Latest / REL Freedom Podcast / Mike Swenson - How We Bought A 128 Unit Apartment!

Transcript

Mike Swenson - How We Bought A 128 Unit Apartment! · REL Freedom Podcast

• 0:00
  Mike Swenson: What we tell our investors is, like I'd mentioned, you can find deals that you probably can't find on your own.
• 0:04
  Mike Swenson: This one was off market.
• 0:06
  Mike Swenson: You can invest in deals larger than you could probably invest on your own, achieve economies of scale that are bigger than you can on your own, and get returns more lucrative than you could on your own, all without doing the work by yourself.
• 0:18
  Mike Swenson: And so that's the benefit of working with us.
• 0:22
  Mike Swenson: Welcome to the Real Freedom Show.
• 0:24
  Mike Swenson: We inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:29
  Mike Swenson: I'm your host, Mike Swenson.
• 0:31
  Mike Swenson: Let's get some real freedom together.
• 0:41
  Mike Swenson: Hello, everybody, and welcome to another episode of Real Freedom, where we talk about different ways that people build time and financial freedom through opportunities in real estate.
• 0:50
  Mike Swenson: I'm your host, Mike Swentz, and if you want to get started on your real estate investing journey, check out our website, freedom throughrealestate.com.
• 0:59
  Mike Swenson: That's freedomthrureestate.com.
• 1:01
  Mike Swenson: We put all of our content on there, great stories to help inspire you to take action and pursue your career or pursue your goals through real estate.
• 1:10
  Mike Swenson: And today I am super excited to share with you more personal stuff, which is we recently closed on a 128-unit apartment building with our team.
• 1:20
  Mike Swenson: And so we want to talk about that deal and to be able to share that information with you.
• 1:25
  Mike Swenson: So sit back and relax, and we will go through all of that information.
• 1:29
  Mike Swenson: First things first, just to kind of bring you up to speed for those people that haven't followed along the episode or followed along the podcast that often.
• 1:37
  Mike Swenson: We're pushing about 390 units right now in terms of our portfolio that we've grown over the last probably four years.
• 1:45
  Mike Swenson: And so my passion has always been to have low barrier of entry for people to invest in real estate, to find ways to create a great economies of scale versus having to figure it out and learn all those lessons and do it on your own.
• 1:59
  Mike Swenson: And so we offer opportunities through syndication where people can partner with us and invest in deals that they they couldn't invest on their own, probably couldn't get big enough deals on their own.
• 2:10
  Mike Swenson: And they can do it 100% passively without having to swing a hammer, talk to a property manager, talk to a tenant, or deal with any hassle.
• 2:20
  Mike Swenson: It's it's completely passive to them.
• 2:22
  Mike Swenson: And so that's how we've been able to accomplish this.
• 2:25
  Mike Swenson: And so we've got this 128-unit apartment building.
• 2:28
  Mike Swenson: Like I mentioned, we just closed on it at the end of March 2026.
• 2:32
  Mike Swenson: And so I want to be able to share that information with you because we're really excited about it.
• 2:36
  Mike Swenson: And we think this is a great opportunity and excited to see how this is going to be a big benefit for our investors.
• 2:42
  Mike Swenson: And so, first things first, when I talk with people before I get into the nitty-gritty of the DL details, I always like to talk about why real estate, right?
• 2:50
  Mike Swenson: You're listening to a real estate investing podcast, and it's important for people to understand why we are doing this and what is investing through real estate gonna accomplish that other people or even other asset classes may not have.
• 3:04
  Mike Swenson: And so for us, we love real estate.
• 3:06
  Mike Swenson: Number one, because there's a lot of demand for rentals due to decline in home ownership.
• 3:11
  Mike Swenson: We know that home ownership rates are going down, and so the more opportunity that we have to be able to purchase property, we know that people can't build property fast enough with the increasing population.
• 3:23
  Mike Swenson: And so we see there's a lot of value there.
• 3:26
  Mike Swenson: Also, there's a lot of great asset classes.
• 3:28
  Mike Swenson: We're just focusing on what we do well and what we know, which is multifamily.
• 3:32
  Mike Swenson: And so we know demand is going to continue to go up, the population is gonna continue to grow, and they can't build stuff fast enough.
• 3:38
  Mike Swenson: So that's where we're looking for housing opportunities for people.
