Brent Kawakami – Millennial, Engineer, Apartment Syndicator
Brent is currently invested in 450 multifamily units in Texas, Georgia, and Ohio. He started investing in real estate in 2012 buying, rehabbing, and renting single-family houses in the Dallas, TX area but eventually sold these properties to move into multifamily. He is a protégé of Mark and Tamiel Kenney of Think Multifamily, owners of ~3000 multifamily units across cities like Dallas, Atlanta, and Memphis. Brent has a B.S. in Electrical Engineering from the University of Texas at Austin and is a registered Professional Engineer in the state of Texas.

Key Points
From engineer to apartment syndicator
Engineering a life you want
The importance of having a mentor
Evaluating your strengths and weaknesses
Lightning Questions
What was your biggest hurdle getting started in real estate investing, and how did you overcome it?
Lack of experience. Brent looked to people doing what he wanted, and learned from them.
Do you have a personal habit that contributes to your success?
Brent focuses on The Power 5 every day, which he writes in his notebook
Do you have an online resource that you find valuable?
BiggerPockets
Podcasts!
What book would you recommend to the listeners and why?
Getting Things Done by David Allen
If you were to give advice to your 20 year old self to  get started in real estate investing, what would it be?
Start earlier – jump into real estate quicker!
Resources
Commercial Loan Success 

Brent’s BiggerPockets profile

Contact Brent at Brent@hellomultifamily.com

 Visit Audible for a free trail and free audio book download!

Real estate investing offers many benefits. One, and possibly the most important, is the ability to be passive. Passive income is a bit overstated in many cases. Even though receiving rental income seems passive, there are many things that go into cashing that rent check – education, analyzing properties, managing expenses, etc.

However, real estate investing allows you to build systems and processes to automate certain tasks. Listen as we dive into automation strategies, that allow you to work on your business, rather than work in your business. 

Key Points
Wealth doesn’t matter if you don’t have freedom
Why automation is important
How to automate your business
Dictate, delegate, & disappear
4 Steps to Automate Your Business
Do what you love to do, and outsource the rest.
Select a team – from virtual assistants to general contractors.
Automate – delegate to your team and leverage technology.
Do deals! Put the automation in action. 
Resources
www.jacobayers.com/event for special pricing to Jay’s Live Event Oct. 10th, 11th, and 12th

David Pere – Marine, Investor, Entrepreneur
David is an active duty Marine, and has been for 10 years, where he specializes in transportation and logistics, and has spent time as a recruiter for the military as well. Throughout his tenure, David has traveled all over the world, faced adversity, and learned from many cultures! He enjoys hiking, investing, and spending time with his family!

In 2015 David was pointed towards real estate investing by a friend. After reading books and researching online he decided to take action and bought a duplex! David lived in one side, and rented the other side out to cover the mortgage payment. That moment changed his life for the better!

From Military To Millionaire is David’s journey, and his goal is to help you become a millionaire!

Key Points
House hacking a duplex to avoid paying rent
Using a HELOC to buy an 10 unit apartment building
Investing in continental United States, while living in Hawaii
How to protect your downside
Do not let your income limit your wealth
Setting 10X goals
Learn, network, and take action!
Lightning Questions
What was your biggest hurdle getting started in real estate investing, and how did you overcome it?
Education was a hurdle. David delved into the world of real estate via podcasts, audio books, and networking.
Do you have a personal habit that contributes to your success?
David practices a morning routine inspired by Hal Elrod’s The Miracle Morning.
Do you have an online resource that you find valuable?
BiggerPockets
FromMilitarytoMillionaire.com
What book would you recommend to the listeners and why?
The Miracle Morning by Hal Elrod
The 10X Rule by Grant Cardone
The Book on Rental Property Investing by Brandon Turner
Long Distance Real Estate Investing by David Greene
If you were to give advice to your 20 year old self to  get started in real estate investing, what would it be?
Read, network, and take action!
Resources
Commercial Loan Success 

FromMilitarytoMillionaire.com

 Visit Audible for a free trail and free audio book download!

