Episode 21: The Tables are Turned on David Lindahl!

In this episode of the Multi-Family Deal Lab Podcast we turn the tables and David Lindahl is the guest and answers questions about What RE Mentor IS, how it started and what it can offer to YOU!

Speaker 1: Stay tuned for a special edition of the multifamily deal and podcast. What’s one thing you want people to come away with as a result of hearing our conversation?

Speaker 2: I want them to know that if they decide to be in landlord and manage their own properties, we will hunt you down and shoot you.

Speaker 3: Welcome to the multifamily deal lab podcast, where we dissect a deal before your eyes and ears. So you can discover the strategies and tactics that got each deal to the finish line strategies and tactics that you can put in your own toolbox to get you to the closing table from sourcing the deal, raising due diligence to the property takeover, multifamily deal lab shows how you too can get the deal done. And now here’s your host. David Lindahl, everybody welcome to multi-family deal lab. I’m your host, Dave Lindahl. And Today we’re going to do something a little bit different. We’re going to turn it around. We’ve gone through all the podcasts that we’ve done, and we’ve had a lot of people coming through, just getting to know us for the first time. And they hear me interviewing people. And then they end up asking you a lot of questions about who the heck is Dave Lindahl and who is RE Mentor. So John, our executive producer here, who does all of our podcasts and other people’s podcasts as well, I should plug that. He said, Hey, you know, Dave would be a great idea if we flipped the tables and I interviewed you, what do you think about that And I thought, wow, that’s a great idea, John let’s do it. So ladies and gentlemen, this is John Melly,

Speaker 1: Dave, thanks for taking the time to spend some time and talk about this. I really appreciate you doing that. I know you’ve got a full plate busy day. Yeah. It really has been something very interesting to me as we have 20 plus episodes and going through and producing your show is I have learned quite a bit and listen to some really cool stories. And one thing I want to say off the bat is that this show may be about learning how to invest in multi-family real estate, but there’s a lot more going on in these episodes than just how to close deals. One of the things that really stands out to me in listening to these, the breakdowns of the different deals are the personal stories that your guests have, the goals that they have set for themselves, and the reasons why they’re doing what they’re doing through our mentor and what you teaching them.

Speaker 1: A lot of them have higher goals. They want to do things for family members and loved ones. And they, they overcome these personal challenges, nervousness getting out of their comfort zone. So it’s it’s, to me, it strikes me as yes, multi-family property investing is a vehicle to doing so much more than just buying property. It seems to be a lot of personal growth and development that I’m hearing in these stories. So I wanted it to say that upfront and I, the folks who are sharing these stories in these episodes, they know Dave Lindahl story, because they’ve been involved with Ari mentor for awhile, but I thought it would be cool for listeners to get to know you a little bit more, hear what your story is. How did you get to this place of starting Are you mentor and why did you start it and tell us what are you mentor is other than just a deal lab breakdown show.

Speaker 2: Yeah. well, first of all, I can tell my story. I started investing way back in 1996 and I started investing in multifamily properties. I didn’t take the normal, I shouldn’t say normal, the usual route of single family houses. And that was because way back in 1996, I was broke and I wanted a better life. And you know, I I’ve been interviewed by different business shows, you know, about how, how did you raise, how did you, accumulate 8,000 units and yada yada yada. And it always comes to this question of what was the turning point in your life that gets you started And the first time somebody asked me that, I just thought to myself how broke I was broke me. I was tired of being broke. So I was looking at a bunch of different ways to do it. And I started interview with a guy by the name of Harry Helmsley from New York city, started buying and selling apartment buildings, ended up owning the empire state building.

Speaker 2: He started out bro too. And in that interview, the interview said, Harry, what is it about apartment buildings that get you going And Harry said, I always liked the idea that a group of people would pool their money together and give it to me so I could pay off the mortgage. And one of my properties in essence, they’re buying the building for me. I liked the idea that that same group of people would put their money together and give it to me. So I could hire a maintenance guy to swing the hammers and take out the trash and clean the toilets. He said, I liked the idea that that same group of people would pull their money together and give it to me. So I could pay for a management company to collect the rent, to handle the phone calls. So I wouldn’t have to deal with a single tenant.

Speaker 2: And he said, I really liked the idea that at the end of the month, it would give you so much money that after I paid all of those expenses, I would have money leftover that I could either put into a savings account, reinvest, or just go out and have some fun with. And he started with no money. And I thought to myself, if that’s true, I mean, if that’s really true, I want in, I went out and I started telling people what I was going to do. Cause I thought this was the greatest idea ever. And everybody told me I was crazy. They’re like, what are you crazy You’re gonna buy apartment buildings. You know, tenants going to trash, the place, not gonna pay the rent, they’re gonna get foreclosed on. And I was like, huh. And then I hear these tenants stories, but I could see it.