• 3:42
  Mike Swenson: There's a lot of great value add opportunities.
• 3:44
  Mike Swenson: That's really the focus on us.
• 3:47
  Mike Swenson: Primarily, we like to invest in Minnesota.
• 3:49
  Mike Swenson: That's where we're based out of, that's where our knowledge base is, that's where we have great property management contacts.
• 3:55
  Mike Swenson: And we know there's lots of opportunities where we can invest outside of that.
• 3:58
  Mike Swenson: We'll explore those in the future, but for now, we just want to stick with what we know and operationally what we can execute on.
• 4:05
  Mike Swenson: So that's been where we focused.
• 4:06
  Mike Swenson: And then we know there's lots of lots of wealth being made through real estate.
• 4:10
  Mike Swenson: It doesn't happen quickly, and I think it can happen quickly depending on the project, but we know it doesn't always happen that way.
• 4:16
  Mike Swenson: And so we're okay waiting and we're okay finding great deals that have those value add opportunities.
• 4:21
  Mike Swenson: And you know, one thing that we tend to forget as we're thinking about why real estate versus stocks and other opportunities, the way that I always explain it is there's lots of little buckets.
• 4:32
  Mike Swenson: What's really cool about real estate is you've got all these little buckets, and not all of them have to pan out or be a huge win for you, but over time, a few little buckets add up to a really big bucket.
• 4:44
  Mike Swenson: And so the different buckets that we talk about with investors and people looking to invest in real estate is number one, income comes from your tenants, right?
• 4:51
  Mike Swenson: So we have a mortgage every month.
• 4:53
  Mike Swenson: This house that I live in has a mortgage every month.
• 4:56
  Mike Swenson: I have to pay that mortgage.
• 4:58
  Mike Swenson: If I have a rental property, the tenants are paying for that mortgage.
• 5:02
  Mike Swenson: And so every single month, the income that is used to pay the mortgage on the property is coming from the tenants.
• 5:09
  Mike Swenson: With that, the mortgage balance gets paid down every month.
• 5:13
  Mike Swenson: Now, in this case, I'll share more details in the in the future.
• 5:16
  Mike Swenson: We have two months in or two years interest-only payments.
• 5:18
  Mike Swenson: So for two years, that's not happening.
• 5:20
  Mike Swenson: But with other properties, the mortgage goes down every month.
• 5:23
  Mike Swenson: And so when you buy more and more property, it's now turning into hundreds and thousands of dollars of principal that's getting paid down every month.
• 5:32
  Mike Swenson: So our mortgage balances, if we add up all 390 units, it's thousands and thousands of dollars that the balance continues to go down every single month because the tenants pay for the mortgage.
• 5:44
  Mike Swenson: As we add value, the value of the property is gonna go up.
• 5:48
  Mike Swenson: We're only taking out loans typically in the 2025 percent range for this property that we we just closed on.
• 5:56
  Mike Swenson: We're only putting down 11%.
• 5:58
  Mike Swenson: And so we're able to take advantage of some great seller financing.
• 6:01
  Mike Swenson: And so as the value goes up, we only put down 11%.
• 6:06
  Mike Swenson: The value of the property is gonna continue to go up.
• 6:08
  Mike Swenson: And so we have leveraged appreciation, which is awesome.
• 6:11
  Mike Swenson: Great tax benefits.
• 6:13
  Mike Swenson: We'll talk more about that cost segregation study, which we utilize, and so those benefits are there, and then people love that it's a tangible asset.
• 6:20
  Mike Swenson: I drive to the property, I go look at it, I can touch it.
• 6:24
  Mike Swenson: It's not a stock, it's not investing in something else, and so it helps to leave a legacy for your family tree.
• 6:31
  Mike Swenson: I always tell people I'm not expecting my kids to do real estate, and yet if they're excited about it and they want to learn more, I'm here to help them.
• 6:39
  Mike Swenson: But we're building a legacy that will hopefully lead to more wealth creation for future generations and give my kids opportunities that I didn't necessarily have growing up.
• 6:49
  Mike Swenson: And so those are the reasons why we love highlighting why do we do real estate and what does it mean?
• 6:55
  Mike Swenson: And so we talk about that with our investors.
• 6:57
  Mike Swenson: And so that's great information for you guys to know listening to this.
