The Big Breakthrough

Brett saw real estate as an outlet to escape the rat race.  He was inspired by seeing million-dollar homes through his painting business.  Brett worked with a biz partner and learned a lot about management, and other facets but didn't learn about acquisitions

Goal for 2018 was to add 5 units to his portfolio this year. That goal grew to 15 units then 30 units.

Brett owns a property management company and painting company. He realized he was working too hard and asked himself what he needed to do to free time to focus on his real estate investments. He read The One Thing and decided to set the goal of having $100,000 in liquidity within 5 years. Realized that he could accomplish that immediately by selling one of his rental properties. That gave him the time/money to network, focus on BrettBuysRocHouses.com, and work on projects that have more meaning for him.

BrettBuysRocHouses.com – lead-generating tool Brett uses to acquire real estate.

You need to be comfortable being uncomfortable.

How did Brett add so many units to his portfolio in this year?

He started with personal development. Asked "How can I add value to others before I ask for something?"

He used networking and partnerships to acquire real estate faster. Also, he's purchasing properties at the right price so he's able to find money to finance the acquisitions.

Brett's Big Breakthrough was when he was worn out from too much work. His health was suffering from his pace of life. He sees real estate as a tool to give him more time to focus on things that bring more meaning to his life.

You have to build yourself up with positive words. If you're constantly tearing yourself down you'll never get to where you want to be.

The hardest thing in Brett's career was having a negative mindset and not knowing how to process his emotions and turn them into something positive.  If you know how to deal with adversity you'll be better equipped to unlock your potential.

Goal: Within 5 years Brett wanted to have enough passive income to invest back in the community. Someone asked him why he couldn't do that now. He didn't have a good reason why not.  He's taking his positive mindset, real estate expertise, and desire to impact the community and using them to help others grow, learn, and improve their lives.

Current goal setting: Immediate (things to work on daily), Short term (1-2 years), Long term (3-5 years)

Routines/Habits: Mind, Heart, Health

5:00 pray and list what he's grateful for

Gym until 7:30

Andrew got into real estate after a family medical emergency. He had to quit his job, which made him reevaluate life and create a plan for passive cashflow. He and his brother started buying duplexes and fourplexes from there.

Andrew was able to grow his portfolio by living within his means, earmarking bonuses for purchasing property, market appreciation, and the Buy-Rehab-Rent-Refi strategy

Big Breakthroughs:

1. Buying his first duplex - just getting started
2. His first 200-unit deal - operating at a different level

Steps Andrew took to "graduate" from small properties to big properties:

1. Ask: Who is buying these larger deals
2. Understand how people purchase the larger deals (syndications / partnerships)
3. Studying the differences between 10-unit and 200-unit deals
4. Build rapport with investors and build relationships with brokers and property owners

Advice to do what Andrew's done - start taking action. His first investment in a duplex launched a new trajectory of owning dozens of units (and later on, hundreds)

Andrew recommends working with a partner to divide responsibilities and focus on your specialty

Andrew's largest challenge is to not get emotionally tied up in the deals they're considering

"Retro" Exercise... Ask: what did we learn from this and how can it improve our business?

Motivation to shift into real estate: it was a passion that got to the point of Andrew essentially working two full time jobs. His big WHY was passive income, lifestyle independence, and life-by-design and he saw that as much more achievable by going down the real estate path.

Andrew's life by design goal setting includes goal for family, business, investing, health, relationships, etc

Paul transitioned in real estate from flipping to building modular homes, to building stick-built homes, to selling waterfront lots, to selling leads to Realtors, to multifamily syndication

Paul's Big Breakthrough was after failures in local real estate and oil, in a multifamily property in North Dakota

Real Estate Development can often be a double-or-nothing roll of the dice - Paul doesn't want to swing for the fences, he focuses on singles and doubles and making reasonable profits on every deal

Each 1% drop of home ownership in the US means 1,000,000 new people in the rental pool

Demographics for Multifamily:

• Millennials are the largest demographic group in US history - 80,000,000 people, don't generally tend toward home ownership
• Baby Boomers are the fastest-growing renter pool with approximately 77,000,000 people. When they start renting, they will likely stay renting
• Immigrants - rent more often and for longer than US-born people

Wellings Capital looked at 190 deals in the first half of 2018 and didn't find anything they could acquire

5 reasons people might invest in multifamily now:

• Inexperienced syndicator who's overpaying
• International money (some willing to just break even to be in the US dollar instead of their currency)
• 1031 exchange money
• Self-directed IRA money
• Some syndicators who know better are over-paying just to get into a deal