Speaker 2: You know, it just made so much sense to me and all these, there was only department buildings around and I thought, you know, there’s gotta be something to there. So I kinda got quiet about what I was doing. And then I just went out and I, there was nobody out there teaching at the time, how to do it. I bought a bunch of single family books. I went a bunch of different other seminars learned as much as I could. I thought I had enough to do my first deal, enough knowledge. And then I was afraid to do that first deal. I was afraid to pull the trigger. I actually started bird-dogging for other people that were investing in multifamily properties. And I get two to 4,000 per property that would bird dog out. Me and my, I should say me and my partner, because I was so afraid to do this by myself, that I actually brought in my best friend.

Speaker 2: Cause my father kept telling me like, Dave, you invest in apartments, you’re going down. And he had this hand signal, you know, like go down a roller coaster, you’re going down. And he, he made me so nervous. I had to stop talking to him about it. So I talked to my friend Robin and said he was broke just like me. And I said, Rob, you know, I think we can change our lives. If you know, I saw this interview with Harry Helmsley and we could buy apartment buildings in Brockton. We could buy them below replacement costs and they cashflow and that’s a good recipe for success. And I said, but I got to warn you, my father and everybody else keeps telling me that if we do this, we’re going down. I’ll never, I’ll never forget what he said to me because he looked at me, he looked at the ground and then he looked back up and he said, Dave, how much farther down can we go

Speaker 2: You’re right. Like the bills that we add far exceeded the amount of money that we’re making. So we went for it. But again, we were both too nervous to pull the trigger on the first deal. So it gets nine months to finally pull the trigger on a three family over in Brockton, 25 Newton street. And after we did the first one within three months, we had three more. Within six months, we had nine. And within the first year we had 11 of them. Within three years, we had almost 40 of them. Wow. I mean, that’s what, and we see that here at our mentor. We see that with our students all the time. That’s why we always say that, you know, the first deal is the hardest, but once you get through that, and it is the hardest because you know, you don’t have your systems in place, but in order to do that deal, your system needs to be in place by the end.

Speaker 2: you don’t have your team in place, but in order to do that deal, your team will be in place. And then when you actually close on that deal, now that your team and your systems are in place, you have all the confidence in the world. It’s like, Holy crap. It work, you know, and you just build momentum. And then boom, you know, people sprout like a flower after that. So I went three years only buying small deals, 3d six units. We were afraid to buy anything bigger. The market started to change. We started learning more and more and more about investing in apartments. We learned about market cycles. We learned that what goes up must come down. We have become multimillionaires on paper and we didn’t want to lose that status. So we started learning about other markets around the United States that were just starting to emerge like the market we had. We were lucky on our first market, but now we were doing it with knowledge. We were going after markets that had certain job growth in household formations. And we started moving around the country. And within the next four years, we were in 18 different markets with over 8,000 units. Wow. Yeah. So it was exponential growth, but it was, it was a great fun and crazy time.

Speaker 1: That sounds like a, I mean, that’s a great story. You know, the thing that jumps out to me is I had a similar feedback from people about things that I w I wanted to be in radio. And I had everybody telling me you’re crazy. It’s a tough business. you’ll hate it by the time you get through with it and all that kind of stuff. But I think we’re similar in the sense. And I think what made you a couple of things that, from what I heard in your story was I got nothing else to lose. That’s right. And I already know what this feels like, and I want something different, but at the same time, it’s like, well, somebody else is doing it. It’s possible. Why not me And that’s what I heard. And I think that’s really what differentiates a lot of people is somebody else has done it. Why can’t I do that And a lot of people don’t have that internal dialogue. And I think that’s what makes a difference from a lot of people. I’m sure,

Speaker 2: Totally does. One of the things we’ve discovered through our mentors, the fact that we’ve been training people since 2002, we could give you all the skills. We can give you all the knowledge, but if you didn’t have the right mindset, you know, if you don’t have to overcome your own challenges, if you don’t have, if you don’t know how to break through, and a lot of people don’t, that’s why we have a mindset portion of our mentor. You know, part of our program is mindset, to help people through those challenges. but you need to get on the other side of those challenges in order to be successful. And let me just give you another story on that too. So there was two things that Carlton sheets, I got his course way, and like to have a go first time I bought it, it was a get rich quick for those that aren’t old enough to remember him.

