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Would you buy multifamily real estate now? Asset prices are falling, mortgage rates are still high, banks aren’t taking on new loans, and every real estate “expert” thinks that the multifamily space is full of dead deals. If this was so true, then how did Brian Adamson build a multimillion-dollar, 120-unit portfolio with plenty of cash flow and seven figures in equity all in the past four years, a time of tremendous booms and busts in the multifamily market? Well, he’s about to show you!

Brian started investing before The Great Recession but didn’t walk away from the housing crash unscathed. Thankfully, a few upside-down properties didn’t stop him from investing as he continued to do wholesaling and fix and flip deals from 2008 onwards. But, in 2020, he had a calling to start investing in multifamily during a hot market and in areas most real estate investors would run from.

Fast forward close to four years later, and Brian has a rental property portfolio of over one hundred units, with tens of thousands in cash flow coming in every month and millions in equity. He bought when he shouldn’t have, in places investors run from, with loans even top investors refuse to use, but he came out on top. In this episode, he’ll break down his exact strategy, what and where he’s buying, and how much money he’s making, plus some real estate markets he’s bullish on in 2024.

David:
This is the BiggerPockets podcast show, 903. What’s going on everyone? I am David Greene, your host of the BiggerPockets real estate podcast, today here with my partner in crime, Rob Abasolo. How’s it going, Rob?

Rob:
I’m good, man. I’m good. I’m tired. I woke up at 5:30 today. I’ve started the routine again. I’m back on the grind, but there’s light at the end of the tunnel because we’ve got a great show today where we’re going to be featuring an investor who is successfully investing in multifamily today in 2024.

David:
In today’s show, you’re going to see Rob put on his diva hat as we dive deep into a topic that most people are afraid to get into. Today’s guest, Brian Adamson, shifted from single-family rentals into multifamily investing at a time when others consider it risky to invest in that asset class.

Rob:
Yeah, we’re going to cover how to be successful in multifamily today and how to look at markets to invest in. We’re also going to address the big ole elephant in the room, which is funding in the multifamily space and some of the ticking time bombs that might be lurking around the corner for this niche in real estate. We’re also going to get into the nitty-gritty of the numbers on deals that Brian is currently doing in markets that he thinks will be profitable in the multifamily space for the next couple of years.

David:
That’s right. We’ve got awesome content for you. Brian is going to be sharing how much he likes to pay for door, what he wants the ARV on that to be, when he exes deals versus when he keeps them, what markets he invests in, as well as the rents that he’s looking for on the properties that he’s buying. This is some great stuff, so if you’ve been looking for an opportunity in real estate, there’s probably not a better one than in the commercial space is everybody else is afraid to get into that asset. We’ve got what you need on today’s episode of the BiggerPockets podcast. Let’s get into it. Brian Adamson, welcome to the BiggerPockets podcast. How are you today?

Brian:
I’m doing great, man. Thanks for having me.

David:
All right. Now, you’ve been in the real estate game for a long time now, me too, so let’s talk. What strategies are working for you in today’s market?

Brian:
I did fix and flip wholesale for many years. I bought single family at the start of my career back in 2006, and then most recently, the last few years, I’ve been buying commercial multifamily. Started out buying semi-occupied units and then will come in and reposition them. After the rent moratorium in my specific market, it was taking six, eight months to get people out. I’m like, well, I can’t pay for them to live there for free and then still have to do my reposition. I switched up my strategy and started buying vacant units. We come in, do the renovation, put our people in from day one. That’s we’ve been doing the last 18, 24 months to date.

David:
I like that you said commercial multifamily because it removes the confusion between are we talking two to four units or five units plus, because both sides use the phrase multifamily. I’ve had entire conversations where I thought they were talking about big apartments and they were talking about triplexes the whole time, so thank you.

Brian:
I’m a unicorn. I do both. I make sure I delineate which one I’m talking about for that very reason.

David:
Let’s talk about, first off, give me an overview of what your portfolio looks like right now, and then I’m going to dig in on some specifics.

Brian:
Right now, I’ve got about 120 units. I got a small tranche of two to four units, maybe got a single family or two in there. Then mainly though is I got a couple of six-unit buildings. I got a couple of 16-unit buildings. I got a 20 unit, a 40 unit, and 12 buildings, oh, properties, thank you, Rob, properties in total with 120 units.

