Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
It does passive investment is great, but you would need a lot of money to invest to get the kind of passive investment. Then it’s going to replace your income. As an operator. I know other investors are romanticizing, multifamily investing, and I’m looking to learn from other investors mistakes. I know you are too.
Uh, you found the right place. Welcome to Myers methods. Presents multifamily missteps.
Hey everybody. And welcome to Meyer’s Methods presents Multifamily Missteps. I’m your host Jerome, and I’ve got the grand pleasure of having my man from Jersey. Jerry Sanchez in the building with me today, Jerry he’s all the posts. I don’t know who was in the Facebook group or some other place on social media.
I said, look, let me give you 30 minutes. Where I can just give you straight, whatever I can to help you get that multifamily, kickstart generic signed up right away. He scheduled it out like a month from when he saw it, but he jumped there signed up right away. So Jerry, you grateful to have you here. And I just wanted to dive in, man, unless you got some other things you want to throw out.
Yeah, definitely. Listen, I appreciate you having me on, I actually, I, I, you know, uh, listened to you a couple, a couple, I think was on the multi-family destination. And you mentioned how you got to start to get yourself out there. So that was actually. Agreed motivation for myself. Um, I, even though I like marketing and social media, I’ve never been one that’s on social media a lot.
So I actually recently just got myself on Facebook. And so, uh, if I just started clicking buttons and joining myself and not knowing what I got into, uh, let me know. That’s phenomenal. So, but yeah, you stay that man, but you’ve got this phenomenal meetup that’s happening on Thursday nights. Tell us a little bit about that.
So, I mean, they know that you, you got some stuff going already and then we can jump into whatever questions you have. Exactly. Yeah. Yeah. You know, for me, part of it, uh, was, you know, I, I, here I am in New Jersey, uh, you know, multi-family investor, uh, looking to network and meet and, and find, you know, operators to invest with.
That’s how my journey started out about a year and a half ago. Uh, you know, did a LP investment in New Jersey, uh, have a grid operator. Very transparent. I learned a lot and you know, started to talk my, my, what I was doing to others in my group of friends and family, and kind of said, Hey, you know, we can get into doing, you know, investing in multifamily, buying a building.
Oh, you know, how do you do that? And kind of went through the journey of learning how to do. And once a day, we started looking at markets. Okay. No, the Carolinas, just check all the boxes and, you know, places like Raleigh and Durham and, uh, you know, where, where, you know, jobs and people moving. And you’re essentially, I started to say, let me, you know, how I meet people and.
We’re in this world of virtual fullness after the pandemic and kind of took advantage of the fact that, that zooms and meetups and, and giving us the opportunity to connect with people that weren’t, you know, close, uh, physically. So I got the idea of putting together the Carolina multifamily connection and meetup where, uh, you know, the, the, the top ideas out-of-state investors getting together and networking with Carolina based network, uh, investors and.
Man that’s exciting. And I think it’s unique. Most people have no real aim or goal when they give into something like this. So this is outstanding, man. So, I mean, tell me more or ask some questions, man. How can we, how can we serve you best? Yeah. So, you know, you know, one of the things that I have is as, you know, as I start the journey, start the multi-family business and moving it along because you’re networking and finding boots on the ground partners is, is an important aspect of it.
Uh, um, you know, I think for many of those that are our ultimate goals to get out of the W2 and, uh, you know, eventually become an operator, right. Challenging to find the time and systems in place. So, you know, I’m looking, you know, for, uh, always to network with others who have a roadmap and, and you know, ways, uh, to do something that I, I can do that, you know, the for, you know, let’s get further, faster that idea and, and, um, Very disciplined as far as making sure that you start to, you know, uh, for instance, my, um, you know, w when my kids played soccer, when they were little, you know, the, the trainers used to say, oh, you know, you’ve got to get your touches, then you don’t touch that ball.
Right. So for us, it’s the same thing. Make sure. You’re reaching out to workers, make sure you’re, you’re, you’re reaching out consistently to, to, uh, potential partners. So, uh, that’s one of the challenges and I think, uh, you know, making sure that we keep doing that and hold each other accountable is something that I’ve always was working.
Yeah. So from a partnership standpoint, you know, you’re, you’re trying to build relationships with people who you’ve probably never have physical contact. I think that can be pretty difficult because the relationships, especially with men are typically built through work, right? Being side-by-side being in the same proximity and seeing things happen.
