Al Sidhom has been involved in real estate since 1999. The son of Egyptian and Lebanese immigrants, he was raised with a strong work ethic and big dreams. Growing up in Brooklyn and Dallas, he later graduated from Loyola University in New Orleans. Over the past 25 years, Al has renovated over 10 homes, managed 25+ properties, and facilitated more than 100 real estate transactions. With a Master’s in Counseling and a license as a Professional Counselor, he expertly navigates the challenges and anxieties of real estate transactions. Al is passionate about revitalizing properties, empowering lower-income clients to achieve homeownership, and mentoring others to reach their full potential.
Here’s some of the topics we covered:
- Al’s Journey to Real Estate Investing 00:00
- Impact of Hurricane Katrina 5:37
- Finding a Great Deal in a Challenging Neighborhood 8:23
- Getting the Seller to Cover Closing Costs 12:38
- Rod’s Near-Mugging Experience in New Orleans 18:51
- Navigating City Administration in Real Estate Deals 23:38
- Pros and Cons of Section 8 Housing Deals 28:18
- Defining Financial Freedom 32:50
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.
For more about Rod and his real estate investing journey go to www.rodkhleif.com
Full Transcript Below
00:00:55:08 – 00:01:19:08
Rod
Welcome back to Multifamily Rockstars. So as you guys know, we dive deep in these episodes into our guest deals. We got kind of a unique deal today, which is I’m kind of excited to talk about. We did a little pre frame before we started recording and you know so so you know, what we want to do in these deals is even if you’re brand new to multifamily, give you some tools and some some strategies to get started immediately even if it’s your first deal.
00:01:19:08 – 00:01:22:03
Rod
And I’ve got my co-host Mark Nagy with me as usual.
00:01:22:05 – 00:01:34:11
Mark
Yeah, right. Good to see. I’m, I’m excited as well, converting some, multifamily property and, senior living. That’s something we talk about very often. So I’m, so excited to learn about a new strategy today.
00:01:34:13 – 00:01:59:24
Rod
Exactly. So got Albert at home on today. And, Albert is a realtor in New Orleans, and, and that’s where he purchases his properties. And we talked about it. And he also graduated from Loyola. and we talked about, something that I talk about, as it relates to, visualization that relates to that school. But, I don’t know if I to take time to do that today, but, but anyway,
00:02:00:01 – 00:02:19:05
Rod
Oh, you’re. Oh, that’s right. You’ve got a psychology degree I see here. You’ve got a master’s in counseling. You’re a licensed professional counselor because I asked him. I’m like, you know, he’s like in the ninth Ward area of New Orleans, which I will tell you, I, I had an experience in New Orleans once where I almost got robbed, and, and, I may I may share that in a minute, but but welcome to the show, brother.
00:02:19:05 – 00:02:20:22
Rod
Let’s let’s talk about you.
00:02:20:24 – 00:02:27:18
Al
Thank you, thank you. Rod, it’s an honor to be here today. so. Yeah, I don’t know where you want to start. I do.
00:02:27:18 – 00:02:41:16
Rod
Have a. Well, just give us some background. Yeah, just give us some background. you know, why real estate? How long you been in real estate? you know why multifamily? Because I know you’ve done a lot of single family, so just kind of give us a little. Tell us who you are, brother.
00:02:41:21 – 00:03:05:00
Al
Well, you know, been in New Orleans for about 25 years, originally from Dallas. I, I did get, my background’s in psychology. I got my license. professional counselor, therapy, license. And at the first two years to get to that license, you have to kind of do a residency where you’re not making any money.
00:03:05:02 – 00:03:33:07
Al
And so it was then that I got my realtor’s license to compensate because I had a family to take care of. And, there is so much anxiety and counseling that goes into being a realtor that, I kind of fell in love with real estate in that it through that path. And I eventually got my license, became a full time therapist, and realized I just love being a realtor much more.
00:03:33:07 – 00:03:55:24
Al
So now I’m a full time realtor in New Orleans. And, over time, because it’s sales, I had started to accumulate rental property just to build some security for myself through those off months, as last year we could say it was a terrible year for sales. And so I got into singles and doubles, as far back as 2002.
00:03:56:01 – 00:04:29:12
Al
So, was able to get into the rehab market, build some really nice equity, do some nice deals. and then, that’s slowly evolved because in New Orleans, we have a lot of historic housing stock, which sometimes requires a lot of maintenance as a landlord. And so I, I veered into, actually affordable housing over time because there would be newer homes, like a ranch style home versus a, you know, a historic home.
00:04:29:12 – 00:04:31:00
Rod
Like an old Victorian.
00:04:31:02 – 00:04:53:10
Al
Yeah. Exactly. Yeah. So a ranch style home, I could fix it more easily with like Home Depot type items as opposed to like historic items. And and I got into, affordable housing through section eight vouchers and other voucher programs and more middle to lower middle income areas. And so that’s where I’ve been in the last five years.
00:04:53:10 – 00:05:16:05
Al
And, so it was mostly singles, a few doubles. And then I just realized, you know, I had to go bigger, you know? And that’s when I joined your program about a year ago, April, April 2023. And, with the focus of, you know, hey, let’s just learn from scratch. How do I get into the multifamily game?