David:
Now, I want to definitely hear why you are buying multifamily when everybody is running away from multifamily. That’s interesting. I also understand that like me, you are an out-of-state investor, so where do you live? Where do you invest and why did you pick that market?

Brian:
For sure. I live in Orlando, been here for the last almost 14 years, and I invest in Detroit. Now, many people think I invest in Detroit because that’s where I’m originally from. However, that’s not the case. It just so happened to be a great market with great equity positions and great cashflow positions. Unlike investing here in Orlando, while it may be sexy to say I invest here, the margins just aren’t there. You know what I mean? With respects to the yield that I get investing in the Midwest. When you develop good systems and processes and accountability measures, you figure out that you’re susceptible to the same things going wrong eight blocks away as you are 800 miles away. For me, if the risks are all the same, then I’m going to go where the highest potential yield is. That’s why I’ve invested from afar, the way that I have.

David:
I think you and I need to write a book for BiggerPockets, Eight Blocks, 800 Miles and 8 Mile Road, How I Picked Detroit and Why it Rocks. There are gems and areas that you would typically think of like Detroit back in the Josh Dorkin days. People definitely dumped on Detroit as a terrible market, but you’re making it work. Is there a certain local market knowledge that you have that you know where to invest in and where not to invest in because you live there? Or do you think that the gentrification, the money that’s moved in there, if people aren’t aware, a lot of mortgage companies moved in when the auto industries left and they brought a lot of jobs and opportunity, is that why you think Detroit is doing so well?

Brian:
It’s a myriad of those factors. It’s interesting because when I started in 2006, I was in college, I was a junior and a buddy of mine was flipping houses in CD class areas. I didn’t know what any of that meant, this is all retrospect talk. He gave me an opportunity to get started with a $6,000 refund check basically to help cover the down payment for his buyers to essentially gift them the money because they were using stated income loans. Then when he flipped them the house, he gave me a return on my investment. That’s how I got started. I’m going back to your previous question, David, about why am I running toward the market when most people are running away.
At that time, I didn’t have any education. I was just being opportunistic. I started buying properties with stated income loans my senior year in high school, I mean, in college as well. 2007, obviously, 2008 happened, and so while I was upside down on some of those bad investments at that time, I still wasn’t jaded. I was so new. I’m like, that’s three bad deals. All I know is that this $148,000 house is 29 grand now. I’m going to go do more of these. I bought over 20 doors from 2008 to ’10 when the market was contracted. Just because it just made sense to me, I’m like, I saw a lot of people losing their shirt and running away, but I’m like, if you picked this stuff up, you buy a house for 10 grand and you can make 700 bucks a month, how do you lose?
Still didn’t have some fundamentals down yet in terms of analyzing deals properly and planning for capex and all those types of things. I ended up being affected by that as those properties started to age and had to get rid of some of the portfolio. My point is that same energy now. Looking at what’s happening in the market, over a trillion dollars in bad debt coming due over the next 24 months or so in the commercial space, probably 600 billion of that in multifamily, specifically. That just to me means there’s more opportunity. If you know how to analyze deals, you know how to hire and build good teams and go from A to Z on the execution, then it’s a lot of great opportunity out there right now for operators that are being hurt that need help.

David:
All right, stick with us, we’ll be right back after this quick break. Hey, everybody, welcome back. Let’s pick back up right where we left off.

Rob:
That’s interesting because it does seem like there’s a bit of a ticking time bomb in that specific niche of real estate and you’ve known this, and in the last few years, you’ve decided to scale up into multifamily. When and why did you make that choice?

Brian:
June 20 of 2020, first time out the house during the height of COVID where my family, we went to Clearwater Beach, it was Father’s Day, actually. I was out on the balcony praying and God, clear as day told me, he wanted me to start investing in commercial multifamily. This didn’t make sense to me at that time because that was totally juxtaposed my whole business plan for that year, so much so when I called my consultant, he told me I was nuts. I was like, “Bro, I’m telling you, I heard this clear as day, I got to act on it.”
I went out, started seeking a mentor in that area all because I had done single family for 14 years and had a lot of success. I still believe in education. Found a mentor, went and got some framework and started taking action immediately. Had 136 unit locked up in 60 days after getting the framework. Anyway, while that deal didn’t work out and we don’t have enough time for me to go through that whole story, it got me in the act of taking action. From that deal led to the next one, which was my first one that I closed, which was a six-unit deal. Then shortly after that, I closed a 40-unit and then I just kept buying after that.

