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As real estate entrepreneurs, we are doing more than buying properties and chasing cashflow; We are actively building businesses. One of the key elements of building a successful business is your ability to sell. Throughout my years as an IT executive at large public and private companies, I have had to sell multi-million-dollar projects to C-level executives. To do this, I learned and applied techniques from sales masters like Brian Tracy, Grant Cardone and Zig Ziglar. The key thread among all of them was that we must identify and understand the need for the customer or, in our case, the seller. Here are the 4 things you must do to sell intelligently: 1) Discover & Fulfill a Need When approaching a customer or seller, we need to see things from their point of view by taking the time to understand their pain point. If you do not take the time to understand their need, they will not care about the wonderful features your solution has. If you are pitching a land contract idea to someone that is looking for cash, it won't matter to them. The customer or seller wants to know how you are going to solve their problem and whether you can deliver on that promise. If you are working on getting a $5MM building, they want to know how fast you can close and if you can do it. For this, people rely on social proof. The thing is, depending on the amount of pain they have, your social proof and time to close may be more valuable than the amount of the building itself. But again, it all depends on taking to time to understand what they need. 2) Getting Creative to Solve a Problem Once you identify their issue, you can determine how to build a win-win scenario. The best transactions are those that both the buyer and the seller are pleased. This is also important when you are building a reputation in the market place. Again, this involves listening to their needs and coming up with a solution. For example, if the seller is looking to move from Ohio to Orlando, Florida and you just happen to have a condo out there that you were thinking of selling, this could be a good opportunity to include it as part of the sale while saving on taxes. Keep your eyes and ears open and look for ways to handle the problem for the seller or customer. 3) Build Your Social Proof - and Understand Theirs This is probably one of the most important ones - and the one most new people struggle with - is social proof. Many entrepreneurs often forget this one. To help you build social proof, prepare some materials in advance, such as scripts speaking to the social proof, letters from other buyers/sellers and presentations that show you have a team lined up. As the same time, you need to evaluate the seller and their ability to deliver on their side. Will they be a pain to deal with? What do other people in the market say about them? Do they have a bad reputation with vendors and property managers? Take the time to understand who you are buying from. 4) Sell Intelligently When you are looking at the problem from the sellers’ point of view, you need to find what is more important to them. This means asking relevant questions to the problem rather than discussing the weather. The most important leading question you can ask is "What problems are you facing today?". From there, you can ask them, - "What is keeping you up a night?" - "Who is/How is handling it today?" - "If you could do anything, what would you change?" By opening up about their problems and needs you will not only gather information about what is important to them, but you can also show your genuine support for what they are going through and position yourself as a person to help them resolve their problem. When you are positioning yourself as someone that can solve their problem, you need to touch on the points they said was important to them rather than telling them how great you are at solving the issue. Again, look at it from their point of view: if it sounds like you are concerned more about how great you are vs how you can solve the problem they are facing, they will listen and buy. Your job is to listen, ask questions and repeat back the problem along with the solution you will execute. For example: I once had a lady that was selling an 84-unit deal in Cleveland. She needed to close in 3 weeks and move to Florida. We asked why she needed to move? Why 3 weeks? What is important to her?

As you go through the acquisition process, you will surely encounter the need for insurance on the property. I can tell you that not all policies are created equal. If you sign up for the wrong policy and you experience a problem, it could become a major problem for you and your investors. As real estate investors, our main objective is to maximize cashflow possible. Since cashlow is a function of expenses and income, we focus on decreasing expense and increasing income as best we can. There are expenses that are out of our hands or are obligated to, such as taxes and our mortgage, but with insurance, we may have some flexibility depending on what and where we are buying. On just about every deal I have done so far, I’ve been able to get some savings on my insurance coverage. This was because I ran the property through two or three different insurance brokers. Of course, I always did an apples-to-apples comparison between the brokers. However, it’s important to note that price is only one lever. I compare them because there are differences in the policies and you need to get the right coverage for the price as not all policies are created equally. For example, I received 2 proposals from 2 brokers. I’ve worked with each of them before and they were always very competitive. However, Stephanie’s quote was 55% more than John’s! From there, I performed a comparison between the two policies to spot the difference. On the surface, they may look similar. A closer look will tell you that John quoted a basic form policy and Stephanie quoted a special form policy. As you can expect, a basic form policy is typically 35% less than a special form policy. So, the next thing to consider is what does each policy have, and do we need those features. A special form insurance policy offers the greatest protection. Unless there are specific exclusions that are listed on your policy, you are covered is if you experience a loss. Typically, it will cover any type of sudden and accidental loss unless it is specifically excluded, such as sewer and drain, earthquakes and equipment breakdown, mold, or intentional tenant damage. So, if 3 of your HVAC units were stolen, they would be covered. On the other hand, a basic form policy will cover the minimum of the property. Things like wind, hail, explosion, fire, lightning, damage by aircraft or vehicles, riot, vandalism, sprinkler leakage, and volcanic action. If someone walked away with those HVAC units I just mentioned, you would have to handle it on your own. With that said, deciding between both policies, theft is the major driver. You need to consider what is the probability for theft at the property. The same way you perform your own crime check during due diligence, the insurance company does the same thing. They score the property and they compare it against other properties in the area and against the national average. They also look at other demographic information such as income, vacancy rate, occupancy, and income. If the location is solid and the chances of theft are slim, basic form insurance may be fine. Such a property will have low vacancy, good rent, and probably even owner-occupied. But, if the property is in an area that has a lot of theft and other crime activity, would be better served with a special form policy – this is if the insurance company even wants to cover the property. It’s really all about risk and what you are comfortable with doing. Like I said earlier, not all insurance policies are created equal. Some offer full replacement value of the property, loss of rents, and equipment coverage. All these things will impact the cost of insurance. Spend the time to learn and understand in depth what you are getting. I would say that if you do not know what is in your insurance policy today, give your agent a call and ask them. From there, call another agent as ask them what they would insure the property for. Further, if you made improvements, such as cameras, upgrades to the electrical system to get rid of the old fuse panels, or the city improved the property, you will want to have your property re-quoted. So, what do you guys think? Have you experienced a scenario where having better insurance saved you? Please let me know in the comments. If you are you an agent, leave your contact info so others can reach out.

Many years ago, I took up boxing and Muay Thai to get into shape. I've been fortunate enough to have been trained by many excellent coaches and even a heavyweight world champion that took on Wladimir Klitschko and won. There was a lot that went into the training from these masters and my teammates. However, I didn’t realize that all this training would teaching me three critical life lessons that I still use in my daily real estate business. My teams and I would train for 1 to 2 hours every weekday and some Saturday. Our team would learn striking and blocking techniques but also do heavy cardio to build stamina. Some of the exercises included carrying a 220lb man on your back and walk 400 feet to the other side of the gym - backwards. Drills like this was in preparation for us as fighters to take part in an actual match up to fight other teams. While I was not planning on entering the ring against other schools, my coaches pushed me the same as they would those fighters that were. We sparred and fought every week. Sometimes, there were broken teeth, black eyes and bloodshed. Despite their bruises, these people were in top condition, ready to take on some of the toughest fighters at other schools around New York City. Being around them, keeping that positive mindset and training hard was a great experience. This is where I learned my 3 life lessons from Fighters. 1) Find others that are where you want to be and copy them. Warren Buffet says the best way to learn is from making mistakes - they just don't have to be yours. Instead, seek out others that are masters at their craft and learn from them. Early in the real estate game, when I got my start in the single-family space, my mentor was an amazing lady that had been selling real estate for over 30 years. I worked day in and day out targeting deals, running numbers and walking properties so I can build the large portfolio that she had built. Since then, I learn from others in the multifamily space and attend seminars and live events to stay sharp. You network and team up with others to work on and take down deals. It's very similar to fighting where you are continually upping your skills to last longer in the ring and learn new techniques that make you a better fighter. There were some days that were harder than others, but your team mates pushed you to keep up or you would have a hard time in the ring. Surrounding yourself with the right team made all the difference in the world. 2) Get comfortable being uncomfortable. As I continue building my business today, I am pushing into larger and larger deals. I am having to create new relationships with some great people that have helped scale and grow what I am doing. It requires a great commitment to my goals and not letting up on the target. There are some days that something may seem difficult, if not impossible. But when I apply a high degree of effort and really push myself, everything works out. It’s certainly not magic. It is really getting out of my comfort zone and pushing beyond what I am today towards the person I want to become. The very first day I started training, the coach asked us to “get into high plank”, I had no idea what he was saying. I felt a little strange having to ask what that was as I watched others extend their bodies facing the floor and hold in a push-up position. I didn't hear any snickers or laughs. Even if there were, it doesn’t matter. Many years have passed since then and I am much better at holding a plank. And if those people did laugh, they have no impact on my life today. 3) “Sweat More in Training, Bleed Less in Battle”. There are many deals out there and finding the right one for you can be a challenge. The best way to know this is to get a great deal of experience running your numbers and getting familiar with your target market. I have looked at thousands of units and have run countless deals. If I see an upside on the deal and it makes sense to pay a little more for it, I build it in. Regardless, I am not careless with my numbers. There are many people in today’s market overpaying for deals. If there is a slowdown, there better be reserves on hand or it will prove to be a challenging time for them. When we were training, the coach had us go through blocking drills. We would perform the same move – a jab/cross – up to 250 times…over and over. We had to perform flawlessly, or we would get a punch in the face. The person would look at you, apologetically, and throw another one. And you better be ready. The point is, there is little room for error. Sure, you can recover, but you better have the basic blocking down. Have you learned any lessons early on that you still use today? Leave them in the comments.

