Max Shah is the visionary force behind ROS Capital and a distinguished real estate investor. With a stellar portfolio comprising 1100+ units spanning multifamily properties, self-storage, rentals, hotels, and gas stations since 2014, Max brings a wealth of expertise to the table. His background in IT infuses a distinctive technical edge into his real estate prowess, and he excels as a developer of new construction homes. As a committed advocate for clients’ financial success, Max is a trusted advisor recognized for consistently delivering exceptional results. Elevate your real estate journey by partnering with Max Shah for prosperity and unparalleled insights.
Here’s some of the topics we covered:
- Bonus Depreciation Discussion
- Max’s Background In India
- Finding A Great Mentor Is Crucial
- How Max Discovered His Multifamily Superpower
- Top Negotiation Strategies For Better Multifamily Deals
- One of The Most Creative Ways To Get A Deal Done
- The Importance of A Good Attorney
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
Full Transcript Below
00:00:00:02 – 00:00:16:18
Rod
Welcome back to multifamily rock stars. As you guys know, this is where we interview people that are just flat out crushing it in this business. And let me tell you, this show is no different today for sure. And we show the inside scoop as to how multifamily investors are creating massive success in their businesses and in their lives.
00:00:16:18 – 00:00:23:07
Rod
And as always, I’ve got my co-host is the director of our massive action team for our warrior group, Mark Nagy on.
00:00:23:09 – 00:00:25:15
Mark
Good to see you again, Rod. Happy to be here.
00:00:25:17 – 00:00:49:04
Rod
Good to be seen. Good to be seen. And we’re getting excited because we’ve got our warrior only event coming this weekend in Phenix. You know, a couple of times a year we do events just for our warriors where we go deep dives on underwriting and area analysis and things like that. But more importantly, it’s an opportunity for warriors to network because my warriors are now at about, we believe it, about 180,000 units that we know of.
00:00:49:06 – 00:01:13:21
Rod
We’re doing a count and trying to catch up on it. And and I’ve only been teaching a little over five years. So very, very, very, very proud of that. Well, today I’ve got we’ve got Max Shaw on for an interview, and he’s in over 1100 units in different sectors, multifamily and self-storage. And he’s also got some gas stations.
00:01:13:21 – 00:01:19:23
Rod
And I he’s just a good guy. So we’re lucky to have him on. Welcome to show, brother.
00:01:20:01 – 00:01:22:04
Max
Thank you so much. I appreciate it.
00:01:22:06 – 00:01:37:22
Rod
Absolutely. So why don’t you tell us a little bit about your story. Give us a little background on where you came from and you know why you join the Warrior program, why you got into multifamily and just kind of, you know, give us a high level overview if you would, Max.
00:01:38:00 – 00:02:03:19
Max
Okay. So typical my immigration story from India, grew up in poverty, came in here at high school when I was 15 and have been to a few schools around the country, started working at a microsoft. Being like that with my job ten year and started acquiring hotels because that’s one thing I knew how to operate them before ever.
00:02:03:20 – 00:02:25:07
Max
Seeing that as 1 to 3, I like to buy down businesses. So I was I was going around the country buying hotels. Then I ended up in Florida with the gas stations here and I’m like, this is not my life. I want to do something else and I want to get my time back. Now, spending on hours a week at my station.
00:02:25:09 – 00:02:53:19
Max
So I started looking at the other avenues there and then the properties I started building homes, which was two time too much time consuming and it wasn’t easy to have a skill. So I started listening to your podcast and some others, which turn me into multifamily and I’m like, Okay, this is something I got really great at and I could do and put my skillset the use and I could scale up faster and I get my time back in the family.
00:02:53:21 – 00:03:00:18
Max
So I attended one boot camp and I’m like, okay, this is this is the place for me. And I joined the program right after that.
00:03:00:20 – 00:03:05:20
Rod
Wow. And you’ve done 1100 units since you joined. Is that when did you join?
00:03:05:20 – 00:03:09:01
Max
APR In the 2020 to.
00:03:09:03 – 00:03:21:04
Rod
2022. Wow. Year and a half. So year and a half, 1100 units. Wow, buddy, That’s really impressive, man. And. And you said you came from poverty. Yeah. So. So in India, huh? Wow.
00:03:21:05 – 00:03:28:22
Max
I grew up in tents, and I also I was for Nike back in the day, and I don’t know all Nike was or how they could buy. We’re not around.
