Commercial Real Estate Investing with Don and Eden

Joe Bodek is born and raised outside of Philadelphia, PA. After his grandfather and father, he is a third-generation real estate entrepreneur. He received the guidance of his father, one of the largest developers and builders in the country at that time. He continued in the real estate business up until 2012.

After that, he became a mentor because he wanted to solve other people's problems and share his knowledge of real estate. He created a revolutionary mentoring system called the 'Earn While You Learn Lease Option Mentoring Program.' The most important factor of this program is that it costs a whole lot less money in comparison to other courses in the market. This course is for everyone who is facing financial problems but are eager to take real estate courses and make a living out of it.

Episode Highlights:

• Joe Bodek’s Family History And How He Became An Investor
• Leasing A House
• Types Of Lease Options: Sandwich And Wholesale
• Mastering Lease Options In Commercial Properties
• Future Goals Of Joe Bodek
• How He Became A Real Estate Mentor.

Connect with Joe:

Website: realestatementoringUSA.com

Email: [email protected]

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TRANSCRIPTION

Intro: Hey guys, today I'm excited to talk about a subject that many people always ask me about. And to talk about that subject, I'm going to host Joe Bodek. Joe is a lease option mentor. And despite the fact that it has to do a lot with residential real estate, I think it's a super interesting subject nonetheless. And you could also apply these powerful techniques in commercial real estate, in what would be known as a master lease option. So, let's start and don't forget to check us out at DonandEden.com and remember you can always shoot us an email at [email protected].

Lady: Welcome to the commercial real estate investing podcast with Don and Eden, where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey, Joe, how are you doing today? Welcome to the show.

Joe: Oh, good, Don, how are you? I appreciate you having me on.

Don: Yes, of course. I think it's important to have somebody like you because you're dealing with lease options, which is a very interesting subject, and I haven't had anybody in the show that is doing that up until now. So, I would like to hear everything there is to know about it. And I'm sure that the audience would appreciate that as well. But first of all, I want you to tell us a little bit about yourself and your background and how you got into real estate, to begin with.

Joe: Don, I'm not the usual story that you hear about the individual that was working in the cubicle, hated his job, hated his boss, saw the infomercial at three o'clock in the morning and went and signed up for it, got into real estate and of course, the rest is history. You hear that a lot out there these days. I'm not of that area. I was birthed into real estate. I'm the third generation. My grandfather was a developer, builder. My father was one of the biggest developers and builders in the country back in the 50s and 60s and early 70s. By way of explanation, if anybody lives in that split level, or knows what a split-level home is, my dad's want to make them famous. He claims he invented them. I'm not quite sure he did that but he made it kind of famous, he's got thousands of them. So, I was mentored by him for a number of years, work with him running about 3000 apartment units for him and learn to build houses and develop ground. So, I have a fairly decent background in conventional real estate. And then back in the 80s, he decided he wanted to retire, everything got sold off. And I went out on my own eventually got into creative real estate, dealing with wholesaling and lease options and subject to and those kinds of deals, and did that for about 25 years. And for the last, I think it was about 8 or 10 years, I'm not exactly sure, I started mentoring people and found that I was pretty good at coaching. And over the last 8 or 10 years, that's what I've been doing, mentoring and coaching people at least options and wholesaling. And that brings us pretty much up to today.

Don: Wow. So yeah, I got a lot of questions about this story. First of all, I want to say that you're very lucky to be born into a family that is dealing with real estate because you absorb things from an early age and you understand the potential of that business right on. It's something that I'm sure you're grateful for and appreciate right?

Joe: To have my dad is my first mentor was pretty phenomenal. His background was pretty amazing. It gave me a look at both sides of the coin because I got to do conventional real estate which is going out and buying properties and building apartments and all that and go building houses and developing ground. And then they got me the ability to go into creative real estate, which is a lot of fun to do. And of course, you don't have to work with banks as much and all the stuff that I did it was completely the opposite. I had to relearn real estate when I went into creative real estate because it was the opposite of everything I had learned. So yeah, it's been a good career. I've had a good time at it. I've been lucky. I've been around a lot of people that knew what they were doing.

Don: Yeah, we started doing creative real estate in the beginning. So that's how we started and that's how I feel a lot of people are getting started today. Because today you're able to start with creative real estate with no money and no knowledge, no college degree, and for me it was perfect. I'm sure it's very interesting that you got to see all types of real estate during your career. You're focusing right now in coaching and helping others, which I'm sure is very gratifying, right?

Joe: To be perfectly honest with you, I was getting ready to retire. I had done hundreds and hundreds of deals in the last 25 years, and I'm not a spring chicken anymore. And then, you know, what was I going to do sit around click coupons? That didn't make much sense to me. And people kept asking me, how do you do a lease option? How do you do this and coaching all these people? And somebody eventually said to me, why don't you open up a company and do this because you're pretty good at it. And that's how it all came about. So, I decided, well, I'm not going to retire, I'm going to keep doing it. And to be perfectly honest with you, I get way more of a thrill at a coach and a student to get them through their first deal or get them to expand their business and get it flying than I ever did build a house.

Don: You know, when you're in real estate for so long, then the money is no longer the main purpose if you ask for my opinion. I mean, of course, it is the thing I mean, you still want to make money, but it's not just money, it's also the impact, it's also the ability to affect people. And I feel the same when people talk to me about real estate wholesale, which is how I got started in the residential real estate wholesale. The first time you tell people about this, then they go crazy. They don't believe that you can even do things like that. Lease options are pretty much the same as wholesale. The first time you hear it, it's kind of hard to grasp, but then you realize how ingenious this is, right?

Joe: A lot of people, as you just said, they're kind of taken aback when they hear the word lease option. They think it's very difficult, got to go to night school to learn how to do this type of thing, and it's not. The best way I can explain it to your listeners would be if they're familiar with a car lease and how that works. This is the same thing. In a car lease, you go ahead and you lease your car for a period of time, usually it's three years on a car lease, and at the end of that lease period, you have the opportunity to either go ahead, you have the option to purchase that vehicle, or you can give it back and go get another one from the dealer or go somewhere else and get a car. Same thing here. You're going to lease property for a period of time, which you're going to establish with the seller. And then at the end of that lease period, you have the opportunity to go ahead and purchase the house at a predetermined set price, or you can say no, I'm want to move out and go find another place to live. So, the easiest way to look at it is it works just like a car lease, you just substitute a house. 

Don: Yeah. But then it gets a little bit trickier because you assign the lease to an end buyer, and you still able to make money on all the ends on the front end, back end, and the rent money. So, let's talk a little bit about that and how you make money as the investor or the entrepreneur and a lease option.

Joe: Okay, now, first and foremost, there are two types of lease options. We'll talk about this one first, which is called a sandwich lease option. And then if you'll permit me after we've done that, we can talk about the wholesale lease option. Sandwich lease option has three paydays to it, which is kind of unique. So, what happens is, you're going to go ahead and you're going to enter into a lease option agreement with the seller and you have the right at this point, to subleas

Douglas Skipworth has had an entrepreneurial heart from a young age. He began his journey in community banking and worked on earning his CPA and CFA certifications. Since then, he has been in the residential real estate industry for about 20 years and is passionate about partnering with others to develop thriving real estate businesses. He currently co-owns CrestCore Realty, which manages 2,500 properties in Memphis, TN. Along with his partner, they have built several real estate companies in brokerage, management, lending, and construction. 

In this episode, he discusses his life and business, the advantages of community banks, ideal criteria for investing in a new deal, the importance of connecting with others and shares helpful advice on education for today’s world. Listen in as he shows us hows real estate and adding value to others tie it all together. 

Episode Highlights:

• How Much It Helps Your Business If You Connect With More People
• Effects Of Borrowing Too Much Money For Education
• How Local Banks Help In Real Estate Investing
• Importance Of Establishing A Relationship With Local Community Banks
• Douglas’ Interest In Helping Certain Types Of People Via His Businesses

Connect with Douglas:

Website: crestcore.com

Email: [email protected]

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TRANSCRIPTION 

Intro: Hey guys, this is Eden your co-host. Welcome to the show where we talk about all aspects of commercial real estate investing. Today, Don is interviewing Douglas Skipworth. Doug has been investing in real estate in the past 20 years. And today he'll cover a lot of subjects including community banks, relationships in real estate and some philosophical issues like college and financial freedom through self-educating yourself with the tools that are available to us nowadays. I want to mention, again, our new website that's forming a decent shape you can visit us at DonandEden.com. Also, remember you can always reach out to us I answer all emails personally: [email protected]. So, let's get started guys.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: All right. Hey, Douglas. Welcome to the show.

Douglas: Hey, Don. Great to be here.

