Hey welcome back to the podcast. I am so excited about today's guest, daniel blackwell aka multi-family socal in the house, daniel, how you doing pal i'm doing great tom. I'm doing great thanks for having me, of course man. So you know you and i had the good fortune of working together for a while, and i have just been a super fan of your work so for people that don't have context like give him just a little bit of background.

I mean obviously you're a superstar at cbre. You are like a legend in the multi-family space, just crushing um, but give them a little backstory. So they have context because you weren't always this rock star, true true, so i'm 39 years old and i've been living in california for 14 years. I first got in my tahoe.

I was living in north carolina, never thought i'd, venture west and um the market crashed. No eight i got my tahoe and drove west came out of california, where i could specialize in multi-family big big market, big opportunity. I wanted to go see if i can play with big boys on the west coast drove out here. Two months later, i was living in my car yeah in the parking lot of the brokerage office working out at the gym showering at the gym, working at starbucks struggle struggle, struggle, waiting tables, pouring coffee and just put my head down and looking back.

It was a great time to enter the business, was really really tough right and mentally. I got really tough and that was 2008 910. The market started taking off and i had built some relationships, but i didn't know any street i didn't know any school. I didn't know any anybody yeah and it was just hard work.

So that's the back story, hey. How did you even get the job and at what point did they discover hey this guy's like living in his car in the parking lot? Did they ever figured it out? He did. They did some of the guys in the bullpen told the manager - hey uh, this guy from north carolina is living in his car in the parking lot. It's kind of weird you know, like the manager actually pulled me in his office, big italian guy, big family, and he pulls me and goes hey.

I i know you're living in your car is everything: okay, everything's, fine. I actually feel good. I got out of some. You know some responsibilities financially and i'm fine, i'm going to you know he's like you're going to come, live with me and i immediately been with him for three months.

He recruited me from north carolina yeah. I i came out. You know i was begging for a job. The market was starting to sour.

You know i was on 100 commission, he said fine i'll, give you a shot and um. You know i just stuck with it, but i think he felt a little guilty. Bringing me out. You know, and then i lived - i lived with him for three months.

I'd come home at uh at his house at 10, 10 30 at night, and there would be food in the microwave. He said: hey put minute minute 30 on eat the food. You know clean. The plate, and then you know, i was out the door at 5 30 in the morning, so i was there.

They were in bed. I was out before they woke up. You know uh that manager, god bless him, had a choice, cause some people in that same situation. Just say: hey i'm cutting bait.

So there was clearly something about you that he saw there's a reason why, in the interview process, he said yes um, so that was 14 years ago. Right i mean when you look at what you've accomplished in 14 years. You know i i hope you wake up in the morning and pinch yourself even on a bad day, if a deal's falling apart and remind yourself how blessed you truly are. Yes, i am very, very grateful and you know all the goals that i wrote down.

You know 10 12 years ago, if i could just focus on the business, if i could just give this 100 of my time, if i could ever own units, if i get over cash flow, if i could ever have cash flow goals like i'm there now and You're right because you always want to keep striving, but you got to check yourself and you know, experience the gratitude. So so, let's talk about um, just maybe going back four or five years ago right, so you know you're you're! Now you know nine years in you're established you're a good broker, you're doing deals right, you're, making money um, and i think about you know like the time that we met kind of like 2018 2019. I want to talk about video specifically because you know so many people in commercial real estate just crush video, so i know you were feeling behind at the time right. I i know right like if there was ever a time to do video.

I think we, you know it was very obvious. In 2015, 16 17., i was late in the party right and you clipped in in 1819 covet hits in 20 and i'm like all right this video thing. I can't go on any meetings. I can't go and meet.

You know the frequency of people i was meeting. So how am i going to connect so there was like no excuse. I had no other excuse in my head to not do it so 20. I just leaned in i went in on video, and you know it was some of the most frustrating things.

I've ever done was video. You know, i'm sure everybody goes through it when you're when you're getting started and getting rolling yeah. You know the audio is not working or this you know didn't go out right or this i was chewing gum one time at a tour and one of the comments was dude. You're chewing gum in the middle of a here's, a 40.

You know unit building for 15 million bucks yep so but talk. Let's talk about specifically the shows, because i think you know i've watched. I mean i continue to watch your content and you know it's. It's a i'm just super proud of you and b.

It's just a great way to like to listen and learn and find out what's going on in multifamily, so talk about, like maybe the moment or the show where you realized wait a minute like there's something here. This is real. Do you remember that moment? I do. I do so in covid, not a lot of people are paying rent, or at least that was the worry within the marketplace with landlords they're like oh, my god, what's going on, there's all these eviction moratoriums.

