WS1267: Make Millions Through Multifamily Syndication | #Highlights

EPISODE 1267

[INTRODUCTION]

0:00:00.0

Whitney Sewell (WS): This is your Daily Real Estate Syndication Show and I’m your host, Whitney Sewell. Today is a Highlights show that’s packed with value from different guests around a specific topic.

Don’t forget to like and subscribe but also go to LifeBridgeCapital.com where you can sign up to start investing in real estate today. I hope you enjoy the show!

[INTERVIEW 1]

0:00:24

WS: Our guest is Mike Simmons. Thanks for being on the show, Mike.

0:00:27

Mike Simmons (MS): Absolutely, thank you for having me, appreciate it.

0:00:29

WS: Mike is the producer and host of Just Start Real Estate, one of the top real estate podcasts in the world. About five years ago, Mike exploded his real estate investing business, growing it from 1 million in profits in just 12 months. That’s incredible Mike. I know a lot of the listeners like they have their little ears perked up now. But Mike is a real estate mentor, coach, and partner in 7 Figure Flipping, one of the nation’s largest real estate mastermind groups. Note, Mike is not involved in the commercial real estate business but his experience can certainly be translated into helping investors and really, entrepreneurs in any business, I think.

Mike, I’m looking forward to hearing some of these stories, especially taking your business to 1 million dollars in 12 months. I know most people would dream about that, and then you probably dreamed about it for years, before actually making it happen and getting started. Get us started by just telling us a little more about who you are uncased the listeners haven’t heard of you?

0:01:22

MS: Yeah, sure thing. I’m a Midwest guy, born, raised in Michigan. I am the son of automotive, an automotive family here in Michigan, it’s very much motor driven. The goal and the mission for me, from my parents’ point of view, was to get into a union job that had benefits and retirement and stay there for 30 or 40 years, and kind of scrape away until you can retire at 65 or whatever the case may be.

That was sort of the goal and I had nobody in my family that was an entrepreneur or supported entrepreneurialism, or even knew what that even meant. For me, I kind of went down that path early in my life, right out of high school, I got a job at a union company, it wasn’t automotive but a union company. Had my benefits, the whole thing. I’ll just say what it was, it doesn’t really matter, it’s UPS. I got started with UPS. Parents were thrilled, super secure, right?

But I hurt myself, I hurt my back. It’s a physical job, especially when you’re starting out in that company, I was loading-trucks, I hurt my back and realized, okay, I can’t stay here. Went into a more automotive, traditional automotive type of job. Parents are excited, I’m going along, thinking everything’s great, and then around 2000, if everyone who is in that industry or was around back then to know, in 2000, things went kind of bad. We had the tech bubble burst and we had, the automotive industry went totally into the tank, and there were a lot of layoffs in my industry.

When that was happening, I kind of looked around and said, I’m not special here. I don’t have a college degree, I got into a job right out of high school, and I started thinking about what I wanted to do with my life and how I wanted to ensure that I’m not one of those folks that get left behind in terms of a job. I looked into real estate but it really started as a product of me looking into how I could retire, how I could invest. I started off with stocks, stock trading, day trading, and all these things, like the stock market, that I thought were going to be my ticket. I’ll invest money, make my money work for me.

The problem with investing in the stock market is I hated it. I wasn’t interested, it was boring, I got really bored when I was researching it. I would wander on the internet to sports sites and just anything that I could do that wasn’t stocks, right? But eventually, when you Google investing, you’ll end up on real estate investing, if you scroll down far enough, right?

I hit real estate investing and I was like, wow, this is exciting and I couldn’t get enough. I was voracious, I was just absorbing all the real estate stuff I could, and eventually, made my first offer on a house and the first one got accepted and things went really bad, this was like now fast forward a little bit, 2008. What we’re going to talk about probably in a few minutes, I’ll illustrate what happened between like 2003 and 2008 that will kind of shed a little more light on, I think, what a lot of people deal and struggle with – but, 2008, made my first offer, got accepted. The bank that I was going to finance through went under, I lost my deposit, it was a big disaster. Four months later, got another accepted offer on a house in the same neighborhood for half the price, okay?

If you’re doing the math at home, the lesson here is, I would have lost my shirt on the first house because prices started dropping so fast that it was sort of a blessing that I lost that first deal because the house prices got cut in half almost overnight. I did my first deal, made good money, it’s kind of proof to my wife, who is a little more conservative than me, that this thing can work and I was off to the races from that point forward.

0:04:38

WS: Wow, why did you stay in after the first deal? I mean, why go to the first one? Why go to the next one after that one was so bad?