So you bought a piece of real estate – great! Now what? Let’s explore some exit strategies. 

Key Points
How to find qualified buyers for your property
Building a buyers list
Ensuring your property sells
5 Steps To Sell Your Property
Build the buyers list – using FaceBook ads, newspaper classifieds, etc. 
Stage the house. Kitchens and bathrooms are what sell a house, so focus there. Cookies don’t hurt, either! 
Promote the “event”! Create a short notice, 3 days prior to the open event. Use www.callfire.com for contact services. 
Create an open house frenzy. Create a 1 hour Open House. It’s important to hold the event to one hour, to create a sense of urgency. 
Rinse and repeat!
Resources
www.jacobayers.com/event for special pricing to Jay’s Live Event Oct. 10th, 11th, and 12th

Christian Montalvo is a young professional, food microbiologist, and real estate investor in the Dallas-Ft.Worth metro. Christian and her husband, Cameron, have house hacked their way to 8 units in less than two and a half years using conventional financing, sweat equity, and tons of hard work. Outside of working her full time job and building a real estate empire, Christian loves to spend time with her family, travel, exercise, read, and of course, listen to podcasts and audiobooks!

Key Points
Finding a financially sustainable lifestyle
Investing in real estate as a recent college graduate with a full time job
Using an FHA loan to buy  duplex
How to refinance and use an FHA loan for a second time
Goal setting – breaking 10X goals into daily tasks
 Reinvesting cashflow to increase the velocity of money
Lightning Questions
What was your biggest hurdle getting started in real estate investing, and how did you overcome it?
Saving up and getting financing for that very first investment property. By utilizing a low down payment, FHA loan, Christian and her husband, Cameron, were able to buy their very first duplex.
Do you have a personal habit that contributes to your success?
Christian practices the SAVERS methods from The Miracle Morning throughout her day.
Do you have an online resource that you find valuable?
Youtube.com
BiggerPockets
What book would you recommend to the listeners and why?
The Miracle Morning by Hal Elrod
The 10X Rule by Grant Cardone
The ABCs of Real Estate Investing by Ken McElroy
If you were to give advice to your 20 year old self to  get started in real estate investing, what would it be?
Watch out for student loans!
Resources
Commercial Loan Success 

Connect with Christian on Instagram here!

Follow CCT Rentals for great real estate investing videos!

Connect with Christian on BiggerPockets

 Visit Audible for a free trail and free audio book download!

Using other people’s money is critical for growing and scaling your real estate portfolio. From conventional bank financing to hard money, and everything in between, using other people’s money gives you leverage to do more deals and control more real estate.

Key Points
How and why to use private money
Raising money without asking for money
Hard money vs. private money
Building systems and processes to attract private money
Where to find private money lenders
Resources
www.jacobayers.com/event for special pricing to Jay’s Live Event Oct. 10th, 11th, and 12th

At the time of this episode airing, we are celebrating Labor Day, September 3rd, 2018. Traditionally, both Memorial Day and Labor Day have marked the beginning and end of summer. But each of these holidays has more meaning than just the coming and going of road trips, water sports, and heat waves.

Labor Day marks a special time in United States history. As a nation that was founded on hard work, first agriculture then the industrial revolution, its people  have made the United States one of the most prosperous countries ever. It’s with this same work ethic that many people still have today that drives our economy and society. However, work today looks different than it did during the late 1800’s when Labor Day was first celebrated. Labor Day started out as a revolt against poor, unsafe working conditions as the Industrial Revolution was taking off. It was during this time when there were few to no labor laws and very low standards for work environments. Men, women, and children alike were submitted to long hours with little pay. It was around the 1890’s these problems were recognized and American workers stood up to demand better working conditions.

Today our society still has certain professions that are notorious for long working hours and tough schedules. But the labor strikes in the 1890’s set the stage for much better conditions today.