00:05:16:10 – 00:05:33:00
Rod
Well, before we get into your deal that you closed, I want to ask you a couple of questions. You know, I owned a lot of those Victorian area homes in Denver, and, my God, they can be a nightmare. Even the windows, you know, they have they have ropes attached to weights. So the the weight pull helps you pull the window up and, and they’re a nightmare.
00:05:33:00 – 00:05:54:14
Rod
And and you know, the old grass, gavitt grass gravity furnaces that are wrapped in asbestos and, you know, and and and brick foundations. Yeah. Best roofs, brick foundations rather than concrete. I mean, you you encounter a lot of stuff that’s challenging to deal with. But my, my first question is, did you get hammered in that hurricane that that killed the ninth Ward?
00:05:54:14 – 00:05:58:16
Al
Well, you know, Hurricane Katrina was 2000 and that’s it.
00:05:58:18 – 00:05:59:02
Rod
Okay.
00:05:59:02 – 00:06:17:12
Al
Katrina, my, I at the time I had owned three doubles in the uptown area and that area actually did not flood. So, okay, I came out a little bit ahead from just insurance claims in that and was just fine because there was a housing shortage afterwards and rents went up.
00:06:17:14 – 00:06:18:03
Rod
Oh sure.
00:06:18:03 – 00:06:50:07
Al
So my my properties did really well. Okay. Hurricane now two years ago or three years ago we had Hurricane Ida and a little background after Katrina, it was like the wild, wild West here when it came to renovations, no permits, a lot of just junk contractors coming in, churn, burn, bad work being done. So last year during Ida, we had super strong winds, I think 120 mile per hour winds blew off all the cheap roofs.
00:06:50:07 – 00:07:08:13
Al
And so I had ten, ten properties I needed new roofs for. And it was that was it. That was more catastrophic for me than Katrina. Wow. But I came out ahead insurance claim wise, and now I’m sure. So all my rentals. So. Oh, no, that’s nice.
00:07:08:15 – 00:07:29:01
Rod
That’s nice. Yeah. You know, I just settled for almost $1 million here at my compound where I live, from, Ian, you know, man’s name, but but, you know, when I, when Hurricane Charley hit Port Charlotte here, I had 360 houses. That was the largest single family homeowner in Charlotte County. And it was the most it was the most challenging logistical thing I’ve ever dealt with.
00:07:29:04 – 00:07:44:15
Rod
We had 18 crews working on them. Oh, my God, it was a it was a nightmare. You know, the the only other thing I’ll say, you know, and I remember when Katrina hit, I had gone to Jazz Fest, which is incredible. Guys, if you ever had a chance to go to New Orleans Jazz Fest, just fricking do it.
00:07:44:16 – 00:07:49:09
Rod
It’s like 11 stages. It’s the most cool vibe. Have you ever gone? I assume you’ve gone.
00:07:49:11 – 00:07:50:14
Al
for year? Yeah.
00:07:50:16 – 00:08:07:02
Rod
Oh, every year? Yeah. No. It’s incredible. The Rolling Stones, I think this year. But, I couldn’t make it. But it’s an incredible experience. It’s almost like a sublime, serene experience because, you know, it’s just a cool vibe. You know, most, most venues you go to. I know I’m way off track on this is stay with me, guys.
00:08:07:03 – 00:08:27:09
Rod
Most, most of these big events you go to, you know, you get hamburgers and hot dogs. You go to Jazz Fest, you’ll get like, pastry pockets with, with shrimp and and mushrooms and I mean, some of the big restaurants. Yeah. That’s that’s right. Really cool food as well. All right. Well, I want to dig into this section a little bit because I get asked about that all the time.
00:08:27:09 – 00:08:40:01
Rod
But let’s talk about this deal that you, you just closed on because it’s kind of a unique deal. It’s a tough area to just go ahead and describe it, how you found it, how you bought it. Just give us some detail on it.
00:08:40:01 – 00:09:12:07
Al
Sure. So I had been, working in New Orleans East. I had several rental properties out there. And it is it’s an area that has a very bad reputation, but there’s still deals to be found out. There. And if you know the area, it isn’t as bad as its reputation, essentially. And, but the worst type of properties in the East are the multifamily properties, because you essentially have a lot of lower income type of, tenants.
00:09:12:09 – 00:09:39:13
Al
And it condensed congested space. And, it’s generally not a good recipe for, harmony or low turnover. So my focus, I would just cast a broad net looking for the right property. And I found this 14 unit complex that had been, fully renovated, and it was listed for sale. And, I want to say March of 2023.
00:09:39:13 – 00:10:05:18
Al
So right before I joined the program, it was listed for sale for 900 grand. And I was just kind of watching it. It looked good, but, obviously there were ten vacant units. I mean, the numbers were awful, so I was just looking at it as like, okay, casting the wide net, looking at what is available. The, and that was through MLS, you know, but obviously through wholesalers too.
