Armel Bayot, hailing from the stunning Philippines, overcame early hardships and embraced entrepreneurship while caring for his siblings and grandmother. Starting with a small business selling native products and coffee beans, he transitioned from aspiring engineer to a nursing career. As an immigrant with a tenacious mindset, Armel ventured into real estate, progressing from single-family homes to multifamily properties. Inspired by influential figures like Kevin O’Leary and Terrence Doyle, he now aims to make a mark in the multifamily real estate industry.
Here’s some of the topics we covered:
- Armel’s First Deal
- What Caused The Switch From Single To Multifamily
- Zero Experience and Getting Your First Deal
- How To Start Raising Money For Multifamily Deals
- Getting Passed The Initial Fear Of The First step
- Why People Are Willing To Give Their Capital To Multifamily Deals
To Apply for The Warrior Program: Text CRUSH to 72345 and we’ll help you crush it in this business.
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Full Transcript Below
Intro
Hi, my name is Rod Khleif, and I’m the host of “The Lifetime Cashflow Through Real Estate Investing” podcast. And every week, I interview Multifamily Rock Stars and we talk about how they build incredible wealth for themselves and their families through multifamily properties. So hit the “Like” and “Subscribe” buttons to get notified every Monday when a new episode comes out. Let’s get to it.
Rod
Welcome back to Multifamily Rock Stars. And as you guys know, this is where we interview people that are just flat-out crushing it in this business. And we show you the inside scoop into how multifamily investors are creating massive success, not just in their businesses, but, you know, we also talk about 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.
Mark
Hey, happy to be back after another insanely, crazy busy virtual boot camp, recently. So, glad to be back to it.
Rod
Right. Yeah. If you guys missed the virtual boot camp that we just had, it was a lot of fun. I think we had upwards of 500 people. But I will tell you, the next one is live in person. In-person in September. It’s the only live I– only one I do in person like that a year just because they’re brutal on me. It’s three days and a lot of fun. Should be about 1,000 people there. There’ll be a bunch of Warriors there, of course, because we tell them to come. You know, we discovered a long time ago our most successful Warriors are the ones that are the most connected inside the Warrior community. And so, today, we’ve got an awesome guest. His name is Armel Bayot. And Armel is from the Philippines. And I think he joined the Warrior program in December of ’21. And, welcome to the show, buddy.
Armel
Hi, Rod. Yeah. Hi, Mark. I’m happy to be here.
Rod
Glad to have you. Exactly. So why don’t you start off like we always do. And just give a little bit of your background. It’s a very interesting background. You know, you’re an immigrant like I am. So tell us who you are.
Armel
Yeah. So I’m from the beautiful islands of the Philippines. I was born and raised there. Pretty much grew up with my grandma. I lost my mom when I was seven because of breast cancer. And since then, I’ve been kind of helping my grandma with her little business in the Philippines. And that’s where I first got exposed with entrepreneurship. So, I’ve been helping her, and as the eldest of the three siblings, I was kind of looking after my younger siblings who are living with us. So like the immigrant story, you know, I went to school in the Philippines. Initially, I would love to be an engineer because I love math back then. But for some reason, I blank all the entrance exams in the universities back there. So I talked to my dad and then he told me, you know, why can’t you just be in the medical field? You know, my uncles and my aunts were like doctors and dentists back home. So he said, why can’t you just take nursing? Took nursing, graduated nursing in 1996, work as a labor and delivery nurse back then because my uncle has a little community hospital. So I delivered a lot of babies back then.
Rod
Nice.
Armel
Emergency room and then moved here in 1999. And fast forward, you know, my first real estate experience was, I think in 2005 or ’06 when I bought a couple of homes in Sparks, Nevada. I didn’t know anything about real estate. As far as I know, every month, or, you know, negative cash flow, there’s something to be fixed. And then the market crashed. I said, I think real estate is not for me. Just did some side hustles. I started a medical supply business. I still have it right now, knocking on doors and cold calling. And then in 2018, I’m a big fan of Kevin O’Leary. He had a little seminar here in the Bay Area. I attended it and he talked about stocks and real estate. And then I went to the real estate– you know deep dive on that. So I went to that. There’s this flipper from Boston. I guess he’s like an HDTV, you know, guy.