Don: Yes, I think you deserve it because you've been doing real estate since 2001. Right?

Douglas: That's correct. My partner started in 2001. And I started in real estate in 2002. Between the two of us, we're going on 20 years.

Don: Wow. So, you guys have been through a lot, right? So, you started, the market was going up, then there was a bubble, and then everything changed. And then you guys probably had to make some adjustments and change business models. Now, when the markets have been going up for a few good years.

Douglas: Yeah, it's so funny, because I don't know when you always talk about the good old days. I don't know if the good old days were when things were running up, or the good old days, because we were, you know, we were buying and refinancing and things were great or when things kind of went bust, because that was a huge opportunity for us personally to add to our portfolio as other investors busted in community banks had deals to give away and then rates have been so low for the past 10 years that that's been a good time. So, if you kind of look back at the past 20 years it has been the good old days.

Don: Yeah, I don't know who said it. I'm pretty sure it's Warren Buffett. "When there's blood on the street, buy real estate."

Douglas: So true.

Don: Yeah. So, tell us about the early stages of your career. How did you get started? What did you do? How did you even hear about real estate? And what were your goals at the time?

Douglas: Great question. After college, I knew I wanted to start a business. So I kind of jumped into commercial banking and accounting, got my CPA and my CFA certifications to learn all I could about business and then I was working in New York City at the time and I had an opportunity to come to Memphis to work with an owner-operator of a real estate business when he was ginning up a tech company. It was kind of like a proprietary Zillow back in the early 2000s. It was a great chance for me to get on the owner-operator side of the business because I kind of knew from my first few years I wanted to be a business owner. So, I just kind of jumped in real estate tech and was learning a lot about real estate and I moved into a neighborhood and bumped into a guy who was a jogger. So, he and I started jogging together. He was in manufacturing, managing plants across the country mechanical engineer by training and he had in high school, a mentor who owned real estate and so he was building wealth through real estate while working his full-time corporate job. And I was working in real estate on a data in business side working with realtors and appraisers on the residential side. So, we had a lot of commonalities, shared some interest, but he kind of told me about what he was doing with his investing portfolio of properties, both multifamily and single-family, I got interested. So, I started doing the same thing on my own. And we would jog together and share war stories and share best practices and really developed a friendship and almost a partnership. So, we decided we wanted to try and do a deal together that neither of us had done. So, to kind of share the risk. We ended up doing a tax sale because we had never bought a tax sale, either of us. And so, we just kind of shared the risk on that and it went well. Then we shared the risk on another one and another one and then we bought a little portfolio together and then we bought a few more together then we started doing some third party management together and fast forward to today we've got several hundred units together, we manage several thousand units together, we've got a brokerage and property management and maintenance company would do some hard money lending. So, we've enjoyed our friendship and business relationship.

Don: That's truly amazing. I mean, I think, you know, going on a jog, and then meeting your future business partner that you're going to do so many things with, it's just outstanding. And that's why people always say that when you are trying to get into real estate, then you should always say that this is what you're doing to people. Because people are going to tell you something back and they're going to tell you, hey, you should talk to this guy or I've heard about somebody who does that does this and then you get ideas. So, you always gotta talk to people. And that's a great example of how talking to people, getting to know them, listening to them, changes your life in a good way.

Douglas: That's a great point. Especially I was laughing about This was somebody the other day, because when I was working in banking when I was working in accounting when I was working in real estate technology, I would tell people that and nobody seemed interested or knew what to talk about. But as soon as I started investing in residential and small multifamily properties, and I would mention that everybody had either thought of it or had a friend or a family member who had been an investor at one time, or were thinking about doing it themselves or just buying a house. So, to your point, it just opens up a wealth of conversations and connections, that being a real estate investor and talking about it highly encourage people to do that.

Don: Definitely. Now, there's another thing that I want to talk to you about because I just had this conversation with my friend and you just mentioned it that you went to college back in '01 he said, right?

Douglas: I wish and I graduated in '96. So, I'm a little older than that.

Don: Yeah, so a little bit older. So, this is exactly the time where you're growing up, I believe. I don't know how old you are. If you want to share it.

Douglas: I'll be 46 in two weeks.

Don: 46. Happy birthday! Here's my question. So, you are growing up at the times where your parents must have told you for the people that were close to you to go to college, right? Get a degree if you want to be successful in life, right? Now, my generation, I'm 30 years old, and I never went to college. So...

Douglas: Awesome. 

Don: I've been investing in real estate since I'm 23 years old. My background is kind of different because I wasn't growing up in an environment that tells me that I have to go to college because we had the internet so we could hear other people talking. And so, there is the age of information where you could get a book for 10 bucks so you can listen to a podcast for free, right and get all the education you need. So, my question to you, would you recommend going to college in modern times or just jumping right in and just getting an education from a different source?

Douglas: If you're entrepreneurial enough, and you have a plan and you have a determination, then yeah, you can do it on your own. There is a lifelong learning component that podcasts, books, resources now are at our fingertips as well. Well, it's just meeting people's mentors and connections. So clearly have learned more since I've been at a school then I learned in school. But for the right person, so for example, I got a master'

DE 26: Tax Strategies and Real Estate Investments with Thomas Castelli

Thomas Castelli is a licensed Certified Public Accountant (CPA) in New York. He is certified in Real Estate Financial Modeling and Tax Strategist. He comprehends that putting resources into real estate, joined with tax strategies and arranging are critical to limiting the taxes and building long term riches.

He holds equity positions in several multifamily properties and participated in the syndication of an 82 unit apartment complex as a general partner. All his experience in investing and tax strategies are really helping him in finances.

Highlights:

• Difference Between GP and LP
• Thomas’ First Investment
• How Much Money Is Needed To Invest In Real Estate
• How Many Partners A Partnership Should Contain And How Should The Partnership Split Be.

Connect with Thomas:

Email: [email protected] or [email protected]

Podcast: Real Estate CPA

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TRANSCRIPTION

Intro: Hey guys! Today I'm going to interview Thomas Castelli, Thomas is a real estate investor. And I think the most interesting thing about him is that he invested in his first real estate deal as a limited partner and that is something that we haven't discussed yet. A lot of people here don't know the difference between a limited partner and a general partner, also known as the sponsor or the syndicator. And today we're going to talk a lot about the difference between these two types of investments and how you can get into real estate as a passive investor with not a whole lot of money and learn a lot about real estate in the process also, while you make money, so that's a great opportunity. And I think it's a very important episode for everybody who is considering to invest in real estate. So, let's get started.

Lady: Welcome to the Commercial Real Estate Investing podcast with Don and Eden, where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey, Thomas, welcome to the show.

Thomas: Hey, Don, thanks so much for having me on today. Happy to be here. 

Don: Of course. How's your day going so far?

Thomas: It's going great. The weather's not too great here in New York. It's been raining for the last few days. But other than that, I can't complain. It's a good day.

Don: Yeah. Well, you know, it's only going to get colder from now on, right?

Thomas: Yeah, yeah, yeah, this the one bad thing about living in New York is it could be really hot in the summer and the nineties, and then go all the way down to the teens if not lower, when you move into the winter months. 

Don: Well, you know, I live in Florida, we have warm weather all year round. But then in the summer, you got the hurricanes and you got the rain. That's just non stop, and you can't plan anything. And so, you can't go out and do anything because whatever it is you're trying to do. There's going to be rain, and there's going to be sun and there's going to be rain and there's going to be Sun. It's just super annoying. But yeah, I'll take that over New York every day of the week. 

Don: Yeah, well, I would too. I don't blame me. Okay, so, tell us a little bit about who you are, how you got into real estate and then what you're doing currently.

Thomas: My name is Tom Castelli. I'm a CPA. I work for a company called the Real Estate CPA as a tax strategist and I primarily do tax consulting for real estate investors. So, I help them come up with a plan to minimize their tax liability each year. The super exciting job keeps me really in touch with real estate investors and what's currently going on. Outside of that, I am an investor myself. I got started as an investor on the LP side back in 2015 when I started to make a few Limited Partnership investments with someone who basically would become my mentor. I made my first LP investment in a 48 unit apartment building Class D apartment building and got full renovation in Columbus, Ohio. That was pretty exciting. And from there, I started learning more and more about syndications. That ultimately culminated in me participating as a general partner in the syndication of an 82 unit apartment complex in Jacksonville, Florida, actually down in your state. 