Speaker 2: It was a get rich quick. I bought it, I put it on the shelf. I didn’t do anything for six months, six months later, we had the new and improved version. I was like, I gotta get that one. And I did, but that one I opened. And he said, go to your local real estate investment group. Right Notice that there were people in there that looked like you talk like you act like you wear the same clothes as you, and they’re doing it. And if they can do it, you can do it. So that was one apifany. But that also came with, at the same time, I grew up in a lower middle-class household. My mother was a budget or she was an envelope lady. She put all the money in the envelopes for all the different places where it was going to go. My father worked two jobs to support us.

Speaker 2: We always lived in scarcity. It was, we can’t afford that. We can’t afford this. Turn off the lights don’t eat that ice cream. You got to save it for the week. We never went out to eat and it was all about, you know, my mum would always say, Oh, isn’t it great that they could have that. But you know, it’s too bad that we can’t, that’s the mindset I have is like, you know, the good stuff’s for the other people until I get that course. And then I started feeding myself, you know, good stuff like Tony Robbins awaken the giant within and raise the bar, the magic of thinking big. And all of a sudden my body started to shift and I came up with that question. Well, why not me Why not me Right. And then I couldn’t come up with a good reason why go moving forward.

Speaker 1: That’s great. You know, you mentioned some of the resources. Well, one, before we talk about that, how did you make the decision to go from investing in real estate and building your portfolio of properties As you said early on in your story, there wasn’t anybody out there to teach you how to do it. You had to figure it out for yourself and experience as a really good teacher. what made you decide to start Ari mentor and start teaching others how to do this

Speaker 2: Well, what happened was we got good at my portfolio, get larger and larger. One of the things I did when I, when the first few years of, of having that portfolio to buy more multifamily properties, because I, I, I didn’t have my own cash. I used the credit cards and I learned how to flip houses so I could buy more monkeys. I would use the money I got from flipping to buy multi’s. I used to say that, you know, the single family houses supported my monthly family habit. and so I get good at flipping houses and that was flipping so many and then reselling it for myself. I thought, well, why don’t I start a real estate brokerage company and do it for other people and you know, another side hustle. So when you, whenever you, whenever, you know, you figure something out and you put the systems in place, now you get a little bit more time for yourself.

Speaker 2: And if you’re an entrepreneur, you’re always thinking, all right. So how can I make more money Right. So I thought when I do it for other people, and I did, I was still living in the one bedroom apartment. but three years of investing, I don’t know how many properties, but still live in the one bedroom because I was so, so busy. And then my mentor calls me up. I got a mentor after my seventh deal and he calls me up and he says, you’re still living in that apartment. Aren’t you And I said, yeah. And he says, but you started a brokerage company. I’d say you. I said, yep. And he said, how you doing it out of your apartment And I said, well, it’s working. And he said, how about this I’ve got a property over in Brockton. It’s on a, it’s on a main road.

Speaker 2: It’s not in the greatest part of town, but it’s on the main road and I’m foreclosing on it. I’ll just, I’ll just do, is take over the payments. And I was like, really I said, well, how much what’s the mortgage on it He said, 70,000. I said, what do you think it’s worth He said 140. I said, you’re going to give you 70,000 in equity just to take over the payments. He said, well, it wasn’t my money. I just rented. I just paid the 70 and you’re going to give me my 70 back. That’s all I care about. We’ve been doing business, you know, cause he was a hard money lender too. So I’ve been doing business with him and that’s how he became my mentor. And he says, I see what you’re doing. I like what you’re doing. I like you. So here you go.

Speaker 2: So he gave me that. And then I, I started, PHB Realty. I went from zero to 26 agents. It was all about the vision. You know, I envisioned when I first got there, it was me and my sister and this long hallway and a couple of big rooms. And I envisioned it being a busy office, you know, with a bunch of realtors in there. And they were putting listings on the board. And every time I looked down that hallway, that’s what I saw. I saw all these people in their busy office and within a two or three-year period of time, it happened, we were busy. We had become number three in the city of Brockton and it was going really good. Except real estate brokerage companies are really hard to run. It’s easy to get in. It’s easy to get out. I, my office had become a psychology center, you know, because, because my brokers, the whole thing became an adult daycare, shuts the brokers.

Speaker 2: I first brought it. I was teaching them how to list and sell houses. Now that wasn’t the goal. My goal was I was supposed to be the one that was supposed to build the business. My sister was supposed to be the one that was to, handle the agents, manage the place. But then her husband decided at the last minute that he wanted her home by two 30 each day to get the kids off the bus. And you know, that’s when things start really happening in the, in that business. So I realized I had to do it. I did what most people do. You know, I bought all the books and courses on how to run a brokerage company. I trained people how to do it. I’m really good at marketing. So my, we get a lot of listings and sales and my people started getting really jealous of the new people coming in. As we were growing, they’re like, damn, don’t tell them how to park it. Don’t tell them how to do the postcard. Don’t this. It’s like, they became very,

Speaker 4: What business is this Right.

