Latest / Own More Doors / #21 How To Purchase Your First Multifamily Property! Basic Steps, Tips, and Success Stories

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#21 How To Purchase Your First Multifamily Property! Basic Steps, Tips, and Success Stories · Own More Doors

0:00
SPEAKER_02: What's up everyone?
0:00
SPEAKER_02: Juan Weezar here with the Own More Doords podcast.
0:03
SPEAKER_02: This specific episode was first shared on our YouTube channel, Sage Real Estate.
0:08
SPEAKER_02: Check it out.
0:08
SPEAKER_02: And we're excited to bring it to you here.
0:11
SPEAKER_02: We hope you enjoy the interview.
0:13
SPEAKER_00: Of all the videos that we've made up to this point, there's one video that stands out from the rest, and that is the basic steps to multifamily investing.
0:20
SPEAKER_00: We got tremendous support.
0:22
SPEAKER_00: We got a lot of love on that specific video.
0:24
SPEAKER_00: And so as a result, we're bringing you part two today.
0:27
SPEAKER_00: So without further ado, let's jump right into it.
0:30
SPEAKER_00: Hey everyone, it's Wana Weezar with Sage Real Estate.
0:32
SPEAKER_00: And I'm Caleb Baldwin also with Sage Real Estate.
0:35
SPEAKER_00: In today's video, we're going to be covering some of the most common questions that we get from buyers from all different walks of life, all different approaches.
0:42
SPEAKER_00: And we're going to dive into some of the most frequently asked questions as well as provide some pro tips, some inside success stories from clients that we've personally work with, and hope that we instill some useful knowledge to you as you get started in your investment career.
0:57
SPEAKER_02: So let's kick this off.
0:58
SPEAKER_02: This is, we're almost calling this part two of our basic steps on how to buy your first multifamily property in 2024.
1:04
SPEAKER_02: Now, if you've not seen our first video, we're certainly going to be adding to that one, but please make sure you check that video out.
1:11
SPEAKER_02: Terrific video.
1:11
SPEAKER_02: It's got a lot of views, and we have we we love all the support and all the comments that you've been giving us.
1:16
SPEAKER_02: So please continue with that.
1:18
SPEAKER_02: So with that being said, let's start off with what's the most important part in in starting with step one into wanting to do this game up?
1:26
SPEAKER_02: Like, like what's the first step?
1:28
SPEAKER_00: Yeah, that's that's a great question.
1:29
SPEAKER_00: And I believe that the first step before any of the X's and the O's and the nuts and the bolts of the process is being in the right mindset.
1:37
SPEAKER_00: It's a big unknown.
1:38
SPEAKER_00: It's usually the biggest purchase that any of us will ever make in our life.
1:42
SPEAKER_00: And so entering it with the right mindset and mentality will help alleviate some of that unnecessary stress, which I believe is originated in a lot of those unknowns, the big question marks that we have to answer and address before we can feel comfortable and confident moving forward with actually beginning the process and taking the the actual steps that need to be taken in order to kickstart your investment career.
2:06
SPEAKER_02: And and and I agree with that, you know, and I call that a mind shift.
2:09
SPEAKER_02: And so there's a couple of things that happen.
2:12
SPEAKER_02: Either you know someone who's done it, whether it's it's a friend who went off and they bought their first four-unit building, or maybe you read about someone in a book, or maybe you heard a podcast, or maybe you've been watching our YouTube channel, but at some point it's a mind shift of saying, Yes, I can too.
2:30
SPEAKER_02: Or if I can't, I want to find out why I can't.
2:33
SPEAKER_02: And if they did it, I could do it too.
2:35
SPEAKER_02: So a lot of it has to do with you, the individual, saying, Now, there's a couple reasons why people want to buy rental properties.
2:44
SPEAKER_02: Caleb, like what are some of the most common things that you're hearing from the clients that you're currently working with today?
2:49
SPEAKER_02: Why is it that they're wanting to buy in a time where some people are gonna say, the interest rates are so high, why would anyone buy right now?
2:57
SPEAKER_02: You're you're crazy.
2:58
SPEAKER_02: Why are they buying?
3:00
SPEAKER_00: That's a great question.
3:01
SPEAKER_00: And I would say at the very basic core, is people want to be in control of where their monthly housing payment is going.
3:10
SPEAKER_00: And if you're not in control of that, that means somebody else is.
3:14
SPEAKER_00: And so when you're in control of your monthly housing expense, there's a certain confidence that that instills in you, knowing that no one can come shift that or raise your rent over time, and that leaks into every other category of your life, just knowing that you're in the driver's seat and you essentially control your own destiny when it comes to that monthly housing payment, which is most people's biggest expense every month.
3:37
SPEAKER_02: You know, Caleb, and a lot of times what I see from people who want to invest in real estate is there's there's a couple main reasons why they want to invest.
3:46
SPEAKER_02: And one of those reasons is well, I've heard and I've seen that when people buy a piece of property, you know, set seven, 10, 15 years later, it's doubled, it's tripled in price, and that's a thing called appreciation.
3:58
SPEAKER_02: It's just an investment.
3:59
SPEAKER_02: It's like uh, you have to live somewhere, and why not live in a in a property where in most likely in most cases we have appreciation.
4:07
SPEAKER_02: Certainly in Southern California, we know that that's a I'm gonna call it a guarantee, although some of you might push back.
4:12
SPEAKER_02: There's this guarantee of like, well, I have this money that I've saved up.
4:16
SPEAKER_02: Now I could go invest it in some other type of investment type, but I know if I put it in real estate, I'm gonna be pretty safe.
4:23
SPEAKER_02: So there's there's there's I want to have appreciation in my life, and so that's one of the reasons.
4:29
SPEAKER_02: A lot of times people say, you know, I'm gonna retire someday, and I don't know that I'm gonna have a pension plan or I'm gonna have this extra cash flow that I don't have to work for.
4:39
SPEAKER_02: And sometimes that real estate gives them that.
4:42
SPEAKER_02: A lot of times it gives people freedom.
4:44
SPEAKER_02: And then the last part is people tell us, I want to leave a nest egg behind.
4:49
SPEAKER_02: A lot of us have friends, and they know that when grandma and grandpa pass away, that they're gonna get several buildings.
4:57
SPEAKER_02: And sometimes this happens, and we see this happen all around us.
5:00
SPEAKER_02: Now, Caleb and I, and I'm gonna tell every single, we are not in that situation, okay?
5:04
SPEAKER_02: We're not in a situation where anyone's gonna leave us anything.
5:07
SPEAKER_02: And you might be in that situation too.
5:09
SPEAKER_02: But just because you're in that situation doesn't mean that you can't change that for this for the younger generation in your family.
