The Tony Stephan Show · Episode #015

Small Multifamily BRRRR Breakdown: A 13 Unit Apartment With $500 Rent Growth

With Walter, mentorship client, former sheriff's deputy and house flipper · March 29, 2026 · 33 min

Walter spent about six years with a sheriff's office in the Bay Area, then moved his family to Colorado, worked as a residential agent and built a house flipping business. He always came back to multifamily because it is a business and rewards good operators. Within about three months of joining Tony's mentorship, he found his first deal.

It is a 13 unit in Oxford, a Metro Detroit submarket, right off the downtown: a duplex in front and 11 units behind, built by the seller's grandfather and owned by the same family for more than 50 years. It was listed at $1.1 million by a residential agent. Walter offered $1.13 million and beat two full price cash offers. The due diligence documents were handwritten leases.

Residents paid $450 to $545, and Walter just signed two leases at over $1,000 plus about $100 in utility bill backs. Tony calls it one of the best deals in the coaching program and runs the math on about $500 of rent growth per unit. Walter is honest about the other side: bridge financing, a property that cost him money in the first months, a burst pipe and an old boiler to deal with. His advice: it will not cash flow at first, build a team, and bet on yourself.

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Key takeaways

1. Properties held for decades by one family often have artificially low rents and big management upside.
2. Deals like this are not clean. Expect handwritten leases, deferred maintenance and fast decisions.
3. A heavy value add deal may not meet a bank's debt service coverage ratio on day one. Plan the financing and the reserves.
4. Keep your main thing your main thing. Walter grows his income through his business instead of rushing the refinance.
5. Build a team before you need it: a trusted contractor, a handyman, a boiler technician and a lender.
6. Research the competition after going under contract. New construction nearby rents for far more, which supports the plan.

Guest: Walter

Mentorship client, former sheriff's deputy and house flipper

Walter worked for about six years at a sheriff's office in the Bay Area, then moved with his family to Colorado, where he became a residential real estate agent and built a fix and flip business. He joined Tony Stephan's mentorship and within about three months bought his first multifamily deal, a 13 unit in Oxford, Michigan, which he runs from Colorado with a local team.

Chapters

1. 0:00 $500 Rent Growth on a 13 Unit Deal
2. 0:25 Meet Walter: From Cop to Investor
3. 2:23 Why He Chose Multifamily
4. 4:37 Finding the 13 Unit
5. 5:23 The Value Add Opportunity
6. 7:25 The Fear of Raising Rents
7. 10:18 Winning the Deal Above Asking
8. 12:01 Why Long Term Owners Mean Opportunity
9. 16:11 The Million Dollar Math
10. 17:59 The Reality: It Didn't Cash Flow
11. 20:02 How He Took the Risk
12. 26:58 Advice: Just Take Action
13. 31:46 Final Takeaways and How to Get Started

FAQ

What did Walter pay for the 13 unit?

It was listed at $1.1 million. Walter offered $1.13 million, over asking, and beat two full price cash offers. The listing agent was a residential agent, and they went straight under contract with only a day or two to look at the numbers first.

How much rent growth is there?

Residents were paying about $450 to $545 a unit. Walter has signed new leases at over $1,000 plus about $100 a month in utility bill backs. Tony uses a blended $500 per unit on 13 units, $78,000 a year of NOI, and they discuss a value around $1.7 million after about $100,000 of work.

Did the deal cash flow right away?

No. Walter says the first couple of months cost him money. The property's debt service coverage ratio was below 1 at purchase, some lenders wanted 50% down, and he used short term bridge financing at about 6.75%. He expects a cash out refinance in about two to three years.

Why were the rents so low?

The same family owned it for three generations and self managed it without debt. Tony explains that owners who own a property free and clear often keep rents far below market to avoid headaches, which leaves a lot of upside for a new operator.

What is Walter's advice to someone nervous about a deal like this?

First, accept that it will not cash flow at the start. Second, build a team: contractor, handyman, insurance, lenders. Third, go all in and bet on yourself. He underwrote every deal that crossed his desk to get reps before buying.

13 Unit BRRRR With $500 Rent Growth: Walter's First Deal

From the sheriff's office to real estate

Tony calls this one of the best deals any of his mentorship students has closed. Walter spent about six years with a sheriff's office in the Bay Area, working nights and interviewing gang members as part of a classification unit. He and his wife then moved to Colorado to raise their kids. He was always interested in real estate because of leverage, worked as a residential agent, and built a house flipping business.

He kept coming back to multifamily. "I like the debt on it and I like that it's a business," he says. "You get rewarded for being a really good operator." He had joined another program before and says paying for education made him take action. His wife's attitude helped too: if you are going to do something, go all in.