On the Investment side what led me to syndication though was when I was in college, I was pretty much saying, ‘Oh, I don't want to like live the normal nine to five life.’ I need a way out of this and start researching real estate, you know, the Rich Dad, Poor Dad, all that. And then eventually it led me to a meeting of RIA meeting out here on Long Island, and I met a syndication group and I went to their three-day seminar where they went through syndication A to Z, and I fell in love with syndication. That's where I met my mentor. And that's the person who I started investing with on the LP side, and it all led up to that eight units GP. Since that point, I haven't been too active. I've made a few investments in LP since then, but at this point, just kind of waiting for us to be putting this property on the market.

Don: I know we already discussed that on previous shows. You know the difference between LP and GP, but I'm sure some people are going to listen to that, and they're not going to understand really what we're talking about if they're new to all the terms. First of all, I like it that your first deal was an LP so you invested with somebody else, and then we're going to talk about that, but first, how about you give us a brief explanation about the difference between limited partner and a general partner and then the way that a syndication process works.

Thomas: Yeah. So, the limited partner and investment, you're the passive investor, you're the silent partner or the money partner some different terms people say. You're investing with the general partner, and you're not taking an active role in the business or the investment. You're just kind of sitting back and collecting your check. I think the biggest aspect for a limited partner when you are investing is to understand who the general partner is, what their track record is, do they have experience with the assets and just have an overall idea of what market you're investing in that can be pretty important. But for the general partner side, the general partner to deal they are responsible for putting the entire deal together from A to Z. 

So, it's finding the property, going through the acquisition process, including due diligence, and then ultimately overseeing the property management than any renovation plans you have for the property, that entire processes and ultimately selling it. They're also responsible for raising the capital from investors, the LP’s and making sure that they are handling Investor Relations properly communicating with their investors. They're also responsible for getting the debt financing working with a bank or perhaps to Fannie/Freddie or mortgage brokers, however, we're going to go about getting that loan, that is their role. They're pretty much responsible for the entire thing, which is why as a limited partner, when you don't have that control when you don't have that management, say, it's very important to know who you're dealing with on the general partnership side.

Don: Yeah. And I would like to add a few things. So as a limited partner, the advantage is that you're passive and so you don't have to worry about too many things. So, the only time you have to worry about is when you're getting into the deal. You have to do some research, you have to know the market, just like you said, that's pretty much it. You invest the money and you should be getting some nice returns. I always say that if I wanted to retire, I would just invest all my money as a limited partner with other people that I trust and just go to a cruise or something and just have fun forever because you get good returns. You could get, I would say 15%. It's pretty normal to get on a yearly basis. If you know who you're investing with, and you have experienced and you could even get a 20% return on an IRR based on for five years. So that's the advantage as a limited partner. 

The advantage for the general partners, also known as the sponsors of the deal, is that essentially, they collect money from investors. So, they raise capital, just like you said. Typically, they have to raise about 30% of the purchase price of 20% for a down payment, and then 10%, for CapX, what is known as the repairs, or the implementing of the value add plants or the property. And so, what happens is that they raise the 30% from other people, and they get a split of 30% of the entire deal. So, let's say that they improve the building that's worth 10 million to a point where it's worth 13 million, so they would make 1 million in profit if they get 30%, roughly 1 million, so 900,000.

Yeah, you are a CPA. And then that is the reason why you decided to invest as a limited partner because you wanted to keep your day job, right? You wanted to be a passive investor. And you also wanted to get into investing in syndications, right? And learn as much as you can.

Thomas: Yeah. One of the things is like when you're first I guess, taking on this investing adventure that some investors go on is it's good to have the experience on the LP side first, because you kind of get to see it from the back end angle, and you experienc

In today’s episode of “Commercial Real Estate Investing with Don & Eden” we have guest John Casmon. He’s founded Casmon Capital Group where he primarily invests in Chicago & Cincinnati. Together, he and his business partner/wife have helped families invest in multifamily apartments to create a passive income stream and tax benefits without the hassles of becoming landlords. 

In today’s episode, John discusses his partnership and business goals, his big deal in Texas, shares a variety of resources to learn your market & discusses important factors when analyzing a deal. He also explains why multifamily apartments are the main focus of his business strategy, his different types of value adds & views on the mobile home parks asset class.  

Highlights: 

• Importance of Building Relationships
• How to Analyze Unfamiliar Markets
• Data Points to Focus On
• Knowing When to Scale Up

Connect with John:

Website: casmoncapital.com

Email: [email protected]

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TRANSCRIPTION

00:00 Hey guys, this is Don and my guest today on the show is John Casmon. John is a real estate investor and he's investing primarily in Chicago and Cincinnati and he's in control of over 920 units, which is quite a lot of units. So I'm very excited to have him on the show today because he's one of the most experienced investors out there and I'm also, John was kind enough to share his resources with us. So at the end of the episode I'm going to read a few websites that you want to check out in case you want to do some research and find out some more information about the multifamily deal you're looking at. So we're always happy to give you guys that information. So stay tuned.

00:46 Welcome to the Commercial Real Estate Investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

01:03 Hey John, welcome to the show. Thank you for having me on.

01:07 Of course. I think you deserve it. I heard you own or in control of over 920 units.

01:14 Yeah. Were general partners of 920 units across the country, primarily in Texas, Florida, South Carolina and Cincinnati. And continue to grow that and working with investors. So excited about everything.

01:27 That's great. But I know when you started it wasn't always this way, so now you're a full time real estate investor, but when you started, you were doing that part time. I know you're investing since 2012 if my records are right.

01:41 Yeah, absolutely. We started off part time. I started with the house hack. We had a two unit property, lived in one unit, rented out the other and you know, from there we bought a three unit building. A couple of years later we bought an eight unit building the next year and just continued to build the portfolio. And eventually it got to the point where we were running out of our own money and we're talking to a lot of people who were interested in investing in real estate but didn't have the time to really learn everything that we had learned in the us on their own. And at that moment we kind of realized, Hey, there might be a great opportunity to partner with these people where we can bring them in along side of us on deals. They can be passive, they can, get all the, you know, the income that comes from being an investor without having to actually be the landlord and take care of the property themselves. So that kind of really opened us up to different ways of expanding and growing our portfolio. Yeah. So when you say we, who exactly are you talking about? Oh, my wife. You know, I don't make any decisions without checking in with the boss.

02:41 Yeah. Just checking in with the boss. That's, that's true. So when you, when you first made the transition to real estate, I know you were working in a different job, a day job and then how, how did your wife take it? So how, how was she with, with that idea?

02:57 Yeah, I mean it's the, it was truly a partnership thing. So it wasn't like I had to convince her or anything like that. I know some folks go to those situations, but you know, we were always aligned on the lifestyle we wanted to create a lifestyle, we wanted to live the environment we went to raise our kids in. So as we had conversations about how to create it, real estate was a big part of it. So that first property, I mean we lived in that property, lived in one unit. We lived in our property for seven years. So I mean we lived basically in an apartment for seven years in and built equity and continue to grow. So that was something we were always aligned on. And I think that's really important. If you're going to invest in real estate you want to make sure your partner is on board with that.

03:38 So she was completely aligned with it. We had our roles in the business, so she did certain things. I did certain things and we kind of use that to grow the portfolio. So we were both, you know, doing it kind of on the side and we have a smaller portfolio, you can do that. I think when you get to the point where you really want to scale and you want to start working with other people, that's where you start to have to shift roles, responsibilities and dedicate more time into the business. Yeah. So when did you feel that things are getting bigger and that you, you're, you just scaled up a little bit? You know, we bought the eight unit building and that was our first commercial property. We hired a professional management company to over see it and we're still pretty involved in the process from an asset management standpoint.

04:22 But going through that process gave me the confidence and, you know, the readiness to start moving forward into some of the larger properties. So I think for me, you know, cutting the teeth on something that was commercial but not overwhelming, that gave us a chance to learn to work with property management companies, understand the way they work, the way they underwrite, the way they manage and just really take that experience and they use that to kind of build and take the next step into kind of larger commercial properties. Okay. So yeah, let's talk about that. So when you're saying large commercial properties- I'm assuming you're talking about multifamily units over 80 units or 90 units, right? Apartment buildings. That's right. Yeah. So tell us about the first deal that you had of, of that scale. Yeah, so I mean, we were looking for properties for awhile and knew just like now the market's been kinda tight and we were looking for properties where we could deliver strong returns for our investors and we're having a hard time finding it.

05:23 So we ended up partnering with a friend, a gentleman that I had met and he was in a similar boat, but we just kinda had a conversation and I expressed that if he found something that made sense, wanting to love to review it, and if the deal looked good, we'd be interested in coming on as partners and maybe bringing some of our partners on as well. Because at that point point we had been talking to investors for a little bit of time and you know, they were kind of getting itchy and wanted to get in on a deal that all the great things we have been telling them about multifamily investing and we were struggling to find that deal. So we ended up partnering with that investor and that was 192 units out in San Antonio, Texas. Oh, that's a big, that's a big property. Yeah. Yeah, exactly. So it was a win, win situation because that was the big property for them as well. Right. So that was their first very large apartment deal where they kind of word the, the leads. So we came in as general partners and we help them with you know, kind of some of the marketing from the investor relations and you know, that was kind of our foray into the larger commercial apartment space.