7 Paths to get into multifamily:

• Invest in small multifamily (duplex/fourplex), improve, trade up, repeat
• If you have access to capital, syndicate deals on your own
• Deal finder for multifamily company
• Be a capital finder (bring money to other peoples' deals)
• Be a passive investor (completely passive or active-passive)
• Get a multifamily job (real estate broker, asset manager, property manager, etc)
• Find a mentor

Good investing is like watching paint dry or like watching grass grow

During the Great Recession, Paul went from having $2 million in the bank to being $2.5 million in debt (tied to real estate). He and his family started giving generously and after a chance meeting in a Subway restaurant they turned around a real estate project and 13 months later they were completely debt-free

The mindset of Risk and Return: Low risk typically yields low return, but high risk has the potential for high return or no return. If you take risks, do so with a low amount of your capital so if it doesn't work out, you're not completely sunk

Routine: Get up, listen to audio, journal/meditate/scripture

Paul started his search for a property during the Great Recession. He found an area of town with a planned light rail project and waited for the right opportunity

The overheated real estate market made Paul shift away from real estate. He considers himself "asset agnostic" and seeks the best return for his investment dollars

Paul now focuses on "digital real estate" - income-producing websites that can be bought, sold, improved, and valued similarly to physical real estate

A digital real estate operator focuses on content and building the right team to operate the website and handle customer service / fulfillment / etc.

Paul sees the real estate market like horse racing: Wait until you see a horse with odds that are way out of whack then bet on that horse to take potential of the high expected value relative to the current odds

Know your end goal and wait for the asset that will help get you there

For people wanting to get into real estate, find someone who may want to exit the industry, help them and learn from them, and possibly partner with them down the road

Pauls' tips for success:

Sleep enough each day (he targets 8.5 hours). His financial success is really based on 5 key decisions he's made, and sleeping enough helps us make better decisions. Sleep also helps restore will power, which drives good decision making

Read a lot. Paul consumes 1.5 books / week between reading and listening. It helps get more perspective quickly

Lifestyle Design: Paul read Tim Ferriss's book "The Four Hour Workweek" and was fascinated by the concept. Now that he's generally arrived, he focuses on creating a satisfying life through investing time and not money

Mark was in college when he made his first offer on a duplex. He leaned on the opinions of a family member who didn't have any real estate experience

Mark started in real estate on the side while he was working full time in IT

Mark's Big Breakthrough was the realization that he couldn't work full time while managing a bunch of small properties - he needed to syndicate and do bigger deals in order to devote all of his time to real estate

Most people want more for themselves and their families, but are they willing to sacrifice the time to make those dreams reality?

Everyone says they want to do something, but they know the steps to take - will they do it?

Don't discount the experience of working on smaller properties - it teaches you the basic concepts and basic steps, but you don't need to start small to do larger multifamily deals. Also, don't keep working on the small properties if you want to work with larger ones. After getting the experience of 1 or 2, you won't gain any more at properties 3, 4 , or 10

Mark's first mentor was a commercial broker. His second mentor was focused on mindset, which Mark thought silly at first but now sees the value in

Mark's hardest obstacle in real estate to overcome was a bad partner

If you buy into an existing LLC, you buy into potential issues that you don't even know about. Mark did that once and never will again

If the deal works financially and it's a good deal that meets your investment goals, it doesn't have to be a killer deal. Don't hold out only for killer deals in today's market

Don't let emotions impact your financial / investment decisions

Mark's routine includes going to the gym, at least a little alone time, and treating people equally

Mark started in real estate investing because of a neighbor's loud barking dog. He started looking for a house to purchase and came across the concept of House Hacking on BiggerPockets. (House hacking is the idea of purchasing a multi-unit property like a duplex or fourplex as your first residence and getting free or cheap rent from the rent your tenants pay).

The possibilities Mark found in House Hacking led him to shift his search from a single family home to a multi-family property

Mark realized he would have to sacrifice having a space completely to himself, but that sacrifice is worth it to him

If you want to invest in real estate and haven't purchased a home yet, purchase the multi-unit property FIRST, then move into a single family house SECOND. This allows you to get owner-occupied financing for BOTH properties, which provides better financing options (with lower down payments)

If you rehab your multi-unit property, you can sometimes "force" appreciation which may allow you to refinance and take out some or all of the cash you invested

Mark runs a website - FreeingTomorrow.com that teaches beginners how to invest in real estate, figure out how to buy their first rental properties, and how to self-manage

Mark's goal with real estate investing was to attain financial freedom to allow him to focus on his music career