The deal

Walter found his first deal within about three months of joining Tony's mentorship. It is a 13 unit in Oxford, a Metro Detroit submarket, right off the downtown with its restaurants and shops. It was listed at $1.1 million by a residential agent with little commercial experience, so they skipped the usual letter of intent and went straight under contract. He offered $1.13 million and beat two full price cash offers.

The property is a duplex in front and 11 units behind. The seller lived in the duplex; his grandfather built the 11 units. The family had owned it for more than 50 years and self managed it. The due diligence documents were handwritten leases. Tony explains why that matters: owners with no debt keep rents low to avoid headaches, which leaves big management upside.

After going under contract, Walter researched the area: household income, renters versus owners, and new construction nearby, which was going to rent for close to double what he would charge even at market rent.

$450 rents and the fear of raising them

Residents who had lived there for a decade paid about $450 to $545. Walter just signed two leases at over $1,000 plus about $100 a month in utility bill backs, and a third applicant is in screening. "You sit there on paper and you're like, okay, they're being charged 500 bucks a month. How am I going to get them to a thousand?" Tony felt the same on his first 7 unit, where rents were $700 and market was $1,100.

Tony tells the story of that first refinance: bought for $660,000, NOI from about $30,000 to $60,000, a new loan of $750,000 at 75% of a million dollar value, and about $250,000 back after paying off the old loan, against $132,000 put in. He refreshed his bank app all night waiting for the wire.

The math

With a blended $500 of rent growth on 13 units, that is $6,500 a month and $78,000 a year of NOI. At a 6.5% cap rate, that is about $1.2 million of added value. Walter says they underwrote buying around $1.1 million, putting about $100,000 into it, and a conservative value around $1.7 million. The front duplex, vacant at purchase, should rent for more than that blended number.

The part people do not show

Walter is candid. The first couple of months, the property cost him money. At purchase its debt service coverage ratio was below 1, so some lenders wanted 50% down. He used short term bridge financing at about 6.75%. A pipe burst in a freeze, a tenant can trash a unit after a big increase, and he just got a call about a boiler certificate the previous owners never handled. The duplex is from the early 1900s. His flipping background made the construction less scary.

He has stretched his timeline from 16 to 18 months to two or three years, so he can keep his main business the main thing. He has real estate professional status, and Tony notes that cost segregation can offset the taxes on his flipping income.

Advice

"Step number one, it's not going to cash flow," Walter says. Then build a team: contractor, handyman, lenders, insurance. He underwrote every deal that crossed his desk to get reps, and he leaned on Tony and Andrea's network. His next deal will be 20 plus doors, once his team is in place. "Go do it. Bet on yourself."

Transcript

0:00 My client Walter bought a 13 unit apartment deal that last sold 50 years ago and he's getting $500 in rent growth on this deal. This is one of the best deals I freaking ever seen. One by far one of the best deals any of our mentorship students have closed on. I'm excited to have him share his journey, how he's doing the massive BRRRR strategy on this 13 unit deal and most importantly teaching you from our real world journey to help you in yours. Amazing story. You bought a 13 unit recently. You're freaking massive action taker. Doing fix and flips, doing all these crazy things. So typically I don't always say like hey tell us your life journey, but your life journey is really interesting man. So you got a 13 unit right now, fix and flip business. You done really well with the stock market.

0:47 You used to be a police officer dude. Just tell people who you are and like what your story's been. How what has been your story and how'd you end up in multifamily? Yeah, so kind of as Tony was saying you know in another life pre-kids, all that sort of stuff. Spent about 6 years working for the sheriff's office back in the Bay Area in California. Worked nights, worked as part as the classification detective unit, like interviewing gang members, just doing all this fun stuff. You don't come off as a cop. That's the thing. That's good. That means I was good at being a cop to be honest, right? Kind of tell like a cop they've got like the like stern kind of like I'm going to see you at I know you can like you probably can't see me, but I'm tattooed and all that stuff. So I take that as a compliment, right? That meant I was like pretty good at being a cop cuz I didn't really come off like a cop.

1:35 But so I did that for you know almost 6 years and then my wife and I decided to settle down, have kids, go all that sort of stuff. And so we actually relocated from the Bay Area out to Colorado. And I was always super interested in real estate, right? Because of the power of leverage. And not even necessarily multifamily at that time, right? Like you don't know what you don't know. So started off on the BiggerPockets and the forums and the this and the that and just kind of it's like drinking from a fire hose, right? Like you kind of don't know what where to start even, right? Is it STRs? Is it I know there's a million different things now to try and manufacture cash flow, but I always kind of came back to multifamily because I like the debt on it and I like that it's a business, right? Like I've always been really interested in acquiring small businesses too. But I just like the debt on it.