Now it's kind of like flip, where the tenant tenant's more protected than a landlord. The tenant doesn't have to pay rent, but i still got to pay my mortgage and all these worries and i've always wanted to help people, and i said this is great time in video to help people i'm going to start pulling. I've already got all the data. Let me go ahead and get all the rents within the marketplace: survey, larger buildings, smaller buildings in various markets, and pull all that information together and shoot a video and talk about rent collections.

And what i found was. I did that in march of 2020, and i did it every single month for just about a year and a half yep, and i put the information out and people started reaching out and saying. Wow in the rent collections were like 92 95 99. It was in the high 90s, so i think it cleared a lot of worries from people because they didn't other owners didn't know what other owners were doing or how they were.

You know performing in their buildings. So that was the aha moment. People reached out more people wanted to share their information on their books and let people know what they're doing yeah and i was able to help other people, but it instilled confidence within the marketplace and a lot of people really appreciated that they said. Hey.

That's great. You know, and then there was more ideas coming from that clients were like. Well hey. Can you do a video on this subject or this subject and there's, like you said you know we're joking about it.

I mean nobody on the commercial space is doing it right right, it's kind of like a blank canvas. I could just go for it. So looking back right, i remember i forget the association, but somebody said you know hey. We do you mind if we post your video like on our website, and it was one of those like nationwide multi-family.

You know, associations like what what was that like for you, oh that was, that was amazing. It was just confirming what you know. I wanted what i was already doing. Yes and you know other people sharing it on their platforms.

That's what it's all about right, so it was great and that helped a lot of people follow and subscribe, join the newsletter yeah and then they're getting direct content. So so a lot of people will say: okay. That was a great moment in time, and you know he brought a lot of value to the marketplace, but did he do more deals because of it? Did he actually get any listings or transactions direct from it? So yeah, i know you track and measure everything give us give us a little insight on at what point did it? Finally, click where it went from i'm putting out this content, trying to be an educator to i'm now getting meetings and appointments and listings and buyers and deals. Oh well, the first call i remember the first call, because you know you, you usually you know somebody's and you've already built a relationship with them.

Then they watch your videos and then you kind of do a deal with them. You can't really associate well the video kind of was the deciding factor, but there was one where we have over 10 000 emails within our database and a lot of those have been added to our agent team. So we posted the rent collection videos. We started doing hey just listed just souls and pushing out those videos, and i got a call out of the blue and it's from somebody that was not in my sphere and said.

My name is john. You don't know who i am, but i own in laguna beach. I have a couple small fourplexes and i want to buy another property and i want you to represent me. I said okay well great, he says i've already found the property, and it's this little.

Two million dollar property in costa mesa and i've already got it. I want you to call the agent represent me, and i just that was a direct like okay. That has that's not in my sphere. I can't totally assign that to video that was 100 video and we put that we put that deal together and actually had him do a testimonial on video he's.

Like sure you know so i that was the start of it. That was the first time i was like wow there's, actually direct revenue and then since then, you know we're posting uh renovation, videos we're probably 1031 videos, investor videos like how they got started their story. And now it's more you know inbound yeah, yeah yeah. So what would be your advice if you were, if you were talking to a bunch of you, know mortgage lenders? Listening to this, you know residential agents, team leaders who are just oh the time and video, and how do i get the right content like? Do you think, there's something special about your content that resi could use, or even the lenders could use a hundred percent 100.

You know with lenders like it's funny. You say that because i haven't seen in my world a lender posting this information going out and sharing where the best deals or what rates they've got done or walking through a property or just showing some tips right. You know hey before you fill out an application. You need to have these few things done so right.

That would be huge. That would be huge as far as rezzy i mean coming up with ideas. You know we empowered our team, i started doing it, but the team i started. Empowering the team hey throw out some ideas.

What do you think you know? Other people started following other people and that would inspire an idea. We'd talk about it. You know, there's still a long list of video ideas. We didn't execute on yeah, but i think empowering the team.

You know the videos, the videos are great, but what i also didn't want to do is go completely to the other side of it. Where i'm not doing enough deals, it's hurting yeah right yeah. You got to balance it, you got to balance it, so i would say like one to two videos a week. You know start at one and just get on that.

Cadence get on that frequency right and then you have social accountability yep to like continue and get it going so yeah one one's a lot. That's fine, like you, don't need to do 37 pieces of content a day or whatever it is yeah. Just do one video! A week and that's just get there talk about distribution like how are you getting all of your content out? What platforms you put it on? What do you not put it on give us some context around that so linkedin's big yeah, the commercial world yep, so we go heavy on linkedin, heavy on instagram and then heavy on youtube yeah. So those are the three i haven't really explored any i mean that feeds to facebook yeah, but it's mainly youtube and then we're pushing out to our investor list.

