WEBVTT - Study Hall: How to Become a Real Estate Developer 0:00:00.400 --> 0:00:04.280 You just realized your business needed to hire someone yesterday. 0:00:04.800 --> 0:00:09.000 How can you find amazing candidates fast easy? Just use 0:00:09.080 --> 0:00:12.360 Indeed stop struggling to get your job posts seen on 0:00:12.480 --> 0:00:16.360 other job sites. With Indeed sponsored jobs, your post jumps 0:00:16.400 --> 0:00:18.720 to the top of the page for your relevant candidates, 0:00:18.960 --> 0:00:22.000 so you can reach the people you want faster. According 0:00:22.040 --> 0:00:25.680 to Indeed data, sponsored jobs posted directly on Indeed have 0:00:25.800 --> 0:00:29.840 forty five percent more applications than non sponsored jobs. Don't 0:00:29.840 --> 0:00:33.519 wait any longer. 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It includes weekly webinars from industry leaders. 0:01:13.680 --> 0:01:17.200 It includes access to our investment Facebook group, movie club, 0:01:17.400 --> 0:01:21.080 our book club. It also includes access to monthly financial 0:01:21.120 --> 0:01:24.000 planning calls with yours truly. But what has been added 0:01:24.520 --> 0:01:27.680 has access to MG the Mortgage Guys home Buyers Blueprint 0:01:27.720 --> 0:01:30.280 over fourteen hours everything you need to know as far 0:01:30.280 --> 0:01:31.360 as the home buying. 0:01:31.120 --> 0:01:32.080 Process is concerned. 0:01:32.319 --> 0:01:35.280 And also what has been added is access to our 0:01:35.360 --> 0:01:39.280 monthly group chat call. So once a month, Me, Troy 0:01:39.319 --> 0:01:40.800 and the whole team is going to let you in 0:01:40.840 --> 0:01:43.720 on our personal plays, our portfolio, what we're doing and 0:01:43.840 --> 0:01:47.160 more so all of that. We are running for a 0:01:47.200 --> 0:01:51.880 special promo code of seventy percent off for limited time only. 0:01:52.000 --> 0:01:55.200 So at the Eyluniversity dot com right now and take 0:01:55.240 --> 0:01:55.760 advantage you. 0:01:55.760 --> 0:01:57.240 Know not its works, don't wait, don't have to take you. 0:01:57.280 --> 0:01:57.600 We'll see you. 0:01:57.640 --> 0:02:02.680 On the other side, my graduates from my school being 0:02:02.800 --> 0:02:08.440 forced back drop b drop, Mike drop back drop drop. 0:02:18.360 --> 0:02:20.880 I got my hands on a book called The People's Principles, 0:02:20.919 --> 0:02:24.280 which was written by Don Peebles. Don Peebles, billionaire black 0:02:24.320 --> 0:02:27.360 developer from DC. That's where he started, then moved on 0:02:27.440 --> 0:02:30.720 to Miami and went to Vegas and uh now it's 0:02:30.760 --> 0:02:34.480 based in New York and I read this book really 0:02:34.560 --> 0:02:39.320 was inspired by the really technical things that he said 0:02:39.360 --> 0:02:42.040 within it. It's like, this is how I became what 0:02:42.120 --> 0:02:43.919 I became. And I was like, oh, this is great. Okay, 0:02:43.960 --> 0:02:46.800 well I'm follow a similar path, but just do it 0:02:46.800 --> 0:02:50.720 my way. So on twenty seventeen, I twenty sixteen, I 0:02:50.760 --> 0:02:54.120 got my first low income housing tax credit. So affordable 0:02:54.120 --> 0:02:57.600 housing developments in the past were financed through Section eight. 0:02:57.800 --> 0:03:00.320 So if you think about a Section eight property Brinnie 0:03:00.320 --> 0:03:02.919 Green's in Chicago. You know some of these really large 0:03:02.919 --> 0:03:07.480 berry farms in DC, really large complexes three four hundred 0:03:07.600 --> 0:03:11.600 units and really just clusters of poverty. That's how they 0:03:11.639 --> 0:03:13.840 were financing them. But now they use a tool called 0:03:13.919 --> 0:03:17.560 Section forty two i RS Code. 0:03:16.400 --> 0:03:17.560 Which is a tax credit. 