Assumable HUD 223(f) Multifamily Loans

Owen Li Podcast Summary

Why an Assumable HUD 223(f) Multifamily Loan Wins in 2025

Owen Li’s story speaks directly to serious investors: a Harvard Ph.D. who moved from a W-2 career and early flips into $90M AUM by prioritizing durable, accretive debt. The centerpiece is his use of an assumable HUD 223(f) multifamily loan—fixed for decades and transferred at 2.45%—to stabilize income and reduce refinance risk. For wealthy professionals and business owners seeking predictable cash flow, this approach pairs conservative underwriting with long-term debt structure that can support indefinite holds.

Case Study: 133 Units in Hattiesburg, MS with Owen Li

Li and his partners acquired a 133-unit asset for $9.2M after the seller invested roughly $4M in upgrades, yielding unusually low maintenance needs for a 1970s property. The assumable HUD 223(f) multifamily loan was the force multiplier: a fixed 2.45% rate with about 30 years remaining removed the biggest variable in today’s market. With in-place income around $1.3M and sub-$1,000 rents, the team is executing sensible value levers, including RUBS and modest rent growth, to drive NOI without relying on aggressive projections.

From Immigrant Beginnings to Institutional-Grade Execution

Owen Li arrived in the U.S. with debt, earned a Harvard doctorate, and spent 12 years in a W-2 role before scaling from single-family flips and small multis to large multifamily. Those early projects built a transparent track record and investor base, enabling him to raise $4.45M of equity quickly when the HUD loan assumption was green-lit. Joining Rod’s Warrior Group in late 2024 expanded his partnership bench, tightened KPIs, and accelerated deal flow without adding unnecessary operational complexity.

Operational Discipline That Protects Returns

The asset’s efficiency stems from tight weekly review and clear communication with local management. Li focuses on practical, repeatable metrics that reveal performance early and guide action rather than anecdotes or vanity numbers. A consistent KPI cadence keeps the 133-unit deal on track while minimizing time spent.

• Core KPIs he watches: lease expirations and renewals, loss-to-lease versus market, delinquency trends, work-order aging, and occupancy velocity.

• Simple value levers: RUBS of about $50 per unit and organic rent increases toward the $900–$950 range, which can translate into a meaningful value lift at a mid-single-digit cap rate.

How to Apply This Strategy as a Busy Professional

If you’re a high-earner looking to diversify, the key is to target stabilized assets with assumable HUD 223(f) multifamily loans or similarly durable fixed debt. Build conservative models that assume higher operating costs for insurance, taxes, and payroll. Use communities like Rod’s Warrior Group to source partners, compare underwriting, and refine your KPI dashboard. When investor expectations and hold period preferences differ, great debt provides flexibility—operators can facilitate secondary transfers or buyouts instead of refinancing into worse terms.

Should You Still Be Buying Multifamily Now?

Owen Li’s perspective is clear: opportunity is abundant if you buy right and secure stable debt. Distress from floating-rate maturities, DSCR constraints, and expense inflation is pushing motivated sellers to the table. An assumable HUD 223(f) multifamily loan can turn a good deal into an exceptional one by locking in cash flow and limiting downside from rate volatility. The goal is not to time the market perfectly but to structure the capital stack so your plan works across cycles.

If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.

Owen Li is a first-generation immigrant who came to the U.S. with $6,000 in debt and earned a Ph.D. from Harvard. After 12 years in a W-2 role, he started investing in real estate with a $32K house and now manages $90 million in assets, including 600+ multifamily units, 900+ self-storage units, and 205 acres of land. He joined Rod’s Warrior Group in November 2024 and closed a 133-unit deal in Hattiesburg, MS the following month for $9.2 million, assuming a $5.75 million HUD loan at 2.45% and raising $4.45 million in equity. Based in Chicago with his wife and three kids, real estate has given his family financial freedom and educational choices.

Frequently Asked Questions About Assumable HUD 223(f) Multifamily Loans

What is an assumable HUD 223(f) multifamily loan?

An assumable HUD 223(f) multifamily loan is a federally insured mortgage for stabilized apartment properties that allows a new buyer to take over the seller’s existing loan. Because these loans are long-term (up to 35 years) and fixed-rate, assuming them can give investors access to below-market interest rates that may no longer be available in the market.

Why are assumable HUD 223(f) loans attractive to multifamily investors in 2025?

In today’s high-interest-rate environment, assumable HUD 223(f) loans provide rare stability. Investors can lock in ultra-low debt service costs, avoid the risk of refinancing, and create better cash flow predictability. With many properties bought between 2019–2021 at historically low rates, assuming these loans often creates immediate competitive advantage.

Who qualifies to assume a HUD 223(f) multifamily loan?

Qualifications are strict. HUD requires that the buyer be an experienced operator with financial strength, a strong track record, and a qualified management team. Buyers must also complete HUD’s approval process, which can take several months, including financial and operational due diligence.

What are the main benefits of an assumable HUD 223(f) loan?

• Fixed interest rates for up to 35 years.

• Long amortization periods that improve cash flow.

• Non-recourse structure, limiting personal liability.