5:16
SPEAKER_02: I have two daughters, and I'm thinking, geez, when I pass away, do I want to leave them a bunch of buildings?
5:21
SPEAKER_02: Of course.
5:22
SPEAKER_02: Of course, I want to do that.
5:24
SPEAKER_02: And so those are some of the reasons why when we're talking about mindset, we're talking about motivation, it's this is why you're doing it.
5:30
SPEAKER_02: Is it easy?
5:32
SPEAKER_02: No.
5:32
SPEAKER_02: Um, is it what I like to call get get rich guaranteed?
5:37
SPEAKER_02: It's definitely get rich guaranteed.
5:39
SPEAKER_02: And so let's talk about Caleb.
5:43
SPEAKER_02: The first thing we tell people, once you have that mindset, that motivation, that hey, I I want to know.
5:50
SPEAKER_02: I want to know is do I can I pull this off?
5:53
SPEAKER_02: What's the first thing that they need to do?
5:55
SPEAKER_00: Absolutely.
5:56
SPEAKER_00: So, again, because it is a big purchase and there's naturally gonna be stress involved due to the size of the transaction, there's a lot of big questions that need to be answered before you can have that peace of mind to move forward.
6:08
SPEAKER_00: And the first one is am I gonna be pre-approved?
6:12
SPEAKER_00: What do I qualify for?
6:13
SPEAKER_00: And that's typically a very easy starting point because if you're proactive throughout the process and you're taking the right steps, I mean the fact that you're watching this video now tells me that you are.
6:23
SPEAKER_00: The next step would be to get in touch with the lender, work through the process, which is it's free, it's relatively easy and quick to get through the process and compile the necessary items that a lender is gonna look for.
6:36
SPEAKER_00: And as you work through that process, you again you're you're gaining this confidence because you're taking the necessary steps, and at the end of it, you're gonna be given, in most cases, a pre-approval amount.
6:48
SPEAKER_00: And that is one of the biggest questions that we need to answer up front because now we can focus on the type of properties that we're interested in within that price range.
6:58
SPEAKER_00: And I have found that from our newer investors, just simply going through the pre-approval process takes this massive weight off of their shoulders because that's again one of the big unknowns.
7:08
SPEAKER_00: And when you put a check in that box, you all of a sudden have this newfound confidence saying, Okay, wow, I was approved for a lot more than I thought, and now we can actually take that and build a strategy around that pre-approval amount.
7:22
SPEAKER_00: And I have found that as soon as someone's through that process, again, all a lot of that stress of not knowing whether it's something that they can do or not is now eliminated.
7:32
SPEAKER_02: We, Caleb, we we often get folks who want a buyer consultation with us and we're happy to do so.
7:39
SPEAKER_02: But moving forward, here's what I would like.
7:42
SPEAKER_02: Before someone reaches out to us and wants a buyer consultation, because here's what's gonna happen.
7:47
SPEAKER_02: A lot of folks want to meet with us and say, How can I do it?
7:51
SPEAKER_02: And we're gonna say, Have you been pre-approved?
7:54
SPEAKER_02: And most times, surprisingly, even though we make these videos, they've not been pre-approved.
7:58
SPEAKER_02: And so promise us before you reach out to us, let's get you pre-approved.
8:02
SPEAKER_02: Now, whether you go with our in-house mortgage, Sage Trust Mortgage, or you check in with the local bank wherever you might be, it doesn't cost you anything.
8:12
SPEAKER_02: So sometimes a lot of our folks will say, but I don't want them to run our credit.
8:17
SPEAKER_02: Please think about what you're saying is you're telling us that you want to buy a property, and we believe you should, right?
8:24
SPEAKER_02: That's a very like prudent thing to do, is to start investing in real estate.
8:28
SPEAKER_02: But you are being your own, like kind of your own roadblock.
8:32
SPEAKER_02: Someone on a podcast or a book said, Don't let them run your credit.
8:35
SPEAKER_02: It's really tough for any lender to pre-approve you.
8:39
SPEAKER_02: Now they can, but they really want to give you a firm approval and they want to run your credit.
8:44
SPEAKER_02: So for anyone who says, I don't want them to run it, have them run it one time.
8:48
SPEAKER_02: You have a copy of your report.
8:50
SPEAKER_02: It's I strongly suggest that you do that because whether you're working with us or you're working with someone like us, they're gonna say, Are you pre-approved?
8:59
SPEAKER_02: Yes, I am.
8:59
SPEAKER_02: And here you go.
9:01
SPEAKER_02: You're now in a position to do so.
9:02
SPEAKER_02: But let's go back a little bit, Caleb, because sometimes we get people and they'll say, Do I need to have any savings?
9:09
SPEAKER_02: What's my credit like?
9:10
SPEAKER_02: Do I have to have a job?
9:11
SPEAKER_02: Like, how can we just guide some of those folks to say, for the most part, this is kind of what you need to have?
9:18
SPEAKER_00: Yeah, so there's several factors that will be uniform across the board, regardless of what lender you choose to work with.
9:24
SPEAKER_00: Some of them are a little bit more obvious than others, but they're pretty much the same criteria that each lender is going to look at.
9:31
SPEAKER_00: Now, obviously, everyone's case is a little bit different.
9:33
SPEAKER_00: Some people are self-employed, some people have a cash-heavy income, and the lender will take a close look at each of those case-by-case scenarios.
9:41
SPEAKER_00: But in general, here are the things that the lender will take into consideration.
9:44
SPEAKER_00: So the first is again a pretty obvious one is your credit, which is why having a good credit score is essential.
9:50
SPEAKER_00: If you don't, then a lender will be able to provide some guidance in terms of how you can improve that over time.
9:56
SPEAKER_00: The second is, of course, your income, because that's what's going to help you be able to make that monthly mortgage payment.
10:01
SPEAKER_00: The third one, which a lot of people overlook sometimes, is the debt-to-income ratio.
10:08
SPEAKER_00: So for that reason, as you're working through the pre-approval process or gearing up to buy your first property, we always recommend before you make any big purchases, such as a car or opening any new lines of credit, just check with the lender first and make sure that you're in a good position from a debt-to-income ratio standpoint, because that is another big factor.
10:26
SPEAKER_00: And as Swan mentioned, you also need some level of a down payment unless you're a VA buyer, which is the only exception where you can come in with zero money down, which is a great option for veterans.
10:37
SPEAKER_00: You will need some level of a down payment, anywhere as low as 3.5% to 5%, all the way up into 25%, just depending on the type of loan product that you're going to get.
10:48
SPEAKER_00: So just to recap really quickly, they're going to look at your credit score, they're going to look at your income, they're going to look at your debt-to-income ratio, as well as your reserves or the balance that you have saved.