0:03:18.040 --> 0:03:20.919 So we are given a tax credit that we sell 0:03:21.000 --> 0:03:23.560 to an investor and use that to finance the project. 0:03:23.560 --> 0:03:25.320 Can you can you explain that a little bit, because yeah, 0:03:25.360 --> 0:03:27.680 we section eight. I think most people know what Section 0:03:27.720 --> 0:03:29.880 eight is, right, where it's like it's government and they 0:03:30.400 --> 0:03:34.000 subsidized housing, right, and but Section A you don't have 0:03:34.040 --> 0:03:36.240 to live in the projects like you can have a house. 0:03:36.360 --> 0:03:40.520 So there's two different types. There's Section eight project based vouchures. 0:03:40.840 --> 0:03:44.680 So projects got the Section eight assistance, but then they 0:03:44.720 --> 0:03:47.480 were also like people based box where you can take 0:03:47.520 --> 0:03:48.240 that you. 0:03:48.200 --> 0:03:50.840 Go into like a house, and they pay the landlord. 0:03:51.560 --> 0:03:52.800 So what's the new way? 0:03:53.000 --> 0:03:56.000 Section forty two is the primary tool for affordable housing. 0:03:56.000 --> 0:03:58.960 There's still some Section eight, there's still some vouchures, but 0:03:59.040 --> 0:04:03.000 Section forty two just really high level. If you think 0:04:03.040 --> 0:04:06.880 about a building, and you think about developing a building, 0:04:07.240 --> 0:04:10.480 it may cost forty million dollars to develop. 0:04:10.160 --> 0:04:11.320 A building, right. 0:04:12.640 --> 0:04:15.920 Typically, in order to fund that building, you need rents 0:04:16.000 --> 0:04:19.960 that'll pay you enough to then get a bank to 0:04:20.000 --> 0:04:22.520 give you a loan, so you need a construction loan, 0:04:22.560 --> 0:04:24.320 and then you need perman and financing. 0:04:24.600 --> 0:04:25.280 So in order to. 0:04:25.200 --> 0:04:28.039 Get the construction loan, one of the threshold items is, hey, 0:04:28.360 --> 0:04:31.440 how much is the loan to value of this projected property? 0:04:31.880 --> 0:04:32.520 So if your. 0:04:32.480 --> 0:04:35.520 Value based on rents being at fifteen hundred dollars a month, 0:04:35.839 --> 0:04:37.599 it equates to forty million dollars. 0:04:37.880 --> 0:04:39.160 You can then build. 0:04:39.800 --> 0:04:42.160 Who's doing the assessment of how much each one is worth? 0:04:43.279 --> 0:04:45.680 Each unit? The market kind of determines that. 0:04:46.120 --> 0:04:50.320 So drilling deeper into that, let's say fifteen hundred perer 0:04:51.440 --> 0:04:55.280 equates to forty million dollars. Let's say now you're in 0:04:55.320 --> 0:04:57.640 an area that rents can only be seven hundred and 0:04:57.720 --> 0:05:00.400 fifty dollars per People still need to lo but we 0:05:00.440 --> 0:05:03.320 still need additional housing in order to build that. The 0:05:03.360 --> 0:05:08.480 government created a tax credit that subsidized developers for the difference. 0:05:09.720 --> 0:05:13.240 So if the seven fifty gives me twenty million, I 0:05:13.520 --> 0:05:15.800 effectively are gonna get I'm gonna get twenty million in 0:05:15.839 --> 0:05:17.640 a tax credit to then make it balance and make 0:05:17.640 --> 0:05:17.960 it work. 0:05:18.080 --> 0:05:22.400 They so they'll pay you the developer, they pay the project, 0:05:22.440 --> 0:05:24.880 the project. They pay them, not you personally, but they 0:05:24.880 --> 0:05:26.520 fund the project and. 0:05:26.440 --> 0:05:29.560 They allocate a tax credit to the developer to sell 0:05:29.680 --> 0:05:30.719 on behalf of the project. 