949-392-1999
SHOW NOTES FOR EPISODE #017 – FROM SOFTWARE TO PIZZA TO PROPERTIES
What Will You Learn
- The difference between retail “passive income” and real estate “passive income”
- The importance of having a property manager that is “on the same page” as you
- How you can raise money BEFORE you have the deal
- The fund raising value of a “Sample Deal Packet”
- How to get verbal confirmations from potential investors
- How to get a “Yes” from a potential investor before there’s a deal on the table
About Our Guest
Michael Blank
I have on the call with me today my friend Michael Blank, who is an expert in teaching others how to do their FIRST apartment building deal by raising money from others.
You may recognize him from Bigger Pockets where he’s been a weekly contributor for the past two years. He hosts the # 1 apartment building investing podcast and he’s also an expert instructor for the REI Classroom on Flipnerd.
Michael knows a thing or two about raising money: He’s raised about $1.6M in total for house flips, pizza restaurants and apt buildings.
Michael’s one of the rare individuals who truly cares that you succeed, not a sales guy who also happens to invest in apartments. He’s an active investor and he has a talent for teaching, which is a rare combination in this business.
Other info on his beginnings
- Was successful in software business, used the funds to start investing in pizza parlors
- Was hoping that pizza businesses would take off but it didn’t turn out that way
- In 2009-2012 started flipping houses to raise money. Flipped about 30 houses
- Found out that there was nothing “passive” about flipping houses and that it was very labor intensive
- Decided to try multifamily investing and purchased his first apartment in 2012
- Now he is completely focused on growing his multifamily properties and in teaching others how to purchase multifamily
- First deal was a 12-unit in Washington DC
His “Lightbulb” moment
- When he started raising money
- He realized that in order to find bigger deals he had to be able to find money
- Set out to master the art of raising money and how it made a big difference in his investing success
Biggest Mistake in Real Estate
- 12-unit in Washington DC
- One tenant was calling government agencies and ended up costing a lot
- Rent control but can increase rent on section 8
- Property manager did not like section 8 yet they had many section 8 tenants so had to fire property manager
- Difficult in DC to get bad tenants out
- The experience matured him
Other Mistakes
- Getting into Pizza business
- Believing that there is really “passive” income – he thought that his pizza could be passive but the less attention he paid the more he paid in another way
- He transferred this thought to real estate and now still stays very involved with his property managers
- It’s important that your get good referrals for property managers
Biggest Success
- Learning to raise money
How to Raise Money
- It’s possible to raise money before you have the deal
- He uses a Sample Deal Packet (see his free eBook on how to do this) to raise
- Finding Investors
- Start with inner circle and then network outside
- Outside is
- Referrals from inner circle
- Networking group contacts (REI, meet ups, etc.)
- People in your phone
- Start with getting a series of “yeses”
- Outside is
- Educate yourself
- Start with inner circle and then network outside
What Excites Him in His Current Business
- Growing the education side – teaching others to succeed
Rap-it-Up
- Favorite Real Estate Book – Rich Dad Poor Dad by Robert Kiyosaki
- Favorite Business Book – The Compound Effect by Darren Hardy
- Favorite Website – BiggerPockets.com, FlipNerd
- If Only Had $1,000 – Get a laptop and start a meet-up group
Closing Comments
- Be Clear About Your Goal
- Know what do you want?
- Map out how to get what you want first
- Take a serious look at multifamily property investing
How Can People Reach Michael
- His website: TheMichaelBlank.com
Until our next podcast, keep moving forward and God bless!
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