The Tony Stephan Show · Episode #021
My Client Bought 7 Units As A Busy W2 Worker (Deal Review)
Ryan lives in Bowling Green, Kentucky, works 40 to 50 hours a week at a W2 job and has a construction background. In 2018 he started a small real estate company and did a single family rehab with a partner. They added a bathroom and a bedroom, and he worked on it nights and Saturdays for about ten months. When they sold, they walked away with about $12,000 to split. He calls it education and very demotivating.
When he found Tony's content, what clicked was the cap rate: in multifamily, adding income raises the value by a multiple. Six months into the mentorship, he is about to close on his first multifamily deal, a 7 unit in Eastpointe, Macomb County, Michigan, for about $685,000. It fits his buy box of $500,000 to $1 million, has one bedroom units, two below market rents, no ancillary income and room for laundry and storage.
Ryan talks about his wife Emily and their two kids, putting God first, family second and work third, and wanting to work for himself in five years. Emily is working toward real estate professional status. His advice: pay for a mentor, because the mistakes you avoid are worth far more than it costs.
Watch the full episode · Watch on YouTube
Key takeaways
- One to four units are valued on comparable sales, which makes it hard to get your money out even after a lot of work.
- Your time is valuable. Ryan learned he is better off finding good deals than swinging a hammer himself.
- Set a buy box and do not overleverage on your first deal. Ryan's was $500,000 to $1 million.
- Look for the signs: below market units, no ancillary income, an older owner and room for laundry and storage.
- Choose a first deal with the big CapEx done and good curb appeal. Think about the next buyer from day one.
- Pay for mentorship. Free advice gets less attention, and one missed step like a phase one environmental study can be very costly.
Guest: Ryan Downey
Ryan lives in Bowling Green, Kentucky, with his wife Emily and their two children. He works a full time W2 job and has a construction background. After a single family rehab through the real estate company he started in 2018, he joined Tony Stephan's mentorship and is closing on his first multifamily deal, a 7 unit in Eastpointe, Michigan.
Chapters
- 0:00 Intro
- 0:53 Why He Quit Single Family
- 3:46 Why the BRRRR on Houses Didn't Work
- 5:30 The Power of NOI
- 6:50 The Seven Unit Deal Breakdown
- 8:21 $1 Is Worth $16 in Multifamily
- 10:34 First Deal Lessons
- 12:17 Why This Deal Works
- 15:00 Family and Long Term Vision
- 17:36 Real Estate Professional Status
- 20:05 The 9 to 5 Funds the Portfolio
- 22:21 Advice for Beginners
- 25:36 Take Action Now
FAQ
Why did Ryan stop doing single family deals?
His first rehab took about ten months of nights and weekends on top of his W2 job. After selling, he and his partner split about $12,000. He says he learned a lot, but that his time is worth more than working weekends for that return.
What deal is Ryan buying?
A 7 unit in Eastpointe, in Macomb County, Michigan, for about $685,000. The units are one bedroom, one bath. Two units are below market, there is no ancillary income yet, and there is space in the basement for laundry and storage.
What does Tony mean by a dollar being worth $16?
In multifamily, value is NOI divided by the cap rate. At a 6% cap rate, each new dollar of yearly NOI adds about $16.66 of value. Tony's example is a barn on his first 7 unit that now rents for $500 a month, about $6,000 a year and roughly $100,000 of value.
What is Ryan's long term goal?
To work for himself within about five years, with his real estate company owning 25 to 30 doors or more. He wants to build something for his family and says he does not want to still be working his job at 60.
Why does Ryan recommend a paid mentor?
A person at a real estate meetup told him to find a mentor he pays, not one he has coffee with. He says avoiding one large mistake, such as skipping a phase one environmental study, can be worth far more than the cost, and he wanted a blueprint he could copy.
A Busy W2 Worker's First 7 Unit: Ryan's Story
Ten months for $6,000
Ryan lives in Bowling Green, Kentucky. He works 40 to 50 hours a week at a W2 job and has a construction background. In 2018 he started a small real estate company and did what most people do first: a single family house. He and a partner rehabbed it completely, adding a bathroom and a bedroom. Ryan handled the finances and the construction and spent his Saturdays and nights on it for about ten months.
