In true American Dream fashion, Michael Beeman’s story exemplifies just that. Motivated with needing to provide for his family of seven children on just a corporate salary of $60k, he wanted to do more than just make ends meet. Michael started cutting firewood to generate an additional income stream and while doing so immersed himself in listening to countless multifamily podcasts and real estate audiobooks. While his splitting firewood business brought in an additional $15k a year, Michael decided he was ready to make the leap into real estate investing.
With $12k to his name to invest, he turned to his mother and best friend to see if they were interested in working with him to start looking for his first deal. His mother and best friend contributed $20k. Then Michael was able to invest in his first deal and he has been acquiring multifamily units ever since with a current portfolio of 136 units.
On this episode of Multifamily Real Estate Investments with Don and Eden, Michael shares the details of his current projects, how to find the right deal at the right time, and discussing the importance of networking to develop key relationships for future business partnerships. Michael describes how his passion for real estate investing paired with his resourcefulness helped him find his first breakthrough deal and overcoming the challenges he faced along the way. Listen in for a remarkable story of Michael starting a side-hustle of splitting firewood into real estate investing with a portfolio worth seven-figures in less than two years!
Highlights:
- Michael’s beginnings in Real Estate Investing
- Key Tips for Acquiring Multi-Family Units
- How to Find the Right Deal
- How to Stay Open-Minded when forming Partnerships
- Ways to Analyze the Current Market and Anticipate
- The Importance of Networking and Building Relationships
Connect with Michael
Michaelbeeman@beemanandsons.com
#: 217-508-8185
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Transcription
Hey, guys welcome to the show. Today we’re going to host Mr. Michael Beeman. I’m very excited to have him here because his story is truly exceptional. Michael was able to educate himself in real estate through podcasts and books. And two years later his portfolio is worth a little bit over three million dollars which is phenomenal. So without further ado let’s welcome Michael to the show.
Welcome to the real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies.
Hey, Michael welcome to the show. How’s everything today. Oh, everything is going well. How are you? I’m good, I’m good. I can’t complain. How is your day so far?
It’s going good. You know talking to some business partners talking to some possible investors looking at deals; always grinding. That’s the key to success though. Honestly, I’m very excited to have you here today on our show because your story is a story that a lot of people could relate to as you know you started with a big family and you were splitting wood the last time I checked I kind of listened to your story in a different podcast. This story was so special that I wanted to have you on my show as well and see how you could change your whole life from one direction to the other with real estate. So, first of all, how about you tell us a little bit about yourself so my audience here would know this story as much as I do.
Well back in early 2016, I was going through bankruptcy from a previous marriage where I had agreed to take on more debt than I actually could handle, but I also got custody of my kids We met and we had three kids each and we have a very large family. And I was making 60 grand a year and she had to stay home with the kids because we had very young ones. Obviously, a newborn plus you know seven children altogether between doctor’s visits and everything else it made working for her almost impossible with the cost of daycare and stuff. So I decided to start a side hustle splitting and selling firewood because I knew that that would help us to make ends meet a little better, but then I was doing that for about a year and a half or about a year into it I started listening to real estate investing podcasts. And one of my dreams, you know at the time I had been renting, was to own rental properties because I’d always felt like landlords were making pretty good money, of course, that was the naive mindset of a renter at the time, but I was willing to learn and grow. And so I had saved up about twelve thousand dollars and I went to my brother and my mom with this plan of what I was gonna do.
And I was asking them to all pitch in – and let me guess they were not really up for it.
No, they were not up for it at all. So then my best friend he had said I’ll pitch in twenty thousand dollars because I just inherited 80. What would you give me for that?
I said I will give you a one-quarter of the business. And then my mom heard about that and she had actually wanted to go along with me before, but she did not want to upset my brother. So it felt like the easiest route was to just be quiet. So she went ahead and said No if he’s going then can I have one quarter for 25 percent so then I had all of a sudden fifty-two thousand dollar pool of money to expand wisely to start investing.
