Today I was asked why I teach real estate investing.
I’ve been doing it so long that I hadn’t thought about why in a while.
I started syndicating deals in 2011, and started my own business in 2013 – a few years before the massive influx of syndicators I noticed around 2016.
There wasn’t much coaching to be had in those days, and what there was seemed mostly of the late-night infomercial scam variety.
Plus, I arrogantly thought I had it all figured out – how hard could it be, anyway? You buy an apartment building, rent out the apartments, and fix stuff when it breaks.
I had been a renter. I know how this works.
I did, however, take the precaution of going through the materials my first partner had purchased from the biggest apartment guru of the day.
I got this covered, I thought.
Then I bought my first apartment and reality hit.
The first realization was I didn’t know how getting a commercial mortgage worked. I had raised $1.25mm. Why couldn’t I just get a $3mm loan for a $4mm property? The guru never explained this.
Then, once I closed, I realized my underwriting was wrong. The property wasn’t performing as underwritten. Not even close. But I underwrote on actual expenses, just like the guru said. The guru never discussed how my costs would differ from a seller’s and how I needed to adjust my “actuals” to my situation.
Then, I learned I had undercapitalized the property. I didn’t raise a reserve fund, because the guru didn’t mention it. We had to pay capex out of operating profits, so there was nothing to distribute to my investor.
When I did further deals, I ran into trouble raising money to close. I trusted what the guru had said: “If you find a good deal, the money will find you.”
Except that I found a great deal and the money didn’t come. And I was out of pocket thousands of dollars I couldn’t recover.
All this made me mad. I had trusted this “respected” guru. His materials weren’t so much bad as they left out a lot of really important stuff. The most important stuff. Anything that was hard or negative, basically.
Presumably, the real information was reserved for people who paid for the next level of coaching.
But the basic course was expensive enough. Thank goodness I didn’t pay for it.
I decided then and there to destroy the guru industry. To design a better program, containing what new investors really needed to know. And I would make it affordable.
Well, I haven’t exactly destroyed the gurus. They’re still doing fine with their $50,000 a year programs. In fact, there seem to be more of them now than ever.
Especially since deals are hard to do right now and many syndicators have turned to coaching to keep the lights on.
But I did achieve my other two goals – making a better program than the gurus and keeping it affordable.
Some people who have been through my program have called it “the best” one out there, better than the much more expensive guru programs they’ve been through.
Where have I failed? Definitely in the marketing. The gurus know it’s easier to attract flies with honey: a dream of easy, fast, riches through multifamily investing. So they sell the dream.
Dumb old me, on the other hand, keeps trying to sell my programs with vinegar: honestly talking about how success in multifamily requires actual work and eludes most people. Telling them not to invest when everyone around them is making money at it and to invest when everyone around them says it’s a bad time.
Where am I going with all this?
Right now, I’m revising my entire program for 2024. I’m wrapping up the new underwriting section this week. It will be continue to be affordable. But it will be released at a special introductory price the week before Thanksgiving.
I truly believe an opportunity is coming, the likes of which we haven’t seen for more than a decade. And are unlikely to see again for another decade.
I intend to take advantage.
And I’m building a community to take advantage with me.
A community of investors tied together by the knowledge that together we achieve more. United by a common rejection of dreams of easy money and a dedication to learning to invest right. For the long haul.
There are about 100 community members already inside. If you’d like to help us build this thing when it re-opens next month, and get ready for the opportunity to come with a bunch of like-minded people, then add your name to the waiting list right here.
