate investor meetings UH in my
Speaker 8: market and then your city and go to those and
Speaker 8: build networks with the people that are there who are
Speaker 8: also interested in real estate. They're called r e I
Speaker 8: A meetings. These are real estate investor association right, and
Speaker 8: then again meetup dot com is a way to find
Speaker 8: other meetings in your network. Okay, then the next one
Speaker 8: is wholesalers.
Speaker 3: Right.
Speaker 8: People will oftentimes get confused about by who wholesalers are.
Speaker 8: You see these signs all the time we buy a
Speaker 8: house for cash or things of that nature. That individual
Speaker 8: is actually not buy the house for cash, right. That
Speaker 8: individual is a mediator that has either got a contract
Speaker 8: on our property right through cold calling, through research and
Speaker 8: things of that nature, and they're looking for a cash buyer.
Speaker 8: So they're trying to attract that person who needs to
Speaker 8: sell their home quickly.
Speaker 3: Right.
Speaker 8: And then they also need to have a balance of buyers,
Speaker 8: and so they aren't the actual individual who buys it
Speaker 8: for cash. They're actually looking for you to buy the
Speaker 8: property from them for cash, and they take a little
Speaker 8: cut in the middle for bridging that gap.
Speaker 3: Right.
Speaker 8: So anytime you see what they call bandit signs, actually
Speaker 8: call the number and say, Hey, I'm a real estate
Speaker 8: investor here in this city and I'm looking for deals
Speaker 8: in this criteria. Please add me to your email list
Speaker 8: or your text messaging list and send me any deals
Speaker 8: that you have come across your way. And I get
Speaker 8: emails all the time wholesale deals not on MLS. Look,
Speaker 8: that's the actual that's the actual subject line of the email.
Speaker 8: Wholesale deals not on MLS. And you can see I
Speaker 8: got a whole bunch of deals that were sent to
Speaker 8: me because this wholesaler is great at actually attracting and
Speaker 8: attracting great off market deals.
Speaker 3: Right.
Speaker 8: And then finally, skip tracing owners. So skip tracing owners
Speaker 8: means that you use tools like city records, the assession's website,
Speaker 8: white pages dot com to actually identify who actually owns
Speaker 8: that property and text and text them or call them.
Speaker 8: My single family home that I bought in New Orleans
Speaker 8: again after I had several multi family homes. I found
Speaker 8: it through skip tracing an owner literally through whitepages dot com,
Speaker 8: and I reached out to her and at the moment,
Speaker 8: she didn't want to sell it. And it wasn't until
Speaker 8: a year later. I kept following up every three months,
Speaker 8: kept following up because she wasn't making any moves on
Speaker 8: this abandoned property, and eventually she said, I'm ready to
Speaker 8: sell and that ended up becoming my single family home.
Speaker 8: I bought it for one sixty to it in praise
Speaker 8: at four hundred. Right, this is what it means to
Speaker 8: find an off market deal. So this is the power
Speaker 8: of building your real estate rolytics. People won't tell you this,
Speaker 8: they'll just say go find it a deal on a website.
Speaker 8: Deals are not on websites. Those are listings. We are
Speaker 8: looking for off market deals. So now I want to
Speaker 8: talk to you about how to run the numbers. And
Speaker 8: this is going into real estate returns.
Speaker 3: Right.
Speaker 8: This is one of the key factors of the game.
Speaker 8: And we're going to go through an actual example using
Speaker 8: the Purchase a Pass deal analyzer.
Speaker 3: Right.
Speaker 8: The reason this is so important is because for us
Speaker 8: building wealth, we always have to be able to compare
Speaker 8: our options apples to apples. Right. So some of you
Speaker 8: are committed to stocks, right, and how does stocks compare
Speaker 8: to a real estate investment? How do you know which
Speaker 8: one you should do? Should you double down on Apple
Speaker 8: right now? Or should should you buy this four plax?
Speaker 8: How does investing in this piece of real estate compared
Speaker 8: to putting more money into your business? Right? Is your
Speaker 8: business going to have a great return than this real
Speaker 8: estate investment? And then of course we know that a
Speaker 8: savings account is only yielding point zero three percent interest,
Speaker 8: and if you use a rule of seventy two seventy
Speaker 8: two divided by point zero three, it will take you
Speaker 8: twenty four hundred years to double your money in a
Speaker 8: savings account. So usually we're gonna take that apple off
Speaker 8: the table because there's no way to build wealth. You
Speaker 8: can'not save your way to wealth. You have to invest
Speaker 8: your way to wealth. And so the apples the apples
Speaker 8: comparison that we use between these different asset classes is
Speaker 8: cash from cash return otherwise known as return on investment,
Speaker 8: and so in order to compare.
Speaker 3: Earners, what's up?
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Speaker 1: Coach, the energy out there felt different. What changed for
Speaker 1: the team today?
Speaker 2: It was the new game day scratches from the California Lottery.
Speaker 2: Player is everything? Those games sent the team's energy through
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Speaker 1: Are you saying it was the off field play that
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Speaker 8: Or claim your stock portfolio or your business to a
Speaker 8: real estate investment and know which one you should make
Speaker 8: a move on in this given moment in time. You
Speaker 8: have to know how to calculate cash and cash return
Speaker 8: or return on investment. Many people don't even know how
Speaker 8: their stock portfolio has returned over time. They might have
Speaker 8: an aggregate Oh, I'm up thirty six percent, but that
Speaker 8: has been over the past four years, right, So if
Speaker 8: we annualize that, what is the actual average rate? Of
Speaker 8: return on that portfolio, it might not be. It's not
Speaker 8: thirty six percent, right, and so you have to be
Speaker 8: able to run these numbers in fact, in in chat,
Speaker 8: how many of you know what the S and P
Speaker 8: five hundred has returned over the past twenty one years
Speaker 8: since January first, twenty two thousand. Since January first, two thousand,
Speaker 8: what do you think the average rate of return has
Speaker 8: been on the S and P five hundred, which is
Speaker 8: a major stock market index. Just type it in in
Speaker 8: the chat. What do you think the return has been annually?
Speaker 8: The average return annually? A lot of people think that
Speaker 8: the stock market just increases by ten percent annually. Just
Speaker 8: put your money in the stock market and it grows
Speaker 8: by ten percent annually. That is not true. It's not
Speaker 8: even close to the truth, right. I've actually run the numbers,
Speaker 8: and numbers don't lie. So you can debate me if
Speaker 8: you want to. But the S and P five hundred
Speaker 8: January first, two thousand was fourteen sixty nine. At the
Speaker 8: end of twenty twenty one, it was four seven hundred
Speaker 8: and sixty six dollars. Now that's a huge game. That's
Speaker 8: almost like that's a most three x. But when you
Speaker 8: look at the annualized rate of return over that twenty
Speaker 8: one year period, which is a good amount of time,
Speaker 8: that's five point seven six percent annual rate of return.
Speaker 8: That's only a five point seven to six annual rate
Speaker 8: of return. And so, as I said before, when we're
Speaker 8: talking about buying multi family real estate, right we're looking
Speaker 8: for at the very minimum a twelve percent cash on
Speaker 8: cash return. So we're looking and idally like fifteen percent.
Speaker 8: So the asset class that I'm teaching in terms of
Speaker 8: multi family real estate has a three times greater rate
Speaker 8: of return than the SMP five hundred, and a lot
Speaker 8: less volatility like these negative thirty eight percent or even
Speaker 8: last year up forty seven percent, because single family real
Speaker 8: estate can have volatility with the market, but multifamily real
Speaker 8: estate does not. Okay, because what happens in a down
Speaker 8: market when people are in a down market bought single
Speaker 8: family homes that were overpriced and they get foreclosed on.
Speaker 8: Where do those single family buyers go to live, y'all?