That's over ten thousand emails, so we're like directly marketing to them right through those channels. So so i'm on your email list and i'm trying to think of you know, like typically you know it's the cbre logo green. You know, and it's usually like a photo of you with a you - know the like play here: button right ready to rock um, but i don't recall now, as i'm sitting here, i think they go direct to youtube. I think you usually direct me to youtube.

So, that's that's the focus, that's the focus, okay and and what about your like? Like do you track and measure against your email list? I mean because are you sending a weekly email to 10 000 people with the video, but then there's you're doing listings and you're doing you know case studies around you know. Here's a deal had a ton of hair on it. This is how we solved it. Like you do a lot of that kind of stuff, which i think is always interesting, because people love that stuff, it also shows you're creative and you get done um but kind of knowing what you know now is there anything.

You'd have done differently with how you got the word out. I think so i i think it's just you know finding the right people to help you execute it is. Is the most important there's a lot of trial right um, but i think it's it's just one of those things. Videos like i should have done this three years ago, yeah yeah five years ago, yeah, it's one of those things yeah anything different.

Now i think, just getting started going for it. You know there's um, there's just so many people out there that uh just want really good information and right we're in the business daily, and you know we just assume that you know this is like, maybe not that important or whatever everybody doesn't know it or whatever. Yeah but there's we're the conduit in the market, there's so many people that don't talk to other owners. You know, even if we put on an event and we get 30 or 40 people together, they're just so excited to get to know one another and right connect and share information and share ideas.

So the demand is like so high to just do this. So i think it's i wish i would have got started sooner. So i'm going to make this statement and you know i make it with the utmost respect. I work with a lot of creatives.

A lot of, like you, know, video creative cinematography, like they're, just that they're out and they're just they're their personalities, sometimes they're, just larger than life. You are this north carolina buttoned up, like you, know, hairs high and tight, like very focused, very commercial, real estate broker and you're slaying it on video. Now i know you have a personality but like when you start talking you're like we're at 93 rent collection. It's very much like today in the news, walter cronkite, you know, bam bam, bam bam.

Do you? Do you think that that is i mean? Obviously it works. It resonates with your clients. Do you think, there's a different approach that could be had or do you think because it's commercial, real estate people are like? I don't want him to be like crazy. I want him to just you know, drive in his car and show me the deal you know.

I think, as video look at some people are natural with it. Some people are not, i think it's just you know from the first video you look back you're like oh, my god i was chewing gum or like i was terrible. I wouldn't say i'm like no mike no microphone, you know like bad lighting. Yes, exactly so like i've gotten better on some of those things, but i think that the personality and like just being fully authentic is not fulfilled.

Yet just candidly because you're still kind of thinking about how you're coming off and yeah, i think people just want you to be you, but sometimes it's a little hard in front of camera yeah. But i think that's slowly. Coming out i mean i'm not going to be doing like cartwheels in front of a building or anything wild, but uh yeah yeah, i think just being yourself. So when you go in front of somebody, it's just they feel like they already know you.

It's not like. You're someone different, you know bingo yeah, i mean that's. That is the answer man, so so one of the things i think you shine at is these interviews you're doing whether it is i clicked on one. The other day, like the guy, started a new fund that he was out, gobbling up properties um like what was the inspiration behind the interviews and how are they? How are they performing in your opinion, they're performing better than pretty much any other bit video, and you know when i first got in the business back to like 14 years ago.

You come out here. You start pulling out all these comps. All these sales you're, like whoa this guy, this woman, started with a four unit building and now she exchanged all the way to a thousand units. I want to know the story right right, or this person owns 20 000 units.

They came from nothing like. What's the story, so i was always blown away because eventually i wanted to be an investor on the other side of the telephone right, be somebody like that and have a great journey and story. So i think it's if i could somehow pull just a few of those people into a room and just say: hey, share your story, yeah. How did you go from here to there? What was it like? How do you know when to sell and to buy and grow a portfolio right? So i think it's just for my own want and need yeah.

You know to learn, but then other people are going to want the same thing too. So um it's just and there's been a lot of people with some explosive growth in a very short period of time. So right it just stemmed from there. Some people are cool with getting on camera and doing it.