0:05:30.800 --> 0:05:33.000 So they paid that the person paid seven hundred and 0:05:33.160 --> 0:05:34.800 one thousand dollar if it was seventeen hundred and one 0:05:34.800 --> 0:05:36.560 thousand dollars, is being paid. 0:05:36.720 --> 0:05:40.160 Through through the tax credit upfront. 0:05:40.880 --> 0:05:42.839 And in exchange for the tax credit, you have to 0:05:42.880 --> 0:05:46.000 restrict the rents for a certain amount of time fifteen years, 0:05:46.040 --> 0:05:49.839 thirty years, et cetera. And the rent to like market based. Yeah, 0:05:49.920 --> 0:05:53.480 so it's based on the area median income. So that's 0:05:53.680 --> 0:05:57.159 really like how they determine it, and they have different thresholds. 0:05:57.160 --> 0:05:59.880 So a thirty percent unit is like very low in 0:06:00.560 --> 0:06:03.320 a fifty percent unit and a sixty percent unit is what. 0:06:03.240 --> 0:06:05.719 We will call workforce or affordable housing. 0:06:06.240 --> 0:06:08.640 And then you have eighty percent units as well that 0:06:08.680 --> 0:06:12.080 can be financed through this tax credit. And that's based 0:06:12.120 --> 0:06:15.159 on So take DC one hundred thousand dollars area media 0:06:15.200 --> 0:06:19.800 income in DC, UH fifty percent unit is fifty thousand dollars. 0:06:19.920 --> 0:06:23.120 If a person makes fifty thousand dollars in DC, they 0:06:23.160 --> 0:06:27.120 can qualify for affordable housing. Under this threshold. You take 0:06:27.200 --> 0:06:30.159 thirty percent of that income divided by twelve months. That's 0:06:30.200 --> 0:06:32.080 how you come out to the rent amount that you 0:06:32.120 --> 0:06:36.400 can pay. Okay, So okay, yeah, so it's a little deep. Sorry, No, 0:06:36.560 --> 0:06:38.880 that's that's right, up eyo, that's what we do. That's 0:06:38.920 --> 0:06:41.039 the whole it's right, a lot of numbers right in 0:06:41.040 --> 0:06:44.040 line with our content. So you meet, you meet down 0:06:44.120 --> 0:06:47.960 people's right, Yeah, and how does that go? 0:06:48.240 --> 0:06:48.520 Yeah? 0:06:48.560 --> 0:06:51.640 So twenty seventeen, I jumped out. He was speaking at 0:06:51.680 --> 0:06:54.440 a conference in DC, and I was like, I have 0:06:54.480 --> 0:06:55.200 to meet this guy. 0:06:55.320 --> 0:06:58.040 So I still by the door, very to niceous. 0:06:57.680 --> 0:07:01.000 Sid I'm an ambitious guy by nature, a type personality. 0:07:01.080 --> 0:07:02.440 If I want time, I'm gonna go get it. And 0:07:02.480 --> 0:07:05.880 I wanted to meet him, so I went introduced myself. 0:07:05.920 --> 0:07:07.880 I just received that tax credit. That's why I wanted 0:07:07.880 --> 0:07:09.960 to get a story. Just receive the tax credit. I 0:07:09.960 --> 0:07:12.800 was about to develop my first project. Hey, don what's up. 0:07:12.840 --> 0:07:15.960 I'm branded. I got my first project in. I got 0:07:15.960 --> 0:07:19.000 a couple more in my pipeline. Would love to connect. 0:07:19.400 --> 0:07:22.240 And he was impressed by what I was doing because 0:07:22.320 --> 0:07:24.200 my age I think I was twenty six twenty seven 0:07:24.240 --> 0:07:27.520 at the time, and his first project I was twenty seven. 0:07:28.080 --> 0:07:31.040 He was awarded his first project at twenty seven as well, 0:07:31.280 --> 0:07:33.320 so I was on that path. It's like, okay, yeah, 0:07:33.320 --> 0:07:35.560 this is the only black billionaire doing what I'm doing. 