• 7:01
  Mike Swenson: We invest in commercial multifamily properties.
• 7:04
  Mike Swenson: We look at how do we increase income and how do we decrease or hold the line on our expenses?
• 7:12
  Mike Swenson: And so as we find ways to add value to the property, we're gonna increase rents, we'll increase fees.
• 7:18
  Mike Swenson: I always tell people though, there is a human element to this.
• 7:21
  Mike Swenson: We're not just going to jack up prices on everybody and tick off all the tenants, right?
• 7:25
  Mike Swenson: We understand these are hardworking tenants that have great jobs.
• 7:29
  Mike Swenson: They might be struggling paycheck to paycheck, and so we want to be able to help them.
• 7:34
  Mike Swenson: And so we're not just gonna continue to jack up rates.
• 7:37
  Mike Swenson: And so they're great tenants, we want to work with them.
• 7:39
  Mike Swenson: However, over time, we're gonna continue to have our rents be market rents as much as possible, find ways to add value to the building, maybe attract people that would be willing to pay more as we continue to make our properties nicer, and then hold the line on expenses.
• 7:55
  Mike Swenson: And so we can do that and add a bunch of value that way.
• 7:59
  Mike Swenson: And then we love working through a team.
• 8:01
  Mike Swenson: And so the cool thing about investing with us and investing with these larger opportunities is you know, we believe in if it's a it's also also been credited back to an African proverb proverb, but it goes, if you want to go fast, go alone.
• 8:15
  Mike Swenson: If you want to go far, go together.
• 8:17
  Mike Swenson: I totally recognize we could probably be moving faster on things if I just went by myself.
• 8:23
  Mike Swenson: But I love working with a team.
• 8:25
  Mike Swenson: I love working with great investors so that we can build something meaningful that's gonna last and so that we can do that together.
• 8:32
  Mike Swenson: And so we love working with the property managers that we have, the relationships that we have, different vendors to be able to go far together and help each other out to create wealth.
• 8:42
  Mike Swenson: And so, you know, that's what we focus on.
• 8:45
  Mike Swenson: That's why we love being a part of a team and why we have investors teaming up with us.
• 8:49
  Mike Swenson: And so what we tell our investors is like I'd mentioned, you can find deals that you probably can't find on your own.
• 8:55
  Mike Swenson: This one was off market.
• 8:56
  Mike Swenson: You can invest in deals larger than you could probably invest on your own, achieve economies of scale that are bigger than you can on your own, and get returns more lucrative than you could on your own, all without doing the work by yourself.
• 9:08
  Mike Swenson: And so that's the benefit of working with us.
• 9:11
  Mike Swenson: Mentioned we do that through syndication.
• 9:13
  Mike Swenson: So, about the market.
• 9:14
  Mike Swenson: So, this particular property is up in northern Minnesota, it's in the Fargo Moorhead area.
• 9:19
  Mike Swenson: We're on the Minnesota side there.
• 9:21
  Mike Swenson: Why Fargo Moorhead?
• 9:22
  Mike Swenson: So, a couple things.
• 9:24
  Mike Swenson: I know we can invest in lots of places in Minnesota.
• 9:27
  Mike Swenson: Whenever I find deals from people, my first question is always who's gonna manage this deal?
• 9:33
  Mike Swenson: As we're continuing to get more and more sophisticated and learning and getting smarter, we realize the value of great property management and using people that we know, like, and trust.
• 9:43
  Mike Swenson: And so we're finding these opportunities, working through management companies that we want to continue to work with.
• 9:50
  Mike Swenson: So it would be hard for me to pick a deal in a place where I don't have confidence in finding a great management opportunity now moving forward.
• 9:59
  Mike Swenson: We've had some challenges in the past with management, and so that's why we want to stick with and build upon the relationships we already have in place.
• 10:07
  Mike Swenson: And so we found a great property manager in this market.
• 10:10
  Mike Swenson: We said, hey, here's the deal we're looking at.
• 10:12
  Mike Swenson: Is this something you'd be interested on?
• 10:14
  Mike Swenson: And then we had that property manager also help to speak into some of our projections that we had.
• 10:20
  Mike Swenson: They're in the market, they understand the market, and so we were able to run that by them.
• 10:24
  Mike Swenson: Hey, are we off base in our projections?
• 10:27
  Mike Swenson: Can you help us?