Some aren't so yeah yeah, but i can tell you you're, you know you have a natural sort of grace and style that i you know just you know as an observer and someone that watches a lot of content creates a lot of content. I feel like it's very easy for them to answer the questions right that you know you're you're kind of right there patiently with them. Saying tell me more about that like how else do you do that, so so kudos to you man? So let's go a different direction: dan, there's a good chance that someone is listening right now, who last year sold 75 homes a hundred homes, 500 homes? And yet i say to them, you know the fastest way to become an investor, is to refinance your house and go buy something new and congratulations. You now own one unit or i tell them, because it's just the financing ability to buy a duplex, a triplex or a fourplex in your marketplace, and and these are smart, highly productive, residential, real estate agents, running teams or not killing it on deals.

But then i say now go buy one and they look at me with like x's on their eyes. So i'd love for you to just unpack. For us. I actually wrote down literally from sourcing deals selection criteria, what you look for when you're walking it due diligence, negotiation tips, rehabbing raising rents like if we literally went through and there's probably six more inside that you're thinking of.

If we went through one a time and just said, let's just give people like what they should be doing to go find their next deal, because i'm arguing with inflation being very real right now. Only since 1970, the greatest hedge against inflation is real estate. So so, let's unpack it like what would you tell somebody like? How would you tell them to go about finding deals, sourcing deals off market on market etc? So i kind of broke down some of the things that i've found to help me get deals. You know believe it or not: it's from the smaller buy size deals the mls just getting the alert when you get it sent to your phone, the mls we have here, it's probably like everywhere else.

It's real time yep, so i purchased three or four fourplexes. Just off the mls yep and where it's just right property right place right time. I already know the market and go in and i work with that agent. I let them represent me tomorrow.

I don't act as an agent yeah. I want to get a two and a half or three percent fee and then put yourself at a disadvantage. You wanted to be just a buyer, easy buyer to agent, so yeah the mls. It's just been a constant.

You know deal source so that was that was number one i didn't expect. It would be the mls yeah get on the alerts, so number two is buying with investors and partners. So as i bought my first building and my second building and third building, as i'm brokering, some of the buyers have said: hey dan, can you co-invest in this deal? Would you be open to co-investing? In this case there might be co-investment opportunities as you grow. There might be an investor that might need a little bit of hand holding and want you to stay in the deal.

Maybe you guys get along really well and that can grow and turn into something great. So and just curious, are you kicking in your fees as a part of the deal or bringing in cash, diff or combination of that's a great question i bring in new money, i bring in cash all the fees run through cb, i get paid, pay taxes and Then buy so it just depends on if you're at another shop - and you can do that, if you're an independent, you can roll your fees, that's even better yeah, so um another thing is agent referrals. You know, i i think it's yeah. It's obvious.

You know you want to get agent referrals, but after you start buying a few properties, especially if you're buying in a certain area. You know if you buy, let's use it within southern california. You know if you buy a property in la you, buy a property in orange county and then in one empire, you're, not really identifiable in the marketplace. But if you're buying like three or four properties in the same city in costa mesa, other agents are going to realize: well tom ferry's, probably a likely buyer for this new building that i have i'll just give him a call.

So i think that's been big for me, not everybody's, going to call an active apartment broker and tell them about a new listing they have but but but but some agents will i mean they have through multi-family soak out they've reached out and said hey. I got something so pay attention to the referrals. I think the focus being focused you know being on the front lines every day within the market. Uh you're gon na see things happen sometimes before the open market knows about it.

You're not gon na get access to every deal, but i think specializing and staying focused, there's just that could result into one deal a year just by just by focusing a lot of commercial agents. They just they don't specialize and it can kind of you're going to miss the good opportunity right beneath your nose. So when you say specialized, do you mean, like you know, geography, zip code territory? Just for you know for context for people yes, location and deal size. You know when i first started it was anaheim.

It was like five units to 50 units. I didn't look at anything below or above and i just went deep. I literally walked every building took photos yeah. I knew that i knew the age, the building the owners.

So when something popped up, i kind of had some of the back story on the deal 100, and then i mean this goes without saying. But it's just a reminder. You know we're all the people that are watching that are agents. You know we all want to work with a good buyer.

We all want to make sure they do what they say. They're going to do, and i think, if we're going to be a buyer, we need to be doing the same exact thing. We need to be an easy buyer. We need to be acting with integrity and doing what we say we're going to do it's just that simple, sometimes, agents you can just over negotiate a deal, and it's just not the time to do that.

I think that's a, i think. That's a great insight like you. Don't have to be the lead on these deals, but then someone's going to say well damn, but how do i find those people yeah? So i found them just because i was selling apartment real estate in southern california, so i was selling to some of these syndicators and some of these group partnership deals right and i didn't go. I didn't have a lot of cash.