• The ability to bypass today’s higher-rate lending environment by stepping into legacy debt.

Are there challenges when assuming a HUD 223(f) loan?

Yes. The approval process can be time-consuming, often lasting six to nine months or longer. Ongoing reporting requirements can also be detailed, similar to Fannie Mae or Freddie Mac loans. Additionally, some deals fall apart if capital raising timelines outpace HUD’s slow approval cycle.

How do assumable HUD 223(f) loans impact value-add strategies?

Because these loans provide predictable debt service, operators can safely implement value-add improvements like renovations, RUBS (ratio utility billing), and rent increases without the risk of sudden refinancing challenges. Even modest NOI growth can translate into millions in value when paired with such stable financing.

Is now a good time to pursue deals with assumable HUD 223(f) loans?

Yes. Many owners who financed deals at historically low rates are being forced to sell due to operational or partnership issues. For buyers, stepping into a HUD 223(f) loan means securing low fixed debt in a market where new financing often comes with much higher costs

Here’s some of the topics we covered with Owen Li:

• From Immigrant Struggles to Earning a Harvard PhD
• Why Multifamily Beats Burnout from Labor-Intensive Startups
• How Buying Foreclosures and Fourplexes Built Owen’s Foundation
• Passive Investing vs. Going All In on Multifamily
• Investing in Other People’s Projects Vs. Multifamily
• Why Scaling in Multifamily Is a Total Game-Changer
• Build Trust Fast by Building a Proven Track Record
• Raising 4.45 Million Dollars With His Team
• Should You Still Be Buying Multifamily Right Now?
• How Joining the Warrior Group Fast-Tracks Growth

If you’d like to apply to the warrior program and do deals with other rockstars in this business: Text crush to 72345 and we’ll be speaking soon.

Disclaimer: This summary was written with the help of AI and reviewed by Rod’s team. 

Owen Li Full Transcript Below

00:00:29:01 – 00:00:46:01
Rod
Welcome back to multifamily Rock star. So as you guys know, this is where we dive deep into our guest deals. And you know, the the the outcome is to give you some actionable and practical, you know, advice and steps that you can take to get started and do your first deal, especially if you’re brand new to this business.

00:00:46:05 – 00:00:49:12
Rod
And I’ve got my co-host, Mark Nagy with me, as usual. Hey, Mark.

00:00:49:14 – 00:00:51:07
Mark
Hey, rod. Good to be back for another one.

00:00:51:09 – 00:01:09:20
Rod
All right, let’s do this. So, we’ve got only here today, and everyone has really a cool story. So I’m very excited to, to have him on. He’s he’s an absolute rock star. And just killing it, in the business and, so. Yeah. Oh, and welcome my friend.

00:01:09:22 – 00:01:15:13
Owen
And long Mark. Thank you for giving me the opportunity. Thank you. It’s my honor to be here.

00:01:15:15 – 00:01:25:02
Rod
Absolutely. So why don’t you give us a little of your background? Because I love your story. You’re an immigrant like me. First generation. So tell you a story.

00:01:25:04 – 00:01:52:06
Owen
I came to the U.S after finishing my, college in China, and, by that time, my family was so cool, I didn’t have money to do so after, like what, like six, $6,000? Know what you can do that you us for, you know, all those fees. And I started, I got my degree from Harvard, and then I have, you know, chip design, W-2 job.

00:01:52:08 – 00:01:57:13
Owen
I worked for, like, ten years. That’s my first job. And probably.

00:01:57:17 – 00:02:10:12
Rod
Oh, hold on, hold on, hold on. You came here as an immigrant, and now you have a PhD from Harvard. Yeah. Slack. You’re a slacker. Wow. Good for you. That’s fantastic. What is your PhD in oh one.

00:02:10:14 – 00:02:34:15
Owen
One two, three years ago in chemistry and, material science. That’s the way I like lots of, like, computer chip, like AI chips now. Like, it’s so hot. Right? But in, manufacturing, it’s very, very complicated. It’s like 1000 steps, but each of these steps can impact each other. So it’s not like systems.

00:02:34:17 – 00:02:46:16
Rod
Oh, that’s very cool. And I just had to put a pin in that because that’s so impressive. But I just. Anyway, so you got your PhD, you worked for 12 years, in a two job go from that point, please.

00:02:46:18 – 00:03:16:12
Owen
Yeah. Mean mean in my, W2 job period. I start to, play, you know, for a few years, I play around with some, like, startup ideas. I had lots of, like, IP ideas, like, I have, like, over 100 patents, like. Oh, wow. It’s, published lots of papers. But the problem with the startup word like it’s it’s, very capital intensive and very labor intensive, like, like, there is all.

00:03:16:12 – 00:03:38:15
Owen
Not like what? Set me back, like ten penny. So you fill in all the investment. Now, you, like, you do the most advanced the chips. And so it’s very difficult and a little like, my family moved to Chicago and, like the last second before. Before I bought the second home. I have no idea about New York State.

