Ep #556 – MFRS – Financial Freedom through Multifamily Real Estate
Warrior Chris Grant started flipping single family homes and quickly realized that flipping was like a J.O.B. In 2019 Chris moved on to multifamily real estate and he’s not looking back! Here are some of the topics we covered:
- Planning for worst case scenario
- Direct to seller campaigns
- Non-contiguous property
- How mindset helps through the trials
- Passion and Drive
- Associating passion with outcome
- Build your own dreams or someone else’s
- Pay for speed
Full Transcript Below
Rod: Welcome back to Multifamily Rock Stars. So this is where we interview people that are crushing it in this business. And we show you guys the inside scoop into how multifamily investors are creating incredible success in their businesses and in their lives. And as always I’ve got my co-host who’s the director of my massive action team for my Warrior Mentorship Program, Mark Nagy on the call. Mark, what’s up bro?
Mark: Hey Rod, not too much, just excited for our call. I know our guest today was just telling us about a little bit of a unique deal that he did which you know we’ll have to get into. I’ll let you introduce him but I’m excited to get into it
Rod: Yeah so we’ve got Chris Grant with us today and Chris, he’s in three syndications of 453 units and I know those are as an LP but he just closed on a 24 unit which we’re going to dig down on and I don’t know, well anyway, before I get into questions welcome to the show brother
Chris: Hey thanks Rod and Mark! Thanks for having me on the show I really appreciate it kind of share my story
Rod: Sure. So, when did you join the Warrior Program? You’ll have to refresh my memory
Chris: Yeah so we actually joined the warrior program not last June but the June before. So June 2019. So we went to the live event and in Denver and
Rod: It was the Denver event okay awesome and that’s where I had my mom there my brothers brought my mom from assisted living and she’s in a wheelchair and she was in the front row and I’m behind the curtain crying like a little baby because she’s the reason I got into the business and I had to pull myself together to come on stage. That was quite an event that was a really important special event for me well. Awesome awesome awesome so why don’t you take a minute and talk about your background Chris and how you got into this business and you know bring us up to date if you would
Chris: Yeah I’d love to. So, I actually got started in real estate buying investment real estate back in 2011 actually. We bought our first single-family house. It was a foreclosure property and this is when we lived up in Washington state and we bought it solely for a rental property and then later that year we actually converted a house that we were living into and into a rental property you know we’ve always been interested in real estate. I actually grew up living in apartments. My mom was an on-site property manager, my dad was actually a maintenance supervisor, so kind of a unique perspective of kind of living in them and then you know being around my mom and dad who are actually involved in the business. So in 2011 we always knew that we wanted to buy real estate so we started with buying a single family property and then converting our primary into a single family property and then we had our son so kind of use that. We put a pause on the rental property because I also worked a W-2 job. I was working as a manufacturing manager for an aerospace company up in Washington state. So, after he had my son we put a pause in the real estate which I kind of regret doing I wish would have kind of kept chugging along at it but you know as the years went on we had two more kids I had my two daughters over the course of the next few years then we decided you know we really want to take our real estate investing to the next level and kind of get out of the W-2 job was working quite a few hours, a lot of stress and you know it wasn’t really the passion you know the career that I wanted to be in long term and I knew that. So at the beginning of 2015, me and my wife sat down and we said, actually we went to a seminar on flipping houses we got all juiced and inspired there and I said you know what I want to get back into rental properties and I want to get enough income to quit my day job so we can kind of be free to do what we want to do. So we decided at the beginning of 2015 that that was going to be the year we’re going to do that. So kind of like you mentioned Rod it’s kind of one of those things where when you go to do something when you tell people what you’re going to do right it kind of puts it out there and you you kind of feel I don’t want to say the pressure but you you feel motivated
Rod: Some accountability there
Chris: Yeah exactly so yeah so in that situation you know I was the job was great right I was making in the six figures, the benefits were awesome you know healthcare, everything that you’d want in a job you know 401k. So you know naturally we told our friends and our family and they the first thing they thought was what are you doing? You sure you want to do that? That’s crazy, you have kids. I have actually had one person say you know you have a family right what are you going to do about your kids? It’s like it was just like a death sentence but you know that was just motivating right we knew what we wanted to do and we had a plan so through the course of that year while working my W-2 job we started flipping houses. We held some, we sold some and then started building up a rental portfolio while we did that and then also extra cash to kind of supplement purchasing rental properties. And at the end of that year I quit my W-2 job you know there’s obviously a lot in between that that went on but yeah I went down to the the very end of the year and you know since then I’ve been kind of focusing on you know real estate investing and you know either flipping capacity or rental capacity although we did stop flipping houses late 2017 because believe it or not I thought the market was too hot back then and you know obviously if I would have stuck with it you know would have been a better place too but yeah we’re so happy with the decision you know just having that financial freedom to do what you want spend time with our kids you know go to their shows at their schools without having to request time off that’s during the day. It’s just priceless and I wouldn’t go back to it
Rod: Yeah so why did you join the Warrior Program?