2:22 I like that it's a business. I like that you get rewarded for being a really good operator, right? And not having any background in property management or anything like that, you know I started seeking out like hey where can I learn more about this? And I'd actually been part of another group and it was it got me started on the journey, which is good, right? Like I think that's a huge step that a lot of people just never even take, right? They listen to the million podcasts, they read the books, the whatevers and you know go to masterminds or anything, but they don't ever take action, right? And I think like once you put a monetary value on that, like once you come out of pocket, you're like oh crap, I got to go do something, right? Or I'm just wasting not only my time, but money. So that's even how I got started flipping, right?

3:07 It was like I paid a mentor to help me understand it because I also too wanted to go faster, right? Like I didn't you know I'm in it for the long haul, don't get me wrong, but I didn't want to just be kind of average or dabble in it. I was like hey if I'm going to do this, I'm going to go do it. And that's I'd probably say really more attributed to like my wife. She's like hey if you're going to go do something, go do it, right? Don't just like dip your feet in it, go all in like I got your back. And so you know I spent a couple years there just a normal residential agent and Oh that's right. You were an agent. Yeah in Colorado. You've lived many lives, bro. Yeah no kidding. Yeah we had a couple kids in the meantime. But so yeah started like understanding my way around a contract in real estate and started eat, sleep and breathing it, right?

3:53 Like you guys do. And always with the goal to get into the investing side of it, right? And so now it's been like a really good balance I think. One thing that I've liked that you really preach and Andrea's you know keep your main thing your main thing. And that's really stuck with me as far as you know like how do I scale this? How do I do bigger deals? How do I like well go make more money. It's actually a really easy problem, right? Like it's simple not easy. And so even in the you know our flipping business I've kind of re-aligned my business plans and like what my goals were really to buy more real estate. You know we won't get into all of the cost seg and the rep status or real estate professional status if you guys aren't familiar with what that is. There's just so many benefits, right?

4:40 And so you know we jumped in and man I don't even know we're in your program for more than 3 months before we found a deal. Took massive action. Yeah and it just kind of has ended up being a whirlwind. It's for sure been mines a large value add and I don't know how much we want to get into it. But like I definitely bit off a lot on the first one, but it's been so cool. It's been you know if we talk about the deal specifically, I give you a real high level of like these people have been living there for a decade and were being charged like five anywhere from like 450 something to like 545 in rent per month per unit, right? Like dude you can't even rent a room in most areas of the country for that. And we've just signed two leases this month at a thousand plus about another hundred bucks a month in rubs, right?

5:29 Right ratio of totally bill back. And we have a third one right now who's interview or interview applied and is going through the background process. So it's like it works, you know, which is crazy because it's like you sit there on paper and you're like okay, they're being charged 500 bucks a month. How am I going to get them to a thousand? And right like there's definitely there's headaches and I've had a pipe burst when they got you know blasted with a freeze over and all that stuff and you know it's like not all sunshine and rainbows, but I know in a year or two whenever that time comes it's going to be a great feeling and a great payday, right? I'm 100% confident I'll get to 100% cash out refi. And I was so at first like worried about going fast.

6:15 I'm like I'm not saying that you shouldn't, but I've kind of scaled back a little bit. You know at first I was like I want to get this done in like 16, maybe 18 months. Now I'm like two to three years somewhere in there because again going back to what we're talking about, like keep the main thing the main thing. I'm focusing on my other business. I spend a couple hours on this. I got a great contractor out there who was recommended by you and Andrea and you guys have worked with before, you know, Chris. Yeah. And I feel like we're in a really good spot. Dude, love it. So much there that I would love to unpack. But I want to highlight what you said cuz I felt the same way too. Like when I bought my first value add deal. It was seven units. They were renting for 700. Market rent was 1100 bucks. I said the same thing. I'm like is this going to work? I'm like I get it on paper.

7:01 NOI divided by cap rate equals value add. And for every $1 in new NOI divided by the cap rate, that's how much money I can create. There's always that fear at first, but especially like 450, bro that's crazy. Like that's why when we saw this deal we were like dude. And I mean a lot of people were excited about this. You were the one who took action though. You were the one to be able to like see past the adversity in on it, right? Because it's not like you just snap your fingers and go from 450 to you said a thousand plus 100 in rubs. Yeah literally doubling. Killing it. Killing it. It takes it takes courage and faith and action to do that and you're going to have to deal with some headaches along the way to that. They're not just like no problem. Where do I send that? Double, you know. Where do I send the ACH? Oh now you're charging me fees and this and that and But like you said you're cleaning up a lot there, you know what I mean?

7:51 You're putting a lot of money into it. I'll also tell you this. When you go to do the cash out refi cuz I agree like I mean we've looked at these numbers a lot of times together. Cuz you know we helped you underwrite it, go through the entire process. When you go for that cash out refi, you'll be like well so wait a minute. They're just going to send me all my money back? We did it. I bought my first deal for 660, rents for 700, got them up to 1100, took the NOI from 30,000 to 60,000. Deal priced for a million bucks. They're like cool, we're going to do a cash out refi 75%. We're going to give you a new loan 750,000, pay off your old loan it's about 500k. So the net difference is to me 250,000. Only put 132k down to do the deal. I remember I signed all the papers and I'm like okay, so like you guys are just going to wire me this money?