Closing on a new deal is very exciting! But now that you closed, the work begins on ramping up your vision of why you bought it. On-boarding the property can be a challenge if you do not prepare for it upfront. So here are the 10 steps you need to do once you take down an apartment deal. Step 1 - Initiate your business plan Your responsibility is to initiate and put into place the plan you outlined in your proposal to your investors. During due diligence – well before you purchased the property – you should have put together a pro forma for what you plan on doing once you gain control of the deal. You need to put that outline into a budget to calculate the specifics of what you will repair, improve and upgrade. You can also determine what the upgrades will yield in terms of rent bumps compared to comps in the area. Make certain that your property management company can get behind the numbers as they will be executing on the increases and they need to know what your targets are. If the management company gets behind your plan and they are certain they can execute, it is on you as the syndicator to make sure you execute the plan and not blow the budget. Your management company should provide you access to the reporting system, so you can track how your income and expenses are going and that it stays to budget. Step 2 - Let your investors know the deal is closed While you are working up to the close, you should be maintaining communication with your investors on how the deal is progressing. There are usually hiccups, but by maintaining communication with your investors, they will feel like they are part of the process. After you close, you need to send out the congratulatory email indicating the deal is done. Aside from any inside scoops of the close itself (good or bad) you are also setting the tone for how often they can expect communications and payments from the property. The email will outline that you will send monthly notifications for the first 6 months while you stabilize the property then it will go to a quarterly email. With that quarterly email, you should have the financial statement and quarterly rent roll. Aside from pictures of improvements to the property, you should include links to news articles that show positive changes to the local market the property is located in. You will also want to include details regarding taxes, distribution payments and other information the investor will welcome as it related to the return they are expecting. Step 3 - Setup a weekly KPI review Schedule a weekly call with your property manager to go over the properties KPIs (Key Performance Indicators). The KPIs you want to track are things like income, delinquencies, expenses and moveouts. You will also want to know where the management company is with vacancies, the number of rent ready units, occupancy and move -outs. All these KPIs must be reviewed on a regular basis so there are no surprises. Step 4 - Handle Investor Distributions You may have a clause in your agreement with your investors that you will distribute after the property is stabilized. This is typically 6 months, but it depends on what you and your team decided. Regardless, on quarterly basis, you will need to send out distributions to your investors. It is during the planning phase where you decide who in your organization will handle distributions. You will want your CPA to provide you with what investors get what amount, but I recommend that you personally handle the mailing or ACH of the payment along with a “thank you” note. It adds a nice touch for the investor. Step 5 - Maintain Ongoing Investor Communication Every month, you need to update your investors on the regular progress of the property. You will want to email occupancy numbers, renovation updates, any major capital expenses, and any special events you plan on holding for the community. Like I mentioned previously, you want to report financials on a quarterly basis and their tax documentation on an annual basis as well. Step 6 - Managing Renovations If you bought the property with a bridge loan to cover renovations, you will most certainly be in regular contact with the lender while you make the improvements. Typically, they give you draws to pay for the repairs. For instance, if you needed to get a $60,000 roofing job and it is split into 3 tranches, you will need to get the bank to send you each of the tranches as the project hits the milestones. They will also send a representative after the final payment to make sure the work was completed. If you are using investor money for the renovation, you won’t need to get bank approval for each tranche. However, you will still want to report how you are progressing with the project, so your investors know that the improvements were made.

Capital Expenses, or CapEx, is money spent to improve or maintain your property. A common mistake many real estate investors and syndicators make when renovating a property is to overspend on CapEx. Specifically, they spend cash on upgrades and improvements that may look nice in or on the property, but will not yield more rent because of the overall location or how much rent you're able to pull in. I see many investors get caught up installing granite counter-tops, stainless steels appliances, wood flooring, and other custom features. You may need to do this for a Class A property, but with Class B properties, it may not be needed. When you're planning on spending thousands per door, you will need some serious rent growth to get a decent ROI. Do you know if can you bump rents with those finishes in a B or B- property? Other things to consider in your budget are the increased vacancy loss due to increased turn times to complete the renovations and overhead costs related to managing, planning, and inspecting the work. For large projects, you also need to consider the cost of the disruption the renovation causes elsewhere on the property. For example, will you need to reduce rents on all or some of the unrenovated units to make up for the inconvenience the new residents will put up with, or will you need to reduce your exceptions on renewals while your crews are working on the renovations? These are some low-cost upgrades that often have more bang for their buck because of how noticeable they are: 1. Entryways: If you put down a small area of ceramic tile at the door, it not only makes a good impression, but it also provides the tenant to remove their shoes before walking on the carpet. 2. Bathrooms and kitchens are what move units. Consider some low-cost options like kitchen back-splashes as may get noticed even before the flooring does. Most apartments units have short wall spaces making it a low cost for a high impact. 3. Simple touches like wall plates are cheap and easy. A new faucet and cabinet handles are much less expensive than new appliances and can really spruce up the look of the bath and kitchen. 4. Something as simple as a curved shower bar like what you see at your nicer hotels makes for way more improved resident comfort at very low cost. What I'm saying in to test and measure your upgrades depending on your asset class and location. Here is a guideline you can use when modeling your CapEx budget: Understand the financial impact of the capital improvements that you add to a property. Don't improve a property without knowing the financial benefit those CapEx expenses will generate for you. The standard for larger multifamily says that your CapEx should pay for itself in 5 years or less. This means that every time you underwrite a property that needs some renovation or repairs, you need to determine the financial benefit you will get as a result of the CapEx you plan on spending. When you figure it out, make certain to document how it will perform as your partners and the bank will ask. Better yet, you can include your due diligence in your proforma plan once you assume control of the property. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

If you are serious about obtaining more wealth without the risk and hassle of building a portfolio one single-family home at a time, then multifamily is the answer. When it comes to cash flow, multifamily apartments are by far, the most lucrative way to get that stream of income that is within the reach of private investors like you. Here are 5 reasons why I like multifamily deals: 1) Steady Cash-on-Cash Returns Higher cash-on-cash returns compared to single-family homes make multifamily a solid winner. Getting $300 of monthly cash flow on a single-family home is a good starting point for many investors, but multifamily investors can realize multiplied cash flows. This is multiplying the number of units. If one deal works, why not multiply it by 50 or even 100? Even owning a single multifamily deal with 12 units will put two or three thousand in your pocket. It may not be enough for some of you to change your life, but it would certainly help cover some of your bills. 2) Plenty of Demand In case you hadn’t noticed, the is a ton of demand for multifamily. Aside from Baby Boomers and Millennials moving to renting rather than owning, it’s less expensive to live in an apartment than maintaining a single-family home. For investors running their properties correctly, it means high occupancy. The large cost of multifamily deals compared to single-family homes are enough to keep many investors away. So this market has considerably less competition. For those that are not afraid of the numbers, they are charging ahead. 3) Low Risk If you are familiar with how banks lend on multifamily, you know that their rates are usually low and have a high degree of flexibility and leverage. This is because they see multifamily as a low-risk investment. If your single-family home goes vacant, you need to worry about having cash reserves to sustain it. If you have a mortgage on it, you are pulling that cash out of your personal reserves. The benefit of having many units in one building is that if one goes vacant, there is still cash coming in from the others to keep it running. If banks like low risk and you can leverage their money, you should take advantage of it. 4) Leverage Professional Property Management The cash flow of a properly run multifamily deal enables you as an investor to hire professional property managers to handle maintenance, tenant concerns, and problems if they arise. The incoming cash flow generated by a multifamily property allows you to use your time to source more deals or spend it on what you enjoy doing. What’s more, having a professional property manager will allow you to scale your business if you like as you can lean on their expertise. 5) It's a Business Many investors favor multifamily properties because of the consistently strong market and the significant return on investment. So, like any business, there are many tax benefits and ways to increase cash flow. Aside from depreciation and interest deductions, other expenses like insurance and ongoing maintenance are spread over the number of units in the deal. You can force appreciation and Net Operating Income in more ways by offering benefits to your tenants. This drives valuation up and creates value in your multifamily deal. Anyway, this is just an outline for you to consider the benefits of multifamily properties. What do you like about multifamily deal? Let me know in the comments. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