Rob:
Previously to the multifamily stuff, you said you were doing fix and flips, right?

Brian:
Yeah, fix and flip and wholesale.

Rob:
Cool. All right, so fix and flip wholesales, which are obviously once you’re a skilled investor, you’re good at one thing, it’s probably easier for you to transition to something else in real estate. More than someone just breaking into industry, you decide, hey, I feel like I want to do multifamily. You get into this first property and it didn’t work out. Tell us why. What was the actual process there? Because I feel like just jumping into 136 unit is something that most seasoned investors wouldn’t even do. Give us a little bit of a timeline of what happened in that deal.

Brian:
I didn’t realize I got to have a therapy session today. Well, thank you, Rob.

Rob:
What do you see on the cards?

Brian:
Yeah, exactly. It was a crazy situation where I found this deal on LoopNet and I started, it was in Flint, Michigan, 136 units. They wanted like 5 million bucks for this thing, and I knew it was overpriced. I just so happened to call the number. Why not, right? Called the number, just so happened the number was to the owner. He lived in Miami, I live in Orlando. We talked a little bit about the deal and I told him, I said, “I’d love to come down there and get knee-to-knee with you and do lunch.” I drive down to Miami and we have a conversation and he just was like, “Look, if you’re serious, I’ve had this thing fall in and out of contract a couple of times. If I don’t sell it by March, I’m going to lose it to some back taxes.” He was like, “If you fly up there, do all your due diligence and you’re ready to move forward, then we’ll put it under contract.”
I moved in faith, I went up, I got my contractors out. We did phase one appraisals, serving, everything. We did all the due diligence on it, walked all 136 units and finally got the thing under contract by Halloween. I was spending tens of thousands of dollars before I even had this thing under contract because I just believed it was that good of a deal. I got the number down to well under 2 million bucks because we had probably about a $400,000, I’m sorry, it was a $4 million renovation we would’ve had to do to it, but it would’ve been worth 8.5. In that process, because of working on a deal that big, shout out to Mayor Neeley, I got to meet the mayor of Flint. He and his cabinet gave me a ton of support and met former state senators and formed alliances with the local Boys and Girls Club.
It was a tremendous thing, and it was a faith walk because obviously, I’d never done it before, but this is why confidence is only built through competence. I only felt like I could do it because I took the time to invest in myself, get the right support, get the right mentorship network that afforded me enough confidence to keep taking these action steps. Through it all, we got redlined by a couple of lenders. We got pretty close to getting this thing over the finish line twice. When it got to final committee at both of these different lending institutions, they pulled on it because they didn’t like the fact that it was in Flint. Many of them thought that there was still a water crisis, although mass media covered the water crisis, but they didn’t cover the other side of it, which was the fact that it was fixed. I learned that from spending so much time up there that the issue was resolved.
By this time, it’s getting close to the time that the owner said that he was going to lose it if he didn’t figure something out. He ended up taking another contract on it, and those guys that were coming in had the money but not the infrastructure. They ended up calling me after I got cut out the deal and wanted me to partner with them and they were going to bring me in on another 171 units. The deal turned into almost $24 million worth of real estate, a little over 300 units. I would’ve had to move back to Michigan. They were going to pay me a salary. I would’ve had equity in one of the buildings but not the other. When I finally got an opportunity to meet their team, they flew to Orlando for a final meeting with me and some just didn’t sit right, to be honest. I saw the dollars, but it was a lot of character things, things that were mentioned during that meeting that just didn’t align with me and where I’m at and where I was at in life and that time.
I went to told him, give me a week, let me think about it, pray about it. Just so happened I got invited to this Mastermind in Miami and Jeff Hoffman was there and we sitting in this small room, this intimate setting. Jeff was just talking about how this billionaire was pursuing him to do a deal on a private island. He was like, he wasn’t interested. The guy flew his private jet to pick Jeff up in Orlando, and Jeff was like, “What part of I can’t be bought don’t you understand?” Somebody in the room asked Jeff like, “Why were you so upset with the guy?” He said, “Because our company culture is, we only do business with people if we can ask ourselves are they one of us?” For me, I felt that confirmation in my spirit at that time that, that was my answer. I got back that Monday. I called up the guys, I pulled out of the deal. The very next day is when I got the 40-unit apartment building that I eventually ended up closed.

