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SHOW NOTES FOR EPISODE 247: FINANCIAL FREEDOM WITH REAL ESTATE INVESTING
For many people, the dream of acquiring an apartment building is something desirable but not likely. In this episode, real estate entrepreneur, coach and author Michael Blank dispels the myths of apartment ownership and shares what’s truly required and how soon one can actually achieve financial independence through apartment investing.
What You Will Learn
- Three types of apartment investors
- How to buy your first apartment building without experience and without money
- Financial independence through apartment investing is typically achieved with less units than most people suspect
- Achieving financial independence in 1 to 2 years
- What is the number one myth that prevents investors from buying multifamily properties earlier?
- What snowball affect happens after the first deal
- How to acquire your first property in 90 days
About Our Guest
Michael Blank
Michael Blank is a leading authority on apartment building investing in the United States. He’s passionate about helping others become financially free in 3-5 years by investing in apartment building deals with a special focus on raising money. Through his investment company, he controls over $24 million in performing multifamily assets all over the United States and has raised over $6M. In addition to his own investing activities, he’s helped students purchase over 1,600 units valued at over $55M through his unique “Deal Desk” and training programs. He’s the author of the best-selling book “Financial Freedom With Real Estate Investing” and the host of the popular “Apartment Building Investing” podcast.
More About Michael Blank
- Over the last two years has been doing more than just investing in real estate
- Started an online extension that teaches people how to buy apartment buildings, with a special focus on raising money
- Started coaching
- Now have live events – One coming up on November 7
- Established something called “Deal Desk” – Where people can submit deals to him and they can partner with new investors, raise money for them, has funded 1,000 units in the last 18 months with the program. It has been his primary source of deals. Also helps support his mission to help people do their first apartment deal
- Started a “Multifamily Inner Circle” that happens four times a year, which gives students a chance to meet with Michael. Open to students and others
Deal Desk
- Criteria and process for people to work with Michael on a deal
- Through his coaching, he can help people find their first deals
- Teaches them (through online training or through coaching):
- What size deal is best for them
- How to generate deal flow
- How to raise money
- They have to go out and find the deals, analyze them and raise the money
- And the people who do that, do end up doing deals
- Teaches them (through online training or through coaching):
- Must use and submit their deal through his Syndicated Deal Analyzer
- Must join his online forum – Deal Makers Mastermind – only $49 per month (alternative to his high end coaching program)
- After they submit the deal, there are a series of paid coaching calls that could take 0ne to four hours, depending on how ready the student is
- Through his coaching, he can help people find their first deals
- Once they accept the deal, they write up a “Joint Venture Agreement” and the paid coaching calls stop and they become partners at that point
- All deals are syndicated deals
- Many are first time syndicators, others are not
- Example:
- Josh Cooper brings a 40-unit deal (on the low end of their minimum to participate – 50 is minimum – pay-off is bigger for larger deals, plus more units would allow for better property management) in Birmingham, Alabama
- He closes the deal but is a little nervous
- His second deal is 100 units
- Josh is required to raise part of the money
- Deals keep getting bigger
- He prefers starting people with 100 plus but some are just not ready for that to start
Coaching Methodology
- 12 month system
- First 30 days
- Next 60 days
- Last 9 months
- Varies based on how much experience coaching students already have
- Has one-on-one coaching (with experienced coach on his team) and group coaching available as well
His Book
- It took longer than he thought
- Had to modify his morning routine to get it done – committing to writing 45 minutes each day
- It has become his passion right now
- It encapsulates what he teaches and what he does in real estate investing right now
- Sales are great – Number one real estate investing book on Amazon
Options for Old Dawgs Interested in Apartment Investing
- Three options to get involved in apartment investing:
- Operator/Entrepreneur
- You find the deal
- Analyze the deal
- Making offers
- Raising the money
- Hire the property manager
- You do everything
- Passive Investor
- Typically has a “nest egg”
- Higher salary
- More savings, 401-Ks, etc.
- “How can I get an above average return, coupled with a low risk factor (multifamily) and extraordinary tax benefits?”