00:03:29:00 – 00:03:46:05
Rod
No, kid. And you were making footballs. That’s crazy. That’s crazy. So talk a little bit about your start in the multifamily. Like maybe what was your first deal? Yeah. How did it come together? Did you have warriors helping you? How did how did you do your first deal?
00:03:46:10 – 00:04:09:04
Max
So my first really first there was I was not joking. It went to people and took me six months to figure out what role was I can play in teams and what I could do best of my abilities and support them. So I was talking to people and other warriors reached out to me. Game one Joe Pointers. And so I took their pointers and I went out there and found Bill.
00:04:09:06 – 00:04:25:15
Max
Well, people found a deal and they brought it to me and they had we had two weeks of close. We got it under contract December 20, December. Well, yeah, and everybody wanted to close it before 24 hours to get the hundred percent depreciation.
00:04:25:17 – 00:04:27:10
Rod
Oh yeah.
00:04:27:12 – 00:04:47:07
Max
So we didn’t have much time. We had a loan, everything approved, but that wasn’t closing in through January. So I took it to my investors and I told them, Hey, I mean, the deal, I’m putting my money as well and I’m out this at the same time. I’m in the closet before 34 for tax depreciation as well as the other other stuff I want.
00:04:47:07 – 00:05:05:15
Max
I wanted to get out there faster too. So we present owner self-financing at 4% for years interest only. And he was hesitant about and December 26 on Christmas time morning calling me up at like Christmas medical school for no.
00:05:05:15 – 00:05:22:12
Rod
Kidding no kidding you had a Christmas miracle I guess you should make a movie about that was music and everything. Yeah, I love it. So you’re having to close it by the end of the year. Good for you. So, by the way, guys, we don’t know what bonus depreciation is, is allows you to capture 100% of the depreciation in in in the first year.
00:05:22:15 – 00:05:35:19
Rod
It’s extraordinary. It’s 80% this year. Unfortunately, we’re losing that in a couple of months. Then it’s it goes down 20% a year. It’s going to be 60 next next year. But wow, Good for you. That’s that’s a that’s an awesome story, brother. I love it.
00:05:35:21 – 00:05:46:23
Mark
One thing you mentioned that I that I was curious about, You said you had team members bring the deal to you. I wanted to kind of stick on that for the listeners. Who were these people and why? Why did they bring the deal to you?
00:05:46:23 – 00:06:21:20
Max
So it came from networking with a bunch of people before that, six months, when I joined the Warrior program, I was being told and thought networking is the success to the team and success to success in this business. So not with everybody I can talk to. I spoke to about 400 people back then when I got my first deal and I told them what I do and what I didn’t past and two guys, I was keep on calling them like weekly, monthly basis just before the auction and whatnot.
00:06:21:20 – 00:06:46:13
Max
And he’s like, okay, you’ve been calling me home sometimes. So I got this deal and I can use it for capital raising and asset management and I told them capital raising is not my strength, but I said, Man, it is because I’ve been running hotels and what not so sure. So I joined it as asset manager and I did raise $1.5 million in two days then.
00:06:46:15 – 00:07:08:05
Rod
Yeah, so, so maybe capital raising, maybe, maybe you’re not so terrible at it. I hate to break that to you, but, you know, it’s funny. I remember meeting you at a warrior event here in Sarasota, and somebody brought you to me, if I recall, because you had your story was unique coming from India and what you did there and everything and all the things you’ve done.
00:07:08:05 – 00:07:26:23
Rod
I vaguely remember. Of course, you know, I’m meeting hundreds and thousands of people a year. So the fact that you remember, that’s astounding. But but I remember you were a network or networking fool there, buddy. I could see it. You were networking with everybody. And and that’s the main reason we have those warrior events is is, you know, we’ve discovered this, like, I don’t know, three and a half, four years ago.
00:07:26:23 – 00:07:42:21
Rod
Our most successful warriors by far, are the ones that are the most connected. So we started doing things to help facilitate those connections like we have, you know, speed dating every other week on our after our Q and calls, we do these breakouts and we speed that warriors can meet each other and we connect warriors with their work in the state they live in.
00:07:42:21 – 00:08:02:00
Rod
And then of course these warrior events. But I remember you specifically networking like crazy. So, you know, I beg to differ on your on your, you know, your opinion that you’re not a good capital raiser because that’s what you know, that’s one of the and what we’re heading into economically, the money is going to be harder to find than the deals.