00:03:38:19 – 00:04:00:22
Owen
And, I don’t know, like what? Like, stick in the house. I cannot immediately realize. Oh, there’s, like, chew on the key, like like equity builder. Like I bought it, like, 700,000. And, I spent a 150 K there, and now all of a sudden, it’s. You own this house. It’s not like one going $1 million, so there’s like, 200 k equity.

00:04:00:24 – 00:04:26:16
Owen
That’s why I like. It’s not Walmart. Oh like that. Because this looks interesting. That’s where I started to like dig in more information. And although I moved to Chicago like, like 95, for rat two of rat and, they, I, hook up with, like, for college opportunity because that’s cheaper. Much cheaper than market price.

00:04:26:22 – 00:04:33:00
Rod
So you were buying duplexes and for plexus and then you then you discovered foreclosures, which. Yes. Much cheaper. Awesome.

00:04:33:02 – 00:04:34:06
Owen
Yeah. Yeah. That’s right.

00:04:34:06 – 00:04:37:00
Rod
What year was. What year was this that you started doing this.

00:04:37:02 – 00:04:39:04
Owen
It’s Tucson 16.

00:04:39:06 – 00:04:41:18
Rod
Okay, okay. Please continue. Wonderful.

00:04:41:20 – 00:04:59:07
Owen
Yeah. Yeah. After that, after. You know, I have been doing, tricks and threats against the road and for like, 100 houses. During this whole process, I loaned my kids loans all the lessons, you know, all those crappy contracts, you know, seminars.

00:04:59:07 – 00:05:01:08
Rod
We call them seminars, right?

00:05:01:10 – 00:05:24:06
Owen
You know, a lot, a lot, well, you know, the the way you that, the company is, all those are with, like, small lessons, like we can afford to lose. And, my building up or those, credentials, my confidence goes up to manage big and a big project. Project that way. Like, I kick off with Marty.

00:05:24:09 – 00:05:48:08
Owen
I really like big scale start now. But among those same way. Also, like, I build up a my track record, among my friends, my investors base that I start to raise capital for those projects even in, foreclosure because I used up like five media knowledge. Them that’s my track record. Step by step way to do that.

00:05:48:10 – 00:06:06:21
Rod
Yeah. So. So basically, you were raising money just to even do your fix and flips. You say you raised $5 million just to do that. But but what you did is you built your competence, right. Your competence, which of course equated to confidence. And now you’re doing much larger deals. And I know you’ve raised about 30 million now so far.

00:06:06:21 – 00:06:08:04
Rod
Is that right? You.

00:06:08:04 – 00:06:36:01
Owen
Because not only that, well, like all those were fired up from like a halfway house in a hat lessons albeit check and record all the time and then like, you know, by the time I already started to invest in all the people’s projects, like as a passive investor, I had to invest like over ten Cassius Morris Avenue, new construction, technical hotel, all those stuff.

00:06:36:01 – 00:06:55:17
Owen
So I kind of like, collect information from different investment that all this multifamily, is, is that way to go and apply that fun. Actually, I start listening to your like podcast on, you know, now like on the Cash flow podcast. I look a lot like checks.

00:06:55:17 – 00:06:56:05
Rod
Yeah.

00:06:56:07 – 00:06:57:10
Owen
Yeah.

00:06:57:12 – 00:07:09:10
Mark
By the way, I didn’t even give them the stats either. Now $90 million assets under management, 600 plus multifamily doors, 900 plus self-storage doors and 205 acres of land development.

00:07:09:12 – 00:07:11:09
Rod
Holy cow, Holy cow.

00:07:11:11 – 00:07:13:13
Mark
Forgot to mention that’s about. Oh, and.

00:07:13:15 – 00:07:18:13
Rod
That’s that’s fantastic. Oh, and then you joined in November of 23, is that right?

00:07:18:15 – 00:07:20:00
Owen
And you bought for.

00:07:20:02 – 00:07:34:21
Rod
About 24. Wow, that’s so impressive, my friend. That’s so freaking impressive. So what would you say? I mean, I know the answer. Just based on what you told me so far, but what would you say is your superpower in this business?

00:07:34:23 – 00:07:58:16
Owen
I mean, I’m actually very open to people that way. Like, wing like you. The project that I talk to people. Oh, that’s the way in. Like people say, oh, I you like 50% discount. Nobody can invest with you. If I’m open, nobody will know like I’m doing this. So that’s where I feel capital raising part of like, well, that’s the like electric moment.

00:07:58:16 – 00:08:24:14
Owen
I mean we these 5 million large dude I mean, I figure I have a friend. It’s much easier for me to run. What do you do monetarily. And then obviously the track record, you’ll see that, you know, online open, transparent you my masters. But also like all the confidence build up there like I’m very careful about which projects, do you do like what does that cash flow.

00:08:24:16 – 00:08:44:14
Owen
What’s the the Vanguard component? How do you control risk? You know, I never do like, a three year in jitsu program. That’s just sell it to me. Like to gain a little bit profit margin. But you don’t know after three years. I mean, I mean, you know what I mean? Not we’re actually a total not for us to.