00:10:05:18 – 00:10:31:12
Al
I’m always looking for that. And then, as I got more into the program, the price dropped and we were down to about 750. And then it started to become a little intriguing. And so I just kind of contacted the realtor for it because I’m a realtor and just poked around. I didn’t even tell them I was the buyer and was just like, hey, you know what’s going on with this property?
00:10:31:14 – 00:10:53:05
Al
And he was he was very open with me. You know, he he was just like, this guy’s in a jam. He’s getting a divorce. It’s a nasty divorce. He needs to liquidate it. And he said, you know, throw a number out there and I could maybe make it work. And I was like, okay, we’ll see. I let it go just through my own business.
00:10:53:07 – 00:11:04:09
Al
And about, you know, a few months later, I came back to it, and then he revealed to me, hey, you know, if if you give me something in the fives, I think I.
00:11:04:11 – 00:11:04:23
Rod
Will.
00:11:05:04 – 00:11:16:15
Al
Make it work for you. And that’s when I was like, And so I went back with my coach, who I love, by the way. Great. great coach Chris, your.
00:11:16:16 – 00:11:18:09
Rod
Warrior coach got you. Okay, good.
00:11:18:10 – 00:11:39:01
Al
We ran the numbers with my coach, and, it was doable. But the apprehensions again, was, you know, what are we doing with this property? Because, you know, even there were 14 one bedrooms and, subsidized section eight housing would pay up to 1150 per unit, which.
00:11:39:01 – 00:11:39:11
Rod
Wow.
00:11:39:15 – 00:11:41:22
Al
It’s pretty strong for that area.
00:11:41:24 – 00:11:42:22
Rod
Yeah.
00:11:42:24 – 00:11:47:07
Al
Yeah. And so we were like, okay, we can make these numbers work, but that.
00:11:47:09 – 00:12:10:18
Rod
Well, listen, let me let me throw something out there. I apologize and listen. Anytime you can rent a property for 2% of what you’re paying for it, it’s a freaking home run. Okay. That’s when I first started in this business. I was buying houses for 20,000, renting them for 400. Okay, you’re talking about you’re even more than 2% because you’re talking about 14 units paying 500,000, and you’re at 1100 per door.
00:12:10:21 – 00:12:17:24
Rod
I mean, you’re a probably 3%. So yeah, if you can’t make those numbers work, we may as well go home and go lay down because. Right. Yeah.
00:12:17:24 – 00:12:49:00
Al
So to me, I was thinking similarly, like this is a home run, but I got to be apprehensive about it. You know, why, why does anybody want this? And in the end, I think it came down to just the, the area and the reputation. And, now many people are well versed, in section eight housing in this area because you’ve got your bigger guys that want 100 unit complexes, and then you’ve got your smaller guys that just don’t want to be out there once a week talking to the tenants and being hands on.
00:12:49:02 – 00:13:10:12
Al
And I was already hands on. So I felt like for my first deal, I could maybe make this work. And so, the next part of this was making the numbers work for me. And so I didn’t have a ton of cash on hand, but I had used a, a, a private lender for several deals prior to.
00:13:10:14 – 00:13:12:03
Rod
Sure. For your, for your single family deals.
00:13:12:03 – 00:13:34:17
Al
Right, exactly. So what I did was I was in the process of selling one of my single families, and I was going to net out, like somewhere between 30 and 40,000 on the sale. So I was going to do a 1030 wanted to this deal. I offered 575 with 25,000 to closing costs. but I called it.
00:13:34:17 – 00:13:46:21
Rod
Okay, let me stop you. Let me let me stop you. So what what he’s talking about here, guys, is the seller giving $25,000 concession to closing costs to minimize his down payment? Very good strategy. Okay. Please continue.
00:13:46:21 – 00:14:08:10
Al
And even better, then I went to my private lender and said, hey, I think this this property is worth 800. Will you give me a loan for 600 if it appraises for eight? And he goes, yes. And so we got the appraisal, which I there were a lot of lessons in this deal and one was commercial appraisals are so much more expensive.
00:14:08:16 – 00:14:10:20
Rod
Than others that there is that.
00:14:10:20 – 00:14:40:05
Al
Yes, I had no idea, but, it appraised for 801, so he gave me a $600,000 loan on a 575 deal, and so I got 25,000 extra for renovations. I got 25 from the seller for closing costs, and then I got 35 from the deal I sold. So I actually bought this without any true cash coming out of my bank account because.
00:14:40:06 – 00:14:58:20
Rod
This is called no money down, peeps. Okay. And this is how you do it. What a great example. I mean, that is a great example of how you structure a deal creatively. And there are going to be more and more of these creative deals coming down the pike these days. So, so thank you for sharing that. That is freaking brilliant.
00:14:58:22 – 00:15:04:07
Rod
I want to circle back. let Mark ask a question here first, but I want to circle back to how it’s doing. Yeah.
00:15:04:09 – 00:15:24:06
Mark
Well, you mentioned ten of the units were vacant when you bought it, which I’m sure is what scared a lot of people away from it now. And I know section eight typically has, very high demand, long wait lists, things like that. But going into this, how how were you confident that you were going to be able to fill those units when the previous owner obviously couldn’t?