• 10:28
  Mike Swenson: So this Fargo Moorhead market um has had some significant population growth.
• 10:33
  Mike Swenson: So dating back to 2000, um, the MSA, the metropolitan area as a whole, had a population of around 175,000.
• 10:42
  Mike Swenson: Just 25 years later, it's now grown almost by 100,000 people.
• 10:47
  Mike Swenson: And they anticipate that to grow close to 100,000 people over the next 20-some years.
• 10:52
  Mike Swenson: And so going from in the year 2000, roughly 175,000 people to the year 2045, you're looking at roughly 345,000 people in the MSA area.
• 11:03
  Mike Swenson: There's great growth that goes back to what I had talked about before.
• 11:07
  Mike Swenson: We know housing is going to continue to be short.
• 11:09
  Mike Swenson: And so this is a market where that happens, where we can have some good things going on.
• 11:14
  Mike Swenson: The labor force has grown there.
• 11:16
  Mike Swenson: 58,000 millennials call this area home, 7,000 more than the national average for this an area of this size.
• 11:24
  Mike Swenson: There's two major interstates that run through.
• 11:26
  Mike Swenson: So you've got lots of trucking operations that come through, which means there's going to continue to be businesses there.
• 11:33
  Mike Swenson: You've got some world-class universities that are there, technical colleges, lots of top education, which means that this area is going to continue to be strong because you have great educated people that want to stay and live there.
• 11:46
  Mike Swenson: So there's some great industry diversity as well.
• 11:49
  Mike Swenson: So great market.
• 11:50
  Mike Swenson: We're super excited about it.
• 11:51
  Mike Swenson: We're excited about the growth that it's going to have.
• 11:54
  Mike Swenson: This deal in particular, like I mentioned, 128 units off market.
• 11:58
  Mike Swenson: We found it through a great business connection that we have that has found some great deals for us in the past.
• 12:03
  Mike Swenson: Why did we do it?
• 12:05
  Mike Swenson: Number one, it's a property that's two to three times larger in terms of purchase price than anything we've purchased before.
• 12:12
  Mike Swenson: Now we do have 144 unit student housing building, but that purchase price was a lot less.
• 12:18
  Mike Swenson: So this one, it really stretched us in a way that we haven't been stretched before, but we got some great financing terms.
• 12:26
  Mike Swenson: So we are doing a wrap mortgage from the seller.
• 12:30
  Mike Swenson: The seller already has a relationship with a local bank.
• 12:33
  Mike Swenson: They're providing essentially the seller's providing financing to us to take care of the mortgage existing mortgage they already have in place with the bank.
• 12:42
  Mike Swenson: We talked to the bank, we got a letter from the bank basically saying, yes, we know what's going on and we're okay with everything that's going on.
• 12:50
  Mike Swenson: And so the bank reviewed all the documents.
• 12:52
  Mike Swenson: Obviously, the seller, we worked that out with them, similar to another property that we have.
• 12:56
  Mike Swenson: We ran that the same way.
• 12:58
  Mike Swenson: So the nice thing is we don't have to go out and get a new mortgage right now.
• 13:02
  Mike Swenson: With mortgages, right, it takes a lot of time and hassle to be able to get those done.
• 13:07
  Mike Swenson: We've had a lot of those done in the past, and so now we don't have to go through that.
• 13:11
  Mike Swenson: The seller is staying on as a guarantor on the property.
• 13:15
  Mike Swenson: Obviously, we have some personal guarantee stuff that we have to sign, but it allows us to get into a much larger property that would be a little bit maybe more difficult for us to qualify for at this stage in our careers and where we're at.
• 13:28
  Mike Swenson: So we work that out with the seller.
• 13:30
  Mike Swenson: The seller understands hey, we know about how much money's coming in.
• 13:34
  Mike Swenson: We know you should be able to pay for this mortgage, and we got some great financing terms.
• 13:38
  Mike Swenson: So, like I mentioned, two years, interest-on payments.
• 13:42
  Mike Swenson: And then for years three through seven, the next five years after that, we're gonna have an interest rate of 5.3%.
• 13:49
  Mike Swenson: So, as of right now, those are some great terms, much better than what we could get right now.
• 13:55
  Mike Swenson: And we did just close on a property a couple months before that and had a rate that was higher than that.
• 14:00
  Mike Swenson: So, some great financing terms.