So shortly after that one of my buddies was over and we were having a drink that evening and I was telling him about you know because I always talk about this you’ve got to be super excited and you’ve got to be really excited and you’ve got to really want to go for it. And so I was telling him about my dreams and what I was planning on doing. And he said, Well I don’t know if you’re interested, but my girlfriend’s mom used to manage this 66 unit building for the guy and then he got tired of dealing with it. Now it’s sitting vacant -it needs some work, but you can get it at a steal of a deal.
So you know you basically heard about a motivated seller of a six-unit.
Yep. So I bought the thing and I had to go through and rehab every unit, but I got 100 percent financing down. I spent a little bit of the fifty thousand rehabbing every unit. We did a lot of work ourselves, my wife and I and then we had some help from an outside contractor so what was the total amount of the purchase price. What was at this point I was sixty thousand, but it appraised even vacant right then for ninety thousand. It’s amazing.
Yeah I mean you’re in the Midwest so you can buy six units for sixty thousand in the Midwest.
Well, that’s uncommon. I wish I could find another six units for sixty thousand. I’ll tell you that you’re usually looking at 30 to 40 thousand units around here, but yes. So it was a steal of a deal and I ended up putting about thirty thousand units and we ended up about two years later we sold it and made a significant profit on it.
That was your first deal in real estate, wasn’t it? Yes. And that was basically for you. I remember my first deal it was a flip I flipped the house and it was just a residential deal. And I remember I made good money, but you know your first deal is as if it’s there to teach you what’s going on. And just the rules, but it’s not there for you to be able to make a lot of money. Everybody feels this way about their first deal, but you managed to somehow jump from 16 a deal as your first deal to what was 61 62 units.
Yes. For the next year, I was looking at triplexes – I found a 10 unit that was mostly vacant about six of the units were vacant and needed rehab. We got a really good deal on it and then I found a five-unit that was vacant. So I was finding these landlords that were just exhausted that’s all.
Ok so let’s focus on that. Let’s focus on the people that are just trying to get into real estate we all know it’s about finding the deal. That’s how you make money. So what would you give as advice to two young investors that are trying to find deals? When you say I found these deals how did you do that.
Well in my case I had a local broker that knew what I was doing because she had done a little bit of it years before, but never had done it in multi-family she would just buy single-family houses and she had been a landlord and decided she didn’t want to be a landlord sold all of her portfolios and bought a hotel. She basically knew that there were still deals out there and she knew that there was finally a buyer around that would do it. You know that was gonna buy these and was gonna fix them up and actually do something with them. So she was bringing me a deal or two. And then when the landlords locally within 30 miles of me started hearing this the ones that were exhausted may occasionally talk to each other their friends they have their own community because these are generally 60 to 80-year-old men and they have their own community. And so as you know these might these portions of their portfolio that they don’t want to deal with that you don’t want to go through the hassle of a whole rehab. They don’t want to deal with contractors and they’re just kind of like the look I’ll take a loss on this. And so that’s how I built my portfolio over the course of a year. And then I got a deal from also an exhausted landlord that was a really good deal and I knew I was pretty well out of money getting close to being out of my own money to be able to just continue to buy up these deals because I refinanced out of as many deals as I could, but the bank was getting a little bit tight on being able to refinance. They wanted you to hold it for two years. And I’m not the type of guy that wants to hold onto something for two years to wait to do something else. I’m the type of guy that wants to go slow down. So high time right. Right. So I had a guy that reached out to me is a software engineer. Name is Rohit Jenga and he reached out to me he asked me cause he was really interested in real estate investing and he had a little bit of money saved and he was interested in partnering with me because he’d heard me on another podcast and I had said no at first that I didn’t need any more partners. And then after I ran into a wall I was like you know what open your mindset Michael and look think that you do have something to bring to the table even though you can’t bring money and maybe he can bring a little money and you guys can do a deal together. So we did and it gave him something like fourteen point nine percent returns and he was excited. Obviously, everybody be excited about that. So he was really excited. He got really good returns. And now all of a sudden I had an investor that was actually asking me if I had more deals.
So he was investing the entire amount or the entire downpayment.