0:07:35.600 --> 0:07:36.320 I need to meet him. 0:07:36.360 --> 0:07:39.400 So we met, had a phone call about a month later, 0:07:39.680 --> 0:07:41.600 and the biggest takeaway I took from that phone call 0:07:41.800 --> 0:07:44.560 was he said, work on larger deals. So at that 0:07:44.560 --> 0:07:47.000 time I did was twelve and a half million. I 0:07:47.040 --> 0:07:49.360 had another deal that was about fourteen million, and I 0:07:49.400 --> 0:07:52.080 had another deal that was like seven million. The fourteen 0:07:52.080 --> 0:07:54.360 million dollar deal was a market rate unit. There wasn't 0:07:54.400 --> 0:07:56.960 an affordable Housit development. I actually never went through. I'll 0:07:56.960 --> 0:08:01.080 talk on that too, but I need to raise about 0:08:01.320 --> 0:08:05.320 one and a half from equity investors in order to 0:08:05.400 --> 0:08:07.960 finance the project. And you just, you know, go out 0:08:08.000 --> 0:08:10.480 to folks, get one hundred thousand here, two fifty there, 0:08:10.600 --> 0:08:13.240 you know, et cetera, et cetera. And he pretty much 0:08:13.280 --> 0:08:15.640 just put it in perspective for me. He said, I 0:08:15.760 --> 0:08:18.280 just raised five hundred million dollars in New York and 0:08:18.320 --> 0:08:22.640 this is the easiest money I ever raised. Because institutional capital, 0:08:22.680 --> 0:08:26.920 the demand on that is so it's so much, it's 0:08:26.920 --> 0:08:30.920 so much less than the demand on every day individuals 0:08:30.920 --> 0:08:32.960 and investments. Because you can invest in stocks, you can 0:08:33.000 --> 0:08:34.920 invest in bonds, you can invest in a different real 0:08:35.000 --> 0:08:37.319 estate project, you can invest in your kids college fund. 0:08:37.720 --> 0:08:42.160 Individuals have so many options. But institutional capital needs places 0:08:42.200 --> 0:08:44.360 to put this money. So he told me to work 0:08:44.360 --> 0:08:47.160 on larger deals. And I said, about three months later, 0:08:47.559 --> 0:08:48.240 I moved to DC. 0:08:48.400 --> 0:08:52.720 That reminds me of three stories. So I'll take it 0:08:52.720 --> 0:08:56.120 one by one. Well, first off, you know how one 0:08:56.160 --> 0:08:59.280 of the people that really got done people's into the game, 0:09:00.040 --> 0:09:02.760 Barry and Barry for sure, you know that legend DC 0:09:02.960 --> 0:09:07.800 legend rest in peace. So that's one story. The second 0:09:07.800 --> 0:09:10.760 story is that that also that what you said reminds me. 0:09:10.880 --> 0:09:13.320 I watched the interview with Magic Johnson and Maverick Carter 0:09:13.320 --> 0:09:15.800 to shout out to both of them, and Magic told 0:09:16.000 --> 0:09:20.360 Maverick he said, the same amount of time that it 0:09:20.440 --> 0:09:23.000 takes to do a deal for one million, it takes 0:09:23.000 --> 0:09:27.240 to do one hundred million, So do one hundred million 0:09:27.400 --> 0:09:31.080 because it's the same energy, same energy. It's not like 0:09:31.120 --> 0:09:33.680 it's not you have to do additional energy. It's the 0:09:33.760 --> 0:09:36.600 same energy output. It's just you're focusing your energy on 0:09:36.600 --> 0:09:39.640 the small guy level. You can focus your energy on 0:09:39.679 --> 0:09:41.320 big or you can focus your in this on small. 0:09:42.240 --> 0:09:46.760 The third one was Byron Allen. He was on a 0:09:46.800 --> 0:09:49.600 breakfast club and he just said what you said as 0:09:49.600 --> 0:09:51.400 far as like what especially in institutions, a lot of 0:09:51.400 --> 0:09:53.559 times they have a problem where they have to they 0:09:53.600 --> 0:09:55.280 have to spend money. They have to they have to 0:09:55.280 --> 0:09:55.800 spend money. 0:09:55.840 --> 0:09:57.600 They raised it, they haven't exactly. 