Mastering Broker Relationships in Multifamily Real Estate: Insights from Eric Bubbel

during lunch. So far today, as a reminder, we have dinner and a concert here. One of the cool things about the Robin Hood is that we are a music venue and a wedding venue through a lot of the year. I have only got to go to one concert at the Robin Hood. Therefore, I brought one here because I want one so you guys can enjoy it, too. But that is Christian's party for having a resort. As everyone makes it back, um hopefully you guys had a good chance to mingle. On the back end of this, I we talked about funnels, we talked about math, we talked about finding deals and negotiating uh going through what what actually makes a deal a deal and how do we source our deals? As I mentioned, while owner meetings are the most powerful thing that you can do, there are people out there uh whose main job is to find deals and do them with you and put them together for you. And it's brokers. And most of you guys, your first few deals will be with a broker. I'm bringing Eric. If you guys close your eyes and imagine what does that wasn't me. What does a professional real estate broker look like? And then look at Eric. It's exactly that. This is exactly what you expect. Uh Eric is awesome. He's professional. He's done conventional deals with me. He's done creative deals with me. One thing that I want to share and I wrote out some questions and then we're going to pass it to you. Eric has the best job of this event. There is nothing he can do at all to prepare anything because you guys and I are going to run the entire thing for him. We're just going to ask him questions and he's going to answer honestly. Think about as we're going, I have 10 questions prepped and then I want to pass it to you guys. But think about what it is that you would like to know after we get through those questions like what would you ask a broker? What things are you getting stuck on? I have done deals with Eric when we didn't have any money. we were able to close those deals. Eric does not like it when people say, "Hey, I saw Cody and Christian online and um I also have no money. Can I work with you?" So, we're going to help position this in a way. So, like how how do you get through these problems when you are new? How do you buy beyond the money you have and still work with brokers where brokers want to work with you? That's the most important thing that I can share with you guys. My questions are right here. Eric's coming on up. Eric, get up here. and we are off to the races. >> Thanks for having me, man. >> Dude, absolutely. Now, >> right. >> Well, you can have your mic here if you're comfortable or you can hold the mic. I've been told that we can do either. Chris gives us the thumbs up. Thank you, Chris. Also, quick round of applause for Qu. He's been amazing. Everything's worked up here. So, thank you, Chris, and all of our other Chris's who are here. Chris and Chris and I appreciate all of you named Chris Chris today. As a reminder, my name is not Chris, it is Christian. Please do not get that wrong. It has never been my name. I am not Chris. That is the nickname for Christopher. Christian is me. All right, here we go. Eric, question number one. As a broker throwing out, no matter where everyone else is, just in general, if you were to get a call and you're like, "Oh my gosh, this is the perfect the perfect client." What does the what does the ideal client look like for you when you first meet someone? >> Yeah, I think in realistic terms without someone being in a 1031 exchange all cash and need to close tomorrow, that's probably the best. But, uh, you know, the biggest thing when you call a broker is you need to be very dialed in with your buy box. So, if we talk about location, uh what return metrics you need to hit, uh size of building and asset type or types, that's the those are the biggest ones you need to hit. We're going to ask you where's the money coming from to buy the deal and how much is that? Because if we know what your down payment is, we can determine what price point you can buy up to. So versus you coming to us and telling us we're looking for a $5 million deal, you know, we'll reverse engineer and flat out ask, hey, what's what equity would you like to place? And does that also include your renovation budget if you're looking for a value at deal? So, kind of going into more detail with the buy box, if we go to the first step on location, um, and this these are legit conversations that happen, right? So client or or a new client will call and they'll say, "Hey, we're looking for a multif family deal value ad in Ballard and we need a six and a quarter cap on minimum numbers." And we're just talking high level here. So the next step will be like, "Okay, well, you know, I know of a deal that's a six and a quarter cap, but it's actually located in Fremont." And then the person on the call will go, well, you know, yeah, Fremont's pretty close to Ballard. We'll do we'll do Fremont. So, you can see how that buy box shifted, right? And then I'll say, well, I've got one in Wallingford that's a 6 and a half cap. I know it's not Ballard, but it's close. Is that something you do? And it keeps shifting over and over till you finally find the end part on how far north, south, east, and west you will buy. So, if it's a whole state, that's great. But you also have to think of areas that you don't want to be in. You know, if they're rough areas, gang related, uh, or if they're areas that you're actually priced out of. Those are great things to talk about. When we talk about returns, you got to know what your minimum cash on cash return is. We can kind of go over this if you're unfamiliar with what I'm talking about, too. Uh, cash on cost, internal rate of return, cap rate's an easy one, but you kind of get more nuanced with uh with more stuff. So, that would be the biggest thing to to really find out if the buyer's serious and if they've done their own homework first before we start putting a ton of effort into sending you deals. Now, quick show of hands. Who here is currently employed, self-employed? Who here is currently working any job? I'm definitely I'm here working today. All right. So, we have a a pretty much everyone. Uh, who here likes to get paid when they work? That's everyone. Okay. Uh so does your broker. Uh your your ideal situation is that you work with the person who's actually going to close the deal. And that is what Eric is doing by asking questions. If you guys are like, "Hey, I'm coming into obstacles because my broker is asking me all these nosy questions like where's the money coming from?" Eric does not want to ideally does not want to work with you if you have absolutely no game plan. If you're just like, I don't have the money, but I saw online that I can do this thing and uh I'm a fan of the YouTube channel, that's not super likely that you're going to close just based off that information there. I mean, of course, if someone's like, I know Christian, Eric's like, obviously they're going to close. >> That's right. Well, I get attacked by a bee for lying. That was an immediate immediate karma. That's the main thing that you're trying to do is you want to legitimately you're not trying to like con the broker into thinking that you're a ready, able, willing buyer. Your goal is to be a ready, able, willing buyer and know what it is that you are trying to accomplish. If you haven't established that, you can figure out over the couple days if you just like quietly think to yourself as opposed to like waiting months and months to build your buy box. Just sit down and say, "Hey, this is the most important roadblock between me and brokers, let me go ahead and really put together what what is it that I'm looking for when I make these calls?" And then when you talk to brokers, now you actually have traction. You should have some sort of game plan. >> That'll help a lot. >> Yeah. And I think to add to that too is if you're also not sure how to build that buy box or you you're not quite sure on the returns or anything like that, when you make the call and you talk with a broker uh that's specializing in what you want to purchase, that's also a big one. Um have that honest conversation upfront. And yes, some brokers might not be willing to give you the time. It's it's not uncommon, but some will if you're like, "Hey, this is what we want to do. We have money to acquire, need a little bit more help with understanding the numbers or the financials more in order to make it work, but these are the areas we're looking." And you can have that initial conversation, but definitely be be open and honest. And the brokers can actually either have connections to help you raise capital uh or you know of course offmarket deals that or help you also if you want a 20 unit let's say but you're not there they'll be able to help you pivot and say hey we need to look for smaller deals but here's what you can get from a return and this is why it can make sense and you can save on taxes and whatever it might be. So that'd be my recommendation. So, what qualities or behaviors make you excited to work with someone? So, we talked about like the qualifications, but what is the actual like you can always tell, at least in my experience, when you're talking to someone, you're like, I just don't feel like this is someone who's going to like what what personality traits come through in that initial meeting where you're like, this is the person I'm going to be sending a deal to. >> Yeah. If it kind of goes back through that conversation, but if you know if you're talking to me about all the return metrics, what you've done as far as renovations, rehabs, or you