When they sold, they walked away with about $12,000, $6,000 each. "It was education for me," he says. "Learned that I didn't want to do it again." It also meant a lot of time away from his family.
Tony shares a similar story. His fourplex rents went from about $500 to $950, and he still barely broke even when he sold. "Failure's not failure. Failure's just feedback," he says.
Why multifamily clicked
Ryan was about to go all in on BRRRR with single family homes when he found Tony's content. What changed his mind was the cap rate. "Understanding how just something as simple as adding $20 to the bottom line, how that can compound based on the amount of units," he says. Five doors and above, the property is valued on its income.
Tony explains with his first 7 unit, which came with an empty barn. Others saw a liability. He rented it for $250 then; it rents for $500 today. That is $6,000 a year, and at a 6% cap rate about $100,000 of value. Every dollar of NOI is worth about $16.66 there. He adds that a 7 unit and a 70 unit are run the same way, but on 70 units, seven people not paying is "just called Wednesday."
They also discuss the fourplex debate. People online argue that four units is multifamily. Tony's answer: call your bank and ask how they will appraise it. For his 56 unit refinance, the appraiser asked for the P&Ls and the rent roll.
The deal
Ryan joined the mentorship about six months ago and is about to close. His buy box was $500,000 to $1 million, and he did not want to overleverage on his first deal. This 7 unit in Eastpointe, in Macomb County, Michigan, is about $685,000. The units are one bedroom, one bath. Two are below market, the P&L shows no ancillary income or pet fees, and there is room in the basement for laundry and storage. It is a brick building with pitched roofs and the big CapEx done.
Tony likes that it is a light value add. He has done two heavy repositions, a 16 unit with new ACs, furnaces and roofs, and a 100 unit where many residents had to leave, and he says both were hard. He reminds Ryan that someday he will sell, and the next buyer will see everything he sees.
Family, faith and the long game
Ryan is married to Emily, and they have two kids. "God first, family second, work third," he says. They rented an apartment for two years when they first married, and he wants to give residents a good place to live. He admits he was scared; this is his family's future. After his workday, he handles the lender's requests, from a global financial statement to a phase one environmental study.
His goal is to work for himself in about five years, with 25 to 30 doors or more. Emily is working toward real estate professional status, which Tony explains is about 750 active hours, not a license. Tony's advice to him is to keep the main thing the main thing: the 9 to 5 pays for the 5 to 9 until the 5 to 9 can replace it. And in year one, put the money back into the property, exterior first.
Advice
At a meetup in Bowling Green, someone told Ryan to find a mentor he pays, not just someone to have coffee with. One mistake, like skipping a phase one environmental study, could wreck a new investor. "I'm a copy and paste guy," he says. "If it worked for you, it can work for me." His last word: deals are bought every year, and the longer you wait, the further behind you get.
Transcript
0:00 My client Ryan is getting ready to close on his first seven unit small multifamily apartment. He tried the BRRRR method on one to four units. He didn't like it. It didn't work out for him like we always preach, skip the one to four. Now he's buying a seven unit and we're going to break down his story and his journey to help you in yours. Let's get to it. You are getting ready to close on your first multifamily deal here. You're doing it for your family. There's a lot of really exciting things going on. So just Can you tell I always want to document like when I created this YouTube channel, I wanted to document my own journey. But at a certain point I understand like as Andrew and I are growing and you know, we're getting to 400 units, 500 units. I wish I would have talked a little bit more about that first deal. Yeah. Cuz the first We always say the first deal is the hardest deal. And the first deal then leads to It's like the gateway drug, right?
0:47 So like why Let's start with this, why multifamily? There's a slew of options for you and your family. Why multifamily? Well, we dove in 2018, I started a real estate company Ready Homes and we did single families, right? And I look back on that deal. I did everything. I did the BRRRR except for the you know, the repeat and the refinance part. We just sold it. And I think about how much money we left on the table on that deal. And so, you know, getting into real estate, it's really hard. And so, we you know, fast forward till today and under contract now with you guys, it's a complete mind shift. I mean, it's a complete mind shift. Remind me of that. How many single family home cuz that's how we started, too. We started with one house. I don't know about you. Did you feel like I kind of have to start with houses? Yeah, I was We did. Yeah, that was that was there. We live in Bowling Green, Kentucky and you know, at the time there was lots of houses, lots of stuff on the on the market, you know, and was sitting there.