10:59
SPEAKER_02: And if you're watching this video and you're like, you know, I've been working with this company for a year and a half.
11:04
SPEAKER_02: I don't know if I qualify, or you know what?
11:07
SPEAKER_02: I've I made some mistakes early on with my credit.
11:09
SPEAKER_02: I was young for whatever happened.
11:11
SPEAKER_02: It's it's okay.
11:12
SPEAKER_02: I would say, let's look at it, let's let's run your credit, let's speak with the lender and let's find out.
11:19
SPEAKER_02: Because it's most times you might be 80% there, ready to qualify.
11:23
SPEAKER_02: You might be there, but there's but we kind of need to be told whether we qualify or not.
11:28
SPEAKER_02: Now, when you're speaking with a lender, you're gonna want to figure out do they have experience in doing multifamily type loans?
11:36
SPEAKER_02: Now, there because a lot of lenders specialize in homes, townhomes, condos, that's perfectly fine.
11:43
SPEAKER_02: They are able to do a loan on a four-unit typically, and no more than that.
11:47
SPEAKER_02: That's gonna get into commercial loans.
11:49
SPEAKER_02: I'll touch a little bit on that, but they should be able to help you, but sometimes they don't understand it.
11:53
SPEAKER_02: They don't know how to give you credit for the other rental units that are coming in that will help offset the the expense of that new mortgage.
12:01
SPEAKER_02: And so it's important that the lender that you're speaking with understands rental properties because that makes this huge, huge improvement.
12:08
SPEAKER_02: Now, let's talk about the the first time we did the video, the interest rates were at 3%, 3.5%.
12:17
SPEAKER_02: That was two years ago.
12:19
SPEAKER_02: Now they're at 7%, 7.5%.
12:23
SPEAKER_02: Okay, more than doubled.
12:26
SPEAKER_02: In most cases, we would have said, okay, that's gonna bring the real estate market to a complete halt, and no one's ever gonna buy again.
12:33
SPEAKER_02: What's happening right now?
12:35
SPEAKER_00: Yeah, so I believe that as interest rates ticked up over time.
12:39
SPEAKER_00: Obviously, when you see it go from a three to a seven, you kind of pump the brakes a little bit, maybe a little bit of sticker shock.
12:46
SPEAKER_00: But as we've kind of settled into this new normal, this new lending environment, if you will, with these new interest rates, a lot of buyers have kind of come out of their hibernation, if you will, and re-entered the market, realizing that historically 7% isn't crazy.
13:03
SPEAKER_00: There was times where when there was you know up to 15% interest and people were still buying property.
13:07
SPEAKER_00: So although the interest rates did cause people to pause a little bit, those people have now come to terms with where we're at and the new normal that we're operating within.
13:16
SPEAKER_00: And as a result of that, have re-engaged in terms of purchasing their first property.
13:21
SPEAKER_00: And they also know that they have options.
13:23
SPEAKER_00: So one is what happens if interest rates go down?
13:27
SPEAKER_00: They have the option to refinance.
13:29
SPEAKER_00: If interest rates go up, then they're happy because they got the better rate based on where interest rates were headed at that time.
13:36
SPEAKER_00: And so it's kind of a win-win.
13:39
SPEAKER_00: And I know that some people might push back on that point a little bit, but at the end of the day, you either have the best interest rate available to you at that time, if they go up, you're locked in at the lower rate, and if they go down, you simply refinance to that new rate.
13:54
SPEAKER_02: One thing that we're seeing right now is if you were a buyer and you were unable to buy when the interest rates were at 3%, and now you've decided I'm not gonna buy a property because they're at 7%.
14:09
SPEAKER_02: My first question to you is okay, you were unsuccessful when they were at three.
14:13
SPEAKER_02: Why?
14:14
SPEAKER_02: And in most cases, you were unsuccessful because you might say, Well, my realtor put in 12 offers, 13 offers, 14 offers, and I never got selected.
14:22
SPEAKER_02: That was probably the case for those people that missed out when the interest rates were low.
14:26
SPEAKER_02: Why did you miss out?
14:28
SPEAKER_02: There were so many buyers.
14:30
SPEAKER_02: There was buyers that were able to outbid you, and now you're on the sidelines.
14:35
SPEAKER_02: Now, where I see a mistake being made in wealth creation, because this video at the end of the day, our channel is teaching people how to build wealth.
14:44
SPEAKER_02: Right now, although the interest rates are much higher than than than we would like, one thing has changed.
14:51
SPEAKER_02: All those multiple buyers that were competing against you, there's less of them.
14:56
SPEAKER_02: Are there still buyers out there?
14:58
SPEAKER_02: There's still buyers out there, but there's less and less people competing for these properties.
15:03
SPEAKER_02: Does that mean that no one wants the asset?
15:06
SPEAKER_02: Does that mean that it's a bad time to buy?
15:07
SPEAKER_02: It doesn't mean any of that.
15:09
SPEAKER_02: It just means other people are having apprehension at moving forward.
15:13
SPEAKER_02: And so what I believe is where maybe there was like a long line to get selected before, that line has shortened.
15:21
SPEAKER_02: And sometimes we're submitting offers and we might be one of three offers.
15:25
SPEAKER_02: We might be one of two or one of one.
15:28
SPEAKER_02: What does that do to our current client?
15:30
SPEAKER_02: It locks them into a property.
15:32
SPEAKER_02: Now, the first step in building wealth is securing a property.
15:35
SPEAKER_02: And when I say secure, I mean like closing the property, closing the escrow.
15:39
SPEAKER_02: It's it's yours now.
15:40
SPEAKER_02: And listen, a lot of the wealth that's being built is being built through through um long-term holds, long-term ownership.
15:49
SPEAKER_02: We none of our videos are we talking about quick flips, quick profits.
15:54
SPEAKER_02: We've never promised you that.
15:55
SPEAKER_02: But we did promise you wealth creation, and you're gonna get it.
15:58
SPEAKER_02: And you're still gonna get it even when interest rates are at this higher rate.
16:02
SPEAKER_02: Why?
16:02
SPEAKER_02: Well, there's a couple things.
16:04
SPEAKER_02: When there's less competition on the buy um on the buy side, um good brokers could help you negotiate the price.
16:12
SPEAKER_02: You know, there's there's there's a lot of cost associated with um with lending fees, but now, since there's less buyers, you could come in saying, Well, I'm gonna offer you less.
16:23
SPEAKER_02: I also want you, um, the seller, to also give us a credit.
16:28
SPEAKER_02: Give us back money.
16:29
SPEAKER_02: And so let me give you an example.