know, who you've worked with with renovations, rehabs, and you're realistic on the expenses associated with that and what it's going to cost, that is that's great because when I send you numbers and I come in with my cost to renovate a unit, um, we're going to be aligned because you know exactly what it is versus thinking you're going to take a really bad unit to a condo style finish. So super high-end on a two-bedroom in core Seattle, you know, if you think you're going to do that for $10,000 and you're hiring this all out and not doing the work yourself when that is just not not a realistic number, right? And you talk to me like I understand it's it could be 25 to $35,000 per unit depending what we're going to do. So those little nuances if that helps. >> So basically having the business problem or having the business plan and what I have found is that if if you really do incorporate your game plan with your broker like they know stuff about the market. It's okay to ask questions. You don't need to position yourself as like hey I'm a genius and I know everything >> because Eric can see through that and any broker who does a lot of transactions. Your your job is not to be something that you're not yet. If you're doing your first deal, your job is not to come off as like, "Oh my gosh, I I do all these deals. I'm locked and loaded. I'm ready to go." It's just giving them an honest, this is where I'm at. This is what I'm trying to do. Eric's job is to work with that and align the right people to the right opportunities. That's how the relationship typically works. Little backstory, by the way, between uh between these. So, Eric actually reached out to me, which is where we met. I was uh speaking with Cody in Dallas. This is before I moved to Dallas, but we were at an event. Uh, we had just got coffee with someone and my phone rings and I answer it and it's Eric and we had bought Cody and I bought the tiniest triplex you have ever seen in your life. We called it the Bean Plex. It's a tiny little little apartment complex uh seller financed uh earlier in the year. Eric did what a good broker would do and he he had a 10plex that happened to be seller financable and he was calling people who had recently transacted in Moses Lake which happened to be Cody and Christian. So I got a call from Eric. I answered a few of his questions and I was like, Eric was talking about this 10-unit. I was like, I swear Cody and I have talked about this. So, I hand the phone over to Cody and Cody's like, "Oh, I know this owner." This is the nice thing about networking and knowing people in your market. When Eric calls and he's like, "There's a Templex." And in this initial call where he reached out to us and we're like, "Oh, this is the owner and we know the property." That's a really good indication that this might be someone that Eric would want to work with. It's like, okay, the these people already have some idea of what's happening in the market from there. I if I recall correctly, you actually brought up the seller financing. I think you mentioned that there was seller financeable in the opening call. >> Yeah. So, whenever, and this can go into like cold calling or my job, right, how I get deals. It's part of the initial conversation when I get a seller on the phone and talk with them about uh you're good. Uh talk with them about selling and if they say yes, all the qualifying questions. What are the rents? What are the expenses? What's the age of the roof? What's plumbing, electrical? All that. But then you top it off with hey, what's the debt structure? Usually I can see what their debt structure is, but if I can't for some reason that service is missing it, I'll ask the owner. And I think they had a small a very small loan, maybe 100 grand or something like that. You guys might remember more than me. Um, and that also tells me that that's eligible for seller financing. He was he didn't want to market it and scare his tenants. That's another big concern for uh sellers and brokers. So, we talked about doing the offmarket and bring it to my database and me finding a buyer for it. And I talked to him about scenarios on seller financing, what could work. And typical times, three to 10 years for seller financing. And he was open to everything. So, made it easy. I think Christian's words when I first called him, he's like, "Dude, you couldn't have called a better person for this deal." It's like, >> "Okay, we're rocking." >> Always always be promoting yourself. I I I I I I grew up watching UFC and so when a lot of them are very good self-promoters and so I was started back in like the Uriah Faber era for those UFC fans. Uh and then Conor McGregor obviously came in and just absolutely outshined that. But one thing that I did take away from watching UFC was the people who rise to the top are the people who are really good at self-promoting. And it's not that they're lying, they just actually believe in themselves and self-promote. So when Eric calls, he's like, "It's seller financable. It's Moses Lake." Who does seller finance deals in Moses Lake of that size all the time? I'm like, there is no better buyer for this. Of course, of course we're going to do this as long as the numbers make sense. And then we started working on that piece. But that's a good point. I forgot about that. Uh that is the one thing. Always be promoting yourself honestly. But like be excited about yourself. If someone calls and they sound like really hesitant, I just feel uncomfortable. I'm like, I don't know this person yet. They sound hesitant. I'm be be excited about the opportunities. That is one of the most powerful things you can do in driving the deal. >> I think I realized my baby monitor is on my phone still. So, sorry. >> There we go. You guys will be seeing my my my baby here later. I think six o'clock. Danny and Z are going to be down here. So, you guys will you guys will meet my little family. uh if someone isn't there yet um like maybe they have limited experience or capital, what should they be doing today to become someone that you would trust with the deal? If if you came in, imagine imagine that deal actually as an as an example. Imagine that uh you had connected with Cody and I, we were excited about this, but we hadn't bought that triplex, we hadn't bought other units here. What would I be doing today to prepare myself for doing a first deal with a broker? I don't have the track record. What do I do? >> Yeah, I mean it's tough and you know if we had done the call and you said I don't owe anything yet, but I would ask about capital, you know, do you have the funds to this is the down payment required that that the sellers asked for or that the banks are going to require based off debt coverage ratio. Um do you have that? And if the answer is yes, then the call can continue. And then I would ask about, hey, what would you do with a building like this? these are the type of units and the finishes and kind of get a feel for your experience. To go backwards, if someone has limited experience or capital, the first thing you want to do is exactly what we're doing now. Network. Meet people who own buildings. Talk with them. Pick their brains about other deals that are listed um that you've underwritten. Or let's say you've met with someone who's you think of a mentor. print off the deal, underwrite it, put it in front of them, talk about the deal, show pictures of the interior units, say, "Hey, what's the upside on rents? Where can this be?" And that's those are really great starting points. And the next part is the financial part. That's always the big one for everybody is having the money to buy a larger deal. Networking is also part of that. So, going to events, finding more mentors. If you know a specific area you want to be in, like think of one city, call it Ballard, call the owners next to that and ask them, hey, if I found a deal and it had these returns, would you want to partner with me? I'm looking to do my first investment and kind of hit the pavement on calls. That's what I would highly recommend doing. >> Well, it's the nice thing blending in the because we talked about the owner meeting and the broker meeting. This is where the two intersect. If you've met a bunch of people who already invest in this market while you're meeting with brokers, who's the most likely person to invest in a great deal that you find in a market, the other people who already invest in that market? That's why these go hand inand so well. If Eric was to ask me when I have no cash and no experience, like, hey, do you have the money for this deal? This would be a classic yes and I was yes, I do. It's it's going to come from a several other investors, but I want to hear more about the I would drive the deal first. I'm not worried about the money. And hopefully we've talked enough so far and we'll go more into it tomorrow. The money is not the part that we're really concerned about right now. If I have an opportunity, the money is going to be there. I don't explain that to the broker. That's like he Eric doesn't know need to know that right now. I just want to tell them I want to tell him, hey, this is my first deal in this market. I want to know about the deal. Capital is not going to be the issue. I don't have the money personally liquid right now. I will figure that part out next. Let's move on through the transaction. When you get stuck on those things in the conversation that is as a broker, and I was a broker for two years, too. As a bro, I hear those things. I'm like, "Okay, this is not a super likely buyer. I'm probably going to be calling other people. If someone else made an offer, I'm probably going to try to promote them as the buyer