Speaker 2: And all of a sudden, you know, I’m dealing with the people that are territorially, I’m dealing with people that have their problems. And like, I didn’t like go into the office anymore. And I know that I train in a and I, I didn’t, I don’t manage my own properties, you know, but I wasn’t managing this, this brokerage company and it was a mistake. So I was driving in one day and I’d have this conversation in my head. It’s like, I hate going in there. And the other side says, well, don’t go in anymore. I’m not going to go in anymore. I was like, then don’t. I was like, I’m not there. Don’t I pull over the road, I call it my sister. And I said, I’m not coming in anymore. I’m done with that business, tell Jackie’s the new manager and figure it out. She’s like what I said, I’m not going.

Speaker 2: And she’d heard the tone of my voice. And she knows that she’s like, you’re really not. I says, I’m not. So I didn’t. And then I thought I saw, I pulled off. I pulled over on the side of the road, Brockton. I’m thinking now, what am I going to do And I thought, well, I’ve trained all of these agents, how to be successful listing and selling properties. And you know, I’d been at the local REIA training people on how to do multis. And I thought, you know, when I was around doing all the seminars and the seminar junkie, and I had a bunch of friends back then it was like eight years prior. And they, they started going out and they started teaching. I thought I got to call one of them and see if I can teach at their event. And, she said, sure, you know, come to the event.

Speaker 2: What do you want to teach And I said, I can rehab. I’ve been rehabbing all kinds. And she said, well, I do the rehabs, you know, can you teach anything else I said a lot, but I own a lot of apartments. She said there was nobody teaching that. And she says, come teach that. So I did her event. It was the last day, there was 40 people in the room. Three happened to be real estate, investment association owners in different parts of the country. They asked me to speak at their clubs and then boom. I started this, the army mentor up the top of my garage, my mother, who was just got laid off, as a fish cutter, she was on the fish fields of Boston for 27 years. And she got laid off and replaced by a machine, but she was in tears and she didn’t know what she was going to do.

Speaker 2: She had no skills. So it was like, mom, you just kind of, I started this new company, you know, I’m going to teach people how to buy and sell. And I got to make CDs with these courses that I’m sending out. You make the CDs back then. It was, it was one computer, one CD holder, record it back out. And there was eight CDs per set. That’s how it started. And, the next year I had like, I think it was 42 speaking gigs. And then the next year I had like 140 and it’s just like crazy. It went crazy. And at the same time now I’m buying a apartment complexes around the U S so now I’m traveling either training or I’m traveling, accumulating for my portfolio. I went from one 800 units to over 8,000. When I, from when I first started my Ari venture here. So, but the great thing is, as I shared on that growth, as I was doing it, I, you know, I created best practices and I shared what I, what was going, right. What was going wrong with everybody then, and now can you, do we continue to invest

Speaker 1: That’s one of the interesting things about the episodes and the interviews that I hear you do is that it’s very transparent that, you know, one of the questions that you make sure you ask in every episode is what were the roadblocks, what were the problems What were the big mistakes that you made and how other people can learn from them So that’s really, really cool. You’ve talked about the courses and in the conversations that I hear you have with your members and your students, I hear

Speaker 2: The great thing. The great thing about that podcast is, is I’m just talking to my successful students. Like any other student that, you know, through the years now, we’ve had so many deals come through here. I mean, hundreds of thousands of doors, you know, so now it’s just, so when I have a podcast coming up and just say, Hey, Jeannie, you know, get somebody that has had that had this problem or get somebody that’s fun and exciting. And she’s like Monday,

Speaker 1: Well, that’s the, that leads right into the question that I have for you is that people at Ari mentor know the members and yeah. And there’s a, there’s a reason there. And w one of the things that I hear references to in your conversations with your students is that they reach out to Ari mentor when they run into problems.

Speaker 2: Oh yeah, absolutely. That’s the great thing about this. Yeah.

Speaker 1: I wanted you to explain a little bit about what Ari mentor is in that sense. It’s not just about courses and going to a seminar, but there’s also support. And I wanted to see if you could talk about all the things that Ari mentor does for its members.

Speaker 2: Well, we are not just, you know, I, I ran this company out of my garage for the first year, realized it was going to be, I had nine people up there after that first year of running this company with me. Wow. from there, we went to my real estate brokerage company. And back then, do you remember that show survivor Sure. Survivor was big. So of those 26 agents, I snuffed out 22 flames because I needed the space for this new company. And, you know, the 80, 20 rule, 80, you know, 20% of them do 80% of the business. So I just let the rest of them go. I let them have Remax. Finally, you could have them while they were at their heels every day, anyways, and Keller Williams, I was like, yeah, you can have them go there. And so I moved the company in there.