0:09:57.800 --> 0:10:01.800 They're looking for. They have whole teams devoted to look 0:10:01.840 --> 0:10:04.640 for opportunities, which means they have whole teams devote to 0:10:04.679 --> 0:10:06.760 look to say where can I give money away to 0:10:06.920 --> 0:10:10.280 different deals and how can I position this because I 0:10:10.360 --> 0:10:14.559 have five hundred million dollars, so it was just. 0:10:14.520 --> 0:10:19.000 Five hundred So it's real. Raise your hand please, So 0:10:19.400 --> 0:10:22.240 you have to understand the key to that. You have 0:10:22.280 --> 0:10:24.959 to understand that language. It's a language of finance. That's 0:10:25.000 --> 0:10:26.439 the way I look at it. It's no different from 0:10:26.440 --> 0:10:30.320 English verse Spanish. We all know English, some people know Spanish, 0:10:30.360 --> 0:10:31.320 some people know finance. 0:10:31.360 --> 0:10:32.160 It's just a language. 0:10:32.240 --> 0:10:34.240 And if you understand the language, and if you understand 0:10:34.240 --> 0:10:36.079 what they are saying and what they are looking for, 0:10:36.720 --> 0:10:37.439 you can make it work. 0:10:37.600 --> 0:10:38.160 So how did you? 0:10:38.160 --> 0:10:40.440 I'm interested to notice because you started in the game 0:10:40.559 --> 0:10:44.280 very young, twenty early twenties and twenty three, you know, 0:10:44.320 --> 0:10:48.440 humble beginnings, like your family was in real estate. So 0:10:49.000 --> 0:10:50.680 how do you get your first deal? How do you 0:10:50.760 --> 0:10:52.760 learn the language? How do you get your first deal 0:10:54.040 --> 0:10:56.320 in real estate as a developer? Like how does that? 0:10:56.440 --> 0:10:59.360 He walked me through that process, like your very first deal, Like, 0:10:59.360 --> 0:11:00.000 how does that happen? 0:11:00.120 --> 0:11:02.679 So my first deal was actually a four unit investment. 0:11:02.760 --> 0:11:05.319 It was a real estate investment type. Okay, it was 0:11:05.320 --> 0:11:07.840 a hud home on the north west side of Milwaukee 0:11:07.840 --> 0:11:11.200 by Hoole. Yeah, I just sold it about a year 0:11:11.240 --> 0:11:13.640 and a half ago. So I bought that when I 0:11:13.720 --> 0:11:17.920 was twenty three. So let me rewind FJA three and 0:11:17.960 --> 0:11:20.120 a half percent down. It was only eighty five thousand 0:11:20.120 --> 0:11:21.760 dollars and I sold it for like one sixty n 0:11:22.200 --> 0:11:25.440 So that was like, well played, it's different. You know, 0:11:25.520 --> 0:11:28.760 it makes sense. So that was my entry entry point. 0:11:28.800 --> 0:11:32.600 But rewinding. So once I finished the Acre program, I'm like, Okay, 0:11:32.600 --> 0:11:34.120 this real estate thing is cool. I think I want 0:11:34.160 --> 0:11:35.719 to figure out how to be a developer. I spent 0:11:35.800 --> 0:11:38.120 a lot of time trying to put the pieces of 0:11:38.120 --> 0:11:40.840 the puzzles together. So I started going to events. I 0:11:40.880 --> 0:11:45.200 went to a ton of conferences, a ton of seminars, gallas, 0:11:45.280 --> 0:11:48.360 all types of things. I was just searching for people 0:11:48.400 --> 0:11:51.600 and information and knowledge. And I equated it to like 0:11:51.640 --> 0:11:54.960 putting together a puzzle. Right, It's like, if this is 0:11:54.960 --> 0:11:57.800 the real estate puzzle, how do I find the pieces 0:11:57.840 --> 0:11:59.200 and then how do I put them together? 0:11:59.800 --> 0:12:02.120 I met a guy by the name of Keith Broaden. 