So why does all of this matter? Well for several reasons. First, as a real estate investor, you are not shy of hard work. Many people start out building their investment business as a side hustle, putting in hours outside of their day job, working nights and weekends. And for this, you hard work and dedication to helping yourself and others is recognized and applauded. Secondly, it’s jobs that make our society function. Jobs indicate production, be that an assembly line worker at an automobile manufacturing plant, an accountant auditing financial statements of a Fortune 500 company, or the bank teller at your local bank managing deposits and withdraws for your bank account. Without jobs, we would just consume and not produce. This is the equivalent to swiping your credit card all the time, but never earning a paycheck to be able to pay for those things. And lastly and most importantly, jobs are what pay you as a real estate investor, rent every month. Without jobs, tenants cannot afford to pay rent, and without rent, your real estate investment will probably not fair well.

So to those of you working, creating jobs for others, and investing so that others can have a better quality of life, congratulations. Keep it up. Our nation needs you.

Well let’s get into the more nuts and bolts of this week’s episode. I wanted to give our guests a break from their work this week, in respect of labor day, so today it’s just you and I. If you’ll recall, last week in Episode 137 with Clayton Morris, we discussed the 7 steps to your first rental property. To recap those seven steps, they were:

7 Steps to Your 1st Rental Property
Set a goal.  Write that goal down and put it where you will see it every day. Reverse engineer your Freedom Number, and determine what it will take to reach that.
Find a deal. Use wholesalers, turn key providers, real estate agents, or hunt for deals on your own.
Calculate the Return on Investment (ROI). ROI = (Monthly Rent x 12 months x 0.6) / All in cost of property
Take action! Analyze deals, make offers, and follow through with consistent action. Don’t get stuck in analysis paralysis.
Get a property inspection. This will help you protect your downside. You will uncover any potential problems with the property and use that information to determine if you want to purchase the property.
Find a property manager
Rinse and repeat!
Today we’re going to focus on analyzing deals and how you can turn this process into a relatively easy one with the help of some rules of thumb and then bringing in a good calculator for further analysis.

Here’s how I personally go about analyzing properties.

I first set some criteria. My end goal for a single family home may be to cash-flow $250/month after the mortgage is paid and then all expenses are paid included vacancy, insurance, maintenance, taxes, utilities, and management (VIMTUM). Knowing this criteria, if a property doesn’t meet it, I don’t have to stress over whether I should make an offer, or what offer to make. I know my minimum cash flow per door I need, and don’t deviate from this

I use some rules of thumb to help me determine which properties are worth analyzing further. One of my favorite metrics to use is the Rent-to-Value Ratio. Some call this the 1% rule. Only 1% doesn’t work in every market. In my lower cost markets I invest in, 1% isn’t that great, and I can usually find deals that produce a little better than that. In San Francisco, you might only be able to find 0.6% RVs. It all depends on your market. But once you figure that number out, you can use it as a filter to analyze the deal further. If you are searching for properties and see a bunch of them that don’t meet this filter criteria, then don’t spend the extra time analyzing the deal.

Once I find a property that meets my initial criteria (usually the 1% RV rule, but sometimes I use others), I’ll analyze the deal further. This is where a good software calculate comes in handy. There are lots of calculators out there for your use on the internet. Most are Microsoft Excel based. Lots of them are free, and others are more sophisticated and cost. Regardless of what you use, make sure you are comfortable with is and it does what you need. For a single family buy and hold analysis, you won’t need anything super fancy. Just something that can calculate you income and expenses, and perhaps calculate the amortization table of your loan and project property values based on appreciation.

Remember a calculator is only as good as the information you put in. So if you’re calculating rents that are 25% higher than the market rents, and not accounting for maintenance, then you likely be disappointed when you buy the deal and the numbers aren’t what you calculated.

When analyzing a deal, I make several analyses revising and refining my numbers each time. To begin, I use the 1% RV rule of thumb. Then if it meets that, I use a calculator and estimate expenses, taxes, insurance, and vacancy rates, based on my knowledge of that particular market. If the numbers are still looking good, I’ll take another pass at refining those expenses. I will look up the how property values are assessed by the county assessor for that particular county. Note – this is a common pitfall for some investors. Most of the time, when you buy a property, the property value is reassessed by the county assessor. So that tax bill that the previous owner was paying will likely not be what you are paying. Lots of times, and especially if the owner has owned the property for a significant amount of time, a property is assessed for much less than the true value. So once that owner sells the property assessed at $50,000 for $120,000, you’ll be liable for a much higher tax bill. Looking at the current tax bill is a lagging, not leading, indicator of the future tax bill. Don’t make this mistake.

