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Speaker 1: I got to get me some financial freedom, and I

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just wanted to parlay my IPO millions into passive income.

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So I learned how to learn how money works. I

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traded stocks and options for a while. Trade at Iron

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condos for eighteen months was pretty cool. I flipped a

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couple of houses for good measure, took a commercial real

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estate class. But my big idea, Carrie, was to get into.

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Speaker 2: A you're listening to Carrie.

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Speaker 3: Let'sa's financial Survival Network where you get valuable information you

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just can't find anywhere else to thrive in today's trying times.

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You need the Financial Survival Network now more than ever.

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Go to Financial Survivalnetwork dot com and get your free

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newsletter and gift. Financial Survival Network now more than.

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Speaker 4: Ever, and welcome you are listening to and watching the

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Financial Survival Network. This is our first show of February

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of twenty twenty five. So much going on, so much uncertainty.

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Nobody knows what the FU sure will bring. All we

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can do is look at the past and hope to

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draw inferences and guidelines and over time. Real estate. You know,

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we're very pro real estate. I've had some significant windfalls

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in real estate, so never say never.

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Speaker 2: It's always too high. That's one thing I've learned.

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Speaker 4: The price is always too high, but it's always going higher.

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Maybe doge, we'll solve all of our fiscal problems and

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we'll start living within our means as a country.

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Speaker 2: But you know what, I'll believe it when I see it, And.

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Speaker 4: If you believe it, then We've got a bridge for

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sale on eBay right now and it's going to go fast.

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Speaker 2: You better go on there and get it. Michael Blank

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is with us now. Michael real Estate.

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Speaker 4: Invents Investor par Excellence into multifamily. Michael, it's great to

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have you on the show. So tell us how did

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you get involved in real estate?

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Speaker 1: Yeah, so I kind of consider myself carry the crash

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test demmy of financial freedom, and maybe your audience a

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little bit. I've done so many different things, you know.

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I was first taught to go to go to school,

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get good grades, get a job with benefits. And I

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have a master's of computer science. Carry. I'm highly educated,

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and so I was part of this the software IPO

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in March of two thousand, company called What Methods put

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a bunch of money in my pocket until I read

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rich Dad port At in two thousand and five and

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threw me for a loop because that was what it was. Gosh,

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son of it, son of a gun, really through for loop.

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So I was like, I have it all wrong. I

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got to get me some financial freedom, and I just

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wanted to parlay my IPO millions into into passive income.

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So I learned how to learn how money works. I

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traded stocks and options for a while, traded iron condos

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for eighteen months, was pretty cool. I flipped a couple

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of houses for good measure, took a commercial real estate class.

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But my big idea, Carrie, was to get into a franchise,

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because that's what you would have done. So it was

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a restaurant franchise and I and I.

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Speaker 2: Did like mistake, Yeah, of course.

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Speaker 1: But I also invested passively and with a developer, which

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I said, which I had subsequently lost, and had a

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bunch of stuff with equity. So I've done a lot

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of things. I'll experienced a lot of things. And yes,

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the franchise did not go well for me. I I

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lost my IPO millions, and I had eight restaurants at

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the height and uh and uh, I did flip three

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dozen houses. Try to flip my way out of I

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had a few rentals and uh, those were pretty cool,

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you know, not very not very passive, unfortunately, and uh,

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twenty twenty eleven got into apartment buildings and that changed everything.

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So we that is actual more passive, much more scalable.

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So I've done a bunch of stuff. Where do you

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want to take it from here?

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Speaker 2: All right? So got into real estate? How do you

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how do you like? You know, how do you find

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a building to buy? How do you raise the money?

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And how do you what do you do after God forbid?

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It all work and you own the building?

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Speaker 1: Well, you're jumping through whole whole minds of hoops. First

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of all, line the world would you get in a

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multi family in the first place? Like, what's wrong with

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flipping and rentals? You just prove it right past it.

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But let's say you move back past The problem with

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that is it's hard to scale and it's not very passive.

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That's the biggest problem with single family house I've found

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is I've done a bunch of it, and so apartments

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is actually much more scale, will much more passive, and

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I would argue also less risky, which is important if

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I want to get into a strategy I want to

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be able to scale it, but I don't want to

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have to arder either, and I can't. I can't have

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spent five years building a business and then lose it

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to some market event or some legislation that I can't foresee.

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And that really puts the damper on things. And so,

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after all the things I've done, apartments really is the

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one thing that's stuck, and it sucks. Think it has

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stuck since then, and it has performed well over the

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last you know, you know, decades as well, So I

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really like the acid class.

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Speaker 2: How'd you do during the pandemic?

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Speaker 1: Pandemic was surprisingly positive?

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Speaker 2: Right?

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Speaker 1: It was privately because we all thought that no one

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would no one would pay rents and then you couldn't

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get them out because of the directions, and the exact

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opposite happened. Right, People actually pay their rents Number one,

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I think because people's the one thing they control as

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a roof overhead, because their jobs were on the line.