8:38 They're like yeah. I'm like are you sure? Like when am I getting the wire? They're like we've already sent it, you're good. I'm like I remember all night, bro. I'm just like on my Chase Mobile just refreshing cuz I'm like I it's real, but then once it hits you're like oh my god, dude. So that's how you're going to be and that and that's where you're at. It took courage to do that type of deal though because there's uncertainty with that. How did you overcome that uncertain certainty? You know this one is really interesting too, right? Because like I don't know how familiar everybody will be with the process of commercial deals, but it's a little different than residential. But this one actually was listed by a residential agent with really next to no commercial experience is what I was told. What do you think of that? To start off. Well so you skip a couple steps, right?

9:25 Like you go past LOI, PS like we just went right under contract, right? Like we didn't have there was no back and forth. And so this was purchased in Oxford which I've become very familiar with that market or kind of like submarket of metro Detroit. And great area. I mean like this is you know look it up on Google Maps, whatever, but it's like not even a block off of downtown. Like our parking lot juts up to downtown with like all the restaurants and shops and you know little slice of Americana, right? And so we had to skip some steps and like it was fast. Yeah, they did. They knew what they had and we actually went over asking price, which I know people probably like raise their eyebrows in this market, right? And had to fight off two cash offers.

10:15 Full price cash offers. Do you mind if we ask how much how much was the deal? Yeah, it was 1.13 and we did it was listed at 1.1. They had cash at 1.1. Yeah. See folks, that's what that's what we're saying though. It's getting super competitive. Everybody wants small multifamily. Yeah, well that specific area I didn't really know it at the time, but once I went out there, you know, six or seven days later for the inspection and all that sort of stuff and we're already under contract. You know, I started doing some research and figuring out like, okay, what's my competition? What else is out there? Like what's going to be my replacement costs? You know, like is this really a good deal because we moved so fast. And I was like, oh holy cow, like the new construction out there is going to be darn near double what I'm going to be charging in rent even once I bump it up to market rent.

11:00 Like it didn't have much competition. And so I felt really confident. I love the area the more I looked into the metrics like household income, how many people were renters versus homeowners, all these other things that right like you as an investor need to figure out what's important for you, but I'm less worried about cash flow and I'm more worried about growing equity, right? Because like again, keep your main thing your main thing, right? Like I increase my active income versus, you know, oh I'm going to retire off this 13 unit cuz that's not I need this 100 bucks a month of Right? Like that's not realistic cuz what's going to happen is like I said, your pipe's going to burst and it's going to cost you two grand or you know, a tenant's going to trash a unit because they lived there for a decade and they're pissed that you doubled rent, which fair, okay. You know, and that thousand unit turn you thought is now costing you four grand. Like that's just, you know, real estate is a capital intensive business.

11:49 Yep. For sure. But I think there's just huge bait, you know, there's huge paydays. And see do Tenants don't understand that. They think like again, so the deal last sold how long before you bought Yeah, dude, this is crazy. It's like you can't even make this up, right? So, the seller had lived there is third generation Yeah. From that property. So, it's a duplex and then 11 units behind the duplex. Yep. And the seller was living in that duplex. His grandfather had built the 11 unit. That's wild. And so there's three generations. I think he'd been there I want to say in excess of 50 years. So, he just self-managed it. So, it never been to market as far as I understand the 11 unit at least. Wow. Yeah, so the duplex itself is old. I mean, I think we landed somewhere like early 1900s which maybe not the most ideal thing for your first deal, but there was so much upside, right?

12:42 Like on increasing NOI and producing more income and I felt pretty confident because I had a contractor that was trusted from you and Andrea. And also too just like my background from flipping homes, right? Like I've got a 100 year old home right now in Denver that is down to the studs. We did engineer structural work. All this like that stuff doesn't scare me as much and don't get me wrong. Like we're not going that in depth on the duplex. It's real just paint, floor, rental grade and you know, put her back out there, but it's probably a little bit heavier of a lift than most multifamily operators would be I don't want to say willing to do cuz it probably I think a lot of people would buy that deal, but probably more so than like the average you know, operator ends up having to deal with. But it didn't scare me. Yeah. No, I love that. So, like Hey, real quick before we get back to the episode, I wanted to say thank you to our sponsor today, which is just me and I just wanted to let you know that hey, if you're loving this conversation, number one, drop it in the comment section.

