Jonathan Nichols is a real estate investor local to the DFW metroplex. He began his REI career after having worked for almost ten years in the aerospace engineering industry as a propulsion engineer where he analyzed and integrated turboshaft engines on helicopter platforms. His past real estate projects include a 75-unit A class apartment complex in College Station, TX as a GP, two 100+ unit complexes in the Tulsa MSA as a GP, an 8-unit apartment to STR conversation in Arlington, TX as a GP and almost 1000 units investing as an LP.
Here’s some of the topics we covered:
- Starting In Residential & Transitioning To Multifamily
- The First Deal Could Be The Worst, Don’t Quit
- The Way To Get Started in Multifamily
- Finding Deals, Or Raising Capital?
- The First Step Into Multifamily Is Educating Yourself
- What Is Value Add In Multifamily?
- Your Relationship With Your Property Manager
- Words For First Time Investors
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
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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 to another edition of The Lifetime Cashflow Through Real Estate Investing. I’m Rod Khleif, and I’m thrilled you’re here. And I know you’re going to get a ton of value from the young gentleman I’m interviewing today. His name is Jonathan Nichols and his company is Apogee Capital and he’s in about 300 doors as a General Partner and about 1,000 as a Limited Partner. I love the background because he’s a propulsion engineer and worked on turbo shaft engines and helicopters, which are two things I love. I’m really looking forward to drilling down on his real estate stuff, but that’s a pretty cool background as well. Jonathan, welcome to the show, brother.
Jonathan
Hey, Rod, thanks for having me. I’ve been a long-time listener, so really excited to be here.
Rod
Thank you. Thank you. I appreciate that. Well, why don’t you do a much better job of telling us who you are than I just did? Just give us a little background, high-level background, and, you know, why real estate from that, you know, very interesting background. And maybe you’re still doing that on the side, but give us a little bio on you, if you would.
Jonathan
Yeah, absolutely. The quick synopsis is, you know, I grew up with the traditional upbringing, go to school, get a job, work for 40 years, and retire. And so my chosen career path, as you’ve already mentioned, was aerospace engineering. After university, I started working for a large aerospace company here in the Dallas Fort Worth Metroplex on helicopter engines specifically. And so, you know, by everyone’s standards, had a great job, a good career, well paying. And about the time I met my wife, I began to, you know, kind of have some doubts in that career. And specifically, it was, you know, you would go and work, say, twice as hard as anyone else. But then you get to the end of the year and you have your performance review and they’re like, hey, you did an outstanding job this year. We’ll give you you know half a percent more raise than everyone else. And so that’s about the time when it started to click in my head that something’s not right or there has to be a better avenue. And so my wife and I got married about six years ago and shortly thereafter read the book “Rich Dad Poor Dad” and began learning about real estate investing as a result of that. And we kind of wanted to find a hobby or something to do together. So we thought, well, if we do investing, it’ll be a hobby that pays us instead of one that we have to pay for. And so, you know, off we went. And, you know, several months later, bought our first property, which was a residential property, a fourplex here in Arlington, Texas, where we live. However, we had a problem, which was that when I analyzed the deal, you know we believed we were going to make a few hundred dollars a month of cash flow, but instead it had so much deferred maintenance, we were actually losing some cash flow every month. And so obviously that was pretty discouraging starting out in investing, thinking, hey, this is going to be something that’s going to give me financial freedom one day. And then it goes actually in the opposite direction. So we put our heads together and pivoted and started doing short-term rentals with this property, which took off and did extremely well. And from there, just began to scale that business in residential investing with short-term rentals for a couple of years. But after doing it a couple of years, we realized, hey, this is not long-term what’s going to scale. This isn’t what we’re going to build a real business out of. And so we began to learn about multifamily a few years back. You know got some education, took the time to learn, and feel confident in using other people’s money and investments. And then did our first deal as GPs about two and a half years ago and pretty much the rest is history as you read in the bio. We’ve done you know several deals as GPs now. I’m a full-time syndicator you know looking for deals in Texas and Oklahoma, and we also passively invest. It’s been a life-changing journey for us.