Next, I’ll call or email my insurance broker with a request for a quote for property insurance. He’ll need to know a few basic things about to the property, like age, construction type, roof type, etc. With that, I can get a more accurate insurance quote.

When I’m buying 1 to 4 family properties, I always buy a Home Warranty insurance policy. This insurance covers systems like HVAC, appliances, how water heaters, plumbing, and electrical. These home warranty policies have saved my lunch on more than one occasion. They usually cost the same for every single family property, this it’s easy to estimate. From my experience, a home warranty policy costs about $50/month for a single family. Well worth the money in my opinion.

For expenses like maintenance and vacancy, I use rules of thumb. I set aside 5% of the rents for maintenance. For vacancy, I’ll use anywhere from 4-8% of rents, depending on the property type, condition, and market. By setting aside money for maintenance and vacancy every month, you’ll be prepared for those expenses, when they happen. These expenses are sure to happen, so it’s smart to be ready for them.

Now you have all of the data to really analyze the property. Once you plug all of this information into your calculator, you will see what the property will cash flow. Some calculators will tell you your Cash-on-Cash return, show you how much money out of pocket the project will require, and other important metrics.

Next comes the most critical part – financing. As we all know, leveraging debt on a property magnifies your return (or loss!). By borrowing money you are able to control more property and grow your portfolio. By this point, you know the property makes financial sense to you, but what about the bank? How will they look at the property? For the longest time, this is where I would get stuck. This used to cause me a lot of fear due to the unknown. See banks have different metrics they look at. First, they want to know a property’s value so they don’t lend more than it’s worth. That’s understandable. The bank also looks at other metrics like the debt service coverage ratio. This is a metric that shows if the rents, minus the expenses are enough to pay the mortgage to the bank.

For those of you who listened to Episode 127, you remember our guest, John Matheson, from Commercial Loan Success. The CLS software allows you to put in the income and expense numbers you’ve already determined from your financial analysis and in minutes you know if the deal is favorable in the bank’s eyes. I’ve personally started using CLS to vet a few deals I’ve been working on. It’s very intuitive to use, and in just a couple minutes I was prepared to go to the bank armed with a One Sheet on the project with those metrics that banks care about. Not only can you vet a deal for lending, if you own rental property and are looking to sell or refinance, you can establish a realistic selling price, or find out how you look before going to the bank to refinance your property (remember velocity of your money is important!).

Analyzing properties is a numbers game, both literally and figuratively. You have to look at a lot of deals to find the ones that make sense to really crunch the numbers on. Then only a few of those deals that you analyze will be worth making an offer on. Then only a small percentage of those that you make offers on will actually be accepted by the seller and actually close! This is one big funnel, and it’s important to keep that funnel full and flowing, and be able to weed out deals quickly. Systems, processes, and tools all help you do this. Setting your criteria and sticking to it, sorting though deals, and taking action on the ones that meet your criteria is a recipe for actually buying deals.

Every step of this process is critical, from analyzing deals, to making offers, to lining up financing. The first deal you analyze will seem like it takes forever. Then the next one goes quicker, and then the next one goes even quicker. You’ll get a better idea of how to estimated expenses, from taxes to insurance and vacancy. You’ll get a better idea of market rents in your neighborhoods. You’ll pick up a good calculator that you like and find a good financing tool like CLS to help you automate and streamline the process.

But please, I emphasize, please, don’t do all of this and never make an offer. This is a crucial phase, but not one to get stuck in. You must act on all of your hard work, else it’s all in vain. Rely on your numbers, and not the emotion. If the deal looks good according to your numbers and your research, then take action and make that offer. Soon enough you’ll have closed your first deal, and you next one and you next one, each one getting easier than the last.