He invested about 60 or 70 percent of the down payment. I had two other small investors that invested 10 percent down each and then I invested 10 percent. Now, what was that? What was the size of that deal? That was an eight-unit deal. It was only about I found it half of an exhaustive landlord off the market so it was I think I only gave like twenty-five grand a door for it and now it’s raised at like thirty-four. So anyway and we’re actually in the process of trying to refinance cash out the investors, but they still get to hold onto their portion of the investment. Right after that so now I’m sitting around after this deal and I’m sitting on about 50 to 60 units at the time period and I start looking around and I’m like because he had mentioned bring in more money my mother because she was getting really good returns and she had a decent amount more money from her savings. My dad passed away in 2015. His family owns and runs this family business and so she had said well I could maybe bring some more money well. I talked her into bringing twice as much money as what she originally wanted to bring and Rohit brought a huge chunk of money so they basically both brought two hundred thousand dollars each because we were buying a sixty-two unit and we raised another one hundred thousand dollars from investors and we bought this 62 unit that we’re always going to raise with half a million. That raised was half a million. So we did a syndication on that 8 percent preferred return and we had a huge value add in there which was there were thirty-nine thousand dollars thirty-nine or forty-two thousand dollars in water bills that we could get the tenants to pay because it was common locally to have tenants pay their own water bill, but we could do nothing expensive significant. Yeah exactly. So we could decrease the expenses significantly plus the units per unit rent was about fifty to seventy-five dollars below market so we could increase the value significantly. So we’re in the process of doing that. And then we basically add about seven hundred fifty thousand dollars in total value to the property and then our plan is to have a two-year exit strategy to either ten thirty-one exchange out of that or try to refinance out of it. And so that’s what put more permanent Fannie Mae debt on it. That’s right.
So I want to ask you a few questions about that one deal specifically because I know as I talked to you before and we discussed the fact that you started from. So I want to talk about that for a minute. Here’s the question that I have. As far as how you got the deals so correct me if I’m wrong, but it sounds like the place that you’re living is that is that a small town or a small community.
The place that I’m living is a small community it’s about halfway between St. Louis and Indianapolis right on the interstate that runs between I 70. So it’s a small community with actually a Good job market in the area. There’s a decent amount of jobs because there’s a pretty thriving oil industry locally. Yeah and so then there are jobs for that. There’s a local company that does about three different states around here and they do right away clearing for the pipelines so there’s a lot of good jobs for young men that just start them out paying you to know 14 to 20 dollars an hour.
That’s so important what you’re saying right now. Why everybody keeps saying to first work your market. Doesn’t matter where you are because you know your market better than anybody else. Exactly. And you know so from what it sounds it looks like you knew the people and that is how you got in touch with the brokers and that is how people got the word for what you’re doing. And then they contacted you and you kept getting more and more deals because of the small community and now you’re a player and people hear about you and they know about you. So they start picking up the phone and call you and wanting to invest with you wanting to sell you deals right.
That’s the game. Yeah exactly. And so then we’re basically doing that and then I’m on a few podcasts here and there because my story is quite interesting. That’s not very common that you go from the guy that was renting his house for four years ago having a side hustle that was splitting firewood and you know exhausting work to have a portfolio that’s worth over three million dollars. So that’s not a common thing. So then I’m in the middle of this sixty-two deal the financing falls through.
And it was the loan it fell through on the day of closing. Oh actually I just had an interview with Joe Fearless on this and I think that comes out soon, but this whole financing topic because it was such a struggle to put the whole entire. And you can hear that story because it’s a twenty-five-minute interview by itself, you can hear that story on Joe fearless. So that fell through and I struggled and I pieced all of it back together and still got it closed with a different lender.
And so you got to extend it closing. And yeah I had to get an extension on the closing date. I did do all of the things that you have to do when you’re just trying to salvage something and we’re talking on your first indication – Yep on my very first syndication Well my first syndication. My other one was a partnership.
You have to go through all this adversity and you manage to pull through and you manage to make it happen. That’s amazing. Yep yep.
So now we’re in the process of doing those value ads and then you know I started to give out my phone number on podcasts and I started talking to people just a lot more regularly just because it’s so interesting. Like we were talking before this about your market because down in your market you have a portfolio that is basically about the same size as mine in gross gross revenue, but your money as opposed to residential or residential housing. And how do you know in your market you know you try to find cash flow, but you have to also assume appreciation and different things.