Rob:
Let me backtrack a little bit here, because you said something that’s really interesting to me that I don’t want to gloss over, I feel like a lot of people don’t necessarily know how to close this loop. You mentioned the deal was roughly about 2 million bucks, somewhere in there, and you were going to need to put in $4 million in renovations, so we’re at 6 million total. As a result, it would be worth 8 million. You’re adding $2 million in value. Why is it now worth $2 million more after the renovations? Where does the actual, like what kind of metrics play into getting that much money out of a property?

Brian:
For sure, that’s a great question, Rob. Essentially, we did the capex, we’d have done the reno, but with that, would’ve afforded us stability to then increase rents. Once we increased the rents and occupancy, then our NOI would’ve increased. Then our NOI, which is our net operating income divided by the cap rate in that area, would’ve then given us our new evaluation and added that value to the property.

Rob:
That’s really interesting, because you mentioned you got some appraisals on the property. Were the appraisals that you got based on the actual real estate, the actual building improvement on the land, or were the appraisals based on NOI and the cap rate and all that good stuff?

Brian:
We did both. We did an as is appraisal, which was part of my leverage for getting the price down based on what he put a hat out there on the internet. Then we did an as complete with the income approach as well as the sales comparison approach. On these types of assets, you look at it from two different ways. You look at it from an income approach as well as the sales comparison approach, which is your cost per door versus what the actual thing is producing from an income basis.

David:
Now, I’m going to ask you the question every investor hates, so work with me here. We’re going to try to get as specific of an understanding of the numbers as we possibly can. Nobody go blow up Brian and say he said 40 a door and I found out it was 41 a door, so don’t worry about that. If we’re looking at someone who wants to buy a deal similar to this one, what’s the price per door that you’re trying to get? I’ve got a series of questions to ask you like that.

Brian:
I won’t talk about the one that I didn’t do, because that’s the one we were just talking about in Flint. In my local market in Detroit, I want to be all in at no more than 45,000 a door, and that’s with the acquisition as well as the improvements that we have to do to the property, so that I could potentially exit at 60,000 a door or more at some point.

David:
Beautiful. In a sense, this is like a burr or a flip where the acquisitions, what you’re paying for the property and the improvements would be your rehab budget. You want to be all in for $45,000 a door and you want to try to bump the ARV to 60,000 a door so you could sell. Now, are you buying these deals with other investors?

Brian:
I am, yeah. Most of my deals, I try to look for partnerships first and then I’ll put my money in if I have to, but I’ve been fortunate to raise a lot of capital.

David:
Now, you may keep the property of course, but you want to know that you could sell it if the partners wanted to get their money out, if interest rates weren’t in a favorable position, if you had a better place to put that capital. That doesn’t mean we’re flipping apartments, but you want to have that exit strategy available to you. It’s always good to have an emergency chair there when the music stops because when you’re playing musical chairs, which is the world of commercial financing, you don’t know when that balloon payment comes due, what that chair is going to look like that’s sitting right in front of you. What is the general rent you’re trying to have per door that you’re looking for?

Brian:
It’s interesting, the first 120 units I bought, I strategically bought them all in affordable housing space. I did that because at the time in which I started investing in commercial multifamily, obviously, again, June 20 of 2020, that was at the height of COVID. All of this, the CERA funds, and all of that didn’t exist yet. All the operators who had A and B and C class stuff that didn’t have guaranteed rents were being hosed and all of that.
For me, I was like, well, I want to start the base of my portfolio with as much guaranteed rents as possible so I could have Section 8, other subsidized rents, et cetera. I’m using Section 8 and other subsidized rents in my market. I’m actually outperforming market rent in those areas. Say for instance, on a one bed, one bath unit market, it’s probably 750 to eight. I could get 950 Section 8 in these areas that I’m buying in. Two bed, I could get up to 1,200 even sometimes. The one beds, we can get as much as 950 to a thousand Section 8. Then the two beds, in some cases, we can get as high as 1,200 bucks.

David:
You’re looking for anything between 900 to 1,200 a door, and of course, not every door is the same, so you’re going to have a mix of one bedrooms and two bedrooms in here. That does give people a pretty good understanding of a target to shoot for if they have a market similar to Detroit. Now, what are some of the things that would automatically disqualify a property? You don’t care what the numbers are, what the price is. Is there neighborhood issues, is there flood issues, is there crime issues? Is there building age issues or certain things in a building that you don’t want to mess with?