Speaker 8: Where do those single family buyers go to live? They
Speaker 8: go to rent. And so now the demand for rentals increases,
Speaker 8: and when demand goes up, what happens to price the
Speaker 8: price of rent goes up. So multi family real estate
Speaker 8: is one of the most secure recession proof asset classes
Speaker 8: that you can engage in. Right, So it's really important
Speaker 8: to have an apples and apples comparison. So I want
Speaker 8: to teach you what cash on cash return is not
Speaker 8: just from a verbal verbal standpoint. I want to show
Speaker 8: you the numbers for cash on cash return because you
Speaker 8: need to be able to analyze this for your stock portfolio,
Speaker 8: for your business, and for real estate investing decisions. So
Speaker 8: I'm going to use an ATM machine. So imagine I found
Speaker 8: an ATM business that produces one thousand and ninety dollars
Speaker 8: per month in cash flow, and to acquire this ATM machine,
Speaker 8: it's going to cost you ten thousand, five hundred dollars
Speaker 8: right now. Okay, some people might be like, man, Julian,
Speaker 8: I can't find ten thousand, five hundred dollars. Trust me,
Speaker 8: when you understand what cash on cash return is, you
Speaker 8: will find this ten thousand, five hundred dollars. So the
Speaker 8: question is when you give up or go get the money. Now. See,
Speaker 8: a lot of people think that the litstate is expensive,
Speaker 8: but it is not expensive when you know how to
Speaker 8: calculate cash on cash return. If I find a ten
Speaker 8: million dollar deal, right, and the cash on cash return
Speaker 8: is twenty percent, that is an amazing return. And I'm
Speaker 8: actually going to go find that ten million dollars, right
Speaker 8: because now I'm able to make ten million dollars. Actually
Speaker 8: is going to cost two point five million dollars to
Speaker 8: get into that deal. I need to go find two
Speaker 8: point five million dollars just twenty five percent down payment
Speaker 8: plus some closing costs. So let's say three million dollars.
Speaker 8: I need to go find three million dollars to actually
Speaker 8: close on this property. And then that three million dollars
Speaker 8: that is mine as well as investors, is working at
Speaker 8: twenty percent while we have this property under control. That's
Speaker 8: an amazing return. The SMP five hundred is only five point
Speaker 8: seveny six percent, right, So it's not about what is
Speaker 8: expensive is your savings account. Your savings account is expensive
Speaker 8: to you because you are losing value, especially when it
Speaker 8: comes to inflation. Cash this is the lowest yielding asset
Speaker 8: in the entire world. Holding cash is expensive. I know
Speaker 8: that doesn't make sense. What do you mean that having
Speaker 8: money is expensive? Yes, holding cash is expensive. This five dollars,
Speaker 8: let's say it was ten dollars. If inflation was ten percent, right,
Speaker 8: then that means that your ten dollars is not only
Speaker 8: worth nine dollars. And on top of that, it's only
Speaker 8: only a new point zero three percent interest in your
Speaker 8: bank account. That is what is expensive. So when you
Speaker 8: find a great enough deal right that has a shore
Speaker 8: fire cash on cash return that is worth it, you
Speaker 8: will figure out how to go find the money, right,
Speaker 8: you will figure it out. And so there are many
Speaker 8: different ways to raise money and finance real estate deals.
Speaker 8: So how do you calculate cash on cash return for
Speaker 8: this ATM machine business? Cash on cash return is the
Speaker 8: annual income from that investment divided by the divided by
Speaker 8: the initial investment. So one thousand, ninety dollars times twelve months, right,
Speaker 8: that was a cash flow divided by ten thousand, five hundred,
Speaker 8: which was then initial investment. This is one hundred and
Speaker 8: twenty four percent cash on cash return. Again, the S
Speaker 8: and P five hundred was only five point seven six percent.
Speaker 8: So this rate of return is absolutely remarkable. And for
Speaker 8: those of you who are Elon Musk fans, I did
Speaker 8: Elon Musk annual rate of return from the moment he
Speaker 8: sold Tesla No the moment he sold PayPal his one
Speaker 8: hundred and eighty million to what his net worth is today.
Speaker 8: Elon musk annual rate of return, what I call is
Speaker 8: personal internal rate of return, has been forty four point
Speaker 8: four to four percent annually since he sold out of PayPal.
Speaker 8: Forty four point four four percent. That is the highest
Speaker 8: individual rate of return that we know of at this
Speaker 8: moment in time, and this is what has made him
Speaker 8: one of the wealthiest people in the world. So you
Speaker 8: don't need so twenty percent is really really good, right,
Speaker 8: Twenty percent is really really good if we know that
Speaker 8: Elon Musk is performing at forty four point four to
Speaker 8: four percent at this moment in time. All right, So
Speaker 8: let me give you a simple example of cash on
Speaker 8: cash return. Then we're going to go into a deeper example.
Speaker 8: So here is a duplex. Here are the duplex that
Speaker 8: I actually control in New Orleans, and the price three
Speaker 8: hundred thousand dollars three and an hared percent down with
Speaker 8: the FHA is ten thousand, five hundred, the same as
Speaker 8: the ATM machine. Right, the rents on this duplex are
Speaker 8: sixteen one hundred dollars per month per unit. So that's
Speaker 8: thirty two hundred dollars per month. The mortgage on this
Speaker 8: property is twelve fifty nine, the taxes and insurance are
Speaker 8: three thirty five, and the CAPEX re pair reserve and
Speaker 8: vacancy rate are five hundred and fifteen dollars. So in
Speaker 8: the YouTube video, a lot of people saying Julie, well,
Speaker 8: how do you pay for repairs with the multifamily, Well,
Speaker 8: every single month I set aside money for repairs from rents,
Speaker 8: so for CAPEX capital expenditures another vocabulary word that includes
Speaker 8: your roof, your foundation, you're electrical, your plumbing, and your HVAC.
Speaker 8: We know that over time, five years, ten years, those
Speaker 8: things break down and they have to be replaced. So
Speaker 8: rather than waiting for those moments, what we do is
Speaker 8: every single month from rents, we set aside money ten
Speaker 8: percent of rents in a separate account for win tho
Speaker 8: those things occur, so that we can maintain the structural
Speaker 8: integrity of this home. There's so many real estate buyers
Speaker 8: who buy a property and never put any money back
Speaker 8: into it, and then they wonder why they are commanding
Speaker 8: the value that they desire when they're ready to sell
Speaker 8: it because they didn't put any money into it. They
Speaker 8: literally let this home that they could have bought it new, right,
Speaker 8: and thirty years later, now they have a thirty year
Speaker 8: old home that needs a whole bunch of new stuff
Speaker 8: and they can't sell it at market value. So we
Speaker 8: as ethical investors to take care of our tenants and
Speaker 8: as good stewards of these properties, we make sure that
Speaker 8: we continue to reinvest back into the property. And that's
Speaker 8: where CAPEX comes in. Repair reserves is five percent of rents,
Speaker 8: and that is for leaks, broken window, the quick fix
Speaker 8: on the heating system, paint a broken door, keys, things
Speaker 8: of that nature. That's what repair reserves were in. Vacancy
Speaker 8: rate is five percent, and that means that we assume
Speaker 8: that one out of every twenty four months, this unit
Speaker 8: is going to be empty, somebody's going to move, we're
Speaker 8: going to have to repainted, etc. And it'll be vacant,
Speaker 8: and so we set aside money for that so that
Speaker 8: we can still pay the mortgage even when that rent
Speaker 8: is not coming in from that unit. So we literally
Speaker 8: set aside about twenty percent of rents for cappacks or
Speaker 8: pairs of a vacancy rate. Right, and this is really powerful. Now,
Speaker 8: if you have a single family home. Where does capacks
Speaker 8: or payers of a vacancy rate come from? It come
Speaker 8: from your personal stavments account. Nobody's there to help you
Speaker 8: fund that. It comes from you. When the roof breaks
Speaker 8: or and is leaking, you have to come out of
Speaker 8: pocket six thousand dollars. You got to pull it from
Speaker 8: your retirement. You got to liquidate your thoughts. You have
Speaker 8: to pay for that. With multi fimming real estate, it
Speaker 8: is being accounted for and included in rent okay. And
Speaker 8: so when you look at this particular deal, the cash
Speaker 8: flow on this is one thousand, ninety dollars a month.
Speaker 8: This is an ATM machine. Family, You've been driving by
Speaker 8: Aten machines on your way to work, on your way
Speaker 8: to pick up your kids from school, on your way
Speaker 8: to the grocery store. You've been driving by ATM machines.