for the deal because your likelihood of closing, if you have really no plan and no cash and no experience, is really low." Yeah. And I think too if we use a an example, a $2 million deal and it takes 500,000 to put down payment to buy it, right? Not even thinking about rehab or anything and you don't have the money. Another thing you could do is you could also call another syndicator, bring it to them and say, "Hey, look, I want to bring you in on the first deal I've got because I need the experience and that'll help me buy future deals and look better." That would be another way to also get experience from someone experienced. Yes, you do give up a chunk. But remember, it's the first stepping stone to build your whole entire portfolio. And sometimes you got to give a little bit to get a lot. For the deals that we're working on actively right now, we've referenced these a few times. On our 200 unit one, it's really low down. The bank's really excited to work with us. There was like no qualification process on the smaller deal, the 172 unit. They were more nervous. They wanted to see uh that was a non-negotiable for them. They wanted to see my liquidity. They wanted to see Caleb's liquidity. They wanted to see Mark's liquidity. And they're like, "Hey, we want you to add one more person to this deal." So, we tagged in one more person who was highly liquid on the deal. Some deals you do actually need to have some qualifications for. Some deals you don't. Okay? And sometimes they're huge deals. I needed zero qualifications, which is hilarious, for the biggest deal that we're ever doing. like there there was no they have not looked into my financials at all. I'm like that's crazy and they're a bank. That's great. You don't need money to do every transaction. There are going to be some where legitimately you need to have some connection with someone to open the transaction. Doesn't mean you can't ask more questions about the deal. Eric's not going to just hang up on you. Get get some financial information. get enough to pitch it to someone and you can bring that person into the and I would tell Eric that be like, "Hey, >> I don't have the money right now. I have a couple of ideas for my partner on this. Can I ask a couple of clarifying questions and let me get back to you with a plan on how we might take this out." And that would be how I take the rest of the call is I have people who are interested. I need to run this past them. This is what I need to present to them. Let's get through that and then let me get you off the phone so you can go about your day. And then I will very quickly be reaching out to them. And by quickly I mean within a few days if not same day. Hey this is where I think the deal works for me and here's my plan. That's a reasonable way to attack this. What is not reasonable? I call him. I get a whole bunch of information. I ask for every document under the sun and then I don't respond to him for another four weeks and then I email him again like hey can I get more documents? Yep. >> That is the most annoying thing. Do not do that. >> They will not work with you. You have now burned that relationship. Don't. It is so annoying as a broker if you're like I take your time, you make no money. I just as a as an agent I work really hard. As an agent, he works really hard. Eric would also like to get paid. That is a very important thing. Everyone wants to make money. >> He's working. Make sure that he has a clear path to get paid. They work for you with you. It's not a free service. You don't pay the broker, but you have to actually do your job for them to get paid. >> Yep. It's all full circle. And I think too, one thing I want to add to the financing part is while creative financing, yeah, of course you can get creative, make it work, but sometimes deals will come across your plate that are phenomenal, but seller financing in any way, shape, or form is not an option, and you have to get permanent debt. Well, one thing too, if this is going to be your first deal and you came across a gold mine, is you're actually going to have to bring an investor that's going to have to sign off on the debt because what banks, this is what banks want to see, and this is just permanent debt 101. 90% of it, they're going to look at the building and what it supports for a loan to value. You can get a rehab loan. That is another creative way to get the rehab cost built in. But what they want to see is the other 10%. They want to see that you're worth the amount you're going to borrow. Okay? And that can be in stocks, bonds, other real estate. And if you haven't built that up, you can't show that part, right? Therefore, you won't qualify. They're also going to look at credit score. So, if you're in that situation, that's where, you know, getting involved with maybe another syndicator or someone that can show that they're worth that differential in other properties and experience is is going to be crucial. So, just one extra little thing just to know, a nuance about regular financing. And we'll cover that in depth on the creative equity piece tomorrow on basically all you're doing on any transaction. creative finance equity. I mentioned this before, probably say this several times to this thing. Real estate investors in general, most of us do not sit with millions of dollars sitting under the desk to deploy on a deal. Most of us are illquid as I mentioned earlier uh to really wealthy broke people. Like we do not carry a lot of cash on hand all the time. That is normal. you need to figure out what is needed to close this particular deal and then you just match the pieces to it. So on some of these conventional deals that 172 I actually for once I can actually show a lot of liquidity. That was really cool. Um I sent them seven figures of liquidity. They get back we need to see more liquidity. I'm like how many how many buyers on this deal that you've got no offers on have have showed you a million dollars? Like come on. I obviously can do this. here's my schedule real estate on I they're like we just want to see twice that. So we brought on one more person who can show the same thing that I can show and now it I still have to do the same thing though. Sometimes I get all the pieces and with the experience and even with some capital on hand sometimes I still need to show them I have a business plan and here's the money. It's it's just part of the game at every level. You you do a bigger deal if it's bigger than you. you know, I can't show $10 million of net worth yet. Get kind of close, but I can't show definitively I'm worth what the loan is. So, like add one more person to it. And that's what we had to do. If a person completed um or sorry, I've personally completed uh four creatively financed deals with you. I recall correctly. I think we three or four. >> That's right. Uh, for someone who's never discussed creative finance with a broker, what is the best way to bring it up without sounding unrealistic or inexperienced? Because this one is the number one thing that people botch. This is this is what I talk about when you're putting a sticker on your head that says, "Hello, I'm broke and I don't know what I'm doing." This is what almost everyone does. Do not do that. I mean, yeah, the the calls that come in, of course, you know, if you call me and or call a broker and say, "I need a hey, I'm looking for a multifamily deal and I need an 8 cap in Seattle, day one, trending to a 10 cap, and oh, by the way, I need seller financing. I don't want to put more than 10% down." you know, chances are there's going to be a lot of other people that broker can call before they call you, right? If not buy the deal themselves. So, so one of the things too is don't call and say I'm looking for seller financing because that also I'm just looking for seller financing because that also shows and can show your inexperience because like we just talked about there's ways in a lot of creative ways that actually can be more beneficial doing conventional perm debt financing right and can get a deal done that way. Now, yes, seller financing, whether first, second, position, and low down, everybody wants that. So, how if you want to do that, how can you look as good to a broker as possible? Well, if I bring you a deal and you're realistic about cap rates and pricing, but it's seller financed, a low down payment, the other aspect is the terms of the deal, the inspection period, the time you need to close. If you want that great deal with low down, but you need 60 days for inspection because you still need to raise capital or you need another 90 days to close, that's something that's also probably not going to get delivered to you, right? If you want that great deal and you want to convince a broker, it's something where you will have a 5-day inspection period, if not waving inspection period with a deal like that. um as long as you can get through for a quick tour or you know seller financing can close very quickly after inspection. So there's no reason why you should have this crazy amount of time, especially if you're looking for this amazing deal that just came across your plate. You've got to be attractive on how can you close that deal and quick to get the broker paid for lack of a better word. How can you make their life easy? >> And if you remember the presentation from earlier today, it's deal then debt than equity. If you start with, hey, I'm looking for a specific debt product. My immediate thought is for what? What What are you trying to solve with seller financing? What what what why is that the solution for this deal that doesn't exist? To me, that's the same thing as if you're going to go buy a car and you go to the