It’s kind of different because you can make the same money people make in the Midwest from buildings from you know from single-family homes.
Yes. Yeah exactly.
And like you say the sellers are not as sophisticated you know when you talk to a single-family owner they’re not sophisticated you can get a bargain and it’s yes it’s quite easy. Where we talked to a multifamily investor then they’re obviously not living in the property and know what they’re doing.
Yeah, you’re basically looking for in my market a lot of times you’re looking for Mom and Pop owners. I have one of the good friends that are. A married couple that basically we partnered up. They brought the investment dollars we partnered up on a 12 unit that I found off-market in Terre Haute, Indiana which is right near me in a really nice location. And we founded off of a mom and pop owner and he had kept hold of it for about eight or nine years, but with his disability had come through from the military and he was already you know obviously he had all the back pain and shoulder pain. But anyway he’s ready to sell and he got one of my letters from one of my mailing campaigns and he sent me a text message what I thought was kind of odd just getting a text message Yes I do want to sell and I’m like I don’t think he realized because we did take time to make sure that the mailing looked like it was individualized, but I don’t think he realized that I sent out like four hundred of them. And so it’s like I’m sorry I’m confused too is this for me. You thought he was the one who got the letter. I developed a relationship with him and only that eight-unit building that I was talking about that I’d also bought. So this was a twelve unit building. This was a twelve unit building that he had bought back then and he wanted only twenty-five grand a unit for it as well. I already knew from my experience buying that eight-unit building and for twenty five grand a unit that we were gonna get some good returns if I could figure out how to come up with the sixty seventy thousand dollars I needed to get the deal done and sixty or seventy thousand I could probably go to the bank this point and get a lean on one of my businesses, but I’m really not trying to just leverage myself to death. I’d rather bring somebody else an opportunity partner with them on the deal. We have a property management company in place that can take over property management at a very reasonable like 8 percent on those units or 7 percent on those small families and still get great returns. I still wanted the deal. I just knew no matter what I didn’t want to let that kind of deal go away. And so I built a relationship with him and then partnered with Roman and Amy and they brought the money to the deal. I bought the deal and we had good proper management and so we just closed on that last week so that brought us last month and that brought us a hundred thirty-six units. That’s great.
So yes that’s the portfolio right now one hundred thirty-six.
Yep, yep that’s right now. And so right now I’m working on I’m going to tomorrow to look at a twenty-three unit building that is two thirds vacant exhausted landlord and it might be a steal of a deal as well. He’s talking and numbers that are sound and really good at his per-unit price. Actually, it’s ironic.
I lived in the building when I was in college. Yeah. So 12 years ago I rented that building so I thought that was funny.
So I want to ask you another question regarding the first deal the sixty-two units. So yes a lot of young investors and syndicators they’re worried about the value. So you know they worried about getting into the building and doing the renovations and picking up what needs to be done. And so you’ve noticed that there are a lot of expenses that you could reduce and that was your value plan. And so what I want to ask you is as a beginner so you could say somebody who had never done a big deal like that before is a beginner. So as a beginner How did you have the confidence of trusting your value and then knowing that this is what needs to be done in the property and that this would bring you to the place that you want to be?
Maybe I’m overconfident I don’t know. I think you know my degree is in business and I’ve read basically every book I could get my hands on real estate investing I’ve listened to thousands of hours of podcasts when I get into something I really get into it and I really study it. And so I knew you know I knew that if the same thing that I was doing was working on an 8 unit building there was absolutely no reason it wouldn’t work for who underwrote the deal.
Did you do the underwriting?
Yes. Myself and my mother. Oh and that’s special. Yep. Myself and my mother and so we underwrote the deal together. And then I kind of I’ve managed it because she’s actually she enjoys your area. She gets down to Miami for about two or three months in the wintertime and we were closing and it was early spring late winter and she’s in Miami. It’s the closing day. It’s the last day of all the extension that I got. And we’re trying to do a for a close from down there. It was just a whole heck of a fun mess because we finally close the deal from Miami.
I mean I always whenever I close the deal you know I do that from Miami.