00:08:02:00 – 00:08:26:04
Rod
How we’ve got to deal we put under we think is under contract. We’re not sure just yet, but got it yesterday it was at 28 million. We’re getting it for 18. And so, you know, that’s what’s happening right now out there. There’s deals coming. And so, you know. So let me ask you this, Max. What suggestions would you have for someone starting out in real estate investing?
00:08:26:06 – 00:08:42:22
Rod
You know, because, you know, I have a lot of listeners that that know they they need to do something. They see there could be opportunity coming. I’m telling you, there is opportunity coming up as the example I just gave. But, you know, they haven’t taken action yet. They know they need to take action. What advice would you give them, my friend?
00:08:43:00 – 00:09:02:10
Max
First thing I would tell them as a coach or a mentor, they will completely change your life. Once I join the Warrior program, This is not me. I was this the tech guy sitting in my corner talking and nobody but one guy in the Warrior program. I can’t be show up myself. I just keeps on going that rookie.
00:09:02:12 – 00:09:15:17
Max
So get a mentor and start learning from what they have to offer. And the best way to do it. I don’t know that we’re going to ask the same reason, and that’s the best decision I made in my life.
00:09:15:19 – 00:09:21:22
Rod
Wow, that’s really nice of you to say that, brother. Thank you for that. I’ll have to slip you a toe when I see you next time.
00:09:21:23 – 00:09:24:04
Max
You know, man.
00:09:24:06 – 00:09:25:20
Rod
I’m so. I’m kidding.
00:09:25:22 – 00:09:44:07
Mark
What are some of those things that you’ve done to kind of break out of your comfort zone? Right. Obviously, you’ve networked at time. Do you do you just call people? Do you set up zoom calls? Do you like to do it in person? What are some of those things that you’ve done to really break out of your shell that might help other people listening that they could do?
00:09:44:09 – 00:09:56:03
Rod
Yeah, because before you and before you answer, before you answer, you know, I mean it when someone’s in the tech space, they’re very analytical. Yes. And very often they’re they’re fairly introverted. Would you consider yourself an introvert?
00:09:56:05 – 00:09:57:11
Max
I was not anymore.
00:09:57:13 – 00:10:17:02
Rod
It was not anymore. Okay. Because. Because I asked you before you came on and said, have you been on an interview before? You said, No. I’ve been asked 20 times what? I haven’t done one yet. And so I made me think, Well, maybe he doesn’t like this. And I said, Well, you just started on the biggest one in the world, so no pressure.
00:10:17:04 – 00:10:22:02
Rod
Anyway, so. So I completely forgot what the question was. So what did you do? What did you do to break.
00:10:22:02 – 00:10:26:14
Mark
Out of that? And yeah, yeah. Some of those specifics that you’ve done that good.
00:10:26:16 – 00:10:47:00
Max
I’m going to tell a sad story at the same time. Good story too. While I was joining Warrior Program, I had my first kid was born around the same time my my 22 the next month after my dad passed away. So I was like, my dad wasn’t there for me, not because he didn’t want to be there. Whether he was working out there trying to feed us.
00:10:47:02 – 00:11:07:08
Max
So I was like, I want to change my life. And I join the Warrior program already. I want to take on the government only and my coach been telling me they’re not broken. People are a matter of good call people. So one day I just woke up and that’s when the Warrior Facebook page and started mentoring everybody who wants to talk to me.
00:11:07:10 – 00:11:18:11
Max
Then I got ten calls getting the same week and that led to the different calls and different calls and different groups and yeah.
00:11:18:13 – 00:11:42:22
Rod
There you go. And now you’re at 1100 units. That’s that’s a that’s an awesome, awesome example. Listen, as you started getting into the multifamily space, talk about any epiphanies that you had, you know, aha moments, you’re like, okay, now I get it and I’m sure there’s numerous ones, but try to think of a big one where you’re like, Okay, now I know what I should be doing here.
00:11:43:00 – 00:12:00:11
Max
So I was starting through the 90 day action plans and whatnot that you had, and I, my coach was guiding me along and I was like, okay, let me try different things and figure out what am I good at? Then I was good at asset management, but I wasn’t sure what else I could do.
00:12:00:12 – 00:12:01:11
Rod
Yeah.