dealership and you're like, "Hey, let's start talking about financing packages." It's like, "What vehicle are you buying?" I don't know. I just want to see what my financing options are. What are the monthly payments going to be? It's like, well, it kind of depends on, you know, the year, the actual price of the you don't have there there's no deal for some reason with any other item. It's obvious you wouldn't lead with financing. You would never do that in any other scenario. But for some reason in real estate, maybe just because the dollars are higher, you're thinking, if you're already thinking about the money problem and you call me as an investor or an agent and you're worried about a money problem for a deal that doesn't exist, my interest level is so low. You've decided how you want to buy something that doesn't exist. That's not like a super engaging conversation that I'm like, "Yes, I was waiting for this call. someone who wants creative finance, >> you know, just lead deal first then debt then equity like understand the opportunity and if you propose seller financing and it makes sense with what Eric has told you that the buyer wants to do you underwrite it conventionally you're like ah they won't flex on this price we're not that far off but if the terms were this it could work hey Eric we have we have an idea so this is where I'm at conventionally first of all conventional debt's fine I can close what I can close a good deal >> can we do that and if he says says, "No, we can't." Now, you're solving a them problem. You're solving the sellers's problem, which gets Eric paid. Eric likes being paid. You'll notice a theme here. Your broker does not want to work for free. It's not because he's greedy. It's because everyone everyone raised their hand for wanting to get paid when they work. This is Eric's job. Eric would like to close transactions. Let Eric get paid. That's that's a theme of this. Eric, we like making you money because when you make money, we make usually more money than you. Nice thing about being an investor, be on the right side. Sure. >> Yeah, absolutely. >> Okay. What are the biggest misconceptions that brokers have about uh creative financing and how can investors overcome those objections? So, what I find all the time is sometimes I will talk to a broker about creativity and they just don't get it. >> Yeah. >> One, what's different about you >> or I can talk to you about creativity and you get it. Why is it why does it work for you? And why are there some brokers that just cannot grasp the concept? Because it is very frustrating as an investor when you're like, I I have the solution. I did everything in order. And the broker just can't comprehend what I'm saying. Yeah. It might not be uh it's because they probably don't have experience in doing that. They haven't done they may might have done one seller financing deal, right? or they haven't purchased their own deals using using creative financing. So, a lot of it is an experience standpoint, but I will kind of defend the brokers. I've got listings that I get calls all the time and people are literally pushing seller financing over the phone. It's like my clients bought this two years ago. They have a huge loan. Seller financing is not an option in any way, shape, or form. and they did a cost seg so they have to do a 1031 exchange and the amount of buyers that will go back to the seller financing standpoint and trying to make it go that way it just see sometimes you also got to hear the broker like is I just gave you four different explanations on why it can't work right I'm not a broker just saying no not seller financing's not going to work with no explanation right so kind of listen to what they're saying and you'll know how to push a little bit more on that side of Where do you find a majority of your opportunities today? We all talked about doing meeting with owners and doing what you do is source deals with owners. I mean, that's that's what you're doing. Where are you finding because you've and we've done a lot of creative deals. Like, how are you finding the opportunities that you find? >> Yeah. First and foremost, cold calling. It's It's the best way to talk with the seller direct, see what their feelings are over the phone whenever you bring up a subject, and you can also see what turns them off quickly and what not to talk about. So, I mean, a cold call, nothing beats a cold call. Yes, you still, as a broker, I have to do everything else. Marketing, email marketing, texts, mailers, I got to do it all. But that's from the broker standpoint. And I think it's great if you're doing direct reach out to also do the same thing, but nothing. Don't listen to anybody who says cold calling is doesn't work or it's obsolete. It's the best way to get a deal. And it does, in my experience, it doesn't have to be a high volume thing. You when you have a number and you have a reason to call, the best thing you can do is just dial the number. Even if you don't have a good call, I've had plenty of calls that were bad calls, you just call back a couple weeks later and you can use it as an icebreaker like, "Hey, I'm I'm the person who botched that call with you last week. Can I try again? Uh, a question for you." And then you just dive in. It's not that hard to do. >> As I mentioned earlier, people in real estate usually want to talk about real estate for the most part. If you have an engagement, everyone's here talking about real estate. You get out of our little bubble, no one wants to talk about real estate. This is what everyone nerds out about. The other investors who own these buildings are generally speaking pretty excited about what they do. That's why they do what they do. It's not that hard to build a relationship or have a conversation. And you don't have to be transactional. As an investor, you don't have to do that. And the nice thing is with your broker, you build relationships with a few really good brokers. They'll do the work of is the deal available or not. He'll Eric will take care of the transactional relationship piece for you or your your equivalent. They'll take care of the hey are you guys open to selling what kind like he's going to work that part. Your job is to build a long-term relationship with those people. His job is to open up deals that are available now and or about to be. If you can keep that relationship solid, okay, this is what my broker's doing. This is what I'm doing. We're building relationships, but we're all calling the same people. You can you have basically an infinite pipeline. Like you will just have deals forever. I needed to make my font bigger. >> Okay. >> Or be less blind. Uh when pursuing a deal, is it generally better to work a direct Oh. Oh, okay. I get this question all the time. Uh and I have my preference, but I want to hear this from you. >> Okay. Someone list the deal. >> Yep. I have some some broker who I'm a friend with who I've also talked about deals in this market, but they didn't bring me this deal in this scenario. I just see a listing online. I call the listing broker. Who should write up this deal? Does the listing broker represent both sides or should I get someone to represent me? What does the broker want? Is is the same thing that's best for me as the client? What would your advice be to an investor on how to handle this? >> Yeah. Um, two points. It depends on the type of investor. I would say if you are a newer investor and you haven't done transactions or know nuances, highly likely you're going to need a fiduciary to represent you to help you get a better deal. Especially if they have experience or they own deals there. They can be a huge value for you. Now, for an experienced buyer, yeah, I think calling the listing agent is a great idea. Um, definitely would have said that prior to 2021, anything because of a seller's market, yeah, you needed to call a listing broker if you want to get the deal for sure because they make more money, hence getting you the deal, right? Um, but the last couple years, it's transition. It's more of a buyer market and other listing brokers are just happy to get the deal done, right? There's already a commission for the buyers buyer to have an agent and you can still get that proper representation versus someone being a dual agent uh which has very limited representation. There's a lot they can't share legally. So, um, still a good idea, not as good as it used to be. And if you're a newer investor, get your own broker. 