It's no secret that interest rates are on the rise. What are you doing to protect your assets and maximizing returns? Position yourself for maximum cashflow. Make improvements and move rents to market while providing value to your residents. Create stability to attract funds from lenders and investors alike. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

A common term I hear in real estate is "The bigger the deal, the easier it is." It wasn't until I had begun to acquire a large portfolio of single-family homes many years ago that this fully resonated with me. I can tell you from first-hand experience the bigger the deal, the easier it is and the more lucrative it is as well. So here are my 5 Money-Making advantages of Multifamily deals The first reason is cash flow. Because of scale, cash flow on a multifamily is always because you have more rents coming in. The bigger the deal the less risk you, your lender and your investors have. If you have a single family house and the tenant bounces, you lose 100% of your income. For some properties, this could be your entire profit for the year. If you have a 10 unit and you lose a tenant, you still have 9 rents coming in to pay your expenses, mortgage, and your stakeholders. Secondly, the economies of scale are better. If you have 10 single family houses versus a one 10 multifamily, you have ten roofs to repair, ten lawns to mow, ten tenants spread out throughout your city or town and property management is more expensive. In your 10 unit multifamily, you have one roof, one lawn and your tenants are centrally located. Economies of scale are in your favor. Third, because you have a larger cash flow, you can afford to hire property management to manage your tenants and keep an eye on your property. You can focus on finding and finance more deals. Fourth, larger deals yield more cash back at sale. When you go to sell your property, you can typically get more money for them because you control the deal and you can force appreciation by making improvements. Keep in mind the multifamily is a business. You can improve the tenant experience and push up rents because people will want to live and stay in your apartment complex. And fifth, there are so many ways to save on taxes, that there should be an entire section on this one! Unlike single family, you can do a cost-segregation study on your deal and accelerate depreciation. This means you will have tax “losses” on paper that offset investment income. You can also do a 1031 Like-Kind Exchange that allows you to move gains from real estate property to another one all tax-free. This is huge for you guys that are building wealth in single family and get hit with taxes once you move that cash out of the deal and into your bank account. So, here are the five biggest advantages of investing in multifamily, but there are many more. If you are interested in creating more wealth at a faster rate, adding multifamily deals to your portfolio is the way to do it - either by yourself or partnering up with someone. Let me know what you think. Leave a comment. Go out and crush your deals! HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

Let's talk about getting loans for your multifamily deals. Here is a rule of thumb: the easier it is to get a loan on a deal, the less money you will make. There are many different types of loans. The easiest one to get is a residential loan, which is 1 to 4 units and you must live in one of the units. For this discussion, a house isn’t considered an investment simply because it doesn't produce cash flow. If we contrast a house, you will have a down payment, pay PMI or private mortgage insurance and an interest rate based on your personal credit score, your debt, employment, and other factors. To get that loan, you have to prove that you personally have the cash flow to afford the debt on the house because the bank doesn’t consider it an income producing investment. The opposite is true on an income producing property, like multifamily. Picking and investing in the right multifamily deal is one of the most important things you’ll do starting out. Structuring the right equity, debt, getting a good rate and cash flow on your deal is incredibly important. In this case, your biggest partner on the deal is the bank because they are usually putting up 60 to 80% of the debt on the deal depending on how you structure it. So, financing is extremely important. You need to know financing and the various ways on how to get the deal done because it costs you money. A difference of only a quarter of a point in interest on a large deal can mean paying hundreds of thousands of dollars more per year. Many times a bank will offer an interest-only loan at a certain percentage above Treasury rates when financing these types of deals. You’ll need to compare rates to find the best one and length of term for your situation. Another thing to make sure you line up the equity side, or your down payment. Unlike buying a house, you don’t want to pay the principle down. The objective is all about how much money you can cash flow on a monthly basis. As the land value appreciates and rent increase because you are driving appreciation in the property, you still get cash flow. The cash flow covers the debt payment and gives you passive income. There is no upside in paying more to bring drive the debt side down. With that said, I like to do long amortizations as I want to reduce the monthly payment and maximize cash flow. This will vary on the type of loan and what the bank is willing to do on the property. And if you are working on a larger deal, you should spend more time negotiating rates and terms with the bank. Here are the 3 things the bank is going to look for when they are considering your multifamily deal: 1. First, they are going to look at your net worth, which includes liquidity and assets. 2. Then, they will look at your credit. They will be looking for lates, bankruptcies and other blemishes. 3. Finally, they will look at your track record and experience in buying and managing real estate. To get started, you need net worth and liquidity. Whether you have it yourself or you lean on partners that have the liquidity and net worth. This means partnering with experienced syndicators that have done multifamily deals in the past or have a foundation in good sized commercial real estate. Then, make sure your credit is in good shape. There are many credit repair companies out there that will work to get rid of the tradelines impacting your score. If you know your credit is lacking, I'd suggest you start on that today so you can be ready when you find a deal. And for your track record, you can lean on your property management company. If you can find a company that manages many units, they have a good reputation and are easy to work with, you will be good. Anyway, let me know what you think. Do you have any lenders, credit repair or property managers you'd like to recommend in your area? Leave them in the comments. And if I provided value, please share. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

What are your deal breakers? Evaluating a deal varies from property to property. My focus these days are Class C and Class B deals, so it really depends on the business plan for the property which drives the underwriting process. This includes gathering the expense and income data, building a financial model, performing rent and sales comps and in-person visits. All this can take anywhere from a few days to a week. Then, once you negotiate the fine points and get it under contract, you will have 30 to 60 days to perform due diligence to confirm your underwriting assumptions and build out your business plan according to what you find. When you consider the costs of both the underwriting and due diligence process, deal evaluation becomes an investment of both your time and money. So, the sooner you can find any deal breakers, the better. Here are my 5 tips on potential deal breakers to look for when you are checking out a multifamily deal: 1) Mistakes in the Offering Memorandum The offering memorandum is a marketing document created by the sellers’ broker that summarizes the deal. Note that I just said “marketing.” The purpose of the OM is to support asking price the sellers’ broker. All the photos will look very nice and the typesetting will be impressive. The intent is to sell the deal for the highest price possible – and yielding a beefy commission check for the broker. Typically, the OM will include a pro forma, a T-12 (trailing 12), and a rent roll. You never use that data when analyzing a deal. At most, you should use it as a guide because most of this data will not be accurate. Sometimes they are even totally fabricated. Remember, this data is to pull in the highest offer. I have looked at many deals where the rent roll in the OM and the actuals from the property manager were off by over $100 a unit. If you are looking at an 80-unit deal in a 9-cap market, it could mean the value is pumped up by $500k to $1MM. They also had occupancy at 100%. As soon as you see anything ending in a zero, you know it’s bull – especially when you see the rent roll historically showed 87%. I can assure you that they are not chaining tenants to the refrigerators! You must always use actual historical data and a current rent roll when looking at a deal. Another time, I found they didn’t add the expenses up property and it made the deal appear like it had a higher cap rate. Other times. the internal rate of return was wrong. And other times when someone transcribed the rent roll from an 86-unit deal from paper to Excel and the numbers were all wrong. I know that people may make mistakes, how can you trust the numbers if there are so many errors in the OM? Again, understand that these numbers are all for show. Use them as a guide only when underwriting. 2) Unrealistic Pro Forma The pro forma contains detailed information on the financial performance of the property. Generally, the T-12 is used to see if income and expenses of the property are stable month over month. Here is an example that happened to me recently: I was looking at a 150-unit deal. The financials showed gross income for the previous 5 years starting at $780k and increasing by about $12k annually, which seem reasonable. The pro forma showed gross income for the coming year to be over $250k from current and it showed 100% occupancy. Additionally, the expense ratio was at 39%. Even the very best run properties with little to no maintenance run at a 40% expense ratio. While it is possible, the property would be a very well-run machine and those tend to be hard to come by. On another deal, I found the expenses were super low compared to what they should be in the area. For instance, the annual water and sewage bill for a 30-unit deal was about $5k and the property was sitting on 1.8 acres of land with a lot of grass. Just doesn’t seem right. The best way to overcome an unrealistic proforma is to base your analysis on how you will run the property. If you are leveraging partners – like a property manager – ask them to prepare a pro forma of their own based on the seller data and knowledge of the area.