00:15:24:09 – 00:15:53:20
Al
That’s a great point. You know, and ironically, the year before in 2023, as for 2022, as a realtor, I was given the task of, I was given the listing of renting out an entire apartment complex, and this apartment complex had ten affordable units that were all one bedrooms. And the interest I got from that from section eight was overwhelming.
00:15:53:20 – 00:16:26:02
Al
And I had realized in 2022, the most understood section eight market is a one bedroom unit because for whatever reason, a lot of the affordable housing market or two and three bedroom units, and so I was I knew confidently there was a need. my biggest fear was, I was going to be leasing to one bedroom tenants, but then they would have a boyfriend and maybe three kids and, you know.
00:16:26:04 – 00:16:35:22
Rod
and that’s what happens. That’s what happens very regularly as well. The the woman comes in and then the then the deadbeat boyfriend comes in selling drugs and everything else. Right?
00:16:35:24 – 00:16:55:21
Al
You’re 100% right. And so I was really not going to do the deal until I casually mentioned it to my wife one day that I was looking into it, and she said, oh, because she’s a nurse, she’s a registered nurse. She’s like, oh, it’s always been my dream to do senior housing. Would you make it a senior facility?
00:16:55:21 – 00:17:15:23
Al
And I was like, and it was like the the heavens parted. I realized in that moment I we’ll just rent to seniors because the senior population is they’re actually great. They’ll just be like, they don’t want any drama. They, they’re actually will be or watchdogs on the property.
00:17:16:01 – 00:17:40:17
Rod
Oh, you like nobody you’ve ever seen, let me tell you. In fact, let me share something. But but you so you did seniors, seniors with assisted housing. So section eight and other assisted programs but only seniors. Brilliant. I will tell you. And I teach this in my bootcamps. You know, if you’ve got a 10 to 20, 10 to 30 unit property and you can find an old retired couple, give them a free apartment and you’ve got them.
00:17:40:17 – 00:17:56:07
Rod
And the guy is is someone from the trades. Maybe he was a plumber, electrician, drywall or paint or roof or whatever, because those guys can do anything. If they’ve done any one of those, they can do all of them. And you, you give them a free apartment, you let them the guy help with the maintenance, the woman kind of quasi manager.
00:17:56:07 – 00:18:12:00
Rod
She’s the one at the window with her, you know, with her binoculars, watching everything that’s going on. I mean, that is a match made in heaven. I can tell you, doing them a favor, and they will take very good care of your property. But if you’re just renting to seniors as well. Brilliant. Love it. Yeah, absolutely. Love it.
00:18:12:00 – 00:18:13:00
Rod
So continue please.
00:18:13:05 – 00:18:36:12
Al
When that happened, I mentioned it to my private lender because he had had one other deal in the East fall apart. So he was a little apprehensive too. And then he fell in love with the deal as well. So I had everybody in on the deal. I just had to execute and I just felt confident because of I was in the market and I just knew the population, I knew the people.
00:18:36:12 – 00:18:55:04
Al
And honestly, I will comically say, being, you know, being just racially ambiguous looking, you know, it really helps in the market because they, they just accept you. They, they don’t, like, reject you as some, rich white guy coming in trying to like.
00:18:55:06 – 00:18:55:16
Rod
Yeah.
00:18:55:18 – 00:18:56:02
Al
Take it.
00:18:56:02 – 00:19:11:04
Rod
And it’s no, that’s a factor. I mean, that’s a factor for sure. Yeah. I mean, it’s, you know, we don’t like to talk about race. My my, my, my, the love of my life is black, but, you know, the the it’s a factor. And, you know, I will tell you. I’ll tell you my story on New Orleans.
00:19:11:04 – 00:19:39:13
Rod
So this is this is probably 20 years ago, but, it’s kind of a funny story. So just as an aside, we were one block off Canal Street. Okay, one block, but it was three in the morning, and we were drunk on our asses. Okay? And it was my my, my ex-wife at the time, before Tiffy and and a buddy and and we see this guy leaning against this, this fence post, and he had a newspaper that was really thick and didn’t look like the kind of guy that really consumed the newspaper, either.
00:19:39:13 – 00:19:58:00
Rod
Let me just say that I. And I was so drunk, but it triggered with me that I knew he had a gun. So we walked by and he started following us. And I don’t know how I remembered this, but I remembered if you encounter a crazy you ask, you act crazier than they are. So I started screaming and ranting about Earl Scheib ripping me off on a paint job.
00:19:58:02 – 00:20:14:00
Rod
True story. And and I look back and the guy gives me a dirty look and he goes over and pretends to open the door to a barber shop at 3:00 in the morning. So I and I even didn’t even all register until the next day when, when I was on, hung over and realized we had almost gotten robbed.
00:20:14:02 – 00:20:22:05
Rod
but New Orleans is I. It was like the murder capital of the world for a while. Wasn’t it? I mean, the country for sure. Yeah, it was really bad. Has it gotten better? Yeah, it’s.
00:20:22:05 – 00:20:27:17
Al
Gotten a lot better, especially over the last year. They’ve just put more focus on crime. But.