Speaker 8: But you couldn't see it as such because you've been
Speaker 8: taught to buy real estate and look at real estate
Speaker 8: based on emotions. I'm teaching you look at real estate
Speaker 8: based on the e nomins. All right, So answer me this,
Speaker 8: what other business can you buy right now? Family? For
Speaker 8: three hundred thousand dollars with only ten thousand five hundred
Speaker 8: dollars down, get financed for the other two hundred and
Speaker 8: eighty nine thousand dollars simply by emailing some documents to
Speaker 8: a lender. Right, have a get financed for that in
Speaker 8: thirty to forty five days, have that business immediately cash
Speaker 8: flow in the first thirty days, and succeed with minimal
Speaker 8: time effort experience. What other business can you buy like
Speaker 8: this right now? There are none. There are no other
Speaker 8: businesses that you can buy at this level with this
Speaker 8: amount of leverage. And the reason why is because real
Speaker 8: estate is a physical, tangible asset that if you fail
Speaker 8: to pay right the bank can reclaim and resell. They
Speaker 8: can get their money back and get it out. They're
Speaker 8: not going to finance your ten page business plan that
Speaker 8: has no revenue right at this level. But with real estate,
Speaker 8: especially multi family real estate, they will. And this is
Speaker 8: why they give you a credit for seventy five percent
Speaker 8: of the rental income that you're going to get when
Speaker 8: you're getting financed for these particular properties. Is because they
Speaker 8: know that your mortgage is being subsidized by the people
Speaker 8: you are housing, providing affordable housing for right, So this
Speaker 8: is really really key. Now, this home that you see
Speaker 8: in front of you, this is actually a million dollar home,
Speaker 8: but most of you wouldn't know it because you because
Speaker 8: you don't know how to run the numbers on a
Speaker 8: real estate deal. This is a million dollar home. It
Speaker 8: will never be featured on AHGTV. And guess what, I
Speaker 8: don't care, right, and let me prove to you that
Speaker 8: this is a million dollar home. We've talked about cash
Speaker 8: on cash return, right, Well, cash on cash return is
Speaker 8: only one of the four ways that MULTIPI family real
Speaker 8: estate actually pays you. Right. So over the next thirty years,
Speaker 8: this one property, this duplex, will pay me six hundred
Speaker 8: and thirty eight thousand dollars in passive income. Right, that is,
Speaker 8: after principal interest, tax, insurance CAPEX, or payers of the
Speaker 8: vacancy rate. I would get six hundred and thirty eight
Speaker 8: thousand dollars from this one property. The tax savings on
Speaker 8: this property, because the tax code is written for business
Speaker 8: owners and real estate investors, I will say two hundred
Speaker 8: and seventy eight thousand dollars in taxes on a three
Speaker 8: hundred thousand dollar property family, I will be able to
Speaker 8: save two hundred and seventy eight thousand dollars in taxes
Speaker 8: on a property that I purchased for three hundred thousand dollars.
Speaker 8: Did you hear that? Okay, when you understand the tax codes,
Speaker 8: it's not tax evasion. This is tax avoidance by leveraging
Speaker 8: the tax code that was actually written for real estate
Speaker 8: investors and for business owners. Right. Then the principal paydown
Speaker 8: of two hundred and twenty five thousand dollars will be
Speaker 8: by the tenants I take from their rent and I
Speaker 8: use that to pay down the principal. Right, So that's
Speaker 8: two hundred and twenty five thousand dollars. And then if
Speaker 8: this property appreciates by one percent every single year for
Speaker 8: the next thirty years, and one percent is conservative. Real
Speaker 8: estate typically appreciates it around three percent, that would be
Speaker 8: another one hundred and four thousand dollars. So when you
Speaker 8: add that up, how much is this one property worth family?
Speaker 8: One point two million dollars? This is the one point
Speaker 8: two million dollar property, but you wouldn't know it by
Speaker 8: looking at it. So this is why I'm teaching you
Speaker 8: not to look at real estate from an emotional standpoint.
Speaker 8: You have to look at it from an economic standpoint.
Speaker 8: And I have fifteen of these properties and I'm going
Speaker 8: to continue to buy more and more and more. Right, So,
Speaker 8: when you imagine what my net worth is going to
Speaker 8: be just off my real estate portfolio, loan thirty years
Speaker 8: from now is going to be amazing. And because of
Speaker 8: capex repairs of a vacancy rate, not only will my
Speaker 8: properties be cashloing, but they will still have the structural
Speaker 8: integrity because I pour back into the properties that is
Speaker 8: calculated in See, there's some people out here who will
Speaker 8: talk to you about cash on cash return, but they
Speaker 8: will not account for capex repairers of the vacancy rate.
Speaker 8: They're just telling you, well, here's what's left over after
Speaker 8: we pay the mortgage. No, there are other expenses that
Speaker 8: have to be accounted for to get to the true
Speaker 8: cash on cash return for a particular property. And as
Speaker 8: you get better and better and better, your deals get
Speaker 8: sweeter and sweeter and sweeter. So in the beginning, I
Speaker 8: was getting deals at twelve percent cash on cash return,
Speaker 8: and as I get better and better at identifying deals
Speaker 8: and negotiating once I'm under contract, now I'm moving towards fifteen, seventeen,
Speaker 8: twenty percent cash on cash returns indefinitely, indefinitely, Okay, So
Speaker 8: I told you earlier on that I collected around thirty
Speaker 8: seven thousand dollars per month to rents. I do not
Speaker 8: keep all of that, right, sixty percent a bit goes
Speaker 8: to principal interest, taxes, insurance cappecks, or payers of a
Speaker 8: vacancy rate. Right, So what I'm left with is about
Speaker 8: fifteen thousand dollars in positive cash flow passively. Now fifteen
Speaker 8: thousand dollars a month times twelve months, that's one hundred
Speaker 8: and eighty thousand dollars a year passively. And I built
Speaker 8: this portfolio in just eight years. Literally, if you just
Speaker 8: put your head down for a decade and you buy
Speaker 8: as much multi family real estate the right way as possible,
Speaker 8: you can literally have over six figures and passive income
Speaker 8: for the rest of your life. And then once these
Speaker 8: mortgages fall off, right then, my daughter, when she's thirty
Speaker 8: six years old, is literally going to have over three
Speaker 8: hundred thousand dollars in passive income for the rest of
Speaker 8: her life. She doesn't even have to manage the portfolio
Speaker 8: because property management, which we set up side six to
Speaker 8: ten percent of rents for right, we'll be able to
Speaker 8: take care of it and just send her checks for
Speaker 8: the rest of her life. Right. So this is the
Speaker 8: power of just locking in on a specific asset class,
Speaker 8: right in doing everything you can to acquire as much
Speaker 8: as you can while your active income is high, until
Speaker 8: you get to a point where your passive income has
Speaker 8: surpassed your active income. All right, So when you're buying
Speaker 8: multi family real estate is different to buying single family
Speaker 8: real estate. I hope that's clear by now. When you're
Speaker 8: buying single family real estate is three decisions, right. It
Speaker 8: is how much we get approved for. We got a
Speaker 8: proof of four hundred thousand. How much is the home
Speaker 8: it's three ninety Do we like it? Yes or no?
Speaker 8: Three factors when it comes to buying single family real estate. Right.
Speaker 8: When it comes to buying multi family real estate, there's
Speaker 8: actually twenty three numbers that you need to know to
Speaker 8: evaluate a multi family real estated deal. Effectively, this is
Speaker 8: the purchase of past deal Analyzer. I'm gonna walk you
Speaker 8: through it in just a second. But if you literally
Speaker 8: leave out one single number on the purchase of past
Speaker 8: deal analyzes, you can step into a bad deal. The
Speaker 8: purchase past deal Analyzer takes all emotion out of this
Speaker 8: game and it makes it purely economic, Okay. It tells
Speaker 8: you what the cash on cash return is, right, and
Speaker 8: it tells you whether you should purchase or pass on
Speaker 8: the deal. I run every single deal through this. I'm
Speaker 8: able to analyze the deal in less than ten minutes
Speaker 8: because the only thing that beats a cash offer is
Speaker 8: a fast offer. So I run the numbers quickly, I
Speaker 8: text my agent what number worked for me, and then
Speaker 8: I get a purchase agreement signed within fifteen to thirty minutes.