Chris: Yeah that’s a great question so like I said, I quit that job in 2016 and actually joined and went to the first warriors event in 2019 over that period of time you know I was just managing my single family and duplex and small multi portfolio in Washington you know we got sidetracked a few times with some fitness businesses and a few other entrepreneurial things but you know we kind of knew we really wanted to be in the real estate and the next step was to scale up right. So before we came to your event Rod you know we knew we wanted to get coaching. We wanted to get help to take that next step because you know we’re adding more zeros to the projects we’re doing right so one mistake and you know it’s you know
Rod: It can be it could be the first and the last one right
Chris: Yeah it could be the first and the last one right so you know coaching is just one of those things to where it’s kind of preventative right you know if you can avoid making one of those mistakes you know it’s going to be less costly than it is going to be you know and you know
Rod: Sure, paying for the coaching yeah it’s usually a multiple but yeah okay
Chris: Yeah so you know we we went to a few different events we actually talked to a few different coaches but you know with your group what we really liked is you and Robert really have that kind of the dynamic duo right and your coaching program you know it doesn’t just focus on just the real estate, focuses on the mindset which like you said is you know over 80 percent of you know actually getting things done in the business. So we really like that aspect because it kind of combined the high performance coaching along with the real estate coaching. So yeah we, in 2019 went to your denver boot camp as we mentioned and you know we decided your team and was the best fit and and honestly when we went to your boot camp not just your team but just the atmosphere of people that were there, attendees, is amazing
Rod: Right, it’s great energy yeah it’s great energy at those events even on the live stream events we get that kind of energy it’s amazing and just really a blessing. Okay and so let’s talk about well let me let me circle back to something you said because it was really important. You got a lot of dumbfounded looks and and and reactions when you said you were going to quit your 100k plus a year job with incredible benefits. They’re like what about your kids they’re going to be on the street starving. I mean you know one of the things I want to mention is and and you guys may have heard me say it before if so forgive me but but the bottom line is, you want to be very very careful who you allow to influence you because people out of their own fear or their own you know fear of failure, fear of rejection, fear of losing you because you’re growing and advancing or it could even be jealousy in some cases. There’s so many motivations for people to try to derail other people’s dreams you’ve got to be and and very often it’s family too I don’t know if it was in your case but you know and I tell people love your family but choose your peers choose who you allow to motivate you and I think you saw that you know that’s one of the incredible benefits of being in a group like ours is that motivation that everybody wants more it’s just it’s like this own little ecosystem that builds on itself everybody helping each other, motivating each other, growing together, and so you want to be around people that want more out of life and it’s so important because who you hang out with is who you become. And so you know I just wanted to draw attention to that but now let’s talk about that 24 unit you just did
Chris: Yeah and just before we go to that I’ll just touch on real quick Rod what you mentioned on the fear you know a lot of it was just fear and you know they were just looking out for you know the what if for us and you know the biggest factor for us quitting our job and other major moves that we’ve made in our life are you know what’s the worst case scenario? I think when you take a step back and you say, okay, I’m going to quit this job, I’ve been a great employee here, I love working here and I’ve done a lot for this company. I know I’m a hard worker so the worst case scenario is I go out for this year and I’m not able to get it done. They’d be more than happy to have me back or another company would and then I have rental properties plus I’m back into W2. So if you really start thinking about the worst case scenario most things in life, it’s really not that bad right
Rod: Yeah if you can handle the worst case then it’s all uphill from there and that’s how I look at things as well you know when things were crashing back in February, March with covet I’m like okay babe we could be you know we could we’ll have to see could we you know that may not be teaching anymore it might just be buying multifamily and you know and then we look at worst case and all we did the same thing you know everybody goes through those we’ll talk about let’s talk about that deal. So talk about that if you give us a little background