00:12:01:13 – 00:12:24:08
Max
So I started talking to the brokers and sellers directly. Then I figured out I was good at negotiation and due diligence, so that was my moment that I went to. One of the deals, looked at property or surprisingly year one, the agent was agent for growth. I got to disclose that it was on a bankruptcy and you can’t buy the property when they’re already on bankruptcy court.
00:12:24:11 – 00:12:26:20
Max
You had to negotiate with a mediator.
00:12:26:22 – 00:12:31:11
Rod
Now actually with the trustee. The bankruptcy trustee. Yeah, exactly.
00:12:31:13 – 00:12:49:02
Max
And broke up. I got to tell me about that deal. We already signed the PSA on it, but yeah, I didn’t see it, but I was like, okay, let me do my duty to the property. And that’s what came on. And so you better do it right, like you say.
00:12:49:04 – 00:12:54:20
Rod
Yeah, yeah. Oh, that’s, that’s very interesting. Wow. Did you end up getting it or. No.
00:12:54:22 – 00:13:01:19
Max
We had to skip it because it had so much shady stuff going on in their bank statements and whatnot. It was this big and.
00:13:01:19 – 00:13:22:14
Rod
B Yeah, Yeah. And so you discovered that you were good at negotiation. You know, I don’t want to make this sound racist, but isn’t it in your culture is very good at negotiation, negotiating, correct. I mean in the markets and everything else, right. You know, if you pay, if they think you’re an idiot, if you pay, what they ask, am I correct there?
00:13:22:16 – 00:13:27:01
Max
Yes, sir. But when I get to base, I lost my poker.
00:13:27:02 – 00:13:42:16
Rod
Yeah, yeah, yeah, yeah, yeah. The bone up a little bit. Now, you mentioned the 90 day action plan. You know, that’s something that our students, you know, utilized to stay on track. You know, it’s so hard because it can be overwhelming. And so and I love the way you described it, where you used it to figure out what you’d be good at.
00:13:42:22 – 00:14:03:17
Rod
And that’s that’s super important. And what we’re talking about here, because, you know, you’re not going to do every piece of this business. You’re going to you’re going to hone in on on your on your skills, on your superpower, on your strength. Because if you’re playing in what you’re strong in and you hire a line or partner for what you need help with, manage success is inevitable.
00:14:03:17 – 00:14:20:15
Rod
And when you’re doing what you’re good at, first of all, you’re going to love it. And you don’t really work another day in your life. You probably really enjoy due diligence and negotiation like I do as well. I frickin love that part of the business. And and so work is play. And then if you love in what you’re doing, you’re passionate about it.
00:14:20:15 – 00:14:28:12
Rod
Right? And and what’s required influence people passion. And so you know, that was a really, really good example. Thank you.
00:14:28:13 – 00:14:46:00
Mark
What are some of those strategies you’ve used, you know, in this sort of market where prices are coming down? Obviously, Roger’s cave, what example for himself? What are some of those negotiation strategies that you’re doing and using right now that don’t come off in a offensive way to the broker or seller?
00:14:46:00 – 00:15:02:23
Max
So I just go straight forward. I actually do stand in my underwriting and I tell them this is what my investors want, this is where we at and you are at ten times higher than that or way far away. But that is still there to be made. And I don’t like to talk to brokers over the phone when I’m negotiating.
00:15:03:01 – 00:15:25:01
Max
I would rather go face to face and talk to them because if it plays down to psychology, you know, not to create and nowhere to be, if you are more face to face and if you’re going to explain yourself better to them, they will take it to the owner where usually I tell broker to bring the owner with them to and I put them on the spot and tell them, Hey man, this is what it is.
00:15:25:03 – 00:15:35:02
Max
My investors don’t like it and I’m Where can you make it better? I’m here to make a deal. I flew in 2000 miles just to talk to you guys, so I’m not going to go empty him from here.
00:15:35:04 – 00:15:56:14
Rod
And that’s really good. That’s really good. And I will tell you something else you just said is when you’re in front of them, the more face time you have, the better shot you have, because they’ve already invested time with you and and and they feel like they’re losing if they don’t put the thing together because they’ve got so much time invested as well.
00:15:56:14 – 00:16:18:08
Rod
So that’s a another strategy. But I love what you just said. I flew in to do this. I want to make a deal. Here’s our numbers. Show me why they don’t work. Okay? And I love it because you’re putting it right in their face like that. That’s a really good strategy, Max. So, you know, everybody thinks this business is, you know, cream puffs and rainbows and, you know, we get our ass kicked occasionally.