06:29 Okay. So do you feel like you got into the deal because your investors got itchy or did you actually spot the opportunity there?

06:37 Well, I mean I think it comes down to building relationships first of all. Right. So for us, we would not have done this with just anyone. This was an individual that we had gotten to know over the course of probably about nine months. And you know, we've met him in person, we've sat, we've had dinner with them. We've had various conversations at that time. I had just launched our podcast “Target Market Insights” and he was one of the early guests on this show and it actually came up while we were talking right after we recorded the episode. So, you know, he was someone that we respected, we, we understood how he was looking at deals. He had been a general partner and other deals as well. In a large space. So he had experienced that. He knew what he was doing from that perspective. So I think we, there was a level of comfort with with that individual that gave us comfort and moving forward and, and being a partner there that I don't think we would have had no matter what our investors were thinking or looking for.

07:33 Okay. So let's talk about the numbers for that deal. So what was the purchase price? Find my ask and, and what was the value at plan and everything there?

07:41 Yeah, 16 point $1 million purchase price. We invested a little more than a million bucks into renovations. Value adds a couple things. Interior innovations on that property. We changed up the exterior landscape changed out the siding. There was a who's that? There was a, a second area

In today’s episode, we have the pleasure of having Benjamin Inman, founder of Inman Equities. Benjamin brings over 20 years of experience and has become successful via hard work and strategy. He has a really good reputation in the real estate market due to hard work, consistency, and persistence. 

Benjamin touches on his beginnings into the wonderful world of real estate, his lesson on how important it is to have deals in writing and the difference between the two markets he’s involved in like buying a property of over 200 units and buying properties on a smaller scale. He also discusses the importance of being involved from start to finish with the deal on the table along with the other partners or investors involved. 

Highlights:

• Benjamin’s Career Briefs And An Unexpected Experience About His Very First Deal
• His Tips And Tricks On How To Become Successful
• How He Grew His Reputation Within The Southeast And Beyond.
• Details About How, When And Who To Chose As A Business Partner
• Never Miss Any Details In The Contract Agreement

Connect with Benjamin:

Email: [email protected]

Phone: 615-513-3088

Linkedin: @inmanequities

Facebook: @inmanequities

Instagram: @inmanequities

Twitter: @inmanequities

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TRANSCRIPTION:

Intro: Hey guys! I hope you’re ready for today’s episode. Today I’m going to host Benjamin Inman. Benjamin had been involved in multi-family in the past 20 years and worked and learned under the famous real-estate guru and tycoon Grant Cardone. In this episode, we will talk about the process of understanding that you can do this by yourself and use your connections and knowledge that you’ve acquired during the years. And also, for the first time on the show, we’ll have an investor that invests in institutional properties that are over 200 units. So, these are the bigger deals out there. Today’s episode is very informative, so stay tuned. And on another note, I’d like to remind you to check our website donandeden.com where you can find ways to contact us and connect with us and learn more about who we are, our deals and so on. So yeah, let’s get started and we have a lot to talk about. 

Intro: Welcome to the Real Estate Investing Podcast with Don and Eden where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies.

Don: Hey Benjamin! Welcome to the show. How’re you doing today?

Benjamin: I’m good. How are you doing?

Don: I’m doing just fine. So, I know you’ve been doing a lot of work, you’ve been buying properties in the market that everybody’s saying that it’s hard to buy but you’re still finding good deals, and I know you’re buying institutional properties over 200 units. So, I would like for you to tell our audience a little bit about who you are, what you do and how you got into real estate.

Benjamin: To start, I appreciate you for having me on. Always enjoy doing this type of thing. I started my career 18 years ago. Really starting to ground up I was so eager just to get in the business that I actually started as a landscape architect, doing single-family homes and then really just put myself out there because I was always interested in the multi-family space and got introduced to a developer down the Miami, offered a job to me as his corporate landscape architect and I was off to the races. Once I was there, I knew that it was a good opportunity for me. I was always asking a bunch of questions and surrounded myself with the right people in the firm and, so really just utilized that to the best of my abilities just kept growing and building on that from the time I left there until I went to the next shop and then from there just kept building and adding on. Just about all knowledge-based and then 2 years ago I left the last two investors I was working for and started my shop and never looked back. So, we typically have two different focuses. All the stuff that we buy, they are all in the multi-family space. So we have an institutional arm and we have a smaller bucket that we acquire 50, 76 units, 44 unit properties in and we have the institutional side bucket to where we buy 450 unit portfolios at one time and I do each of those with different partners so I have a partner for the big stuff and have partners for the smaller stuff. That’s our way of diversifying. The big deals are good in their way, the small deals, they are good in their way. The small deal’s cash load typically a little bit better than the big stuff. So that’s really in a nutshell, our focus and we pretty much focus throughout the southeast.

Don: So, I know you are buying large properties and small properties and you’ve been doing that for the past two years but your career had spawned for a lot more. So, I would think that you working with big investors, I know you’ve worked with Grant Cardone, Cardone Capital and I’m from Florida so it’s impossible not to know who Grant Cardone is if you live in. So, I know you’ve worked with these investors. So how does working with people of that caliber helped you understand the market and got you to the place where you are at right now?

Benjamin: You have to understand their way of thinking because you can ask ten investors what the criteria are and you may get ten very different answers. Each deal that you decide that identified to take down, you pretty much know which of those deals or you should know which of those deals fit the personality box for your potential partner or partners. And so, I kind of cherry-pick which deals I want to share to which partners based on that knowledge and it’s worked out well. I think the challenge a lot of people have is, they have a database of, let’s just say they give you a deal flow, but they aren’t successful on either how to start or if they do know where to start, they are having trouble executing because I don’t think they put that strategy to work because I think that’s a very standard not only what your partner’s personality type is as it relates to, you know, in the investment criteria in the properties that look for but also, knowing what their individual bandwidth is. For me, I’ve had different partners that I use for different properties because I know that this partner A actually get so many deals done in the time and if I have another deal come across my plate that makes sense, I have to find another partner that’s similar in personality type and criteria wise as well but then I’ve got to do the deal with them just because I don’t want to overload anyone partner including myself and not be able to take a deal down. And so, really just being very strategic about which partner I chose to bring in to which deal is just as important as knowing the investor types that come into the deals from the LP standpoint. I know what their personality types are because you have some 50,000 and some 25,000 check writers and then I have guys that are 500 and million dollars check writers on every deal that I put in front of them. So, different people and it depends on overall equity sides of the deal and what their percentage ends up being allocated out to. So, there’s a lot of those variables that come into play when making a decision, of course, but yeah, it just really comes down to knowing your individual investors.

Don: Yeah. So, when you say you’re partnering up with people on different deals, so I assume that you’re getting the deal so the process works in a way that you’re talking to the brokers, outsourcing your deals and then you find a good deal and so you raise the money already you know your investors. And so, you want to partner up with people in the local market where the deal is at so that these people would implement the value add a plan or what exactly is the other partner doing in each one of your deals?

Benjamin: Yeah so it's a good question. So, most of my partners are either in south Florida or in Texas or Charlotte, North Carolina. So, you know the partners that I’ve had deals with aren’t necessarily in the local market where a specific asset is located. I wouldn’t say it’s a bad strategy, that’s just not our strategy. Mainly because all the markets that we’re currently in, I’m knowledgeable of those markets and already have boots on the ground in many cases whether that’s construction companies or just different vendors like flooring vendors, paint vendors, roofing vendors you name it. We already have those relationships resources in place. I don’t look at that way with having a particular partner being based in a specific geographic area and that’s not what I use to base my decision on but, for a different person like me, that’s not a bad strategy, that just hasn’t been our strategy.

Don: Yeah. So, what is your strategy, how do you choose your partners?

Today’s episode guest is Bill Ham- a real estate guru & mentor with 14 years of commercial real estate experience based in Atlanta, GA. He owns and operates Phoenix Residential Group, LLC and Phoenix Residential Management, LLC. Learn how Bill walked away from being a corporate pilot to create a large portfolio of multifamily assets. 

Bill discusses how he started his journey into the world of real estate, how he sourced for his first deal, and how he was able to switch from the single-family apartment to the multi-family sector. Learn what to look out for when sourcing for deals and how he teaches his students to read the profit & loss statement. 