And in your, you work in a pretty intense environment and your day job. And so. You know, trying to build these relationships from what I would consider a matrix organization where it’s pretty easy to put on right now. Right. You can just put on a jacket and a collared shirt and present to the world, your profile super for professional and buttoned up.
And you got gym shorts on underneath where your pajamas. The hurdle of figuring out who’s real and who’s not, it’s pretty important. What I think is going to be extremely beneficial for you on your journey is just really digging in into the person’s track record and background and experience. The investing space is pretty small.
When you’re dealing with somebody who hasn’t done much, it’s going to be pretty difficult to find anything about that. But for the people who I think have re who have done, and a few deals are done, a deal, people are going to have an opinion about them and you’ll be able to get a really pretty cool, well, you’ll get a good read.
Once you spend enough time in the world, basically you will know at least two people who knows the person that you’re talking to. If they’re actually somebody who. Boots on the ground. And when I think boots on the ground, I think of them as an operator, not just as a bird dog or that coworker or somebody that just goes out and find stills for you or goes and takes pictures at a property that you’re interested in looking at.
One of the books that I read that was transformational for me in 2020 was sizing people up by Robin Dreek. And that allows, allows you to see. If that person is really looking to build with you, the book is about trust. The, the lesson that I had to learn was that liking somebody doesn’t mean that you should trust them.
There is a lot of people that you like, but that doesn’t mean that you should trust them. And that right there is a pretty hard pill to swallow because you want to think, why would I like somebody that I can’t trust and what the truth of the matter is there are six behaviors. That indicate whether or not you can predict what the person’s going to do.
And if you can predict what the person’s going to do, then you can trust them because you’ve got some insight into what the outcome is going to be. Does that make sense? It does. I think, I think it’s a great point because, uh, you, you know, you, you bring up about work and, you know, we not, you know, and there’s no, you go to work and, you know, may have a relationship with someone.
But you’d never know until there’s some really moment of distress, you know, and how someone acts and addicts. And that’s a great point. So, um, I know it’s interesting. You may trust people that you don’t like either, right? You, you can absolutely trust people that you don’t like trust is all about being able to predict what they’re going to do.
Right. And if you can predict what they’re going to do, then you can protect it. It’s the people who you have no idea what they’re going to do that are the real risks, because they’re a wild card just like in, I was talking to somebody who plays poker and he said, look, man, not gambling. When I play poker, I know the potential outcomes that are there.
And based on the cars that are played, I have the same amount of information as everybody else. And so I can make my wager based on the risk associated with it and the likelihood of, or the probability of my success. And that’s the exact same concept. Right. If you know, what’s going to happen. And the great thing about real estate is this insider trading.
Okay. Inside traders. Okay. The more information you have, the more advantage you are and that in and of itself is really valuable. So, so another challenge, uh, you know, I, I was being able to know like trust, uh, is you’re building a team from a far and it is. You know, trying to find that team that compliments your strengths and weaknesses.
Uh, if you are, you know, if time is weakness or you may be, someone may be a good underwriter, but not, you know, good, you know, um, speaker or marketer, you know? So I think that’s something that’s a challenge when you meet potential partners to, to almost be able to. Save time and say, well, you know, I’m not looking for this or, you know, I’m, I’m looking for that.
Like, you know, how, how, how do you manage that process? Uh, you know, wild while still maintain a relationship, but, you know, being stern enough to say, well, you know, maybe, you know, we can’t necessarily work together, but, you know, we could still, uh, uh, share and learn from each other. Yeah. I think the easiest way to cover that one is to be very open about what you are looking.
Right. Here’s what I’m looking for in a partner and let the people self-select out of that. Right. And you know, one of the things that I get grief about from time to time is I I’m very open about profit. Isn’t my motivation first. Right? I want to make an impact and I want my investments to make an impact.
And so the person who’s trying to maximize their rev, their money to their pocket does not want to partner with me. And that’s okay. Right. I want the flexibility. I want the flexibility to be able to make whatever decisions that make the most sense for the property long range. Because for me, this is a career, right.