00:16:18:11 – 00:16:32:08
Rod
Talk about a war story. I mean, it’s only been a year and a half for you, but I’m sure you’ve got a couple of, you know, war stories. I mean, that one example where you wanted to close by early in the year is kind of a quasi one. But think of another one. I’m sure you’ve got another one you could tally up here for us.
00:16:32:10 – 00:16:55:19
Max
I got a bunch of them. But 11i would say was the one know who you were working with, your partner and your people. Right. And I had a few deals went under me. Then I worked on and taken away from them. They were really them, all of them would be about $20 million or more.
00:16:55:20 – 00:17:04:17
Rod
How how were they? So somebody just went around you and bottom sort of what was it, a warrior? Was it a warrior? Because they throw their ass out of the system.
00:17:04:19 – 00:17:09:08
Max
If he was a warrior, I would not be sitting here right now. This right now, you.
00:17:09:10 – 00:17:25:18
Rod
You, you would be sitting here. But they wouldn’t be no longer in the program. I just tell you that right now that’s like that’s like sacrosanct in our business, in our program. You know, that whoever gets the deal brings the deal is their deal. Anybody goes around them, they’re out in seconds. So it’s never happened. Actually, it’s never happened.
00:17:25:18 – 00:17:32:09
Rod
That’s why I was sitting here kind of concerned when you brought that up. So it was somebody outside the program. Thank God. Yeah. Yeah.
00:17:32:11 – 00:17:39:05
Max
Okay. So that’s. So I don’t know your partners or you working with know them better than, you know, your wife.
00:17:39:07 – 00:17:47:02
Rod
Yeah, no kidding. Well, I can tell you, I don’t know about you, but, you know, I don’t know if you’re able to make the. Are you coming to Phenix or you’re going to make it?
00:17:47:04 – 00:17:52:21
Max
You know, I. This is the only one element I’m going to miss because of the second baby coming along.
00:17:52:22 – 00:18:01:11
Rod
Oh, congratulations. Excuse. That’s a pretty good excuse. Yeah. You brought your baby the last 24, I recall. Right. Then I get to meet your baby down here.
00:18:01:11 – 00:18:03:17
Max
We’ve been to every single one of your events so far.
00:18:03:17 – 00:18:25:16
Rod
Yes, that’s right. That’s right. That’s awesome. Well, listen, you know, we talked about you mentioned, you know, getting torpedoed by somebody stealing in your deals. And that absolutely never happens in the Warrior program. But let me talk let me mention the Warrior program. If you have an interest in applying to this extraordinary freaking program, you text the word crush to seven two, three, four or five.
00:18:25:16 – 00:18:44:11
Rod
Again, that’s crush 272345 will set up a call with you. You look us over, we look you over. And if it’s a fit, you’re off to the frickin races. If it’s not, then you’ll still leave that call better than you when you went on it. But, you know, I think you’re hearing. Would you agree, Max, you said it was the greatest decision you ever made.
00:18:44:11 – 00:18:47:10
Rod
So I don’t think I don’t think better than it all.
00:18:47:10 – 00:18:50:17
Max
But this is a this is an antibody. Are you going to make that.
00:18:50:19 – 00:18:51:15
Rod
Up for me.
00:18:51:15 – 00:18:52:18
Max
This program?
00:18:52:20 – 00:19:18:22
Rod
Thank you. I really I really appreciate that. So, you know, you’re handling the do diligence asset management because you’ve got incredible experience across different businesses managing assets. So that that just carries over for sure. But you know, I know I don’t I don’t think I have to guess at this. You’re why you’re why is your kids right you don’t want them to have would deal with what you had to deal with growing up would that be a correct.
00:19:19:00 – 00:19:39:00
Max
That’s the one of the my lies. My biggest one is I have enough money for truly to live my life and my kid’s life. They have, you know, for them. But I want to build schools and communities in real world countries in Africa or somewhere. And wow, what I’m doing now is going to go towards that.
00:19:39:02 – 00:19:40:13
Rod
Oh, that’s fantastic, brother.
00:19:40:15 – 00:19:57:09
Max
Everybody deals the schools. I don’t want to get you, but everybody, you know, please forget about building universities, forget about getting them a job because high school education is not going to do them a job anymore. Right. So I want to build a self-sustaining community. The parents can work in the community while the kids can go to school.