Rod
Nice. You know it’s interesting you had a bad experience on your first deal and regretfully, some people stop at that point. You know, there may be people listening here that are struggling with their first deal, overpaid a little bit. And hopefully, you’ll be inspired by Jonathan’s story here not to give up because you know I’ve had seminars, we call them seminars. They’re not failures, they’re learning experiences. And it’s a good thing that you didn’t give up, obviously. Now, you said you shifted to–
Jonathan
Short-term rentals. Yes, absolutely.
Rod
Short-term rentals, STR.
Jonathan
Yeah.
Rod
I’d written down STR and then I just didn’t click with me what it meant. I knew what it meant, but I’m old. But anyway, so why did you stop doing that? I’m just curious.
Jonathan
So we actually still own all of our short-term rentals to this day.
Rod
Okay.
Jonathan
And so the way that I see it is like– I see it as stepping stones in our financial freedom journey, if you will. Right? So my short-term rental business, it does really well. We make more money from that than I did as an engineer. It’s an awesome business. There are a lot of pros with it, but it still is not as scalable as multifamily, right? We still have those properties, we still have the business, although now we have managers who run it for us, which is great. And so I’m definitely not anti-short-term rental by any means.
Rod
Has it slowed down? Has it slowed down any for you? Let me ask this first. Are they leisure vacation rentals or are they more business related to near a hospital or near a business or something like that?
Jonathan
In general, most of the year they’re more business-related because for example, our fourplex, you’re talking about 2/1 apartment units.
Rod
Okay.
Jonathan
But they are in Arlington, Texas, which is where the Dallas Cowboys play. You know we have a lot of entertainment venues here. And so, you know, we do get some vacation-type guests, but, you know, they’re a small percentage of our total guests.
Rod
Got it. Okay. So, you know, I know that one of the topics that we chatted about before we started recording that you think you could add some value, and I’m sure you can, is in how to get started in this business because there are a lot of people listening to this show that haven’t pulled the trigger yet. They know they want to do something. They know they need to get out of the rat race. And I believe the incredible opportunity is coming with the economic environment that we’re in. So, you know, talk about how to get started.
Jonathan
Yeah, absolutely. So I think what it comes down to, Rod, is that if you’re going to be a General Partner on a team, you have to find a way to add value to that team. And so as you know, most syndications are done by a group of individuals. It’s typically not just one person that wears all the hats. And so the sooner that you can figure out what it is that you can do to add value to a team and then sharpening those skills, the quicker that you’ll take off in this industry. So, you know, I mean, a lot of people that are like well, I worked as a project manager, so I can be a great asset manager on a multifamily property, just bring me in and I’ll do that. Well, that could be true. You may have those natural abilities, but you’ve not developed them yet as an asset manager or had real-world hands-on experience. And so the idea that, hey, a team is going to just pull you in without raising capital, without finding a deal, and just trust that you’re going to run their asset well, it might be a little bit far-fetched for a first-time syndicator. Right? So I like to tell people who are asking me about it, two things. You’re usually either finding deals or you’re finding capital. That’s what most people do to get involved in this industry. And so for me, my background was engineering. I did a tremendous amount of analysis, numbers. I understand how things interact from a number standpoint. And so for me, the deal-finding was a little bit more natural. Whereas on the capital side, you know, sales, marketing, finance, that stuff was interesting to me and I’ve grown a lot and learned a lot in it. But it wasn’t necessarily the place I could add value first coming in as a new syndicator. So figuring out where you best fit in that piece and then really focusing in on that. And then one more thing I would say that I see tons of people make a mistake on is not understanding where their expectations should be on an effort level. So you talked about seminars and how we learn from our failures. One of my seminars, my other seminars was when we first started in residential investing, we were trying to find off-market deals and send out flyers, right? You know it’s a very common way to find off-market deals. And so, you know, we sent out like two or three hundred and then wondered like why didn’t we get a deal? Well, then one day, you know I ran into someone who does it professionally and they’re like, oh, yeah, you know our test batch for this is like 5,000. And then we send out 25,000 a month, you know. And so, you know, sometimes I think people come into multifamily, they think, oh, I’m going to analyze three deals and have a home run when really you need a funnel of at least 100 deals to find that special one that’s going to work for you.