16:30
SPEAKER_02: Give us back$5,000,$8,000, give us back$10,000 to offset the cost of me getting this loan.
16:38
SPEAKER_02: Back when the interest rates were at 3%, they would have slammed the door shut on you.
16:42
SPEAKER_02: They would not even respond to you.
16:44
SPEAKER_02: Do you think they're gonna think of you now?
16:45
SPEAKER_02: You they sure are.
16:47
SPEAKER_02: And so we're able to put people in in at a really good price, at a good credit that will pay down some of that loan, and then sometimes do some level of significant repairs.
17:00
SPEAKER_02: And so at the end of the day, the the consumer is winning.
17:03
SPEAKER_02: Now, we need to look past the oh my gosh, the interest rate's so high.
17:07
SPEAKER_02: I'm just gonna wait.
17:09
SPEAKER_02: Because what's on the on the other side of waiting?
17:11
SPEAKER_02: You're gonna wait, interest rates.
17:14
SPEAKER_02: Let's just say interest rates go back down uh three, five years from now.
17:17
SPEAKER_02: Well, what's gonna happen when interest rates come down?
17:19
SPEAKER_02: All the buyers come back.
17:21
SPEAKER_02: You want to be competing again?
17:22
SPEAKER_02: And I don't think that that's the case.
17:23
SPEAKER_02: Because again, the strategy here is buy as much as you can, borrow as much as you can, be strategic on your pricing and everything else, and hold.
17:33
SPEAKER_02: So the actual process is not a hard process, it's simply buy and hold and wait.
17:39
SPEAKER_02: Okay, so that that tremendously, anyone who's applied that strategy in Southern California and in areas that are appreciating and have had historical trends of appreciation, you're gonna win.
17:50
SPEAKER_00: Before we move on to the next point, you mentioned pricing a few times as we as we discuss interest rates.
17:56
SPEAKER_00: So for those people that are maybe just getting started and are unfamiliar with what that relationship looks like, can you can you expand on that a little bit?
18:02
SPEAKER_00: What how how are interest rates and prices correlated to each other?
18:06
SPEAKER_02: Yeah, so so what ends up happening is when interest rates are really low, the prices is the price is gonna get pushed up, okay?
18:13
SPEAKER_02: And so it's almost like um it's what I'm gonna call an inverse relationship.
18:18
SPEAKER_02: Interest rates are low, prices are high.
18:20
SPEAKER_02: Well, now it's shifting the other way.
18:23
SPEAKER_02: Interest rates are high, prices are lower, right?
18:27
SPEAKER_02: So we sell a lot of apartment buildings, and what we're seeing is oftentimes we're not getting the price that the seller wants.
18:34
SPEAKER_02: Oftentimes we're sitting on the market much, much longer.
18:37
SPEAKER_02: There's less interest on the properties.
18:40
SPEAKER_02: Now, little by little we start dropping the price.
18:43
SPEAKER_02: Why are we dropping the price?
18:44
SPEAKER_02: Well, the market has let us know that maybe that maybe they're not willing to pay that price anymore, but ultimately it goes to a price that does make sense.
18:51
SPEAKER_02: And at that point, that's when you, the buyer, need to insert yourself and take hold of that property.
18:59
SPEAKER_02: Let me be very, very clear that I don't expect a collapse in the markets.
19:03
SPEAKER_02: If you've watched any of our videos, we've covered the potential of could this happen, and we've interviewed a lot of industry um experts, and we're not seeing any of that.
19:13
SPEAKER_02: So some of the pushback that I get sometimes it's and Caleb, you hear this too.
19:18
SPEAKER_02: I'm just gonna wait.
19:19
SPEAKER_02: I want properties to drop.
19:21
SPEAKER_02: And then I'm gonna ask the question of how much do you think it's gonna drop?
19:25
SPEAKER_02: Because if you watch some of our prior videos, I'm interviewing um the head analyst for CoStar.
19:33
SPEAKER_02: I these are people that all they do is they're they're analyzing what's going on with the economy, with the with the market, what buyers and sellers are doing inside of the commercial level market, and they're not expecting a big drop either.
19:46
SPEAKER_02: They're saying maybe five to ten percent.
19:48
SPEAKER_00: Yeah.
19:48
SPEAKER_00: And again, to bring it back to the mindset, making the decision, the conscious decision to say, I'm going to buy a property and I'm gonna do whatever it takes to get there.
19:59
SPEAKER_00: The only regret that I hear from our clients and investors that we work with, whether it's a new investor or an investor that we worked with for years, is the only regret is I wish I would have bought more.
20:10
SPEAKER_00: And then you have the other side, which is I wish I would have started.
20:14
SPEAKER_00: And some people just never get the ball rolling, and having the right mentality will certainly help you take the first steps.
20:21
SPEAKER_00: And again, don't be one of those people that really wants to do this because let's face it, at the end of the day, everyone knows that the power behind real estate investing, and it's just taking those first couple steps to making it a reality.
20:35
SPEAKER_00: And the one thing that pains us the most is when we have clients that reach out, and then it comes time to take those first steps and take action, and they never do it, and then we realize that there's just a segment of people that want to buy that never will because they can't quite get over that first hurdle.
20:50
SPEAKER_00: And so making the choice to do so is a very powerful thing.
20:54
SPEAKER_00: Entering it with the right mindset is of utmost importance, and once you decide to do so and you realize that it's really not that complicated, just take step after step after step, you will make sure that you're not on the side of people that are regretting their inaction or not taking the first step, and you're on the side of people that regret not buying more when they had the opportunity to do so.
21:17
SPEAKER_02: You know, Caleb, that reminds me of this old saying that I've heard and I've said it through the years, is you know, some folks will say, hey, the best time to have purchased real estate was 20 years ago.
21:28
SPEAKER_02: So that's the that's the first.
21:29
SPEAKER_02: So the best time to have purchased real estate was 20 years ago?
21:32
SPEAKER_02: When's the second best time?
21:34
SPEAKER_02: And the answer is now.
21:35
SPEAKER_02: Okay.
21:36
SPEAKER_02: Now, I'm gonna I'm gonna kind of break down that, I'm gonna kind of unpack that statement.
21:41
SPEAKER_02: Okay, and the reason why they say the best time to have bought it was 20 years ago, because that's 20 years of appreciation.
21:46
SPEAKER_02: Now we know that with appreciation, we're we're compounding on top of growth.
21:52
SPEAKER_02: So if in a year your property went up by just say 20,000, well, now the growth is happening on what you paid for the property, the 20,000.
22:00
SPEAKER_02: And it's going to grow.
22:01
SPEAKER_02: And so that's called that's compound interest, uh, which is that is where real wealth is being made.