I received a message yesterday night after my last video. The person asked what it takes to become a multifamily syndicator. Here are the five qualities I rely on every day: 1) You Must Be Determined Like any business, there are days when things don’t go your way. Sometimes, you are disappointed because someone let you down. When things go hard, you go harder. I will work to make things happen. I will reach out to people and travel in person if needed to meet face to face to hash something out. Having that “whatever it takes” attitude is a core principle for me. When you are making the leap either from single-family or from zero, you need to be determined to get past all the no’s you will encounter. As a syndicator, we have processes that take us from start to finish, but there are always challenges and there is no clear map to get to the end sometimes. So clear determination is a must to see your deals and your dreams through. 2) You Must Be Trustworthy Another core principle is that you need to be trustworthy. People need to be able to recognize you are a trustworthy person. If you cannot trust yourself with handling your money, forget about raising money from others. If you are looking for investors to put up thousands of their hard-earned money into your deal but you have a hard time managing your own, you may need to revisit your options. 3) You Must Have a Track Record When I say track record, it doesn’t need to be in real estate syndication, but it does help. For some of you, it could be that you have experience doing fix-n-flips or wholesaling and you consistently earned profits from money borrowed from lenders and investors. For others, you may have a proven track record in the corporate world. I started out in single-family more than 15 years ago but also built a career as a Chief Information Officer in the financial services industry. I can point to my operational and budget management experience. If you are just getting out of college with no experience in the real estate world it will be tough to start out on your own. However, you can partner up with others that are in the syndication game either in cash or sweat equity. Ultimately, investors need comfort that their money and the asset itself are in good hands. You need to demonstrate you have the business acumen to execute on the plan you outlined. 4) You Must Know Your Numbers Knowing how to analyze and put a deal together is crucial. You don’t need to have 15 years of experience analyzing deals. Rather, you can partner with someone who has the knowledge and experience. Regardless, you need to have an understanding of how the numbers work, know how to read a given market, and know the verbiage used by brokers, lenders, and sellers. You don’t want the lender asking you if you would like to do an “IO Loan” and you have no idea what they are talking about. 5) You Must Appreciate Your Team Many great leaders talk about gratitude, with a good reason. When you are positive and appreciate the work that your partners, property managers, and vendors are doing for you - and you tell them - it will make all the difference in the world. People like to know that you recognize their efforts. And when you do recognize, they will work that much harder for you. It will help you make each day a positive experience and help you on your path towards everyday greatness. Tell me what you think. What qualities have made you successful? Leave a comment and let me know. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

I had someone reach out to me the other day. He indicated that getting to 500 units is not possible for most of the people that follow me on social. The thing is, if you allow negativity and have a “can’t do” attitude, you will not only NOT reach your goal of anything, but you will not experience your full potential. I have personally interviewed people on my podcast and have many people that come to our weekly events that far surpass 500 units. I’m not going to say it was easy getting there, but I’m going to outline 5 of the biggest obstacles real estate entrepreneurs face when growing their business. 1) No Follow-Up with Potential Investors When you are starting out and you build your team, you should also begin by identifying potential investors and partners in your deals. This means creating sample materials, networking, and meeting ‘friends-of-friends’ to explain what you do and why it should matter to them. How do you do this? There are many CRM providers and often have a free option. I have used Hubspot personally and it does a fine job. It requires some setup, but it is easy. If you’re not technically inclined, use an Excel spreadsheet and list their name, phone, address, contact date, and some notes. The important thing here is that if you say you will follow up with a meeting or an update, you do it. The prospect needs to know that you stick to your word. It shows you have character and follow-up. 2) Deals in a High-Priced Market If you are trying to buy in a competitive market or in a market where brokers are doubling the cost per door compared to average, it can be very discouraging. Some of you may want to focus on the local market because you know it well, but others may want to check out other markets because the numbers make sense. Many markets are experiencing cap rate compression because of low interest rates, but with rates on an upward trend, there should be some easing. Regardless, you may need to get creative to find deals. For example, my buddy found an on-market opportunity that was publicized and marketed by a broker on Loopnet, which had a high price. Instead of walking from the deal, he had his broker reach out to the seller to see if they had any other deals they would want to sell and had one across the street. After getting to know him and his team, they were able to negotiate a good deal for two buildings and got both under contract at a good price. If he had only looked at the on-market opportunity, it wouldn’t have made financial sense. But because of the cost savings associated with purchasing both buildings on the same street, he was able to close both. On the other hand, if you know that deal flow in your area is slim and you decide to pursue opportunities outside the market where you live, building an experienced team is imperative. This starts by selecting a market, understanding the area, demographics, and opportunity, then interviewing and hiring a property management company and a broker and partnering with an active investor in that space. 3) Chasing Too Many Rabbits This is something that many real estate entrepreneurs face – both new and experienced – and that is to work on many investment strategies at the same time. As real estate specialists, we have so many ways of making money – enough to even paralyze an aspiring investor because they don’t know which way to go. The good thing is that the longer you are in the industry and the more relationships you build, you will be presented with a variety of new and exciting investment opportunities that suit you, your personality and goals. So as an aspiring investor, how do you decide which investment strategy to pursue? I think you need to identify the root of the problem first. Are you struggling with selecting your strategy or are you just using that as an excuse to not take action? If it is indeed the former, pick the business you want to be in (one that aligns with your current interests and skillset) and become the very best at it. Keep in mind that investors in many of these fields have had success and built fortunes doing so. You are not creating anything new! If it is the latter, you need to learn how to identify the hang-up and get past your fears. You can do this by building a team and surrounding yourself with experts. How does the established investor avoid chasing rabbits that are outside of their skill set? By holding yourself accountable. You can do this by joining a mastermind where you meet on a weekly or monthly basis, voice the concern and solution, and commit to the group that you will do what you say. You can also hire a mentor to keep you on track.

Here is a question that comes up in conversation: How to make the jump from single family to multifamily. As subtle as the differences look, the contrast between single and multifamily properties can be big. If you are looking to take down a 5 unit or greater, the additional units under the same roof will impact the financial terms, time to close, budgets and many other items related to the property. Sometimes getting into the deal can be easy, but at times it can be frustrating. It just depends on the personalities involved and how committed you are to be easy to deal with. Despite all this, the process is generally the same - whether it be 10 or 100 units. Investing in multifamily may seem intimidating, but if you learn and partner with experienced people, it doesn’t have to be. Before you decide to take down your first $10MM property, I've outlined the 5 biggest differences that you need to know: 1. The Numbers - The biggest difference in single and multifamily properties is with the numbers. On a single-family home rental property, you look at projected rents and maybe lean on the neighborhood to tell you if you have a good deal. In a multifamily deal, you will look at this info and much more. And the bigger the deal in terms of units, the more data you need to rely on. You will be looking at the T12 (or Trailing 12), rent rolls, maintenance costs, net operating income, vacancy drivers and other material info. Not only do you need to know what all this means, but you also need to account for every dollar. When you are starting out, trying to decipher the terms and numbers can be confusing. But if you analyze enough deals and are diligent, it will become second nature. 2. More Docs - It may make sense that a 50-unit building will require more due diligence than a single-family home. Along with the number of units, there will be more paperwork and degree of order required. You will want to review all the leases and look for “heads on beds”. Meaning, is the seller just placing anyone in the units to drive occupancy up? You need to look at rent rolls to see where the rents are to market and if there are any dips in occupancy. You will want to look at major repairs that were made and what warranties are in place on such items as the boiler, roof and water heater. Anyway, just understand it will sometime take time to get your hands on all the paperwork not only for your own review but for the bank as well. In addition to all that, the lender will want to look at the deal appraises. Unlike single-family homes that are appraised on comps and listings, a multifamily property is appraised by how much cash they generate because it is a business. In order to put both the buyer and seller at ease, putting these deals together takes more time. All this means is that it will take more time to close. The good thing here is that the bank is your partner. If the documents you are sending do not make sense to the bank and they don’t like it, it means you shouldn’t buy it. 3. More Capital - This is the part that many people get hung up on. But here’s the thing: if the deal makes sense, the money will come. So, there are a few ways to look at expenses in a multifamily deal: If you own a smaller deal, all the expenses are under one roof. If you need a need roof, dryer or furnace, you typically need one for all the units. When you looking at bigger multifamily deals, you need to make sure you have reserves to handle the unexpected. One big mistake that new multifamily investors make is not setting aside enough capital to renovate or cover incidentals. For example, the closing costs on a multifamily deal are more than a single family. If you are syndicating, you can expect to pay an SEC attorney anywhere from $8,000 to $12,000 to prepare the paperwork. Between legal, environmental and other lender costs, things can add up quickly. A good starting point for a class C property is setting aside $1,000 per door, but that may vary on your location. 4. Bigger Team - For many in real estate, landlords that handle a single-family property may feel that one property is difficult enough. Suffice it to say, the more units you have, the more difficult it is to manage everything. If you plan on making the leap to multifamily, I advise people to get property management when they hit 16 units. If you bought it right, there will be enough cash to cover their cost and still provide a healthy profit while allowing you to focus on buying more deals. In addition to a property manager, you need to find a good accountant and a handyman.