00:20:27:17 – 00:20:28:19
Rod
Oh good. Good.
00:20:28:19 – 00:20:37:10
Al
But yeah, I mean, again, just like New Orleans East has a bad reputation. New Orleans has a reputation for, drunkenness, partying and.
00:20:37:15 – 00:20:47:11
Rod
well, there is that. I contributed to that back then. But but but so so so so question. So how’s that? What’s what’s going on with that deal. Now give us bring us current.
00:20:47:13 – 00:21:18:03
Al
And yeah I, I shared all the positives. Now I’ll share some negatives because I do think it’s good for listeners to, just learn lessons vicariously, you know, through. Sure. What we do. And one of the oversights I did was not really looking into the permitting of the property, which, prevented. The biggest roadblock I’m going against right now is I’ve added security to the property, totally changed the culture, cleaned it up.
00:21:18:03 – 00:21:18:16
Al
00:21:18:18 – 00:21:21:17
Rod
Tell me about the security. Tell me about the security real quick. Yeah, we move on.
00:21:21:22 – 00:21:26:20
Al
We, we put gates all around the property, and it’s fantastic. Yeah.
00:21:26:22 – 00:21:31:01
Rod
Perimeter security is huge. Perimeter security is huge. Fencing and gates. Okay.
00:21:31:01 – 00:21:57:04
Al
There were a couple stolen cars parked behind the property. Got them towed away. landscaping is kept up to, you know, every two weeks. And then lastly, we added, 360 security cameras throughout the property. And, it also allows each tenant to, download the security cameras on their phone so they could perfect monitor the cameras from inside their home if they hear something at night.
00:21:57:06 – 00:21:58:16
Rod
You got decent lighting as well.
00:21:58:17 – 00:22:17:20
Al
Yeah. And that was the last thing I was going to add. 24 hour, basically nighttime lighting that is on all the time. So it’s not motion. activate. Activate is just always on at night. So it literally looks like a stadium lit at night, you know, as you drive by. But it totally distracts crime.
00:22:17:22 – 00:22:24:21
Rod
Those three things are the biggest things. Perimeter, security, lighting and and, cameras that we do that in every asset. No.
00:22:24:22 – 00:22:44:11
Mark
I want to ask you about what? What was the setup for the property as well? Because I know obviously the government paying the rents, they typically come in for section eight and they do inspections and. Yep, check every little aspect of the house before you can rent to somebody like that. How hard or easy was it getting up in section eight for this particular property approval?
00:22:44:11 – 00:22:45:17
Rod
Yeah. Getting pre-approved.
00:22:45:21 – 00:23:11:16
Al
No, that’s a great point. You know, I inherited four tenants. And just the process of getting those four tenants, you know, getting their rent direct deposited into my accounts took like eight weeks, honestly, because when I the second I closed, I found out three were in abatement, which basically means they’re things to be fixed in their units before they’ll pay their rent again.
00:23:11:18 – 00:23:42:03
Al
So I had to get there, get the things fixed. Then you had to get the inspector there and coordinate that and make sure the inspector’s there. When the tenants there. It’s it’s a lot of babysitting. And then generally the workers at these subsidized program facilities, they’re very DMV like where they’re not on the ball per se. And so there’s repeated emails and you can’t get on their bad side either.
00:23:42:03 – 00:23:48:06
Al
So, you know, you gotta be really diplomatic and patient. And so, it’s a process.
00:23:48:06 – 00:23:50:08
Rod
You’re talking about the inspectors.
00:23:50:10 – 00:23:53:12
Al
Inspectors and administrators to.
00:23:53:13 – 00:24:10:01
Rod
Oh, yeah, I know you got to kiss ass the whole time. Been there. The you know, you were so grateful to be working with you. Thank you. What can we do to make it better? We want to make it easier for you, blah, blah, blah. And that’s frankly the case with any county or, bureaucrat that you’re dealing with.
00:24:10:04 – 00:24:27:12
Rod
Not only do you schmooze them, but the other thing is, you follow up every communication with a written email because they will forget things otherwise. And so, you know, there’s some tips there, guys. Okay. Very important if you’re dealing with the county or the city or section eight, any housing authority, when you talk to them, follow up the conversation.
00:24:27:12 – 00:24:34:14
Rod
This is what thank you. Let me just recap what we discussed and agreed upon, kind of a thing. Very important. But yeah.
00:24:34:14 – 00:24:43:05
Al
That’s a great point, right? Because they, it’s never like, malicious. It’s more just this malaise of, of non urgency by them. Right.
00:24:43:07 – 00:24:43:17
Rod
Well yeah.
00:24:43:21 – 00:24:50:04
Mark
Any government agency is like that. Oh please matter how good or bad they do. Right. That’s how it works.
00:24:50:06 – 00:24:54:11
Rod
It’s mine. It’s mind numbing sometimes how painful it is to deal with them.
00:24:54:13 – 00:25:12:06
Mark
Yes, but high demand in section eight, there’s always going to be tenants. They typically end up staying longer because they don’t want to give it up, because they have to go through a whole approval process to get paid for the rents. And so now going through all of that, tell us about the upside, the cash flows, how has this deal been working out for you.