22:06
SPEAKER_02: Okay.
22:07
SPEAKER_02: So that's why they say, hey, within time, everything's gonna make sense.
22:11
SPEAKER_02: Now, why would you want to get started now?
22:14
SPEAKER_02: Is that you want to get that that 20-year uh clock ticking as soon as you can, and can can you put roadblocks in front of you?
22:25
SPEAKER_02: Because you because some of you might say, prices are too high, interest rates are too high, I'm not gonna buy, and that's fine.
22:31
SPEAKER_02: We can't convert everyone, but there's some people that are on the sidelines that are thinking, you know what, you bring up a good point.
22:38
SPEAKER_02: Ultimately, if I were to ask you, and I'm gonna ask this question, where is the real estate market 10 years from now?
22:46
SPEAKER_02: If I ask that question, I think most of you are gonna say, I think we're gonna be fine.
22:52
SPEAKER_02: I mean, think about it.
22:54
SPEAKER_02: Is it gonna be up?
22:55
SPEAKER_02: Most of you are probably gonna say 10 years from now, yeah, I think it's gonna be up.
22:58
SPEAKER_02: So all we have to do is be able to control a property, control it, close it, and hold it.
23:05
SPEAKER_02: Now, the reason why I love that statement that I said um previously is because that statement says that the best time is to buy now because it doesn't bring into the component of cash flow, which is what I'm gonna get into next.
23:20
SPEAKER_02: The statement that I just said pretty much says the best time to buy was 20 years ago.
23:23
SPEAKER_02: Why?
23:24
SPEAKER_02: Well, because you had the appreciation made you wealthy, okay?
23:28
SPEAKER_02: And that is that's gonna be the number one reason that's gonna make you wealthy again, not cash flow.
23:33
SPEAKER_02: Now, let's talk about that because it's it's kind of a here in Southern California, it's a very big like, well, hey Caleb, I want to buy a building that cash flows, I want it to be a good price.
23:46
SPEAKER_02: What do we tell people when they want both cash flow and I want it to appreciate at the same time at first?
23:52
SPEAKER_02: Like, what's what's the possibility of that?
23:54
SPEAKER_00: Yeah, so that's a very common question that we get, and we know that there's a lot of great information out there, a lot of great blogs and websites that talk about real estate investing, and a lot of times you'll hear people say the phrase cash is king or cash flow is king.
24:09
SPEAKER_00: Now, while that might be true in certain markets, it's very dependent on where that specific investor, where you as an investor are at in your in your life, in your career, in your investment journey.
24:20
SPEAKER_00: For instance, if you're a young working professional that has yet to enter into their peak earning years, then cash flow might not be as important because you know that your salary is gonna continue to increase.
24:32
SPEAKER_00: If you live below your means, you can make that spread that much larger.
24:36
SPEAKER_00: And if you're somebody that's maybe on the latter end of your career, well you realize that your weekly paycheck is gonna go away, your bi-weekly paycheck is gonna go away, then maybe we need to supplement that income with cash flow.
24:49
SPEAKER_00: So it's very dependent on again where you're at in the process.
24:52
SPEAKER_00: If you're just starting and and you still have a lifetime of earning left, then I would certainly recommend you lean towards the appreciation because, again, as Juan mentioned, the compound interest is gonna continue to grow and grow.
25:03
SPEAKER_00: And when I hear the word compound interest, I hear generational wealth.
25:07
SPEAKER_00: And if you're the first person starting that for your family or your family to come, then the sooner the better.
25:14
SPEAKER_00: And if you're somebody that's again in your older years or thinking about retiring early and you need to supplement that income, then maybe we'll look at it more from a cash flow perspective.
25:23
SPEAKER_00: But to Juan's point, the the power is in the equity growth, in that compound interest that continues to grow and grow and grow year after year.
25:32
SPEAKER_00: It's not rocket science, you just buy it and wait.
25:35
SPEAKER_00: Right?
25:36
SPEAKER_00: So it's it's not wait to buy real estate, it's buy real estate and wait.
25:40
SPEAKER_00: So again, not get rich quick, but it's get rich guaranteed.
25:44
SPEAKER_00: All you have to do is knock down the first one, get that positive equity growth working on your side, and then you have an extra piggy bank, if you will, to go play.
25:52
SPEAKER_00: Can we pull from that to buy the next one?
25:55
SPEAKER_00: And and in a nutshell, you have options at your disposal to continue expanding your real estate portfolio.
26:02
SPEAKER_02: Um, so so two things about that.
26:05
SPEAKER_02: And when we're talking about building wealth, getting started, what we've seen the biggest learning curve, you know, when when Caleb's talking about knocking down that first one, uh, we've seen the power and what that does to an individual when they've closed their first triplex and they decide to live in one and they decide to self-manage and fix up one of the units and get at least up.
26:27
SPEAKER_02: They realize how easy it is.
26:29
SPEAKER_02: Yeah, they realize holy smokes, one that rent that the tenant moved out.
26:35
SPEAKER_02: Um, I I asked for a market rent, one.
26:38
SPEAKER_02: We had 50 people show up to the open house.
26:40
SPEAKER_02: I can't believe it.
26:42
SPEAKER_02: All of a sudden, light bulbs start going off.
26:44
SPEAKER_02: It's not that hard.
26:46
SPEAKER_02: You're essentially buying a business that there's demand for, a lot of demand for it.
26:52
SPEAKER_02: And all of a sudden, you go from buying your first triplex and being a little nervous, and um, I don't know what to happens when, you know, like uh dealing with maintenance issues and contractors, which is part of this business.
27:05
SPEAKER_02: And you quickly within within months, I we talk to the client again, and then that they're thinking we're saving up more money because we want to buy our next one.
27:14
SPEAKER_02: And we see that over and over and over again because that learning curve and owning real estate and being a uh a manager of rental properties, it's not that hard.
27:22
SPEAKER_02: It's actually not that hard.
27:24
SPEAKER_02: And so um, I do want to talk about a little bit about it's in the starting phases.
27:31
SPEAKER_02: A lot of times people worry about well, how's the rental market?
27:33
SPEAKER_02: Um, I worry about tenants, and and if you're in a state that has statewide rent control, California, we have that, and a lot of more and more states every year are bringing on their own statewide rent control.
27:45
SPEAKER_02: So you might be in a state watching this thinking, I don't have to worry about that.
27:49
SPEAKER_02: It's coming.
27:50
SPEAKER_02: No one could stop it, California couldn't stop it, and more and more states are gonna say there's gonna have to be some some level of rent increase cap that is put on hold to try to protect the tenant.
28:02
SPEAKER_02: Now we all know that there's there's there's a bad side to every law.