0:12:02.360 --> 0:12:02.400 No. 0:12:02.559 --> 0:12:06.440 First, I went to a uh An Awards bank will 0:12:06.440 --> 0:12:08.760 called the Mandy Awards' Community Development Awards in the city 0:12:08.800 --> 0:12:11.240 of Milwaukee. I'm actually up for I'm a finalist of 0:12:11.320 --> 0:12:14.800 a Real Estate Awards. Okay too, So congratulations, thank you. 0:12:14.840 --> 0:12:15.560 I'm sure you win. 0:12:15.800 --> 0:12:21.040 Yeah, I appreciated this episode were put over the finish line. 0:12:21.200 --> 0:12:21.840 So yeah. 0:12:21.880 --> 0:12:23.880 I went to this awards banquet and I met a 0:12:23.920 --> 0:12:26.559 gentleman by the name of Wayman Winston Waymon Winston was 0:12:26.559 --> 0:12:29.400 the executive director of WEEDA. WEEDA is the housing authority 0:12:29.400 --> 0:12:33.600 that administers the long time housing tax credits. So I 0:12:33.640 --> 0:12:35.200 was like, yeah, I want to be a developer, et cetera, 0:12:35.200 --> 0:12:36.240 et ceter He was like, well, if you want to 0:12:36.280 --> 0:12:38.040 be a developer, come to this conference. 0:12:38.120 --> 0:12:40.719 This is the developers conference. It's going to be all developers. 0:12:40.880 --> 0:12:43.439 There's going to be lenders, there's gonna be architects, syndicators, 0:12:43.600 --> 0:12:46.280 anyone that plays in this arena in the state of 0:12:46.320 --> 0:12:49.080 Wisconsin will be here at the conference. Conference was like 0:12:49.160 --> 0:12:52.160 a couple of hundred dollars I didn't have. It ended 0:12:52.240 --> 0:12:55.079 up getting sponsored somehow. I think I like figured out 0:12:55.080 --> 0:12:57.680 a way to finesse my way up here. So you know, 0:12:57.720 --> 0:12:59.360 I threw on a suit. I had a little nappy 0:12:59.360 --> 0:13:01.560 frow at the time. I mean, I just was meeting 0:13:01.600 --> 0:13:03.840 everyone I could meet, and I ran into this gentleman 0:13:04.240 --> 0:13:04.640 who I just. 0:13:04.640 --> 0:13:06.320 Saw a few weeks ago, Keith brought next. 0:13:06.679 --> 0:13:09.679 He was working at Great Lakes Capital, which is now 0:13:09.720 --> 0:13:13.480 costing their their syndication firm. They raised funds and then 0:13:13.480 --> 0:13:17.240 they minister. They pretty much purchased the tax credits on 0:13:17.240 --> 0:13:20.360 behalf of investors, and he gave me my first pro former. 0:13:20.840 --> 0:13:25.760 So a performer is essentially an Excel document that pretty 0:13:25.800 --> 0:13:28.520 much is the business plan for real estate development. 0:13:28.960 --> 0:13:29.720 And what that does. 0:13:29.800 --> 0:13:34.079 It allows you to understand how much this will cost 0:13:34.120 --> 0:13:36.800 to build and how it will perform over the next 0:13:37.400 --> 0:13:40.400 fifteen to thirty years. So he gave me this performer, 0:13:40.720 --> 0:13:43.760 and I had no clue what it was. I wasn't 0:13:43.760 --> 0:13:46.320 really a finance I was an economics major, but I 0:13:46.360 --> 0:13:49.679 wasn't a math or finance guy really. So I was 0:13:49.760 --> 0:13:51.199 just diving in and I tried to figure it out. 0:13:51.200 --> 0:13:52.760 So I would like google every term. 0:13:53.480 --> 0:13:57.360 You know. Google university is a thing, YouTube university is a thing. 0:13:57.480 --> 0:13:57.680 You know. 0:13:57.800 --> 0:14:00.319 I was googling every single term trying to understan. 0:14:00.120 --> 0:14:02.840 You know what else today eyl university. 0:14:02.920 --> 0:14:05.760 We'll talk about that later on. That's the thing you 0:14:05.880 --> 0:14:08.560 need it. It's a real ting, okay, but even better 0:14:08.920 --> 0:14:10.320 you know, by us. 0:14:10.400 --> 0:14:14.079 So yeah, I was just googling all of the terms 0:14:14.080 --> 0:14:17.200 within this document, and I just started to work in it. 0:14:17.240 --> 0:14:19.000 So I was working at the bank at the time. 0:14:19.360 --> 0:14:20.680 I was working at P and C Bank as a 0:14:20.680 --> 0:14:22.800 personal banker and making twenty three thousand dollars a year, 0:14:23.160 --> 0:14:26.000 and I was like, man, I