I think my first deal i put 20 000 into a right million dollar apartment building yeah and i still been invested in that deal. They've refinanced, the property twice: i've gotten 75 80 percent of my initial money back on the refinances plus a small 200 yeah recorder, or something like that. But right it was been a great deal. But that was my first year.

I didn't have to save up hundreds of thousands of dollars to go put down so little blocks dan. I got to tell you i'm so grateful. You said that story and not like. Oh, i put like 300 into this.

No, you put 20 grand in and you get 200 bucks a quarter and you got 75 of your money back already from the refi like, like that's a perfect example. So is there, like, you, know like if i was going to invest in startups? There's a lot of different syndication sites. You can go to there's a lot of syndication deals and i know there's a ton also in multi-family and other commercial sectors, but is there a site or two you recommend or a place that you would say hey you want to go here or, like you want To ask this attorney or that attorney in your marketplace. You know who's doing these deals.

You know there are the big. There are the big groups, the reits and the reits and everything and i kind of went with the smaller, i wouldn't say, mom and pop, but like the the more local markets indicator that yep it's more kind of like friends and family co-investments yep. But there's a group and i've got it on my to-do list. There's a group um called the tides and i have not invested with them.

I don't know these guys, but they are buying a lot of real estate. They have bought in texas a lot they've bought in phoenix a lot. They've done a lot of deals, but i just had it as a hey: look, go and invest on one of their next deals. Right just go put 50, whatever their minimum is the tides equities um every building they buy is called the tides at such and such so there's big, there's big groups like that, but i i had a little bit more inside baseball.

If you will to where i knew, who had a great reputation who was buying good real estate and had other people were saying good things about them, so i put my money with those folks yeah. You know um, but if you don't have that um, you know. That's i would start with the tides or there's a few others out there, but that's the only one that i can think of right now and maybe just go to your local. You know commercial, real estate broker and say hey who who handles multi-family in our marketplace.

Right, there's all there's always this at the bigger shops. There's always going to be somebody, you know jll or you guys right, they're going to say. Oh yeah, go talk to you know martha over there like she crushes it and she may know. But let's say let's say that they're just they're in market and they're driving through, like i think of like um, you know costa, mesa or anaheim, or you know other spots where it's pretty dense and there's a bunch of these.

You know multi-family deals. You know, let's just say that they identify something: what's what's your process to go through and really make sure that this deal is right. The first thing what i would do is i mean deciding on deals. You know i always have kept my pencil sharp and i would always run numbers and it's just being focused within those cities.

The market that you're talking about is orange county. You know i've i've, i've sized up over a thousand multi-family properties in in the county. So i kind of know when something's priced right, yep and might be you know a great opportunity. So i would say the biggest thing is there's two things, one.

It's like the fixer-upper, that's like totally mismanaged in a good location. You know those are the things if i'm driving the market, i'm kind of getting a feel for things. That's like the perfect value at apartment property that you could acquire it might not. Cash flow very well right away, yeah, but you could build a lot of appreciation in forced equity by getting good management on the property having some of those units turns and taking those rents to market and if you're buying in a good area, you can't you can Fix the property, but you can't fix the area, so i think that's that's like a great entry point for somebody.

If it kind of hits those criteria. I found a couple of those properties literally down the street, a couple blocks from where i lived where there was again there was no excuse yeah, i felt really good about it. It was very hard properties to replicate on the market, so it wasn't it's hard to kind of like say what numbers um, but those properties you know on on on paper. They didn't even really make a whole lot of sense.

You know i mean sometimes when you're buying these small little plexes um it just it's hard for them to really pencil. You know and and that's what you got ta weigh. I could go put my money in an lp deal and make maybe five seven. Eight percent cash on cash yeah or i can go put it into something on my own deal and maybe i don't make any money on just put money back into it.

But then now there's this huge upside in radiation right. So but i think, don't you think. That's part of the selection process like it's it's you know, taxes, cash flow or appreciation and when you can get the holy trifecta right, especially especially if you can go in like we just bought a nine plaques um near our place in dallas - and it was the Same thing i, like i, i walked up. I looked at my wife and i'm like i'll.

Take it she's like let's, let's walk the units first and i'm like the brand new like luxury five-star hotel is gon na, be four blocks away. These units are basically shitty, but this is a really nice neighborhood. I'm like this is a no-brainer right and like we can raise every one of the rents and we're you know doing little cleanups cut. I mean your process right, just going through cleaning up sort of one unit at a time.