Rod
At least.
Jonathan
Exactly.
Rod
Now, I’m going to say this about your mailing comment. You know, I don’t completely agree with that advice that you got. I think if you carefully hone a list, you get people that have owned a long time. You go in and you dig in and deconstruct the ownership entity, find out where they live at home and mail them there, and then you do some strategies around the mailing. I can tell you, I’ve had phenomenal results. Now, the thing you said, you did one mailer and expected results. The mailing is a thing you do three or four times.
Jonathan
Right.
Rod
It is really probably at least four times a year because you need to get them when they’re motivated. But I don’t believe you need to mail thousands. That’s just my two cents on that, just based on my personal experience. You know you talked about the two hats that are definitely going to be the most appealing to a team, which is finding deals and bringing money. Now, of course, you guys know, you’ve heard me say this before, you cannot just bring money. Okay? You have to be actively involved in the deal.
Jonathan
Right.
Rod
In fact, you should ideally be there for the due diligence and then play an active role in the asset management calls moving forward at a very minimum. You can not be a money raiser as that being the only thing you do. Now, you know, how do you feel about somebody that’s super analytical like you are, Jonathan, bringing their underwriting chops to a deal, okay? Would that be an option or do you feel like they need to bring the deals and do the underwriting?
Jonathan
Yeah, it’s interesting. I would have said absolutely no, probably prior to about three or four months ago last year because you know, the environment last year was me as a sponsor looking for deals, I could underwrite everything that came my way because not a lot came my way. Well now, as you know and you’ve already alluded to in this podcast, there’s tremendous opportunity out there. And even on my desk right now, there are so many deals to look at, you know.
Rod
Right.
Jonathan
And so, you know, I think that from a time perspective, just bringing even that one component now would be incredibly valued.
Rod
Right.
Jonathan
The kicker Rod is like, you need someone who’s actually good at underwriting. Right?
Rod
Sure.
Jonathan
You know if you’re like, hey, I have to teach them from the ground up, it’s just not the same. By that point, it’s like, okay, you might as well you know, do it yourself while you’re talking to the [inaudible], etc.
Rod
Sure.
Jonathan
But yeah, go ahead. Sorry.
Rod
Well, I was just going to say one of the things we’ve done in our team now. We’ve got regional managers that will bring a deal, but then we’ve got a VA that actually enters it into our system, does the rent comps, gets it ready to be normalized and proforma, and everything else, which saves a ton of initial groundwork. Seems to be working very, very well. So we’re able to just go through a lot more deals. And then the regional does the initial real underwriting, and then it goes to our committee. And that process that we’ve just put in place and we’re just now working out, this looks like it’s really going to work well for us. So, you know, as it relates to getting started, what suggestions would you have for someone that’s sitting here listening, that knows they need to do something, knows they need to– you know even they may have a high-paying job, even have money in the bank, have the ability to invest in deals as a Limited Partner, but they haven’t pulled the trigger on anything. Maybe they’re a little afraid of the market right now. Speak to that person.
Jonathan
Yeah, absolutely. So I think it depends– I think of the new syndicators going through a couple of different phases to get to their first deal. The first one is the education phase.
Rod
Sure.
Jonathan
You have to learn. And that’s where you know, podcasts like this, books, resources are valuable. You know, one of the cool things is we live in a world today where you can learn just about anything for free, online, through podcasts. The bad thing is you have to do a little more work on filtering what’s actually valuable to you as you’re learning because there’s so much information out there.
Rod
I’ll save you from that pain. Just get your butt to one of my boot camps. I do four a year.
Jonathan
Exactly.
