Building a Multifamily Portfolio: Strategies and Insights from Texas Investments

Hey, multi family strategy. It's Christian. Today, you're going to follow me into the field as we walk a property for an inspection. I also want to show you how how we're finding so many different deals. So, I will show you how we took over a city like we've done in Stevenville and Waco, Texas, now in Long View, like I started in Moses Lake. Today, I'm going to take you to Abene, Texas, where we already have hundreds of units. I'm going to show you a walkthrough of a 100 unit that we're doing right now. A bunch of other deals we're working on. I'll even show you the 80 unit that we're already under contract for out there. But there is so much opportunity. I want to talk about why it is coming up, how it applies to you, and what it really looks like, and what you need to do to put together a multiund portfolio over the next couple years. Follow me. I'll see you in the field. Hello, YouTube. We are back in Abalene, Texas. This is 105 unit. Yes, we're also under contract for an 80. This one is going to be a little bit more of a project. I want to walk you around what is actively available in markets all over Texas and in fact all over the country. I want to show you what it looks like to take over a city. So, on today's episode, I'm going to walk you through the building that we are looking at buying right now. We're on inspection. I'll walk you through the other building that we are closing on right now. I'll walk you through over 250 units that we have purchased. We've done it all in the last 2 years. The opportunities are out here. I'm going to talk about how we're finding them, how you can find them, and as a bonus, you can actually see the portfolio that we're building in real time. Caveat, this one is the project that we're looking on taking on. So, if you're like, "Hey, this building that you're in looks a little bit rough." Uh, yes. This has uh there's going to get a lot of cash injected. First of all, check this out. This building is twotory. We're talking long hallways, 105 units, one beds, and studios. I got the team in there doing inspection. So, you might see some common recurring characters from this channel in the lobby. But, we found this deal. This was on market. Broker brought it to us. Nothing all that interesting or sexy. It happens to be 1 and a half minute drive from the nicest property I own in Abalene, Texas, the 55 plus community, 80 units, Anson Park Senior. We'll walk there next. One thing I really do like about this building though, they've optimized a lot of little things down from like the way the utilities are run, the repairs that they have already done to the building, the vending machines out front, and they're maintaining 96% occupancy. That's a really good place to be. Now, this building has not one but two elevators, which will take my total elevator counts to three in my portfolio. And while my mission is not to collect elevators, it does kind of feel cool to be at a scale in business where picking up heavy machinery, tractors, golf carts, and elevators is just part of the normal day-to-day job. I started in the 9 to5, which a lot of people who want to get into multif family uh started. It's just kind of cool going from a duplex to buildings exactly like this. Let's shoot upstairs. Also, talk about old elevators. Check this thing out. This is a old elevator. Our other elevators are very fancy. This one a little less so. Yeah, this is going to get a little bit of love. So, when you're buying deal, there's two different types of deal. There's really only two that you can buy. Ones that are really heavy on cash flow day one. So, you're buying something where there's an operations problem you're solving. And then there's properties where you have upside in the maintenance. If there's no project to do, generally speaking, there's no money to make in every business. You make money by solving problems, and that is exactly what we're doing here. So, on this, they've actually taken this really far from where it was 7 years ago. The current ownership, uh, they picked this up for a steal of a price. However, the project is not done. So, we're picking it up where they left off. This is a overall building that has a lot of positive momentum. Uh, really great tenant mix. Their collections are fantastic. So, they don't have an operating problem. they have a physical building condition problem. So, that is where we're making the money on this one. Uh, while there is day one cash flow, the main thing on this deal is the stabilization optimization. We're talking replacing windows, fixing the roof, redoing many of the pieces of flooring throughout the building, and updating things like fire extinguishers, which I've noticed are mostly missing throughout this building. It's just getting it all the way. They got this thing 90% to where it needs to be. It is completing the last 10% on the execution and moving the capital through to do so. tons of upside, but this is one of the only two tropes that you really see in today's market. You have high cash flow day one, but needs operation help or you have a deal that does cash flow, but it has a lot of upside because you are fixing a physical problem with the building. So, this one's physical. The last two projects we did in Naval are management. All of them you can make a bunch of money on. I generally recommend that if you are getting started in real estate, specialize in one of the two. This is an office at an 80 unit that we have. This is 2 minutes away from that property. When I talk about quality, this is where I typically work when I'm in Texas. Also, it's really fun to get to go through these offices and you like provide jobs that actually contribute to the economy. Like I'm going through my different offices and there's like humans working doing their job that we're providing jobs for. It's pretty cool. I really appreciate getting to do what we do and she has a beautiful office to work out of. The model that has worked for me has been really really simple. When deals are listed in a market that you want to buy in, and I was looking at Abling for a long time, you call the broker and you talk about the deal. You throw the price out. I don't care what they list it for. It's often just says unpriced. I have a conversation with them around the property that I would love to buy. I ask good intelligent questions, which is pretty easy to do. You just kind of let the broker sell you on the