100%. I like that. What what I have found, and I agree actually that this is really good advice. What if you have a little bit of experience or you have a a healthy amount of mentorship, I I think if you've practiced this and you have someone in your corner who can who can help you navigate these things, that also offsets the risk. someone's helping you with the underwriting and reviewing your deal. Like if someone's reviewing that contract with you who has experience, that that's really what you're trying to solve for. You want someone in your corner for the first few deals. Whether it's a broker, it's a mentor, you want to make sure that there's someone in your corner. When I have done these deals, I have found that I call the listing broker. I have whoever brought me to the dance is who I'm going to dance with. That is my that is my policy. dance with the partner who brought you. What have I been saying this whole time? One thing brokers really like to do is they do actually like to get paid to do their job because it's a really hard job. They do a lot of work. If they make twice as much on the same transaction and that is my relationship with you and imagine this for whatever job you have. If you just got paid twice as much to do roughly the same job, next time a deal comes up, who are you more likely to call? The person who is going to pay you more or the person who's going to pay you less to do the same amount of work? I would like to work with someone who's willing to like I have a listing. I would like to work directly with you. I just found all four brokers who I work with primarily the ones who have ended up in my roster of this is the person that I work with. Every single one of them, they represented me on both sides of our first deal. Just feedback feedback for everyone. That's that worked well for me. >> Yeah. Another thing too is if you even if if you're jumping into a new area, let's say as well, and there's a 10-unit multifamily deal and it happens to be listed with a residential broker that you haven't seen his name before over the last year of looking, this also could be your opportunity to build a great relationship with a multif family broker on the buy side, right? Because there's already a commission given. So, there's other some nuances there that can really help you in your career and your growth if you're newer. Um, I would, yeah, I think adding that parts >> would be really beneficial. >> And if a broker sent me the deal and I first saw it from them, I would have them write it up instead of trying to make it double-ended. I I think the general advice of just dance with the partner who brought you is usually the best way to build relationship with brokers. That that's generally speaking been my policy provided that it gives you an adequate amount of representation for you to be comfortable with the transaction. We got a hand up. >> Is that mic? Is that mic live? That we might be test that. Test that mic. You might be able to ask a question right up here. >> I'm going to try this out. >> Yep. Um I had an experienced um I'm talking two decades of experienced guy. He went with a buyer's agent broker. And what he didn't know was the buyer's agent broker not only charged his, but he also asked the selling broker for a percentage of his. And that's the reason he got turned down. Didn't know until he says, "I just need to let you know this is why we turned you down. Your price was good. I know you're underwriting. I know you guys are good for it. At the end of the day, I got to eat. My kids got to eat. Um, what you didn't know is your broker that represented you. He gets his piece, but also he asked for peace of mind. And you know, to be honest with you, I know these other guys and I had to represent my seller. I really know these guys and I know they're going to close blah blah blah. And that was just there were several of you that way. So, no offense, just what do you do with So, my question would be to a mentor is what I've seen is that they typically >> often go to a mentor like yourself, another mentor, and in fact, I've got a guy that can sign on 10 million, $20 million loans, $30 million loans, who's a sponsor, extremely experienced. Even he goes to a mentor to say, "What am I missing?" And occasionally another mentor of his will say, "Yeah, this right here." >> And so I guess the question is, "How much do you like or dislike getting that kind of call and saying, "What do you think?" >> Oh, well, as a as a mentor, that's that's like the main point of mentoring. That's if anyone who's gone through the onboarding call with me in the multi strategy at any point the I say this like 12 times through the onboarding. It's like first of all we have a course. We also meet weekly. Also it's a mentorship which means I'll mentor you which means like ask me questions. The only thing that I cannot do is read your mind. If this sounds like exactly like our onboarding college because I say the exact same thing every single onboarding call because it's exactly true. Um I won't be able to read your mind. So if you don't ask a question I can't answer your question. So you can't be disappointed with me later. If you're like oh my goodness this problem came up and I never asked. I'm like well I I'm not psychic. Um however I mentor a lot of people which means I see a lot of situations. I think we have the right I really try to tailor the size of multif family strategy so that specifically I have the right amount of people where I can answer all of the questions and I still get a lot of questions like I I mentor the right amount of people that I can handle at the same time that's done by design as a mentor. There's nothing more valuable to me than actually asking the questions for what what do we actually need to do to get this done? Do you need me to review your underwriting? You should do that. Like send me your underwriting. Ask me questions. I review contract all the time. Absolutely. Another thing that you said um which I actually wanted to uh bounce off of Eric. Eric, I feel like there there there's a bit of an ethical issue if the broker is not communicating to you that they're asking for more money. What what the the dealings that happen where the broker kills the deal because they got greedy. >> Oh, okay. How do you how do you one, is there an ethical dilemma with brokers just like trying to get paid more and wrecking the deal? And two, how do you handle that when there is a broker who is just, "Hey, Eric, can I can I can I have some of your lunch, too?" Like, I I hate >> Yeah, >> I don't like that. But >> you're more patient than me. Yeah, you can run into it sometimes, but you know, when we list a deal, it's listed out specifically in the commission uh agreement on the listing agreement that, you know, if a buyer comes forward, this is the commission breakdown. If it's dual agency, here's the commission breakdown. So, it's already locked in. Um, I guess where that can get tricky and brokers can play a role is if there's large teams will take the entire fee versus maybe a reduced fee if it was dual agency. You'll see that sometimes. But I think to go to your point to your question, if you're trying to get a deal, fastest way to lose a deal is to come after the broker's commission or ask for credits or anything like that. Right? You're initially going in looking at the deal itself and that commission's already talked about, already communicated with the seller who's paying it. So, don't the the $20,000 on a $2 million purchase to to credit to your down payment is not going to save the deal. I promise you. >> Don't bite the hand that feeds you. >> There you go. Uh, what are the biggest mistakes investors make when they're submitting offers that caused the broker to stop taking them seriously? So, they did great on the initial call. They've built all the confidence. We're right there. And some of you may have been here like, "Hey, the broker conversation is going amazing. I feel really really good about this. I send an offer. Nothing." So, what what do we do on our end between hello and submitting an offer where it's like, "Oo, this is I've lost my confidence in this buyer now." >> Yeah. if you're not. So, if we talk about a deal, let's use the same $2 million purchase, right? I've got it off market. I bring it to you. You say you're interested. You go rerun numbers and go, "Eh, I can make this work at 1.6 million and I would like to write that up and present it to the seller." Well, as a broker who's got this offmarket there, we're kind of in this gray area where it can hurt my reputation with this deal. this offmarket deal that I've got and we know based off my conversation with the seller, Christian, I know this $1.6 million will be offensive and it's going to kill this and it will potentially kill even getting this deal done anywhere else. So, you know, I recommend we don't do that. But let's go over the numbers. Let's see what you might be missing that I'm seeing on why the numbers can make more sense at a higher number uh closer to the 2 million or at a price initially that's not going to be so offensive that we're never going to be able to have another conversation on this deal. That is exactly. So, so the general rule of thumb that we generally follow in multif family strategy, unless you have a feeling that it needs to be different, but the general rule of thumb, if you're at least within 15% of asking price, I can usually tell the broker like, "Hey, here's where I'm at. Can we like let's let's shoot for it." If you're off by more than 15% or you have creative clauses, always ask the broker, "Hey, this is where I'm at." Or if if you're going convent conventional finance, this is where I this is where I believe the bank's going to be at, too. That's a great entry point. If you really think that that is where the bank's going to fall out, that's a good conversation to have. This is where I'm at. I also believe this is where lending is going to be at. Would this be offensive if we submitted it? Cuz I always feel bad for Eric. He sent me two offers recently because he has to send offers. If someone submits an offer, he has to present it. He's been forced to send me two offers that basically said, "Hey, Christian, can you write like a $700,000 check and then seller financed this back to us?" >> Yeah. >> And I'm like I'm like, "Eric, what what's my answer going to be?" I know. Actually, he he he Eric usually texts Danny because Danny responds faster to him. He's like, "Danny, uh here here's what we got." And he's like, "Just just let me know when I can tell them no." >> Yep. >> That's a waste of time for Eric. Don't waste the broker's time if you are significantly altering what you had first discussed about. That is the question. Would this be offensive if we submitted this offer? Or is this worth getting front of the owner? I recognize this is not so sometimes I'll have a crazy