Rod
You just educated yourself, basically. I know you had Brandon Turner’s name down here with BiggerPockets.
Armel
Right.
Rod
You worked with him. And I guess you came across me, it looks like when I got interviewed on the multifamily version of BiggerPockets with Terrance Doyle, a really nice guy in Denver. I was actually in Denver and he was like, hey, let’s interview. And I’m like, sure. I was there. So that’s how you found us. And then you joined the Warrior Program in December of ’21. Is that right?
Armel
Yes, sir. December ’21.
Rod
All right. So you’re in, I think, 66 units now?
Armel
Yeah.
Rod
And you’ve done those with other Warriors. Talk about your first deal that you took down. What was the first one you took down in the Warrior Program?
Armel
Yeah, it was a 66-unit. And this was in–
Rod
Oh, so it’s the one deal. Okay, so it’s been one deal so far. Got it.
Armel
Yeah.
Rod
Okay, so 66 units. Where is it?
Armel
It’s in Columbia, South Carolina.
Rod
Good market. We own one there as well in Columbia. Okay, good. Fantastic. A value add deal. You did it with some Warriors. So you were involved from the beginning, involved in the due diligence, raising capital, the whole thing?
Armel
Yes sir.
Rod
Wonderful. You started in single-family, what caused you to switch over to multifamily? What caused you to make that decision?
Armel
Yeah, the biggest thing is the economies of scale. When they learn about multifamily, there are a lot of ways to increase the value of the property and you can leverage your money and you can leverage the manpower. It’s a team sport and that’s what I like. Being in the medical field, you know, saving lives in the emergency room, it takes a team. So that’s what I like, you know, multifamily.
Rod
In single-family and residential multifamily, like a duplex, triplex, fourplex, you’re pretty much locked in to whatever the comparables, properties have sold for. So, you know, they use comps to determine the value. And of course, the beautiful thing about what we do is– you know, commercial multifamily is valued on a multiple of the net income, and you’re able to force that appreciation by increasing the net income, which is, of course, why we love this business. Right? So I just wanted to mention that. Go ahead, Mark.
Mark
Now, you talked about team, and a question I get so often, very, very often from people is, okay, I have no multifamily experience. Why would people want to work with me? And I know you came into the group with no multifamily deals, no multifamily experience, like most of our Warriors. But why do you think people listened to you and were willing to work with you, even though you hadn’t done any multifamily deals before?
Rod
Good question.
Armel
That’s a good question, Mark. Yes. I mean, in multifamily, I think all of us, as what Rod says, we have our own superpower. So we can tap on that and we can add value to the team. If you’re good at math, if you’re good at talking to people. So if the team is needing that kind of talent to take down a big project, so, you know, if they like and trust you, they would bring you to the team and be part of it.
Rod
And that’s what happened with you, yes? And so you were involved, like I said, you were there for the due diligence. Did you actually raise some money as well?
Armel
Yes. That’s pretty much more I focused on, that I raised capital because I’m here from California.
Rod
A lot of money in IT in San Francisco, for sure. So that would definitely be what I would have suggested. Good. Good. Good. So, you know, in this process for you so far, have there been any aha moments, any epiphanies where you’re like, okay, now I get it.
Armel
One epiphany is I don’t have to do everything in single-family homes. I found out that, you know, I might be good in underwriting or with numbers, but there are actually better people who can do that for me. So I try to just focus on my strength, not on my weakness. And I just try to work on that and add value to the team that I’m going to be working with.
Rod
A quick follow-up. So you raised money. How did you raise the money? Did you go to friends and family? Did you go to a business circle? Talk about raising money for a minute.