1:39 So we got a great deal on it. We completely rehabbed that place. We added a bathroom. We added a bedroom. Like we went big time. Wow. And you know, I remember at the end of the day when we closed on it, we walked away with like 12 grand. I'm like, I worked on this. Yes, I worked on this thing for literally 10 months, blood, sweat, and tears. I was the finance and I was the construction on that one because I was over there on Saturdays and I felt that need, right? I had to get it done and to walk away 12,000 cash was you know, it wasn't the payday that we were looking for. Do you mind do you mind if I ask how long did you hold that deal for? It was almost a year. So about 1,000 bucks a month. Right, yep. And I had a partner. Okay. Yep. So six and six, right? Right. Well, dude, I appreciate you sharing that because that's the message I always try to preach, too, is like listen, folks, there's a million ways to skin the cat.
2:27 Yep. Right? And I always say like my way isn't the only way. I'm just sharing what's been most valuable to us and why we're so passionate about help helping other people. We did the same thing. We started with a house. Then I bought another house. Then I bought a duplex. Then I bought a fourplex. Fourplex was similar thing. I put we put our blood, sweat, and tears into those and we were like, "Oh, it's perfect cuz it's a it's like a mini apartment." Yep. But it's not. It's still a single family rental. One to four units. It's valued based on the market. Right? What is the market say my property's worth? So this four unit Yeah. I think we held it for two years, maybe 18 months, but very similar. Put a lot of energy into it. Put a lot of blood, sweat, and tears into it. They were renting for like 500 bucks. Yeah. Got the rents up to 950. We did as people moved out, little unit turns, upgrades, all that. Dealt with the tenants, termites, toilets, all that stuff.
3:16 I sold it. I barely broke even. Yeah. With commissions, all that. I paid 300 for it. I sold it I think for 315 or 320. Yeah. And that's why I try to do this and show people like one to four units is tough, man. It's a tough game unless you're doing these like massive flips, these massive construction plays, you're holding it for a long period of time. It's really hard to get your money out of it. I mean, 12 grand split two ways, that's six. Like what was that? Like frustrating? Was that demotivating? Like what did that create inside of you after that? It was education for me, too, as well. I mean, I learned a lot on that one. Learned that I didn't want to do it again. But it was very demotivating. I spent a lot of time away from the family doing that, you know, like cuz I'm a full-time, you know, W2 earner as well. And so, you know, 40-50 hours a week in my W2 and then going over there at night and on weekends.
4:05 Because I have a construction background, I felt like I could do that myself. But the thing that I've learned going forward is that my time is way more valuable than going over there and swinging a hammer. And you know, I'm better off looking for the deals and finding the deals that are going to, you know, actually do well after we get in. And I was about to go all in on BRRRR strategy on single families. And then I come across your content and some recommendations and I started deep diving on you guys and I'm like, that is what I need to do. And that's when I reached out to you guys. And I was like, dude, I'm all in on this. Like because it's what I want to BRRRR. I love the strategy. I love the buy and the re you know, the rehab and I love that process. Yeah. And then to couple it with, you know, multifamily, it was just like the magic button for me to go all in on. What resonated the most with you from with going from the one to four units into the multifamily?
4:54 Was it just like the scale? Was it getting off the comparable sales model? And dude, shout out to you for sharing that cuz I know it's going to resonate with a lot of people. I would say, don't judge a man by his successes. Judge him by his failures, what he's able to overcome and move forward. A lot of people would have quit at that point. They would have been like, dude, six grand for a year's worth of work divided by how many hours put in? Right? Probably far less than you're paid in your full-time job, right? But we always say too, failure's not failure. Failure's just feedback, right? So you get the feedback. But what was the big like resonance point getting out of the single family into the multifamily? Man, to me, the magic is in the cap, you know, the cap rate and the NOI increase and understanding how just something as simple as adding, you know, $20 to the bottom line, how that can compound based on the amount of units that you have.
