Speaker 2: Hi friends, this is Vinny Chopra from here in Danville,
California, and you might be saying, Hey, Vinny, what are these over here?
You know, I wrote this book a few years back, Apartment Syndication
Made Easy, it became top seller.
I came from India with 7 in my pocket.
It says 500 million.
It's going to be 1 billion very soon, very soon.
I'm right at about 850, 900 million.
It's And then I'm ready for the next billion.
Actually, you will see that happening two billion in this book.
Also, the other book I wrote, which has been a very big
positivity has been my life.
Always, always.
I've been married 43 years with two children.
And the beauty is to be positive.
The mindset that can take you to all the places in the world.
And that's the book that also.
Became big, big seller.
My third book, Senior Assisted Living is coming.
So do yourself a favor, go ahead and click the link below to get free
copies, audio copies of these books, even printed copies of these books.
If you, I'm a print in means digital, if you can't afford it,
but I would highly recommend for you to get these or go to amazon.
com.
Just go to Amazon.
I got it in soft cover and hard cover.
In Kindle, in audio, also the Spanish version of this.
Oh, this book also.
So let's crush it, guys.
I know you can be successful.
I know you can do the kind of things that you want to do in life and have
the streams of income and know how to really, you know, educate yourself so
that you could become a strong, strong force in this world in real estate.
I know you can.
So take that step.
Don't just be on the sideline.
Take charge of your life.
Take charge of your education.
All right.
Let's have some special time together.
Yeah.
How are you?
How are you doing brother?
I am doing good working from a beaver today because it was just out hot
outside, but still looking for deals, still like excited about working
for, getting something in place.
Yes.
I know things have not panned out exactly the way I wanted to,
because I was hoping I would be getting some kind of a deal by now.
But hopefully things work out and they will, they really will, and
the exciting thing is that market is turning, interest rates are going
to be coming down even further.
Lot more hustle bustle is going to enter this market now.
And multifamily is something you can always count on, so
it's going to be fantastic.
Just we need to have some little bit more patience also.
Finding the right deal is so important.
It's so very important because the first deal, if it's great, then the next and the
next and the next will be very good too.
And took me 11 months to get my first deal, by the way, 11 months, way back
when, and then certain times lately, 2014, 15, 16, maybe I used to buy, you
have to go through hundreds of deals.
To find one gold nugget.
One golden nugget.
So keep that in mind, yeah, no problem.
All right, let's just start by hello, Franco.
How are you, brother?
Good to have you.
Yay.
All right.
Let's do this.
Our attorney asked us to do glad you are all here.
And hope you're excited.
Welcome to my, weekly inner circle mastermind and so forth.
And brother Daryl is coming in again, the it's for entertainment
and educational purposes only that we meet and talk about real estate, talk
about mindset, talk about positivity.
All these great things.
And it's educational, probably no legal.
advice or accounting or, invites is given.
So please consult your attorney and CPA and so forth like that.
Again, growth mindset.
It's huge.
I'm going through my life with the knee surgery now, but I'm
feeling so good in three weeks I'm walking without the Walker.
And I, I was my therapist said, Oh my gosh, Even my superstar coming in,
I couldn't believe it, so anyway, I feel positive that the recovery, full
replacement recovery has gone well.
Praise the lord.
So brother daryl, how are you sir?
All right Having a good day having a good day Hey, that's the key.
That's the key, and brother franco.
How are you?
Yeah, i'm doing How are you?
i'm doing great doing awesome.
We might have three or four more students joining You know, they
are finding more i'm doing event bright This is my first Eventbrite.
I have 92 tickets sold out of 100 tickets and it is mind blowing.
I'm going to be talking about senior assisted living, in this
and it's a catchy, very catchy.
A lot of people are really excited about it.
Bill, who is my marketing manager, we were just discussing an hour before this.
I meet with Bill.
Every Wednesday.
So we were able to get all the first name, last name, and the
email addresses of 90 people.
I don't even know them from Adam and they are the ones who want to attend my
seminar webinar, which I'm giving for one and a half hour on Saturday morning.
Not this Saturday, but the following Saturday, and they want
to, learn how to buy, what to say, and how to do all those things.
So very exciting.
So I'm going to be doing like once two webinars on Eventbrite month.
To build database also and also clients and things like that.
Anyway, I wanted to share that with you because it's very simple way
to gather lots of people who are interested in what you're doing.
Yeah.
All right, let's go to what should we talk about today?
What's on the hot topic?
Hot topic.
So this group, except you, Vinny, I, Franco, and Daryl, we met yesterday.
Talking about the deal that you had sent out.
We were just like underwriting it thanks to Franco and Daryl's initiative.
So I'm so happy you guys did it.
It pleases me immensely because the thing is we need to be totally Ready.
For analyzing lots of deals because you will find them now, and there
is a great deal in Nashville.
I just got today 71 townhomes looks very attractive, and my daughter
and I we talked about when I go to buy 300 units 400 units like we've
been doing for such high price.
But we would love to go with a value at function at a smaller
level, like 100 units is usually we are looking at, but no, go ahead.
You want to share?
Let's dig into it.
Because the one in Huntsville, or was it the one in Georgia?
Huntsville.
Okay.
Good.