Raising the rents right not not egregious raises rights want to take care of the tenants, especially ones that have been there for a long time, but, like i knew like it was all three for us, even texas, because texas with taxes is a little wonky right on Real estate, but it's not worked out. Oh that's awesome, but what would you like so so break it down for us like? What's your process or you know, is it just appreciation because you're in southern california - and you know it's there? Yes, i think it is a lot of appreciation because i don't have a sizable amount of cash to go, buy a stabilized building. If you did, you can go, buy a stabilized building, that's still a good deal. You could buy it from one of these syndicators right where you're going in cash flow might be five six percent cash on cash return in southern california.

You don't have to put a lot of capex into the building yeah, but for me i need to kind of grow my equity a little bit more. So i go. I flock towards the appreciation properties and then i want a 1031 exchange into a stabilized deal. Once i build up enough equity and then the cash flow starts coming in then, but you could absolutely buy.

You know if you wanted to buy like a fixed up property. If you can get in, i would say the best location. It's almost like you know you buy. You buy the so-so deal in the best location.

You possibly can it's really hard to build workforce housing, especially in southern california, right we can still do these deals below replacement costs. So if you buy a great property in a good location - and you can get it at a fair price - that's very, very, very compelling because that's very hard to do it's kind of like the warren buffett model, he's looking for these great companies right at a fair Price, it's the same thing as an apartment house. You know you want to make sure you're getting the best location, because you can't fix that. You can always do these little light value ads.

So i i look at the four main things i look at price per unit. I look at price per square foot. I look at the grm the times gross the gross certain multiplier and i look at the cap rate. You know if i was going into another market - maybe i didn't have as much intimate knowledge on, let's just say if it was like north uh, northern california, i would probably look at where i could get like a 200 basis.

Point spread on my cap rate. So if i'm buying out of four - and i can take it to a six yeah - i think that's pretty good. I would probably look at a few different deals to see what the market's kind of doing, but you know a lot of syndicators. Look at that.

You know they want 150 to 200 basis, point spread on the current cap rate to market cap rate yeah yeah. So my brain's going like a hundred different directions, but it's just super. I mean it's so much fun just to talk to you about this stuff, so uh talk about 1031 exchange. Well, actually, i want to go back to rehab first and then i want to go 1031 exchanges, so like fall in sort of the chain, so when you're rehabbing a place like do you have like a set amount? Hey i paid i'm making up these numbers.

I paid 175 a door and i will put no more than x into it like. What's your like? What's your formula, you know because i see these people that, like they start rehabbing and it's like it's their freaking house and i'm like new like like that's at least my model, you know yeah. No, that's really good questions, and i you know i've turned probably 10 units on my own yeah, where i'm hiring hiring out. You know subbing out everything, i'm not physically doing it, but i'm running it as the gc yeah.

Now i have a project manager helping me, which has been helpful, so i can focus on brokerage right, but you know the biggest things is getting a standardized turn and we're still pretty getting it pretty tight, but we're still finalizing our standardized turn. What does that mean? What does that mean to you like? Give it give us the non-commercial lingo like standardized turn? Oh, we got, this is the cabinets. This is the paint. This is the trim.

This is the door. This is the door knobs. This is the shower closure. This is the vanity.

This is the mirror. You know like literally going through it and getting that standardized turn and trying to provide the best product we can, but it's got to make mathematical sense. So, there's a workforce, housing standardized turn that we're coming up with yep. So we're we're in a market that we got to be sensitive to what we can take the rents to yeah.

We can only spend so much so that one's around twenty thousand bucks yeah it's a standardized term for workforce housing, we're we're doing pretty good there. That's that's been the easier one to kind of uh replicate yeah the harder one is when you're in this, like kind of coastal market, where you could literally spend twice that and you can get the rents way higher. So you get a better return on cost right and we've had cost overruns like crazy on those sure, but you know we bought i i say we it's a team thing, but i i bought these deals right. So if i'm going cost overrun, i know it's not smart, but i'm okay with it just because you make your money on the buy right, um, but but we're standardizing.

Those turns the biggest thing that i talked about was like the return on cost. So back to these syndicator groups, they're looking at you know when they're raised money for lp investors and they put their money to work they're, the ones that have the model we're just learning from them on what to do so. They look at it as a return on cost if they can get their. Let's just say they can raise rents by take the rent from two thousand dollars a month, three thousand dollars a month once they renovate it.

That's a thousand bucks. I mean that's a little more excessive, but i'm using that for an example, so that cost them 25 000. For that turn, that'd be a 25 return on cost yep, so that and that's just on a monthly level. That's not even at an annualized level, so um that would be a no-brainer.