Speaker 8: And my offer is in a lot of y'all are
Speaker 8: out here on Truly and Zilo, flipping through photos, heart
Speaker 8: and stuff, putting it in your favorite folders, talking about oh,
Speaker 8: look at this open concept and looked at this nice backyard,
Speaker 8: right while my offer is being submitted, And then you
Speaker 8: wonder why every time you come back, right, it says
Speaker 8: under contract a pending is because you haven't moved quickly enough.
Speaker 8: You didn't have the confidence and you didn't have the
Speaker 8: knowledge to be able to make aggressive offers. And this
Speaker 8: is why you keep getting beat out by people who
Speaker 8: are more educated than you. Right, So this is a
Speaker 8: key part of the equation. Now, in order to find
Speaker 8: a deal, I want to give you the reality of
Speaker 8: the game. Right. This is not a love at first
Speaker 8: sight type thing in order to find a great deal.
Speaker 8: This is the actual process. This is the deal funnel. Right.
Speaker 8: So I have deals coming to me from agents, wholesalers,
Speaker 8: contractor skiptration websites, the entire real estate rolldex that I
Speaker 8: talk to you about right now that can be lead
Speaker 8: to one hundred listings, right, I don't know if their
Speaker 8: deals yet. That's one hundred listings. Now, when I do
Speaker 8: the one percent rule, which means that rents have to
Speaker 8: be the monthly rents have to be at least one
Speaker 8: percent of price. So if the price is three hundred
Speaker 8: thousand dollars, the monthly rents have to be at least
Speaker 8: three thousand dollars per month for me to even go
Speaker 8: any further with that deal. Okay. And so a lot
Speaker 8: of properties will not pass the one percent rule. And
Speaker 8: there are some exceptional markets like California, like New York,
Speaker 8: some parts of Florida, some parts of Texas where we
Speaker 8: do not use the one percent rule. We might use
Speaker 8: the point seven percent rule, okay, otherwise we don't look
Speaker 8: at that deal. Those are appreciation markets and not cashbow markets. Okay.
Speaker 8: So then now I'm left with forty deals, sixty percent
Speaker 8: of them did not pass. Then I run the forty
Speaker 8: deals through the purchase a pass deal Analyzer and that
Speaker 8: leads me down to twenty deals. Twenty get eliminated when
Speaker 8: I put in all twenty three numbers.
Speaker 3: Okay.
Speaker 8: Then from there I go visit that listing in person, right,
Speaker 8: or if I have an agent on the ground and
Speaker 8: a distant market, they go visit it. Then I might
Speaker 8: make offers on ten out of twenty of those deals. Right.
Speaker 8: Then of those offers that I made, I might only
Speaker 8: get four contracts, and of those four contracts, only one
Speaker 8: might actually get to closing. So this is how you
Speaker 8: actually get to a real estate deal. And so if
Speaker 8: I want ten deals right in the next year, then
Speaker 8: guess what I need to do. I need to actually
Speaker 8: look at one thousand properties. It is purely a numbers game,
Speaker 8: and some of you just aren't looking at enough deals.
Speaker 8: So to conclude, I want to walk you through the
Speaker 8: purchase of past deal analyzer. I'm literally gonna show you
Speaker 8: how to evaluate a deal properly. All right, So this
Speaker 8: is a deal that just came up on market in
Speaker 8: New Orleans. I don't know if it's a good Excuse me,
Speaker 8: it is a listing, Okay, I don't know if it's
Speaker 8: a good deal or not. I'm actually going to guide
Speaker 8: you through the process of how to evaluate these deals.
Speaker 8: So I need to switch over my screen and we're
Speaker 8: gonna go through. We're gonna go through this right now
Speaker 8: in real time, to see if this is something we
Speaker 8: should pursue. All right, So let me go get the tool.
Speaker 3: On me.
Speaker 7: One second, Yo, you're now tuned into JG TV. That
Speaker 7: is yes, that is a whole fat man. This is incredible.
Speaker 7: This is incredible.
Speaker 8: So let me pull up the tool for you.
Speaker 6: All right.
Speaker 8: So this is the Purchase a Past Deal Analyzer. We've
Speaker 8: actually turned this into an online software now, but I'm
Speaker 8: just sharing with you the old version. All kinds of
Speaker 8: equations are built into here. This literally would show you
Speaker 8: what this property will pay you over the next thirty years,
Speaker 8: et cetera, the tax savings that you'll get. All of
Speaker 8: that is mapped out here and these other tabs. But
Speaker 8: now it's an online software that is only available to
Speaker 8: my students and MG students in four three two one.
Speaker 8: So here's where we start. We go to this listing.
Speaker 8: And one of the key things you need to know
Speaker 8: on Trulia is you want to select the multi family
Speaker 8: tad mark here right, and then you can also put
Speaker 8: in keywords like four plax right and that will refine
Speaker 8: your search and you can save that search again. I
Speaker 8: don't find any more deals on trullion Zilo, but for
Speaker 8: those of your beginning, this is just a way to
Speaker 8: have inventory start coming to you. So you can see
Speaker 8: that in New Orleans right now, there's only eight listings
Speaker 8: that fit this criteria, right, So from there we have
Speaker 8: this listing. I'm gonna take the url. I'm gonna take
Speaker 8: the url. I'm gonna put that here. I'm gonna take
Speaker 8: the address. I'm gonna put that here. Okay, and now
Speaker 8: we're gonna run through the numbers as quickly as possible.
Speaker 3: All right.
Speaker 8: So the home price, the home price is four ninety five.
Speaker 8: That's what the seller wants. So I'm gonna put four
Speaker 8: ninety five here, Okay. Down payment for me, as a
Speaker 8: real estate investor who's not going to live in this
Speaker 8: property is going to be twenty five percent. If it
Speaker 8: is owner occupied and you choose to use faha, it'll
Speaker 8: be three point five percent. If it is NAKA, it
Speaker 8: will be zero percent. Right, if it's VA, it would
Speaker 8: also be zero percent. That means you're going to occupy
Speaker 8: one of the units. Okay, But I'm going to run
Speaker 8: this as a real estate investor who's not going to
Speaker 8: own or occupy right now on a non owner no,
Speaker 8: since most of you're going to be faha, I'm gonna
Speaker 8: do faha for you. Okay. Now, interest rates are rising
Speaker 8: right now, so let's say that you're able to get
Speaker 8: a three point seventy five percent interest rate from MATT.
Speaker 8: Closing costs are typically about six percent, but they can
Speaker 8: vary based on the market that you're in. Okay. So
Speaker 8: now we see our total upfront investment is twenty eight
Speaker 8: thousand dollars for this property. Right again, we're sending you
Speaker 8: the list of down payment assistant programs to help you
Speaker 8: with that. If you think that number is too high,
Speaker 8: otherwise you can go through NAKA, which has no down
Speaker 8: payment and no closing costs. Right now, one of the
Speaker 8: key numbers that you have to get, and this requires research,
Speaker 8: is the annual property taxes. Okay, And so the way
Speaker 8: you get property taxes, you're going to go to your
Speaker 8: city's assessor's website. Okay, so in New Orleans it's NOLA
Speaker 8: assessor dot com. It's no. In New Orleans it is
Speaker 8: NOLA assessor dot com. So you need to get very
Speaker 8: familiar with this website. You're going to go to search
Speaker 8: records for me. I have to click yes and accept.
Speaker 8: I think I still have their address there seven o nine.
Speaker 8: It pops up search. You see the same exact property
Speaker 8: right here. Correct. So now we take that and we say,
Speaker 8: how do I find the property taxes? We know that
Speaker 8: in twenty twenty two is going at twenty seven thousand dollars. Okay,
Speaker 8: the land value is twenty three thousand, the building value
Speaker 8: is two fifty one, the total value is this. New
Speaker 8: Orleans has a ten percent assessment rate, so that's how
Speaker 8: you get to twenty seven four four zero, right, But
Speaker 8: that is not what the annual taxes are going to be. Okay.
Speaker 8: Here in New Orleans they have something called estimate taxes.