0:04:45

MS: Yeah, I could say because I’m tenacious and I love the thrill of the hunt. Really, what it was, to be honest with you, my wife and I took a weekend coaching or mentoring type of a thing. It was $3,000 for the two of us for one weekend, Friday, Saturday, Sunday. A local guru kind of like showing us the ropes and, to be honest with you, when we were done with that, my wife was not going to let us not succeed.

She’s like, “We spent all that money, you are not going to” – not that I wanted to sit on the couch but she was absolutely like, we’re doing this, we spent the money, we will not waste that money, we will do this. It was great to have that support because we went out there and just went for it and things turned out great. But with a lot of people, if that first deal, if we had lost a lot of money, I don’t know, it’s hard to say. I really wanted it bad but I’m also married and I have a relationship that means a lot to me and it might have not been as easy to convince my wife to keep going if we had lost money in the first deal.

Thankfully, we made good money on that first deal and that was just all the proof she needed and I just went for it after that.

0:05:46

WS: Nice. Okay, it was helpful for you though to actually – actually bring your spouse to an event like that and they get educated as well. I know that’s a common problem, there’s a spouse who just wants nothing to do with it, it feels like it’s too big of a risk, but there’s one that really wants to get into it, and it’s difficult, right? If you don’t have that support and if you value that relationship, you need to think through that, right?

0:06:11

MS: Totally. Whitney, I’ll tell you what, I know people that have spouses that are not totally into this real estate investing world, and they’re not convinced, and it’s 10 times harder. I won’t lie, I had an advantage that my wife was behind all of this and she was into it, but bringing her into the world was what it took. I think some people go, “I’m just doing this thing and this is what I want to do,” and they don’t invite them in. It’s harder when you’re looking from the outside – how do I get convinced of something if you won’t let me be around it?

I bought her in, immersed her in the real estate world, and she was excited. It made all the difference.

0:06:45

WS: They treat it kind of like it’s their own hobby over here on the side, I guess, some people, instead of yeah, involving their spouse.

0:06:52

MS: Yeah, I mean, if you’re a golfer and you want your wife to be cool with you golfing, bring her golfing. Bring her into it, right? Or bring him into it. If you enjoy golfing and you have a husband who doesn’t want to do it, bring him in. If you really want to be able to do it a lot, make them a part of it, right? She’s conservative. It would have been an impossible sell if she hadn’t thought about or seen the opportunity, so she did.

0:07:14

WS: Nice. I know your specialty is like helping people get started. Helping them just make that leap and it’s hard. Looking back, it’s like, the hardest part of it, right? It’s getting started. Once you get past that, just a little way, it’s so much brighter, right? I mean, things start to happen and you can make things happen a lot easier than when you got started. But what about you? How about elaborating a little bit on, let’s just jump into how you help people get started, and maybe some of the things that hold them back, or even your story to getting to, taking your business to a million dollars within 12 months?

0:07:49

MS: All right, I will illustrate the difference between someone who can accelerate their business and someone who isn’t accelerating their business, because I’ve been both people. I can sympathize, I do sympathize with folks that have a hard time getting started. I decided in 2003, I was interested in real estate, I want to do this. I think this is my thing, my passion, my calling, whatever. I didn’t buy my first house till 2008, right?

What happened Mr. Just Start, what happened? Well, I started researching, I started reading books and I started – I got paralysis analysis. I kept thinking A, either I don’t know enough and I’m concerned that I don’t know enough. or B, there will be a new book, a new strategy, I would go to an REA, there would be some speaker. I just kept getting the shiny object syndrome and I couldn’t decide where or how to start.

For me, it was like paralysis analysis and excuses. The only thing it really was, honestly, was I just was afraid to start. I finally got started and took some action and, frankly, I didn’t come from an entrepreneurial family and that’s not necessarily an excuse, it’s just a reality. I had no one in my life as an example to just go for it and take life by the horns. I tell my kids all the time: you can choose your life or your life can choose itself. It can dictate what’s going to happen, or you can dictate.

Life rarely makes decisions for you, that you don’t have any control over, that you love. Usually, things happen to you when you let them happen to you. But when you take charge, you’re in charge, right? That was number one. I had to take charge but once I did that, I realized, I like taking action. I enjoy implementing things and seeing what happens. I like steering my own boat, I don’t like having a captain telling me where I’m going. I like being the captain.

When I started, it was almost like for me, it was like a drug. It was a good drug but it was like a drug. Having control, knowing what I want to do, implementing it, seeing the results, making corrections or course corrections or whatever along the way, and then relaunching the idea. I love that, I got addicted to it.