13:36 We make this content to help you, but if we don't hear from you, we don't know what you like. So, drop in the comment section. We're going to pick one person off this comment section and we're going to actually give you my multifamily startup bundle. It sells for 49 bucks online. Pick one comment, we're going to give it to you for free. Like, comment, subscribe to the channel if you're new. If you want to learn more about the mentorship program that my student is in who bought this first deal, click the link in the description, fill out the coaching application, we'll see if you're a good fit. Now, let's get back to the episode. Like this is how you know you get a good deal, right? When did it last sold? This thing hasn't sold, right? It's just been passed along family to family to family, three generations, right? So, that's one of the things. It reminds me a lot of my 56 unit. Their dad bought it and then the kid or like the kid like the dad owned thousands of units in Metro Detroit, then the kids all broke it up. The deal last sold in 1993.

14:23 Wow. And I bought it in 2023. You know what I mean? The longer the current owner has owned it, there's going to be more man- management upside, right? It's probably going to be artificially low NOI. People like, well, if it's such a good deal and if the if the market rent is a thousand, why were they charging 450? Cuz they don't have debt on it. Yeah, I'll say cuz yeah, cuz they own it in cash. They own it in cash and they want no headaches. Yep. When people pay very far below market rent there's minimal headaches, right? Like tenants aren't stupid. They go on Zillow. They go on apartments.com. They see what are things renting for. Like you said, that's a nice area. They go, oh my god. They're building new construction for two grand a month. I'm paying 450. Hey, don't call them about that leaky faucet. Just leave it. Just leave it cuz we don't want them to be like, wait.

15:09 Yeah. So, you know, like that's a huge thing. Management upside with that. When did the deal last sold? And like these are the things we you got to look for, you know, because we always talk about like rent growth, number of units, all that good stuff. You got 13 units. Let's just say you get like you it's about 400 bucks a unit. Rent So, there's one lady paying like 450-ish and then everybody else was like low to mid fives, like 525 to 545. So, call it 450. Yeah, probably blended would be like 500. 500. What was the cap rate that you used when you I think we did six and a half. Not bad, bro. Cuz it's good area. Yeah. So, he's getting $500 a month in rent growth on 13 units. See, you picked a good size deal. Here's where it starts to get crazy. We probably can't do this math just sitting in our phone, right? So, the duplex was vacant.

15:56 So, the duplex is a three bed and also a one bed. Okay. So, that duplex is probably going to rent out for about 2,000 a side and then about 1,300 for the other side. So, there's So, it's going to be even more. So, it's going to be even better than what we're doing. It is, yeah. It was just say 500, 13, 6500 a month multiplied by 12 months, 78,000 in NOI. And at a six and a half cap? Yeah. Bro. I'd say at least half a mil. 1.2. Yeah, I was going to say that's yeah, I think I we underwrote it basically buying it at that 1.1 area, putting about 100k into it and then like really conservative, like probably even still a little under market value, like 1.7. I think this is probably one of the best deals we'll ever see like in our coaching program. It's one it's one of the best deals like even compared like what I bought, bro. Dude, it's hilarious.

16:42 So, the going back to being under contract, the due diligence docs were literally handwritten leases by the agent. They don't people don't believe me when I tell them. See, everyone but see, bro, and this is why I'm excited for you to be here to like give the truth and reality to the people. Like everyone wants what you just did. Oh, I know, right? You talk about like the deal written on napkin or whatever, right? The upside, the long time owners, the location, but it's risky. It's not clean. Yeah. Like that's not clean. Like everyone's like, I want off market and I want value add, but I don't want any headaches. Right? And oh, I want off market, but I where's all the leases? Where's all the rent where's the rent roll? Where's the perfect T12s? Bro, someone who's owned it for three families, they probably did they have a T12?

17:28 No. I'm pretty sure they just got all the leases signed to for the due diligence documents even though you've got people that moved in like 2024 and then people that have lived there since like 202015, they're all magically on the same lease. So, I'm pretty sure they just went and backdated it. They probably had like handshake agreements. Like dude, come on, pay your rent. You know you're right. Yeah, right. And so, it's funny because like you were talking about the upside or no headaches and all this other stuff. It was like fully transparent, the first couple months I owned that deal, it cost me money to own it, right? And so like going back to banks, which again, I used a lender that was recommended by you guys. Shoot, I can't think of his name. Carl, right? Carl, yeah, Carl with NBC. Do you know him? No. Old school. But you know, I had problems finding debt on this that wasn't just it felt unreasonable, right?

18:18 Like so I even went like short-term bridge financing because right? The way the commercial debt's structured, there's no DSCR, right? You're negative DSCR. You're like.7.8. Because it's so low on in See, again, thank you for sharing this. This is what people don't understand. They're like, but it's not cash flowing on day one. It's like, dude, but you're getting $500 in rent growth upside. You're getting a million two in equity increase, right? Of course it's not going to cash flow with debt today. That's where it like it takes someone with confidence and someone who has the blueprint and like the confidence to buy a failing business essentially when you put debt on it, right? Now, they weren't failing cuz they've owned it for three generations. But to buy business with debt, right? What was your all in interest rate? Do you remember? Six and three quarters, I think. Dude, great. Right?