Highlights:

• Benefits Of A Multi-family Over Single-family Apartments?
• Key Points when Sourcing a Deal
• Thoughts on the Future of the ‘C’ space
• Predictions for the Real Estate Market

Connect with Bill:

Email: [email protected]

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TRANSCRIPTION

Don: Hello, dear listeners. I hope you guys are enjoying the episodes and the content we give. Remember if you want to get in touch with us, you’re always welcome to do so and send us an email at [email protected]. So please do, we want to know how you feel and always appreciate the feedback.

Today, I’m going to interview Bill Ham. Bill is a multifamily investor and mentor and one of the people I consider a multi-family guru. I would say his strength is his ability to see the hidden things most people are going to miss while underwriting and his profound understanding of the real estate market that enables him to predict market trends and shifts. Also, on a personal note, Bill and I have already established a relationship in the past, and I’m very happy to have him on the show. So without further ado, let’s start.

Intro: Welcome to the real estate investing podcast with Don and Eden, where we cover all aspects of real estate investing with underwriting attention to multi-family apartment buildings and off Market strategies. 

Don: Hey Bill, welcome to the show. It's so good to have you here. 

Bill Ham: Thank you, good to be here. 

Don: Yes, so, I know you're one of the best deal analysts that out there, So you can analyze a deal better than most people that I've ever met. 

Bill Ham: I appreciate that. 

Don: We've had a few conversations in the past where you've helped me analyze deals. 

Bill Ham: Yeah A few of them. 

Don:  I know your ability and how good you are; And so I would appreciate it if you could talk a little bit about yourself and your background and how you started your real estate career.

Bill Ham: I have been in this business for about fifteen years now, and I was a corporate pilot by trade, and one of my very first deal was a duplex, and the duplex was making $300 a month cash flow. I had saved up $10,000 from my career, and I walked away from Aviation one duplex ten thousand bucks in $300 a month in cash flow; this was in ‘05. So headed into the hundred-year recession that was so bad, but I survived it, and I don't recommend everyone do that. By the way, I was 28 years old at the time, you know, no family, no children, and so it was a little bit easier for me to make that sort of commitment, but that's what I realized I needed to do is commit and focus and that has been the number one success trait that I think I have and have noticed in other successful people; the ability to focus. That's how I got started, and then just kind of climb the ladder, flip houses for a while and then I did a 9 unit and then a 27 units and a 20 units and a 44 unit then a 152, so I grew I didn't go from  2 to 100, I mean, I started from the smaller assets and then built out of it a pretty big portfolio over the years.

Don:  Let’s talk about that transition from doing single families and flipping homes, which is how a lot of people start, and it's how I started in real estate and then the transition into multifamily, you said something about nine units, please tell us more about that transition.

Bill Ham: I went in and heard someone speak about multi-family, someone who is no longer in the business. I listen to a lecture by this individual and I was hooked on it when he started talking about the economy of scale and know so much easier to manage and to have more units under one roof and I knew from a business perspective that was the future and that you can flip houses and do single-family and that’s great, but you're never going to get the zeros behind that model, then you're going to get in larger commercial especially multi-family. That was my thought, I needed to go bigger out more, and I did, and I did a lot of creative financing at the beginning, lots of seller financing, a lot of lease options after I had built a small portfolio. That's when I got into syndication, which is bringing on partners and raising down payment money from other investors, that’s how I made the transition, nice and slow.

Don: that’s exactly how I feel about this, When you flip homes, you make good money and you have a very good lifestyle, you can travel the world, you could buy fancy cars, and you can make a really good money, money that most people don’t make, but the problem about this is that you don't really create a passive income or a steady passive income that you can retire when you're 35 or 40, and that's very achievable with Multi-Family. Was that the mindset was that what guided you to move forward from flipping houses?

Bill Ham: It was ultimately, I looked at all of the large commercial investors and owners, and none of them own houses, and so I thought, why do the big people not own lots of houses? You know, why do they own commercial as supposed to single-family and the reason is because it's a business and it's easier if you're trying to grow and operate a business, your product really should be in a commercial space, but If you're trying to do a side business, you know a little bit extra money here and there, then single families are a great way to go. 

But if you're really trying to build a big portfolio, for example i can manage a   Hundred Apartments at the same time you can manage 10 houses, the time in the economy of scale is just not in the single-family market and then I always use a sentence that multifamily was built to be an investment model, houses were built to be someone's home.  So multifamily makes money by Design, houses make money when you steal. You gotta go out and steal the value on a house for the numbers to work out for it to be a rental property because it was never built to be so, but multi-family is.

Don: Yeah, that’s exactly how I started, me and my partner, you know, we got that Steal's on single families, and then we were able to acquire them and great wealth, but we noticed as we scaled up at that it's not scalable, that’s exactly the difference, it going to create nice passive income for us, but it's not going to be quiet and like free really because we still have a lot to do with during which includes fixing and in doing some other things, maintenance  especially; it's not scalable. So, what I realized recently is that it's not just about an apartment, it’s more about units. It doesn't matter what type of commercial property you buy, you could buy self storages and have a hundred units there, or you could buy a mobile home park and have 50 units there, or you could buy a multi-family and have a hundred Apartments. It's all the same thing. You were right; you buy a business, I agree completely. 

Bill Ham: Yeah, it's whatever asset class makes sense to you, whatever you enjoy, what you know your investors want, That's the model. So mobile homes are great, storage is great; I just do apartments. It's not because apartments are better than one of the others, it's just what I do, and I have a lot of friends that make money on mobile home parks, have a lot of friends make money in storage but I don't and that doesn’t mean all of those aren’t assets.

Don: Definitely, you got to choose and become the best at what you do. So when you are at your peak as far as your multifamily portfolio, what was the biggest amount of properties that you held? As a general partner [a GP]?

Bill Ham: yeah, have held over a thousand units, 1000 unit at the peak of my career, and I have actually been selling off Over the last two years and am down now to about 400 units that am holding currently.

Don: Okay, so you sold 600 units in the past three years. 

Bill Ham: Yes roughly.

Don: so let's dig into that, Why are you selling properties right now? Is it about the economy, the recession, or the overheated Market? 

Bill Ham: Not really. It's not about the economy or Market. It's more about Market cycle and understanding the rise and the fall of the market cycle and what Market cycle you're in; this is a question I get a lot of times , are we going into a recession or are we going into a down cycle, so we shouldn’t buy real estate; No no, that's  a complete misunderstanding of Market Cycles. If everybody only bought real estate in a recession and never buy real estate any other time, then everyone would go home for 5 years, and the whole real estate industry would collapse, and that obviously doesn’t really occur, and that's one of the greatest things about multi-family, and that it's a cash flow model.  The value only matters twice, when the time you buy and when you sell. So as long we get the debt, that allows us an Exit strategy on the

In today’s packed episode of ‘Multifamily Real Estate Investments with Don and Eden’, we’re joined by Dave Zook- a successful business owner and an active real estate investor in sectors such as multifamily apartments, self-storage, and ATMs. He’s also written a book on syndication “8 Real-Life Lessons for Syndicators and Their Investors.” 

In today’s episode, Don & Dave discuss the secrets to success, the do’s and don’t of the business, and the steps needed to have a strong foundation & longevity. Dave also touches on how a tax problem led to him dive deeper and deeper into the world of real estate, what he learned from watching his father and gives us an insight on this family modular storage sheds and garage business. 

Highlights:

-Discusses his focus on Multifamily Apartments, Self-Storage, and ATMs

-Explains how he was ‘Chased into Real Estate.’

-What’s the Modular Storage & Garage Business?

-Current Projects & plans for the future

Contact Dave:

Email:  [email protected] 

His Book: “8 Real-Life Lessons for Syndicators and Their Investors”

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TRANSCRIPTION 

[00:00:08] Hello, everybody. I hope you guys are excited for another episode where you learn a lot about commercial real estate and real estate in general. I want to say personally that we are so grateful to have you guys as listeners and we work hard on these shows and try our best to give you quality content with as little fluff as possible. Doing this isn't always easy and it requires a lot of time and energy. I'd like to ask you to give back by checking our new Website, which is being developed by my partner Eden. He's the best at it. You can find ways to connect with us, learn about us and see what kind of properties we invest in. So the Web site address is DonandEden.com. Again, that's DonandEden.com. No shocker there. And you can always send us an email at [email protected]. It's [email protected]. So thank you very much. We appreciate the feedback and you can take the time to do that. Our guest today on the show is Dave Zook. Dave invests in many asset classes as well. And his main focus is multifamily and self-storage assets, which is an asset class that picked up tremendously. So let's hear more about it. 

[00:01:33] Welcome to the Real Estate Investing Podcast with Don. Any time where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies. 