idea and that's I'll just I'll be like I'm way off. Would this even be worth getting in front of them? And sometimes the brokers surprise me. They're like I see no harm in it. >> Yeah, let's do it. >> And occasionally they come back and they're like, "I'll be darned." They said yes. The 26 unit that we bought in uh Texas, it's worth like $2 million, maybe 1.9 when we bought it. It's worth about 2.3 today. It worked for me and Caleb to be worth our time. I'm like, look at I don't really need a 26 unit right now. They're all studios. It's going to be a little bit harder to lease up. I'll do it if the price is 1.6, which is like not even kind of what they wanted. We The broker's like, I don't think they'll take it, but let me let me ask. And then no counter. There's a yes. Like, we should have asked for 1.5. >> Perfect. Uh, but everyone won. That there is no harm in asking. Eric's not going to be upset if you ask, but don't just submit an offer that looks absolutely nothing like what you guys discussed. >> Yeah. And the broker will, you know, they'll let you know. They'll say, "Hey, this is this is too low. They're not going to take it." You know, take that advice. If you kind of press the issue on and he at the very least, they can also go verbally and chat with the seller. And if they don't even want to do verbally, you know, your offer is way too low and it's going to be insulting. A lot of people are going to get mad. So, you know, I would say there's room to push, but also heed the advice. >> It's okay to have crazy idea. It's just not okay to make Eric do a bunch of work on your crazy idea. >> Yeah, some of these questions double pasted themselves. So, I apologize for my awesome amount of slideshow abilities. Oh, how do you balance being a active investor and a broker? One of the my favorite things that it is so hard for me to want to work with a broker who does not own any real estate themselves. It is really hard for me to be like, if you knew what you were doing, why are you not making money doing this? Eric is an active investor. This is what a normal broker for me looks like. The question then becomes, well, if you're sending me deals, but you're also doing deals, are you just cherrypicking deals? How does the How do you balance being a fantastic broker and that being your career and also buying deals yourself? >> You're too kind, dude. Um well as far as the balance as far as the balance it's for me specifically any deal that I go and purchase there has to be enough income to support professional management or an on-site manager. So that's first and foremost. And then I'm okay with distance-wise. It's fine. But we have to have a really good game plan or, you know, the family's got myself individually or partners or the family. We we have to have a really good game plan if it's like a 4-hour drive as far as what's going to happen with management. Um, but it's finding a property that supports that number. And of course, I look for like everybody else, value ad deals. So, how can I change the asset completely and get it up to date with marketing or these times versus 1950s? So, because the brokerage takes so much time, I mean, it's a lot of hours. It's a lot of running numbers, talking with clients, driving other places. I can't I can be there for a phone call for help, but I can't be there to actually run the property the entire day all day long. >> Oh, yeah. What does it look like when you have this conversation with the seller? This is this is something because we don't see this side. Sometimes I'll talk to a broker and they're like, "Hey, this is seller financable." When you're actually having these conversations with a seller on the brokerage end, when you're negotiating the putting together the deal, what are you talking about with the seller where you identify, hey, seller financing actually might be the solution for what you're trying to do? How did how does that conversation look when you are negotiating the deal? >> Yeah, there's actually a a current one I'm I'm working on. older older seller husband had passed and she's ready to she's ready to sell sell the building and we go through the valuation get the numbers and I see that the cap rate on pricing that she was expecting versus where I'm at the cap rate was too low I think uh five and a quarter maybe even a five cap but she had purchased it from the family at a specific price and really wanted to hit or get close to that So what I explained to her was what's going on with commercial financing right now? Where are rates at? Why does that correlate with where this cap rate number should be? Right? So we have that conversation and then I'll of course know the debt situation. So, I told her, I said, "Hey, look, we can get you a higher price, and you can make more money on top of that, which will help with the capital gains taxes, and this is the option. It's seller financing. Here's what it looks like. Here's what your monthly payments would be. You still get a check, but you have your hands off from the building completely, and if the buyer screws up, it's going to be a little bit of hell, but you ultimately will take the building back." So she ultimately agreed and thought that would be a great idea and that she had enough funds to be able to do that and still live her life. She didn't need the the big payout from the property. So we're currently in that process and that's how most of them usually go. >> All right. Now is the fun part. We open it up to you guys to ask questions to Eric and I. Mostly Eric though this is Eric's this is Eric's presentation. Uh, if you guys have broker related questions, run up to the mic and let's snag them. Just line up at the mic. No, no, no, no reason for hands. Just just get in line and roll. >> Hi, Eric. Thanks for coming out. >> Yeah. >> So, we've established that um that the Ballard area you don't have anything in. Uh, Wallingford, um, Fremont. Okay. And I'm telling you that the Magnolia, Queen Anne area is out for me, but I could go as far as Greenwood. >> Yeah. >> So, what would it what would you like to hear from me to get higher up on the list for getting a call from, you know, say if you get, you know, I wouldn't be at the top of course, but, >> you know, to to get, you know, possibly number three, number four, hey, I know this guy's interested. What What would you like to hear from me? >> Yeah. So we so high level we go over kind of the buy box initially and then when I get a better feeling there I start to ask about okay hey let's say I brought you a deal >> what what sort of offer can you write regarding terms so how much time do you need for inspection period on a 10-unit deal you're looking for and you would say you know I need 30 days and I would then coach you and say hey there might be a possibility if you're willing to pay the seller's asking price but like everybody Everybody, we all want a discount. So, there's a give and take. >> Yeah. >> If you want a discount, you got to move faster. >> So, this is what we're typically seeing. And you'll be upfront or say, I can't do 10 days. I, you know, I got to raise capital. >> You know, I'd like to have 45, but I could do 30. It's like, okay, so that kind of tells me where you'd be or the chances of actually finding a deal. If you can, if you're willing to pay market pricing, then of course you're going to be somewhere in the top because there's lots of properties at market rate available, right? Yeah. >> So, those are nuances there and the little tidbits I ask to to vet you as a buyer. >> Okay, great. And so, if I were to tell you I could give you a great kickback if you contacted me before Christian. >> No. Okay, I'm out on that. >> Yeah. Yeah. Right. I just have to disclose it. I don't know if you can answer this, but what I found in some brokers when you catch up with them, they actually want to get to know you. They ask you questions. They're going to share stuff about their life, their background, whatever. They seem to be call it a dating relationship. And some of them are just know strictly pretty quick um any guidance or advice with regards to in other words, I think the approach is generally the same. said, "Hey, I would like to get on your list to hear about anything good. I would love to make you money, make sure you and your kids eat well. Is that okay? And if so, what would it take to get on your list, maybe your text list, your first list, and that type thing?" And listen, and and I'm waiting on them to come back with if they want to know more about whatever. >> Uh how would you guide this fleet here when we're trying to get a relationship with brokers that hear about these deals? >> So, here's the honesty. the broker that's short on the phone call. Those are the ones doing deals. Those are the ones you want to talk to. So, like I said, you come up to them, have your numbers ready, and they're going to send you a deal. And if that property comes to you, and you turn it down, and you gave them everything that was in your, you know, was a 5% cash on cash return day one, met your cash down payment requirements, don't necessarily need seller financing, you can get perm debt, get it done. If you don't do that, you can drop to a bottom of the list as well. So, just make sure that you are honest with yourself on that buy box and that you relay that quickly and efficiently to the broker because that they will test you by by sending you deals, which is what you want. >> So, you're going to get everything you ask for. You just got to be honest. >> I've got two questions. >> Okay. >> Um, first one, have you ever done a structured payment plan to lower a buyer's cost to close with a commission? because the broker here did