19:04 So, with a pretty darn good interest rate today Yeah. Being able to say, you know what? Maybe year one, worst case, I break even. I put the money in the deal. I do what I got to do, but look at the payday. Tax benefits. Dude, I got rep status, which I know is a different conversation, but you know what I mean? Like everybody wants That's what I'm saying. Everybody wants what you have. How did you mentally physically, emotionally, you're married, you have kids. Like how did you take that risk, which we know it's going to pay off, but still it's still you still feel nervous when lenders like, dude, like are you sure? Like it doesn't cash flow, right? How did you how did you do that, bro? Yeah, so it's funny, right? Because so I talked to I'd say at least half a dozen lenders, right? Recommendations from not only you guys, but then also going outside and doing my own due diligence. And you know, I got some that were like, okay, we're going to need 50% down, right?

19:52 Because we're going to need a lot of equity because this is a failing business today. And finally able to find somebody with a little bit better terms. And it's just like trust it, right? Like trust the mentorship, trust the blueprint, the plan. And by then I was in it enough like I looked at the deal enough times cuz we only maybe had 24 48 hours to do the due diligence on the deal before putting in the offer going under contract. And so I was still doing due diligence after the fact. But it was just like that trust. They like, "Hey, right?" Like go do it. You know, I mean we still had outs in the contract, right? But it was just kind of like, "Hey, it's got massive upside." I was already in real estate and flipping whatever. So I that part didn't scare me as much. And I'm like, "You know, hey, worst case scenario maybe I don't get my cash out refi in 2 and 1/2 years, but in 5 years you know, I come back to what you said before too of like, "Hey, what's you know, expensive today is cheap tomorrow." And the more I looked at it I'm like, "Hey, there's no other buildings like this around, at least not for sale and I haven't seen any that have sold in like the last 5 years.

20:55 You know, I think this is a great opportunity." And then yeah, I mean my wife is a huge support system. And I can't sit here and be like, "Oh, it's just ever I haven't been stressed about it all." Of course, like I had you know, I got a call yesterday about the CSD one boiler, you know, certificate thing that I'm like, "Oh, the other owners hadn't taken care of." So now I got to deal with that. But like it's all good. It's going to be worth it and you know, in a couple years. That's the big thing, man. And that's what we say is like if you're buying a deal with massive upside, there's not going to be a lot of cash flow in the beginning because you got to take And that's why we always said the cash flow you do get you just pump it right back into it cuz you got to fix these things. When the rents are so low and the NOI is so low, there's things that just aren't being taken care of. That's your value add. Like you said you redid that duplex, right? You upgraded it. You're doing the things to get that rent growth. That rent growth is not just like some egregious landlord who comes in and double It's like look at all the things you're fixing and taking care of.

21:46 And in a year, 2 years people are going to be so proud to live there, they're going to be so happy to live there, and you're going to make your big money on the cash out refi. What made you cuz obviously you're doing great with fix and flipping. What made you say, "You know, fix and flipping is just earning me more money, but every time I'm like I'm sorry and stop sorry and stop." To be like, "I can't just fix and flip. I also have to own long-term assets like multifamily." Yeah, I think like you just said, right? It's the difference between like building wealth and just having income, right? Like you have you know, if you make a million dollars a year and you spend a million like I you're not building any wealth, right? And so we just you know, my wife and I have always been like savers and we're a little bit more on the frugal side. Like you know, I drive a car with almost 100,000 miles on it. Stuff like that. Yeah. It's a Lexus. It'll run forever. You know, Toyota it'll run forever. Like that will be my kids first car.

22:33 Who's four by the way. And you know, it's like my wife and I have just like had been stepped like hand in hand just kind of like financial literacy and just being a little bit more conservative with things and you know, she's put away money in 401k, stock market, all that stuff. And we're very much more so like long-term investors, right? Like we don't care as much about our I'd rather put money into assets that are going to appreciate over time versus the I mean, I don't have a super new iPhone it's a couple years old, you know, than the latest iPhone for example, stuff like that. So it's just kind of always been our plan. And then multifamily and this deal I say I don't know how long I'll own this deal, but I would imagine it's going to be at least 4 or 5 years, right? And in the meantime earn more income buy more real estate, get more tax breaks, you know, right?