[00:01:51] Hey, Dave, welcome to the show. 

[00:01:53] Hey, it's good to be on your show. 

[00:01:56] Thank you very much. How's your day been going so far? 

[00:01:58] So far, so good. It's been very busy. But looking forward to talking to you and your listeners. 

[00:02:06] Yeah. Thank you. So, yeah, busy is always good. So does first of all, so that we get to know you. I know a little bit about you, but our listeners don't. So give us some background and tell us a little bit about yourself. 

[00:02:18] So I was born into a very successful entrepreneurial family, very fortunate there. I grew up in our family business. It was a modular building business, still active in that business, along with my three brothers and my dad. 

[00:02:34] I saw my dad invest in real estate as I was growing up and I saw him taking the capital that he was making from his business and put them in real estate. He was buying arms and land and as single-family homes, I saw him sort of self manage some of the single-family homes. And I just realized at an early age that I was not a path that I was interested in being on. So I started investing in businesses and started a couple of businesses. 

[00:03:06] I partnered in a couple of businesses. 

[00:03:08] I sold a few and got to the point number of years ago where I was doing well and I had to pay a big, big tax bill. 

[00:03:21] At that point, I realized after doing some studies and reading a lot of Robert Kiyosaki his content, I realized that real estate not only can be a real wealth-building tool in the form of cash flow and appreciation, but it can also be a real tax protection vehicle. And that caught my attention. So I went from not wanting to have any real estate to want and all I could get my hands on. And the timing just so sort of aligned that the timing was great to be a buyer. And that was coming out in 2009. It started to allow timely real estate in 2010, 11. And so the timing was great and got myself in a position where I went from paying a half a million dollars a year in tax to pay zero federal tax and not so that was sort of the start. People asked me how I got and I got involved in real estate. I always tell em I got chased into it for tax reasons. 

[00:04:20] That's very interesting. So I already have a lot of questions to ask you about what you said. So the first question I have is what exactly is that modular business? So what does your company do? What do you guys do? 

[00:04:30] So we build modular outbuildings, modular garages, and not necessarily homes. 

[00:04:36] But think about this. So you as our customer, you're getting up in the morning, going to work. We put in with a modular two-bay, two-story garage and we get to work. And when you come home from work, you're ready to pull a car into your brand new car to the bay, two-story modular garage, which is a ton of them all over the country. 

[00:05:03] Nice to see you guys also. You manufacture them and you deliver them. 

[00:05:06] We do. So we're one of the few companies here in Lancaster, Pennsylvania, that kind of focus on retail. We've got some other. This is kind of the hub of the modular storage sheds and garage business, Lancaster County, Pennsylvania. And so there's a bunch of different builders in this area. But we sort of found our niche and that is we build. But we're also the retail retailer. So most of the other builders in the county are, you know, primarily wholesale sell into and that network of dealers. And they may have 5 or 10 percent of their business may be local or retail. Yeah, we're just the opposite. We're 90 percent retail and 10 percent wholesale. 

[00:05:52] So you're able to offer better prices, better prices. 

[00:05:56] We control the service quality. We're the only person you're dealing with. So you come into our facility, you get to tour the plant, you get to see firsthand where the more the buildings get built. You're dealing with our salespeople and we bring the building out to you. And it's a one-stop-shop. 

[00:06:15] It's very understandable why you guys are so successful because you have a great model. And it brings me to talk about the next thing that I wanted to ask you or not even ask more of a statement. So, you know, I talked with my friends and we always talk about business. And so we figured out that it doesn't matter what you do, if you're going to be successful, you're going to end up in the real estate. So we're all becoming real estate investors. 

[00:06:39] We have no choice but to interact with real estate at some level. 

[00:06:44] Yeah. If you are successful, then that's what I figured out. You have no choice whether you made your money in retailing. You made your money in. I don't know. Developing something or like like a patent or an idea. You're going to end up making, you know, investing or parking that money in real estate. And I think that's what your father understood. 

[00:07:00] But he probably didn't understand how to scale it up or how to make it work for you instead of working in it. So tell us a little bit more about your father's experience and what was going on there. 

[00:07:12] You know, it worked out quite well for him. I mean, he bought farms and land and single-family homes and, you know, 18, 15, 18, 20, 25 years later, I helped him transfer some of those farms that he bought and ten thirty-one, you know, ten thirty-one. Those farms there were kind of sitting there not making any sense, but they did have a ton of appreciation and you know, 15, 20 years in land value, in land value. 

[00:07:39] So I then helped him rule those farms into multifamily apartments back soon after the recession. And we're in the process now of selling one of those apartment buildings. We're supposed to close tomorrow. Wow. And it's going to work out quite well for him. 

[00:07:58] So, you know, being able to get in, you know, the ground level on the front end and then seeing all that appreciation and turnaround into and rolling into an apartment building at the right time and to realize some more appreciation, it's gonna work out well for him. 

[00:08:12] Yeah. I haven't met a lot of people that invest in real estate for the long term, and we're not successful. I mean, maybe before the crash, people that, you know, we're buying a lot of properties, right, Dan? But, you know, and any other scenario, I don't see how, you know, where the compounding interest and the appreciation of real estate. I don't see how you could lose long term. So what exactly you're doing right now in real estate? 

[00:08:38] So we've done we've bought a ton of multifamily over the last couple of years. We've accumulated well over 3000 units. I've syndicated most of those. I started out buying multi-family apartments on my own because I had a tax problem. Turns out there are a lot more people like mys

After successfully having a career in the restaurant industry, Gino Barbaro became increasingly interested in the opportunities that investing in multi-family units could bring and the financial freedom one could attain. After conversations with his friend, Jake Stenziano, Gino and him decided to form a business partnership founding their real estate education company, Jake & Gino. Gino Barbaro is an author, real estate investor, and entrepreneur who is the co-founder of the real estate company Jake & Gino. Currently, they are in control of 1,400 units and are passionate about mentoring others to follow their long-term wealth strategies.  

In this episode of Multifamily Real Estate Investments with Don and Eden, Gino will share his unique story and path that led him to multifamily real estate investing. He also will talk about the importance of the right mindset into becoming involved in real estate syndications and why having the right mindset is so important.  

Highlights: 

• Gino’s Beginnings in Real Estate 
• Why Gino Decided to Not Only have a Career in the Restaurant Industry
• Forming a Partnership
• Importance of Mindset 
• Current Projects and Future Outlook

How to Connect with Gino

Website: https://jakeandgino.com/

Facebook: https://www.facebook.com/jakeandgino

Instagram: https://www.instagram.com/jakeandgino/

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Transcription

Hey guys, I'm very excited to tell you about our new website DonandEden.com. We have put a lot of hours into making the website very accessible, beautiful, and comfortable. You could find ways to contact us for a variety of options if you would like to network, we always want to hear new stories and get to know you better. We would displace some of the past deals we were involved with, you could learn from each of those deals. The important lessons we have also experienced on the website, you would be able to invest with us on our future deals if passive investors, and even as general partners. Today, Don will interview a person who is very dear to both of us, and his name is Gino Barbaro. Gino is the part of the famous duo Jake and Gino who is in control of over fourteen hundred units. Gino will share his story and the path that led him to real estate investing as well as the right mindset you need to be able to do this. Also at the end of the episode, Don and Gino will discuss one of our deals that are coming up, and we are very excited about the development of 28 units in Hollywood, Florida. 

So stay tuned and enjoy the episode. 

Welcome to the real estate investing podcast with Don and Eden, where we cover all aspects of real estate investing with special attention to multifamily apartment buildings and off-market strategies. 

Hey, Gino welcome to the show. How are you doing today? I'm doing really good. Thanks for having me on. Of course, I'm honored. If anybody, I'm honored to have you on the show it's going to be you the person that helped me so much in my career and developing myself as a real estate investor. I've learned so much from you. So I'm very honored as I mentioned. Thank you for putting the time to do this. Thank you. Yes. So you are a very accomplished man, and it seems like your whole life is about doing and creating. So I want you to tell us a little bit about your career how it started and what currently drives you. 

Well, my biggest accomplishment, I think, is being a father of six children. 

That is by far the most important thing to me, and that's the reason, believe or not why I got into real estate because I was in a tough business. I was in the restaurant business, and it just took a lot of time. 