28:06
SPEAKER_02: I'm not gonna get into that today, but how's the environment, Caleb, when it comes to can we rent a property?
28:13
SPEAKER_02: Is the tenant gonna pay me?
28:15
SPEAKER_02: Like what's what should I worry about?
28:18
SPEAKER_00: Yeah, so as as Juan just mentioned, when you purchase a property, an income-producing property, you're essentially buying a business that has customers waiting in line to purchase that product, which in this case is rent one of the apartments from you.
28:31
SPEAKER_00: So I would ask the question if something as catastrophic as the pandemic, where people couldn't go to work, they were stuck at home, maybe they got furloughed, did people stop renting apartments?
28:43
SPEAKER_00: Did those customers go away, or were there still prospective tenants lined up out the door?
28:49
SPEAKER_02: Um people needed housing.
28:51
SPEAKER_02: People moved a lot, depending on, hey, I'm gonna be working from home, so now I need maybe something bigger.
28:56
SPEAKER_02: And sales went up during that time.
29:00
SPEAKER_02: I I think we were worried, as from a business perspective, but there was more people willing to what I call transact, buy and sell rental properties during that time than they're doing so now.
29:11
SPEAKER_02: And so to your point, no, people still needed housing.
29:14
SPEAKER_02: It was still a we call it a product, but it's because that's what we kind of view it as.
29:18
SPEAKER_02: But it is housing, it's essential.
29:20
SPEAKER_02: And no, it wasn't impacted whatsoever.
29:23
SPEAKER_00: And and I believe that that speaks to the stability of uh real estate as an investment as a whole.
29:29
SPEAKER_00: At its very basic core, you're putting a check in the box of one of the most basic human needs, right?
29:34
SPEAKER_00: Which is food and water, clothing, and the big one, shelter.
29:39
SPEAKER_00: And that's not gonna go away.
29:40
SPEAKER_00: It's been around since the beginning of time, and it will be around until the end of time because at the end of the day, people will always need a safe, comfortable place for themselves, for them for their families, and there is no alternative.
29:53
SPEAKER_00: I mean, you have in technology, for instance, it's rapidly moving, there's always something new, but a building is always gonna be a building.
30:00
SPEAKER_00: People are always gonna need a roof over their heads to keep them out of the conditions, and so at the very basic core, the utility of the real estate is what's going to maintain it as a great investment for now and to forever.
30:13
SPEAKER_00: So, as you know, if you followed our channel, a lot of our content is based on the small apartment market, so two, three, and four units.
30:20
SPEAKER_00: But there are investors that when they're first getting started or maybe moving up to that next level want to get into the commercial side.
30:27
SPEAKER_00: So, could you elaborate a little bit on what is commercial real estate from the financial perspective, from a lender's perspective, and what are some of the differences and things that people should look for when it comes to that product?
30:39
SPEAKER_02: Perfect.
30:40
SPEAKER_02: So when when you're buying five units or more, so if you're looking at a property and it's a six unit, seven unit, eight unit, twelve or even more, know that that financing requirement is going to be different.
30:50
SPEAKER_02: Now, here's the difference, and which is a lot of people actually prefer what we call commercial loans.
30:57
SPEAKER_02: Now, I don't want to throw you off.
30:58
SPEAKER_02: When I use the word commercial loans, it means five units and above, okay?
31:02
SPEAKER_02: So what ends up happening when you're at the commercial level, the lenders, the commercial lenders, look at the property.
31:09
SPEAKER_02: How much money does it make and what's gonna cost to operate?
31:12
SPEAKER_02: Now, the beauty in that they're auditing the the profit and loss for the building is they're gonna depend less on you as the qualifier.
31:22
SPEAKER_02: Okay, meaning you need, they almost want the property to stand alone without your help, which is a very good thing.
31:29
SPEAKER_02: Some people are like, well, why would I buy a four-unit when I could buy an eight unit?
31:32
SPEAKER_02: Great.
31:32
SPEAKER_02: Now let me tell you why that's gonna be harder, especially in today's environment.
31:36
SPEAKER_02: If you buy a four-unit building, you could get it with 25% down.
31:40
SPEAKER_02: When you buy a four-unit building or a three-unit building, the bank doesn't care if you are negative, meaning like you're gonna lose money every month, meaning that you might have to put in$600 of your own to make it pay for itself, break even.
31:53
SPEAKER_02: Okay, so the bank doesn't care.
31:54
SPEAKER_02: They'll do that loan all day long if you have 25% down.
31:58
SPEAKER_02: They definitely care when it's five plus.
32:00
SPEAKER_02: Even if you're a wealthy individual and you have plenty of cash flowing, you don't mind putting in$2,000 a month to break even on a commercial loan.
32:07
SPEAKER_02: They do care.
32:08
SPEAKER_02: They will not give you that loan.
32:10
SPEAKER_02: Now, typically what ends up happening in today's market to buy five units or more, you're you're looking at 40% down, 50% down, 60% down, 70% down or more.
32:23
SPEAKER_02: So what what what it means right now is you need a lot more money down.
32:27
SPEAKER_02: If you're looking, you know, if you're looking at a million dollar six unit building, you're putting in half a million dollars.
32:34
SPEAKER_02: Now, it's not always a set amount for all the units.
32:39
SPEAKER_02: It depends on how much income is being produced.
32:41
SPEAKER_02: There's a thing called the debt coverage ratio.
32:44
SPEAKER_02: And I'm trying to make this uh in a simple way, what the bank says at the commercial level says for every dollar of expense that this building is gonna incur for everything for the mortgage, for the property taxes, for the insurance, for the maintenance, for the management, for everything that's gonna entail, we want you to make a dollar twenty to the dollar.
33:06
SPEAKER_02: Okay.
33:07
SPEAKER_02: So that's so that's what we call the one 1.2 debt coverage ratio.
33:12
SPEAKER_02: So every building is gonna be different because one building, one eight-minute building might require 40% down, and the one next to it that you think is identical, but the rent is less might require 60 or 70% down.
33:24
SPEAKER_02: Well, you could see there's a lot more people with the 25% down to buy that fourplex or triplex than there is someone that has 70% down.
33:33
SPEAKER_02: Doesn't make commercial bad, it just means you need to have more money.
33:38
SPEAKER_02: And can you make more money at the commercial level?
33:41
SPEAKER_02: Yeah, you can.
33:42
SPEAKER_02: You can because there's actually you're um you're buying what we call more doors.
33:47
SPEAKER_02: In some cases, you could be bringing on more debts, uh, you could reposition the property.
33:52
SPEAKER_02: So it's not that one is better than the other, it's you as the individual, what are you comfortable with?