23:23 The blueprint. So while we continue to do other stuff too, right? Like so put away in the stock market, dollar cost average, all those sort of things, right? Different genre, different podcasts. But it's just kind of I know that time in the market versus timing the market, right? I feel like that's a you know, very applicable to real estate. That's even what I say with like fix and flips too. I'm like, "Hey, if you have the ability to stay in a fix and flip even if it was failing, but you can hold it for 5 years, you'll eventually win the market will just save you, right?" For the most part. I know the pandemic kind of threw stuff off, but you know, it's like the same thing with this one. Like, "Hey, even if I don't operate it great, which so far it's going really well. But 5 years from now I'll still be saved. 10 years from now it'll be great." I mean, look at these people after 50 years, right? Like they still they I don't know how much they paid to you know, build the thing in the 50s or 60s or whenever the heck, but and they cashed out for a million dollars.

24:14 And the thing had probably six figures worth of deferred maintenance on it. Not bad, you know. No, I agree, man. That's a good mindset and that's where it like working with you has been really enjoyable because I think you model what Andrew and I have done in our in our career. Like we keep the main thing the main thing. You said we keep earning more money. You know what I mean? I love what you were saying too. You're like, "Dude, if I want to buy more real estate, I'm just going to go earn more money in my business instead of forcing this deal, right? Instead of like rushing this deal." You know, to buy my 42 unit I had to kind of like rush some refis to go buy a $6 million deal. Do I regret it? No. But you know, it was not it was not unstressful, you know what I mean? And I gave a 4% rates to go to 7 and 1/2 because that's where the market was.

24:59 But I needed more equity to go buy this $6 million deal. So now with our 56 unit, bro, I'm like so chill out chilled out cuz I'm like, "Hey, we'll get we'll get it when we need to." I waited 2 and 1/2 years. I waited till the perfect lender, the perfect terms, the perfect rate. We just locked our rate 6.2. I bought it on a 7.5, you know what I mean? That alone, yeah. Yeah, dude, that alone I mean, dude, I'm going to be borrowing like over seven figures more and I think my payment's only going up like a couple hundred bucks because of that if that rate changed, you know? But when you go from 4% to 7 and 1/2, bro. Yeah. You like you talk about Like mess it in Denver in the in the market for home buyers. So you keep the main thing the main thing. You're cost averaging it. You're going to take a massive tax write-off, right?

25:45 So now you as you earn more money, you keep more money. Everyone's like, "How do I go get more money?" It's like, "Bro, you got to just keep some of your money." That's a good start. Right? Like instead of giving 40% to What does Colorado have state income tax? What's the what's the percentage? 13, I think. 13? It's pretty high. Think 37% to Fed, 13% that's 50, dude. You make 100k on a house, bro, you make 50. Yeah. Right? But cost stack can wipe that out on from your apartment building. Keep that, focus on the refi, take care of the building, the building takes care of takes care of you and that's the power play. What would you say to someone watching this who's maybe in the fix and flip space, maybe What would you say to someone who's watching this and they're resonating with your story, man? Maybe doing some fix and flips or they're like, "Dude, I know I want to get into multifamily. I want to buy that deal, Walter, but golly, man, I'm scared.

26:33 I'm scared seeing $400 rents and being like, dude, I'm going to put debt on this and how's it going to cash flow at first? I think it can be $1,000." What would you say to that person knowing what you know now who's doing it? Step number one, it's not going to cash flow. Yeah. Right? Like just get that out of the way. Step number two, right? It's like build a team around you. I think that's super important, right? That's something that I've learned with fix and flips, right? It's like you got to have the right contractor or PMs, whatever you want to call it, trades, real estate agent, insurance people, all this stuff. And it's really like the same thing cuz it is a like you just said it's a business, right? And so I that's one reason I think I really resonated with you because dude, I didn't I didn't just sign up, right? I got we had like a couple phone calls. I kind of grilled you a little bit. I was like, "Dude, is this really worth it?" Right? Like straight up cuz it's I can go on the internet, I can go on YouTube, master classes, this, that, right?

27:20 The forums, whatever. And you know, I would just say go in it with your eyes wide open, but don't like half butt it. You know, don't kind of tip your toes in it. Like you got to go, right? Like I was underwriting deals and I was already full-time in real estate. So that may be part of it. I know it's not realistic for everybody, but I was you know, looking at every single deal that came across my desk like full in depth, right? Number one cuz I needed reps, right? Just like working out or playing a sport or whatever. Like I needed to feel confident about my underwriting. And then again like I said leaning on you guys for the mentor aspect and then also kind of getting access to your Rolodex of business, right? Lenders, contractors, you know, not necessarily PM. But that gave me the confidence to be like, "Okay, I'm pretty sure I found a great deal. Now I'm going to figure out how to operate it." And that's what I've been doing, right?