Speaker 8: So I here, I pace in that number and then
Speaker 8: I click compute. That gives me the annual taxes for
Speaker 8: that property. So I'm gonna take that number. I'm gonna
Speaker 8: put that into the annual taxes. Okay, building value, we
Speaker 8: have that, let me see do we still have it?
Speaker 8: Building value? This is for tax purposes. So anytime it
Speaker 8: says building or improvement, that improvement means building.
Speaker 3: Okay.
Speaker 8: So I'm gonna put this as the land value and
Speaker 8: then improvement or building are the same thing. So they're
Speaker 8: valuing this at two fifty one, okay. And this is
Speaker 8: just for tax purposes. It has nothing to do with
Speaker 8: the price you were negotiating with the seller. All right,
Speaker 8: So now how do we find the rents? That is
Speaker 8: the next question. So there are a couple of websites
Speaker 8: that we can go to. We can go to apartments
Speaker 8: dot com and see what things are renting for around there.
Speaker 8: We can go to Rerntometer. But in this particular neighborhood,
Speaker 8: I'm going to section eight these units. So what I'm
Speaker 8: gonna do is I'm gonna google. I'm going to Google
Speaker 8: in New Orleans Section eight. It's called Hanno, okay, And
Speaker 8: I'm gonna look for the payment standards that Hanno has
Speaker 8: for twenty twenty two. And I pulled those up, and
Speaker 8: this is how their payment standards come out. So this
Speaker 8: property is in seven zero, one, one nine. Okay, So
Speaker 8: what I'm gonna do is I'm gonna look at seven zero, one,
Speaker 8: one nine. It's eight bedrooms, so that means four units
Speaker 8: means two bedrooms each, so that's twelve eighty seven. Now,
Speaker 8: twelve eighty seven is probably their height, So just to
Speaker 8: be conservative, I'm gonna take twelve eighty seven and I'm
Speaker 8: gonna consolidate that to twelve hundred dollars. Twelve hundred dollars
Speaker 8: for each unit, Okay, even my unit, because faha, I
Speaker 8: only have to live there for one year, so once
Speaker 8: I move out, perhaps to my single family, then I'm
Speaker 8: gonna be able to rent this unit for twelve hundred
Speaker 8: dollars a month. So this is forty eight hundred dollars
Speaker 8: in total rents.
Speaker 6: Okay.
Speaker 8: Other revenue can include washer and dryer on the property,
Speaker 8: parking spaces, things of that nature. Right now, we don't
Speaker 8: have any of those, so we already know. Remember the
Speaker 8: one percent rule, forty eight hundred dollars a month in
Speaker 8: rents would only justify a price of four hundred and
Speaker 8: eighty thousand dollars, So we already know we're below the
Speaker 8: one percent rule. Okay, so that could mean that this
Speaker 8: is not a deal. So Now you also have to
Speaker 8: know how the city, what the city requires of the tenant,
Speaker 8: and what it requires of the landlord. In New Orleans,
Speaker 8: water and electric and trash are on the tenant. So
Speaker 8: these are gonna be zero, zero, and zero for me.
Speaker 8: But if I look at these pictures, there's some lawn
Speaker 8: care out here, right, and there's probably some long care
Speaker 8: in the backyard. So I'm gonna have to pay somebody
Speaker 8: about thirty dollars every two weeks to come do that
Speaker 8: as the landlord. Okay, then once I move out, I'm
Speaker 8: gonna have to pay a property manager anywhere from between
Speaker 8: six and ten percent of rents. So I'm gonna put
Speaker 8: eight percent for property manager. If you remember what was Capex?
Speaker 8: What was Capex? Everybody? What percentage rate was capex? Ten percent?
Speaker 8: That is for what five things? So let's see who
Speaker 8: remembers what five things? That is for Hvaco foundation, electrical plumbing.
Speaker 8: We know that these things need to be swopped out
Speaker 8: every five to fifteen years, and we set aside money.
Speaker 8: Literally in this case, we're gonna set aside seven hundred
Speaker 8: and twenty dollars a month in Capex. Right, We're not
Speaker 8: put pocketing that We're not going to vacation with that money.
Speaker 8: That's gonna be in a separate account so that when
Speaker 8: these emergencies happen, that we have the money to pay
Speaker 8: for them. Okay, Now, vacancy rate we're gonna do five
Speaker 8: five percent, and repair reserves we're gonna do five percent.
Speaker 8: So look at this, y'all are operating expenses. Literally, of
Speaker 8: the forty eight hundred dollars in rent, one eight hundred
Speaker 8: and eighty four dollars is going towards operating expenses. Okay.
Speaker 8: This is what most people will not tell you when
Speaker 8: they run cash on cash return. They will not account
Speaker 8: for these things that are extremely important when it comes
Speaker 8: to running the numbers on a deal. Now, in New Orleans,
Speaker 8: I know that homeowners insurance is gonna be around two
Speaker 8: point fifty. Then we're gonna have flood insurance, some of
Speaker 8: you might have earthquake insurance, some of you might have
Speaker 8: a tornado insurance. Right, this is gonna be another ninety dollars.
Speaker 6: Okay.
Speaker 8: And then because this is FHA, FAHA is going to
Speaker 8: have a PMI expense and they're usually going to charge
Speaker 8: you a point for that. So that's gonna be one
Speaker 8: percent and PMI is indefinite on faha right. And then
Speaker 8: if there's any repairs, right, we need to paint. Let's
Speaker 8: say that's four thousand dollars to paint, and let's say
Speaker 8: it's one thousand dollars for deep cleaning. So now we
Speaker 8: look at this particular deal and our monthly cash flow
Speaker 8: is negative, which is a negative two thirty eight and
Speaker 8: it's negative ten percent, meaning that I'm losing money with
Speaker 8: this deal. And you can see down here the purchase
Speaker 8: the past deal analyzer says pass pass pass past. It
Speaker 8: only says green where it says can I afford it?
Speaker 3: Yes?
Speaker 8: I have enough savings to afford it? Right? Do I
Speaker 8: have enough reserves to pay for this property? Yes? But
Speaker 8: when it comes to cash on cash return being greater
Speaker 8: than twelve percent, the monthly rent meeting the one percent rule,
Speaker 8: op X being less than fifty percent pass and cap
Speaker 8: rate being greater than six percent means pass. So this
Speaker 8: deal is a no go. We just ran these numbers
Speaker 8: in about ten minutes, and this deal is a no go.
Speaker 8: I throw it to the side and I keep on
Speaker 8: with my search. So this is the power of knowing
Speaker 8: what you're doing. Literally, if we leave out one number.
Speaker 8: Let's say you forgot to put in taxes, right. Let's
Speaker 8: say you forgot to put in taxes, and you forgot
Speaker 8: to put in your PMI expense, and you got to
Speaker 8: put in your property management right. And let's say that
Speaker 8: you overestimated rents. Somebody told you that rents were fifteen
Speaker 8: hundred in that neighborhood and they were increasing, and you
Speaker 8: thought that your interest rate would be three percent, but
Speaker 8: it ended up being four all of a sudden, some
Speaker 8: switches and numbers. Excuse me, you thought your interest rate
Speaker 8: was going to be three percent. Some switches and numbers,
Speaker 8: and all of a sudden, you think that you were
Speaker 8: going to have monthly cash flow thirteen to twenty eight
Speaker 8: and a fifty five point six percent cash on cash return,
Speaker 8: all because you got some hearsay here about what rents
Speaker 8: were going to be. You forgot to account for property management,
Speaker 8: your homeowners insurance. You underestimated homeowners insurance, right, and you
Speaker 8: forgot to put in your PMI expense. You didn't even
Speaker 8: know what PMI expense was. You think you're stepping into
Speaker 8: an amazing deal, But when you actually acquire the home
Speaker 8: and you actually get the real numbers, you realize that
Speaker 8: you stepped into a mess and you're likely going to
Speaker 8: have to sell and lose money, right or you're gonna
Speaker 8: have to live there until the property organically appreciates to
Speaker 8: put you in position to sell. So this is the
Speaker 8: danger of not knowing what these twenty three numbers are,
Speaker 8: where to find them, how to find them quickly, and
Speaker 8: how to evaluate a deal in the proper way. All right,
Speaker 8: So that is how you analyze a multifamily a real
Speaker 8: estate deal. We EYL and the multi family movement never
Speaker 8: ever ever want you to make mistakes on these deals.