So I guess, you know she has a bank account with Regent Bank and I thought you know she has 50. She has 50 thousand sitting in that bank account just because it was one of her expense accounts or whatever. And I thought oh you know what. You have to fax and do a whole bunch of things just walk into a local Regence bank account. Tell me your account number. Tell him you need a little bit of assistance to just get this done. The guy behind the counter called his manager and the manager came out and said Well I don’t care. We’re not doing it we’re not helping you. And so that’s not our policy. We don’t do that. She’s like I’ll pay you a dollar a page I know it’s like one hundred some pages. I’ll pay for you. I don’t care. I don’t want it. She’s Ubering all over town trying to get something that will fax and do this other stuff because the hotel she was at was more not less of a hotel and more of the Air B and B for a month. So she didn’t have access to anything. She didn’t have access to any of those items that she would need to fax or email or any of this stuff. And so finally she gets the job done in the end and gets the paperwork signed and overnighted. And we finally get the deal closed, but that was just one of them. Yeah that was just one of the fun things at the end of the confidence issue I think that I run into that a lot of people call me and I try to mentor everyone. Everyone that asks or try to help people out all the time try and share my time. It actually just comes around to you too because when you do that you talk to these people you work together on stuff you know deals are coming your way. They’ll have deals that they can’t takedown, but they know about and sometimes they’ll have investors that are looking for a good deal and you’ll have a good deal and you’ll find an investor that helps you out there’s more things to it than that because sometimes you’ll get nothing more than just satisfaction and that’ll be that’s just it.
I mean you know why you’re always going to get burned out because I have the same example this guy who’s trying to get into real estate who’s calling you about this deal and I could see that he was trying to wholesale deals and you know as I came in if you’re already wholesaling it then you might as well just do a different thing. And so he was I guess listen I’m new and you know I don’t know things right. So it’s like hey come on up to my office and sit and let’s talk about things and let me teach you a few things and then you know this guy he’s one of my students now. So we’ve been doing I think we’ve done three deals together in the past two months. Completely changed his whole life. It also changed my income, of course, I made good money from that. So my desire to help him and teach him ended up creating some nice income for me you know from deals yes. Exactly. I would never find. And so helping others as always. You know you give what you get back. That’s it. That’s a law that any investor I think is already aware of that. Any serious investor is already aware of that right now because you know it’s just the way things are. It’s like karma is the way the world is working.
No, I totally understand that. You know it’s just that’s the way the world works. I think if you give it you can’t you know you’ll get the satisfaction you’ll get deals you’ll get it if you give your time and effort and you know because at this point it’s very possible for me to just step away and say you know I have enough money to pay my bills. Well, I can kind of live this you know semi-retired life come in and check on the people at the property management company that they’re actually filling units and doing their job, but I don’t really have to because they do a great job at that. You know and I could be like which I do you know I do quite a bit of vacation. I probably go on three or four of them this year, but which you know one-week vacations
It’s a privilege that you deserve to get and also I just took a vacation in L.A. and I went there for three weeks. You know I just felt a little bit overwhelmed and when I got back I was so clear. You know and I was so motivated to do things you know things that I could not complete before all of a sudden it’s a piece of cake.
Yeah. Because you’re basically your distressing from everything and stepping away, but I enjoy the grind. I keep coming into my office every single morning. I’ve got a list and right now I’m working with a life coach on organizing my life a little bit more, my time and trying to pack in what I’m doing. I’m curious about that.
So what exactly do you mean organizing your time a little more so? Right now I feel like there are times where I could pack everything I get done and 10 hours into five or six hours I feel like if I utilize my time better in certain areas and if I just went for only my high-performance hours and tried to organize so right now I’m working with her and she is she started out as a health coach and she started that business and she did really well with it and then she moved on to doing a little bit of life coaching because she’s a high performer as well and she only wants to really work with high performers and she’s kinda getting tired of being the health coach because sometimes you’re not working with high performers.
And so she was offered her services after I pay for the health coaching stuff and started working on that she offered the life coaching for free because she’d been studying that for quite a while and so she wanted to see if she could take me on and help me out. So right now we’re working on a schedule so I can see if I can’t pack 10 hours of work into six hours of really effective high-end time and then be able to spend a little bit more time with my family.