Speaker 2: And then from there, we, that space lasted a year. And then we moved into this 12,000 square foot space where we are now. And in that we’ve grown in terms of people, people in support, because that’s the biggest thing that we pride ourselves on is the fact that, you know, if you go downstairs into the four-year here, we’ve got our core values. And our number one core value is that we are not successful until our students are successful. And I, I made that a core value because I had to do so many seminars myself prior to I was a seminar junkie. But you know, the more you go, the more you learn the mastermind junkies and all that. But I had been to so many seminars that were just a waste of my money, but it wasn’t so much the waste of my money. You know, that, that bothered me, but it was a waste of my time.

Speaker 2: And it became a waste of my time. It was like, there was so many other things that could be doing instead of listening to this crap, you know And so, I that’s, when I said to myself, if I’m going to teach, I’m going to teach the nuts and bolts of what it takes to actually be successful. You know, no fluff. Here’s what it is. Yes. There’s an investment involved in any level of education that you get, but it’s going to be, the investment is going to be much lower than the value that we give. so one of the things is, is, you know, every time I tried to get support from those other places I been to, you know, it’s like, Hey, fax over your question. That’s when factors were big facts over your question, it’s like fax over your questions. I an answer now. And then half the time, you know, we didn’t even get a fax back or the fax back didn’t really address what I was really asking. So I thought, you know, this is when anybody calls here, there is somebody that’s going to answer that phone, regardless if they’re in a high level program, a low level program or not, if not, not even in a program, somebody’s going to answer the phone is going to answer the question

Speaker 1: Because it’s, it’s a very time sensitive business. There are so many moving parts involved. So having live support like Ari mentor does must be a game changer for people who may have tried other real estate investment programs. And then finally found you and I read mentor,

Speaker 2: You know what it is, you know, they just become part of the community. So not only do we support here, but the community supports each other as well. So a lot of times, you know, we get so many students doing deals with each other, you know, and we’ve got this event called ultimate partnering or this year is going to be, I think it’s gonna be the first weekend of October. We’re just looking for the venue now, but we’ll be live again finally. And so in one of the things people say about, you know, when they go to ultimate partnering, maybe friends that have been to other people’s events is that they can’t believe the amount of people that are actually doing deals, you know, within our community. And that’s because, you know, number one, they get the nitty gritty of how to do the deals. And, you know, we’re transparent here. If that deal’s not going to be good, or you’re not doing the right things to get deals, you just bring in crappy deals. You know, you’re not businesses set up, not right. We’ll tell you, Hey, you know, you got a smart nut, you gotta do this. You got to do that. You’re not going to go anywhere. Simple as that.

Speaker 1: It’s a good thing. You’re helping them out.

Speaker 2: I would want to hear. Yeah. You know, I don’t want to talk about all the people, but the, you know, you’ve seen people that if the, if the planets all aligned in the perfect order, and it is a blue moon, now this is going to work for you. You know what I mean Or the worst you doing the right thing, just keep doing it, you know, just keep doing it. It’s like what

Speaker 1: So tell me about some of the resources that are there. So I’m not involved, but I want to get involved or I’m a potential member and I’m kind of interested. So what is it that I can expect if I want to explore things that Ari mentor offers

Speaker 2: Well, I mean, if you’re interested in multifamily properties and you’re just not sure that you can read my book, my family, millions, you can get it on Amazon. We have a, if you go to Dave today.com, there’s a free book offer, just pay shipping and handling with a bunch of extra bonuses. That’s probably the best thing to do because we give you a bunch of bonuses. You can read that when you can read, emerging real estate markets, that’s another book, but if you read multifamily millions and you see that this is a business for you, then come over here and talk to one of the reps downstairs. You know, the, the next thing you want is the home study system, or go to a live three-day event. And there, we just basically give you the step-by-step on how to get into this business. And then eventually how to scale it.

Speaker 2: You know, we have coaching programs as well for those people that want to be held accountable for those people that want to get there faster. We’re really big on emerging markets and emerging market investing. Although investing in your own backyard works too. As long as you know, all four phases of the market cycle, you make your most amount of money in this business and appreciation. So we want to go with the appreciation is, but if people are, they just want to be in their own backyard. That’s fine too, because that appreciation swing will come at two points in the cycle of two of four points in the cycle. Every cycle, every cycle lasts anywhere from eight to 12 years, depending on where you are. So all you got to do is you got to understand where you are on the cycle. You need to understand what strategies to be using for that particular part of the cycle.