Speaker 8: This is why we put together this particular, this particular
Speaker 8: webinar for you because we see a lot of people
Speaker 8: getting inspired by what we're doing and the information that
Speaker 8: we're sharing, and they just want to run out there
Speaker 8: and do it. But if you go do it and
Speaker 8: you're not educated properly, you will literally step into bad deals,
Speaker 8: and we do not want to leave a sour taste
Speaker 8: in your mouth. We don't have any room. If we're
Speaker 8: going to close this wealth gap, we're going to close
Speaker 8: this home ownership gap, we don't have any room for
Speaker 8: us to make any mistakes. We all have to be
Speaker 8: on one accord. We all have to know exactly what
Speaker 8: we're doing and we all have to go swoop up
Speaker 8: the best deals as quickly as possible. So with that,
Speaker 8: I want to say thank you, thank you, thank you.
Speaker 8: I hope that this presentation has blessed you and just
Speaker 8: move you one step closer to becoming a multi family
Speaker 8: real estate investor. With that, I'm going to pass it
Speaker 8: back to Sead and Troy and to close us out.
Speaker 3: Yeah man, all gods, people say man.
Speaker 6: Now, always always goough man.
Speaker 5: That was crazy and I felt like I was actually
Speaker 5: going to university.
Speaker 3: No joke, Joe. So I'm taking like my notes right here.
Speaker 8: Yes, yeah, yeah, man.
Speaker 5: So I mean that's pretty much like you know, I
Speaker 5: feel like there's not really a lot to really talk about.
Speaker 5: We talked about it so much, but I just want
Speaker 5: to ask a few questions before before we wrap. Since
Speaker 5: we're in London, we don't we're not actually doing the
Speaker 5: traditional how we have earnings coming on ask asking questions
Speaker 5: due to the time difference. But a few questions that
Speaker 5: I had that I saw some people might have had
Speaker 5: from the last episode and maybe they might have now
Speaker 5: is when analyzing I know you talked about that a
Speaker 5: few times on the episode and today the twelve percent
Speaker 5: cash on cash return, So like for somebody that like,
Speaker 5: all right, we understand, like that's what you need to get,
Speaker 5: but like, can you just break that down a little
Speaker 5: bit more for people that are still kind of newer
Speaker 5: in this space.
Speaker 8: Yeah, So right now, right now, Bank of America savings
Speaker 8: account is producing point zero three percent interests. Right, So
Speaker 8: rule of seventy two tells you how long it takes
Speaker 8: w your money. So seventy two divided by point zero
Speaker 8: three means that in a Bank of America savings account,
Speaker 8: it will take you twenty four hundred years to double
Speaker 8: your money. Right, that's terrible. Twelve percent cash on cash
Speaker 8: return will be seventy two divided by twelve, meaning that
Speaker 8: the money that you put in in terms of down
Speaker 8: payment and closing costs will double every six years. So
Speaker 8: if your down payment and closing costs for thirty thousand dollars,
Speaker 8: then six years from now that thirty thousand dollars is
Speaker 8: going to be sixty then it's going to double again, right,
Speaker 8: and it's going to double again. So it's really the
Speaker 8: rule of seventy two is just a quick way to
Speaker 8: estimate how quickly your investment is going to double. And
Speaker 8: we know that Bank of America savings account is point
Speaker 8: zero three percent interest. We know that the S and
Speaker 8: P five hundred has performed at five point seven six
Speaker 8: percent over the past twenty one years, and so if
Speaker 8: we can get double that with a multi county real
Speaker 8: estate investment deal, it just means that you're creating well faster.
Speaker 5: And that's done through like the comps, all of the numbers,
Speaker 5: running the numbers and actually seeing what correct with the future,
Speaker 5: what your buying price is, and what.
Speaker 6: Your expected future priciple evaluation.
Speaker 8: Now that's appreciation. This is just cash on cash return.
Speaker 8: Remember there's four ways that multi family real estate pays you. Right,
Speaker 8: that's cash on cash return. You still have appreciation, then
Speaker 8: you have your tax savings, and then you have your
Speaker 8: principal pay down. So what most people don't know is
Speaker 8: that we can't even it's hard to actually compare multi
Speaker 8: family real estate to even stocks or business And the
Speaker 8: reason why is one, you can live in the asset,
Speaker 8: right you can live you can't live in your stock
Speaker 8: market portfolio. You can't live in your cryptocurrency. So it's
Speaker 8: eliminating your biggest expense in life, which is housing first
Speaker 8: and foremost. Then on top of that there's the appreciation, right,
Speaker 8: there's the tax savings, and there's a principal paid down
Speaker 8: which the other asset classes don't don't give you. So
Speaker 8: the actual annual rate of return on a great multi
Speaker 8: family real estate deal when you account for all four
Speaker 8: is actually twenty five percent cash on cash return being
Speaker 8: twelve and then the other three adding up. Even though
Speaker 8: it's it's equity basis, tax savings based, et cetera, the
Speaker 8: actual real return on a multi family real estate investment
Speaker 8: should be around twenty five percent when you add in
Speaker 8: the other three.
Speaker 3: Incredible.
Speaker 7: So you spoke about this early in the piece of station.
Speaker 7: He said, there's one hundred and forty seven assistance programs.
Speaker 7: You spoke about the landlord classes. I'm interested. Obviously, it's
Speaker 7: state by state. You have to find out what it's
Speaker 7: where you live. But can they keep being combined with
Speaker 7: each other, almost like when we talked about like scholarships,
Speaker 7: like how many can we have?
Speaker 3: How many sistant publics can we have?
Speaker 8: Usually now you can't stack on a fifty percent off
Speaker 8: coupon with another fifty percent off coupon and said, can
Speaker 8: I get this? It don't work. But usually you can't
Speaker 8: stack the programs onto each other, uh, not that I
Speaker 8: know of, So you can't. People say can I use
Speaker 8: FHA and that, No, you don't.
Speaker 6: You don't need that you do.
Speaker 8: You can't use advocate and not at the same time.
Speaker 8: So no, typically you can't stack.
Speaker 5: Okay, let me ask you this about the gentrification thing,
Speaker 5: because you spoke about.
Speaker 6: A few signs.
Speaker 5: What's your what's your favorite one, or what's one that
Speaker 5: you haven't spoken about publicly or one that most people
Speaker 5: aren't thinking about in that thirty three that we might
Speaker 5: catch somebody by surprise, or it's one that everybody can
Speaker 5: kind of you recognize, Like, what's one that new?
Speaker 8: The favorite one we have in bat and Rouge is
Speaker 8: city plans. It's city plans, going to those city planning meetings,
Speaker 8: reading their reports and seeing what their plans are for
Speaker 8: a specific neighborhood. Now, sometimes city makes plans and they
Speaker 8: actually don't move on the plans. They'll pay a consult
Speaker 8: and a whole bunch of money and not move on it.
Speaker 8: But when you start seeing the city actually commit financial
Speaker 8: resources to that area, you know they see something and
Speaker 8: you know that you can be a part of it.
Speaker 8: And so in bad and Rouge, the community is so
Speaker 8: small there, we are tapped into people in city council
Speaker 8: and so we know when things are going to happen
Speaker 8: and for real before they even hit, you know, like
Speaker 8: news and things of that nature. So we're able to
Speaker 8: move with that knowledge based on what relationships. And so
Speaker 8: city plans is one of the key things a lot
Speaker 8: of us are just a lot of us have distanced
Speaker 8: ourselves from politics because it feels so irrelevant. But the
Speaker 8: city planning is one of the key places. If I
Speaker 8: know a transportation route or new train station or new
Speaker 8: roads or bike lanes or a stadium or anything like
Speaker 8: that is going to go in a particular neighborhood, I
Speaker 8: already know what's going to happen to the real estate
Speaker 8: in that neighborhood. So staying in touch with city council
Speaker 8: when you're playing at a large level.
Speaker 5: Chris Sinegal said that, remember he said that he was
Speaker 5: the first person I actually heard that said that when
Speaker 5: he was on the city plans.