Rod
They were about $100. I don’t sell anything there and they’re virtual, so you do them in your freaking underwear. And so, you know, 16, 18 hours of training with nothing being sold for $97 is kind of a no-brainer. Okay? So, you know, that’s an option. Okay?
Jonathan
Yup, absolutely.
Rod
And my students now own upwards of 150,000 units that we know of, and I’ve only been teaching for five years. So something I’m very, very proud of. So, you know, that’s something you could do. But I agree with you, there’s a lot you can learn online. Some of it you have to take with a grain of salt, which is why I’m glad you put that caveat in there because it seems like everybody when they buy their first deal becomes a trainer. And I’m going to tell you, there’s going to be some carnage over these next couple of years because some of these so-called trainers bought everything with bridge debt and they’re freaking out right now. Are you seeing any of that on your radar, Jonathan? Any troubling signs from either deals you’ve looked at or students that you’ve talked to that are in a little trouble with the bridge debt?
Jonathan
Absolutely. And I think everyone is in agreement that there’s going to be an opportunity. The only question is how much? Will it be a little bit, some, or a bunch? Right?
Rod
Yeah.
Jonathan
That’s the only thing we have to figure out. Yeah, people are in trouble right now and it’s really– I mean, it’s an opportunity for us as buyers but it’s kind of disappointing that it’s a temporary problem. Right?
Rod
Yeah.
Jonathan
Their interest goes up for two years and they’re sunk.
Rod
Yeah.
Jonathan
It’s sad but that’s why your upfront risk assessment of deals, your understanding of how your debt interacts with your deal, and the financials on it is so important to get right the first time.
Rod
Yeah. We’re actually doing an event for my students, my Warriors. There’ll be 300 of them here in Sarasota, on March 11th and 12th. It’s just for students. That’s one of the topics actually we will spend a couple of hours on, which is the impact of debt on a deal. Maybe not a couple, maybe just an hour. But one of the people that’s coming is– you know we do deep dives on underwriting, things like that. But that’s the thing. You know, it’s like anything else, guys. You have to actually get started, but then you have to immerse yourself in it, wallow in it, for lack of a better word, and just underwrite like crazy and learn as much as you can, as quick as you can. But you have to get started, you know. Would you agree with me, Jonathan?
Jonathan
100%.
Rod
Okay.
Jonathan
You know, I mean, after you’ve done your education, you have to make a plan and take action. Right?
Rod
Yeah.
Jonathan
And initially, that probably looks like underwriting deals, talking to brokers, talking to potential investors, whatever it might be on your action plan. And then kind of that last step is pulling the trigger.
Rod
Yeah.
Jonathan
And for some people, that’s the scariest part because then it’s real.
Rod
It’s the first step. It’s the law of the first deal as well. Our mutual friend Michael talks about that first deal. It’s the scariest. It takes the longest. It’s the hardest. And then I see with my students all the time, it might take six, eight months to get a deal, and then they get one. Next thing I know, they have three or four going. I’m like, what the hell just happened, you know? So let me ask you this. In your career, Jonathan, were there any aha moments, like any epiphanies, like, okay, now I get it kind of moments?
Jonathan
That’s such a great question.
Rod
Thank you.
Jonathan
You know, you mentioned the law, the first deal, and that’s an easy one to mention.
Rod
Right.
Jonathan
You know, I think rather than being a single moment, there’s this realization when you close that first deal, I’ve done it. I know the process now. It’s like riding a bike. I just have to repeat it. And for me personally, that definitely kicked in because I closed my first deal on a Thursday and signed my PSA for a second the next day on Friday.
Rod
Wow. Good for you.
Jonathan
So, you know, I definitely can’t argue against it. For me, the numbers are really where the aha comes from. You know, when I sat down and read a book and understood how commercial real estate was valued at– or evaluated and how you can add value by taking advantage of forced appreciation, that was probably the biggest aha moment to me because you know, you’re chugging along in the residential world and I like residential investing. I’m not against in anything. But the ability to add value in multifamily is unparalleled. And so I would say that was probably the biggest moment for me.