33:59
SPEAKER_02: What can you qualify for?
34:00
SPEAKER_02: Now, the one other thing with commercial loans, to kind of wrap this up, the loans are typically good for five, seven, or ten years.
34:08
SPEAKER_02: Meaning when that time frame comes up, you now have to go get a new loan.
34:13
SPEAKER_02: Uh, to get a new loan is not free and you're having to pay.
34:16
SPEAKER_02: And so a lot of times we've we've we've uh really um doubled down on like, hey, just buy a fourplex because your loan's never gonna change for 30 years.
34:26
SPEAKER_02: You you could make a lot of plans and a lot of assumptions in in owning this business, knowing that for 30 years that loan's not gonna change, when you have five plus or more doors, it's gonna change every so often.
34:39
SPEAKER_02: And so that's those are two different things.
34:41
SPEAKER_02: One is not better than the other.
34:42
SPEAKER_02: And I will tell you this for those of you who are um ambitious and want to get going on your on your first fourplex, but that is just the first one of many.
34:52
SPEAKER_02: I will tell you that in order for you to scale, in order for you to grow, in order for you to become uh super wealthy, you need to get into the bigger, the the bigger properties.
35:00
SPEAKER_02: And so a lot of times we'll say, if you if you want to scale, let's start with the small stuff, let's build some equity, and then let's grow into the larger units.
35:09
SPEAKER_02: At this moment, you are having to put more money down because the interest rates have risen so high and it's it's really throwing off our debt um coverage ratio.
35:19
SPEAKER_02: But once the interest rates come back down, the amount of down payment will change, it will spur things up again.
35:25
SPEAKER_02: And so those are two different things to look for.
35:27
SPEAKER_02: I don't want anyone to think that just because you've never done it, that you shouldn't start with the big units.
35:32
SPEAKER_02: Listen, if mom and dad or or someone is willing to partner with you and you want to go chase bigger units, I I will tell you this, you're gonna have better deals at the larger units.
35:41
SPEAKER_02: There's gonna be better deals to be had, but you better get ready because you're gonna need that money to be uh the the larger down payment to be able to pull that off.
35:50
SPEAKER_00: Yeah, and you brought up an interesting concept that another word that's often thrown around when it comes to the entry-level investor, which is scale, right?
35:58
SPEAKER_00: And so I get asked this question a lot by new investors that are just getting their feet wet, and they always come to me, they say, Caleb, what I want to do is scale my portfolio as fast as I can.
36:09
SPEAKER_00: And I always have to tell them to take a couple steps back because in order to scale, you have to buy the first one.
36:16
SPEAKER_00: And if you have no for if you don't have that initial property, there is nothing to scale, right?
36:21
SPEAKER_00: So another common acronym that goes under the umbrella of scale is the the BERR method, right?
36:26
SPEAKER_00: So buy, rehab, rent, refinance, and repeat.
36:30
SPEAKER_00: And I always tell my clients that that come to me with that, and it's a great approach and it does work.
36:35
SPEAKER_00: However, what's the first letter is buy.
36:39
SPEAKER_00: So a lot of people will get caught up on all the R's that follow that where they should be focused on the B because once they knock down the buy portion of it and complete their first purchase, now they can move into the next phases.
36:52
SPEAKER_00: So there is no skill without the first property under your belt.
36:56
SPEAKER_02: Let's talk about for someone who's pre-approved and they want to know how do I know that it's a good deal?
37:07
SPEAKER_00: That's very dependent on each specific investor, again, depending on what it is that you're looking for from an investment and a return on your investment.
37:15
SPEAKER_00: So some people think that a good deal is purchasing in an area that's going to climb in value, and if they can break even or get close to a break-even point, that's a great deal for them.
37:26
SPEAKER_00: Other people, depending on where they're at in life, they have to have the cash flow.
37:30
SPEAKER_00: So unless there's a little bit of incremental income coming in each month, then maybe that deal doesn't work for them.
37:35
SPEAKER_00: And that's why it's important to work with somebody that's able to sit down with you, understand what your exact motive is, and then build a strategy around that specific objective.
37:44
SPEAKER_00: Without figuring that out up front, it's really hard to tell somebody what a good deal is or isn't without knowing what's driving them, what's causing them to take those first initial steps.
37:54
SPEAKER_00: And once you can outline that and have a good understanding with the professional that you're working with, then you'll be able to say, okay, for what I'm trying to accomplish, this puts a check in all of the boxes or majority of the boxes.
38:06
SPEAKER_00: And to me, if we're able to get close to the complete list of investment objectives, then that that makes a good deal, in my opinion.
38:15
SPEAKER_02: You know, Caleb, you bring up a good point.
38:18
SPEAKER_02: When someone takes the uh the first step of I'm gonna buy a property, um, it's rarely the perfect property and it meets all of these things, therefore I I have to buy it.
38:30
SPEAKER_02: Oftentimes someone might say, Well, I like it, I like its location, the cash flow is not great.
38:36
SPEAKER_02: But we remind people, hey, that that cash flow is not permanent.
38:42
SPEAKER_02: The income of today is not the income of tomorrow.
38:44
SPEAKER_02: And all that means is when you're looking at a property, oftentimes, because it's your first one, you might be thinking, I really love that location, I feel that it's safe, I feel that I would feel comfortable there.
38:54
SPEAKER_02: It's got a little backyard, I could rent out the other three units.
38:58
SPEAKER_02: And if the rents are low, don't let that stop you.
39:02
SPEAKER_02: Don't let that stop you because oftentimes you're doing the math and you might say, Oh, you know, I'm gonna lose$6,000 because I have to put that money to make up the difference.
39:13
SPEAKER_02: But if the building goes up by$20,000 or$30,000 in appreciation that one year, are you really losing?
39:21
SPEAKER_02: Or, well, I guess in the if you ask us, we're gonna say you are gonna be losing without taking that initial step.
39:27
SPEAKER_02: And so again, just because a property has really low rents does not mean that there's not a way to strategically figure out a way in the next 18, 24 months, how can we change that?
39:38
SPEAKER_02: Where can we make adjustments?
39:40
SPEAKER_02: Um, where can we give, you know, legally, you know, what are our legal rights to be able to reposition some of these units?
39:47
SPEAKER_02: It's not, this is the income, so therefore that's the income for the rest of its useful life.
39:53
SPEAKER_02: That's not the case, although people get stuck on that, and the purpose of this video is that we're trying to get you on stuck, we're trying to let you see how we view things and how people are taking those steps and building wealth.
40:07
SPEAKER_02: And so when it comes again, when it comes to is it a good deal or not, if you're working with a professional who knows the area, and we strongly suggest if anyone's looking to buy multifamily, work with someone who specializes in multifamily because they will understand.