28:09 And like it hasn't been super perfect or smooth or easy. You know, like I said I've had stuff with the boiler. We had a pipe burst. We had this, that, all of it. But like that's real estate, right? Whether you're flipping homes, you're a long-term you're a short-term renter or you know, STR person, Airbnb, whatever. Like they all have their things, right? But I'm just a big believer that I think multifamily real estate, you know, small multifamily real estate, not necessarily like syndicating or GPing on anything. And I do have an experiences in LP, so I think I can kind of speak on that. I think it's just really probably just such a great way to build wealth. You know, it's accessible, too for you know, like you definitely you know, got to be able to make some money for sure. But it's also kind of get in where you fit in like you said, right?

28:54 Maybe it's with a five unit or is he start with a 30 unit? I don't know. I love my deal, but I'm already looking for when my next deal comes I want to get like maybe 20 plus doors, right? Like economies of scale. Cuz I'm getting my team in place, right? Like I have my contractor, my handyman for easy stuff. I got my guy that I know works on boilers and you know, all that sort of stuff. So now I can scale and go a little bit bigger. But then I go back to square one. I need to make more money, right? So keep the main thing the main thing. But I would just say, you know, go do it. Bet on yourself, right? Because I think that's kind of where things start to change, you know, like I've you know, when I got one of my first like six-figure flip fix and flip deals I was like, "Oh my gosh, I used to have to work a year for this at the sheriff's office and work nights and like grind overtime and get in fights and spit on and all this stuff." And I'm like, "Wow, I just did this in like 30 days." And like I know that's not everybody's case, right?

29:46 Like but there's just so much opportunity in real estate, and I think the nice thing that I've always kind of had like the mindset to was like not necessarily the scarcity mindset, more this abundance mindset of like, "Dude, I just need a small piece, right?" You know, I know you guys are at 300 and 77, but who's counting? You know, I'm like, "Hey, I want to be the first student to 100, right?" Like, we're all kind of at our own pace. And so, yeah, I think it's also enjoying the process, enjoying the journey. I've been kind of lazy lately. I haven't really been underwriting deals just cuz I know I'm not ready to buy quite yet, but maybe second half of the year I need to get back into that. But yeah, I just I just say do it. Love it. You know, and I like I said, I had another mentorship program, not specifically around multifamily, but around longer-term real estate investing, and it just wasn't a great fit, but I'm I don't regret it.

30:36 I wouldn't say that, right? Because it still got me more and more in. Tell you something. Right? Like, I learned stuff, but it also made me go do things because again, I think like once you invest in yourself, that's a different level of accountability versus like, "Hey, I'm going to read this book, or I'm going to watch this YouTube video, or you know, cuz I did that for years." And I'm like, "Hey, if I bought this deal that I bought today 5 years ago, holy cow, great. You know, where would I be today?" but I started, right? Like, I think that's the biggest thing. So, I just say go bet on yourself, right? Couldn't agree more. If people want to connect with you, follow along with your journey, where should they go? Social media? Yeah, Instagram, like not the biggest. I need to be better on that, but Daily Homes, just my name Walter Daily. And so, like I said, ex law enforcement, real estate now, and mostly you'll probably find like pictures of my kids and stuff.

31:26 Still relevant, still good. No, man, your wealth of knowledge, bro, so Yeah, so it's been a lot of fun. Yeah. Appreciate you, man. Thank you. Yeah, likewise. Thank you. You just saw me break down a real-life case study example of one of our mentorship students who found a deal, they invested in themselves, they bet on themselves, they joined our mentorship, we helped them find a deal, underwrite a deal, buy a deal, close on a deal, and then most importantly, manage and operate deal because the money is made in the management and operations. You heard how they overcame the fears, the adversities, the nerves, but they took massive action. So, now I want to make an invitation to you. Number one, if you enjoyed this video, dude, my client took time out of their busy schedule to come share their story, drop it in the comments section. What did you think? Did you like it? Did you love it? Did you hate it? Do you think we're just over here making stuff up? Let me know, put in the comments section. If you're new to the channel, make sure you subscribe to the channel cuz we're all about teaching you how to get into multifamily.

32:17 Drop us comment, hit the hit the like button. If you want to learn more about this, grab my book, the Small Multifamily Burn Method, where I break down everything we talked about today. Sells for 20 bucks on Amazon, but you can get it for absolutely free by clicking the link in the description to get a digital download. If you want to be like my student who you just saw, and you want our one-on-one help, you want our support, you want Andrew and I to walk this journey with you every step of the way, finding the deal, funding the deal, underwriting the deal, closing on the deal, and then most importantly, managing the deal, then I want you to click the link in the description somewhere around this video, apply for our mentorship program. If we feel like you'd be a good fit, we'll reach out and see if you'd be a good fit to join our one-on-one mentorship program. We'll help you buy your first apartment deal because one small multifamily apartment deal will change you and your family's life. Till next time, we'll talk soon.

33:04 Thanks.

Topics: Client Podcasts, 10+ Units, BRRRR, Out of State, Off Market

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