00:08:44:20 – 00:09:02:01
Rod
Oh, it’s a fantastic time. There’s a ton of deals in trouble, a lot of deals they’re trying to sell for the debt and even just for the debt. They don’t make sense yet. And the banks are going to start taking haircuts. There’s going to be incredible deals coming. And and so, you know, like you said, you built up a track record just doing the fix and flip.

00:09:02:01 – 00:09:20:19
Rod
So people trust you. They want to invest with you. And of course you’ve learned you learn so much doing that work. And so guys, those of you listening, I mean, even if you just buy a house and flip it, wholesale a house, you know, buy something and rent it out, the more of that you do, even on a small scale, the more you learn because you’re going to get your butt kicked.

00:09:20:19 – 00:09:39:16
Rod
You’re going to have stuff happen to you. And that’s how you learn and grow and, and build your. Yeah. Like I say, your competence and then ultimately your confidence. And once you’re once you’ve got the confidence, you can go out there and raise money. So, so let’s talk about your, this, this, this, this 133 unit deal.

00:09:39:16 – 00:09:44:17
Rod
Let’s go into that one. I know that’s, the first deal is a warrior. Talk about that one. Tell me about that one.

00:09:44:19 – 00:10:08:15
Owen
Yeah, I’d love that. One is, you know, any smoke? Mississippi? I mean, that’s probably the poorest state in U.S, but that’s a fabulous deal. The reason we got the deal was that, one year before we purchased that, I bought another one of 14 units in that same town, but the other one was a much better condition.

00:10:08:15 – 00:10:36:09
Owen
I can’t be admired as much if they got nice. This one was again, like, they got you to like, 1970 experience. So like I said, it’s crazy. But you cast the area so. And the group following you that the previous seller only spent almost $4 million to upgrade. You know, all the from the electrical or the kitchen interior out of the exterior.

00:10:36:09 – 00:11:08:11
Owen
So and by that time we, what we tried to, give an offer that’s the seller had, we expected expectation for how much they want to sell the original. The offer was like 40 million, but but, you know, like everyone know that, you know, from middle to 22, the families ramping up the interest. So they they waited and waited, you know, and, there’s a few are and a few are in the US.

00:11:08:12 – 00:11:29:22
Owen
You only had a few interest going up. So their expectation going from $40 million, you didn’t fail. You never at a certain point. It’s kind of like up to the lowest, the broken point. So I offer them $9 million. And, we negotiate the deck intervals and we sell our nine point. You jump.

00:11:29:24 – 00:11:31:02
Rod
Well that’s fantastic.

00:11:31:04 – 00:11:32:15
Mark
Another discount that.

00:11:32:15 – 00:11:39:04
Rod
But that’s but that’s not the that’s not the big that’s not the big exciting piece of this deal. Yeah. Talk about why this deal is so exciting.

00:11:39:06 – 00:11:45:19
Owen
I know then like, the seller also has a, mortgage reaching is a hot lot.

00:11:45:19 – 00:12:06:08
Rod
HUD, mortgage, HUD, mortgage. By the way, let me interject something. HUD mortgages are probably the best mortgage you can have on a multifamily property. Here’s why. Because the interest rate is fixed for the entire term of the loan. And it can. And typically it’s a 35 year loan, which I’m guessing this was because you said it has 30 years left on it.

00:12:06:08 – 00:12:17:11
Rod
So we owned it for five years. Yes, yes. And yeah. So I, I won’t steal any more of your thunder. But that is the best loan you can possibly get and you assume that loan. But tell us about the loan.

00:12:17:13 – 00:12:21:19
Owen
Yeah. I mean, what interesting. Get that 2.45% for two point.

00:12:21:19 – 00:12:25:12
Rod
4 or 5. Oh my God. Wow.

00:12:25:14 – 00:12:35:16
Owen
Okay. Like that’s what I mentioned. This probably isn’t the best program in the world we can find. Yes. The the only problem were that the approval process takes.

00:12:35:17 – 00:12:38:00
Rod
Oh, it’s a pain. It takes forever.

00:12:38:02 – 00:12:38:17
Owen
So. Yeah.

00:12:38:17 – 00:12:55:09
Rod
Yeah, it’s 20 and dollars dollars. Just cutting a lot of the DoD payroll right now. So it’s going to be even worse. Okay. I mean, I was worried they were going to cut the section eight program. I don’t think they are, but but you know, it’s going to take even longer. Hey, I’ve, I’ve heard as long as a year sometimes to get a new loan approval.

00:12:55:09 – 00:13:01:07
Rod
Six months is standard. How long did it take you to get your loan approval assumption approved.

00:13:01:09 – 00:13:26:22
Owen
Two month, nine months. And, well, never have to get closer cause of some problem about. Because we were trying to buy or poverty the the, zodiac aspect cards, the top for all my capital raising aspect because if easier this can be causing like three months, three months, six months people, you know, arranging you know how much they like that by the time.

00:13:26:22 – 00:13:55:14
Owen
But even like eight not eight month, nine month, it’s we were not sure it will be coming in eight months until like last minute actually, when I thought of the new, you know, how approved that I was in here. Actually, I didn’t expect that. Like oh wow. Like that November. So I, I lost that and then I, you know, got funding and like less than two weeks and then that year because we already called up before the end of the year for that.