Armel
So yeah, in the beginning, when I was in a single-family and switching– transitioned to multifamily, I didn’t know how to raise money. So, you know, just getting out of my comfort zone, I start talking to friends and family, you know, at work. There are a lot of healthcare people that don’t know this business. So I am actually on a mission to educate them and tell them that there’s an option outside you know, W-2 and the 401(k) that we have. So I’m passionate to just, you know, teach them about this business and learn. There’s an option outside our careers.
Rod
Right. A lot of people don’t know it or they’re afraid of it. So by the way, guys, I did a four-hour masterclass over two days on raising capital, and it was the same training that I trained my Warriors at my last Warrior event. And so it’s really detailed and really deep dive on raising capital. So if that’s something you want to check out, I know it’s in The Big Multifamily Group. And if you’re not in The Big Multifamily Group, go to “RodsLinks.com” and there’s a link there. My podcast link is there, obviously, and the boot camp link is there as well. But go to The Big Multifamily Group and that’s where we recorded it. And it’s really valuable in raising capital. So I just want to throw that out there.
Mark
Armel, what do you think– we’ve talked about a team, partnering with other people, economies of scale, being able to do bigger deals, obviously, 66 is quite a bit bigger than one. But what do you think your real estate journey would have looked like if you did not team up with others and you just did everything yourself? Would it have been a single family? Would it have been just a smaller multi? What do you think that would have looked like?
Armel
Yeah, I’ll probably stick with investing out of state. I still have a small portfolio in Florida, and I’ll probably be still doing you know, one rental at a time. And it might be a long process and it probably got to work me and, you know, still working on my W-2. Probably a slower process and I wouldn’t find you know, amazing people who are doing bigger things in life, which I want to do as well.
Rod
Who you hang out with is who you become. And that’s why I think the Warrior community has been so incredible. I think– we’re still counting, but I think we’re going to push between 160 and 170,000 units that the Warriors own now, which just blows my mind. But, you know, I know you listen to my podcast and you know we do these “Own Your Power” clips where I’m just talking about motivational content, ways to build yourself up and goal-setting and visualization, and so on and so forth. So sometimes I like to ask, you know, where do you get your drive, buddy? What makes you jump out of bed in the morning and conquer the day?
Armel
So pretty much I like to have that– besides the time and financial freedom and, you know, taking care of my family, you know, that’s one of my biggest why. But my other biggest why is personal. So I believe that at the end of our life here on Earth and not being too religious, I think at the end of our time here in the world, we will meet our creator and we will meet that best version of ourselves. And the creator will tell us this is supposed to be you. And I don’t want to have that regret and meet him that, man, I should have been that best version of myself while I’m living on Earth.
Rod
What a great answer, buddy. That’s an awesome answer. And I’m going to tell you, you know, we’re going to be doing a Hall of Fame at the Orlando boot camp for Warriors as well. We’ll pick 10 Warriors for a Hall of Fame. And we did that at the last big live event that we’d had. And I noticed a pattern between the Warriors that got the award because we did a slide for each one of them that just talked about their accolades and things they’d done, how many doors they had, and so on and so forth. And every single one of them made the world better through some philanthropic endeavor like you know, helping veterans’ suicide, homelessness, you know, sexual trafficking, these horrible things that are happening in the world. But it was just extraordinary to see that every single one of them gave back. I’m like holy– and I told the 1,000 people there, like do you see a pattern here? Are you getting the clue, you know? Success comes to those who serve and make the world a better place.
Mark
So good, too. Because comparison– they say comparison, you should never compare yourself to others. You compare yourself to a billionaire, you’re going to feel bad. You compare yourself to a homeless person, you’re going to feel good. That doesn’t get you anywhere. But like what Armel said, just compare yourself to the best version of what you can be. And that’s what, you know [inaudible]. I love that.
Rod
I love it.
Mark
Now, for those people listening that maybe are running a business or the W-2 employees that are thinking, okay, how can I add this in? How can I do multifamily on top of my job, my kids, my business, whatever? What advice do you think you’d give them?