It took a lot of energy, a lot of effort, a lot of long hours and a lot of long weekends working on the holidays- it was difficult, and I was the son of an immigrant. So that's what I thought everyone did. I mean, I was working hard, but I didn't feel fulfilled, and I seemed like I was always away missing those important things with my family. So I was back in 2008, the Great Recession came in, and I was making pretty good money. The restaurant and everything changed, and I said to myself I need to go on a different path. I need to find something different, and I already had a job. So I didn't get into a residential real estate. I didn't get into fixing flips. I tried to get to the multifamily, and I think that was the saving grace me.  Try and get into a multifamily business, buy properties still have the restaurant, but do this on the side and make some extra money because as to have a large family it's a lot of mouths to feed. That was my priority to do something where I can get a little bit of extra passive income on site. And over the years from 2008 to this point continue to buy. Continue to grow. I just got fortunate enough that back in 2016 of March I left the restaurant and I dedicated my life full time to real estate. 

 That's beautiful. So you decided to focus on multifamily whereas other investors typically when they start they try to focus on single families because they have the conception that this is the safest thing to do and that was our conception when we started doing business in real estate. 

 But you challenged that and so you tackled multifamily right from the beginning. So tell us a little bit about that? How was it? How difficult was it to get into that arena? 

 Well,  in the beginning, everyone believes what they think. If you believe it's easier to get into single families, that's what you're going to believe. It's a self-fulfilling prophecy. Everyone knows how to buy a home so they think, hey single family's easy I can get into it I've done it before. 

Everyone hears the word multifamily commercial, and they start shaking their boots, and they think of commercial financing, and real estate is a team sport. And for me, I didn't want to have another job. I didn't want to fix and flip a home. I mean, I love that process, it's a lot of fun. But once you think about all the hours and the time that you need to do a house, the capital gains, the risk factor, and where you are in the market cycle. All of a sudden you've done all that work, and then you've got to go and repeat it; it didn't seem like it was a really good strategy for me. I wanted something that would have at least residual income. I wanted something more I built long term wealth. Yeah, I wanted something where I could have the capital gains to avoid tax benefits there. I want something where I could build a business where it was scalable. So if you're thinking about buying single-family homes take a step back and say to yourself, how is it going to be when I have ten or eleven or twelve houses spread out all over the city. They're all different. It's going to be harder to manage every single one of them if I've got ten homes and three of them are vacant. That's a big vacancy. As Jake and I started on our twenty-five-year property they were all in one location. I was working full time. I could manage these part-time at the very beginning, and it was easier because they're all in one location. There was one landscaping bill. There was one garbage bill. There was one utility bill. There was one roof there. So it was just easier for me. There was an economy a scale thing. There were scalability factors and all those other factors that I've mentioned. It just made more sense. 

Yeah. Also when you flip a home it feels like a job. 

 you make good money. I mean I've done that before, and you make good money. I get a good day you're placing your time so that you can earn money. So it's a good job, but essentially it's a job. It doesn't create residual income for you as far as multifamily does. And also I mean you could get there it’s not scalable, but it's possible. I mean it's possible to hold 20 single families and make residual income, and welfare. But it's not as easy and as convenient so I can relate. 

Well, I think the problem is most people like that don't mean effect. It's so much more rewarding to actually buy a house fix it and then flip it three months later and get paid. It's a great feeling right, that's a transaction. It's a lot harder.  using my immigrant background to be a farmer plant the seed water the seed weed the garden take care of it let it grow and wait six months and pray that it doesn't rain hardly ever hail. There's a lot of risks involved that's an entrepreneur's journey because you're holding on and you're delaying the gratification. 

Whereas I think single-family homes you're fixing the flipping it's a different process it's a different mindset. You're going to get into multifamily think of yourself as an entrepreneur. You think of yourself as someone who's solving problems for tenants. And the more tenants and problems you can solve the bigger portfolio, the more money you are going to make and the more as you scale bigger and gains the more property and more units the more cost savings you're going to have the more revenue generator rate are you going to have and that's how you start becoming really successful in this business. 

Yeah, I agree. So you've entered the multifamily business. I mean a few years back so it's not like you've been doing that for 30 years while you were in the restaurant business. So how did your life change ever since you got into multifamily. 

Well I mean for me, the best thing was I wen

Todd Dexheimer is a multifamily investor and syndicator and has been investing in multi-family units since 2012. A former high school industrial tech teacher, he began investing in real estate as well during the recession of 2008-2009. Due to the hardship to acquire loans, he began to flip homes - acquiring a solid rental portfolio before becoming involved in real estate syndications. 

In this episode of Multifamily Real Estate Investments with Don and Eden, Todd will discuss his first deal to transitioning from a single-family to multifamily investor. He also will outline his perceptions of the state of the market due to the talk of a looming recession. Todd also discusses what exactly he looks for in markets when investing in real estate and the types of real estate he chooses to invest in depending on what the current market outlook is.  

Highlights: 

• Todd’s Beginnings in Real Estate 
• Transitioning from One Career to Real Estate -Making the Jump Full time 
• Are We Headed for a Recession?
• Where to Invest
• Current Projects and Future Outlook

How to Connect with Todd

W: VentureDProperties.com

E: [email protected]

Coaching & Mastermind: coachwithdex.com

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Hey guys. Today I'm hosting Todd Dexheimer. Todd is a multifamily investor and syndicator and he had been investing in multi-family since 2012. Today we're going to talk about Todd's first deal to transition from a single-family to multifamily investor and the state of the market due to chatter of a looming recession. 

Welcome to the Real Estate Investing Podcast with Don and Eden where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies. 

Hey Todd, welcome to the show. How are you doing today? 

I'm doing well. Thanks for having me. 

Of course. Yes, so tell us a little bit about your day what are your plans for the near future. 

Well for the day or the future that's a big difference. 

Right. How about we start from there and then we take it to the future I know you say you're going to be traveling to Europe right. 

Yeah. So, today I've got a couple of things I've got - I'm in the third round of a property we're looking at purchasing. And so I've got the call with the seller. So we'll see how that goes. I'm very hopeful to be getting this property and then I'm also redlining a contract that I've got an office building under contract. So we're doing the redlining which redlining means you're just going back and forth with the seller and making changes and trying to get the contract. 

So it's good for both parties so very busy before I go to Europe, but then tomorrow we fly to Germany and spend two weeks with the wife and kids traveling around Europe. 

That's nice. I've been to Germany and I'm going to go to Germany in September for personal reasons. So that's nice that you can travel and work and stay busy when you travel. I guess that's the kind of lifestyle that you get when you work in real estate and you work for yourself. Is that right? 

Well yeah I mean the benefit of owning your own business and doing real estate as I do, is that I've got time flexibility right? I can do this trip and it's not extremely disruptive and I probably on this trip will have to do some work just because of these properties and hopefully, I get this other property and so hopefully I'll be having two properties that were redlining but can be done from everywhere, I’ve got a computer. So that's a benefit. And again it's time flexibility. We can go when we want to go. 

Yes. That's nice. So, tell us a little bit about your real estate business. I know that you have been doing real estate for quite a while now and you've done residential and commercial. You've gone back to commercial, you've gone back to residential, which is kind of different most people they either do this or they do that once they do to transition from residential to commercial then they stay there. I know you had a different story so tell us a little bit about your background and career. 

Yeah. So real quick I was a high school industrial tech teacher and started doing real estate while I was teaching full time. I was buying single-family homes and duplexes keeping those as rentals and then kind of ran out of money and availability because at that time at the time in 2008-2009 at the time it was really hard to get loans and especially get them in your personal name you can only get a few and so I could only qualify for about four loans including my house and so I ran out of credit availability I ran out of money and so I started flipping houses. And that allowed me to then buy more rentals and continue on that journey doing flips as well. I finally was able to quit my job and do it full time and just continue doing the flipping and buying - so I was always buying rentals. I was always wanting to build that rental portfolio. The goal from day one when I first started was to get a thousand units thousand multi-family units and of course find one to four-family units would have taken an eternity but I had a business partner at the time and we really focused on these flips and I think definitely over-focused on the flip side and I think he kind of let us towards that which is fine, but that transition just took a little bit longer. 

When you say it started with multi-family and went back to single-family and then went back to multi-family we bought a 15 unit building that was a good opportunity that purchased and renovated and capped and the deal went okay. But it wasn't great. And so I think it kind of made us go well let's just keep on doing these smaller deals that are simple and we're comfortable with them. So, we transition back to kind of doing those smaller deals and quite frankly we do the smaller deals while we're doing the multifamily still. And then finally in 2015 my business partner I split up and I took a step back and decided what I want to do and where do I want to take this business, what makes the most amount of sense. 

The multifamily made the most sense of building my rental portfolio made a lot of sense. I looked at the numbers quite frankly I looked at the returns on the flips versus the returns on the rentals and the returns on the rentals especially when you take into consideration the principal pay down and the equity that you're building those returns made as much or more. Sounds financially as the returns on the flips and there are a heck of a lot less work way less head damage and way more control. So, the rentals just made way more sense to continue down so that that's that was the transition that was a reason for it. Now again that was in 2015 when I decided all right, this is actually what I'm going to focus on and stop doing the flips. 