deal. And you just make enough calls, which is probably like two a day, to get to a point where you can reasonably submit one offer every week. I did not want to create a sales job for myself. So, what we ended up doing is coming up with an acquisition model that takes like 1 minute a day to find a deal and about 10 minutes of conversation when someone picks up the phone. I'm working like 15 minutes a day on actual acquisition and then once a month I like to get out into the field because I find this super fun. However, you can do the same thing from your desk. You can drive these markets on Google Maps. You don't have to be out here in person. You can be playing this game at 15 to 20 minutes a day. A little bit of time, less than you would spend in the gym to try to get in shape. Fixing your financial freedom, building a portfolio. The result is buildings like this, which we also purchased $0 out of pocket. And this was also a low down deal. We're just about to finish our refinance on this, less than a year after acquisition, and it's looking really, really lucrative. Uh, I love deals like this. It's not just about making money. It's also providing jobs and excellent housing. It's fun to be part of the economy. But if you're doing deals, why buy a duplex when you can buy stuff like this? This makes more topline income. These deals are available right now on the market. I'm going to drive you down one more block to a 144 unit building that we purchased and I'm going to share with you why these opportunities are showing up on market so aggressively right now And here we are in yet another office about a block or two down the road at Anson Park, the 144 unit. That's Caleb behind me. He actually found this deal. I just want to point out that guy back there was 22 years old when he found a 144 unit deal that we took out here together. He negotiated the original capital and while we partnered together to close this bad boy, our total investment in the deal was, let me count, oh yeah, that's right, uh, $0. Uh, these deals are available and they are on market. This one came up because again, we became an operator. So, as I walk through this campus, I want to share how you can actually do that. Because if you're listening right now, you might be thinking, "I'm not an operator today, so I can't buy these cool deals that Christian's talking about." When I was working at CoStar and I was in the office, while it's a cool office, uh, my experience in real estate was zero. Uh, also, my available capital to invest in real estate was about zero. I bought a house. I just got married. I wasn't rolling in dough and I definitely didn't have the experience. I didn't have any of the traditional qualifications. So, how do you actually build them so that you can buy properties that look like this? This is 22 acres. So, I am not going to walk the entire thing, but you guys can join me as we go through. The first thing that you need to do to become a landlord is you have to buy a deal. You want to buy a deal that is 5 to 50 units. Do not waste time on the single family in the duplexes. Everyone wraps their head around them cuz they're like, "Well, it's a lower dollar amount, so I can afford it." Um, if you are playing the game with only your own money, you are not looking at deals. You're looking at what could I maybe afford, which means you're probably buying problems. You're probably building low cash flow. And you'll end up with a few units and experience that no one really cares about when you're buying deals like this one behind me. You're not going to employ anyone. You're not going to build a business. And you're probably, while you might move forward financially, you're not going to build financial freedom. So, what changed for me? I had bought those couple duplexes. They weren't moving me forward. I started speaking to the same brokers who listed the same properties I'd purchased, and I just asked, "Hey, what else is out there if I was trying to get into something bigger?" We looked at about 10 deals. One that came up was this 38plex in Moses Lake. Instead of focusing on where's the cash coming from, we just looked at the deal and we said, "Hey, what's the opportunity here? What's the price? What do they actually want?" We walked the property. We looked at the numbers. We asked them what they wanted and they said, "Hey, full stop. $2 million is as low as we will go." Property at the time was totally worth $2 million except it did not have the income to match that. They had collections problems. They were renting to family members who weren't paying them. They had delinquencies, vacancies. They were an operational nightmare. The owners were over 80 years old and they were very tired of the property. It was on market for 13 years. 13 years they're trying to get out of the same deal. However, the pricing wasn't the problem. The cash flow was the problem. So, we put together a seller finance deal at only $300,000 down, which I didn't have, but we'll get there to where we could buy it at low enough interest with low enough payments, especially over the first 6 months. We had custom low payments, so it was basically no mortgage. We put together a deal with a little bit of creativity that allowed us to cash flow day one. And what did we do? We fixed the vacancy. We made ready the units that needed to be made ready. We got people moved in. We reached out to the tenants who hadn't paid for a while. We got it sorted. Almost all of them ended up paying. We actually didn't have a lot of evictions at this property. I think there's one or two, but we came in and we fixed the problems. It didn't take that long. The deal's cash flow went up and up and up, and we got an appraisal on that building for about $3.8 million. We bought it for two. Where did the $300,000 come from, though? Well, after we had an opportunity to buy this deal for $2 million, we negotiated the seller financing, we had the opportunity, and it was very clear on how it was going to make money. I called four people I'd never met before. I spoke to the same brokers. I said, "Look, do you have any other investors who are also trying to buy larger, who haven't figured this out yet, who'd want to do this with me?" They suggested four names. I called all four. Three of them said yes. None of those three I had a prior relationship for. So, I didn't use prior connections. This wasn't a a business connection or earned income. I was shy 300,000 out of $300,000 to buy the deal. Instead of looking for the