Chris: Yeah this is a unique deal. So, it’s actually the whole project itself was 28 units, so this is a direct to seller. So, we actually we do have broken relationships out here in the phoenix market you know we reach out to them periodically but we found was a lot of the deals we were getting for the return criteria that we were looking for and that we wanted to provide to investors is you know we’re seeing most of the deals were you know 20% to even 30% over the price that would make sense for us to to do a deal and you know offer the type of returns that we expect for ourselves and for our investors right. So you know the next step what we started to do is you know how can we get to the sellers directly and negotiate with them and kind of try to find a deal that you know may fit our criteria so we get launched a direct to seller campaign. We were doing things from cold calling, texting, emailing, just you know directly reaching out to the sellers to try to see if we can drum up some interest we reached out to over 300 sellers in the in the Phoenix market and a lot of no’s, we got a ton of no’s right which was expected. But you know we had some people who said oh maybe maybe we’ll be interested in the future but not right now when you added them to a follow-up. In this particular deal, it was all about timing right. I think it was the third or fourth time we had reached out to them via text or a phone call and we finally got a response right. And it actually wasn’t a response directly from the seller it was from their property manager. She said hey you know it’s this might actually be good timing right now the seller they either need to refinance or they need to sell the property so I think you might be reaching out at a good time so once you work up some numbers and you know tell us where you think you could be and I’ll run that by the seller and see if it’s something that would fit. So you know she was very vague with you know the profit and loss statements it’s a kind of a mom-and-pop show. So there wasn’t like fantastic financials you’d get from a real property manager. So we came up with the number. We presented that to the seller and after a little bit of negotiations we got a assigned LOI and we were super excited right it was our first deal. And actually believe it or not Rod, me and my wife were driving through we recently moved to Arizona we were driving through kind of a dream neighborhood of ours kind of visualizing it and that’s actually when we got the phone call that they were going to accept our LOI so it was just that just by chance so yeah, so we got the LOI sign and then there was a lot of time between the LOI and having them sign the contract what we found was we were a little less prepared with our transaction attorney and the amount of time that it would take to kind of go back and forth with revisions. So yeah we got the transaction attorney involved. They started drafting the contract and we sent it over to the broker and they just had lots of questions and they were very slow through the process to respond to questions that we had and then so there’s probably four or five revisions of the PSA before we actually got to the point where they’re about to sign the PSA. So through that step right went like literally the day before they were supposed to sign the purchase and sale agreement, they received another verbal offer from a buyer and you know like because we knew this was a great deal right. So after all that work we spent quite a bit you know with the the attorney to get everything just right you know that favored you know that was in our favor for the contract and then we just told her, hey you know we put so much time into this what do we need to do to to get this deal done? I know you can’t tell me what the other offer is right but I know you’ve committed a lot of time and we’ve committed a lot of time and we’d like to move forward with this deal and after a little bit of negotiating we you know we went up in our purchase price because we want you know to take it to the next step and the returns were still great right so we went to the due diligence and then at that point we started doing our due diligence walks went
Rod: So you were under contract? You got it under contract?
Chris: Correct. Yeah we got it actually signed up and we’re under contract so that felt good right you know doing that we’d have to worry about any other offers coming in at that point. So this is a unique deal because it’s actually a series of four plexes that are make up these 28 units right but there’s one of them that’s not contiguous with the six parcels right. So there’s six buildings which make up 24 units that are contiguous and then there’s one that’s non-contiguous. Well that got a little tricky with the financing right because some lenders don’t like when you have non-contiguous parcels. So that was kind of a hiccup we had when we were kind of going through our financing options kind of concurrently with our due diligence and that’s when we decided that we were going to break that one four-plex that wasn’t continuous away from the main deal and deal with that separately right. So we went through our due diligence and then when we got to finished we knew that we had gone up about 175,000 in our purchase price from where we were originally at and we really wanted to get back to closer to where we were and that was kind of part of our strategy going into it right get into the property, maybe it’s in better, shape maybe it’s in worse shape, and we can kind of take it from that step yeah it’s the due diligence cost was very minimal at that point to kind of take it to the next step. So we renegotiated and we, of the 175,000 that we went up we got them to come back down about 145,000. So net we were very close to where we originally were and we’re very happy with that
Rod: Nice, nice now what did you actually never mind never mind. You answered my question
Mark: Obviously, a lot of few hiccups in that deal or speed bumps if you will it sounds like and then I know when I saw your Facebook post for this win for this deal I know you mentioned that you know mindset was something that was super important in the entire process. I mean tell the listeners here about how mindset really helped you through that entire deal or even just leading up to that deal