I started taking massive action. Now, how did I get from the kind of doing a deal here and there, which is what I was doing for the first handful of years, and trying to figure out how to grow. I was having a hard time cracking the code because I was too small to hire, but if I didn’t hire, I was going to stay small, this whole catch 22 logic that I had back then. I’m only one person, there are only so many hours in the day, and I had kids, I had a wife, I had a house. In the beginning, I had a job, I was kind of doing this on the side. What does it take?

Well, for me, and what I think for a lot of people it takes, is getting around other people that are like you, they have the same mindset. For me, I joined a mastermind, a real estate mastermind. I’m not saying like a local REA, I mean, like an actual legit mastermind of people who pay to be there, right? If you pay, you pay attention. A lot of times, things that are free, sometimes people take for granted, they don’t’ take them seriously. I can illustrate that point very well in a minute but – I got involved in the mastermind with folks who were kind of where I was and some of them were far beyond where I was, and the people who were far beyond where I was, I was able to sit down and sort of forensic analysis and deconstruct their businesses and say, “What did you do that worked? You were where I am 3 years ago. Now, you’re where I want to be, what happened in that 3 years? What did you do, and what did you do wrong, what mistakes did you make? If it took you 3 years and you can articulate to me what you did in those 3 years right and wrong” – Imagine if you could live your entire life, Whitney, with hindsight, always with hindsight, right?

You’re about to make a decision, you could go 5 years in the future, see what that decision outcome was, come back, make the appropriate decision. To me, that’s what surrounding yourself with the right people can help you do. You get hindsight, you use their hindsight to make decisions in your similar or exact same company, and that’s what we did.

I took a gentleman, his name is Andy McFarlin, he’s a great mentor of mine, he was 3 to 4 years ahead of me and I said, “Dude, tell me what you did. I’m going to compress that, because if I can’t beat 3 or 4 years, knowing all of the hindsight that you created, shame on me.” I did that and I compressed it, and to be honest with you, that’s the basis of the book that I wrote.

People ask me all the time, “How did you go from doing a deal or two to doing 12 to 14 as a wholesaler and a house flipper? How did you do that?” I’ll tell you what, a little spoiler alert, for anyone who is interested, it wasn’t software, it wasn’t like a specific technique that I did or some interesting way of making offers. Those are strategies that help make you better for sure.

But it’s way more than that, it’s a little more high level. It’s hiring, it’s creating a team, a culture within the team that you create, that makes them want to run through walls for you. By the way, hiring people that are better than me at specific jobs – I’m okay at a lot of stuff in my business, I’m really good at some things and I’m passable at others.

I own the company, I had to realize, I’m not the best salesperson in my company, nor should I be. It’s not my background, it’s not my strength.

0:12:42

WS: I’m sure you don’t want to be.

0:12:43

MS: I don’t want to be. I did it, and I was competent, but when I brought a person into my team, who was an actual salesperson, wow, I just marvel. I said, “So that’s what a salesperson is. Because it’s not me.” They blew it up for me. Having that mindset of I need to build a team, right? It doesn’t have to be all employees at your – I get it, I hear what people are saying, “I don’t have the money to hire people, I can’t do it.”

Trust me, there are creative ways to bring people onto your team and build a team that helps you grow. Then as you grow, you can bring actual people on that maybe are salaried or commissioned or whatever, but building that team and then creating the systems that allow the team to run. One of the biggest mistakes that people make in business, is not just our business, but any business. I was in the automotive industry for a long time.

I would see the best engineer in the department, the engineering department, the best engineer they had, what do you think they did to that guy? They promoted them. They made them the engineering manager and then you realize, wow, he’s a horrible manager. Great engineer, horrible manager, right? We do the same things in our own business, we create this investing company that’s really good and we’re doing everything.

We’re good at what we do and we’re building this thing and we’re great technicians and then we start bringing on a team and we elevate ourselves to management and we realize, we can’t manage, right? Understanding that there’s a process there, you’re going from being the technician to being the visionary, right? For your company, there is a difference. Teaching people how to do what you do and doing it is totally different. Having systems and processes that are repeatable and make sense and having lanes for everyone in your team, just creates a really good company.

You know, I partnered, I have a partner on my business, do you need a partner to run your business? Nope. But there’s a time and a place for a partner, it’s not for everybody. I get that question constantly. You have a partner, you’re successful, I need a partner. No, you don’t’ need a partner, you might need a partner but not because I have one. Let’s talk about it, right? We talk about that too because it can be powerful if it’s done right.