Yeah obviously. So as you’re saying it’s always important to get better and work on self-improvement and I’m going to ask a question since you said you mentioned the fact that you’re reading a lot and you’re listening to a lot of podcasts so I bet you can give us a recommendation for the book that everybody listening to this show must-read. So what’s the book that you recommend the most to our listeners?
So if you’re a very beginner and you need the confidence to step out into know everything about everything from the small stuff into you know basic mid-sized stuff because generally if you’re a beginner you’re not going to step in and buy a 60 unit even if you have the money you’re going to be too scared or you’re gonna make a mistake. Brandon Turner did a wonderful job – His earlier book called The Complete Guide to Real Estate Investing. And I really enjoy that book because he explains his roles in single-family houses and multifamily. He explains a whole list and how to do it. Who to go to for financing. How to do the burn method which is by rehabbing refinance and get your money out. So he does a great job on that book and then he also does a follow-up book which is basically the complete guide to like I think property management or something like that. Managing your real estate in a real estate investment manager which my knowledge from just that book made me feel like a real king because Rich Dad Poor Dad does a great job with your mindset and Richest Man in Babylon really does a good job with your mindset.
I highly recommend both of those yes Rich Dad Poor Dad is the first business book that I’ve read. I think I read it when I was 15 or 16. It was a book that changed my life forever. It means that I still do everything that I am you know right now is because of that book.
So I think reading books is so important and it’s something that I’ve had to constantly improve because everybody around you is a possible partner, but you need to know what they know you need to be able to be on top of everything going on. I love that Marcus Miller lets out a bunch of good information on their website about markets that you can go to. What are things selling for? Watching the trends. And then I also spend quite a bit of time listening to podcasts that talk a lot about economics. I spend a lot of time which isn’t even in the real estate deal I spend a lot of time listening to podcasts on economics trying to understand and see if I can somewhat predict that case.
So that’s how he is today. Exactly. No yes, the fiat money. Basically, you’re telling me it’s probably going to be talking about the fiat money system monetary system. Yeah, I would love to read that thank you for the book recommendation of course. Michael, I just wanted to ask you a couple of questions because I love talking to people about their markets as well. You said you were down in South Florida. That’s right. How did you get started?
So I got started I was actually in the retail business and I managed to save money together with my brother who’s also my business partner and we always had a dream of becoming real estate investors and so we figured you know we were doing good money in retail, but we lived in Minnesota. So the cold wasn’t for us I mean I love Minnesota.
It was like we said OK that’s it we’re Israeli. So I mean the cold wasn’t for us. It’s just you know not good for our blood I guess you know growing up in Israel you were so used to the heat. So we moved to Miami. Also, this is a big community of Israel people here and Jewish people and so we figured you know it’s where we want to live. And we didn’t think back then, Miami was the right market for us as far as mystical, but we said we’re not going to compromise about you know our lifestyle because what’s the point. What’s the point of making a lot of money if you’re not enjoying your life. So exactly yeah. So we moved here to Miami and then we were looking for. We were looking for a residential deal we were looking for a house to flip because we had enough money to buy in cash. So we went for this one property and then we found it and we flipped it and it took us about I would say six months to complete the renovations and sell the property and we made a decent profit I say I think it was sixty-three thousand and so we made a decent profit, but then during that process we were exposed to real estate wholesale and we figured that Miami and the entire region of South Florida was at its peak when we were there. So we came right on time and so properties were still appreciating a great deal. And so we managed to two also properties and you know us in our minds that we thought that when you host a property that you’re going to take a fee of five or ten thousand, but literally we know that you could make fifty thousand sixty thousand if you’re into it. Absolutely. Yeah.