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There was death in the streets, so they actually paid

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the rent and the ones that didn't guess what the

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government paid for them. And so our elections actually went

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up wild.

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Speaker 2: Wow, yeah, unbelievable. What markets do you like Michael.

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Speaker 1: I like any market status growing where I can get

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cash flong properties. So for example, we like Atlanta, that's

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where a majority of our portfolio is in. But there's

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a number of other markets, you know, Houston, Dallas, Austin, Huntsville,

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or number of markets. It won't be either coast. It

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won't be Boston, won't be New York, it won't be

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San Francisco, LA. While they may be growing. Again, it's

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tough to get cash flong properties.

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Speaker 2: There, understood.

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Speaker 4: And what about the laws of the jurisdiction getting rid

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of non paying tenants, Like in New York, you know,

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you might as well marry your tenant because you're stuck

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with them for life, and then if you want to

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get rid of them, it's going to cost you a

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ton of money.

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Speaker 2: So it's just like a marriage.

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Speaker 1: Yeah, my first deal was in Washington, DC, again because

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I didn't have someone advising me at the time, and

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that was a nightmare, nightmare very much so, very difficult

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to vect people, very easy for tenants to sue the

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landlord for no reason whatsoever, impossible to get out, and

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then actually really hard to sell. They actually weird topa

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laws and so it is important to find the right

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jurisdiction you're in, and that disqualifies Great State of New

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York or California or places like that. It just makes

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it more difficult to do business.

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Speaker 4: So what's your favorite market overall in terms of value

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and in terms of landlord friendly jurisdiction.

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Speaker 1: There are so many. I mean I just mentioned a

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number of them. We happen to be Atlanta, but like again,

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you can be in Dallas, you can be in Austin,

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you can be in Houston and Huntsville, Birmingham, Chattanooga. These

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are all in the South Southeast, are all relatively the

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landlord friendly growing and the.

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Speaker 4: Cashflow positive real estate. It sounds like you have reluctance

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or issues with Florida. Yeah, yeah, because a little bit

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of it unknown.

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Speaker 1: As you know, with the within, with the hurricanes and

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the insurance and insurance, it's becoming increasingly difficult to get insurance,

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which is a problem. I mean, if I could say

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insurance goes up twenty percent of a year, I can

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put that on writing. It's not a problem, but it's

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a bit certain. So I'm a little cautious about Florida.

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Speaker 3: Yeah.

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Speaker 4: Well, they've made some changes, but you know, then you

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got the engineering thing and the reserve funds. Well, I

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guess for apartment buildings none of that counts, but it

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does count because you still have to make provisions for

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repairs and maintenance.

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Speaker 2: Right, that's right.

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Speaker 1: Absolutely, it's like a bit uncertain to kind of raise

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it the risks, so a bit cautious on Florida right now.

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In general, I do like it's growing. It's a growing market, obviously,

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cash flowing properties. Great place to live a pro pro

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owner also great, except that that one thing to put

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the damper on things a little bit.

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Speaker 4: Yeah, yeah, you know, looks really great, that ocean front apartment.

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But go to Fort Myers Beach if you think it's

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so great. Years later, two three years later, they're still

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cleaning up and they're still demolishing and still waiting for money,

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waiting for insurance companies to pay, waiting for FEMA to

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do its thing. It's it's nuts. So I got your

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point there better. But look at North Carolina. Nobody thought

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that was in a hurricane zone. Yeah, they got hurricanes,

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you know, in the outer banks, but never one going

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up the middle of the state, flooding everything in sight.

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Speaker 1: That's a good point. I mean stuff happens, right, stuff happens.

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The difference though, is you can you can actually file

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a claim and get money from it.

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Speaker 2: Right.

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Speaker 1: The problem in Florida is that is in question. We

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an'll know a single in California. We don't know what's

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going to happen there.

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Speaker 2: Yeah.

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Speaker 4: Well California is easier because nobody will write insurance there

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because the place is called burned down, where they'll.

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Speaker 2: Be quakes or whatever. Yeah.

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Speaker 4: So if you were starting out now, knowing what you know,

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what would you do?

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Speaker 1: I would get right into apartments. I wasted so time

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with a restaurants, so much time with single family house investment.

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The only reason that people don't get in apartments they

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think that it's heart, they think it's advanced, They think

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that they need millions in the bank. And none of

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those things are true.

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Speaker 2: So how do you buy? How do you buy like

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a fifty unit complex?

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Speaker 1: You've got to change your mindset a little bit. So

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normally people ask how do I do certain things? How

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do I raise money? How do I inderwrite deals? How

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do I do that? There's a great book by Dan

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Selvin called Who Not How, and it kind of articulates

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the shift in mindset. When you're trying to scale anything

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but real estate in particular, start asking who questions. If

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you start asking who questions instead of saying how do

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I raise money? You ask questions who can get me money?