Have you felt like you wanted a deal so bad you could taste it? I know the feeling, believe me. I’ve been the real estate business for more than 15 years. It wasn't until I set my sights for multifamily that now I’m always looking for my next killer deal. The other day, someone reached out asking me about how I got started. I'll sum it up in one word: mentors. Your success in the real estate business depends on your knowledge, experience, and your network. When I started out in single family, then transitioned to multifamily, I leaned on mentors to make sure I wasn't making any big mistakes and show me the way to make the most for myself and my investors. In real estate, like any other business, you will be entering into the unknown. You will need to leave your comfort zone and face challenges that are new and unfamiliar. Mentors will be a huge asset to your success. The great thing is that on the other side of your comfort zone is the future you are seeking. My mentors have been a big part but my whole business. Even to this day, I lean on in-person and virtual mentors to help me with everything from real estate acquisition to business management. By virtual mentors, I'm talking about masters in the respective field that I follow on YouTube and Facebook as well as books of people no longer around today. There’s no way I could have done this without guidance from others. When I was getting into multifamily, my mentor said I needed to find a property management company with experience and scale that I can lean on. I listened to him and found a group that is doing a very good job. From there, I continued to build out my team of brokers, inspectors, and contractors. Aside from the steps, here are the six things my mentors taught me: 1. Keep a positive mindset and believe in yourself. Stay away from negative people and surround yourself with can-do, no excuse action-takers. 2. Follow systems that work. Don't reinvent the wheel. Use proven systems to underwrite and run your properties. 3. Listen carefully to your mentors. Look to people that are 10 years from where you are today and do what they say to do. They are successful for a reason. Follow their advice. 4. Understand that persistence brings success. Absorb materials from only 2 to 3 mentors. Go deep with all their material. Line up your team and build credibility and take that first step. 5. Don’t ever quit. There will be days that things just don't work out. You must stick with it. If others have built fortunes doing this, you can too. A mentor will also tell you that can't do it all by yourself. Investing in real estate needs support from many different professionals. There are property managers, brokers, inspectors, banks, attorneys, investor partners, accountants, and even mentors. I'm sure you heard of that old adage that you are only as good as your weakest link so choose your team carefully and never forget the first thing I told you about negative people. Getting in multifamily is a business and the dollars you are leveraging is substantial. You want to make sure that your team members have the same ethics, morals, and business philosophy as you do. This is not to say that you will not make mistakes and or changes along the way but when you start out defining the qualities you want in your team, it makes identifying the team members much easier. For example: If your goal is to get to 500 units, you are not going to use a real estate attorney that is just starting in real estate. You want someone who knows the business and has the experience to look for pitfalls. Rather, you can ask that attorney if they would like to review the contract after your primary attorney reviewed so they can get the experience. With that said, once you establish your team, be loyal to them. For example: If you do some networking and someone hands you a property you like that they want to sell. Most people would just work directly with the seller. Let me suggest you call the broker on your team and let them go to work for you. By allowing the broker that closed 10 transactions for you in the past year go to work, they will get you the price and terms they know you are looking for. In addition, you will be the one they call when they find a deal that has to be sold fast. This is something I know from experience. If people know they can rely on you and you watch their back, they will watch yours. Anyway, I hope that this will help you in getting you started. If I provide any value to you, please share.

When we are going after a goal, we spend most of our time focused on the journey. When we do finally reach that goal, often, we acknowledge it, and then move on to the next goal. Since hitting the goals most times takes longer than it takes to acknowledge our success, we need to ensure that we pay close attention to our own internal happiness and positivity that keeps us motivated. If not, it could lead to us feeling like we are spinning our wheels and slipping into unhappiness. One of the things that I try to focus on as I'm going through my goals, is to maintain a level of happiness as I go through and knock out new deals, new LOI's, and new partnerships. I've come up with five ways to help keep my internal positivity on track with my goals: 1) Remind Yourself of What You're In Control of Changing As in business and in life, they're only a few things within our control that will ultimately make a difference. I focus primarily on what I can change, what I can make better, and how I can help others. I avoid getting overwhelmed by things that I can't control. For example, if a contractor does not deliver their work on time, I ask myself what I can do to improve the situation. Believe it or not, this is extraordinary hard as we all have bad days and sometimes obstacles get in our way. But if we can even control our emotions and maintain a positive mindset, you can see through the obstacle and get on the other side of it. 2) Watch your Language I talked a little bit about this in the last video in terms of using positive language when speaking to investors. The same thing goes for speaking to yourself. If you're able to keep what you tell yourself in check, you will do so much better. Do you say to yourself: "I screwed that up. I am such an idiot" or "I can't believe I'm doing this. I'm such a fool". All this inner dialogue gets built up inside your own head. It's like you're programming yourself with these limiting beliefs. It may seem harmless, but believe it or not, it impacts your overall way of being. You mustn't allow that sort of self-talk to enter your mind. It's detrimental to yourself and to your future. If I notice I'm having negative thoughts about a situation, a good rule of thumb that I use is if my brother messed something up, would I berate him? Of course not. So don’t berate yourself. 3) Commit to the Goal, Not the Path Having a goal with a purpose is good for your brain. It establishes a focus. Once you understand what your goal is and commit to it, you must make sure that you don't get confused between the commitment to the goal versus the attachment to the path to get there. If you think you know one way to get to the goal, then you will only see certain opportunities. You’re only going to go in the direction that your brain is familiar with. It’s like you are putting blinders on and ignoring anything that can help you achieve the goal. Committing to a goal means doing - within the limits of your value system - "whatever it takes to get there" vs "it has to happen this way and at this time using this process". For example, if you are counting on a friend's money to invest in a certain deal, but for some reason, that money is not available anymore, think creatively other ways to get that funding. Stealing or doing anything out of the law is not an option. Go through your social media contacts and find potential investors. Organize your proposal and start talking to people as soon as you can. Maybe the very same day. Make it happen. Don't make the mistake to talk yourself into doing things only one way. It may/will turn you off to looking at other possibilities to realizing their vision. When your approach is more like a matter of commitment and you do whatever it takes to reach your goal, it frees your mind. It opens your brain to seeing many more possibilities and make that goal happen. You will see other people to network with for collaborative efforts or you will use other methods to reach out to investors that you hadn’t considered.

I had a meeting earlier today. It seemed that several attendees had two obstacles that kept coming up, specifically around raising money from investors and finding off-market deals. Here are the four tips that came out of the meeting: 1. Build Your Network I'm sure that some of you have heard the quote "Your Network is Your Net Worth". This is where it all begins. Many of the wealthiest people in the world spend time forging relationships and networks with others. This is the first phase that leads to a business partnership. In the world of real estate investing, this is the most important part of building success. I spend quite a bit of time cultivating relationships, getting to know people and positioning myself as a person that can help others achieve their goals in the multifamily space as a thought leader. I provide my network with a weekly podcast, a YouTube channel, daily videos, and live events to learn about multifamily real estate. So, where do you start? Begin by speaking to your immediate “sphere of influence” and begin associating yourself with multifamily real estate. From there, you grow your sphere outside of your group. It will take a lot of time and consistency to get people you don’t know into your sphere, but the key is to meet with and talk to people that know your immediate sphere of influence. If your Aunt Mary associates you with multifamily real estate, it may come up as a topic of conversation when your Aunt talks to her dentist about her niece that is blowing it up at real estate. Many have raised millions doing just this! 2. Show Interest & Watch Your Language When you are meeting with a potential investor, take the time to get to know them, to understand what is important to them and to discover their “why”. You can ask them, “What is driving your decision to invest in real estate?”. You will be surprised to find that it's not always money. Sometimes it's to build generational wealth. Or perhaps it’s to avoid getting nailed on taxes. Whatever the reason, take the time to understand them. When speaking to investors, be aware of the words you use. Avoid using words that will get them saying a negative word or put them into a negative state of mind. We inadvertently use negative statements all the time: “What if the deal doesn’t work out?” or “What if I can’t raise the money?”. All these negative reinforcements hold us back individually. The same thing happens to others as well. Instead, we need to ask better questions that assume we will be successful, such as: “how do people that find great deals build success raising capital?” Follow their examples, study them and apply their techniques. 3. Look for Opportunities To succeed in a hot market, you must be creative to find deals. This means not just looking at what the brokers are giving you. Rather, you need to get creative and look at what is around the on-market property. If other deals are selling in the immediate area, maybe someone who is not selling will unload their property to you. 4. Partner with Others Back when I was buying single-family and small multifamily deals, I was investing on my own. My business was stagnant for many years. It wasn’t until I partnered with others that our skillsets were amplified; I had someone I can lean on where we complimented aspects of our strengths and weaknesses. Whether it be analysis or just bringing a balance sheet to the table. Finding a partner takes time. You really need to know yourself before and work together to know if you want to continue building a business. If you are a high action individual with aspirations to build massive wealth, you may not want to partner with someone who is happy doing one small deal a year – or vice versa. You also need to know what you are good at and what you are not so good at. You want to find partners that compliment these elements and have the same ethics and goals as you do. You build a team around those answers and your business will do well. So, to wrap it up, to raise money and find deals you need to: 1) Build your network and establish yourself as “the real estate expert” in your immediate circle of influence. This is done by talking to people about what you want to do with real estate and staying consistent with your message. 2) Ask questions and show genuine interest in the people you are speaking with. Pay attention to what you say and how you say it. 3) Make opportunities where there are none. Knock on the door, get to know potential sellers, and target markets with activity. 4) Partner with people that has strengths that complement yours, and you can join forces to focus on a goal. What do you guys think? Do you have other tips? Let me know. Comment below. And if you like, share!