They could put a tenant in there if that tenant stayed for a pretty short period of time. You know they're, already gon na get their money back. So what is their return on their cost yeah? So that's what they look at when they go to these certain markets, so um i'm paying more than that, but i would say if you can get your money back within four to five years: yeah. That's probably a really good kind of situation, a good rule of thumb, yeah, you get your money back in a year or two, that's like a no-brainer right.

So speaking of because that leads nicely into you know 1031 exchanges right so um there seems to be like i'm one of my uh partners, we're working on this project together and and the thought is sell, nothing ever right. And then i have other friends and deals that are like hey man. We're buying in you know, x, city in you, know, texas, and everything is going that direction. We're buying a nice unit in a crappy location.

That's just in the path of progress right like it's. Just it's just going to get better, whether it's five years or 10 years and as soon as we see it, go from here to there we turn 31 and we go out to the next one like what like. What's your like? What's your take like? What's your rule of thumb around, you know, do you want to hold everything? Doesn't sound like it sounds like you want to keep moving into bigger and you know more larger deals which what's your thoughts, i think naturally like in my gut i'm a whole guy. You know i'm like buy a car got a nice car.

I don't want to sell. I want i'm not a every year kind of you know. So it's the same thing with the apartments or the house that i'm living in yeah, you know hold it. Don't ever sell a lot of these people that come in and out of deals, you know they do that in their business they look back 10 years.

They're, like i shouldn't, have sold anything right right. We're always going to hear that right, like anybody, we talked to hey. What would you have done if they were in their career for 30, 40 years in real estate? What would you have done differently? Everyone almost said i would have bought more real estate. I should have never sold, but the reality is just going back to my little situation.

I have to use the 1031 exchange right. That is the like best thing that i can do to grow my wealth, that's how we help investors grow their wealth. I i am only going to make so much in brokerage. That's only going to buy so much real estate right.

How does that look like if i never sold? What does it look like, let's model that out for 10 years? What does it look like? But if i 1031 exchange and grow and build it up to where maybe you start getting some assets when you get up to scale, if you start getting within southern california, you know 30 50 unit of party buildings. You probably don't really want to sell those, because it's so hard to replicate that again, you know if you've got some four units and six units, those are okay, some, it's okay to maybe sell a couple of those to get to those bigger buildings yeah and when You get to that level, then you just cash out refi, every seven, so numbers plus or minus and buy more. Is there a reason why monopoly stops at hotels? I think we just answered it right. You just you know you stop with the bigger projects um.

So go in a totally different direction. First of all, this actually felt like more of like a nerd wallet interview which i love like. Do you ever look at uh? Do you know nerdwall at the site? Oh man, you should check it out. They yeah.

They should interview they do they do so much on real estate investing and just a shout out to those guys uh. You know if you're listening this and you've never gone to their wallet site. I am a paid subscriber. I listen to a bunch of the podcasts.

They, you know, they'll, hey, we're interviewing today, uh this 18 year old, who now owns 73 units, and he did it all off-market deals with seller financing, you're like what and they're just they're just it's just one story after another of like you can do this. You know what i mean and then and then a lot of tactical stuff like you're talking about here, so i would definitely check it out. What do you think is the state of multi-family like where do you? Where do you think it goes from here? Like you know the next 10 years, what's it going to look like we got to buy as much multiple real estate as we can? I mean the the fundamentals just from you know when i first got into business, i was reading books about you know getting started in multi-family real estate, and one of the things that i can remember was the these apartment. Buildings have been around most of the departments in southern california have built in the 50s and 60s, so the people that were in the book.

This is what it related to the people that were living in those apartments back in the 50s and 60s and 70s worked for companies. They had jobs, some of those jobs and companies are no longer around anymore. Maybe they sold or they closed up, yeah guess. What's still there, the apartment, building that they're living in it's still functional, we can still rent it out today, especially where there's a housing crisis like here in southern california or practically throughout the united states, now yeah everywhere yep.

So i mean people need a place to live until elon or somebody else comes up and changes how we live yeah. I i just i i think it's a very safe and smart long-term play. We'll probably have some some ripples in the water here and there, but i i think it's a great market. You know it's not a it's, not a get rich, quick, it's a get rich for sure.

Most likely, i mean look at all the people from various parts of life that are wealthy through real estate and multi-family. So i i couldn't be more bullish about it yeah. I i agree: what about um financing? What what tips hacks you know recommendations. Would you make if somebody was like going out to finance there for, like, let's say outside of a four-plex where the financing is a little less traditional? Let's do you know fourplex and outside of that so yeah so outside of that, you know you.