5:44 And like how we can truly add, you know, 50 grand by just doing a few ancillary income type of things or a few like raising the rent 20 bucks depending on the size of your units. How that is you're talking about compound interest and compounding the wealth is it's in the multifamily. Five doors and above. Dude, love that. And that makes me think of my first seven unit for maybe if you're listening to this you're like, wait, what's Ryan talking about? A dollar turning into multiple dollars. Small multifamily is all about getting creative. Hey, real quick before we get back to the episode I want to say thank you to our sponsor today, which is just me. And I just want to let you know that hey, if you're loving this conversation, number one, drop it in the comment section. 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.
6:31 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. I love the deal you're buying because I think it's got a lot of Remind me, in the basement is there a storage unit? Yeah, we have room for laundry and storage. And it's a seven unit like your first one. Dude. Yeah. That's serendipitous, bro. It's serendipitous. Yeah. So we had this barn on this empty seven unit. I always want you to remember even after this deal as you do it for the rest of your life cuz that's what we always say in like our mentorship. We teach you how to do this first deal. We coach you till you buy your first deal. Then we set you up to do this for the rest of your life. Yeah. And Ryan, I promise you, dude, doing a seven unit and doing a 70 unit, there's no difference.
7:17 The only difference is you're going to get better financing on the 70 units. Right. You've got more security on the 70 units because if seven people stop paying on seven units, you're in big trouble. Seven people stop paying on 70 units, bro, it's just called Wednesday. Right. You know what I mean? It's just another day of the week. Right. Also, 70 units has enough for an onsite manager. Right. And that's when the game really changed for me when I bought my first 56 unit and it came with that onsite manager, right? But for me, if you're listening this, you're new, you're like, wait, what is Ryan talking about? So, like on my seven-unit apartment I first ever bought, there came a barn with it. And I remember a couple other people were like, "Oh, it's such a deterrent. It's a it's like a liability." I'm like, "Dude, I see opportunity." signs. Right? Absolutely. You When you lack resources in the beginning, you have to look for ways to get resourceful on deals, right?
8:03 Cuz you No one typically husband-wife team is going to go buy a 70-unit on their first deal, right? Start with the seven units. Perfect place to start. That barn, we rented it for 250 back then. It rents for 500 bucks today. So, $500 a month in new income on 12 months, that's 6,000 bucks. That deal appraised for a 6% cap rate, that's a hundred grand in valuation cuz it's just $1 of new NOI divided by the cap rate, that's your magic formula. So, always remember that, a dollar's not a dollar in multifamily, right? A dollar can be worth on a 6% cap rate, what is it like? 16 bucks. Dude, 16 $16.66. See, in single family, that doesn't exist. A dollar's a dollar. And that dollar better be compared to the neighbor's dollar. Dude, I hate that. Yeah. And you got to keep preaching like everything multifamily is, you know, a fourplex is a multifamily.
8:50 It is, but it's a residential. And so, like where people get lost in a lot it again, Ryan, cuz people argue on the internet all day about to I don't understand like if I'm going to like if I'm going to build a development, I'm going to build five doors. When you see four doors, like why not add that was my question to you guys. Why don't you build five doors instead of four and get yourself in that, you know, that completely different NOI, 100%. You know, stage. So, anyway, 100%. No, I get a lot of like feedback on the on the internet. People are like, "No, it's multifamily." Talk to your bank. Dude, right. Hey, dude, I love that. Talk to your bank. Hey, call your bank and ask them. You can call whatever you want. But what's your banker going to praise that at? Comparable sales. What are they going to compare it to? Exactly. Right. We're getting ready to where we're completing the refi on our 56-unit. He's coming out to do the appraisal. And you know what he asked for? He asked for 2024 NOI, profit and loss statement, 2025 profit and loss statement, rent roll.