Speaker 8: That's still brother.
Speaker 5: Yeah, it's like right, it's right in your face. Sometimes
Speaker 5: you're looking for answers. That's right in our face and
Speaker 5: he's like you can literally go and they're giving you
Speaker 5: the city plans for the next five ten years and
Speaker 5: they're telling you like, this is what we plan to do,
Speaker 5: this the areas and nobody is like local politics, nobody
Speaker 5: never pays attention to it and correct it's happening.
Speaker 6: So that was you said that.
Speaker 8: So Chris is somebody who I've invested in and with
Speaker 8: in Houston, also invested obviously with buy Back Back Rouge Fund,
Speaker 8: and then Brittany Rogers also out in Houston. So in
Speaker 8: terms of ways to get into real estate and contribute
Speaker 8: to funds, if you are having difficulty building your own
Speaker 8: portfolio with due to credit or income, there's other ways
Speaker 8: to get involved through real estate funds as well.
Speaker 7: Yeah, so when you started the process, obviously you said
Speaker 7: you've been in for over eight years and.
Speaker 3: Well death and knowledge.
Speaker 7: When you talked about the eyes on the property, it's
Speaker 7: crazy because when you were talking about most of the
Speaker 7: times we're trained to think, all, right, does it have
Speaker 7: stand still appliances, doesn't have the ground.
Speaker 3: And top, does it? Right?
Speaker 7: Is a sizeable front yard or something like that, But
Speaker 7: you said the hidden value is what you should.
Speaker 3: Be looking for.
Speaker 7: So you gave some examples of the living addict, and
Speaker 7: I guess, on first basement, are we looking at these
Speaker 7: because obviously we can turn this into a Liverpool space
Speaker 7: that now could be rentable or what's the process and
Speaker 7: think about that.
Speaker 8: That's exactly that's exactly right. Even like new age vac,
Speaker 8: I know that I got a five to seven year
Speaker 8: run on this h VAC before it has to be
Speaker 8: changed out. That's that's hidden value, right. Whereas if I
Speaker 8: see a roof that is on its last leg, I
Speaker 8: know that that's going to be a big cost. That's
Speaker 8: a hidden costs that's going to catch me up if
Speaker 8: I can't assess that roof properly right or my inspector
Speaker 8: doesn't catch it. So, yeah, that's livable space. That means
Speaker 8: more rental income, especially when you have a four plex.
Speaker 8: There's only so many ways to increase rental income. But
Speaker 8: if this listing was positioned as a two bedroom, but
Speaker 8: you're actually like, wait, if I just put up a
Speaker 8: wall here and there's a window here, then that actually
Speaker 8: makes this the three bedroom. Now when I go to
Speaker 8: those Canno payment standards, now I can actually go to
Speaker 8: the three bedroom payment standard instead of the two bedroom,
Speaker 8: and that's an additional two hundred dollars a month, right,
Speaker 8: because it's now a three bedroom. This bedroom happened to
Speaker 8: be real large and they just did poor planning of
Speaker 8: this space. But literally, with the door wall and a
Speaker 8: little bit of electrical done, all of a sudden, this
Speaker 8: two bedroom now converts to a three bedroom. And since
Speaker 8: each apartment is laid out identical, I can now turn
Speaker 8: this eight bedroom apartment into a twelve bedroom apartment. Yeah,
Speaker 8: so now we need eight hundred dollars more per month.
Speaker 7: So what are some of the requirements that you need
Speaker 7: because I know that somebody listening right now, that's you
Speaker 7: know what I think my addict is livable? Is there
Speaker 7: a certain sealing high Obviously we have to have a door,
Speaker 7: maybe a closet, a window, Like, what are the things
Speaker 7: we need to have to make it livable?
Speaker 8: Yeah, so you got to go through in the planning
Speaker 8: and get get it permitted, right, So you got to
Speaker 8: do that and make sure that it's okay from that standpoint,
Speaker 8: So livable space. I know one of my properties has
Speaker 8: planted attic ceilings and the appraiser would only only count
Speaker 8: the area where the ceiling was a certain height, so
Speaker 8: it left off all this side space, right, But that
Speaker 8: was for the appraisal. But if somebody, if somebody's living
Speaker 8: there now, right, and if that person values that space
Speaker 8: regardless of the slanted ceilings at a certain rate, that's
Speaker 8: additional income that was not there based on the previous owner.
Speaker 8: Because I chose to put in this amount to finish
Speaker 8: the attic, and I found a tenant who actually values
Speaker 8: that space, you see what I'm saying. So, and then
Speaker 8: we have to run the cash on cash return equation
Speaker 8: for that. Okay, it's going to cost me twenty thousand
Speaker 8: dollars to finish this attic, to put in a bathroom,
Speaker 8: to put in floors, to finish the ceilings, put in
Speaker 8: the right electrical et cetera. That attic is going to
Speaker 8: bring me eight hundred dollars per month. That's ninety six
Speaker 8: hundred dollars for the year. Ninety six hundred dollars over
Speaker 8: twenty thousand is almost a fifty percent cash on cash return.
Speaker 8: That's a no brainer that we call that a return
Speaker 8: on renovation. Okay, because I made a renovation. This is
Speaker 8: how much renovation costs me. This is how much it's
Speaker 8: going to bring in right and if I can add
Speaker 8: a fifty return on anything, that's a green light.
Speaker 6: You see what I'm.
Speaker 5: Saying, gotcha, Julian, Always always a pleasure. So before we wrap,
Speaker 5: first and foremost, thank you for the information. Extremely valuable
Speaker 5: and extremely important. Make sure you watch this at least
Speaker 5: three times, Ladies joyment, listen to it on a podcast outlets, share.
Speaker 6: With a print. Very valuable, very valuable information.
Speaker 5: And once again this was just a sneak peak of
Speaker 5: what we do every single week at Eyo University. We
Speaker 5: have over one hundred archived classes. We have book club,
Speaker 5: we have a movie club, we have Infinity groups. We
Speaker 5: do monthly financial planning calls, we do real estate calls,
Speaker 5: we do two times a week go over the stock
Speaker 5: market with Lawrence.
Speaker 6: So that's the whole vibe within itself.
Speaker 5: Uh So, if you are interested in joining Euo University,
Speaker 5: we're running a flagshell from our v day is pisc Seasons,
Speaker 5: Troy Birthdays a few days after mind, so from right
Speaker 5: now until Sunday, we are doing sixty five percent off
Speaker 5: the annual membership.
Speaker 6: That is maximum value.
Speaker 3: I mean I like that. Yeah, we got that.
Speaker 5: So that's that's that And go to Eyo University if
Speaker 5: you want to take advantage of that. And then also Julian,
Speaker 5: if you if you watch the episode, you know that
Speaker 5: him and Matt actually came together and they put together
Speaker 5: the four three two one strategy where they combine Julian's community, Julian's.
Speaker 6: Program with MG the mortgage guys.
Speaker 5: I call it the real estate Encyclopedia as far as
Speaker 5: it was the home buyers and they put that together,
Speaker 5: but more more than just an educational course, it's actually
Speaker 5: a community where uh you know Julian, you know, they
Speaker 5: have zoom calls and they actually work together and they
Speaker 5: actually you know, actively going out there and buying property.
Speaker 5: So it's always good to have a community because now
Speaker 5: you have more of an incentive, you know, positive peer pressure.
Speaker 5: We talked about that before, like positive peer pressure. Peer
Speaker 5: pressure can be negative or can be positive if you're
Speaker 5: around people that's pushing you forward. Nobody wants to be
Speaker 5: in last place, Nobody wants to be the dumbest kid
Speaker 5: in the class. So you you push yourself forward when
Speaker 5: you're around good, positive people.
Speaker 6: And that's one of the things that Julian has built
Speaker 6: with his community.
Speaker 5: As far as with the real estate investors, and you
Speaker 5: know with the Black Friday sale which was extended for
Speaker 5: the episode, which you know, since we did the episode,
Speaker 5: this is the follow up for that, So it's gonna
Speaker 5: be the same same thing, so the same deal. So
Speaker 5: if you didn't take advantage on Black Friday, if you
Speaker 5: didn't take advantage for the episode.
Speaker 8: It's last time.