00:19:57:10 – 00:20:11:22
Max
We feed them and we house them. We built one community like that. When they get out of university, they can go out the community. There’s no one person of the time or money back to the community. And we build the second one, a third one that is self-sustaining.
00:20:12:00 – 00:20:30:02
Rod
That is so crazy that you said that, brother, because that is absolutely my goal as well. I don’t know if you ever heard me talk about this. You know, I’ve I’ve fed now over 140,000 children for the holidays. But my goal is, you know, they like the Good Book says don’t give them fish, teach them to fish. And my goal has always been to build self-sustaining schools.
00:20:30:04 – 00:20:47:14
Rod
I love the fact you really calling it a self-sustaining village. You know, my thought was buy enough land that you you can have an agriculture infrastructure or an I.T. infrastructure where they can literally sustain themselves and sustain the community. You and I need to have another conversation about that then, brother, because that’s absolutely something I want to do as well.
00:20:47:14 – 00:21:09:19
Rod
I’m leaning more towards Latin America because there’s so much graft in Africa and we won’t get this derailed. But let me say something as at a high level here, guys, okay? He’s super successful in multifamily in a short year and a half. We do a you know, at our at our boot camps. We will do Hall of Fame’s for Awards for Exemplary Warriors, warriors that have just gone above and beyond.
00:21:09:19 – 00:21:26:12
Rod
And the first one we did, we just did another one just last year, just last one in Orlando. But the first one we did was in Denver and we did a PowerPoint for each one of the warriors that came up on stage and got this hallowed award, which is really what it was, a Hall of Fame award, which is really a big deal with the number of warriors that we have.
00:21:26:12 – 00:21:45:10
Rod
There were about ten or 15 the first time and same the second time. But I started to see a pattern every single one of them gives back in a big way. Veteran suicide, veterans, homelessness, sexual trafficking, building schools in India. Dinesh does that, you know, you know all these things. And and here we go. Max is wise to build self-sustaining schools.
00:21:45:10 – 00:22:02:16
Rod
So, guys, that is what we call a clue. Okay? So if you want success, you give you don’t just focus on making money. You focus on making the world a better place. I love that, brother. Really, really proud of you for that. For you coming back with that. For that. Why? Because power moves to those who serve. And that’s just the way God works.
00:22:02:16 – 00:22:05:00
Rod
The universe works. So love it, brother.
00:22:05:02 – 00:22:25:20
Mark
I can’t let you get off the call here, Max, without you telling us this story about one of your most recent deals. That was extremely complicated. And I know we were messaging back and forth, and you said you were about pulling your hair out by the time you got to the closing line. But tell us about this complicated deal where it started and how you work through it and how you got through all that to get it to the closing line.
00:22:25:20 – 00:22:28:20
Mark
And then how that all went is a great story.
00:22:28:22 – 00:22:37:21
Max
Yep. So first, when we got a deal under and I was accepted, it was six months ago, seven months ago, the rates were different back then, so we.
00:22:37:21 – 00:22:38:07
Rod
Worked a.
00:22:38:07 – 00:22:41:22
Mark
Little. And what price point, by the way, what price point did you start out?
00:22:41:22 – 00:23:08:17
Max
So we had four and a half million dollars. Okay. Well, the owner wanted to renegotiate. I’m down to four and a half, but that’s the number that made sense for it. And that’s where the underwriting was barely passing what I was being told, that audio program. So we got that number and that time with the seller. But then he delayed process by almost six months.
00:23:08:18 – 00:23:32:17
Max
We repaid and we traded with him like three or four times. Then like two weeks before closing, we also had a rate hike for the bank so we can do the mortgage at this rate anymore. The one that we had it ready was ready but not signed. So we had the retread with the bank and so rate went up a bit more.
00:23:32:19 – 00:23:51:15
Max
So we had to go back to our underwriting and go back to the seller. And he and he came on, he was the investor to us. They came back with his bottom number, but this is my number. I don’t want this is what I’m at and this is where my money is going to the next day. So we’re like, okay, fine, we barely can reach with you.
00:23:51:17 – 00:24:00:03
Max
It’s only like $25,000. When we traded. So between reiterating, we were at 3.97. Wow.