00:25:12:06 – 00:25:15:02
Mark
And what was the benefit of all of this all of this work.
00:25:15:02 – 00:25:41:03
Al
Yeah. No, I mean I closed it early March. Today is, June 4th. I have six units rented. I have four ladies in the process of moving in. going back to I was saying earlier, the bottleneck I’m in is, because these these units have been vacant, and they weren’t permitted when they were renovated. I’m in the process of.
00:25:41:09 – 00:26:14:09
Al
Yeah, I’m in the past, I had to file vacancy permits for electrical and the building itself. So the building is fine, but I’m in this holding pattern waiting for the city to give me my electric meters. So the administrative bottleneck I ran into with this deal, and it’s very unique. And and it takes a, a really diligent, patient, approach because I’m for I think by August 1st will be fully leased, you know, within the next two months.
00:26:14:11 – 00:26:17:06
Rod
But what will the cash flow be at that point?
00:26:17:08 – 00:26:20:20
Al
it’ll be close. cash flow. We’re meeting the the no.
00:26:20:22 – 00:26:22:15
Rod
Net net cash yet in way. Yeah.
00:26:22:17 – 00:26:43:06
Al
We’re we’re probably going to be close to 5500 a month, but that’s, that’s going to be at, you know, my current, note is at 13% interest because that’s prize money. So then once it’s fully leased, I’ll be looking to refinance it and then, just have it fully stabilized.
00:26:43:08 – 00:26:48:05
Rod
And then what will the net income be? I want to juice people that are listening. Yeah.
00:26:48:07 – 00:26:49:16
Al
you know,
00:26:49:18 – 00:26:51:23
Rod
I guess, just guess. Shoot from the hip. Yeah.
00:26:52:02 – 00:26:55:06
Al
It should bump up, a good thousand, I would say so.
00:26:55:06 – 00:27:16:23
Rod
You’d be at 6500 a month on one property? Yeah. Listen, I mean, you you’ve encountered some very unusual things where you buy an asset that is renovated, you assume was done properly. They just did the work. They didn’t permit it. So you got to go back, get the permits. They have to inspect it. It’s a pain in the ass sometimes you got to open walls up and do all sorts of crap to satisfy those inspectors.
00:27:16:23 – 00:27:27:12
Rod
And there’s another example of kiss and ass that you have to do, and that and that. so, but, but is it worth it? You better frickin believe it. Those numbers are fantastic. So.
00:27:27:12 – 00:27:36:00
Al
Well, and it’s coming at the angle of, like, I was willing to do the work a lot of people were not willing to do. But I’m not saying it’s not work, you know, it’s.
00:27:36:04 – 00:27:37:09
Rod
It’s a oh, sure.
00:27:37:11 – 00:27:47:10
Al
It’s a complete pain. It’s it’s, it’s very annoying at different times, but I’m just looking at the end goal and, I think it’s going to be worth it.
00:27:47:12 – 00:27:57:17
Mark
Well, yeah. 5 to $6000 a month and 600 K purchase price withholding time, obviously. That’s right. And everything, but that’s all that I would take that deal all day long.
00:27:57:18 – 00:28:04:00
Rod
That’s 80 grand a year. That’s a salary right there. That’s a grand a year for. Yeah, some brain damage I get it. That’s some brain damage.
00:28:04:00 – 00:28:05:19
Mark
With that, brain damage is worth it.
00:28:05:19 – 00:28:08:06
Rod
Probably better freaking believe it.
00:28:08:08 – 00:28:31:01
Mark
Now, now, now that you’ve gone through all all of these different facets of finding that deal and negotiating and managing the tenants, everything for the people listening, what how would you kind of describe yourself, your personality and your superpower? Like what have you, what have you figured out that you’re really good at throughout this process? And what have you figured out that you don’t like so much?
00:28:31:01 – 00:28:35:01
Mark
And you may outsource or build your team or whatever you might want to do moving forward?
00:28:35:04 – 00:28:58:24
Al
Yeah, that’s a that’s a good question. I mean, I’m always loved deal finding and and so and then creatively making a deal work because like I said you know institutional money wouldn’t have even looked at this deal. It’s too small and it’s too tedious. But, I, I really liked finding a creative niche that I was able to tackle.
00:28:59:01 – 00:29:35:13
Al
and honestly, it’s a less competitive realm because it’s a very vulnerable realm dealing with, you know, seedy properties and that clientele. So I would say, defining and creative problem solving have always been my favorite things. and going back to, one of the points that rod has said in a lot of the podcast is I’ve had that same realtor call me for more deals that he has because once they know you’re a close or they’re shopping you deals before, before they’re even on the market.
00:29:35:13 – 00:29:55:09
Al
And so I think for me, my goal is to just create some more systems, some better evaluation for future for future deals. But, I, I’ve just thoroughly enjoyed the process and even just even the mishaps, just learning. It’s just been a great, great process. I don’t know if I answered your question, Mark.
00:29:55:10 – 00:30:03:20
Rod
No, you did, you did. You did a great job answering it, actually. So so, and so you’ve been in the warrior program since when?