00:13:55:16 – 00:13:58:15
Rod
And how much did how much did you have to raise.

00:13:58:17 – 00:14:01:08
Owen Li
Which one is a $4.45 million?

00:14:01:10 – 00:14:06:05
Rod
Yeah. That’s not a, that’s not a not a little raise either. That’s fantastic.

00:14:06:07 – 00:14:13:00
Mark
With such good terms, what was the motivation for the seller to sell? Well, why were they getting rid of this deal?

00:14:13:02 – 00:14:22:14
Owen
I don’t know what exact reason, but I hold up on that one. But relationship part. So, Yeah, they want to, you know.

00:14:22:18 – 00:14:43:09
Rod
That that’s very common. That’s very common. Partners don’t get along. I’ve had that happen in my situation. I’ve got it actually happening a little bit right now. And it happens. So, wow, that’s a fantastic deal. You know what? What, what are the rents look like for you? I mean, what do you think? What are the going in rents and where do you expect it to go?

00:14:43:11 – 00:15:14:05
Owen Li
Knock it off. I do not think the annual income is at $1.3 million. So it’s kind of like one of the chains, although I’m doing nothing. Remember Mark, which is probably like $9.2 million. So, the, the think about the, the, you know, the operation costs we will get in a line for you save on energy. And are they paying off the mortgage like we have like in just the past, the principal pay down for the hot dog.

00:15:14:05 – 00:15:14:17
Owen
So.

00:15:14:17 – 00:15:36:20
Rod
Sure. Yeah. It’s paid. I be sure now. Now, I do have a question, because I know the qualification process is a pain in the ass and takes forever, but there’s also a pretty significant ongoing reporting process as well. Could you could you speak to that a little bit because you’re going to educate me right now because I don’t fully understand what you have to do once you have one of these loans.

00:15:36:20 – 00:15:39:06
Rod
So tell me what you’re what you’re dealing with.

00:15:39:08 – 00:16:14:12
Owen
So, you know, monitoring space and maturity long you’re from like Fannie Mae and Freddie Mac right now who are, traditional checklist. Right. The the the problem manager of what the how to go assumption. Yes. They have their own checklist. The problem there was they have different agency each year with different parts of the materials. So I can tell you that for the same material I stopped reading for a while five times.

00:16:14:14 – 00:16:22:24
Owen
Wow. Different people from different angle are dealing. They are they, they suppose you probably know each other, but they didn’t.

00:16:23:01 – 00:16:39:07
Rod
Yeah. No, that’s that’s that’s not uncommon actually with even with Fannie and Freddie where one department doesn’t talk to the other department. But I’m, I’m more asking now that you own it. What is your is your is your ongoing reporting requirement more intensive than on a Fannie Mae and Freddie Mac loan?

00:16:39:09 – 00:16:42:23
Owen Li
Yeah, it’s it’s actually that’s that’s not that much.

00:16:43:00 – 00:16:44:12
Rod
I’m not sure. Okay.

00:16:44:14 – 00:16:53:13
Owen
Yeah. Because. Okay. It’s not my role review policy. That’s to be pretty similar to Fannie Mae and Freddie Mac.

00:16:53:15 – 00:17:09:01
Rod
Okay. Well that’s that’s good to know. I didn’t know that. That’s very good to know. So I know you don’t have to do much of anything with this asset and still have it be a home run, but I’m certain you’re going to do some, some value add, you know, get the rents up. So what are the rents now and where do you anticipate taking them.

00:17:09:03 – 00:17:35:15
Owen Li
So the range a now again like annual income, you dropped $1.3 million. So you renting if they get out along with 50. So we are already like a raising that to like a 950 range, probably. A little bit of drops just on like a what are you, trash collection since your benchmark, it’s additional like 50 bucks per unit.

00:17:35:17 – 00:17:52:17
Rod
Okay, let me let me stop you. He just said rubs, guys. That’s called ratio utility billing where you build back the utilities like water, electric things of that nature. Trash. Things like that. So, you know, when you build that back, obviously it goes right to the bottom line. So that’s rub. That’s what he meant by that.

00:17:52:17 – 00:18:02:23
Rod
Sorry. I just want to interject that. So that’s 50 bucks a month. You also think you’re going to get 100 to $150 organic rent bump as well, like 809 or 9, 50 or.

00:18:03:00 – 00:18:24:03
Owen Li
Roughly five five year. Very real. All right. Involved we have like Walmart, $50 per unit. The rent increase that we have a chance that you, see, like $1,800 per year income. If you divide by 6% cap rate, it’s like $30,000, value that.

00:18:24:05 – 00:18:29:00
Rod
So and how many, how many, how many units? Again, let’s do the math so people realize what that means.

00:18:29:02 – 00:18:29:11
Owen Li
Yeah.

00:18:29:11 – 00:18:31:21
Rod
So 100 100 and what I’m sorry.

00:18:31:23 – 00:18:33:10
Owen Li
Only three.