• 14:01
  Mike Swenson: So we get in without having to go through the bank and qualify on our own and guarantee on our own.
• 14:07
  Mike Swenson: We get some terms that are very favorable for us, and we only have to put down 11% because of the current value of the property, the existing mortgage, and the guarantee from the seller.
• 14:19
  Mike Swenson: That was part of what the kind of the financing terms were.
• 14:23
  Mike Swenson: So we get in at a much lower price in terms of the capital that we need to bring into this deal.
• 14:29
  Mike Swenson: And then the we wouldn't have done all this if there wasn't some great value add.
• 14:33
  Mike Swenson: So, like I talked about, value add opportunities are really what our bread and butter is.
• 14:38
  Mike Swenson: We want to be able to find stuff, make it better, increase rents, hold those expenses, and add value to this property.
• 14:45
  Mike Swenson: And so this one was a property that had been mismanaged in the past.
• 14:49
  Mike Swenson: Without getting into all the nitty-gritty details in the past, we felt like the management company that we were hiring, who's in the market, has had properties similar to this in the past, could put together good financial projections.
• 15:02
  Mike Swenson: We feel like we can get this property to much better performing than what we currently had.
• 15:07
  Mike Swenson: And so this property is about 75 to 80 percent occupied right now.
• 15:12
  Mike Swenson: Most properties in the area are much higher than that.
• 15:15
  Mike Swenson: And so we felt like having new management come in would be able to increase occupancy over time.
• 15:21
  Mike Swenson: Now we're looking at a timeline of about 18 months.
• 15:24
  Mike Swenson: That's why we had two months interest-only payments.
• 15:27
  Mike Swenson: They knew let's give them two years, come in, increase rents, increase that cash flow so that in two years, when it comes time to be able to pay down the mortgage, we now have much higher income coming in and we can do that.
• 15:40
  Mike Swenson: So we've got about 30 to 35 units out of this 128-unit apartment building that we're going to add and increase the occupancy over the next 18 months.
• 15:50
  Mike Swenson: So that increases revenue by a lot, which will be great.
• 15:53
  Mike Swenson: Current rents, we're looking at about$70,000 to$72,000 a month.
• 15:59
  Mike Swenson: And if we're able to get to full occupancy and full market rents, that's projected to be about$100,000 a month.
• 16:06
  Mike Swenson: So$28,000 a month to$30,000 a month, we can increase the income.
• 16:11
  Mike Swenson: And so that's about 40%.
• 16:13
  Mike Swenson: So there's not a lot of opportunities where you've got already a bunch of people there, and within reason, in the next 18 to 24 months, we can increase that income by 40%.
• 16:24
  Mike Swenson: That's gonna be awesome.
• 16:26
  Mike Swenson: Not gonna be easy, and so I don't want to come on here saying that wave a magic wand, everything's gonna go great.
• 16:31
  Mike Swenson: I always tell people when we invest in real estate, it's real people and real problems that come up.
• 16:36
  Mike Swenson: So we navigate that, we problem solve.
• 16:39
  Mike Swenson: And so it's not gonna be easy to do that.
• 16:41
  Mike Swenson: It's gonna take some work and it's gonna take some money to be able to make that happen.
• 16:44
  Mike Swenson: The unit mix on this property 14 studios, 15 one-bedroom apartments, and 99 two-bedroom apartments.
• 16:51
  Mike Swenson: And so we're excited to have some of the larger, the two-bedroom properties.
• 16:55
  Mike Swenson: So, what did we do in terms of due diligence?
• 16:57
  Mike Swenson: We did site visits, we did a property inspection, and then us and the property manager, as well as some other people on our team, we literally went to inside of every single unit to get a sense of what's the condition, what types of repairs would need to be done, and then put together a budget for what that could look like.
• 17:17
  Mike Swenson: And so we had some things that came up during the inspection.
• 17:20
  Mike Swenson: We were able to negotiate that with the sellers, and so they did some work ahead of ahead of that, and then were able to give us a seller's credit for some of that stuff as well.
• 17:30
  Mike Swenson: So we were able to get our eyes on it, we had multiple eyes on it, and most importantly, we had our property manager, new property manager's eyes on it to be able to confirm what our assumptions were and what our projections were, which was really important.
• 17:44
  Mike Swenson: Operation strategy.