A long time ago, a family member was in a near fatal accident that continues to impact her life to this very day. As you can imagine, it was a devastating blow to our family, as it was obviously unexpected, and she was only in her early 40’s when it happened. There is a lesson to be learned in any situation especially in a case like this where someone’s life could have been cut short. I believe that the way to live life is to use the bad things that come at us to reshape our thinking and motivate us. If you think about it, what’s the alternative? You can get down on yourself and end up in a negative state. Saying things like “Why did this have to happen to her?” or “Why does this crap have to happen to me?”. This type of toxicity paralyzes you. Self-criticism creates limits around your goals, belittles you and erodes your peace of mind. I know it’s easier said than done to keep out the bad thoughts, since we as humans are prone to self-criticism and negativity, but there is always something to learn from these experiences. When something bad happens to me – whether it be in my personal life or my business – I try to pull out a lesson. I then keep that lesson in mind for the future and to help friends, partners, anyone by telling them what I encountered. So, what is the lesson with my family member? It’s this: Life is precious. You are going to die. I am going to die. I am not trying to be dark, but it will happen. There are days that I get caught up with returning phone calls and just working that I forget what I have in my life. I forget that life is a journey that must be traveled but not ignored for the destination. Are you guys guilty of that? If so, this is a reminder that we must enjoy the journey. It’s a reminder to laugh more; To smile more; To be around those that you love and love you; To communicate and offer value to others; To recognize and honor your emotions. For me, it’s a reminder to live my life on my terms. Not to be trapped by dogma. Not letting life “just happen” to me. But rather, controlling what will happen and directing the energy from my emotions into constructive action to make a difference in my life and in the life of those I care about. Are you living life on your terms? Let me know what you think in the comments. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

As humans, we tend to procrastinate when we don’t see the consequence for our lack of action very clearly. If we had a time machine that could propel us forward in time to see what our life could be if we made decisions quicker or stuck to that diet and workout routine, I’m think we would be in shock. We would probably make better choices and take more action. If you are actively reading or listening to books today, I’m certain you see the benefit from not procrastinating on the constant learning. Imagine if you would have started reading about making money 10 years ago – and stuck to the plan – what life would be like today. How much do you think you would have in your bank account? Do you think you would have saved a lot more money? Would you have been better focused on looking for opportunities? Unfortunately, there is no flying DeLorean nor is there a way to see parallel universes. If there were, there would be a lot less procrastination. The good news is that our brains are powerful. It can project into the future. It can allow us to “see” what an outcome can look like if we train, study or work toward specific goal. Try this: Think of someone that you admire. They are making a lot of money, they have beautiful material things, or they are in good shape. Now imagine that someone was you. From there, you need to do the work. By that, I mean to perform the effort needed to build the skills needed to build the wealth that person has or spend the hours needed in the gym every single day. You can see that the main difference between those that have and those that have not is the action taken. They did not procrastinate. They did not waive from their goal. They persisted through the pain and the bad days. Today, I challenge everyone out there to know that great things are possible for you if you commit. Having spent a lot of time in Corporate America as a C-Level executive, I’ve been fortunate enough to work with many great CEOs. These people have worked with millionaires and billionaires throughout their careers. One CEO I worked with for some time said to me, “Following-through is the only thing that separates dreamers from people that accomplish great things. It’s the primary difference between average earners and the wealthy.” To paraphrase his point: Use ACTION to destroy your procrastination. It doesn’t require you to anything difficult. Start small and simple. Setting up challenges for yourself daily and getting them knocked out. After you do, scale them into bigger, more life-changing tasks. There is no formula, pill or document you can buy. Rather, it requires us setting up the tasks and projecting in our minds what the future will look like once it’s complete. Or, look into the future of the negative consequences if you DON’T do that task. There is power in doing that too. You need to be deliberate about what you are doing. Eliminate the habit of putting off a task. Your mind will make an easy task seem hard if you keep putting off doing it. By putting things off in favor of what is easy or fun, is wasting time. There are days when you may slowdown, but time will not wait for you. Time waits for no one. Visualize your future by documenting your goals. Project in your mind what your life can be. Plan your moves accordingly. Don’t be afraid to admit you made some mistakes along the way up until now, but don’t dwell on them. In fact, it cannot serve you. Move past those thoughts. Be optimistic about what you are visualizing. See them in your mind’s eye and make them real. If you rise to the challenge, you will succeed. And you WILL change your life. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

If you don’t want to lose your mind during tax season or get nailed by Uncle Sam when you sell your property, you need to hire an excellent bookkeeper and CPA. When you are looking for a CPA, you are trying to find someone that has experience working with real estate investors and syndicators. You want to know if they are already working with investors today. They need to able to not only grasp how to handle the basics of income and expenses as it relates to multifamily, but also be very well versed with all the tax advantages and specialized investor reporting. If they know about syndication but don’t work with syndicators today, it doesn’t necessarily mean that you can’t work with them. Regardless, working with a CPA that works with syndicators already will be less expensive to start as they do not need to run up the hours – and you are paying for! They need to understand how to implement the various tax deductions and understand the syndication business model to be most effective. Now, if they do not work with syndicators today and they are not familiar with apartment syndication – and you really want to work with them – schedule a call with them. Aside from assessing their ability to grasp the concepts, you will want to ask them how their fees are structured, are there fees if you need them to review financials for upcoming deals, what they charge to prepare a tax return and their bookkeeping fees. If you have outside investors, you will also want to know the cost to prepare quarterly and annual reports. Once you get the fees down, you will want to know who you will be dealing with at the firm. If they want to charge you top dollar, you should expect to be advised by a partner or a mid-level CPA. If you want to take an aggressive stand on your taxes, a conservative CPA would not be a good fit. You rely on the CPA to prepare your return. You want them to apply every loophole and tax strategy available – legally and ethically of course. In some cases, you may want them to push the limits on your tax returns. The CPA should also be able to handle the IRS and any audits that may come up. You will also want to look at the tech ability. Do they have a portal that you can access for your reports? Do they offer a portal to your investors? Do they take security seriously? When it comes to tax planning and strategy, you want the CPA to be proactive and establish a regular meeting to discuss how the property is performing and what you can do to protect your income from the federal and state taxes. Take the time to set the expectations for your needs. If you were not happy with your previous CPA, let the future CPA know what went wrong. If they had a communication issue or were not proactive with their tax planning strategy, point it out. As I pointed out earlier, you want to determine if the CPA is aligned with your goals, interests and future before signing them onto your team. Finally, as you continue building your multifamily business, you want a team that can scale. This includes your CPA. If you choose a beginner that has never handled a syndication to be your CPA and your plan is to buy properties every quarter, you may experience issues. You need someone that can grow with you. Make sure your interview questions are deep and you are comfortable with their ability to deliver. Let me know what you think. What questions did you ask your CPA? Leave them in the comments. And if you like, share! :-) HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