Rod
Yeah, that’s a big one. Let me give an example of that, guys. If you haven’t heard me talk about this before. So we’ve got a 296-unit asset in San Antonio and we numbered the parking spaces, okay? And we allowed the tenants to reserve their own parking spots. Over 100 took us up on it, 25 bucks a month. That was an $800,000 increase in value over some freaking paint on some parking spaces, okay? That’s why we love this business. So let me ask you this, Jonathan, what’s your why? What’s driving all this for you? You’re a very motivated guy.
Jonathan
Yeah, that’s funny you asked. Honestly, Rod, it took me a long time to figure it out. I was one of these people– you know, some people just be like, well, it’s my family. My wife and I are married. I love my wife. We do this together. But, you know, she was not my only why, you know. And some people, it’s like, why, I want to make money–
Rod
Don’t let her hear that. Don’t let her hear that.
Jonathan
Buy a lot of stuff. And for me, I realized it was like a conglomeration of a lot of things. And so you’ll probably see behind me, I have a lot of different running pictures and medals and stuff on my wall. So my hobby, ever since I’ve been a kid is running. I’ve been an endurance runner, triathlete for a lot of years. And so the way that I summarize my why is running the race well. And it’s this idea that you know, you only get one life to live. And it’s a lot like running a race. Right? There are no timeouts, there are no do-overs. You know, you don’t get a retry, you get one shot. You don’t get each day back. Right? And so for me, running the race well encapsulates this idea that one day when I die, whenever that is, I want to say in my life, I’ve done the most I could do. I’ve made the biggest impact I could make you know– my footprint, if you will, in every way that I possibly could. And so, you know, that may play out in my family. It may play out in my community, with different people that I want to help, and in my own life, living a happy, fulfilled life. But I like to encapsulate that in the phrase running the race well. So, that’s my why.
Rod
No, I like that. That’s a great analogy. So let’s talk for a minute about team and leadership as it were. So do you have a team? Do you have someone that you work with or a couple of people that you work with? And if so, can you describe that?
Jonathan
Yeah, absolutely. So, you know, Apogee Capital is just my wife and myself.
Rod
I see. Okay.
Jonathan
We typically partner with other syndication groups on any given deal. And as we’ve already alluded to the different roles that we play, it varies a lot depending on the deal and, you know, just different aspects of where we can add value, the market it may be in, who’s the property manager is, whatever it may be. And so one thing that I think we don’t talk about as much in the multifamily industry as some others do. We talk a lot about the technical aspects of it, finding deals, finding investors, mindset. That’s all great. It’s important. But we don’t talk as much about the interactions with other people we work with, you know. How do we get along with other people? How do we determine if someone else is going to be a good team player in a deal, you know? What do we do when we disagree on things? And so that’s something that I’ve been really passionate about thinking about and talking about with newer syndicators because I believe a lot of times it can be a make-or-break thing in the deal. Just to give one example, your relationship with your property manager. You can have a bad or good property manager. If you have a poor relationship with them, your deal is not going to go well. Same thing with your partners–
Rod
Now, wait a minute. Wait a minute. Wait a minute. Wait a minute. You jumped– unless I missed something. You jumped from partners to property managers.
Jonathan
I did.
Rod
So let’s stick with partners for just a second before we go to property management companies.
Jonathan
Sure.
Rod
You know partnerships are like a freaking marriage.
Jonathan
That’s right.
Rod
They’re easy to get into and they’re hard to get out of. And, you know, I host a Mastermind. It’s called The Multifamily Boardroom, and I’ve got some of the largest hitters in the space in that Mastermind. You know, people with most of them over 5,000 doors and many of them with more than that even. Two of them, a male and a female, when I first started the thing, were dissolving very large partnerships because they didn’t ask the hard questions upfront.
Jonathan
Right.