- The Money Raisers
- Comes from both the operator and passive investor camps
- Operators but don’t love analyzing deals
- Enjoying talking with people – good relationship builders
- Gravitate toward money raising
- Instead of finding deals, they raise money and bring it to people who have deals already
- Bring in family and friends
- Become a General Partner (split is generally very generous)
- Build up equity, passive income and build up wealth
- Operator/Entrepreneur
3 to 5 Year Plan to Financial Independence
- He picked this time frame as a range but has also seen people achieve it faster (1-2 years for some)
- Has a dozen case studies in the book
- Came up with 3 to 5 year time frame from talking with his podcast guests
- The clock starts once someone has agreed to embark on the journey of financial independence through apartment investing
- There’s often a gap between what people are thinking and what is really happening
- The Law of the First Deal – If you do a multifamily deal of any size, you are 3 to 5 tears (conservatively) away from quitting your job. Although, Michael clarifies that many achieve independence in 1 to 2 years
- Takes a year, typically, for most people to close their first deal. Could be larger property or as small as a duplex
- Once you close that first deal, the second deal most often falls in rapid succession (some have the second under contract before they close the first deal)
- You become a magnet for deals and money
- The deals keep getting bigger
- Typically, the number of units increases exponentially – 2-10-25-50
- Start with what is achievable and meaningful and growing from there
- Typically, the number of units increases exponentially – 2-10-25-50
- Most people have covered their living expenses in the first 2 or 3 deals
- Many think they need hundreds of deals to be financially independent but, in reality, it’s typically much less
- If you can close that first deal, it’s gets much easier after that
- Brokers see you can close, so they start sending you off-market deals
- Investors see that you are making other investors money and they want in
Overcoming Myths
- Most people don’t have the funds or experience to get started
- They believe that purchasing multifamily properties will take longer than than is truly necessary
- Typical Myth – I’ll do 5 or 10 years of flipping houses or investing in buy ‘n hold single family rentals to get the experience and raise enough money to get into multifamily
- Not necessarily a bad plan – it just takes longer
- The reality is you can just bypass that and go directly into multifamily
What if You Don’t Have the Money to Start or the Net Worth to Qualify for a Multifamily Loan?
- Raise all the money you need from investors and bypass the banks
- As you’re raising funds, you can find high net worth individuals who want to invest with you and who might want to co-sponsor a loan with you
- You can joint-venture with someone (like with Michael’s Deal Desk)
- If you can find good deals, it’s not hard to find people willing to help financially
- His book addresses this area as well
- Many people limit themselves and often can’t see the various possibilities and options out there
- Sometimes Michael has seen students with different strengths (one a fund raiser, another a deal-finder) partner with each other
- You become a “deal magnet”
- Your comfort zone expands and you’re more confident handling bigger deals
Tools in His Book
- First third of the book addresses how to overcome your lack of experience and funds
- The rest of the book is all about how to do your first deal
- 250 page book
- When you buy the book, you’ll get free access to and online companion course with videos, checklists, downloads, etc
- The purpose of the book is to “set the record straight” about what is possible by sharing what investors are actually doing
- The focus is getting the first deal done
- After the first deal, there are many options available to help new investors learn the other aspects of effective management/operations of their real estate investments
- After the first deal — the toughest obstacle — the rest comes much easier
Next Steps After Reading the Book
- Taking many little steps to get to the bigger goals
-
First 30-Days – Pre-Launch Sequence
- Educate your self
- Online course
- Be Clear on Your First Deal
- How big is it?
- Where is it?
- Analyze at Least Five Deals
- Learn and use his Syndicated Deal Analyzer (analysis spreadsheet for multifamily)
- First most important skill set to have
- Create a Sample Deal Package
- Investor package based on a real deal
- Photos
- Financial projections
- You don’t really have the deal under contract
- Use it as a conversation piece to raise money from day one
-
Next 60 Days – The Launch
- Build Your Team
- Property managers
- Lenders
- etc
- Continue Analyzing Deals
- Get better at this critical skill set
- Meet With Potential Investors
- Have no expectation or outcome in mind
- Get to know them
- Talk to anyone that will talk with you
- No pressure on them
- At the end of this stage
- Have a pipeline of deals
- Team in place
- Potential investors in place
- Build Your Team
Final Thoughts From Michael
- Keep an open mind
- If you’re interested , assess how you want to become involved:
- Operator/Entrepreneur
- Passive Investor
- Money Raiser
- Get educated
- The opportunity in real estate investing is so broad, regardless of age, income, and demographic
How to Reach Michael
- Website: TheMichaelBlank.com
- To buy Mike’s book, go here: Financial Freedom with Real Estate Investing
- To take Mike’s training program: Ultimate Guide to Buying Apartments with Private Money
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