40:22
SPEAKER_02: They will understand that, hey, this four-unit building, the five prior sales in this neighborhood have all sold for this, but the interest rate was lower back then.
40:31
SPEAKER_02: It's higher now, so therefore we think we could get you a better deal.
40:34
SPEAKER_02: We don't expect you to know all that stuff.
40:36
SPEAKER_02: You know, there's things like cap rate and growth rent multiplier, and we've covered all that stuff in our videos.
40:40
SPEAKER_02: You should be familiar with it.
40:41
SPEAKER_02: Our videos are free, so they're there for you.
40:44
SPEAKER_02: So you should be familiar with those things are, but the professional should be able to guide you.
40:47
SPEAKER_02: This is a good deal for these three reasons.
40:50
SPEAKER_02: This is a good purchase because you said that you wanted a yard and you wanted to have the front house with the picket fence and the rental units, and there's plenty of parking.
40:59
SPEAKER_02: Sometimes a good deal is the utility of the property, not necessarily the cap rate or the gross rent multiplier or the return on equity.
41:06
SPEAKER_02: Because going back to what Caleb said, it what's important to you.
41:10
SPEAKER_02: And so when we're advising you, there's a lot of things that are going to be important to you.
41:14
SPEAKER_02: Sometimes it's all about the numbers.
41:16
SPEAKER_02: Sometimes.
41:16
SPEAKER_02: Sometimes it's not about the numbers.
41:18
SPEAKER_02: It's about does that property meet the utility use of what we're looking for?
41:23
SPEAKER_00: Yeah, and again, a lot of people watching, I'm sure if you're interested in real estate, you've thought maybe I should purchase a house or a condo first.
41:31
SPEAKER_00: And the reason why we strongly recommend looking into a small apartment building as your first purchase and you live in one of the units, offset the mortgage with the other incomes, is when you buy that house or that condo, and that's a great choice for a lot of people out there, so don't get me wrong.
41:47
SPEAKER_00: However, purchasing two, three, or four units, what you're doing, as Juan mentioned, is you're purchasing additional income streams that you now, as the owner, have the ability to manipulate in a positive manner moving forward.
42:00
SPEAKER_00: If you purchase the house or the condo, you have a set payment, it's fixed, you're still going to make money in the long run.
42:06
SPEAKER_00: However, you're eliminating your ability as an owner, as a strategic owner, to make the right decisions, to improve the property, to add amenities that will increase that income over time.
42:17
SPEAKER_00: And so I always tell my clients that the more income streams that you have to positively manipulate or enhance over time, the better off you're gonna be as an investor.
42:27
SPEAKER_02: That's terrific advice.
42:28
SPEAKER_02: I'm gonna add a few creative ways that folks are doing now to add value to their properties and we'll and we'll wrap up with those two things is the first one is people are buying multifamily dwellings, rentals, and one of the units or more than one, depending on where you might be, they're turning those into Airbnb.
42:46
SPEAKER_02: Because when Caleb's talking about income stream, when you have a piece of property and we we call that an asset or the product, you want to increase its income.
42:55
SPEAKER_02: And so one way could be if there's a market for it or demand for it, um, is having Airbnb in those units, because you might make more money having one of those units be Airbnb.
43:07
SPEAKER_02: The second part is this is very popular in California, and I know it's getting more and more popular in areas that need housing.
43:14
SPEAKER_02: It's accessory dwelling units, ADUs.
43:16
SPEAKER_02: We've done a lot of videos on ADUs.
43:18
SPEAKER_02: Now, that is a terrific way to build wealth for a lot of reasons.
43:23
SPEAKER_02: One, if it costs you$250,000 to build, and in a place like California, that might be worth$500,000, you just doubled your money.
43:31
SPEAKER_02: So that's an that that's a huge win.
43:33
SPEAKER_02: On top of that, you've brought in another income stream to the property.
43:37
SPEAKER_02: So those are two ways that once you get past the okay, I'm gonna take the plunge and buy my first property.
43:45
SPEAKER_02: If you're working with us, we're gonna say this is ways that people enhance the income of their property by doing these things.
43:52
SPEAKER_02: And whether you're working with us or somebody else, we we hope that they're able to guide you with that, with that, with that type of uh pro tips.
44:01
SPEAKER_02: We we're doing it on the properties that we own, but we also have a lot of clients and we're asking them, hey, what do you plan to do here?
44:06
SPEAKER_02: And sometimes they give us new ideas.
44:08
SPEAKER_02: Hey, I'm gonna convert both of these garages and not just a one ADU, we're gonna do two ADUs.
44:13
SPEAKER_02: And so a lot of different ways to try to build wealth, but of course, adding adding income streams.
44:19
SPEAKER_02: Now, you could never add income stream to something you don't own, can you?
44:23
SPEAKER_02: Correct.
44:23
SPEAKER_00: And you will hear us use this phrase over and over again.
44:27
SPEAKER_00: We will say strategic ownership decisions.
44:30
SPEAKER_00: Now, if we unpack that, the key word to focus on there is ownership.
44:35
SPEAKER_00: And until you are in the position of ownership, there's no decision to be made.
44:39
SPEAKER_00: And so, again, the purpose of this video is to help you get over that initial hurdle, get over some of those reservations that you might have that are preventing you from getting started, and putting yourself in the driver's seat of ownership and deciding which direction that that specific asset or investment is going to go.
44:55
SPEAKER_00: But without the ownership and the equity on your side, you have no choice and it's it's at the discretion of somebody else that's in control.
45:04
SPEAKER_02: So there you have it, our basic steps to buying your first multifamily in 2024.
45:08
SPEAKER_02: And just to rehash some of the major, major steps that you, the individual, have to take that we can't take for you.
45:13
SPEAKER_02: Okay, we'll be here as mentors and advisors, and we'll be your uh your your team pushing you and uh trying to motivate you.
45:21
SPEAKER_02: But the very first step is you have to get pre-qualified.
45:24
SPEAKER_02: You have to align yourself with the lender that knows multifamily, you have to align yourself with a real estate brokerage team that specializes in multifamily.
45:32
SPEAKER_02: Those would be the three key steps into getting the process started.
45:36
SPEAKER_02: Again, none of these steps cost you money, and so you have nothing to lose by doing so.
45:42
SPEAKER_02: So that's all for now.
45:43
SPEAKER_02: Make sure to like, comment, and subscribe.
45:45
SPEAKER_02: We do want to give a special shout out to our sponsor, Sage Trust Mortgage.
45:50
SPEAKER_02: Thank you for putting this show on.
45:51
SPEAKER_02: That's all for now.