Rod
Now, since you brought it up, I’m going to mention a resource that I have, and it’s “The Questions You Should Ask A Partner Before Getting Into a Partnership”. And it’s free. It’s actually in my link tree. If you’re listening, go to “RodsLinks.com”, and it’s there in the free books. Or you can just text the word “links” to “72345” and it’ll take you to that site. Again, “links” to “72345” because here’s the thing, you know you can get caught up in the emotion of getting into a partnership and you don’t ask the questions you need to ask, like, who’s going to do what? You know, do your homework. Have you checked out their work ethic? You know, what happens if somebody gets sick? And here’s another big one that doesn’t get discussed as much, trust your freaking gut. Okay? If something doesn’t feel right, trust it. Your brain is incredibly powerful and it’ll pick up micro nuances that you’re not consciously aware of. There’s a great example of this in a book called “Blink”, where art experts can see a painting and they know it’s fraudulent but they don’t know why. Okay? And it’s the same way with another human being. You can feel something and I can tell you, every time I’ve ignored it, I’ve regretted it. And I hate to say it, but women are better at this than men. It’s intuition.
Jonathan
That was going to be my next comment right there is my wife has helped out a lot with that aspect of it. But, yeah.
Rod
Whenever I do a big hire, we go to dinner with that person. And I can tell you, you know if the wife says [inaudible] then it’s [inaudible] because you got to trust that because your brain is so powerful. But anyway, that resource is awesome. It’s at “RodsLinks.com”. And now let’s talk about property management. Let’s continue down this path a little bit further.
Jonathan
Yeah, absolutely. And so, you know, I think a lot of the same questions that– your property management is a partner on the deal. I mean, yes, they work for you, but they’re a partner on your deal, and they have a very unique role that can make or break your deal.
Rod
It’s the most important role, almost. Your onsite manager and then the regional that’s managing them. There’s nothing more important, in my view, especially if you’re doing a reposition. Would you agree?
Jonathan
Yeah, absolutely. So let me just give you a really tangible example, Rod. So I have a manager who is a rock star. She does a great job. Fabulous person.
Rod
On one of your assets?
Jonathan
On one of my assets that I have a lot of oversight on the asset management on. And she’s a great person. She works incredibly hard, she’s smart, but her personality is to be a little bit more on the pessimistic side of things. So, you know, it’s like if an AC goes out, probably all the ACs are going to go out in the next week according to her, right?
Rod
Right.
Jonathan
And when I first started working with her, it freaked me out because something bad would happen I’d be like, oh, my goodness, probably the building is going to burn down in that. And obviously, I’m exaggerating to make my point.
Rod
Sure.
Jonathan
But I had to understand who she was and where she was coming from in order to realize like she was looking out for my best interest. And while she may be a little bit far on, you know, one end of the spectrum in terms of concern or worry, it’s in my best interest to make sure that she feels heard and understood because that’s what’s going to motivate her to continue to do well working on my asset. And so that’s just one tangible example.
Rod
That’s a leadership role right there.
Jonathan
Yeah. Absolutely.
Rod
And that is validating your people, your peeps. It’s encouraging them, it’s praising them. You know, I’ve owned some large companies and I used to make it a point on a weekly basis to pick some people and find anything to praise them on because people will do more for that than they’ll do for money. Okay? And so it’s so critical with any role in your company. But the other thing is hiring a good property management company if you use third-party property management. And again, that can make or break you. And since you brought it up, I’ll bring up another resource. I’ve got an awesome book on that. In fact, you should download it as well, Jonathan.
Jonathan
Definitely.
Rod
It’s got every possible question you could ever ask if you’re going to hire a third-party property management company. And it’s also in the free books at “RodsLinks.com”. And I’ve got to tell you, I’m really proud of it. I think it’s probably the most comprehensive list of questions to ask because I’m going to tell you, in a new market that we go into, I don’t know if you feel the same way, I feel like we learn more from interviewing property management companies than just about anything else we do because they’re boots on the ground. They know what the demographic is. They know what the businesses are that are feeding that. They know how to market that asset. They know what the expenses are going to run and so on and so forth. Do you agree or–
Jonathan
I 100% agree.