00:30:03:22 – 00:30:06:21
Al
I think it was March of last year, 23rd March of last year.
00:30:06:24 – 00:30:19:24
Rod
Good for you. Congratulations. By the way, guys, if you’re interested in applying to our program, text the word crush to seven, two, three, 4 or 5. and have has that program been, a home run for you, brother?
00:30:20:01 – 00:30:43:12
Al
You know, it’s been awesome. I’ll share. just being a realtor and in real estate, I’ve. I’ve tried several coaches through different programs. not that this is the first for strictly, real estate investing, but just success or, real estate sales. I’ve tried different coaches, and I have a 100% fired. All of them, except the coach I got from your program I loved.
00:30:43:12 – 00:30:45:09
Rod
So, fantastic.
00:30:45:09 – 00:30:46:21
Al
Fantastic of the program.
00:30:46:21 – 00:31:11:05
Rod
Yeah, well, thank you, thank you. So let me ask you this. You know, we’ve got a lot of listeners that that know they need to do something with their lives. No, they need to take action. They’re on the fence. There may be cotton analysis paralysis or fear, or maybe they have some limiting beliefs. But let me. What do you think is one action item that somebody could start doing today to get going and change their lives?
00:31:11:07 – 00:31:12:15
Rod
What would you say to that question?
00:31:12:16 – 00:31:44:18
Al
Well, I’m very into, you know, one thing that connects me to the podcast a lot is I’m very into visualizing and I’m into serving others. And I think if if you’re not, if part of your vision is doing nothing and just sitting on the beach, I, I just, I just don’t think that’s a real vision, you know? And so I, I really encourage people to think of it like, think about where you’ve really enjoyed helping others and see how that relates to real estate, and see how you could just leverage that to your strengths.
00:31:44:18 – 00:32:13:14
Al
Because, like I said, I, I actually enjoy psychology and human potential. And then I looked at affordable housing, which is a very neglected market. But I really believe if you can, take care of people, help them get their basic needs met, they will meet you, at the level you meet them. And so by giving this complex cleanliness, security care, they’re actually doing the same.
00:32:13:14 – 00:32:19:10
Al
The culture has, has come up basically by me just meeting them at a higher level.
00:32:19:12 – 00:32:26:16
Rod
And it impacts the neighborhood as well, brother. It impacts the neighborhood as well. Just that property can start turning things around. Yeah.
00:32:26:18 – 00:32:41:04
Al
And so that to me, is, is really rewarding because to give to give people, to give seniors even just a safe, comfortable place to live for maybe the the last chapter of their life. That’s very fulfilling.
00:32:41:06 – 00:32:42:03
Rod
Yeah. That’s beautiful.
00:32:42:05 – 00:33:02:03
Mark
Now, once you do, once you are able to do that, stabilize the whole asset, get everybody in, get all that taken care of for just for yourself in your own vision. If you were to project out, you know, for your version of financial freedom or whatever you want to call that, what what do you think it’s going to take after this to, to get there at this current pace?
00:33:02:03 – 00:33:26:23
Al
Yeah. I mean, honestly, I’ve been building my portfolio part time for several years. So I think with this property being such a home run, I’ll be at a very stable, technically financial freedom place where, like, my, my bills are covered every month for sure. by just managing my portfolio. But, I would definitely like to do more.
00:33:27:00 – 00:33:27:15
Al
and.
00:33:27:15 – 00:33:31:14
Rod
How many houses, how many properties did you have coming into this deal? I’m just curious.
00:33:31:14 – 00:33:36:03
Al
I had 21 units going in and now I have 35 with this. 14 that I.
00:33:36:07 – 00:33:37:05
Rod
That’s fantastic.
00:33:37:06 – 00:33:44:24
Mark
Let’s just say for people that don’t have any doors to, to go to say that, how many more of these sorts of apartment complexes do you think you would have to do?
00:33:44:24 – 00:33:49:05
Rod
Well, he’s already financially free. He’s already free with this one, buddy. That’s what he just said.
00:33:49:07 – 00:34:04:06
Mark
Oh, so if we take away the 21 units he had before. Oh, God, that our God’s name, that our new, you know, so people can get an idea of like, hey, I’m brand new. How many apartment deals do I need to do to reach financial freedom? What do you what do you think it would be?
00:34:04:08 – 00:34:27:07
Al
Yeah. You know, this one was unique because I was able to tackle it myself without outside investors. and I what was what was satisfying for me is I feel like it legitimized myself a little on a multifamily level. So if I had to bring in investors to the next deal, they know I’m just not, you know, some guy that just did a weekend course that’s just trying to take the leap.
00:34:27:09 – 00:34:52:23
Al
And so, you know, in terms of what the average person would need, I, I mean, that’s that’s very subjective. But I think it is I do think maybe, if I did, you know, if you could do 1 or 2 of these deals like the one I just did, I, you know, if you need more than that every month, you know, I might question if, oh, what your needs and wants are.