In the world of multifamily real estate, people starting out focus on locating a deal or even raising money. These things are important, but one important item is often overlooked: the financing. The wrong financing can kill a deal – or it can make it. To me, it is just as important as raising the equity to get the deal closed. Commercial loans are very different from residential loans, that are for four units or less. Unlike residential loans, commercial loans have many different programs and options. On the residential side, you are looking at rate and term. While both are important, these are the two most familiar with people not active in the real estate space. However, when you are dealing with a specifically a commercial multi-million-dollar loan, there are many ways financing a deal that will impact cashflow. Understanding the different parts of a loan program and how they can affect your returns is important. So, here are my 5 parts you need to know to maximize your returns. 1) Interest Rate: The Interest Rate is the amount charged by the lender, expressed as a percentage of principal, to the borrower. Interest rates are typically charged on an annual basis. 2) Loan-to-Value: The Loan-to-Value ratio (LTV) is the amount of the loan compared to the value of the property. This ratio is calculated by the lender prior to providing the loan. If the property is valued at $1,000,000, and the bank will give you $750,000, you have an LTV of 75%. This percentage will be dependent on the strength of the property and the strength of the borrower. Typically, banks will have an LTV of between 65% & 80%. These two, the interest rate and loan-to-value, are the parts most people focus on. It gives you an idea of what the cost of borrowing the money will be, how much they will lend to you and how much you will need to bring to the table. However, the other parts are also important, so let's continue. 3) Terms: The Terms of a loan can sometimes be flexible depending on the loan product. The term is the period until the loan becomes due and payable. A typical loan will have a 5-year term and a 25-year amortization. Your payment will contain a portion of principal plus interest over the 5 years and the payment amount would be on a 25-year schedule. Longer amortization periods typically mean smaller monthly payments. The loan terms you will want is dependent on your business plan. If you plan on a holding a deal long-term, it will make sense to get a low rate with a 25 or even a 30-year amortization. If your business plan calls for you to add value to a property and refinance after a short period of time, a 24-month, interest-only bridge loan may be the best option for you. After you add value, you can refinance to get into some long-term debt. 3) Nonrecourse or Recourse: When it comes to residential loans, banks want someone they can go after if the loan is not paid. They want that person buying the home to personally guarantee some or all or the loan. When it comes to commercial loans, it is different. Depending on the terms of the deal, you may either have a nonrecourse or a recourse loan. If you have a nonrecourse loan and the deal goes bad, the most the lender could do is come after the property, so you would lose all your equity. Additionally, you are personally protected if you didn’t neglect the property or commit fraud against the lender. There are many options for multifamily buyers that do not have recourse. If you keep the LTV between 65% to 75% and the loan is large enough, you can stay nonrecourse. In either case, if your deal does go bad, the chances of you getting another loan and raising the capital needed to take the deal down are drastically reduced. It is important that you make solid, good deals and work deals that make sense. Don’t overpay for deals because you think the financing is cheap and the money is available. 5) Prepayment Penalty: As the name implies, if you want to pay the loan off before the set term, usually the case if you want to refi, the lender will charge you a fee. This is typically a step-down percentage depending on the term, but it can vary. For example, if you have a three-year term, you would be charged 3% in Year 1, 2% in Year 2 and 1% in Year 3. Again, if your plan is to reposition the property after 24 months and you are getting a 3-year term, having a prepayment penalty is probably not a good idea. If you tell the lender upfront of the business plan, they should be able to come up with a solution.

I kicked off my real estate career in Virginia Beach about 15 years ago. If you know anything about Virginia and the Carolinas is that they are prone to hurricanes. I was living in Virginia Beach when one of the biggest hurricanes, Hurricane Isabel, hit in 2003. It caused over $1.9 billion in damages. More recently in 2017, Hurricane Harvey and Irma devastated Texas, Louisiana, and Florida all in a two-month period and $175 billion in damage. In 2018, Hurricane Florence did almost $19 billion in damage in the Carolinas. The economic losses caused by hurricanes are no joke. As real estate investors, we must consider the possibility of flood damage in certain regions where we buy properties. A property located in a flood zone doesn’t necessarily mean we shouldn’t buy it. However, you need to perform deeper due diligence so that if a flood or hurricane hits, you are prepared, and the investment isn’t negatively impacted. You can purchase insurance for properties located in high-risk flood zones. In some cases, it is required by federal law to have insurance. There are maps that outline where the flood-zones are in each area. However, with super hurricanes, like Katrina, many neighborhoods were not even considered flood-zones. Since it wasn’t required, people didn’t buy any. After that hurricane hit, many families were hit with not only the financial burden of losing their home but also putting their lives back together. According to the Federal Emergency Management Agency, or FEMA, over 20 percent of all flood insurance claims come from areas outside of designated flood zones. If you have an investment property on the border of a flood zone or in an area of a state prone to hurricanes, you will still want to consider flood insurance to protect your asset. There are resources online where you can check if an address is in a flood zone. If you are not sure, ask your insurance agent if the property is at risk for flooding. When you compare the potential loss to your premium, it’s inexpensive. Over the past 10 years, the average flood claim has been more than $46,000 with annual totals averaging $3.5 billion per year. When you consider the damages done to a large multifamily deal, this figure will be much larger. For residential people out there, a flood policy may run you $600/year for a small residential building. Among all the natural disasters, I chose to talk about flooding in this video because according to FEMA, approximately 90% of all disaster-related property damage is from flooding. As for considerations you need to take into account when buying the insurance: Again, you need to determine if the property is in a flood zone during the underwriting process and get the cost before you buy the deal. Also, make sure you are clear on the coverage and the limits of a flood policy. Depending on the size of the deal and your investment targets, the cost of insurance may eat up a larger portion of your expenses, so due diligence is important. It’s worth noting that flood insurance is not covered with your basic policy. And if the property is in a high-risk flood zone, you may be required to have insurance by the lender before you can close. Again, if you are operating in a place prone to hurricanes and other adverse weather conditions, know what you are getting into during your due diligence phase. If the property is in a moderate to low risk flood zone, or even on the border of one, get a quote for insurance. I personally would build it into my expenses and purchase it. Having personally lived in a state prone to hurricanes, I’ve seen it displace families and businesses alike. I still have properties in Virginia and my policy covered damages of over $100k to one of my smaller properties. It not only covered the physical damage but also the loss of rents as it was uninhabitable while under repair. It was well worth the investment I’ve made over the years. As real estate entrepreneurs, we need to take time to plan. The same way you underwrite, perform your due diligence and line up financing, insurance needs to be closely considered. Take the time to figure out if you need insurance and how much. Err on the side of caution if the premium makes sense. Doing so can save you tens of thousands of dollars and countless hours of time. Have you ever been hit with a flood? How did you handle it? Please let me know in the comments. Also, check out our podcast on iTunes and Stitcher and subscribe to the new YouTube channel. We are working on getting new content out every day to help you build your success in the world of multifamily. Be great.

Whether you have owned your property for a while or just taking it down today, there are many ways of boosting revenue. Keeping an eye out for opportunities to increase income is not only important to cash flow, but also to improve the overall valuation of the property. Here are my 5 ways of boosting the revenue of your multifamily deal: Reduce Turnover: One of the best ways of reducing expenses is to keep your turnover as low as possible. Churning through tenants increases your costs simply because you need to turn the unit every time they leave. Even if we are talking cleaning, paint, or a carpet cleaning, you have to hire the contractors, plan, and do the work. You then need to advertise and qualify the incoming tenant. This can shave weeks or even months off the income for that unit. You want to carefully underwrite the tenant almost the same way you underwrite your deals. You want people that will pay consistently and have a good background. The right tenant will also take care of the unit and will not disrupt others. Also, by employing what I call “attentive property management” you can keep the tenants happy and cash flowing. This means tending to problems reported by the property manager and showing you care about the tenant. Sending birthday and holiday greetings goes a long way to letting them know you appreciate them. Increase Rent: This is an obvious way to increase revenue, but it must be handled carefully. You must analyze the rents in the area as well as the amenities of your competitors. If your units do not have the same finishes or upgrades as the units in the local market, there may be an opportunity for you to improve the units and bump rents. Keep a close eye on the economic cycle as well. If your region of the country or city is beginning to experience a slowdown, you want to make sure you can make the improvements and still increase the rents. Regular maintenance is important to increasing rents and sustaining the investment in the property - all while creating value for the tenant. If you are planning to add a stainless steel microwave or replace one of the major kitchen appliances, you may choose to coordinate the replacement with the lease renewal so the tenant sees the value for the additional bump in rent. Fees: There are several fees you can apply to a tenant, always being careful not to cost yourself out of a tenant. In some markets and asset classes, you can get away with charging an application fee. Additionally, you can also charge a non-refundable pet fee of $200 at the beginning of the lease, for example, along with a small recurring fee of $10/month for small pets. There are also late fees, but you need to be careful that this is not indicative of a larger issue the tenant is having in their life, like a job loss. Not charging them tells your tenant that its okay to be late, so make certain you do this. If you are renting individual rooms, you may choose to charge a “roommate change out fee”, which would include an admin and re-application fee of the new tenant. Something similar to this is a “lease change fee” for replacing someone on the lease or for subletting. Talk to your attorney about applying these fees in your area and the language to add them to your lease. Vending: Selling everything from snacks to toiletries to tenants is not only a convenience for them but can drastically increase your cash flow. In some properties, I’ve seen vending machines that sold cold sandwiches and fresh fruit next to a machine that sold hot entrees. Those machines were set up in a senior housing apartment. In other places, I’ve seen laundry detergent, dryer sheets and even toothpaste sold in these machines. Be careful of where you place these machines as you want to make it easy for tenants to get to, yet not disturb others for tenants that are looking for a midnight snack. Also, make certain you have cameras on the vending machines as well. Other Services: Depending on the asset class, you can offer a host of other services such as house cleaning. You can work with a house cleaning contractor and put in a bump so you make a profit. You can hire a cleaning service to come and clean the unit for $50 every two weeks while charging your tenant $175/month for the service. This increases your revenue by $75/month or $900/unit annually. Another option is door side trash pick up which is a great amenity to add to your apartment community. It helps better secure the comfort of your tenants stay and add to the value of the property. Anyway, here are my 5 of ways to boost the ROI of your property while improving the overall valuation of your investment. What are you doing to find additional revenue streams in your properties? Let me know in the comments. If you like the content, check out our podcast on iTunes and Stitcher and subscribe to the new YouTube channel. We are working on getting new content out all the time to help you build your success in the world of multifamily. Be great.