Rod
Okay.
Jonathan
And I would also say that, especially– you know, if you’re talking about, say, a big market like Dallas, right? If you don’t like a particular manager, you just go on and keep interviewing until you find someone you do like.
Rod
Right.
Jonathan
But let’s say you’re in more of a secondary type market or tertiary market where you have maybe two or three property managers who could potentially manage the assets you’re looking at.
Rod
Right.
Jonathan
What happens if you don’t like any of them? Or let’s say you have to pick the lesser of the evils kind of scenario. The issues that that property manager has is going to be a lid on your success in that market. Right? If they don’t believe, hey, we can push rents more than this, even if the data says otherwise, you’re not going to push rents more than that.
Rod
No. That book will really help you with this because you know one of the questions is how often do they do a market survey. You know, what do they do? I think we’re not going to see the rent growth that we’ve seen the last couple of years for the next couple of years, but we’re still seeing some rent growth and there’s still a huge pent-up demand for rentals and their ability for people to buy just has just gotten harder and harder. So, you know, I don’t think we’re going to have a problem with occupancy, although their layoffs are still happening. I just read yesterday Disney is laying off 8,000 people and we’ve heard about all the tech layoffs, so who knows how bad this thing is going to get. And I don’t know why I went down that rabbit hole. I forgot what we were even talking about. Property managers, yeah.
Jonathan
Yeah.
Rod
They’ll know– you know, when you’re looking at a submarket, they’re going to know what type of units you should get there and whether or not the units you’re looking at fit that demographic. I remember we bought an asset in Dallas, it’s called Millennium. And it’s I think 280 doors if I recall, and it’s almost all one bedroom, which is something I would normally avoid. But they’re all nice, large, one-bedroom, a lot of fireplaces, and it is exactly what that demographic wants. And so it’s been 100 % occupied since day one. You know, that’s another important factor when you’re talking to property management companies.
Jonathan
Absolutely.
Rod
And you started to allude to leadership, and boy, that’s just a topic I absolutely freaking love and how to be the best leader you can possibly be and build a culture that people can be proud of, which is challenging a little bit in this virtual environment. That’s something I’m struggling with because we’re completely virtual.
Jonathan
Yeah.
Rod
And if somebody comes up with a way to really enroll people in a culture virtually, they’ll be a freaking billionaire because, to me, that’s like such an– maybe it’ll be– who knows, maybe it’ll be that metaverse or something. But, you know, I remember in other companies that we had, we used to do all kinds of crazy things like office decorating and– you know, we just had a lot of fun. We had a CFO, a chief fun officer, okay, and we’d build a fun culture. But anyway, so it’s you and your wife, and then you’ll co-GP with people, they’ll bring new deals, they’ll help you raise money, things like that. That’s a very common– now, is your wife active in it?
Jonathan
She is. So she still has her W-2 job.
Rod
Okay.
Jonathan
She’s a project manager for a developer here in Dallas area. So involved in the industry even during her day job. But, you know, our ultimate plan, our journey that we’re working towards is, you know, both of us doing it. So that is our ultimate dream. Yeah.
Rod
Got you. No kids yet?
Jonathan
No kids yet.
Rod
Got it. Okay. Well, so as you know, I’ve got a lot of aspiring real estate investors that are listening. They want this. They just haven’t pulled the trigger out of fear or maybe limiting beliefs that they’ve got, you know, about their abilities. And just remember this, guys, you know as it relates to limiting belief systems, there’s a reason the acronym is BS because most of them are BS. But you got to push through them. That’s why I tell you, the biggest thing you can do if you come to one of my boot camps, for example, the first thing we do is goal-setting on steroids because you got to create what Napoleon Hill calls a burning desire. So you push through that stuff.
Jonathan
Right.
Rod
But I want to ask you, Jonathan, someone in that place that hasn’t done anything yet, what words of wisdom might you share with them as to– you know, we talked about first steps getting into the business, but just maybe some motivation, push them over the edge conversation.