[INTERVIEW 2]

0:14:41

WS: Our guest is Lee Yoder. Thanks for being on the show, Lee.

0:14:44

Lee Yoder (LY): Yeah, thanks for having me. It’s a real pleasure, Whitney.

0:14:46

WS: I’m honored to have you on the show, Lee. Lee, says no one in his family invested in anything other than a 401k before he got started in real estate. He bought his first 3 multifamily properties within four months of each other and he is able to involve his family in their multifamily business and maintain his priorities, which are God, wife, kids, and his real estate investing. 

Lee, grateful to have you on the show. I love that you have your priorities in place and I want to get into that just a little bit — and obviously just the name of your company and what that means. I just think you and I would agree on a lot of things as far as that’s concerned and I think a lot of the listeners will as well, and we’ll appreciate your outlook on how you’ve been successful because of those things, those priorities. But give us a little bit more about you and let’s just jump right into that and maybe where you’re located.

0:15:32

LY: Yeah. I’m in — just north of Cincinnati, Ohio. Like you said, yeah, didn’t have really any entrepreneurs in my family that we’re starting a business or investing or anything. I didn’t know I was an entrepreneur because I didn’t know what that looked like. I’m actually a physical therapist by trade. I was actually doing home health physical therapy, which was great for the family because it’s very flexible. It’s a good income, but I was just really bored. I mean, not fulfilled, not challenged. So kind of got in on the corporate side and started climbing the corporate ladder, which was very exciting for me. I was really building out our home health physical therapy division. So I was getting some experience building a company a little bit. So that was very exciting and very challenging and fulfilling for me. Not so good for the family. Had a couple of young kids, my wife and I were starting our family. So, not good in that way.

I actually went back to doing the home health physical therapy but involved real estate. Before this, a friend had kind of tipped me off, so I read the Rich Dad Poor Dad book like everybody and thought — and just like a lot of people, it spoke to me and I started to realize like, “I think I’m an entrepreneur. I think I like this.”

Now, my dad is in construction, and I had done some construction. So real estate seemed kind of natural to me anyway. I like the idea of doing rehabs. Yeah, I kind of jumped in and flipped a house pretty quickly. But again, I wasn’t able to control my time. So again, it just wasn’t good for the young family. My kids were young. So they couldn’t really be involved in the flipping part. So my wife just felt like a single mother for a few months while we were trying to hustle to get it done. Yeah, Whitney, as you said, I’m really focused on — I mean, real estate for me is an opportunity to be challenged, to build something, to build wealth, but also be able to control my time. Because that’s the most important thing to me so that I can still pursue my walk with Christ and pursue my family and do that really well.

In real estate, as I said, the first flip wasn’t really like that. It’s not easy to do that. Real estate doesn’t make that easy. When you’re building something when you’ve been an entrepreneur, it can get very busy and you can be consumed by it. Especially, I think a lot of people get into one of those types of people that really enjoy work as I do, and really just want to go after it like your hair is on fire. And you got to stop and think, “Hey, what’s most important to me?” That’s been a journey for me. That’s where we came up with the name Threefold, where my wife and I intend to partner with the investors that we work with, but we also partner with God to make sure that we’re keeping our priorities straight. That we remember why we’re here on Earth, and that there’s a lot more to it than just building a real estate portfolio, even though as a career, that’s my ultimate goal.

0:17:53

WS: I couldn’t agree more, and just how important our walk with the Lord is and how he has guided us and blessed our business as well. He’s been very kind, of course. But also, you mentioned in your bio that you’re a ‘ready, fire, aim’ type of guy and it caused you to slow down. Can elaborate on that a little bit, because I think there are probably many listeners who are in that same boat.

0:18:15

LY: Yeah, absolutely. I mean, I’ll just say I think it really takes two things to be a good, successful real estate investor, and I think the first one is — Grant Cardone. I didn’t read his book, I’m not necessarily a huge fan, but he wrote the book called 10X — and I think you do have to be able to have a big vision because I would say — I don’t know what you’d say, Whitney, but like maybe 95% of people have never really thought about owning more than their own house. I do think you have to have that — be able to think big. I’ve got that in spade. God did give me that. So I don’t have a problem with that. I can think pretty big and come up with dreams that most people would say, “Lee, you have no business dreaming that. That’s so far off.”