We stumbled upon this one particular deal that we got under contract for I think it was 80000. We had it under contract for eighty thousand and we were able to sell it for one hundred and twenty-five thousand and that’s in two weeks’ time. So we made forty five thousand in two weeks and then we started comparing you know that with the flip that we made a little bit more, but it took six months and we had to put all the money down and so we were thinking – Well wait let’s change the direction here let’s change our plans. Yeah. And so and so we changed our direction from doing flips into risk at wholesale and then things happened really fast. It’s just it all exploded one day. So you know I remember this particular day that I was realizing that I was making good money you know really good money for the first time in my life. I was pretty young when that happened. So I couldn’t you know really cope with it because mentally when you make a lot of money and you’re a very young family then something happens to your mental state your psyche, yeah you change. And so then you got to rebuild yourself and that’s the position that I was at the time. And so from that point on we decided that we want to grow and we want to do things are a little bit bigger. And I remember that one time that I drove on the highway on I 95 and I’ve seen people doing you know renovating buildings you know left and right. I was like Well you’re good enough you’re able to do that. And so that’s how I got into commercial real estate. And right now we are actually closing on a deal in Hollywood, Florida. It’s on land and we bought it for $275,000. Yes. That particular deal is you could develop it, it’s zoned for multifamily and the owner didn’t care. He just sold it to us for a little bit under retail. It’s like 320 and so we bought it for two seventy-five and we already have offers for like 550. It’s like two. That’s awesome. Yeah. So we’re thinking about developing it and doing it ourselves or you know wholesaling it because we’re just thinking about maybe wholesaling commercial properties or developing and getting into you know syndicate a few deals so that’s the way to do it.
Where did that confidence come from for you to step into that from just you know all selling residential to step into because that’s a big jump? That’s a big jump stepping from the small individual house to wholesaling you know a large commercial space.
Well, that’s a great question. First of all, you know I’m in a position where I hold many properties so I have passive income that comes in my way every month. So I’m not afraid because even if I’m going to make a mistake and that’s what people don’t understand when you’re into real estate at the beginning it’s so difficult, but when you’re already making good money. There is a confidence boost because you feel like you’re invincible because you’re making money passively every month. You’re whole selling properties. Also every month you have acquisition managers people that that take care of your leads and go to go to your meetings so your time is a little bit freer. And then you have contractors working on your flips. So you’re gonna be making good money one way or another. Right. You asked me about confidence. There is a boost in confidence because of right. OK, I’m going to buy that deal for $275,000. If I’m going to make it then and I could develop it and sell it for four million or I could assign it for four hundreds of thousands more then I would definitely learn something and I’ll definitely get into a different arena.
Right. And so I guess that you could do knowing that it’s okay that even if you can’t make it and even if you lose that money anyway. I mean what a losing time my money when I buy a prize you can’t lose product losing time.
Yeah, but even if it’s just kind of that attitude that grabs you and it’s the same thing for me it’s that attitude that grabs you and says look even when I just started my attitude was OK I already have this side hustle and already have my job so I’m making seventy-five grand a year. I can make all I can pay all my bills even if I flop on this real estate thing which I didn’t think that I would. I still felt like I know the property I know the property’s worth more than what I’m buying it for. So it’s really hard to lose on a hard asset. It’s not like throwing your money into Google and then all of a sudden their ad revenue drops and you have no control over anything the ad revenue drops or something like that and you suddenly lose 20 percent of the value of your money. It’s not very rarely anything like that happened because you have the knowledge and control the asset.
All of that of course and I’m going to finish our amazing interview which is really one of my favorites so far by saying that you can’t really lose because even if you lose money is the way that I see it right now as a successful investor is fake. But knowledge is not fake. And even if you’re going to lose money then that is your tuition.
You learn something and when you learn something that is going to be there forever until the last breath you’re going to remember and know and have possessed that knowledge that could be utilized into the next deal. So I don’t think you could ever lose money or you could ever lose you could lose money, but you could never lose when you’re getting into real estate. I don’t think that’s exactly what it has been wonderful talking to you Michael really I had a great time and I’m sure we’re going to be in touch you know and talk about other things in the future. Absolutely. Thank you for coming into the show and I really appreciate it because it’s something that you know I’m grateful to be able to talk to people and hear their stories. I know you know we’re investors and our time is very valuable. I want to thank you for dedicating the time to talk to us today. Really.
Absolutely. Thank you very much.
All right Michael. So you have a great day.
Thanks for listening to the real estate investing podcast with Don and Eden. Stay tuned for more episodes. Till next time.