can't this is my life, Like, 0:14:26.240 --> 0:14:28.280 I'm not about to just be wearing these nice suits, 0:14:28.280 --> 0:14:29.680 getting up at six in the morning and getting home 0:14:29.680 --> 0:14:31.800 at six pm doing this for the rest of my life. 0:14:31.800 --> 0:14:32.480 I can't do it. 0:14:32.800 --> 0:14:35.400 So I would then get off work and then go 0:14:35.480 --> 0:14:37.640 back to work from seven to midnight, seven to one, 0:14:37.760 --> 0:14:39.920 seven to two. Every single day. I was in that 0:14:40.000 --> 0:14:44.280 pro form of working for years, educating, educating myself in 0:14:44.320 --> 0:14:49.160 that no articles, pub no press, no publication, no payments, 0:14:49.440 --> 0:14:52.800 every single day I was working. So what then happened 0:14:52.880 --> 0:14:56.560 was I realized that I was only making about fifteen 0:14:56.720 --> 0:15:01.160 hundred after taxes per month. And then I came across 0:15:01.160 --> 0:15:04.360 this four unit that was eighty five thousand dollars in Milwaukee. 0:15:04.440 --> 0:15:07.000 In Milwaukee, so I put three and a half percent down. 0:15:07.480 --> 0:15:09.680 I was written out there. I think the rents were 0:15:09.720 --> 0:15:14.720 about six hundred apiece, maybe six twenty five, you know, 0:15:14.760 --> 0:15:18.000 do the math on that twenty four my mortgage was 0:15:18.040 --> 0:15:21.560 about one thousand, so I was clearing fourteen just off 0:15:21.600 --> 0:15:24.520 of this when I was only clearing fifteen at the bank. 0:15:25.400 --> 0:15:27.920 I quit my job the moment I bought the four unit. 0:15:27.960 --> 0:15:29.760 I couldn't quit before because I needed to show the 0:15:29.840 --> 0:15:32.560 income to bout a four unit. But once once I 0:15:32.640 --> 0:15:34.920 was closed, I quit. I was out of there. That 0:15:34.920 --> 0:15:37.200 then gave me the freedom to dig deeper into this 0:15:37.240 --> 0:15:37.840 real estate thing. 0:15:37.880 --> 0:15:40.120 Now you spend in the entire time, all my time, 0:15:40.240 --> 0:15:43.760 energy and effort was going towards real estate development. Specifically. 0:15:43.960 --> 0:15:46.680 I knew investing was cool, but I wanted to figure 0:15:46.680 --> 0:15:48.800 out how to be a developer. 0:15:48.240 --> 0:15:50.760 Because the fees associated with it are great. 0:15:50.920 --> 0:15:53.800 You know, just to break it down, for real developer 0:15:53.800 --> 0:15:56.200 doesn't get a forty million dollar payment or anything like that. 0:15:56.280 --> 0:16:00.080 But you on the market right side, you made he 0:16:00.160 --> 0:16:02.960 three to six percent of the total costs. So if 0:16:03.000 --> 0:16:05.880 you're working on a one hundred million dollar, dude, do 0:16:06.040 --> 0:16:09.040 the math. On the affordable side, you get about ten 0:16:09.080 --> 0:16:14.000 to fifteen percent percent really on the total project costs. 0:16:14.720 --> 0:16:18.600 So you so so so if you do a forty 0:16:18.600 --> 0:16:21.520 million dollar deal, you get ten percent. That's four million 0:16:21.760 --> 0:16:23.760 dollars correct. 0:16:23.640 --> 0:16:28.120 Yeah, yes, ten to ten to fifteen percent. 0:16:32.040 --> 0:16:33.480 He took the ladder. 0:16:34.920 --> 0:16:38.240 Somewhere don't load for me, don't load somewhere around lower 0:16:39.240 --> 0:16:40.840 respected respect. 0:16:41.720 --> 0:16:44.160 So so so to that point it was like, okay, 0:16:44.280 --> 0:16:45.840 let me figure out how to do this development thing. 