00:18:33:12 – 00:18:53:18
Rod
One third. So you got one third. 133 times. Let’s say 150 times 12. Okay. That’s 239,000 for the year. And if you divide that by a six cap, the increase in value is right at $4 million, 3,990,000. Boom baby okay. Love it.

00:18:53:18 – 00:19:04:03
Owen
And those these are small like this is the other part we we are thinking about. The cuts grow parks grow parks already like 10% catch on class now.

00:19:04:05 – 00:19:06:17
Rod
Fantastic. Fantastic.

00:19:06:19 – 00:19:19:07
Owen Li
And we get our mention about the condition of these units now like every week. Do you know how many walking water we got from this property?

00:19:19:09 – 00:19:20:14
Rod
How many acres?

00:19:20:16 – 00:19:22:06
Owen
1 or 2.

00:19:22:08 – 00:19:39:15
Rod
Work orders really because of the condition. Wow. That’s incredible. Said for a 70s mill property is fantastic that you’re only getting 1 or 2 work orders a week. So they really fixed it up. Nice. You know, typically you’re gonna have a lot more than that. So the Hvac has been upgraded, the plumbing’s been upgraded, the electrical, all of it,

00:19:39:17 – 00:19:54:04
Owen Li
Yeah. I mean, that’s where like, the the accountant, the technician, retired homicide. He said he feels so happy working for this project because the job. Previous job, he got King Hill working on us. Update.

00:19:54:06 – 00:19:55:00
Rod
Right.

00:19:55:02 – 00:19:56:22
Owen Li
One more chance.

00:19:56:24 – 00:20:00:09
Rod
So that’s that’s fantastic. That’s fantastic.

00:20:00:09 – 00:20:18:24
Mark
I’m such a fan of any of these deals, especially right now to where things are overvalued. Anything rents under $1,000 across the United States, where they’re very affordable. Those deals are doing so well right now because there’s there’s still room for rents to go up versus, you know, the Texas, the Florida, those are coming down a lot of times because they were just overvalued.

00:20:19:04 – 00:20:35:08
Mark
But anything under $1,000 is doing super, super well right now. I’m a big fan of those. Now with that, I want to ask what what is the exit plan on this? Because there’s such good debt, you could hold it forever. Do your investors want to just keep it forever? Do you plan on selling it? What’s the exit plan.

00:20:35:08 – 00:20:55:19
Owen Li
With this unit? For me, I want to keep it for the book. Okay. But for investors, they let’s say like they want you an exit in the airport. We walk inside a without, you know, that make all the difference and we’ll we’ll buy our to the shares here down so we can keep holding that because it’s like is such a good that.

00:20:55:23 – 00:21:11:02
Rod
Yeah. You don’t want to refinance that thing. No way okay. No way. You need to unit. Listen, you want out? No problem. Let me find someone that’s smarter than you to buy you out. Okay? That’s what we’ll do if you’re getting 10% on your money and you want out, then you know what? Maybe you shouldn’t be in this deal anyway.

00:21:11:02 – 00:21:14:24
Rod
We’ll find somebody that’s got brain. Well, that’s what I was wondering.

00:21:15:01 – 00:21:16:01
Owen Li
Yeah.

00:21:16:03 – 00:21:19:24
Rod
Yeah. No, I see yeah, yeah I’m teasing.

00:21:20:01 – 00:21:22:24
Mark
Said is that an option. I don’t, I don’t know that maybe that’s.

00:21:22:24 – 00:21:36:19
Rod
A would you, would you want to. You’re at 2.45. You’re not going to get that rate. Good Lord no. God no. No way. You leave that alone, man. You thought you buy people out. If you can’t, you buy them out. You know, that’s what I would do.

00:21:36:21 – 00:22:03:06
Owen
Would buy them all that where I do actually on liquidating all my smaller deals in Chicago than because yeah, you know, it can I mean, when people ask, you know, what is the working mode or format managing the amount of time there wasn’t like small ideas. I won’t say that for this poverty, I spend on like 90 minutes a week, like I know what I like to like.

00:22:03:06 – 00:22:13:21
Owen Li
We can afford the local manager with love and I thought in minutes I’ll read something. I know you know, out of the whole audience, that’s the content.

00:22:13:21 – 00:22:35:03
Rod
So yeah. So he brought up KPIs. Guys, those are key performance indicators. Those are the metrics you’re going to measure on a weekly basis to see how the assets doing. And you know, you’re looking at things like upcoming, lease expirations. How are they handling those renewals. You’re looking at how long work orders are in place. You know, what’s the market survey show the rent should be at?

00:22:35:05 – 00:22:55:11
Rod
What’s the loss to lease based on market rent versus what you’re getting? You know, what’s, what’s the delinquency look like? How much how much, how many people aren’t paying, you know, in any anomaly. So these are these are examples of metrics or key performance indicators, KPIs that you’re going to be looking at on a weekly basis. And typically you can do that if you’re not doing a big value add, you can do that in 30 minutes a week.

00:22:55:11 – 00:22:58:19
Rod
That’s why we love this frickin business. Go ahead. You were going to say something.