9:40 Yep. He didn't he didn't he didn't say, "Oh, what's the comps? Let's look at the comps." NOI, and rent roll. He just wants to make sure who's paying what, breakdown of all that good stuff. Now, he's going to look at comparable sales in the area. It's going to be a small percentage of it. But, it's what's called the income driven approach, so I love that. So, yeah, as you all are listening to this and learning from this, you're looking for these small deals, you're looking for value-add opportunities. So, that's what did it for us. And see, like, I didn't know that when I bought that seven unit. Just kind of bought it cuz I thought it was, you know, bigger and better. And then I started really learning about all this. I'm like, "Oh my god. Why would you" Do you ever see yourself buying another single family rental? No. It's like one It's like It's like the Matrix. Have you seen that movie? It's like blue pill, red pill. Once you take that blue pill I think I took, you can't go back. No, it's it would it wouldn't even make sense financially. That's how we see it. You know, I mean, now, like, you know, when you buy a blue truck, all you see is blue trucks.
10:28 And now all I can see, even driving down here, we drove past an apartment complex. I was like, that would be a gold mine right there. Looking at these deals. It. You used to see it differently. And you've got to get in the game. Like, I joined up with you guys six months ago, and we're still like in the process, you know? And so, it's not an overnight thing. Like, and it's not a get-rich-quick. It's a get-rich-slow. And you have to be willing to, you know, be in the game for a while. But, it takes a while to get started, especially if you're fresh, because you got to prove yourself to the banks. You've got to have a bio ready. You've got to have personal financial statement, a global financial statement, stuff that you've never even heard of before as a new investor. Yeah. But, that's when, you know, joining up with you guys and having you and Andrea to guide us along that process, that has been gold. Love that. Yeah. Yeah. No, it is. It's a different game. But, it's the best game cuz then you start learning, too, the banks look very heavily at the deal.
11:16 Yep. You know what I mean? And your first one's the hardest cuz they're like, "Hey, you're new. You've never done this before." You overcome that hump, just like we had overcome that hump, it gets easier and easier and easier. And then one The next one just flows so much easier. Dude, and Cuz they know you. The deals get bigger, the refis get bigger, Right. Right? All that good stuff. So, tell us about your deal a little bit. So, seven units. Seven units. What got you excited about it? Obviously, great number of units to start. We always say you can start between 5 and 25. Right. Right. Obviously, my first deal was seven. What got you excited about it? Any specifics about that you really like? My buy box was 500,000 to a million. This one fell in that spot. 680 some thousand, right? Dude, it is crazy because that buy box it's getting harder and harder. Yeah. You know what I mean? It's not like 5 6 years ago.
12:03 Yeah. And then and then and it's very important to me to not over leverage on the first one. No. And to be comfortable with what I'm doing. And so that was a 685,000. And so it's seven units. It's sing it's one bed, one bath. And it's like the golden ticket. It's a great base hit unit. It has two units that are under rented. They're not at market rents. There's opportunity to add laundry and storage. Laundry. You know, it's got plenty of upside. There's no ancillary income when we did the T-12 from that, right? We didn't have any pet leases on there. Guys, you got to charge for pet leases. You've got to charge for the ancillary income, like and this is an older operator and so it like it checked all of our boxes. Love it. It fit the blueprint. That's what, you know. It's a cute deal, too.
12:50 I think a big thing with these smaller deals Oh, it's in Eastpoint, too. So, it's in a great location, Macomb County. Macomb County. Yeah. I with these smaller deals curb appeal is huge. Even on I mean, bigger deals, curb appeal is huge. But on these small deals, I always feel like curb appeal is huge. Yeah. With these small ones, they can get a little wonky sometimes. They can be like old homes converted into multifamily. You know, I like I like what you're buying. Yeah. Traditional brick style, you know, the nice pitched roofs, no flat roofs, right? Big CapEx stuff already taken care of. Yeah, that's huge. So, that's what you're looking for on your first deal. Like Ryan's saying, like, "Hey, can I buy from an operator who's not maximizing income?" If you see a profit and loss statement, there's literally only rent on there, you better jump. Yeah, dude, that's when you get excited, right? Good solid foundation, like I said, you don't want a heavy reposition on your first deal.