Armel
If they want to be in this space of commercial multifamily, the best thing I could advice them is just to immerse yourself in this space. Be connected with the people that you know, you like and you trust. If you want to start doing investing with this, you just take action, learn as much as you can, assess yourself where you’re at or where you want to go and find out what’s your why. So that’s pretty much what’s going to drive you to be successful in this business.
Rod
Nice. Yeah. You’ve been to one of my boot camps, right?
Armel
Yeah, I’ve been, twice.
Rod
Twice.
Armel
I’ve been in Orlando and Denver last year.
Rod
Oh, no kidding. You were there when my mom was there. Oh, wow. Yeah. You know, I’ve lost my mom since then, but that was behind the curtain crying because she’s the whole reason, you know, that I did this. So wow, that was a real pivotal event for me. Very cool.
Mark
So I know at that first event in Orlando, right? That’s when you ended up becoming a Warrior jumping on the team. What was that shifting point for you that made you decide to even, you know, do something like this versus just going home, taking the knowledge, and doing it on your own?
Armel
So when I attended the Orlando boot camp, you know, first of all, it was great. It was amazing. It made me cry. Rod spoke to my heart.
Rod
Oh, thank you.
Armel
And being a Tony Robbins fan you know, you really spoke to my heart. And transitioning to multifamily, I mean, I could probably just listen to thousands of free videos and stuff, but I want to have somebody who will kind of guide me, have a coach and a mentor. And I’ve always learned that if you connect yourself with somebody who’s done it before and will teach you and show you the way so you can make your progress quicker, faster, and you will have lesser mistakes. So having a mentor and a coach is the way to do it. So that’s why when I was in Orlando, I just jumped in and, hey, sign me up. I like to have a mentor. I want to learn more in this, and I’m going 100%.
Rod
So you’ve heard about my Warrior Coaching Program, and you’re serious about going to the next level in your life, text “crush” to “72345” and see how my team can help you acquire impact and income, and freedom through apartment investing. So again, just text “crush” to “72345” to apply to our program. So, Armel, another question, and it can be relating to life or business, but what’s some of the best advice you’ve ever received?
Armel
That’s a really good question, Rod. Don’t be fearful. There are three ways to actually deal with fear, you know. First is you can just forget everything and run, you know. Second, you can face everything and rise. Or the last one is you can just see it as a false evidence appearing real. So a lot of us, we fear a lot of things in life. We stay in our comfort zone. We don’t want to do big things, but, you know, we are made in the image and likeness of God. I mean, I’m not being religious again, but we are built to make big things.
Rod
Yeah. That’s it. It’s so sad, a lot of people don’t, you know, but we are made to do amazing things. So let me ask you this, how did you get over the fear of getting involved in that 66-unit deal? How did you push through that fear? Because I know it was there. And how did you get through the fear of raising money, you know? Because I’m sure you had to commit, say, okay, guys, I can bring this much to the table. How did you get past that fear?
Armel
Rod, they said in action fertilizes fear. So I just started talking to people, being passionate about it, and, you know, not thinking that you’re trying to sell something. In this business, we’re trying to give this opportunity to people, to have an option in life. And it’s not about, you know, just getting their money and all that stuff, but we’re trying to help everybody in the community and people in this business and people who don’t know this business. So just massive action.
Rod
Nice. Massive freaking action.
Mark
It always comes down to that.
Rod
Alright.
Mark
On that topic, obviously, the stock market is not doing that great. Bitcoin, everything is fluctuating all over the place. What were some of the responses or biggest reasons why people were even willing to give you capital to go into multifamily instead of just holding on to it, keeping it in the stock market, whatever? What were some of the things that they said that made them convince themselves to do it?