Chris: Yeah I think yeah that’s a good point the mindset piece was so important especially because this was such a long kind of drawn out deal. I think it was 159 days between the time we got the signed LOI to the time we closed it, so it was lots of ups and downs from the lending and on. So the mindset was so important because it was so long and drawn out right we were thinking about it the entire time on all the what if what could happen or where could we do better or you know what if this pops up especially when we were working with the lender. So it was just, and then when it came to raising the capital frankly because you know this was our first time raising capital on a deal. So we were like okay, it’s different when you’re talking about a deal right you’re like oh yeah I think I can raise x amount of dollars for this deal but then it’s like okay now we have you know $130,000 of essentially hard earnest money you know and then see so you start kind of you know second guessing yourself and you start thinking, oh can I really do this? But you know we kind of kept on taking a step back and it was kind of it goes back to like what’s the worst case scenario right. We knew when our money was going hard. We knew when our deadlines were and kind of we had a graduated steps on what our risk was taking up as we approached each step. So that was one thing that kind of calmed us down a little bit knowing kind of where we were in the process and then the next step is just talking to other people you know people in the warriors group there’s lots of people we got support from in there whether it’s you know process driven which is that’s what we love about the group is everyone in there is open. No one’s you know trying to hide secrets or just think about themselves. We’re able to reach out to a lot of experienced lawyers in there who have done deals and say, hey, what would you do in this situation or you know we’re running into this issue with the lender, is this something typical that you see on your previous transactions and we got so much support from various warriors in the group and we actually we partnered with some of the lawyers in the group and we actually had a few of our friends in there who invested in the deal. So, I think it’s just kind of who you surround yourself with and being able to open up and reach out to people for support
Rod: So you partnered with some warriors and you had warriors invest. He has a tremendous amount of money in the group and most of the 40,000 plus doors that have been done in the three and a half years since I’ve been teaching have been done between warriors. So it’s really encouraging. By the way guys, if you’re interested in the warrior program text the word “crush” to 72345 so we can help you crush it in this business like we’re helping Chris and Chelsea. So again text “crush” to 72345 and we’d love to you know chat with you see if it’s a fit you know we it’s it’s an application process we’ll see if you’re a fit and you can see if we’re a fit. So anyway, so Chris, you know what suggestions would you have for people that are just starting out thinking about this business, what suggestions would you have for them knowing what you know now?
Chris: You know I’ll go with the kind of the blanket response that you get a lot is you know start sooner right started sooner I wish you know when I decided to do single family we decided to just scale up from that point right you know instead of taking a pause in late 2017 because the flipping market was too hot and just managing my portfolio which would have taken the step to go into the multifamily at that point instead of waiting until 2019. And then kind of secondly which I kind of touched on earlier is the mindset part right. When you run into an issue or something you want to do, you know it’s obviously not it’s natural to kind of start thinking about like the worst case scenario or oh I can’t do that because you know this might happen. I can’t quit my job because I’m not going to have health insurance. That was kind of the main thing that popped up everyone says, well if I quit my job I’m not going to have health insurance well health insurance is just an expense right, something you account for. You start coming up with solutions instead of excuses I guess and kind of changing your mindset. I think that’s the biggest thing is if you think about the worst case scenario and then come up with solutions to them you, really there’s really nothing you can’t do
Mark: Well a golden nugget that I just want to point out there not just on the mindset but the mindset of having other people around you you know even if it’s not with our group or the warrior group, people should be surrounding themselves by those types of people because think about if you were going into that deal on your own and you ran across those hurdles and you didn’t have other people around you to make you feel confident and have that right mindset. I talk with people every single week that go through that process and it breaks them right then and there and they don’t end up closing on the deal because they just don’t have that confidence and the people around him. And so you know just surrounding yourself with the right people can be a big part of that mindset as well. And so I love that you kind of that you mentioned both of those but let me ask you this here Chris, what do you think is a characteristic that every single leader or every single multifamily investor should have in this business here?