00:22:58:21 – 00:23:17:12
Owen Li
Know exactly what it was. The idea was you could not do the same thing in like API, like accurate. That’s long. Like, I don’t know from where you pull down. I mean, you know, what’s the what’s the requirement? How many dollars of my own salon at your experience, you know, come up this week. Yeah I.

00:23:17:12 – 00:23:18:04
Rod
Know.

00:23:18:06 – 00:23:22:11
Owen
You know modify improve those. But that’s the baseline. So yeah.

00:23:22:15 – 00:23:40:23
Rod
Yeah I know we’ve got incredible KPIs inside the warrior program for our warriors. By the way, if you are interested in the warrior program, you know how you apply to that. If you’re considering getting some guidance so you can experience the life you’re wanting this year rather than later, you know, or maybe you just thought you might be a more effective working with us.

00:23:40:23 – 00:24:00:01
Rod
Text the word crush to 72345. That’s how you apply text crush to seven, two, three, 4 or 5. And let’s see if the warrior program can help, you know, help you overcome any challenges that you have, even if they’re just mindset challenges where you just know you need to take action. So, no, no question.

00:24:00:03 – 00:24:16:16
Mark
Oh, so on that topic. Oh, and because I want to ask you that. Right. And I could debate this and I’ve heard different things and I think it’s very market specific, but in terms of just is now a good time to buy multifamily for the people that are thinking, oh, should I wait? Should I buy now? What would you say?

00:24:16:16 – 00:24:18:21
Mark
What’s your advice on market timing?

00:24:18:23 – 00:24:44:19
Owen
I think a there’s no better time than now to buy the reason. Like in the beginning, we may argue that I’m your neighbor. You are the only like three year already. You can just already call the reason why the, so did the after the three years. But think about this. This year, 2020 bought think about people did the same way in 2021 going to go do they have a three year interest already program.

00:24:44:20 – 00:24:54:06
Owen Li
And then now the you know that poem expires and they have a high of the interest rate from like 3.4 to 8.5% now.

00:24:54:08 – 00:25:12:23
Rod
Well well well not actually it wasn’t the interest only piece. It’s the fact that it’s adjustable okay. So the interest. So the interest rate goes up from 3.585 or 9 or whatever it is. And that’s killing people right now. It’s the adjustable rate even more than the interest only piece. But yeah, the interest only as well. It could be an interest.

00:25:12:23 – 00:25:37:17
Rod
Yeah, it could be both. It could be combined in really tough situations where you’ve got 3 to 5 years interest only, but then at the end of that period you’re going to start paying principal and interest so that payment gets jacked. But what’s really killing people is, is the fact that the interest rates have gone up. And when one of these and and the fact these loans are coming do are they are due and and so what’s happening is when they come, do they even have to sell or they have to refinance.

00:25:37:17 – 00:26:05:15
Rod
Sales are down 90% right now. Okay. Refinancing is is next to impossible because they have to meet debt service coverage requirements. And with the new debt interest rates, they can’t do it. So, you know, debt service guys, just so you know, is the property’s ability to service the debt. You know, like let’s say the properties, let’s say just for round numbers, the property is netting, cash flow of $125,000 a year just for illustration purposes.

00:26:05:15 – 00:26:25:22
Rod
So $125,000 a year is the income, and the debt is 100,000 a year. That’s a 1.25% debt service coverage ratio, which is the minimum these lenders want. And what the interest rates where they are, they can’t meet them. So, you know, a lot of deals are in trouble and lenders are struggling. And I’m seeing a lot of deals for sale for the debt right now.

00:26:25:24 – 00:26:41:06
Rod
And and they don’t even make sense at the debt they need to actually the lenders need to come off the principal balances that they have, which they’re going to ultimately have to. It’s just going to happen and there’s going to just be extraordinary opportunity. And so if there’s ever a time to get into this freaking business, it is right now.

00:26:41:06 – 00:26:51:22
Rod
So if you have any interest, you know, either get your butt to one of my boot camps or text the word crush to 72345 immediately because it is, it’s coming. So.

00:26:51:24 – 00:27:08:06
Owen Li
Yeah, a lot of mention that people cannot refinance because the ground goes down according to the FCA. And, they need to go to capital core, long term capital core. What’s theory not. Yeah. Which is another headache.

00:27:08:08 – 00:27:22:23
Rod
And not only is that a headache, a lot of people have been beaten up by it. And it’s very, very hard to do them anymore. You know, two years ago, it’s a different story. But right now, it’s very difficult to do a capital call to your investors to try to get more money in a deal. There’s a lot of deals going south, a ton of them.

00:27:23:04 – 00:27:28:09
Rod
But again, crisis a crisis equals opportunity, right? So so yeah.

00:27:28:11 – 00:27:45:15
Mark
Well also I just in a different realm. I did two deals last week that came to me that were not syndications. They were privately owned and they the biggest issue was that they’ve had rents going down. And it wasn’t even about capital calls or interest rates or anything like that, but just people are feeling the pain, more of rents going down.

00:27:45:15 – 00:28:06:03
Rod
And so that’s one thing. That’s one thing. And, and to to exasperate that problem, insurance rates have gone through the roof. They’re way up. Taxes have gone up, the cost of supplies to do repairs and payroll has gone through the roof because inflation people you were having to are having to pay a lot more. You know, I used to used to teach a 50% expense ratio.