Any real estate entrepreneur and investor will tell you that relationships are key to building your business. I can tell you that it was through my relationships with property managers, brokers, but most of all potential passive investors, that we were all able to not only forge new friendships but also close several deals. If you don’t have a network yet, you may be wondering how can you meet high net-worth investors? One of the places to meet these people is at non-profit groups and charity groups. Many of these people tend to be generous. They enjoy giving back to their community. When they are in a group with others celebrating the spirit of giving, they are in a mindset of relationship building. They will be open to meet people - people like you. Consider looking at Meetup.com or Eventbrite and search for “charity”, “non-profit” put a list together of events in your area. Pick events that line up with your interests as closely as possible. Go a few times and get to know the people and make yourself visible. Talk to others and get to know them and let them get to know you. If you run into someone that doesn’t want to talk to you, pay no matter. Just talk to as many people as you can. And all you are doing is talking. You are not pitching or selling them. You are building your network. I found that volunteering at non-profits and charities is one great way to build relationships with those that fund these endowments. Many of the high-net individuals that support these causes support them with their time and money. Through these relationships, I personally have benefitted, not only with my deals but also with great friendships I’ve built over the years. Additional strategies I have found to be helpful is to go to real estate conferences, wealth building conferences, and even REIA meetings. You are able to find like-minded people there that have large networks of their own. When you are talking and meeting people, you don’t want to go in cold. Make sure that as you prepare to go to these events, you sharpen your skills. Spend the time to learn the verbiage, deal structures, and lingo. Nail down your story and define your why. Remember that your network is investing in you, so listen to podcasts, educate yourself and make real estate a big part of your life. Network building is a big part of your success. What are you doing to build out your network? Let me know in the comments. If you like the content, check out our podcast on iTunes and Stitcher and subscribe to the new YouTube channel. We are working on getting new content out all the time to help you build your success in the world of multifamily. Be great. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

Having been in the real estate game for about 15 years, I have been through city and state recessions and booms as well as the 2008 crash. Those were some tough times with some lessons learned. Using history as our guide, we know that market cycles are inevitable. We know that before they happen, that is, about once a decade, it’s important as a real estate investor to prepare and protect your portfolio against severe loss. Smart investors understand that economic crashes are not only healthy, they are also windows of opportunity. Ask anyone that went in heavy at the height of the last crash and maximized their returns. To take full advantage, however, requires you to prepare for the crash. So here are some tips to prepare for the next market crash: 1) Know Your Market & Rent Rates: This is something you should know as a matter of course, but it becomes more important as we roll into an economic slowdown. Aside from being in tune with valuations in your market, you should be working with your management company that is knowledgeable about the rental market in the area. During a correction or crash, other landlords may drop their rent to maintain a higher occupancy. Tracking these changes becomes important from a competitive standpoint. 2) Cash Flow is King: If your property cash flows, meaning it brings in more income than expenses and the mortgage, then it doesn’t matter what happens to the value. If the value of the property drops during the crash, that won’t impact you unless you sell. In many markets, experienced investors buy properties that produce income and consider appreciation as icing on the cake, but it depends on your strategy and market. 3) Buy C-class or better: Real estate investors evaluate neighborhoods like grades in school. D-class properties typically have high-crime and high-vacancy rates; B-class properties host upper-middle-class people; A-class properties are typically high-end new development or the best locations in the city. A good C-class area is where you will find your average neighborhoods with plenty of renters. When you invest in C-class or better neighborhoods in economically diverse markets, you avoid the worst of the negative factors when a market turns, and you can ride out the storm. 4) Build a War Chest: When the market turns, you want to have a healthy, liquid cash reserve. When the crash hits, there will be many that did not prepare. So, there will be plenty of short sales and foreclosures at great deals. If you have cash in the bank and ready to deploy, a crash is the perfect opportunity for you to expand your portfolio quickly. 5) Invest in Diversified Economies: Don’t invest in markets where there is a single industry the city depends on for their livelihood. A diverse labor force is vital! Detroit is a very good example. When the auto industry failed, all the home values plummeted as people migrated out of Michigan to where the jobs went. Many rentals in the city and suburbs went vacant as did office and commercial space. To this day, many of these places still haven’t recovered. Instead, look at cities centered around hospitals or healthcare, education, distribution centers, and factories. The market is going to crash again. Technically, history tells us we are already overdue based on the ten-year cycle. We don’t know if a crash will happen in the next 12-24 months, but if you follow these points, you will be able to expand your portfolio. Don’t wait to buy real estate. You buy real estate and wait. If you like the content, check out our podcast on iTunes and Stitcher and subscribe to the new YouTube channel. We are working on getting new content out all the time to help you build your success in the world of multifamily. Thanks so much for watching and I'll see you the next video. Be great. HELP US OUT Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you! Thank you in advance! ♡ HAVE A QUESTION? I am working on a new show where I answer your questions. To submit a question, go to www.bulletproofcashflow.com and you will see a widget where you can speak your question. If I use your question on the air, we'll send you our newly designed t-shirts. ✧✧✧✧✧✧ DOWNLOAD FREE EBOOKS ✧ Talk to Brokers: http://bit.ly/FindBroker ✧ Raise Capital: http://bit.ly/RseFunds LISTEN TO THE PODCAST ✧ BCF on iTunes: https://apple.co/2B4AvXp ✧ BCF on Stitcher: http://bit.ly/StitcherBCF SOCIAL MEDIA! DM me! I want to hear from you! ✧ IG: http://www.instagram.com/bulletproofc... ✧ FB: https://www.facebook.com/bulletproofc... ✧ LI: https://www.linkedin.com/company/bull... ✧ WE: https://www.bulletproofcashflow.com JOIN THE GROUP ✧ FB: https://www.facebook.com/groups/bulle... ♡ Be Bulletproof!

Having been a real estate investor and entrepreneur for about 15 years, I created a set of rules that I follow and review on a regular basis. I discovered these rules through my personal experience and by speaking with successful real estate investors. They remind me what to do to thrive in good market cycles and navigate through the rough ones. So, here are the first 5 rules for successful real estate investing: 1. Commit to Your Goals I'm sure you've heard this advice from many people before, but statistically, you are more likely to achieve your goals if you document them every morning and every evening before you go to bed. By writing down specific goals and keeping them centered in your mind, your mind automatically looks for opportunities, much the same way you begin seeing a car you want to buy everywhere you go. By maintaining these goals with specific amounts and dates, with measurables, you will reach it. 2. Stay Sharp You must stay current with new ways of conducting business in the world in real estate. This means keeping up with podcasts, reading the trade journals, and attending conferences and meetings in person. If you don't stay sharp, you will be doomed to follow other people's bad advice. Gaining new knowledge will help make you a better investor. 3. Don’t Speculate In my experience, it seems that there are many people that have not learned the lessons from the crash of 2007 / 2008; it is dangerous to speculate on deals and chase appreciation. It may be a quick way to build wealth on paper, but if you plan on building anything long-term, it's best to rely on cash flow and force the appreciation of a deal that you are buying. To clarify, I'm referring to making renovations, adding amenities that tenants enjoy, and driving gross revenue that will impact the overall valuation of the property. In addition, building a strong property management team around that asset will maintain higher occupancy and keep tenants from moving which will also positively impact the net operating income. Buying a property and waiting without performing any work to improve it is wasting time and money. 4. Cash Flow is King I've mentioned this in previous videos, but cash flow is always king. When all of your gross income can cover your expenses and debt, you have positive cash flow. This allows you to take down more deals, your portfolio, and increase your net worth. Never get into a deal where you have to kick up extra cash to cover the debt obligation. Every deal must stand up on its own even if your vacancy tips a little bit. Cash flow is always king. 5. Be Always In Buying Mode If you commit to becoming a real estate entrepreneur, you are always watching the market and looking for opportunities. While I am primarily buying in Ohio, I keep my eyes open for deals outside of my target state. I am watching for deals but I am also looking to see how my market is priced versus other markets of similar sizes. I am also checking out secondary and tertiary markets to see how they perform. We have a hot market today, but I am actively looking for and taking down deals. The great thing about the United States is that there are so many great markets and each one moves independently of the others depending on what is going on locally. This means that even though things are blowing up in Cleveland, the market in Nashville may be slowing down. Set up your targets, learn them well and stay engaged in those markets to be ready to take down a deal no matter where the economy at large is. Anyway, those are the first 5 of my 10 rules for successful real estate investing. Check out the second part the the rest of the rules. Remember, as long as you have positive cash flow and operationally, the property is performing, you will be able to scale and grow your real estate business. If you like the content, check out our podcast on iTunes and Stitcher and subscribe to the new YouTube channel. We are working on getting new content out all the time to help you build your success in the world of multifamily.