Brian:
Well, before I answer that, I do want to just put one more caveat on the market rent piece. Because although I evaluate these deals and I know that my target rents are Section 8 rents, which are outperforming market, but I also underwrite the deals from a market rate perspective. I keep that in mind because if for whatever reason I had to put a market rate tenant in there, I don’t want to overshoot what I can really get by assuming I’ll be able to guarantee that I’ll have the higher performing rents in there. I underwrite the deals more conservatively to make sure that I got that wiggle room and agility if it came to that. I just wanted to clarify that point so that people weren’t too overzealous in their approach.

David:
What are some things that you would just say, nope, I’m not going to mess with it? Is there an age of the apartment you don’t want to deal with? Are there neighborhood metrics or statistics that would cause it to be disqualified?

Brian:
Yeah, I buy a C minus, even D plus, but I won’t buy any F properties. I’m not doing that.

Rob:
I’ve got a question. I mean, it seems like you have a pretty good system for how to underwrite and how to pat it in a bit where you’re coming in a little bit more conservatively. Let’s talk about the funding a little bit, because I think right now with everything going on, I’d imagine commercial lending is probably not all that favorable. What’s your experience been in the last 12 months as it pertains to getting loans and getting funding on some of these commercial multifamily properties?

Brian:
To David’s point earlier when he said how finicky it is, it is so weird. You can literally start the underwriting process, have an application in, have an approval, and then two weeks later they’re like, yeah, we can’t do it. The markets have changed that much in that short period of a time. I’ve seen more stability as of late. 12 months ago-ish, we were trying to refinance a larger unit and we ended up having to do a second round of bridge debt on it just to wait, because the product that was available was so outrageous, like the bridge debt was actually better to some degree.
We’ve been fortunate that our units still performed with the bridge debt, but we’ve also had some other refis that have gone through that we put 30-year debt on recently as well. I’m actually, hopefully by the time I get off of here, I’ve got a six unit that I’ve got an appraisal coming back on today that hopefully will get closed out on the refinance next week in a 30-year debt. What I can say is the last 45 days I’ve seen things open up in the lending market again, but 12 months ago, yeah, it was brutal, for sure.

Rob:
How are you combating this? Are you just doing the bridge debt and hoping that it works out once that bridge debt is done, or is bridge debt the answer to some of the wonkiness that’s going on right now?

Brian:
It is. I think because my strategy also changed, I’m more comfortable with bridge debt than most operators because we’re buying these things vacant, which requires bridge debt anyway. Either you’re using all private capital or you got to use a bridge because we’re doing several hundreds of thousands of dollars on rehabs on these properties. We’ve been, again, fortunate because we’ve been buying at such a deep discount that our deal still cashflow with the bridge debt. You know what I mean? It’s not great, but it’s better than not.

Rob:
It works.

Brian:
Yeah.

Rob:
We’re about to take one more quick break, but stick around because when we come back, Brian is going to tell us how he’s combating the risks of bridge debt, which is a huge topic right now, what kind of profit his portfolio is actually making and the markets he sees the most potential in, right after this break.

David:
We’re back. Brian Adamson is here and we’re talking about how he’s making multifamily deals work in today’s market when everybody else is scared of them. Let’s jump back in.

Rob:
Can you give us just a quick refresher on how bridge debt works? Because we’ve talked about it enough where I think there’s some people at home that are like, I don’t really quite understand that concept, just what does that mean?

Brian:
Most of our acquisitions, we’ll get 75% of the purchase, which means that we have to put 25% down and then they’ll cover a hundred percent of our rehab. In that instance, depending on what the totality of the project is, we’ll immediately take out a 12 year, I mean 12 month or even a 24 month, depending on how the scope of the project, because it’s cheaper money if you pay for it upfront that you need an extension versus doing that on the backend. Essentially, bridge debt is designed to help operators get going on a project to bring it to a place of stability so that then you can get long-term financing on it from a more conservative institution.

Rob:
Got it. The idea is we’re trying to have this extension with bridge debt for as long as we can, hoping that the current market rates maybe go down a bit and we can refinance long-term into longer-term debt that is lower interest.

Brian:
For sure, 100%.

Rob:
Awesome. Okay, so tell us a little bit about your portfolio now. I know you mentioned you have a hundred units across 12 properties today. What does that look like in terms of profit? People hear the big numbers, is it more profitable than one would think? Is it not as profitable? Give us an idea of the cashflow of a portfolio that size.