Chris: I would say like passion and drive right. You really got to love it. Like, I know Rod says this you gotta love it or learn to love it or it’s not the business for you but being passionate about it you know that goes with anything you do in life right being passionate about it and loving what you do. That way when you’re talking to people about what you do you’re not trying to sell them on it. You’re you’re really just talking from a place of loving it right
Rod: It’s so freaking important yeah it’s so so important yeah
Chris: And that goes for both teams and then kind of just rallying people around you right and then also I would say detail, attention to detail is so important especially with the multifamily there’s so many different moving pieces. I think being detailed and passionate and then you know I think those are great characteristics for a leader
Rod: Yeah just to, just hold on one sec Mark, just to circle back, just to circle back to what you just said and and this is what I do say at my boot camps is, if you don’t love real estate now, then associate pleasure with it you know like equate it to hunting for buried treasure is one example I use or whatever and then if you can’t learn to love it, then for god’s sakes go do something else. Life is too short because if you love it then you’re inspired by it and if you’re inspired by it like you said Chris you’re going to be passionate about it and people feel that. You don’t have to sell them because they can tell you’re so ingrained you’re so congruent with what you’re saying that there’s no sale involved. You’re going to influence them by your passion. Sorry Mark, go ahead and ask your question
Mark: No, no, I mean that pretty much gave the answer I was just going to say for people listening right now that they might be thinking well you know Rod, Chris, if I haven’t done any multi-family deals or real estate, how do I know if I’m passionate about it? Rod, you nailed it right on the head there. Associate it with what you are passionate about whether you know it’s freedom, traveling, your kids, maybe you want to be a race car driver who knows what it is right all kinds of different things and so associating that in your head I think was really the answer I was looking for there. Let’s get into the other side here Chris. What do you think is the most stressful situation that you faced in your business and maybe it’s in that deal? Maybe it’s something else?
Chris: Yeah I would say this deal was probably one of the most stressful things especially in the multifamily side of things just because of all the aspects that went into it you know like I said it started at 28 units we broke it into two transactions
Rod: By the way, you didn’t talk about what you did with that other four plex. Could you bring that up please because I’d love to hear it because you didn’t say it publicly here
Chris: Yeah so we got pretty creative we split the contract and we actually ended up syndicating the 24 units and closing on that with our investors and then the separate four units we closed on ourselves and then we turned around and reached out to some people in the Phoenix market and we actually have it under contract to sell it. So yeah we should make you know about a 50,000 wholesale fee on that essentially
Rod: Boom! It’s actually a flip because you bought it but yeah but if you’re not doing anything to it it’s effectively a very short-term quick easy flip. Love it man. Love it. Love it. Love it. And so, and guys you know and this is one of things I teach as well as you get into this business, you’re problem solvers and you put on your problem solver hat and that’s what you did here Chris. I mean you you you listened really well and you did what you had to do to make this thing happen and you know some people might have walked away from that deal because they couldn’t finance that non-continuous fourplex so you know I love it so so let me ask you this as as and we just got a couple more questions but what, for number one, what’s your definition of success Chris?
Chris: My definition is success I would say just
Rod: I didn’t leave you I didn’t give you a warning on this one that’s all right but yeah I know you can you can you got it so
Chris: Yeah I think just enjoying what you’re doing in your life I mean
Rod: Good answer
Chris: With your family and your health I don’t think success is always about just the money right like I said when I quit my W2 job, I actually made less money but I felt more fulfilled right because you know I was able to get you know get a hold of my health better. I was able to spend more time with my family and then you know do things that I’m passionate about not just do things that I have to do to make enough money to live right. So I think success is different from for everybody but you know I think just feeling fulfilled
Rod: Oh great answer brother, great answer. What’s a favorite quote or maybe something you’ve got on your wall or something that you circle back to, what’s a favorite quote?
Chris: Yeah I think it would be I actually talked about this with Chelsea earlier as the one that says, if you can’t, if you don’t build your own dreams, someone else will hire you to build theirs.
Rod: Right right right.
Chris: I love that one
Rod: Yeah do you have anything else Mark?
Mark: No, let’s just end it with this Chris. If you could get on TV right now and just give everybody in the world a quick 15 second piece of advice or message, what would it be
Chris: I would say if you want something go after it. Don’t make excuses on why you can’t do it. Come up with solutions on how you can do it and then you know I think Rod says, pay for speed right. So whether that’s coaching or different books that you’re reading and educating yourself but yeah just you know get coaching or you know help yourself out some sort of self-help and then don’t make excuses and just do it
Rod: Great answer brother, great answer. It was great to see you my friend. Please give your wife a hug for me and hopefully we’ll get to see each other in person again soon when this world opens up. But thanks for adding incredible value today Chris
Chris: Awesome. Thanks for having me on
Mark: Thanks Chris.