13:37 I've done two heavy re-positions. I did a 16-unit, which was a physical reposition. I mean, 16 ACs, 16 furnaces, roofs, 16 years, bro. Yeah. Right? Then I did 100 units, bro, completely redone. Beautifully done. Quartz countertops, brand new roofs. 75 tenants had to go. Yeah. So, it was a tenant-based reposition. Yeah. Both equally sucked. Right. Right? I love what you're buying. I love the solid value at what we call the light value at, right? You don't have to do these major things, but it's going to be a home run play. It's in your buy box. You're not over stretching on your first deal, you're buying in a solid area. You're going You're buying something someone else is going to want to buy, Right. Right? Warren Buffett always said, "Never buy an asset where the only way to make money is you have to sell the asset, right?" And you also have to look at your exit play.
14:25 So, we talked about like a cash-out refinance, Right. Right? You talked about tax benefits, which we'll get to in a minute. And then like, "Hey, will someone else want to buy this deal?" That's why we say, "When we get people who are like look at a deal and they've got major reservations on it." I'm like, "You got to think about it. You will sell this deal one day." Right. Everything you're seeing, the next buyer is going to see too, Right. So if you're objecting on it, if you're kind of like struggling with it, don't you think they're going to probably come with it? Yours doesn't have that. It's clean. Yeah. I mean, it's clean and it's got that upside. So, I love that. You're you know, you're a big family man of faith, too, which I love, obviously. Tell me about that, man. Like tell me about the family play cuz that's what really Like everybody who we talked to about this, they always have the mission bigger than themselves.
15:12 And that's why Andrea and I do what we do. You know, you're here this weekend to do this, but we're also doing a big event tomorrow. All of our members out All of our students out. Yeah. Like I couldn't imagine just doing this and just be like, "I'm keeping this all for me." So tell us about that, man. Who else is on the line with these apartments? Like, who else is being beneficiated beneficiary by these? Right. So, I'm happily married to love of my life, Emily, and we have two kids, 9 and 11, Dawson and Ellie, shout out. So, yeah, man, this is the mission has always been God first, Yeah. Family second, work third. That's the goal. And if we can glorify him through what we do, then we're going to do that along the way. And like, my goal is like I've said it many times, like I want to create a good place for tenants to live cuz we rented as well.
16:02 You know, when we first got married, we lived in an apartment for 2 years. And so, until we bought our land and built our home. And so, I'm there's three other mouths that are being fed from this, right? And so, very cautionary when I came on board, right? I was very timid. Like, "Dude, I'm scared to death. Like, this is all in for me. Like, I'm all in. Like, there's no backup plan." reality there is, right? I'm smart when it comes to different things like that. But like, this is kind of like all my chips in on the table. And so, You're not like, "Hey, I'm doing some stocks." I mean, like do you like this is what I'm putting my family's future on? Exactly, yeah. And like I said, I'm a W2 earner, so I mean, I'm 40-50 hours a week at my W2 job. And so, you know, when I come home, I'm working on the deal. I'm sending, you know, the bank's asking for a global financial statement or they're asking for, you know, a phase one environmental study or there's work you have to do.
16:51 And you can't just come home and veg out. You've got to be ready to commit to this. And so, because I see my family and I want to be that man for them. And so, that's what I'm doing. And so, it's a personal mission for me to, you know, I don't want to be 60 someday and still have to come into work and you know, my goal is 5 years from now to work for myself. Ready Homes is my full-time, you know, we've got, you know, 25 to 30 doors or whatever, and we can focus on real estate full-time. But if you don't start now, man, like my kids are not in 9 and 12 or 9 and 11. Like if I don't start today, like I'm going to look up 5 years from now and my little boy's going to be in college. And he's not going to have anything to, you know, I would love for it to be a family affair. You know, so Emily's getting a real estate professional status, not a real estate license, we can talk about that.
17:41 You know, the tax benefits that come from this, dude, it's huge. Like you have to look you have to look down the road and that's what I'm doing now. Like I'm looking down the road. Like I'm being I'm forecasting. And you have to start today. Like I said, we've been doing this for 6 months and still, you know, we're still at the point where we're about to close. It's not overnight. Dude, I love that. A couple a couple of things with that is like number one, like that's how I am, too. I feel like, dude, I'm just doing like God's work, man. Yeah. Like I feel like if people, you know, get some comments like how do you say like you're Christian, but then you like gouge people for housing? I'm like, dude, you got to read the Bible. It's not gouging. The Bible is very entrepreneurial. Right. Like and the Bible like from the dawn of like the inception of it was like these were business owners, said, work 6 days a week, pay fair wages, pay on time, do good, and help others.