The best money is five, seven and ten-year money, and it just depends on where you are um, but you know your ten-year money. The prepayment penalties can be a little hefty, so that's about as long as as people want to lock in 10-year money. The banks continue. Your money, but they can kind of get you with yield maintenance, so i would stay with stay away with anything that has yield maintenance in it.

If you're, a newer investor, i've seen a lot of people in the last downturn they wanted to sell and these pre-payment algorithms came back and they were like serious serious levels like six-figure, sometimes seven-figure prepayment penalties. So i would stay away from yield maintenance. If you do that, uh, at least for starters - but i like seven year money because five comes a little too quick and you get an extra couple years for seven and the interest rate. Isn't that much higher? You know? Maybe they charge you 10 or 15 basis points higher.

So i, like the seven that's kind of the sweet spot. That's i think the most popular product we see out there yeah your ltbs. It just depends on your debt coverage ratios on where you are in in the united states. You know here you're having to put 40 50 down right right right.

So you know i that's tough, because your money just doesn't buy you a whole lot. You know you've got to put so much down to get something in southern california, but it's also. If there are some ripples in the water you're you've got a lot of equity. You know you're not going to get squeezed so the 75 percent.

I don't like putting any you know, that's the max leverage you can get sometimes 80. yeah. I just i like at least having 25 equity in a deal, and i i don't want to be the most creative finance guy in the world, because that's how you can get in trouble, that's really how you can get in trouble in multi-family real estate. I agree.

Finance yeah. I had a friend up in canada who uh who, over leveraged and by the time he called me and asking for help. It was. Can you please like loan me? Every dollar you've ever had and then some because the bank's calling and saying uh hey this, like i mean he was literally at like you, know, 15 down at like 3 000 units and the bank just called one like one bank just called and said this doesn't Work for us anymore, i mean it was true.

It was tragic because he's a super human being and he was hey, he was getting deals that they were offering. You know they were saying: go, buy more man, keep up the good work and then one day they called and said no moss right. This was, and you could you could imagine when seven eight nine right like it was. It was a tough road.

It was a tough road, so i like your thinking, i actually would tell people 30 down and and everything and everything cash flows, the more money you put down everything cash flows. But, like again, do you want? Do you want the cash you not want the cash? That goes back to probably a good question for your cpa, so so we covered multi-family. We talked a little financing. We talked about sort of you know video, which again i'm just beyond proud.

I think everybody needs to follow him uh. You know multi-family socal, certainly on instagram same thing on youtube. Right right, i think you'll, you, you know some of you out. There will see again, like he has a nice body of work now right over the last couple years.

It's a nice body of a couple hundred videos, i'm guessing yeah yeah getting to 200. right. I finally got there tom, you did it, you did it man, i'm so proud, i'm so proud, like i could lit. I remember like driving up dover and seeing you and your family like walking in a store, and i'm like that's my guy.

That's like he's he's, mr video. Now i love it um. Thank you for unpacking. You know the way you view you know deals and i like the idea about getting into syndications, as maybe like a small taste, a small amount that makes a ton of sense kind of just closing thoughts.

I mean you know you you've been around our community right. You've been to a bunch of events by the way, we're back to doing live events, and it's bonkers. You need to like you, you need to come, hang out, it's super the next one yeah so closing thoughts. What would you want to share with everybody out there? Listening, you know, i would just say, like we all have just so much opportunity within you know where we are.

It doesn't matter where you know just being in the united states having the opportunity to be through working with tom. I mean tom. Look, i'm just super grateful when the cove hit and we were coached together and we just leaned in and we crushed it and everything me and you talk about you share with your entire audience all the there's. Just you share everything and i think there's just so much opportunity.

I would just say if all of us as agents i could do a better job is just taking advantage of what you already put out. If we could just do a little bit more yeah. That's all i would say i appreciate that man, it's execution, always always prioritization and execution all right. Well db.

I appreciate you, you know the oh, the only question i didn't get asked. I would ask it: how does cbre feel about all these videos you're pumping out? I think they like it, you know they like it as long as i uh. You know when in doubt on any deal, you disclose everything you make sure we're above board transparent, treating people with respect yeah. So you know they love the videos and uh it it.

It's been great, so that's awesome more to come. We're gon na turn up more frequency. I can't wait man. I can't wait to watch well.

Thank you so much for being on the show and for all my friends out there make sure you follow him check out his youtube channel for sure, maybe linkedin, absolutely instagram, uh daniel, appreciate it man you're the best i'll, see you soon, thanks for having me on. Take care tom thanks, bud, see ya, you.