00:28:06:05 – 00:28:20:23
Rod
Very difficult to get that today with all of these different things going up. So it’s kind of like the perfect storm for multifamily, which is causing a meltdown, which is again, very exciting because with crisis comes opportunity and there’s going to be some incredible opportunities.

00:28:21:02 – 00:28:27:15
Owen
So as long as we prepared for this, you know, that’s that’s time for us. Gotcha.

00:28:27:17 – 00:28:29:16
Rod
Yeah, yeah.

00:28:29:18 – 00:28:45:01
Mark
Okay. So so on obviously you have a lot of doors, a lot of experience. What I know you said you do a various different things. What are some of the things that you like to do on deals. Is it underwriting. Is it capital raising. Is it asset management. What what are kind of the things that you like to stick to moving forward?

00:28:45:03 – 00:29:09:15
Owen Li
It’s actually interesting. I like hands on my experience. Like, I’m getting there. Underwriting. I do a capital raising. I was with you. Absolute madman part. But, because I have been under understand the business model quite well, I really do think that school exponential model is perfect, which means I cannot do this by myself alone.

00:29:09:15 – 00:29:36:17
Owen
So I need to find a community like a Warriors program. I need to interact with other people to understand their local market conditions. And, and I can relate my story to like people who walking in SuperValu looking for street. So I’ll bring capital into that again. So that way, like I need you keep finding that deals, keep finding good partners maybe from Warrior programs.

00:29:36:17 – 00:29:44:19
Owen Li
And then you mentioned like that’s the way like we can throw a little can looks in a few years. That’s where that’s true.

00:29:44:21 – 00:29:54:17
Mark
Yeah I, I could follow up. How has the tech industry and you know where your W-2 job came from. Is that where you raised a lot of your capital from people, you know, in that industry?

00:29:54:19 – 00:30:01:11
Owen
Absolutely. That’s like the two major companies will be Silicon Valley. And then the obviously the like financially and the impact.

00:30:01:14 – 00:30:14:01
Rod
So now fantastic. So what are some actions that that you take on a weekly or monthly basis that you could share with listeners? Yeah. As to what you know, they would do, when they get into this business.

00:30:14:03 – 00:30:40:15
Owen
So I think that that motivation through, getting into the business, be that both from a financial planning purpose, like how can we get more independent financially for our family like that way, that cash flow? Well, that’s what we are not it driven me to here. And we also do it because it’s more stable. The rain collection even like for like, you know, people could pay like 1 million, $2 million.

00:30:40:15 – 00:31:08:09
Owen
I mean, you’re involved. You are not there. You’re not looking at the paycheck stops. But in real estate it’s different. So, that way I can, even, like, we, we are working very, Good job. You still need to think about how can we generate several other revenue to accommodate that? Maybe. Hopefully, like, one thing can get liberated from this commitment.

00:31:08:11 – 00:31:27:13
Owen
I mean, that way, like, we need to put extra effort. You know, I listen to lots of podcasts, I, I travel to you, we check all the people I do. This is understand all the data point. And then these are like my decision making, reference point.

00:31:27:13 – 00:31:36:22
Rod
So yeah. Now that’s really smart. So what’s some bad advice that you’ve received about this business that you think new people should look out? You be careful of.

00:31:36:24 – 00:32:03:17
Owen
You know, this industry, like, you really need to check other people’s the credentials, whether, whatever they thought they advertised it to your check that you that you you that, And they’ll also that out in this area. I mean, I can yeah. But I mean, the person on the line for me, she is like, Starbucks is more like whatever.

00:32:03:17 – 00:32:14:11
Owen
We take the hours, we can be a little bit rest, but a lot and a nice experience. I don’t I’m not I’m not built. So I have this long dream. Big chance.

00:32:14:11 – 00:32:19:13
Rod
Oh, and so, is it okay if we have listeners reach out to you if they’ve got questions?

00:32:19:15 – 00:32:21:05
Owen
Oh, absolutely. People say.

00:32:21:09 – 00:32:24:06
Rod
How could they do that? What’s what’s an email address or something?

00:32:24:08 – 00:32:35:15
Owen
Yeah. People have to. You can, contact my Instagram. It’s, on this show or email me by, Oh one lead online at gmail.com.

00:32:35:17 – 00:32:36:13
Rod
Oh, fantastic.

00:32:36:18 – 00:32:41:06
Owen
Yeah. There I, I at gmail.com. Yeah.

00:32:41:08 – 00:32:50:04
Rod
Beautiful. Beautiful. Well, thank you all. And this has been a lot of fun. I appreciate you coming on. And, and I’m sure we’ll see you in May at the warrior event.

00:32:50:06 – 00:32:57:12
Owen
Yeah. Take care. Thank you. Mark. I cannot wait to see you guys in a minute. So love it.

00:32:57:15 – 00:32:59:04
Mark
Love it. Awesome. Good.

00:32:59:06 – 00:33:00:19
Rod
Later. Thank you all. And thank you.