I’m going to do this longer than I was in corporate, mainly because I like the ability to maneuver and manipulate. And deliver an outstanding result for not only me, but for the residents who are investing in us by paying the mortgage, each one, you know, and I’m okay with that from a standpoint of, you know, I know that it’s my goal to be the deal or the deal lead or the asset manager on the majority of projects I do.
So if somebody wants to be in that seat, W we’re going to probably have some challenges just because that’s what I’ve done for every deal. I don’t do deals where I don’t sign the loan. I expect to sign the loan. And so if you just want me just kind of off in the periphery, that’s not my game and I’m not apologetic about it because I have transparent.
I have clarity and I’ve told people from the beginning. Now does that make it a little more difficult? Are there more potential opportunities out there that could have happened because I kind of X them out and decided that they weren’t going to work. Sure. But the efficiency standpoint allows me to get to the place and to the people.
That I am most interested in and I think will be most interested in me because we have a high likelihood of success. And I think the last piece of that will be, you know, the more that you can share who you are in places other than one-on-one conversations allows people to either come closer to you or get further away.
And it prevents the need for you to have some of those uncomfortable conversations. So you mentioned not just messaging for profits, uh, and you know, I think. Many of us are looking at, especially like the value add and, you know, you’re looking into your first properties and, um, you know, how do you balance that when you’re looking at, at certain deals and, and the business plan, you know, may involve raising rents or evicting, you know, in order to do that, um, you know, how do you balance that part with, you know, making sure that.
Battering, you know, an area or a neighborhood by, by far the product, a lot of people want to be profitable, multifamily operators, but lack the knowledge deal, flow experience, and capital, or be successful. They often try to overcome these challenges out of order, slowing or eliminating their ability to get their next deal done.
We’ve developed a framework that allows them to gain the knowledge they need to find properties. When they do, they create the time and location as well as the generational wealth, they desire for the Myers methods of multifamily investing have proved to be the fastest way to establish credibility and properly grow in an apartment portfolio.
If you want to know more about our four-step process, jump over to Midas methods.com to get three, four steps to getting into multi-family. Let’s get back. So just because I say I’m not looking to make a profit first doesn’t mean that I don’t expect to make money. Right. You got to make money in order to be in business.
It’s not uh not-for-profit and even not-for-profits have to work it at at least zero. They can’t be negative. Right. So my, my thought on the balance question. Yeah. I don’t think that you will be imbalanced. I think there will be times where you’re out of balance. You’ll probably what Bangkok calls loving on the property more than a property’s loving on you, but that investment is made so that on the backend you have less headache.
You have less struggle. You have less challenge. And there’s true value in that, right? Because you can sit back and we don’t have to worry about that when we fix it, fix the issues. And so when you add the next deal, then you can focus on that deal because this one’s performing as you would expect it to.
And then you get through that one and you just kind of move to the next one. I think where you get in trouble is when all of your deals are in the same phase at the same time. Because they all need so much attention. It’s kind of like having triplets or quadruplets, like there’s only two parents. So how do you manage all of those people?
I was talking to SD, I think she has like eight kids. And so it’s just like, what in the world do you do with that? Because you know, you’re working and your husband’s working, you know, it’s just like what in the world. So with that, that I it’s. You want to make sure that you’re still profitable to the partnership makes the decision on and who, um, how much.
Right. How much aware three, if you don’t take care of the property and know that the property is not going to take care of you in the end, like it’s going to come back to bite you. It’s a matter of doing things on your terms or being forced to do. It’s kind of like buying a new car, right? If somebody wastes until the car breaks, they might not be able to shop for the best.
If you’re proactively taking care of things that you know are going to become issues, then you can shop and maybe get people to do it in off season because they’re hungry for work. They may do it for a discount, but you have more control over the situation than if it was an emergency and it’s gotta be done right now.
Excellent. So you mentioned about the different stages. You know, I have a properties in different stages and then, uh, also at fine. You know, networking and, and different operators or different investors that I meet are in different stages of their career, which is great about this industry. Um, I work closely with a networking group here in New Jersey, and I think, you know, just, uh, the, the, the small group that we have and push each other, they make each other accountable, but, you know, as far as supercharging now, you know, moving forward into the multifamily business, um, and particularly now that I’m down, you know, looking to invest in accounting, I want to find a network of others that are physically down in that area that are also looking to invest and maybe, you know, someone that’s already in a 12 unit and now is looking to go with a 50 unit or a 50 unit can go to a, you know, a hundred.