Armel
Real estate is, I think, in my opinion, it’s the best asset class. You can leverage it. There’s a cash flow, there’s equity, and there’s a lot of tax benefits. And people, they don’t get that in stocks. When they learn about commercial multifamily real estate, they’re amazed and they didn’t know that this exists. So when they see the volatility in the stock market right now and they don’t have a lot of control about it, and they see how you can actually have more control in big assets like this, because it’s all about NOI, it’s not about the after repair value like the single-family homes, but it’s basically based on what I call the ARR, the after renovation rent is where you get the value of your property. So when they saw that, you know, hey, I want to be part of it. And they see the return better than 401(k), 401(k) is like 5, 7% annually, wherein you can earn 15, 20% in this business.
Rod
So, you know, in that vein around what’s happening with the stock market and everything happening economically, let me tell you about a bomb that’s coming. And I talked about it on a Facebook Live I just did. But it’s not being talked about a lot. And that is rate caps. A third of all commercial real estate debt right now is adjustable rate. And that’s a third. And, you know, properties have really stopped– the sales have really dropped through the floor. We’re having about a 75% year-over-year decline in the first quarter of this year. Because the interest rates have gone up, so have cap rates, making it much harder to refinance as well. So there’s about 1.6 trillion in commercial debt coming due by the end of next year. And they either have to sell or they have to refinance. Here’s the killer. Rate caps have gone through the roof. Rate caps have gone through the roof because you have to buy a cap so that the rate doesn’t– you know, if the rate continues to increase, you’re locked in at a lower rate. Otherwise, you know, properties will go under. And so these lenders know they have to charge a rate cap. Let me give you an example of what’s happened. In 2020, if you wanted to put a rate cap on a hundred-million-dollar loan, for example. I just pulled these numbers from an article that I read. A hundred million dollars loan in 2020, a three-year rate cap for 3%, so it wouldn’t go up more than 3%. It was about $23,000. That same hundred million dollar loan today for a one-year rate cap is 2.3 million. 23,000, 2.3 million. And a lot of people don’t have that kind of money, you know, these operators, so there’s going to be deals. And so when I tell you, if there was ever a time to learn this business, it’s right now because the deals are coming. Okay? But you got to get up to speed. So whether it’s my boot camp or whatever, but you get up to speed as fast as you can because it’s coming. And I think it’s really going to hit– first quarter, maybe even the last quarter of this year, but definitely first quarter of next year. Well, listen, Armel, I appreciate you coming on the show, buddy. It’s a lot of fun and great to see you. And hopefully, we’ll see you in Orlando again at the boot camp.
Armel
Oh, yeah.
Rod
All right, my friend.
Mark
Good to see you.
Rod
Take care.
Outro
So one other quick thing. We encounter so many people that are frankly frustrated. They’re looking in the mirror and they’re frustrated that they haven’t been able to escape the rat race. They haven’t been able to build cash flow to the point where they’re able to have financial and time freedom with their families. And maybe they see other people buying real estate and creating incredible cash flow and they think well, it’s just scary. You know, buying apartments is intimidating. And I get it. See, that’s why we created our Warrior Mentorship Program. They’re our coaching students, and they’ve had extraordinary results. My students, I’ve been teaching about five years and they own upwards of 140,000 units now that we know of. Right? And we feel like it’s just getting going. Now, we’re looking to grow this group and really take it to the next level and honestly believe that the greatest transfer of wealth could be upon us right now with this current economic environment. Everything’s going on sale. So we’re looking for people who want to follow a proven framework, really like a blueprint or a map, literally, step by step. And then they’re able to leverage our systems and our incredible network to raise money and equity, to find deals and close those deals and build partnerships, really nationwide. So if you’re interested in finding out more about how you can become more in our incredible network and take advantage of the unbelievable opportunities that are upon us, you can apply to my Warrior Mentorship Program by texting the word “CRUSH” to “72345”, or you can go to “MentorWithRod.com”. And what we’ll do is we’ll set up a call so you can check us out and we can check you out and see if it’s a fit. Now, again, you can go to “MentorWithRod.com” or text the word “CRUSH” to “72345” to apply, and we will speak soon.