18:32 Right. Bro, you can't do that if you're not helping yourself and you're not succeeding at the highest level. Yeah. You know what I mean? And that's why I love like doing what I do and that's why like we preach the message we preach. Right. We preach keep the main thing the main thing for right now, right? Get big enough to where this income has superseded that and then you get to make a choice. Yeah. Optionality is freedom, right? Right? Everyone's like, I want freedom. I want freedom. But like options is freedom. Yeah, what are you willing to pay for that freedom? 100%. You know what I mean? Time is it money? Like and everybody gets, you know, tripped up in the in the in the saying is a lot of people say that the money is the root of all evil. It's not money, it's the root of you know, the love of money. The love of money. And that We're not doing this because we are in love of money. We're doing this because we know what better financial future for our kids.
19:18 And there's a parable in the Bible that talks about the one talent man, and the two talent man, the five talent man. And I've been saying for a long time I feel like a one talent man. Like I'm not doing what I'm supposed to do. I'm not I'm not reaching my full potential. And so I'm trying to become a five talent man. I love that, man. And it's like the optionality of you're buying these properties. Like you said, you're going to do a huge cost You're going to do a cost seg when you buy, right? And then you're going to accelerate some depreciation. Yeah. Your wife's going to be able to take that and, you know, utilize that against your guys' earned income, which is huge. That's what That's what my wife did. Like you said, she's a real estate professional. It's not a license, it's not a degree, it's none of that. It's that she spent 750 active hours in real estate, which you guys are going to more than exceed, right? You're doing that, but you're keeping your main thing the main thing. You're still going to work every day earning.
20:05 I love what I said, it's your 9:00 to 5:00 Right. That pays for this 5:00 to 9:00. And then soon enough, one day that 5:00 to 9:00 can replace that 9:00 to 5:00. Right. Bro, that's how I started. I would go work all day at Lifetime Fitness. I would They called me 7-Eleven, bro. Like this guy's here 7 days a week, 11 hours a day. And then after that, I would build my blog back down his blocks, right? This is before you know, social media is what it is, but build my blog, do all that stuff. Like you got to do that. Optionality though, right? And when a bill comes up on your property, you won't have to be in a position to where you're going to say, "Well, do I take care of my tenants and my property, or do we pay our bills this month?" Right. Because you're doing it the right way. You're doing it the way we preach. Keep the main thing the main thing.
20:51 Keep your high income job, Right. Right? Stack assets, dude, right? Like live below your means, Right. Right? Stack assets. Take care of that asset. Take care of those people. Yeah. Former owner is not taking it not taking care of it the you guys are going to take care of it. Right. That's like the number one thing Andrew and I always hear is like people thank us because of how well we're taking care of that asset, right? You're not putting yourself in a position where you're going to have to choose and that's what people who try to like jump into this and like quit their jobs too soon, they then they're forced to make a choice. And those are the people who are the slum lords and all that, but You're doing it the right way, man. Like when Ben did the walk-through and I can tell that the units have been not taken care of. Like I'm like, how you know these people live like this and like just think what a fresh coat of paint or something.
21:40 Like some simple stuff like that would give it a fresh Right, yeah. And that's what we're going to do. We're going to spend some money on it and we're going to get it there and we're going to keep you know, we're going to keep the heads in the beds, you know, that's what we preach. That's it. And that's I would say if you take care of those tenants, they'll take care of you. And you take care of that asset, it takes care of you. Right. So that's something too for those listening and watching this, it's like, man, it's not just strip that cash out of that deal. Like that's how Andrew and I've always been on our first year, we pump all the money back in the deal. Right. The dude, little clean-up, little shrubs, little whatever. Exterior, always start exterior into interior, right? Outside first, then inside. Take care of that building, it'll take care of you long-term. What would you say, man, someone listening to this, especially you know, you're a W2 guy, like you said, you're all in on this, you know, I love what you say, you're like, I'll always figure it out, right? But this is there is no plan B.