Jonathan
Yeah. So I would say two things. The first one is a little bit more comical, but I would say learn fast because the opportunities are coming. Right?
Rod
Yeah.
Jonathan
So it’s time to grind. You’re going to be behind the curve if you don’t get started.
Rod
Right freaking now.
Jonathan
Yesterday, if it was possible.
Rod
I just did a clip on this. I’m sorry. I interrupted. Forgive me.
Jonathan
No, you’re good.
Rod
I apologize.
Jonathan
No, go ahead. Go ahead.
Rod
Okay. Well, I was just going to say I just did a clip on Facebook or Instagram or something about this where if there was ever a time to learn something, it is right freaking now. Pick your vehicle. You know, maybe it’s doing single-family, fine. Everybody starts there. Maybe it’s buying businesses. I think there’s going to be an opportunity there. Maybe it’s trading. I don’t know. If it’s multifamily, you know, get your butt to my boot camp, but don’t wait. You need to get up to speed right now. Here’s why. If you’re trying to learn this in the thick of it, it’s going to be too late. If it does really get ugly for a bit, nothing lasts forever. If it gets ugly, you’ll think it’s going to last forever because that’s what the news will tell you. But everything goes through seasons, including our economic environment. But there will be an opportunity, but you got to get up to speed. You got to build a relationship. You got to learn how to analyze and all this other stuff. Do you agree?
Jonathan
A 100%. You know, anyone that comes to me asking how to get it, I’m like, grind now because it’s– and I’m already seeing, as I’m sure you are, you know we alluded to it earlier that there are more deals now than what there was six months ago. I mean, last year it was a ghost town for multifamily.
Rod
Right. So you said the one thing. What was the second thing? I’m sorry I interrupted you.
Jonathan
The second one you actually already alluded to, but I think it’s really important to reiterate is the limiting beliefs. And so, you know I– and everyone’s is going to be different. That’s the thing that can be challenging. But for me, I knew coming into this business that I could understand the analysis, I could do the numbers, I could understand the business. I even had a lot of belief that I could, you know, have the people skills to talk to brokers, to talk to investors. But to me, the idea of being able to raise money, to be able to use other people’s money, it blew my mind. It was like, who’s going–
Rod
Scary. A little scary.
Jonathan
Who’s going to trust me with this?
Rod
Right.
Jonathan
That was my thought, right?
Rod
Right.
Jonathan
Or, you know, yeah, I know I can talk to a broker and intelligently communicate with them, but I don’t have a reputation or a track record. How are they going to trust me to award me a deal? And so, yeah, it took a while to get through some of those limiting beliefs. And honestly, the best thing I can say is we all have things in our life that we’ve overcome, maybe by our choice or not by our choice. We’re like, I never thought I would get through that, you know. It could be something academically, a job, it could be a sickness. And what I would recommend to people is in your mind, stake that in the ground, remember that when you thought, I’m not going to make it through this, I’m not going to get through this. And then you did. And realize that multifamily is the same way. One day you’re going to be looking back on it and be like, you know, I did my first deal. I did my second deal. I had my first full cycle, you know. And I think once you realize that, it just makes it a lot easier to process mentally.
Rod
Yeah. By the way, guys, full cycle means you bought a deal and you sold it, obviously, typically for a profit. But listen, I want to add something to what you just said, Jonathan, because that was really helpful. And that is, think back to that time where you kicked ass and you pushed through something and think about how you breathed. What you focused on, how you carried yourself, you know, what you heard, what you saw, what you breathe, because associate with all that, bring that energy to this problem or this limiting belief, and you’ll push right through it. Well, listen, I think that’s a good place to put a pin in this. Jonathan, I really appreciate you coming on the show, brother. It was a real treat to chat with you. It was a pleasure to meet you. And I’m sure we’ll see you at some industry conferences in the future, my friend.
Jonathan
100% Rod, thanks for having me. It’s been fun.
Rod
Okay, take care.
Outro
So one other quick thing. We encounter so many people that are, frankly, frustrated. You know, 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.