00:24:00:07 – 00:24:17:17
Rod
By the way, by the way, sorry to interrupt. Re trading means renegotiate a deal, guys, just so you know, you don’t want to do a lot of it because brokers don’t like it. But in this current environment, with the rates going up with rates absolutely impact pricing, you absolutely can renegotiate or retrait. So please continue. I just wanted to let people know they’re wondering what trade meant.
00:24:17:20 – 00:24:30:02
Max
Yeah. So once once the final number came in three weeks before closing at this time and we can’t make our numbers work properly. So we went back to the property, we went back to the.
00:24:30:04 – 00:24:31:22
Rod
Seller.
00:24:32:00 – 00:24:57:04
Max
Seller as well as the property manager. The seller wasn’t working, so we had to creatively think differently, do it differently and make more money for our investors. So our biggest expense with that mortgage was property management fees and whatnot. So we went to the property managers and we offer them solid deals because they figured out they had $5,000 demanding and they’re buying some of them on their own too.
00:24:57:06 – 00:25:25:20
Max
We offer them instead of property management, we offer them doing a partnership spot for their management and one person for first year management fees and 3% afterwards. Wow. Yeah. Didn’t liked it, but we went to owner directly. Property management owner company and we talk to them and we show them all underwriting and everything. Then he was agreed finally, and we also threw in our other asset was nearby as the property management.
00:25:25:22 – 00:25:32:20
Rod
So you gave him another asset to manage and but you told him you’re going to cut your fees for a piece of the deal on this? On this one.
00:25:32:22 – 00:25:37:19
Max
Yeah. 8% to 1% first year and 3% afterwards.
00:25:37:21 – 00:25:38:10
Rod
Wow.
00:25:38:16 – 00:25:42:00
Mark
It’s the first time I’ve heard that on this show. I think of somebody doing that. Oh, that’s.
00:25:42:00 – 00:25:51:19
Rod
That’s very creative, brother. So this is a smaller asset, obviously, you know, if it’s 8% because that means it doesn’t have a full on site staff and whatnot, How big is that.
00:25:51:21 – 00:25:53:01
Max
For the $6?
00:25:53:03 – 00:26:11:12
Rod
Yeah, 56. That makes sense. You typically need 70 $80 to have an onsite manager, full time maintenance person leasing agent, so on and so forth. So they, you know, if, if, if the management company has to handle those things, you’re going to pay, you know, a lot more money on a larger asset, you’re typically going to pay 3% and three or 4%.
00:26:11:12 – 00:26:20:11
Rod
But on a on a smaller one like this, you’re going to pay higher. But that’s that’s very creative, brother. Very impressive. That’s that’s how you made that deal work. Good job, man.
00:26:20:16 – 00:26:27:09
Mark
Who came up with that, by the way, was that you that came up with it or somebody else came up with that and and told you.
00:26:27:11 – 00:26:47:19
Max
That was me and my other other partner? When they go talking to each other and when we just cut the other expense off and we came up with the idea. But that’s not the end of the story though. Then after that, we had the mortgage document showed up. Yeah, so much stuff on before our clause class really. So we had to really trade with them, to.
00:26:47:21 – 00:27:04:15
Rod
Trade with the mortgage company. You had to renegotiate what was on the and this is why you use an attorney for this stuff, guys. So you had a good attorney helping you to to review those documents and you reviewed them as well, I’m sure. But, you know, you can renegotiate some of these clauses in the in the loan documents for sure.
00:27:04:16 – 00:27:06:00
Rod
Wow.
00:27:06:02 – 00:27:07:19
Mark
You’re pulling your hair out.
00:27:07:21 – 00:27:28:02
Max
Well, it was right. It was so broad on the foreclosures. It was also making the occupancy and everything of property as well as the other partners. We had to take all those exact language out. Good. And we were ready to walk out a deal because that was just a way off. Yeah, we don’t mind losing our money if we don’t because we don’t want to lose any investors money.
00:27:28:04 – 00:27:48:11
Rod
Oh, I that’s, that’s the way to do it. I mean, that’s, that’s how you have to approach this. So you got to treat their money like your money. Very impressive, brother. Well, listen, I appreciate you coming on today. You it definitely added value and and I can’t wait to to to see where you’re at in a couple of years because especially in this economy, I know you’re going to snag a couple thousand more units.
00:27:48:11 – 00:27:54:02
Rod
I can just see it coming. But anyway, I appreciate you coming on, my friend. It’s great to see you.
00:27:54:04 – 00:27:56:22
Max
Thank you so much for having me. Appreciate you guys.