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If you're saying how do I get experience? Instead, you

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ask who can get me experience? And that changes everything.

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It changes the entire dynamic because I can actually get

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into the business without my own track record, and the

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only reason is because I borrow the track record from

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others around me. Imagine that a recruited property manager and

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the lender and an SEC attorney and some advisor now

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have all these seasoned people around me, I all of

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a sudden have their track record. And it's just a

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shift in mindset that took me years of figure out

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that it didn't really need in single family house investing.

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Speaker 4: Interesting. Interesting. So so where do you find these who's.

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Speaker 1: Well, I mean they're relatively easy to find. I think

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the biggest thing the same thing with raising capital, right,

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raising capital, there's there's people. Yes, can you learn the

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things you can actually learn to raise capital within thirty days?

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You know how to raise capital in sixty days. You're

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actually relatively proficient within thirty days you can recruit a team,

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and in sixty days you have your team built, and

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you sound like you've been doing it for a decade.

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So it just requires a little bit of education, knowing

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how to do certain things which are easily learned, and

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then it does require a bit of mentorship. You I

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did not do I just because I'm super smart and

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I just try to figure everything out my own. But

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why back in twenty eleven, in my defense, there wasn't

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a lot of support.

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Speaker 2: For I reinvent the wheel, right.

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Speaker 1: I reinvent the wheel? Why why do that? Why figure

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everything out? Takes too long? You make too many mistakes?

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Why do that?

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Speaker 2: Sure?

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Speaker 4: Sure you can benefit you know, they say, a smart

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man learns from his own mistakes, a truly wise man

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learns from the mistakes of others.

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Speaker 1: That's right. It's like trying to figure out what to

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do and how to invest my money when I can

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just follow what you're doing, and you've already been doing

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for so long. Why do I just learn from you

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versus me flailing around the markets for a decade?

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Speaker 4: So where do you find the buildings to buy? Where's

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the best place? In your opinion? Do you just go

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to loop dot com, loopnet dot com and look at

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their listings or do you need to know more than that?

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Speaker 1: Yeah, So loopnet is a joke. Is that where deals

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go to die? Lupnett is where a broker's list of

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deals that everybody has passed on. But it actually is

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a great gateway to where deals can actually be found,

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which is or brokers. So with your single family houses,

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you're looking at the MLS and you're looking through agents,

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but with commercial you don't find them in the MLS,

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you don't find them a lootinist, but you will find

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them through brokers. And a great way to find brokers

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other than the phone book, which no one uses anymore,

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is lootenant. Instead of actually saying, oh, look at this deal,

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let me make a let me make an offer on it,

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you actually create a list of the type of brokers

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that are whatever, selling or listing whatever you want to buy,

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and you call them and you focus on building a

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relationship with them, and within thirty sixty days you are

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essentially in their inner circle and you get what's called

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off market deals or semi market deal no one else ses,

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and that's where the magic hatens.

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Speaker 4: Okay, and as far as financing, do you always get

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seller financing or combination?

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Speaker 2: How do you do it? It's very rare.

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Speaker 1: It's very rare. In commercial it's typically sell financing is

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common or more common with single family houses or small

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multis that are owner operated, but with commercial anything above

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I'd say twenty they're owned by an LLC with a

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bunch of gatekeepers, and they're not going to want to

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sell you know fast, you know, fast clothes, all cash.

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They're going to want to call their broker and goes,

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give me the most you can for this building, right,

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and so so typically they're not seller financed. But on

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the other hand, financing is readily available, very relatively low

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interest rates, relatively high leverage, non personally guaranteed loans, interest

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only for three years. So it's really crazy how affordable

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that financing is for apartments.

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Speaker 4: Yeah, all right, I think we got a good taste

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of it. We're definitely going to have you back on,

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Michael to expound some more on some of these points

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and go more into like the anatomy of a deal,

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how you put it together, how you get the money,

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and what you do with.

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Speaker 2: It once you got it. If we want to contact

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you find you on the web. How do you do that?

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Speaker 1: As two places. If you want to be more the

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active person, you want to get involved yourself, check out

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my free training It's called Apartments one on one and

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it's an Apartments one dot co. If you're more interested

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in looking at investing passively, go to Nighthawk Equity dot com. Again,

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we have a free training course that describes what in

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the world are syndications and what does it mean to

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invest in them? So two places to find me?

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Speaker 2: All right?

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Speaker 4: Excellent and the links will be in the show notes

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to this interview on Financial Survival Network dot com. You

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got a question for Michael myself, shoot me an email

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kl at Carrie lets dot com. And while you're on

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the site, please sign up for your complementary newsletter, like

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over sixty seven thousand other FSN members have.

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Speaker 2: Michael, appreciate you coming on and we'll talk to you soon.

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Speaker 3: Thanks for listening to Carrie Letz's Financial Survival Network your

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solution to today's trying times. For the latest, go to

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Financial Survivalnetwork dot com. Financial Survival Network now more than

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ever