But the other thing I think you really have to have that’s a real challenge for me is the compound effect, Darren Hardy, and just staying diligent and doing the little things day after day after day that take you toward that big goal, instead of the shiny-object syndrome. Or just kind of trying to stay busy, but doing little things each day, and that’s where I struggle. Where I feel like God has been working on me, and he gave me a wife that struggles with the 10X part. She thinks owning our house and me just doing physical therapy would be great. Just stay safe. Save a little bit and do that whole route. That’s what her parents did. That’s what my parents did. But she’s really good about keeping the details straight.

So far, I don’t have a partner in all these, but my wife has been my partner, but I feel like that’s something God has really been working on me — and just slowing down a little bit, because I always tell her, when we flipped the first house, it didn’t go very well. If she’d been all-in like me and just, “Hey, let’s just go, go, go, go, go,” I probably would have flipped 10 houses. But that wouldn’t have gotten me closer to my ultimate goal of owning larger multifamily deals. The fact that we did kind of slow down after that and go, “Let’s take a breath. Let’s think about this,” it caused me to not flip another house because I think you’ll hear a lot of guys that flip 30 houses and then they bought some small multifamily and then 10 years later maybe they realized, “Man! The bigger multifamily stuff is where it’s at,” and they got into that.

I was slowing down and listening and educating myself and having my wife say, “That flip, here’s why it wasn’t that great for our family.” Because of that, I didn’t flip 30 houses. I flipped one. I realized, “Hey, that wasn’t what I’m looking for. Ultimately, I’m trying to get a multi-family. So let’s go that route.” So it took us a year to flip the first house and move into multifamily, but we moved pretty quickly because I didn’t — I just try to stay busy and just do a bunch of things by flipping a bunch of houses, which I probably would’ve done if it weren’t for my wife and for God leading me in different directions and slowing me down a little bit.

0:20:42

WS: Well, I mean a year from your flip to getting into a larger multi-family is, I mean, pretty quick, I think for most people. I think that’s really good. It’s unfortunate, a lot of people are — they’re getting started for a long, long time. It’s like they’re getting started in real estate, but it’s like three years since they got started, getting started.

But I wanted to go back a little bit too — unfortunately, I have heard great things about that book, but I’ve not read it, but it is going to have to go on the top of my list very soon because I’ve heard great things about it. I would like to know some of the daily things that changed for you after reading that book. Because, I mean, I have a similar story as far as how my habits changed and some things that happen that are like, “Okay, I can start seeing success in my business,” and I give all that glory to the Lord, but whether it’s to a book or whatever. But what were some of those things for you that helps you to see things that you needed to do differently — and even if they’re little things.

0:21:38

LY: Yeah. Well, I think when I — Now that I’m really trying to get into apartment syndication, I think, you know, following guys like you, and Joe Fairless. What I realized is to buy a big apartment building, you’ve got to raise a lot of capital, and a lot of things go into that. And it’s a long-term relationship you’ve got to have with people and you’ve got to build up that networking and you’ve got to build a brain. You got to do a lot of different things like that to build up the capital. Then in order to really find good deals, you’ve got to build a lot of relationships with brokers. You might set up a mailing campaign, do some things like that.

What I would like to do when I get up in the morning is just jump online and look at deals. That’s the fun part. That’s my natural —  is just, I’m just going after the kill. I want to go look at deals. That’s not the compound effect. To me, that’s like the 10X thinking of like, “Let’s go big right now and just go after it.” The compound effect to me is getting up and saying, “Okay, what am I doing today to build long-term relationships with some new investors?” I’m starting a podcast. I built a website. That stuff that you can do today, that’s really not going to pay off for months, maybe years, right? To me, that’s the compound effect, is doing the things that say, “What can I do today that’s going to benefit me in a year?

When I jump online and look at a deal, I’m trying to find something to put onto the contract today. The deals that are available to people that want to do that aren’t the best deals. And then are you going to have the capital ready? What I’m trying to change is when I get up, to resist the temptation, just go look for deals right now. But instead, do the little things to raise the capital with those big deals and do little things to develop relationships with brokers. Yeah, so just building out my brain. It’s all the little things that go under that. And we’d get into more of that.

0:23:15

WS: Yeah.

0:23:165

LY: You and I had talked that Joe Fairless is — He wrote a book called the Best Ever Real Estate Syndication, and I think that just lays it out.

[END OF INTERVIEW]

[OUTRO]

0:23:23

Whitney Sewell: Thank you for being a loyal listener of The Real Estate Syndication Show. Please subscribe and like the show. Share with your friends so we can help them as well. Don’t forget to go to LifeBridgeCapital.com where you can sign up and start investing to real estate today. Have a blessed day!

[END]