22:27 You know, like, well, this doesn't work, I'm going to just go buy some storage units. Like, dude, I'm all in on multifamily. What would you say just to someone listening to this, maybe they relate to you, they're like, dude, I've got kids, I'm a family man, I'm in or woman, I'm in a W2 right now. You know, I don't have all the time in the world. I want to do this, but this scare me, but start with single family rentals, getting out of that it is a big leap. Like just what advice would you give to them knowing what you know now? Dude, like the biggest thing is and I actually went to a couple of real estate meetups in Bowling Green where we live at and I found a guy that gave me a piece of advice was like, you've got to find a mentor. And not just somebody that you can go have coffee with, somebody that you're paying for. Because our time is so precious. If you don't pay for a mentorship, then you're not going to get that the information that you need.
23:13 And so just like knowing like cutting out, you know, that $100,000 mistake that you can make, you know, from not doing a phase one environmental study like you talk about. Like dude, that could absolutely wreck me, you know, or anybody. And so like dude, spend a little bit of money for on yourself for your education, for your family. Like you're going to blow what you spend on the mentorship in a year on frivolous things, you know? Maybe don't go out to eat out for a few months, you know, or save some money or you know, sell a car or whatever like don't live so high above your means that you can't afford to reinvest in yourself. And that's what we did. We invested into ourselves so that we wouldn't waste time. I needed to fast track this. I'm 44. I'm not getting any younger. I want to be somewhere in specific time frame, 5 years. And so I knew the fastest way to do that is to join up on a mentorship where somebody's already done it.
24:03 The blueprint's built and I can just man, I can just copy and paste it. I'm a copy and paste guy. Like let me copy and paste. Like if it worked for you, it can work for me and I'm going to do that, you know? So and then go in on it. Love that, man. Yeah, I agree with that. I resonate so much with that. That's how I built my first business is I tried to go a little bit on my own, quickly realized I didn't know what I was doing. I charged up I used money I didn't have. Right? I didn't say I didn't say I can't do this. I said how can I do this? Right. Back to like when you lack resources, you got to get resourceful. So I said who's got my money? Well, I said well American Express here's got my money, right? So I charged that up, hired my mentor and that and that's what it's, you know, led to today. So I agree with that. It's like man, free advice is the most costly. Yeah. Are you going to you try to get people out for a free coffee, dude?
24:51 Like they're not going to pay attention to you. They're not going to invest into you. And Well, most successful people, man, their most limited resource isn't money, it's time. You know what I mean? When you pay, people pay attention to you, right? That's every meaningful like high-level relationship I've ever created with someone I had me, I had to pay one way or another to get into that, you know what I mean? So I love that. People want to follow along with you and your journey on your first seven unit, you and your family's journey, it's going to be the first of probably many deals. I know you said you're going to be doing more content, which I always say, "Dude, do it." Right? If people don't know you, they can't flow you in attention. It's the highest form of currency. Where should they go to connect with you, man? Yeah, we're on Instagram at Ready Homes, r e d e homes. That's Ryan, Emily, Dawson, and Ellie homes on Instagram and Facebook. Love it. Anything else you would say to anyone watching this, bro? Hey, I mean, just don't mess around.
25:40 Like today is the day to take action. Like 26 is going to be a great year. Don't listen to what the media is telling you. Don't listen to what all the experts are saying. Like deals are bought every year. Every day of the year people are buying deals, and those deals are continuing to move down the road. And the longer that you wait, the longer you get left behind. Mm. Love it. Ryan, thank you, brother. Appreciate it. Appreciate you. Thank you. 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 a deal because the money is made in the management and the operations. You heard how they overcame the fears, the adversities, the nerves, but they took massive action.
26:28 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 comment 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 it in the comment section. If you're new to the channel, make sure you subscribe to the channel as we're all about teaching you how to get into multifamily. Drop us a comment, hit the hit the like button. If you want to learn more about this, grab my book at The Small Multifamily Burn Method, where I break down everything we talked about today. It 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 Andrea 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.
27:22 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. Thanks.
Topics: Client Podcasts, First Deal, W2 Investors, Out of State, Trading Up, BRRRR
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