Right. So, you know, uh, w what’s your feeling, obviously you have recommendations in terms. Of getting out there and joining masterminds or groups that that would connect you with a diverse group of people in that sense,
say the last part again, because you twisted it on me. Yeah. You know, looking, you know, the importance of finding a master mind or a group where the members are not just all new, but. Members are, are at different stages of their journey. You know, like whether it’s stepping up to an, a 20 to 50 or 50 to 100.
Yeah. I I’ve watched a lot of people do bunch of some pricing. I had one person, I saw a post on LinkedIn and they were talking about, Hey, you’ve got to have a a hundred million dollars in assets, under management in order to be a part of this mastermind. And what I can say is if you’re only going to talk about it, Hmm, your properties in the mastermind.
It’s going to get boring pretty quick. Right? My goal is always to have multiple points because the properties part is nice. But if the relationships are what matter, right. And me knowing that Jerry owns a 20 unit down the street from me. Doesn’t really do anything me knowing about Jerry and his family or the family wants, and you know, how you grew up and that he likes Rutgers and boom, boom, boom.
Those are the things that actually build a relationship that allow us potentially to do deals together. And if not do deals together, then add somebody that I can call and talk to. As a resource for whatever problem I’m going through. The issue with everybody being new is very what I think most people would suspect.
It’s the blind leading the blind. And so I agree that you don’t want to be in a spot where everybody’s new. I do think diversity within the group is important, but I don’t know that deal sides makes all that difference. I think what’s probably more important is the structure of the day. Right. If you’re doing joint ventures only, and I’ve made this mistake where I’ve just been doing joint ventures only, and I’ve been in masterminds that only talk about syndication, right?
There’s but so much there. And I did it because I was interested in hearing what the syndication folks were talking about from a structure standpoint and it wasn’t going to help me structure my deal any better. And I don’t know that it was going to help me operate my deal any better. I do think, you know, when you get in the class of property of the business plan that you want to operate, our execute is really important as well.
So. If you’re a value add person. And you’re talking to people who buy stuff from developers that are brand new and just in Lisa phase, you’re two problems will only cross where it’s leasing up. Right? If somebody buys something from a developer it’s not fully leased up and you’re willing to do a value add property where you talk the occupancy to zero to bring it back online, those problems will intersect.
Outside of that, what it’s going to take to please somebody that is a plus plus with super amenities and what it’s going to take. Somebody who’s in workforce housing, who just wants to safe, clean place to come home to are very different standards. And so I’ve seen people who buy A-class property go to season like, oh my gosh, this thing is disgusting.
I can’t believe anybody would live here. And I’ve seen people who run C properties. Like why in the world would you spend any money on Amazon? Right. It’s just all of these fully different views of the world. Um, can you take something, learn something potentially, but I just don’t think that you have the same issues that you’re working through and you know, the grass always looks greener for somebody else’s business plan.
Yeah. I think that’s great. For me, definitely. I’m looking, you know, the value, add the joint ventures, those that are looking for those types, you know, obviously I’m focusing on Carolina or the Southeast is there, um, you know, that kind of mentorship slash you know, uh, mastermind. And I think we started, as I was talking about the know, like, and trust.
Uh, you know, the more that you, again, get these touches in these meetings, you will get to learn and know each other better, and you have forged relationships that you want to partner up with. Absolutely. And, uh, if you can do the deal without partnering, do the deal without partnering, right. And people usually get into a space and like, I need a part in this.
I need parts. It’s a whole lot cheaper to pay somebody to do the thing that you don’t know how to do than it is to give up equity in the deal. Just keep that in the back of your mind. Like if, especially if you’re trying to bill for legacy, right? Because every piece of the asset that you give away is a piece that you can’t control or take over your own.
That’s a great one. Yeah. Yeah. I mean, it’s, it’s really important. I think it’s really important to yeah. Partner when you send a cake, because I think you’re sending up two businesses at the same time. One is an operations business where you got to go find deals. You got to go through due diligence and then you actually have to operate it for the second leg of that is you’ve got to have set up a money race in business, right?