that for this deal. >> Yeah, I have never done that. >> Yeah. The second question is what do you think about Walaw Wala? >> I love Walaw Wala. Had some clients try and purchase a deal that went sideways, but luckily we got him out of it. >> That was us. So, we we talked a little bit about you vetting, you know, new people, but you know, there in in certain markets, there's a ton of brokers. Yeah. What can you give some advice on the other side for us vetting to make sure we get good brokers that we're talking to that that you know their numbers are accurate, their performance is not like way off and they're promising you know these sellers, hey your property is way over here. >> No, great question. So yeah, vetting the the broker and this is a lot of cases when you get the like I send a one pager out which shows current market proforma if renovated expenses like just on a one sheet so you can make a really fast choice on a deal because the faster you move the faster we can get the deal and ensure it gets it done. >> So you're always going to have to double check the broker's rents. Number one, you always have to do that. That's that is your responsibility. This is your money you're putting forward, right? So, there is a a responsibility that you have to yourself there. Um, but as far as the expenses, that can be verified with T12 in P&Ls. So, you know, you can have proof there, especially on current rents, right? But the homework as far as where can the rents go, are they actually going backwards instead of upwards? You have to verify that. You got to double check. and brokers will send you rent comps when you're working with them. Uh, but to vet the broker, too, when you're telling them what you need, that's when you can start asking them about themselves, like, hey, you know, do you do you own deals? How many deals do you own? What side type of properties do you own? You know, do you self-manage them? You know, you can ask little tidbits and if you can get, you know, yeah, they own some deals and they or they might not own deals, but they invest with syndicators or clients they've sold to, that's also really popular. Some brokers just they want to be completely away from ownership other than just investing their money with this guy right here. So that that's what I would say. You can kind of slide in questions that can help you, but you always have to advocate for yourself at the end of the day. >> Appreciate I've got one one other question. You kind of went over it. >> Um the question is like, okay, a number's out there and we think it's way high. the what's the best way to approach a broker that to say, you know, I don't want to to send in an offensive offer. I don't want to just, you know, blast offers like people do with like single family stuff where they're just like, I'll send out ridiculous offers everything, >> right? Uh multif family is a little bit, >> you know, more underwriting, a little more complicated. What do you want to see to make sure that's like, okay, maybe maybe they don't owe anything on it. >> Yeah. and maybe they're willing to take it down here, but it's it's worth up here. But >> yeah. >> Yeah. So, I think you're going to do your underwriting and let's say you've been talking with that broker and are we is this maybe you talking with the seller's broker to Yeah. Okay, cool. >> You let's say you find something on the market and you're like, "Okay, it's been there for, you know, 100 days or something." You know, it's it hasn't gone fast. >> Yeah. >> So, >> so if you said, "Hey, Eric, you know, I'm looking at this this deal. We've got 2 million bucks. You know, I'm running the numbers. I don't see that the rents are actually going up. And because of that, I here's where I'm getting on a cap rate, and here's the down payment's going to take, and my cash on cash that I need to hit is 5%. This price equals that. Is this something we can put in front of the seller and not have it be offensive or what do you think? And I'll give you an answer. Okay, we're not going to submit that. But here's the thing. You know, the sellers, they're already losing money and they've told me what their bottom line is and it's we're pretty much there already. So, I look, I've got this information. Really appreciate you being honest. But to submit that, it would it wouldn't go well. It would be a waste of time. But I'm going to keep you in line in case all of a sudden they change their mind, they get really realistic and they get closer to that, I'll call you right away because I know that's where you're at that you'll close. >> Okay. >> Yeah. That sound fair? >> Yeah. Thanks. >> So, he just he just trigger triggered an extra question. So, thank you. >> What is a long time on the market right now as you see it? >> Um I mean, >> yeah, a year, two years. >> So, 100 days is still pretty early. >> I mean, yeah. to to get a deal sold. Now, it's like anywhere from two to six months on multifamily to get it under contract. >> Okay? >> So, it just it takes a while and that might not result in getting full list price. And there's going to be so many deals where, you know, us brokers, we our life is selling deals, right? If we're not selling deals, we're not make making a living. So, there's a lot of brokers out there that a seller will they'll go to a meeting to get a valuation. They'll say, "Your propertyy's worth $2 million. This is where we know it'll trade." But the sellers at I want 24. And sometimes brokers will just take that in hopes that the seller will get realistic once they see their property sitting and they'll do price drops. So, it's called buying a listing. Sometimes brokers will do that and but sometimes we also learn that the sellers are stuck at that price and they will not move. So that's why getting the honest feedback and really listening to the broker um on if sending something less is worth the time. >> Okay. Thank you. That what triggered there. My original question was I have a series of single families. I want a 1031. You said there's a timeline >> sensitivity. Is there a way to sell that? I'm a well-qualified buyer. I just need to do this 1031 and because of the 45day identification period. Yeah, >> I want to dance with you to a certain extent, Mr. Mrs. Seller. Yeah, >> that is a good question. question start my sale of these because I only have 45 days for some reason versus >> Can I give quick context just for just for those that so for those who aren't familiar with the 1031 essentially you have a a six-month timeline from when you sell the property to place the funds so you really want to manage that timeline Eric you mentioned earlier 1031 someone's doing 1031 they have cash to deploy that is awesome as a broker you love to hear it >> however >> that is a dance that like they have to find somewhere to place that money. How do you handle it? >> Fast. >> Yeah. So, in let's use your scenario. >> Okay. >> How many homes is it? >> Nine. If I get rid of all of them. >> Okay. >> So, I want to roll them into something you find for me. >> Okay. And you want a big one big building? >> I don't really care. I just worry about the 45 days. And so, I need I feel like and mentor me on this too, please. that I need to be dancing with a seller, somebody flexible to give me some little extra time, whether it's extensions or something, so I know I'm buying this one. I've got my 45day identification solved. >> Okay, >> then I'll list my single families, which will sell faster than a multif family, and back fill that way, and then we truly start the transaction. How can I convince a seller I'm worth taking that extra time on? >> Yep. So, in this case, there's a lot of give and take. You can get a seller to do that. You absolutely can can try and get your up leg locked up before you sell yours. >> Okay, >> that is most likely 98% of the time never going to result in you getting a discount on the price that they want. >> So, as long as you pay their price, they can you can get the time to close. Now, here's the nuance with yours. You have to you can have the property identified, so that's the easy part. But closing multiple deals at once to buy one larger deal or let's say even two. If you have to roll four and four each into one building, the moment you sell one, it triggers your timeline, >> right? >> So, you got to sell them all and you've got to get into that deal pretty quick. So, you also have to be ready as the seller to start dropping your prices quickly to get them under contract and get it done. So, it's it's definitely possible. It's doable, but it's your flexibility on paying their price to get the big building to get your time that you need. >> Okay. So, the other way I've been thinking is just doing smaller ones, twoozies at a time, maybe trade equity in here for that. The other side is are sellers and brokers realistic on what Fanny Freddy debt's taking schedule-wise right now? >> Um, I mean, if you So, you're talking about just interest rates and cost of everything. I'm talking about the time to close a agency loan. Right now, >> seller's expecting 60-day close when the debt products are like a 100 day close. >> Exactly. >> On on multifamily, as long as you're upfront with them too in that process on the debt product that you want and you know it's going to take this amount of time as well to close for financing, I don't think there should be an issue. Once again, at the end of the day, the seller just wants a price. If it takes standard time frame is 65 days call it standard from from start to end and that's including financing on you know with a sound credit or a a local bank right that's what we're seeing if you need another 60 days let's say to get it done as long as they