0:16:46.120 --> 0:16:48.000 I worked in his model. Boom boom boom bo. I 0:16:48.000 --> 0:16:49.600 saw the number. So I'm like, oh, they're making some 0:16:49.880 --> 0:16:52.240 real life money in this thing. So figured it out. 0:16:52.760 --> 0:16:56.080 So I start working. I met with him again, showed 0:16:56.120 --> 0:16:59.200 him and it was terrible. He helped me met a 0:16:59.240 --> 0:17:03.240 consultant that does development consultant and she was actually a 0:17:03.320 --> 0:17:07.560 CPA as well, CHARLENEA Brown basedide Atlanta. She helped me 0:17:08.080 --> 0:17:10.720 hone my skills when it came to my performer, my model. 0:17:11.160 --> 0:17:13.360 So what we did was just I would I would 0:17:13.400 --> 0:17:14.800 try to work in it. I would send it to her, 0:17:14.840 --> 0:17:18.080 she would edit it, send it back, and eventually I 0:17:18.119 --> 0:17:19.679 got good. It's like okay, yeah, I know how to 0:17:19.680 --> 0:17:21.760 do a project. So then I started looking for a project. 0:17:21.880 --> 0:17:24.359 So are you doing this on a platform? What's the 0:17:24.400 --> 0:17:27.040 exale microsoftic sale? I was on my computer. You could 0:17:27.240 --> 0:17:30.480 huntre it out a computer from best Buy, downloaded sale 0:17:30.480 --> 0:17:31.040 and you working. 0:17:31.640 --> 0:17:34.560 That's it. That's it. You don't need any anything else. 0:17:35.000 --> 0:17:37.960 So I'm just teaching myself all the language, teaching myself 0:17:38.160 --> 0:17:40.560 how to do things. 0:17:41.119 --> 0:17:43.320 So I started swinging at projects and I was missing. 0:17:43.920 --> 0:17:44.760 But it was one. 0:17:44.920 --> 0:17:47.440 It was a city on RFP request for a proposal, 0:17:47.520 --> 0:17:49.199 very similar to the one that I just wanted Madison. 0:17:51.680 --> 0:17:52.120 That one. 0:17:52.359 --> 0:17:55.000 I ended up pitching it to a developer and I'm like, yo, 0:17:55.080 --> 0:17:58.159 let's co develop this project. Here's my model for it. 0:17:58.560 --> 0:18:00.800 Would you guys be willing to split the developer fee 0:18:00.800 --> 0:18:03.359 and the ownership? The model is what's what's the model 0:18:03.440 --> 0:18:05.040 is another name for the proformer? 0:18:05.160 --> 0:18:05.520 My bad? 0:18:05.760 --> 0:18:06.560 What's the performer? 0:18:06.880 --> 0:18:09.960 The performer is the business plan for real estate development 0:18:10.440 --> 0:18:11.080 in the Excel. 0:18:11.160 --> 0:18:13.679 In my mind, I'm thinking developer, performer, and model are 0:18:14.560 --> 0:18:15.320 They're the same thing. 0:18:15.680 --> 0:18:17.520 So I'm using them interchangeably. 0:18:17.600 --> 0:18:19.040 So it's like, it's like the blueprint. 0:18:19.119 --> 0:18:22.520 It's the blueprint, the financial blueprint, financial blueprint for real 0:18:22.600 --> 0:18:23.400 estate development. 0:18:24.040 --> 0:18:26.240 How does developer do the physical blueprint as well? Or 0:18:26.280 --> 0:18:27.560 that's going to be somebody down the. 0:18:27.480 --> 0:18:31.159 Line with we outsource some Some development shops can have 0:18:31.200 --> 0:18:34.520 an architectural person on and but I outsource it. 0:18:34.760 --> 0:18:37.600 So all right, So you you study, you learn, you 0:18:37.680 --> 0:18:40.840 learn how to make a financial blueprint for a project 0:18:41.080 --> 0:18:43.760 like this is my vision is financially how it makes sense? 0:18:43.760 --> 0:18:46.040 For sure, you don't have any experience. So you go 0:18:46.119 --> 0:18:48.639 to another established developer. 0:18:48.800 --> 0:18:49.880 They've done it all. 0:18:49.920 --> 0:18:52.720 They've done it already. You say, I already have the blueprint. 0:18:53.400 --> 0:18:54.920 Let's work together, and this week is split. 0:18:55.400 --> 0:18:55.600 Yeah. 0:18:55.720 --> 0:18:58.520 So so now I'm creating value. That's the key to 0:18:58.560 --> 0:19:00.639