• 17:45
  Mike Swenson: What is these, what are these next 18 to 18 months to five years to seven years?
• 17:51
  Mike Swenson: We do anticipate typically with most of our apartments, we're looking at a five-year hold.
• 17:56
  Mike Swenson: This one, because we do have the financing in place for seven years, we may consider holding for seven years.
• 18:02
  Mike Swenson: These are all things that we communicate to our investors so they know this going in eyes wide open.
• 18:08
  Mike Swenson: We might hold for five, we might hold for seven.
• 18:10
  Mike Swenson: If it's lucrative enough and things are humming along and they're great, we may continue to hold and just have cash flow distributions to our investors, or we might decide we've kind of maxed the value of this, we've screwed squeezed the juice out of this orange as much as possible, and then we choose to sell at that time.
• 18:28
  Mike Swenson: So increase rents, increase occupancy.
• 18:31
  Mike Swenson: There's also quite a few garage units.
• 18:33
  Mike Swenson: Right now, nothing is being charged for these garage units.
• 18:37
  Mike Swenson: We conservatively projected what if we charge$25 a month for people that wanted to use the garage?
• 18:43
  Mike Swenson: We're talking about 80 garages here, so there's quite a few.
• 18:46
  Mike Swenson: $50 a month would be a little bit more reasonable, but we started small with our projections.
• 18:52
  Mike Swenson: So that's another$4,000 a month.
• 18:54
  Mike Swenson: If we do have 80 garages at 50 units or$50 per month, another revenue opportunity.
• 19:01
  Mike Swenson: It might not be the tenants that are renting out the garages.
• 19:04
  Mike Swenson: Maybe there's an opportunity where there's nearby residents, um, people living in other apartment buildings nearby or um housing nearby that needs storage space.
• 19:13
  Mike Swenson: We could we could do that.
• 19:14
  Mike Swenson: So we saw additional revenue opportunity there.
• 19:17
  Mike Swenson: Obviously, we're gonna put money in, update the units as needed.
• 19:20
  Mike Swenson: The main thing, too, that that we really want to focus on is showing tenants that we care.
• 19:25
  Mike Swenson: This is important to us.
• 19:26
  Mike Swenson: And so when we were going through the units, a lot of times when we preview property, the tenants don't know that the seller's looking to sell.
• 19:35
  Mike Swenson: So, you know, we've gone in under the guise of like an insurance inspection or maybe maintenance, right?
• 19:42
  Mike Swenson: Maintenance inspection, maintenance review, things like that for us to get eyes on the property without alerting tenants that hey, the seller's looking to sell here, and then also alerting the management, current management that somebody's looking to sell.
• 19:54
  Mike Swenson: Because if we switch management, their business is going away in terms of what we're doing.
• 19:58
  Mike Swenson: So we did work through that with the seller, with the property manager in a way that that worked.
• 20:03
  Mike Swenson: But we heard tenants say, hey, you know, we've got these fixes that we need to see happen, or we've reached out in the past and things hadn't been responded to.
• 20:12
  Mike Swenson: And so it's important for us to be responsive, provide good, clean, safe housing as much as we possibly can.
• 20:20
  Mike Swenson: And so we want to be able to turn the culture of the apartment building as well.
• 20:24
  Mike Swenson: And so, in addition to the dollars and cents and returns and all that, we want to make sure that we're doing a good job for our tenants.
• 20:30
  Mike Swenson: And so that's important to us.
• 20:32
  Mike Swenson: Like I mentioned, five-year hold, maybe a seven-year hold purchase price, 6.6 million is what we closed on it for.
• 20:38
  Mike Swenson: We raised enough to close, and now we're continuing through the raise.
• 20:42
  Mike Swenson: Uh, but we're got about$1.7 million total that we're raising here in terms of both the down payment, reserves, renovation budgets, things like that.
• 20:51
  Mike Swenson: And then we do have all of our projections over the next five to seven years laid out of what that looks like.
• 20:57
  Mike Swenson: Obviously, we can't talk about that uh on a podcast opportunity.
• 21:01
  Mike Swenson: But then in addition, one of the other cool things that we do is we do a cost segregation study.
• 21:05
  Mike Swenson: And so we're providing great tax benefits for our investors.
• 21:10
  Mike Swenson: For those people that don't know what a cost segregation study is, the best way I explain it is it's an engineering study where they look at all the stuff in the building.