00:34:53:00 – 00:35:08:06
Rod
You know. Yeah. Exactly. Yeah. Oh, that’s a good, good way to put it too. Needs versus wants. Yeah. You know it’s very, very subjective. But I mean financial freedom means when you’ve covered your bills and candidly I mean home run. But you not only did you buy this place, you don’t even have any of your own money in it.
00:35:08:10 – 00:35:27:00
Rod
And you’ve got those kinds of returns, which is just extraordinary. I freaking love it. yeah. So probably the last question would be, you know, and we pre frame this question with you and I think you’ve got some answers for it. You know, what are some hot topics people are talking about right now, in this industry.
00:35:27:00 – 00:35:46:20
Rod
And, and in fact, before you answer that question, I want to mention one other thing. You know, you you did that deal yourself. and you mentioned the fact that now you’ve got some experience if you talk to investors. And that’s really one of the biggest benefits with the warrior program, because you could have that experience just by aligning with a team that already does.
00:35:46:22 – 00:36:03:04
Rod
And that’s why the warrior program is so extraordinary, because, you know, there’s dozens of these teams that have taken down deals where over 200,000 units owned in the program now that we know of. And so and all those deals are done between warrior. So, you know, I don’t want you to get discouraged by the fact that he did this one on his own.
00:36:03:06 – 00:36:20:22
Rod
And he needs that to get investors because you can get in a group like ours and find these people that already have done deals. And if you bring them deals or you bring them money for their deals, like raise money for their deals, you’re in and you can use their credibility to go out and do deals. So I just want to I want to throw that out there.
00:36:20:23 – 00:36:23:03
Rod
Al, I’m sure you agree with me in that regard.
00:36:23:03 – 00:36:53:18
Al
Yeah, I appreciate you. I appreciate what you said 100%. And going back to Mark’s previous question, too, like, I’m not necessarily pigeonholing myself into these types of deals. In fact, what I was going to say once this is stabilized, I’ll probably start going into more of, y’all’s workshops, too. Just. Yeah, I never got into the networking as much as I’d like to, but I feel like I’ll have the, mental space and time to, to engage in that more because, I’m open to different types of deals, too.
00:36:53:18 – 00:36:57:03
Al
I really just, I really just love the deal, per se.
00:36:57:05 – 00:37:03:24
Rod
Yeah. Love it, love it, love it. So back to my question. Back to my question. Hot topics. What are some hot topics in this business?
00:37:04:01 – 00:37:30:20
Al
Well, I think too that that I think about a lot. You know, one that you have reinforced, I think, throughout the last year is the bottleneck coming with, all the, bad debt. And I’m, I’m hearing that from all levels. And I think some of this deal was, was sort of framed on that level, too, because even though it was going through a bad divorce, he had overleveraged himself within, several properties and just had to have a fire sale.
00:37:30:22 – 00:38:02:16
Al
And so being prepared for future fire sales is a is a reality. And it’s a reality that you guys have predicted for about a year. And it’s a reality I, I, took advantage of on this deal. And I would say the, the latter hot topic that there may be counter culture a little is there is a lot of talk on, just scaling, scaling and delegating aggressively and, maybe even going after in a, crazy amount of doors up front.
00:38:02:16 – 00:38:25:13
Al
And, and I’m, I’m all for success and ambition. So I’m not knocking that. But I will say the process has been so enjoyable that there’s something there’s something to be said for just being within. You’re the deal you’re in and just enjoying it. And because I’ve learned so much and I’ve screwed up so much and said, oh.
00:38:25:15 – 00:38:26:16
Rod
Well, that’s how you learn.
00:38:26:22 – 00:38:39:03
Al
Yeah. And I, I just want to encourage listeners to, not be so impatient with the process and, and really enjoy it because it’ll all be folklore for, for your future stories.
00:38:39:06 – 00:38:48:01
Rod
Oh, man, I’ve got so many I wouldn’t even know where to start. but yes, you’re absolutely right. Are you okay with listeners reaching out to you? If they’d like to, if they’ve got any questions?
00:38:48:01 – 00:38:55:04
Al
Absolutely. I’d love to help any of them. they can. Okay. My, email. Should I just say it on the.
00:38:55:04 – 00:38:56:16
Rod
Yeah. Go ahead. Yeah. Go ahead. Sure.
00:38:56:16 – 00:39:03:04
Al
Just. I’ll sit home, Sid. As in dog home as in Mary at Qualcomm.
00:39:03:06 – 00:39:20:03
Rod
Yeah, he’s with Keller Williams. Okay. Well thank you for that I, I really appreciate you coming on today al. You’ve added a lot of value and and, yeah you definitely need to get your butt to the next warrior event. We’ve got one in Sarasota in September if you, you know, because it’s time for you to, in my opinion, do some larger deals.
00:39:20:05 – 00:39:32:21
Rod
and, and, and that’s where you’ll meet the, you know, the people to do that with. Everybody raves about those events. And that’s the next warrior event is in September. And that’s just for warriors. But, thanks for coming on, brother was a it was a pleasure.
00:39:32:22 – 00:39:35:16
Al
I look forward to meeting you both in, September.
00:39:35:16 – 00:39:38:16
Rod
Thank you. Yes. Yeah. Sounds good. All right. Take care. See you.