money, I looked for the deal. The deal allowed me to find the money. That mindset shift got me into deal number one. I went to the same sellers and bought three more buildings from them, all duplexes, but sideby sides. It did a six-unit transaction. Uh we went to a broker from the same office, bought buildings from him. It did not take long to have over a 100 units in central Washington. And we bought the Robin Hood Village Resort the exact same way. seller financed. Found an owner who wanted to retire, leave the country, came up with seller finance terms at 4% interest, took out a hospitality project. Now, before you get too excited about that, apartments way better than hospitality. This is much more passive, much more easy to scale, and quite frankly, I think it's even more fun. But your mission if you want to get into real estate, you want opportunities like this is not to find all the money. It's not to create the partnerships, is not to learn everything that you can about creative finance right now. It's learning how to structure deals and then is learning how to operate those deals. You do it through experience. But I just want to point out I am hundreds upon hundreds of units. You're seeing a ton of my portfolio in one of many cities I own. In these strategies work if you put in this much work very consistently. Again, the model's like 15 minutes a day, an offer a week until you're under contract. And then you just kind of roll through the deal. You close the deal, you move on to the next, you become a better operator on every single property. What happens is you end up with a ton of rentals and a ton of experience which results in a ton of cash flow. We do make honestly a crapload of money doing this business because we put in the work. Very, very, very consistency in very small measured volumes. It's consistency though, not volume. Real estate is still actually honestly relatively passive. It is work, but it's not anywhere near a normal full-time job. And we make many multiples of what an average person would make working said full-time job. Also, a stupidly easy thing that you can do to find more deals is once you take out one deal in the market, you start meeting the other owners and you walk properties while you're out there. I'm out here buying another property in Abene. Today, as you guys saw, we were walking through a deal. I'm walking four or five other deals. This is one of them. But buildings like this, these are open in almost every market. You go out, you shop the deals. If you really want to get a good feel for your rent cops, you can even secret shop them. You can apply as a tenant and walk through the buildings. I'm not suggesting that you just waste everyone's time, but stuff that my team will do is like when we're in town, make the best of your trip out there. You got to be efficient with your time, but this is not a super timeconuming business. We're out here looking for stuff. I don't know what you think about this one, but let me know in the comments. Do you think we should buy this? I think I'm going to do it. And by the way, if you're looking at all this real estate, you're like, "Wow, that's a whole lot of real estate, and I don't know how to do this." There's a link directly below here. Go to a 10-minute video on how we're buying real estate like this. I didn't have anyone to show me how to do this when I got started. So, I started doing it by myself. It took a long time until I found the right mentors. I got connected with a ton of owners. I copied the strategies that they used until I started doing it on my own. I want to help you guys skip the line and jump start that. Click the link below. Check out that video. It'll go through how you can do exactly what we're doing way more efficiently. >> And check out those garages. This place is sick. Also, I am definitely not driving. And we are here at our last stop. This is an 80 unit that we are currently under contract for. It's 55 plus, which as many of you know is my favorite asset class cuz these things stay occupied. Also, your tenants usually know how to be tenants by the time they're 55 plus, and many of them are 80 plus. Uh you usually are with the program by this time. So what we find is that we have a lot of really great tenants even on a affordable property which this is a lot of people and they're 55 plus they're retired they're on fixed income. While it is affordable uh they qualify because they're just no longer working. So a lot of this is just normal people great tenants. Uh this deal was also uh just like offmarket with the broker. So it wasn't uh it was listed but not yet marketed. So we call this premarket. It is just another reason why you need to get in the game. All you have to do to get dealt in is do that first deal. Do one deal. Make sure it's above five units. If you really want to play it smart, I would keep it 50 units or below. That's the sweet spot. I started with 38. I have friends who have started with 12elves, 24 units. Uh the only reason I say limit it to 50 units is everyone I know who's bought a 50 uh like 55, 60. I have friend who bought a 78 unit as his first deal. Uh you pretty much spend all of your time stabilizing it. Even if it's a great deal, you lose your momentum and you kind of have to start the engine back up again when you want to buy again. So to keep yourself from stalling, keep the acquisition momentum up. Get your experience rolling. Anything 5 to 50, you have a huge range of units. Pick a market. I started with three to start looking in deals on. Pick three areas ideally within driving range of you, unless you live in a state that you absolutely don't want to own in. Uh pick them, start calling on the deals there. Again, throw out price. Price doesn't matter yet. you are just underwriting deals to where they make sense for you. Now, there's a link below to our school community if you want to join. There's calculators. There's all sorts of stuff in there. It's currently $1. Uh we may do some changes on that, so I would get it now. Uh but basically for free, you have a ton of resources on this. Learn how to underwrite the deals. Submit up to like one to two offers a week. Don't blow all of your time on this, but be consistent. You will have opportunities like this within the next few years. This is one town that we're taking over. It's not the only town that we've taken over. Uh, but I guess we walked four other deals today that I didn't put on camera. There is a ton of opportunity in the market right now.