Speaker 2: But most importantly, you need to understand when the transition is happening and it’s usually starts to happen about a year before the media even picks up on it. And that’s where you make your most money in the transition. And if you don’t see the transition happening, that’s where you lose your most money as well on the backside of a transition. That’s what it’s all about. When I first started, we only had the home study system, and then we put the three-day event because people kept asking us, you know, can you do a three-day bank Can you go live So we did that. It was like four or five years before we did a coaching program because I just didn’t have time to do it. I was out there buying all those properties and teaching, and then we did the coaching program. And then we, it was probably eight or nine years into it where people, it was like, how are you raising all those money, that money for your deals

Speaker 2: Tell us, tell us, tell us. And I was like, no, no, there’s, you know, there’s a lot of legal stuff involved in that. I don’t want you coming back and saying, you know, Dave told me to do this. So, but then I found an attorney to do the legal stuff. And I thought, well, that would work out right Because of, and I told them, you know, if you do something wrong out there and it doesn’t go right, you just blame the attorney, you know And I even say that from stage all the time. So I’ll never, there was so much pent up demand for that. I actually had prerecorded a webinar. This is, I don’t know, 10, 12 years ago went into a Broadway show in New York city, came back out and saw that 442 people had signed up for a room of a hundred. I was like, Holy crap. Wow. I guess people really need this. Yeah. Yeah. So then from there we, you know, where there’s a need, so we would, we still do this. We sit around and we talk about what the challenges are that the students are having the clients are having. And then we figure out ways to help them out with their challenges. so we’ve built businesses, built the business around that.

Speaker 1: The topic that’s on everybody’s mind in the backdrop is, is, COVID obviously in the pandemic and we’re starting to see some light at the end of the tunnel of that. But one of the most popular episodes that we’ve produced so far is when you talk to people who are doing deals during COVID and what do you say to people who might be a little hesitant to even explore You know, I mean, there’s so much negative energy out about this and fear and uncertainty. What do you say to people who were like, Oh, I don’t know if I want to do this during,

Speaker 2: Well, first of all, if you haven’t done it yet, you’re actually lucky because when COVID first hit those of us, that own properties, the first thing we had to do is survive. We had to understand what this was and how to survive it. And then after we, after we figured it out and figured out best practices, and it wasn’t just something that I came up with and shared it with everybody I got with my coaches, I got, I’ve got students now. I mean, my max, because we buy and sell all the time. My max was about 8,500 units. I’ve got students now that are over 10,000, you know, and growing, which is great. I love when that happens. So we get with our, with the students that, you know, own the bigger portfolios. And we sat down and said, all right, so this is what it is.

Speaker 2: How do, how do we best prepare for it So we don’t, you know, so we can make our way through it. So we created best practices, which we shared by the way, with our coaching students. And then from there, you look at the opportunity to say, okay, so it was a crisis. We figured it out. Now where’s the opportunity. And then we figured out what the opportunity is. The opportunity is with those people that bought properties and the upside of the market figured out because that weren’t buying right. And although they weren’t buying, right, they didn’t get punished by the market because the market was rising and the market corrected their mistakes. So therefore they, they get to this point where they think everything, they touch turns to gold. So they’re sloppy investors, and they never really focused on the operations of their property. But as they say, the naked man at the beach is always exposed at the low tide.

Speaker 5: I’ve never heard that one before, but yeah. Okay.

Speaker 2: The Pandemic is the ultimate low tide. So now we’ve got all of these people that never, that were sloppy investors and never learned how to operate their properties properly. Those are the properties coming on the market. That’s going to be tsunami. It hasn’t happened yet. They’re trickling in. Those are the deals that you’re hearing people on the podcast doing. There’s great deals to be doing right now, but it’s going to tsunami in over the next, probably four to eight months. And then it’s going to be gone. It’s going to be this huge opportunity. And then it’s going to be gone now to get you your, your real question about, you know, people are afraid. So they’re thinking there’s a lot of risk involved. Well now going into deals during this, we know what the risks are. We know that we need to take a look at the, at the, the rent roll.

Speaker 2: When we do, what’s called the lease audit. When we take over the property, we need to understand what type of jobs these people have that are living near, because there are certain types of jobs that are affected by COVID. And there are a lot of other jobs that are not. So, that being said, most of our C plus C C minus properties, they’ve got the jobs that are affected by COVID. The beamline is BB plus properties. They’re the properties that don’t. So we just simply focus on beads. We still do the lease audit. We still look at what type of jobs they have, but we focus on the bees. And they’ll also in our offer. We always say that the value is based on the actual numbers two weeks before the closing. So in case all of a sudden, there’s this wave of COVID going through, and a bunch of people get laid off, you know, which is the big risk of the bank.

