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SHOW NOTES FOR EPISODE 005 – FROM BROKE ROCK ‘N ROLLER TO MILLIONAIRE REAL ESTATE MOGUL
Listen to master real estate investor and educator David Lindahl as he shares his personal rags to riches story and as he shares how others can achieve the same. He shares many insider tricks, tips and techniques that have allowed him to get the maximum return on every property investment.
What You Will Learn
- What convinced Dave that real estate investing was the best way to become rich quickly
- What the next Emerging Market will be that will be as big or bigger than Atlanta
- How me made nearly $4 million on a property he held for less than 2 years
- What you should do to prepare for the upcoming market correction
- What types of properties to purchase now and why
David Lindahl
With more than 18 years of experience in Real Estate Investing, David Lindahl has rehabbed over 820 houses, and currently controls over 7,400 apartment units. Dave is the author of two #1 bestselling books, Emerging Real Estate Markets and Multi-Family Millions. His third book, through Donald Trump’s organization, is entitled Commercial Real Estate Investing 101: How Small Investors Can Get Started and Make It Big. Among other publications, David has been featured in Reader’s Digest, Creative Real Estate Lifestyles, AOL and Kiplinger magazine. Starting as a dead broke landscaper living in a 1-bedroom apartment, Dave Lindahl started buying and selling multi-unit properties in Brockton, MA to create a better life for himself. With no Real Estate experience he created systems that allowed him to create enough monthly positive cash flow to retire with in 3 ½ years. In addition to his expertise in Real Estate Investing, Dave offers a series of home-study materials and live events for investors.
How Dave Got Started in Real Estate Investing
- Left home when he was 16
- Was in a rock ‘n roll band for 8 years.
- Got sick of being a rock ‘n roller and decided to start lawn cutting business
- In the winters, when lawns were frozen over, he did odd jobs which led to him learning construction and starting his own construction company.
- Watched late night TV and saw Carlton Sheets “No Money Down” course advertised – bought it, did nothing with it, bought the revised version and then started buying
- Had no money so went to a course on how to get credit cards and used credit cards to purchase his first properties
- First property was a multifamily property – 6 units
- In three years had 40 units
- Became a millionaire through equity in the properties
- Properties cash flowed so well that he used cash flow to buy new properties
His Lightbulb Moment When He Realized That Real Estate Investing Was It!
- Interviewed with a man named Harry Helmsley and shared how he started investing in income property and ended up owning the Empire State Building
- Later went to local Real Estate Investing group and saw that there were people just like him – didn’t have much money and trying to better their lives – and they were successful and making it happen
- He said if they can do it I can do!
He Doesn’t Like Being Called a Guru
- He attended many real estate guru seminars and with some, felt ripped off after the events. He pledged to do things differently
- Although he also teaches, in addition to investing, he makes sure he covers the critical foundation so someone can get started and provides templates and formulas to make sure his students do things right
- He also emphasizes the importance of buying in emerging markets
Biggest Mistake
- Launched into too large a deal with not enough experience – a 420 unit “repositioning” property in Huntsville, Alabama
- Went from 40-unit to 80-unit to 420 unit!
- Needed to upgrade property and tenants
- Not in the right part of town
- 42% occupied when he purchased it
- Launching 2 other businesses at the same time and was not focused enough on the deal
- One of his first investor deals and wanted to make sure they did not lose money
Biggest Success
- The Wyndhams, south of Dallas, that they purchased for $5.5 million, with an assumed note, that sold for well over $9 million just under 2 years later
- Classic “value add” deal with lower rents, lower occupancy, higher than average expenses
- Went in with strong management company to execute turn-around plan
- Because it was in an emerging market, values increased rapidly
Advice to Listeners Getting Started With Limited Funds
- Learn what you need to get started
- Go in with the right attitude
- Keep in mind you’re not going to be a landlord or property manager
- Know you are an “asset manager” not a property manager
- So you can deal with more deals and cash flow and not deal with tenants, trash and toilets
- Build a good team in the emerging marketplace you want to buy in
- Do business in one of the “Four Phases” of a market cycle
- Get started at the level you are most comfortable with focusing on moving toward bigger deals – that’s where the money is!
- First deal is always the hardest
- Once you have the confidence you know you can do it, the second deal comes very quickly
- The second year is crazy busy!
- Get educated and get started!
What Excites Him About His Current Business Today
- He is preparing for the next market correction that will be occurring soon
- Get educated now and start buying so that when the correction comes, you can pick up great deals that will increase in price significantly and swiftly
What Types of Properties He Looks For
- B and C properties (B properties are better because when the market improves they improve in value faster)
- Meet these three ratios
- CAP rate (which determines value) – 7.75 or higher
- Cash-on-Cash Return (how fast you’ll get your money back) – 12% or higher
- Debt Coverage Ratio (how many times your cash flow covers your mortgage payment) – 1.6 or higher
- This will allow other people to invest in your deals where you can get:
- 25% of the cash flow
- 25% of the resale
- Full acquisition fee
- Some deals will be so good you will get 50% of the cash flow and 50% of the acquisition fee
Rap-It-Up Session
- Favorite Real Estate Book – Emerging Real Estate Markets by David Lindahl and A Fortune At Your Feet by A.D. Kessler
- Favorite Business Book – Good to Great by Jim Collins
- Favorite Real Estate Web Site – reis.com
- Favorite Phone App – Flixster (movie ticket app)
- If you had to start all over and you only had $1,000 in the bank:
- Start creating relationships with brokers
- Go to business and social events to raise private money
- Get into cash flowing real estate deal
- Spend the money on the networking and a direct mail campaign
How to contact Dave
- Visit: REMentor.com.
- Office – 781-878-7114
To Get A Free Book From Dave
- Go to davesfreebook.com and you can get a book called Massive Passive Income Creator
Upcoming Seminar
- Ultimate Partnering Event – August 20-21
- Check it out at!
Check out our other podcasts at olddawgsreinetwork.com.
If you would like to receive our free 3-Minute Rental Property Analyzer, email us at bill@olddawgsreinetwork.com.
Episode Sponsor: Meno Studio – menostudio777@gmail.com