Hardest things to overcome: 1) completing a gut rehab of one side of his duplex himself 2) dealing with a contractor from Craigslist for the second half 3) suing that contractor when he didn't perform as Mark planned 4) learning to deal with tenants

Mark recommends finding at least one mentor who is doing exactly what you want to do (and doing it successfully). Don't get pulled into a strategy that's not what you want to focus on

Know landlord tenant law for your state so you know what you're talking about when you're talking with tenants

Make a habit of connecting with other local investors and knowing financing options

Always remember your "Why" for getting into real estate investing - and use that to decide your day-to-day actions and decisions

We've had 13 interviews so far and we'll discuss some of the themes we've heard:

• Hard Work
• Time Management
• Networking / Mentors
• Belief in yourself (through education, preparation, and shift of mindset)
• Action

Mike's Big Breakthrough came when he was working as a physical therapist, investing rental houses/duplexes/fourplexes on the side. His initial goal was 100 units making $100/month each. After 4 years he had 30 units and adjusted his math to reflect for lower performance to require 150 units. Near the end of a vacation with his wife, he realized that in order to be his happiest he had to leave his normal life. In that moment, he decided that he was going to get out of his job no matter what it took.

Mike found self storage as his new investment plan and bought his first property 16 months after his realization on the beach on vacation. He quit his job the same day he bought that property (even though it was losing $2,000 per month).

For apartments, the Operating Expense ratio is typically around 50%. The Operating Expense ratio for self storage is closer to 30%.

Storage facilities default less often than other mortgage-backed asset classes

When he's evaluating a property, Mike asks 3 questions:

• Why does this property have high vacancy or other blatant problems?
• Is this something that I can fix?
• Is there another fatal flaw (supply/demand, location, outside factors)

You can't tell someone they need storage, you just have to be the first person they find when they look for storage

The key to success in storage is being available for customers when they need you

You need to define what you want to get out of any situation

Learn about storage by reading on Bigger Pockets, All Things Self Storage (Mike's blog on Bigger Pockets), The Self-Storage Almanac (industry stats - look for an old PDF), TheStorageRebellion.com (Mike's online presence)

Mike's hardest challenge was overcoming limiting beliefs about himself, what he could accomplish, and what was possible. Things are only impossible until they're not

Mike defaulted into doing the things everyone around him was doing. He later realized that he never sat down to define what he wanted out of life and what success meant to him

Mike and his wife sat down to describe their ideal life and they set out to pursue that vision

One vision-setting exercise: write the eulogy you would like your best friend to give at your funeral

Mike's daily habits include reading his goals, meditating, and exercise

www.TheStorageRebellion.com

Todd's interest in real estate began reading books by Robert Kiyosaki and grew when he stopped watching TV and gave up other interests to study with all of his free time

He started rehabbing houses during the summers as a teacher. He bought and rehabbed rentals but quickly ran out of money so he started flipping

Todd's Big Breakthrough wasn't sudden - it was more of a snowball

After hearing David Lindahl, Todd was interested in multifamily investing, but didn't get into that asset class for years

After running the numbers, Todd's rentals were producing better returns on investment than his flips. So he started buying 10- and 20-unit buildings before "graduating" to the bigger properties

Real estate is a "Get Rich Slow" game

When considering markets to invest in, consider your own market first

Also, think about what's going on in the market: cap rates, rent / affordability trends, population growth, job growth (and what kind of jobs)

Todd looks for markets with 2 things: 1) cap rates can be compressed, but can't be crazy 2) affordability - tenants must pay less than 1/3 of their income for rent

Look for cities with few rental regulations that allow for the opportunity to find value add properties

Everyone gets the same amount of time in a day - you need to figure out how to use that time most efficiently to achieve your goals

Todd was motivated to get out of his job, to create financial freedom, and to give back

Main Points:

Tyler and his business partner worked with others and couldn't have created this success on their own

Tyler's Big Breakthrough was his first deal - 12 units, $1.5 million purchase price. Tyler and his business partner purchased the property when they were 18 years old and living in their parents' basements

Tyler and his business partner spent money on a course and mentor

They had their first deal under contract before they had the equity or the mortgage lined up

Tyler's first two deals were mostly empty and they worked with the sellers to do seller financing to give time to lease up the properties before getting permanent financing

The #1 thing is goal setting. Then you need someone to hold you accountable for your goal(s). Then focus on growing, tapping into your network, and surrounding yourself with the right people. Adopt the right habits

When you're the business owner you need to be stronger than the business and you need to grow faster than your business

Keep a positive mindset to focus on your big picture (goals) and just move through the smaller problems

Tyler has a set morning routine like from Miracle Morning to keep a clear head and start his day off right