Brian:
Man, I love this question, Rob. I’m always preaching this from my platform and in my community because I think a lot of new investors especially, they’re off on this. Don’t get me wrong, I think there’s a place for both, especially on the tax and depreciation, there’s a place for both. At the very same time, I want the new investor listening to this to understand, you may make more money on a four unit than you would on even a tuning unit in some cases, and that’s all predicated on what percentage of that deal do you own. You got a lot of people that may say, oh, I got a thousand doors. I’m not knocking this, I’m just bringing context to it. They may own 3 to 5% of that. That’s not horrible, but at the end of the day, it’s more of a trophy than it is, it’s something that can help them go on vacation. That, I can promise you. Don’t compare your unique starting point to those that have a big door count because you may be printing money when they’re not.

David:
Door count is the most useless metric anyone could ever give. It always happens at a meetup and they always say it to newbies. I went through the same thing when I was new, when I felt this big, when I’m listening to these people talk about all these doors and then I find out my net worth was like eight times theirs because I had six properties, but I owned all of them and they didn’t. I realized that people just start to say, I got 12 doors, but they don’t tell you it’s a garage door, a screen door, a front door, a bathroom door, a side door, a cabinet door. It’s not all the same, so I’m so glad that you’re mentioning this.

Brian:
It’s important. It’s important because I’ve got a four unit, for instance, that I bought a couple of years ago. I want to say all in, we were at like a hundred, maybe 110, and the debt service on that thing, PITI payment is like 900 bucks, principal, interest, taxes and insurance. We bring in, I think that one gross is 3,200. We net every bit of two grand a month on that property. Those are great numbers and those types of deals exist. On our larger units, I own on average 40 to 50%.

Rob:
That’s healthy, though. That’s more than.

Brian:
Healthy, yes, it’s pretty healthy, for sure. I mean because the way in which I structure my deals, the larger stuff anyway, typically, I open up 50% for limited partners, 50% for general partners. For the newbie that wants to get into jumping up to that space, understand that banks are going to require that you have experience where it’s like, well, how do I get experience if I don’t have experience? It’s a great question.

Rob:
The internship conundrum, where you need eight internships before they’ll consider you for the internship. This is my biggest frustration in college, and I was like, I can’t become an intern without becoming an intern first. What do you want from me?

Brian:
100%. You need to go out and find somebody called a sponsor. With these sponsors, you can have them participate in the deal from an equitable position, you could pay them outright or you could do a combination of both. Although I had 14 years of experience when I got started, my first couple of deals, I had to bring in a sponsor. After that though, then my equity position increased because I was able to sign off on my own debt and didn’t need to bring somebody in and give up a piece of the deal. My encouragement though in saying all of that is start where you stand.
Some people give up 80% of their deal, they own 20% when they start. Some people give up 90% and 10%. I don’t believe any investor should work for free, but I also think that you should be open-minded to what the ultimate goal is and start building toward that. Don’t worry about hitting a home run on your first one. Just keep hitting base hits and let that thing grow organically. That being said, I mean we make tens of thousands of dollars a month. We’ve got a couple of million dollars in equity given, I don’t know where the market is right now, somewhere between three to five I would say, and make tens of thousands of dollars in profit a month.

Rob:
That’s fantastic. I think what you said honestly is very fair because I don’t really like to poo-poo the door count thing because there are so many scenarios and so many times where new investors are bad at negotiating and they’ll take a bad deal just to get a free house. You might say, all right, yeah, you can have 75% equity. I’ll take 25% and I’ll manage it for free just so that I can get into this deal. A lot of investors get into these types of deals where they work for free for a long time, and I think it’s fair to be proud of maybe a partnership like you’re talking about where in your instance, I mean you have a little bit more probably equity than the people I’m talking about here, but I think it’s fair to say, hey, I’m working for free to get into this property. I think that to me is, the concept of partnering with someone to get a quote “free property” is something to be proud of, versus the actual arbitrary number of how many doors that might be.

Brian:
I could see it both ways. I think the thing I cringe most about when people work for free though, you got to have a lot of confidence in whomever that person is that’s making you all these promises or broken promises even. I agree with you, we got to be humble and start where we stand. It’s just that we got to make sure that whatever door we walk through, even if it is for free, that it’s going to lead us to the actual thing that we truly love.

Rob:
Could not agree more. That second opportunity rarely comes in those scenarios, so I agree with you there, and I think that’s super fair to bring up.