Speaker 6: Stop it.
Speaker 5: Stop and take advantage at some point man. And the
Speaker 5: website for that is get four three two one dot com.
Speaker 5: We'll put the links to both of that Eyo University
Speaker 5: and get four three two bond dot com. And in
Speaker 5: the description of the video once again, that is a
Speaker 5: community for Julian MG the mortgage guy.
Speaker 6: They came together, the greater forces of real estate came together.
Speaker 5: And if you're looking to get into the real estate
Speaker 5: and really scale not just you know, buy one home,
Speaker 5: but really scale and buy you know, multiple homes throughout
Speaker 5: the course of the decade and really you know, build
Speaker 5: generational wealth when it comes to real estate brick and mortar,
Speaker 5: which isn't going anywhere. That landlord situation is funny. We're
Speaker 5: in England right now, so we.
Speaker 6: Just came from yesterday.
Speaker 5: We was at the house of the Laws and we
Speaker 5: got like a private tour of the House of the Lords.
Speaker 5: And you know, so when you said the landlord, I
Speaker 5: never knew, but it makes sense. It makes sense why
Speaker 5: it's called landlord. So yeah, you know, just to see that,
Speaker 5: you know, just to see, you know, all of this
Speaker 5: old monarchy and all of the stuff that you know
Speaker 5: was taking and stolen and however they got it, but
Speaker 5: they still have it, like they still have it to
Speaker 5: this day. And you know, to see like Buckingham Palace and
Speaker 5: all of these real estate out here is crazy, like
Speaker 5: I think the most expensive real estate.
Speaker 3: Market in the world.
Speaker 5: So like two barrel apartments for like three million dollars,
Speaker 5: like a penthouse for two hundred and eighty million dollars.
Speaker 5: A Russian billionaire brought a pinhouse that Saudi, the Saudi
Speaker 5: royal family is building like the most luxurious towers. So
Speaker 5: everywhere we go, the Uber drivers, the drivers, they're all
Speaker 5: showing us like this court this month. This is the
Speaker 5: most expensive, and it's all real estate. It's all real estate,
Speaker 5: and it's only going up in value. So it's like
Speaker 5: even at two million dollar two barrel apartment sounds crazy
Speaker 5: until ten years from now, when it's worth four million out,
Speaker 5: so anywhere anywhere in the world. Anywhere in the world.
Speaker 5: So real estate.
Speaker 8: Estate, real estate, real estate. It's not going anywhere. Even
Speaker 8: if the metaverse is here, it's not going anywhere. Matt
Speaker 8: and I are committed to helping three hundred people close
Speaker 8: on their first multifamily home this year, and that's probably
Speaker 8: combined forces. We have had so many successes thus far,
Speaker 8: and we just are trying to streamline that process and
Speaker 8: help more people get to the finish line. You know,
Speaker 8: tools like the purchase of past Deal Analyzer, those are
Speaker 8: only through our program. You can't get those anywhere else.
Speaker 8: I know there's some people in chats and how do
Speaker 8: I get that tool or how do I get that workbook?
Speaker 8: That it's through the program. So if you're ready to
Speaker 8: make this happen and you're serious about making sure that
Speaker 8: you close before the end of this year, then go
Speaker 8: to get four three two one dot com. Get fourth
Speaker 8: three two one dot com. I think we should probably
Speaker 8: close it around Troy's birthday. Toys Thursday, Thursday. Yeah, so
Speaker 8: we should probably close that around Toy's birthday. This is
Speaker 8: the third time and on the.
Speaker 3: Third day of the third month.
Speaker 8: Yeah, third day of the third month, so third time,
Speaker 8: this is it Black Friday. Because this program is worth
Speaker 8: worth way more. I don't know if folks have heard
Speaker 8: or fortune Builders or whatnot, but fortune Builders charges thirty
Speaker 8: to fifty thousand dollars for what Matt and I are teaching.
Speaker 8: We're literally charging a fraction of that. Why now, fortune Builders,
Speaker 8: I believe it's worth thirty to fifty thousand dollars. Why
Speaker 8: because I just give you demonstrations of how I made
Speaker 8: way more than thirty to fifty thousand dollars through real estate.
Speaker 8: But the problem with fortune Builders they try thank you
Speaker 8: so much for the education that you're left with no
Speaker 8: money for the execution. So what we decided to do
Speaker 8: is we're gonna make the education cheaper so that our
Speaker 8: people have enough money to actually execute on the information
Speaker 8: that they've learned. And so this is why we do it.
Speaker 8: We're doing it for the people, and we're doing it
Speaker 8: for the culture, and we're doing it to get this
Speaker 8: land back. And the reason they call this the land
Speaker 8: of the Freeze because they got so much free land.
Speaker 8: And we were here before slave ships. We were here.
Speaker 8: You go look at any O mex sculpture. We were here,
Speaker 8: So we just here to reclaim land that was our
Speaker 8: by birthright, and we're doing it through multifamily real estate.
Speaker 8: And so shout out to MG. I know he couldn't
Speaker 8: be here. He's on his flight to London. I wish
Speaker 8: you all the best. I hope you turn up for
Speaker 8: your birthdays. I hope London treat you really really well,
Speaker 8: and I can't wait to see when you get back
Speaker 8: to State side.
Speaker 6: I appreciate that.
Speaker 5: But the last thing that I'll say is that it's
Speaker 5: not an either or, because you know, we talked about
Speaker 5: stocks a lot, we talk about.
Speaker 6: Crypto, and it's really you got to do both and everything.
Speaker 5: I look at that, even when they was giving me
Speaker 5: the tour and they were showing me the royal family
Speaker 5: of I think it was Qatar or one of these
Speaker 5: Middle Eastern empires, and they were saying, like they're building,
Speaker 5: they buying all this real estate, and you know, so
Speaker 5: they get the money from oil, right, that's like that,
Speaker 5: that's how they actually get the money. This is how
Speaker 5: they became billionaires off of the oil. And they're diversifying
Speaker 5: and now they're buying stocks, they're buying real estates. And
Speaker 5: now that you got to do multiple different things. So,
Speaker 5: you know, real estate has always been an asset and
Speaker 5: something that has always grown up in value. And you
Speaker 5: look at Bill Gates, or you look at you know,
Speaker 5: the Royal family of Saudi or the royal family of Qatar,
Speaker 5: any of these, you know, people that have made money
Speaker 5: in other sectors, they always diversify and they come back
Speaker 5: and they buy real estate. So they get money from stocks,
Speaker 5: they get money from you know, crypto, they get money
Speaker 5: from oil or technology companies or whatever. And part of
Speaker 5: the diversification strategy is to buy real estate on a
Speaker 5: smaller scale. You you should be you should be thinking
Speaker 5: the same way where it's like, all right, you know,
Speaker 5: I got a business, or I'm trading stocks doing an option,
Speaker 5: but a portion of that money has to be diversified.
Speaker 6: And real estate is always going.
Speaker 5: To be something that goes up in value as long
Speaker 5: as you buy and correctly right right price, right place,
Speaker 5: can't go.
Speaker 7: Wrong with I'm glad you brought up Bill Gates because
Speaker 7: most people know him as the founder of Microsoft, but
Speaker 7: he's also the largest landowner a farm farmland in the country.
Speaker 7: And so you turn that asset into something that actually
Speaker 7: produces assets.
Speaker 3: You see how it differs defies over time.
Speaker 6: Yes, education, ladies and gentlemen. So there you have it.
Speaker 6: Ladies and gentlemen, take action. Go to Eyo University dot
Speaker 6: com take it.
Speaker 5: Take advantage of that sale that we have running to
Speaker 5: the end of my birthday and get four three two
Speaker 5: one dot com take advantage of the Black Friday sale
Speaker 5: which will be expiring on Troy's birthday, so we have
Speaker 5: two birthday sales actually running simultaneous. Been a pleasure, Julian,
Speaker 5: thank you, my brother. I appreciate you. Yes, yes, appreciate
Speaker 5: y'all too. You know you know what we've got to
Speaker 5: end with. If you renting.
Speaker 6: The legendary line of it back line, Yeah, appreciate it.
Speaker 6: Go enjoy yourselves, all right, bro, You'll be good.
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