There is no if ands or buts about it. You don’t set up the money raising business, then you won’t be able to fund the deals that you find when you ever, whenever you find them. And I’ve seen people do that with two or three people with one person focusing on the money, another person focusing on new acquisitions and going through due diligence and then potentially a third person on operating the property pretty easy once they’re done silo silo, but if you are doing the deals by yourself, are you doing them in joint ventures then?
All of that stuff is you don’t have to worry about sending out the capital raise in business. And so now it’s all about finding new deals and operating them. And one or two people can do that. You don’t need a ton of people to do it unless you’re trying to create an ecosystem where people can meet and meet other people who are interested in doing more deals.
Right, because I do think there is a place where, you know, maybe somebody doesn’t have the net worth and liquidity and maybe the other person not have the time. And so those two people get in together makes a lot of sense or one person may not be great at underwriting. And the other person, I don’t know, can do whatever market or I don’t know what it is.
Right. They can have those complimentary skillsets and so they can get together. But stacking, a ton of people are thinking that you need people as partners, I think is something that is a struggle. A lot of the time. Now it may change the size deal you buy, but remember you’ll own more of the deal, right?
One of my issues with the industry and its marketing. I get it is, you know, I’ve got 80,000 doors and I’ve got a bazillion dollars under management. Yep. You’re not a hedge fund manager while some people like it, but I mean, it really starts to talk about, it starts to sound like hedge funds instead of real estate investors.
And there’s nothing wrong with it, but it’s really impressive for somebody who doesn’t really understand when you start peeling back the layer, the question that I always come to as well, how much of that is impacting your net? If you own 1% of a hundred doors, then you own one property. You know what I mean?
And so, yeah, let’s, let’s stack it up and make sure that we get to a place where we don’t forget what the goal is. The goal is in assets, under management, the goal is indoors. The goal is income that comes to you or increase in net worth by the equity that you hold in the property. That’s fantastic.
That’s a great point. That’s a good point. Yeah, I guess. Yeah. You know, if you own 3% of you yeah. A hundred doors and yeah. Um, you’re probably, and you’d have less control of that. And then if you were running the deal yourself and so, you know, learning and, and, and, uh, effecting the outcome. Yeah. So as a passive investors, phenomenal.
You know, if you, if you know, you want to be an operator and the only way to get out is to be an operator from my perspective. Now you can transition to passive, but I really believe that you need to be a business owner. In order to be successful at getting out quickly. If you just do the math, right.
Getting 8% on your money, isn’t going to retire anybody earlier than it would. If it was in the stock market or some other alternative, you got to get some really big hits. And those hits come from being an active operator. And, you know, you just have to be good with that. You have to be comfortable with running down there.
Yeah, well, it was all great points. Uh, and yes, it does. Passive investment is great, but you would need a lot of money to invest to get the kind of passive investment. Then it’s going to replace your income and lifestyle. Yeah. Yeah. I mean, 8% on a million dollars is 80 grand a year. They’ll put things in perspective, but people don’t do that math.
And also if you’re not an active investor, the depreciation. I’m not a CPA. Right. But in concept the, the depreciation, if you’re not an active investor, doesn’t go against your active income. So are you really getting the tax benefit that is associated with real estate? If you’re not an active investor?
That’s true. Yeah. It makes a lot of sense. It’s good stuff. Yeah, man. Is there any more questions I can answer for you? Nope. That’s, you know, essentially that’s what, you know, looking to, to, to kind of, you know, move into that space and taking that next step of, of, you know, a network, uh, you know, a mastermind, like you just mentioned that kind of aligns, you know, I like the idea of learning more about the JV side of working with other local partners in the Carolinas.
So yeah, looking forward to VDI. To the, the, the, uh, seminar next week. And, uh, it’s going to be awesome, man. Threats is going to be amazing. This is going to drop afterwards, but I’m telling you. This is going to be exciting, ladies and gentlemen, it’s gotta to be so exciting. And if you weren’t there, you missed it.
I’m telling you right now. Anyway, Jerry, thank you so much for jumping on with me and asking me some amazing questions. These are some that I don’t really hear that often, so I can tell you’re digging deep, super excited about your future. I know you’re going to be extremely successful and to the listeners, the pack is with you.
We’ll talk two favor. Give us a five-star rating. Give us a review. And share this with somebody who’s interested in and said the next time.