David:
Now, I understand that you’re working on achieving cashflow by actually paying attention to the asset, which can only happen if you move away from this passive investing approach, and that’s a personal thing with me. I’ve lost a lot of money over the years. I’ve seen a lot of other people lose money over the years by thinking that you just buy a property and forget about it, you stop paying attention to it. What’s your thoughts on achieving cashflow by keeping costs down and paying attention to the asset, treating it like something like a business or a child, something you have to pay attention to versus the way that real estate is often discussed where you just buy it and you never think about it again and money just shows up?

Brian:
We got to stop telling this lie that rental properties are passive income. You know what I mean? There’s nothing passive about it if you want it to be successful, in my experience. For me, it’s about keeping your pulses on what’s going on at all times, making sure that you’re meeting with property management companies regularly. We got a weekly cadence where I meet with my property management company in addition to the weekly report that they send me. Because even I believe monthly may be a little too loosey-goosey because by the time you find out something 30, 45 days later, that thing can evolve into a 90-day problem really quick. I like having a cadence and a rhythm of meeting with them weekly and really just monitoring more so the effectiveness and efficiency of the operation as opposed to the money that comes out of it.

David:
That’s literally the same cadence I use, it’s weekly meetings. I’ve actually stopped meeting with Rob every week and just to highlight this, as you can see, his shirt is halfway unbuttoned now. He’s showing more chest than he ever has. If you guys are watching on YouTube, you see what I’m talking about. This is an example of how quickly things fall apart when you stop paying attention. Rob?

Rob:
I can’t afford to have the button resewed on. The trials and tribulations I face is taking the buttons off my shirts. What you’re saying, Brian, is that you can’t passively make $10,000 a month and live on a beach and sit my ties, just like all the TikTokers say?

Brian:
It hasn’t been my experience, Rob. It has not been my experience.

Rob:
It’s funny how not passive Airbnb can be for me. I have a property manager/assistant and she, in theory, does all of the managing for me. I live a whole life that I shield her from that she doesn’t even know about. Even meeting with your property managers weekly, there’s just so much work and strategy that goes into making sure that your property managers are also properly property managing your portfolio

Brian:
100%. They essentially need to become a partner in your business, and if you don’t build that kind of synergy and alignment with them, then they just become another expense. I want to make sure that my property management company feels like a partner and that they treat my business as their own in my absence. I invest remotely, that’s been a great strategy for me for over the last decade. Whenever I’m in town, I’m spending less time looking at my properties. I’m spending more time with the people that are tending after my properties. I just think that’s a really, really key piece.

David:
We could do an entire show just on this, and maybe one day we will, Brian. Because it’s like, I just want to shout out from the rooftops, you got to make up for 10 years of bad information people have been hearing that real estate is passive. Brian, I got one last question for you before we let you get out of here. What are some markets that you are bullish on or you think people should be considering similar to how you found Detroit that are worth investigating right now?

Brian:
I think Milwaukee is one of those places. I believe, definitely Cleveland, Cincinnati, Columbus, parts of North Carolina. A lot of people in my community are doing things in Georgia, even. Lithonia, Atlanta, some of those outskirts surrounding Atlanta. I just think the yields in those markets are really good. Just to be clear, it’s a good market in every market. It’s just about what is good, because I think that’s relative to the investor.

David:
And your specific strategy. That’s what I’m getting at for what you’re doing, the way you look at a deal, you feel those markets have a higher-than-average probability of finding a deal that’ll work.

Brian:
For sure.

David:
All right, and do you think people should stay away from commercial or do you think now is a good opportunity to get into it?

Brian:
I think it’s a great time if you don’t know it to learn it and then jump right into it, like 100%. I believe that we have to get out of this idea that just because it’s cheap, we should buy it. It’s the fastest way to lose money because cheap properties are expensive, so make sure that you really understand how to evaluate these deals and you don’t get overzealous just because of the discounts that you see.

David:
Brian, thanks for being here, man. I appreciate it. This was really good stuff. If you guys would like to learn more about Brian or Rob or I, you can find our information in the show notes. Let us know on Instagram what you thought about today’s show, and how happy were you that a guest actually gave the numbers, the metrics, and even cities that he likes to invest in when nobody else ever wants to give those details. Well done, Brian. We appreciate you, man. I’m going to let you get out of here. This is David Greene for Rob what are you doing with email Abasolo, signing off.

 

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