get their price they only have to wait two more months and they're not going to trip over dollars to worry about pennies sort of a deal. You know what I mean? >> Okay. Thank you. And then I lucky enough to know the author of the book on creative financing. >> Does a lease option >> solve either of those or is that too scary to a seller to say, "Look, I really want to control it. >> I'm your buyer. I've got these 1031s to do or I know my debt product's going to take a long time, but I want to lock it up, pull it off the market from anybody else." >> So, hold on. I like the I I'll think I have the answer for this. >> I really like the lease option when we're solving a problem where it would be unsellable if the if they can't solve the problem themselves. So, an actual example in Waco, there's a it's a 270 bedroom. Uh they're all like forplexes. I know it's not perfectly divisible by four, but it's about that number. Uh they're forplex rentals next to this uh college, so it's all student housing. She failed to do her pre-leasasing. She's in her early 80s. So, they're going to be like 65% occupancy is what they're scheduled for. They have actually pretty good books historically, but they're going to go into a really hard year. Banks are not going to want to finance on that deal. She does not have a management plan in place to fix that problem. And I'm actually really well equipped to fix that specific problem. The way that you market those fits really well with our model. And I'm already established in Waco. I've done projects in Waco. So, the proposal for that deal would likely make sense if they're like, "Hey, I have a price I'm married to. No bank will lend on that, but I want to get I want to sell." And if I'm a broker, if I'm bringing this lease option of like, I would like to purchase this, but we need to get it in a certain condition to do so. This is my business. If I'm a broker, I'm like, I'm listening to her wants and I'm like, I don't know how to bridge X and Y. If she wants a conventional purchase, but her numbers don't merit that purchase, I'm kind of stuck as a broker. I have no buyer. If I come in and I I have a way to purchase this and she will get her price and I'm going to fix the problem and here's how I'm going to fix it, the broker's likely going to be on your side to try to push that through because that's the only way they're going to be able to sell that deal. That's where the lease the lease option I'd rather buy the property or or have them seller finance or get creative. But if there's no other way reasonably to move title into my name, we're planting a little flag down the road of this is how we would get to A to B. You just have to be really specific on your business plan. Okay. >> Yeah, title's got to change for the 1031 to also work out, >> right? So, I was thinking lease option. It's not a transfer of ownership yet. It's just a contract. So, >> yeah, >> I don't get serious about the 1031 till I have some of my ducks sold. >> My my Oh, go ahead. Yeah. Just >> also too, >> I would first try and go the standard route, right? See if she'll give you the time or whatever. You can also get over creative and that can kill a deal. Like >> really >> keep it keep it simple, right? Um go that route if she's not willing to. Is it do you also think in that cuz you want to operate it better than what they've been doing. A lot of vacancies. >> No, just simply another way to convince a seller that look you're locked in with a buyer. I'm not squirly. I just have this job to do of selling a portfolio that's not what I want to carry forward anymore. So >> I I would stick with a longer term PSA just because because it always comes down to am I solving a me problem or them problem. This is like hey I'm structuring this specifically to overcome my obstacle and there's probably a better way to do it which would be let's do a longer PSA understanding that this is how I'm doing this. There's a more conventional way to attack the same problem. >> Okay. >> Uh very similar to what we're doing in uh Abene for the other 80 unit. We we have a debt product that takes five to six months to close. HUD loans take forever. No, >> we just worked with you know what I'm talking about. >> We worked with the seller and we the seller's like that's fine. This basically they're like this is the right debt product for you. This is how we'd want to buy it and so we'll close around December or January. That's that's all fine. >> Okay, >> but we we'll structure it. Try to do everything you can to buy conventionally every time. The lease option is specifically to fix a problem that would block you from being able to transact. In this case, you can transact. you just want a different timeline, I'd negotiate the timeline. >> All right, thank you. >> Yeah, absolutely. Really good questions, though. I' I'd love every one of those. >> Final question, then we'll wrap this portion of the session. We'll have another Q&A with Eric, me, and Cody at the very end, too. So, there'll be more room for questions. >> I appreciate you taking the time to share like with that one. Okay. You, you know, if you're going to do that, you're going to have to be ready to lower your prices to make that happen in the time window. That helps those of us that raise capital who say the same, I got this 400,000. I want to roll in there and then they're going to hold the price and they miss it. >> Yeah. Uh, I've seen that too many times. But the main question I was going to ask you was there's not a right or wrong to it because there's folks here that have shared, hey, I've shown the broker my underwriting. This is, you know, this is best I can do. Why is that? They keep the question, does that take up your time and annoy you for people to show you their underwriting? Um, there's cases both ways. Just get your take on it. So, >> you answer first, then I have a I have a thought on this. Yeah, I think it's I don't think we need to have a our call per se to go over your underwriting. You can send an email and say, "Hey, I'm coming up with this cap rate. Here's my return. This is where I'm coming up with pricing. Take a look. That's all I need." and then I can call you back or email you back with questions or, you know, maybe something you missed on why you can't get to the price or I'll say, "Hey, totally understand. Unfortunately, a seller just can't get there." You know, they're just not there yet. >> Okay. So, in other words, you don't mind as long as somebody's super efficient with it and Yeah. in and out, right? Yeah. >> Fine. Yeah. As absolutely as an investor, >> I this is this the only thing that Eric probably doesn't want to hear this as a broker. This is not not not what you're Eric. Close your ears. Uh so when when I'm doing this, the last thing that I personally want when I have underwrote a deal and I think I know where I know where I want to buy this. The last thing I want to do is give the bro the broker's job to sell the building. I do not want to give them more room to just sell me on a deal if I already know where I'm at. I almost never share my underwriting with a broker. I this is where I believe lending's at. Often I've already talked to my lender. I'm like, "This is where they're at. This is where I'm at." And when they try to do they're like, "Well, can I take a look at your underwriting? I would like to look at this and this." I usually just say, "Really appreciate it. I'm going to be where I'm at either way. I definitely don't want to waste your time." Like, I I really generally speaking, if I'm working with Eric and I want his opinion, I'll ask for his opinion. If I give him my numbers and Eric wants to give me his opinion and I don't want his opinion, I'll just respectfully decline because I don't want to get sold on a deal. usual policy, don't share your underwriting with the broker unless you have a very specific reason to do so. Usually, >> yeah, I mean, you you can share it. I think my initial question, just to make it quick, too, >> you're good. Uh, is I would probably just go, you know, if you called me and said, "Hey, you know, I want to talk about the underwriting. I'm coming up with this." The first thing I would ask is, "What's your expense ratio?" Because a lot of early investors will will >> um >> they'll add too many expenses. They'll underwrite themselves out of a deal is what it's called. And they'll have, you know, they live close to the building. They'll have, you know, on a 10 unit, they'll have a full-time maintenance person or full-time on-site, full-time management. You know, things that it's going to be very unlikely for you to find a deal if you keep underwriting that way. unrealistic. >> Yeah, literous test. If you if you want the broker's opinion on the deal or you have you have someone certainly in your market, absolutely get the broker's opinion on your deal. If you don't want their opinion on the deal, you're like, "Hey, I this is going to be a minor ride no matter what." Yeah. >> Don't waste his time. Don't waste your time. Don't give piece people pieces they don't need. It's one of the biggest It's one of my biggest pet peeves in all real estate. I hate it when a broker calls you back like, "Well, I really don't think that taxes are going to go up by this much." I'm like, I I've bought 10 deals here. They always do. This is this is what's going to happen. So, ask questions that you want the answer to. It's my uh Absolutely. That's my litmus test on that. All right, guys. Uh we will take yet another break and then we'll get back with live broker call. I'm going to see how the reception is going and I'll make a determination on exactly how we're going to execute this. But I have a good idea.