If you have any questions about how to set your criteria, what tools and resources I use, or anything else, reach out to me. I”d be happy to show you what has and hasn’t worked well for me.

Resources
Commercial Loan Success software

CLS Video

Visit Audible for a free trail and free audio book download!

Build and track your foreclosure system – Jay reviews records twice a week at the local courthouse
Build a direct mail campaign
Analyze property and get an inspection
Control the deal in 1 of many different ways (i.e. – subject to, seller financing, private money, lease option to purchase, traditional financing, etc.)
Exit the property  (wholesale, rehab and retail on the MLS, sell on rent-to-own, or lease option)
Win/Win/Win/Win

Seller with debt relief
Private lender on secured ROI
New buyer gets a home
Lastly, you, the investor

7 Steps to Your 1st Rental Property
Set a goal.  Write that goal down and put it where you will see it every day. Reverse engineer your Freedom Number, and determine what it will take to reach that. Clayton provides a free resource to help you determine your freedom number. Check it out here.
Find a deal. Use wholesalers, turn key providers, real estate agents, or hunt for deals on your own.
Calculate the Return on Investment (ROI). ROI = (Monthly Rent x 12 months x 0.6) / All in cost of property
Take action! Analyze deals, make offers, and follow through with consistent action. Don’t get stuck in analysis paralysis.
Get a property inspection. This will help you protect your downside. You will uncover any potential problems with the property and use that information to determine if you want to purchase the property.
Find a property manager
Rinse and repeat!At age 13, Clayton saw his dad lose his job. Ever since then he had a fear about money, and he always knew there had to be a more entrepreneurial way of creating wealth. He got into real estate investing to secure a future for his family so they didn’t have to go through the same financial pain as he did growing up. After years of success building up an enormous amount of passive income through real estate investing, Clayton started Morris Invest because he realized his passion is in helping first time real estate investors learn they don’t have to just work for a paycheck, and they don’t need $1 million to achieve financial freedom.

Key Points
How to calculate your Freedom Number
Going from a high profile job as a cable network news anchor, to a full time real estate investor
Be, Do, & Have process
Understand your “why”
Money, people, and a deal – you only need 2 of these to get started
Lightning Questions
What was your biggest hurdle getting started in real estate investing, and how did you overcome it?
Lack of education on where to start.
Do you have a personal habit that contributes to your success?
Clayton journals and meditates every morning.
Do you have an online resource that you find valuable?
Slack.com
What book would you recommend to the listeners and why?
The Four Spiritual Laws of Prosperity by Edwene Gaines
If you were to give advice to your 20 year old self to get started in real estate investing, what would it be?
Block out all distractions. Buy and hold real estate is the number one way to build wealth.
Resources
Visit Audible for a free trail and free audio book download!

Morris Invest

It takes a lot of days and nights to become an overnight success. Here are 5 things you can do every day to position yourself for success down the road.

Read every single day. Reading is like fuel for your mind. It exercises your brain, while taking in what could be valuable information (depending on what you’re reading). Set aside 10 minutes every morning to read. Keep your book by your nightstand and every night before bed read a few pages, rather than surfing social media, watching TV, or staring at the ceiling.
Write down goals every day. The act of writing down your goals has been proven is many scholarly studies to increase your chances of achieving those goals. It keeps the goal at the forefront of your mind. Once you have that big goal, break it into monthly, weekly, and even daily steps to achieve.
Listen to podcasts. You’re already doing this so great for you! Running, commuting, and working out are great times plug in some headphones and catch up on your favorite podcasts.
Do something, no matter how big or small, every day. Consistent action turns into habits. These habits will generate long term results far beyond your imagination.
Replace bad habits with good ones. By eliminating a bad habit, you’re shedding dead weight. By replacing it with a good habit, you’re just adding fuel to your fire to become an unstoppable machine! For example, you could cut back on your use of social media, and replace it with said podcast/book/reviewing your goals.Real estate investing is a lot like climbing Mt. Kilimanjaro. But before you ever take that first step, there are things you can and should to to prepare yourself. We’ll lay these three simple things out, and dive into each in detail.

Education
Network
Analyze deals & make offers