Yeah, I mean, I hear a lot of people say that when they're doing anything transactional or flipping properties or wholesaling properties then that's good for paying the bills. It's good for saving some capital, but it doesn't make you rich. What makes you rich is equity and that you only get when you are getting into the bigger deals and you buy and hold. 

So that's yeah that's my perception. Yeah, flipping can be a good business. I don't want a discount and say it was a bad business and I regret doing it because I don't I mean it was good business and I enjoyed doing it and made a lot of good money doing it was able to get me to where I'm at today. 

I wish I would've transitioned out of it may be a little sooner, but it's just a hard business to scale and repeat and you're always counting on needing another deal to make money and if that's what you're counting on all of that, a lot more challenging business. Not that it can't be done and you can't do well and it's just very transactional. 

Yeah definitely. So, I want to talk a little bit about everything that you've been doing so you've been focusing on multi-family ever since. So you said 2015 and I can't ignore hearing about   all the talk and chatter on recession and the coming recession and so we've been we've been living in the perfect environment so far in 2019 where unemployment is very low, historically low and people can pay rent and people can live in A-class buildings and everything's good and there are no vacancies, but now everybody keeps talking about a recession. And so how does it affect the multifamily investor especially somebody like you that you've been in the business for quite a while and so how does it affect your acquisitions you're still doing deals you still getting in. I do count on that recession to consider it when you underwrite them. 

It is pretty funny. You brought this topic up because I just wrote an article about this and the recession is coming. I don't know well I promise you the recession will have some sort of downturn within the next 20 to 30 years I promise you that, we don't know when the recession is coming. Here are the things everybody since, I got and I got into real estate in  2008 and in 2008 the economy, I mean just crashed right? In 2006, everything was beautiful. In 2008, the stock had fallen and it was still falling. And look in 2008-2009 people said it's going to keep on getting worse we're going into this deep deep recession we're never going to dig out of it. I remember being in, I got my real estate license in 2009 and I remember people saying we will

Eddie Lorin has twenty years of experience in real estate investing and developing. With a unique approach to investing that focuses more on the tenant rather than the cash flow of the deal, Eddie has successfully been able to invest in real estate and purchase over 15,000 units in more than seventy real estate transactions. 

In this episode of Multifamily Real Estate Investments with Don and Eden, Don and Eddie are going to discuss opportunity zones and a different approach of multifamily investing called impact investing. This type of investing is putting the focus on the tenant instead of the profit and the profit usually follows as the tenants tend to stay in the community. Therefore, there are fewer turnovers which are the biggest single expense we could have. Eddie will also discuss shelter and affordable housing development.

Highlights: 

• Eddie’s Beginnings in Real Estate 
• Impact Investing 
• Opportunity Zones
• Putting the Focus on the Tenant
• Current Projects and Future Outlook

How to Connect with Eddie

W: StrategicRealtyHoldings.com

E:  [email protected]

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TRANSCRIPTION

Hey guys. This is Eden and in today's episode, Don will interview Eddie Lorin. Eddie has 20 years of experience in real estate investing and developing - Don and Eddie are going to discuss opportunity zones and a different approach of multifamily investing called impact investing. This type of investing is putting the focus on the tenant instead of the profit and the profit usually follows as the tenant tends to stay in the community. Therefore, they are fewer turnovers which are the biggest single expense we could have. Eddie will also speak shelter and affordable housing development so I hope you guys enjoy the show. 

Welcome to the Real Estate Investing Podcast with Don and Eden where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies. 

Hey Eddie, how are you doing? Welcome to the show. 

Pleasure. Nice to be here. 

Thank you for participating. So how about you start by telling our viewers and listeners a little bit about yourself and who you are what you've done in your career in real estate. 

Well, I've been in the apartment business for over 25 years and I've done over 40,000 units of working for others and working for myself. I specialize in the lower end more low-income housing development and purchasing and rehabbing existing properties and then doing it for a long time. We try to give people a clean safe affordable place to live. Treat them with respect and dignity they stay, they pay and they refer their friends. That's it. Very simple business. We do the right thing all the time over and over again consistently. 

Yes, I know that you are an impact investor and also the name of your company. So tell us more about where you're based, where you're doing business, where are you’ve acquired properties and developing properties? 

We are based in Southern California in the San Fernando Valley. We're building four projects here locally. And we also have a funding opportunity zones that we're funding others across the nation to build their opportunity zone workforce housing. We define workforce housing as people making between 80 and 120 percent of area median income. That's what they can afford to pay. And we only have rents that are tagged to that structure. 

I see. So, I know opportunity zones are a pretty new subject. And a lot of people are very curious about it. I know it offers a lot of tax benefits. So, what could you tell us about Opportunity Zones? Briefly provide your input on that. 

There are three basic benefits. One is the deferral of taxes. It's basically 1031 on steroids. So, if you have gains in Apple stock or you sell a business it's not just a 1031 exchange anymore; you can sell the stock, sell interests in LLCs, you can exchange you any capital gain into opportunity zone investments. What's the benefit? Let's say you sell and you have one main dollar gain. That's let's say in round numbers federally it's 20 percent or 200 grand. That two hundred grand can be deferred until 2026. As you put it into an opportunity zone fund that purchases into one of eighty-seven hundred census tracts across the United States that are low-income census tracts designated by each governor across the country. So the first benefit again is a deferral of taxes. You don't pay that 200 grand until 2026. 

The second benefit is that two hundred grand is going to be less if you purchase into an opportunity zone before now. So within seven years 2026, you get a 15 percent discount off of that tax base. So, in essence, you are paying one hundred seven thousand dollars in taxes so you got a free loan from the government for one hundred seventy thousand with that discount of 30 grand. So that's the number two but the really most important thing is if you hold that new investment into an opportunity zone that's invested in these eighty-seven hundred census tracts across the country hold it for 10 years and let's say that million dollars become worth four million dollars that three million dollar gain is tax free. 

Wow. That's amazing and very interesting. So how is that changing the apartment building business? And in general, the investing business in the United States as far as you see it. 

Well it hasn't yet because this Treasury has been very slow to come out with final regulations is just now getting going it's almost two years since the top tax act. Jobs Act of 2017 passed. So, the frustration for all of us who are on these panels and trying to get things going. We had a second set of regulations come out now we're waiting for a third set. So that's a challenge to get things moving. And the problem is that it was written by two senators that it was a bipartisan law which is a good thing, but it wasn't very heavy on details. And as a result, the accountants and lawyers and they're all wondering. How do we fill in the gaps of these uncertainties and so, we're almost there? 

But it has not changed things much. To answer your question yes. But it will. 

Ok. That's great. So, tell us more about what you're doing in the apartment building business, so I know you're focusing on C properties and B properties you're investing more in the quality of life of the tenants. So, tell us more about that business model and how is it different from other real estate investors. 

Well, it's all about who's paying your bills. The tenant pays your bills. And if you don't have a happy tenant, they're not going to stay for their friends. So that's the basic tenet of what we do. We try to give everyone value and value can come and giving people amenities, even though they're in a little less expensive environment. And that's very simple we give her. It's like a fake Gucci bag. He likes to have a feeling of that Gucci bag. But it may not be real, but it still makes him feel good. And so we give people well-appointed interiors, beautiful paint jobs, the resort-style pools, State of the art fitness centers, social areas to thrive in. And we just give people that nice sense of community because you can smell it when you walk into the leasing office that just it feels good feels like home. It's very simple, but very few people care about the resident. And that's the problem. Yes, people care about maximizing cash flow. 

Yes, I agree because I've been interviewing a lot of investors and it's typically about money not about the resident. So how about you tell us about a deal that was structured this way. So, what are the changes that you've made it improve the quality of life for the tenant? So, give us an example that details so you can understand more about what it is exactly what you're trying. 

We bought a high rise in Maryland called Waterford tower. We got sniped by the county because they wanted to buy it out from under us and we said hey, wait why would you want to buy it out from under us. This thing's neglected it needs TLC. Why don't we work together so we got a loan structured by the county in exchange for putting affordability which we would have put on anyway based on 70 and 80 percent of area median income residents? 

So, we've spent three million dollars in the process of renovating all the interiors, all the common areas. And this place was neglected and it was very sad how this major institution allowed this property to get in such disarray. So, we closed on it, we’re cleaning it up. Residents are happy were 96 percent leased and we're renting to people that only make a certain level of income. Not all of it. 

It's a mixed-income property so half the property is fully market rate and the other is based on income r