• 21:19
  Mike Swenson: So typically, you know, you might be able to depreciate a building over, you know, 27 and a half years.
• 21:24
  Mike Swenson: They look at all the stuff, the carpets, the countertops, the cabinets, the window blinds, kind of all that stuff in there.
• 21:32
  Mike Swenson: And they say, hey, all that stuff isn't gonna last 27 and a half years.
• 21:36
  Mike Swenson: So we can accelerate depreciation on some of that stuff, which allows you to get some better tax benefits early on, create some more favorable cash flow that you can then reinvest back into the property, or for our investors, you know, it helps on their taxes at the time.
• 21:52
  Mike Swenson: And so we do a cost segregation study with all of our investment properties, which our investors love.
• 21:58
  Mike Swenson: So great tax benefits there as well.
• 22:00
  Mike Swenson: Well.
• 22:00
  Mike Swenson: So that's something we're just in the process of issuing those K1s to our investors for 2025 in terms of the benefits that they got for those properties.
• 22:09
  Mike Swenson: So typically what we do is we look at, you know, there's probably a timeline of stabilization.
• 22:15
  Mike Swenson: And then once we feel the property is a little more stable, we're positive cash flow.
• 22:19
  Mike Swenson: And we do look to issue quarterly cash flow distributions to our investors.
• 22:24
  Mike Swenson: So once a quarter, they'll get a distribution with any profit that we have distributed based on how much they invested into the deal.
• 22:32
  Mike Swenson: And then obviously the big windfall is upon sale.
• 22:35
  Mike Swenson: And that's why we want to make sure that we increase the value of the property.
• 22:38
  Mike Swenson: So when we sell, we've got some positive stuff going there.
• 22:41
  Mike Swenson: And so that's the nuts and bolts of our property.
• 22:46
  Mike Swenson: The work is just beginning now.
• 22:48
  Mike Swenson: So it's getting everything turned over to the new property manager, getting all the new tenants into the system, getting them to pay rents to us versus, you know, they might have had an auto pay set up, going in and assessing.
• 23:00
  Mike Swenson: We did find a plumbing leak the first weekend that we didn't know about, took care of that.
• 23:04
  Mike Swenson: But now it's kind of go through and figuring okay, which units can we rent out, which units do we need to renovate right away.
• 23:11
  Mike Swenson: And it's just starting to put new butts in seats and uh try to fill that occupancy as quick as possible and go from there.
• 23:17
  Mike Swenson: So I hope you guys are excited to hear about our new deal.
• 23:20
  Mike Swenson: 128 units, Moorhead, Minnesota, 6.6 million purchase price, 1.7 million raise.
• 23:27
  Mike Swenson: We are in the middle of that.
• 23:29
  Mike Swenson: If you're listening to this right now, uh it's for accredited investors only.
• 23:32
  Mike Swenson: So if you're an accredited investor, you can reach out to go look at our website.
• 23:36
  Mike Swenson: Um it's uh freedom throughrealestate.com, freedom throughrealestate.com.
• 23:41
  Mike Swenson: There's an invest button there.
• 23:42
  Mike Swenson: Once you get there, and then you can click to schedule an appointment with me or a call with me, we can go through things in more detail.
• 23:48
  Mike Swenson: But uh at this point, the reason we're talking about it, it's for accredited investors now.
• 23:52
  Mike Swenson: Um, we do had we did have an opportunity for non-accredited investors.
• 23:57
  Mike Swenson: Most of our deals we do for non-accredited investors, and so if you do want to learn more about these opportunities for the next one or the next one after that, same thing.
• 24:06
  Mike Swenson: Go to realfreedom.com or freedom through realestate.com, click on invest, schedule a call with me, and I'm happy to share these types of opportunities with you.
• 24:15
  Mike Swenson: Excited to share new building, new opportunity, new challenges, and uh, we're gonna roll up our sleeves and make this a great one.
• 24:22
  Mike Swenson: So, with that being said, we hope you guys enjoyed everything.
• 24:24
  Mike Swenson: Feel free to always reach out to me if you have questions and check out our website, check out more about our deals and what we're doing in the future, and uh excited to share more acquisitions and opportunities with you guys in the future.
• 24:36
  Mike Swenson: Thanks, take care.