Speaker 2: That’s the same thing, by the way. so that’s one of the caveats that we put inside of the purchase and sale agreement. So you protect yourself inside of the agreements. and then you protect yourself by doing the proper due diligence when you’re, when you’re looking at a property and then you can kill it. So thanks to the same thing, they look at the actual numbers right up to prior to the closing, and then the, and then if the numbers aren’t right, the bank will say to you, Hey, you got to come up to closing with X amount of dollars. That’s not what you want to have happen. But, you know, in our trainings, we give the we’ve figured out what the recipe is for success in the COVID opportunity. It’s this thing that I call micro repositionings. It’s a term that I created.

Speaker 2: I created it about, I dunno, maybe 10 years ago, when I analyze my deals at the end of every year, you’ve got momentum, plays, deals that cashflow on a regular basis, you’ve got repositionings deals that are below 85% occupancy that need a lot of work in order to come back to the, these repositionings, you can make a lot of money, but the highest risk deal, the cash, the moment the plays, they just, they just cashflow in nicely. And they appreciate nicely when you buy with value add. But then I realized that I’d made my most money at between 85 and 90% occupancy when an area was like 90, 93, 94 plus. So that means it’s below occupancy for the area. It’s actually sliding down, okay. The market, but you grab it before it goes before 85%. And then you do the repairs that need to be done to the property.

Speaker 2: Now, typically it takes about anywhere from nine to 12 months for a property to get into this state. Okay. But it’s using an owner that either doesn’t know what they’re doing or they don’t care. Okay. So it takes nine to 10 months to get into this particular state. But you get in there, you put about two to 4,000 in repairs, on the property per door, you make the exterior pop, the common areas, pop the leasing office pop. And then, then you start doing the repairs to the backlog of repairs that need to be done on the property for the tenants, which the number one reason that tenants leave a property is because of lack of repairs. And then you start doing that. And then you methodically, once you make that, it shouldn’t only take a couple of months to do the repairs. the exterior that pops your tenants are now happy because the repairs are being done.

Speaker 2: So they’re going to stay longer. Now the rents had to come down because the owner on the way to this nine to 10 month, 14 month period, have been lowering the rent just to get decent tenants in trying to get decent tenants because the good ones are all gone. Good people, good tenants. Don’t stand for a property that these repairs, good tenants don’t come in and replace good tenant with a property that needs repairs. So now, you know, the tenant is on its way down. The rents have been decreased so they can get whatever revenues they can to take care of the expenses that are coming onto the property. And then the occupancy is dipping as well. So now you’ve got what we call value. Add these are opportunities to get big pops in your property. You get three value adds there. You’ve got low rent, you’ve got low occupancies and you’ve got higher, higher expenses.

Speaker 2: You buy based on actual numbers. You do these repairs, you, you own the leases when you buy the property. So they tend to take time to be able to redo 12 to 18 months. All the leases are renewed and boom, the fastest way to make a million dollars in real estate is buying a 70 to a hundred unit property that has these conditions that I just talked about. Now, you don’t have to start there, but you know, you do one or two deals you’ll end up there. And these are the types of deals that we focused and try to get. When we see one, you know, it was like, Oh, look at micro repositioning. This is awesome. They’re like few and far between. There’s not a lot of them out there, but the pandemic is going to release a ton of them on the marketplace.

Speaker 2: It’s going to be like a micro repositioning party. So it’s just going to be unbelievable. So, I mean, we’re all geared up, ready to go. We start, we started doing the deals that are trickling in, but it’s just going to be enormous. You know what I say to people I say, if you will do for three to five years, what most people won’t do, you can do whatever you want for the rest of your life. But in this case, it’s two to three years. If you will do for two to three years, what most people won’t do. Boom. You can follow your passion for the rest of your life. Knowing that you’ve got enough cash flow, that’s going to support you, but that will give you more money each month that you could spend. And then you just become wealthier and wealthier. As those tenants pay down your properties,

Speaker 1: You make me want to dive in.

Speaker 2: That’s when you see it, it’s like, yes.

Speaker 1: Well, I mean, there are a couple of things it’s like, obviously you’re passionate about it and you’re excited about it. And you love what you’re doing. That definitely comes across and I’m listening to you talk and I can feel the excitement. But the other thing is I’m hearing your experience and your knowledge and how you have experienced enough to know what these cycles are and to know what to look for. And for anybody listening, I would say it’s probably something not to be overwhelmed by, but rather to be reassured by that, if you don’t know what this stuff is, all the support that Ari mentor offers. This is the stuff that you join iReady mentor for to learn what all this is all about.

Speaker 2: You don’t know what you don’t know. You don’t know, like for instance, until I just said it, you didn’t even know about that micro representing opportunity. That’s that

Speaker 1: I heard you reference it a couple of times in some of the episodes. So, Oh, you know, I listened to, I have to listen to every word. And so I’m getting an education is part of it, but my curiosity was peaked. I was like, you know, there sounds like there’s so much more here to Ari mentor. And the fact that the people who are typically on your show have been with you for however long they have years, I would imagine,

Speaker 2: Well, you know, some of them I interviewed with the first deal, you know, and some of them have been, and they’ve got a portfolio. So yeah, we, we, when we think it’s an interesting deal, then Jeannie will bring it to me and say, Hey, this is an interesting deal. Put on your podcast.

Speaker 1: There you go. What’s one thing you want people to come away with as a result of hearing our conversation.

Speaker 2: I want them to know that if they decide to be a landlord and manage their own properties, we will hunt you down and shoot you.

Speaker 1: Okay. Well that’s okay. That’s not what I expected.

Speaker 2: That took a couple of seconds to sink in. Yeah. Well, here’s the deal. Here’s the deal. Why Because it’s a miserable life when you’re managing your own properties. Okay. And some people think they’re gonna, they’re gonna cut costs and they’re gonna do it. You know, because of that reason, or some people are control freaks, but you cannot, you are not, you don’t go into this business to be a manager. You go into this business to be a, an investor. And the only way you’re gonna grow a portfolio, that’s going to change your life, your family’s life. The next generation that you, that you live with is going to be, if you’re an investor seeking deals on a regular basis of seeking deals and seeking money basically is that’s how we do it. If you get mirrored up in the, in the muck of managing your own properties with the tenants and the trash and the toilets, you know, you’re never going to get you where your goals are. And I learn that, you know, I’d manage my own properties for the first three years. Some people actually have to go through that pain before they realize I’ve got to get a third party. Some people go through that pain and they get out of the business. There’s, there’s a study out there that says the average person that manages their own properties, leaves the business within 200, two and a half to three years, because it’s such a pain in the ass

Speaker 1: Surprised to hear you say it. But I was also in the back of my head relieved to hear you say it, because that would be like the last thing I would want.

Speaker 2: You know, our attitude over here is that our tenants are our gold. You know, we want to treat them the best that we can. We want to treat them like they are our gold, you know Yeah. They’re our cashflow without our tenants, that our business doesn’t survive. So these people that have their stories about all these fricking tenants, Oh, this and all that was like, you’re crazy. You know, you should be doing, you should be creating a nice community. You should be, you know, creating a place to live where people want to be. You know, they don’t want to leave, do stuff for their kids, do stuff for them, you know, make it easy, just make it easy and fun to live there for those people that don’t, you know, that that’s, that’s you have the, you know, one of the biggest expenses in our businesses, tenant turnover. So to reduce tenant turnover, you create that community and you do, you provide different amenities and, and you realize that they’re your biggest asset. Your tenant is your biggest asset, right

Speaker 1: People want to learn more as you know, you can listen to the podcast, but what’s the best way for people to reach out to Ari mentor. There’s a free book. I think that you mentioned earlier.

Speaker 2: Yeah. You can go to Dave today. there’s a free book. The free book offer, pay shipping and handling. You get a bunch of bonuses with that book, in emerging markets poster, 23 costly mistakes that investors make and how to avoid them. The big ones I made a lot of them, and I had a couple of investor friends share theirs. And then, so you can do that. And you could call the office (781) 878-7114 (781) 878-7114. I’d give you the 800 number, but I don’t know what it is off the top of my head, but there was one. and then just call and ask for Jeannie. Jeannie will, you know, Jeannie is like the grandmother over here. Don’t tell her I said that, but, Jeannie is like the grandmotherly figure over here. She takes her under her wing. And you know, you tell her, you tell her your story and she’ll tell you what’s best for you.

Speaker 1: Sounds great. I want to thank you for letting me turn the tables on you today and thank you for taking the time to do this. I think this is a great episode. And for people who are interested in learning more about this, I think this is give everybody a good overview of Ari mentor and all it has to offer. Anything else you want to say before we sign off and we’d move on with the rest of our,

Speaker 2: Just the successful people take action. You know, think it, if it sounds good, you know, then move forward. Because if you don’t, you just sit where you, you know, you sit idle and you know, in my high school yearbook, I wrote, don’t go through life saying the words I should’ve, I could’ve because the past is gone. And in the future you can, and you will. And I have lived that since high school,

Speaker 1: It speaks for itself. I got nothing to add to that. That’s great words. And that’s a great way to live too. You’ve listening to the

Speaker 3: Multifamily deal lab podcast, where the deals get done. If you’d like to learn more visit Dave’s free book.com and don’t forget to leave a five-star rating and review and hit that subscribe button. So you don’t miss an episode.

Speaker 6: Thanks for listening.