Excellent.
Who knows, today we could do one hour of teaching, if we combine everything
into session, yeah, there we go.
Okay.
Yeah.
Basically we were looking at this at a very high level
zoom in.
So you can actually see what and this is the offering memorandum that we had.
Yeah.
Could you share that?
Because I just passed it on to all of you, right?
I said, let you all look into it.
Let's look at the operating memorandum OP and look at and see what
assumptions looked trimming was nice, little bit different maintenance.
The wooden.
The staircase is going up.
We have to see if they were rotted or things like that, that just
comes in my mind right away.
And, oh, is this the one?
Yes.
Okay.
So take us through here.
Yeah.
Yeah, sure.
So basically this is like a newish kind of a place and then we did look at some of
the houses that are close to this as well.
So this looks like a little bit better than what is there in the neighborhood.
Average rent is 810 and this is like a 36 unit of the 36 units.
I think more than half are empty right now.
So yeah, like the pro forma numbers are just not to be trusted, but this 810
number can actually go up to around.
1, 000 to 1, 100 based on rent o meter rents, but probably not in all
the different, not in all the units.
Units, all the units.
Okay.
Got it.
Two acre of land.
That's a pretty spread out, right?
How many buildings are these?
Let's see.
These are, I think, five buildings.
They show up pretty good.
What happened?
Half are empty.
Did they have some murder in the place?
Something, sometimes that happens.
Sometimes bedbugs kill.
By the way, bedbugs are very bad, people leave, tenants leave.
So we're not sure what has happened over here, but the vacancy is very
high, but let's just read through the investment highlights four and
a half miles from the downtown.
These are all just points about hansville.
So we already know this.
? Yep.
Yep.
And there are like eight under 3, 4, 5, 6, 8 different different structures.
Where where all these, so four plexes.
So four, four times.
Oh no.
Eight.
32.
That would be otherwise, so maybe one has six, huh?
Yeah.
So something like that.
And then, . And then they look something like this.
Oh, interiors look good.
And all of them are two bed, one and a half baths.
Excellent.
Okay.
By the way, that's even very good because usually we say one
third should be one bedrooms.
Two thirds should be two bedrooms.
In this case, All two bedrooms, so families can live, you could
increase the rents, at a higher level, you could do that.
And two bedroom the pool becomes bigger, who can rent, right?
That's a good thing too.
So it's good to have two bedroom homes all of them.
Now this is operating statement actual, or is It's just T6 and T12.
Even the T6 and T12 that they're sharing, it's just made up
numbers because they filled up the vacancies with the market range.
Ah, okay.
No, we don't want to do that.
We want to pay the price that it's worth today, with 50 percent
vacancy, like you said, right?
And something like that cars also tell a lot about the demographics.
And how about the police report?
Did you guys do the police report on it or no?
How's the crime in that area?
I took a look, Vinny, but I wasn't able to find anything on the crime.
I did find something on terms of housing starts and family
starts, and they have quite a few.
If I remember right, it was either 23 or 43 new multifamily starts.
It's a good thing, which is good thing, by the way, what you just shared there
by knowing that there are so many starts coming, it means other people have found
this area where more growth of population is coming because they're going to spend
the way building brand new product, right?
25, 26, 27 will be when they come out.
So there is a huge pent up demand.
So new product, when it comes into a proper, into an area, it
helps the older properties too.
It does because it increases the rents, and then you move it along.
So that's a very good thing.
Of course, if I were to build another multifamily, I'll be
scared because 44 other people, developers are coming in already.
I would not take that step, but maybe this is telling us now, where is the
path of progress is another thing, where is this property, and the biggest
thing in my mind, when you just said my heart stopped, that it's 50% vacant.
So my thinking is, how did it get there?
How did it get there?
That's what we need to be the biggest detective ever, with the, broker,
with whatever you want to find out.
I'll even put this address onto Google and space Loop net.
So I want to find out more about it, from the internet, but maybe when this
address and the reviews of tenants, so you could do lots of different things
to find out the color on this property, because why it got where it is now
and what's the loan on it now, who has owned it, how many years and how much.
Apex money they have spent into it.
Is it lipstick on the pig, I call it?
Or is it really inside, they took care of it, right?
Oh, look at that, Zillow's, something showed up there.
Wow, look at that.
Ooh, now that's a better looking.
Why did they change the colors and all that?
Wait a minute.
How old is this picture?
Can we see it, please?
Looks like it's in because even Google maps has the same one.
Oh, okay.
So it would be within the past five ish years, five ish years.
Yeah.
Wow.
Overall, looks like a nice area.
There is no fencing around when there are fencing and around the structure
and all, there is theft going on.
There is vandalism.
But in these, in this case, Looks like these are lots of
them opposite to each other.
Wow.
And there are brick there.
I like the brick and all that.
They look pretty darn good.
And the roofs look nice to me.
Look at that.
The biggest expenses, roof appliances.
And the foundational problems, foundation, if it is going to be, cracks and things
like that, or looks like this, even the, maybe it's not wood, maybe, Oh,
there is a construction truck there.
Maybe they are fixing it up to sell.
Your imagination should just flow.
And you say, you know what?
Why are they selling only six?
Six, I think you said 32, why not the other, or maybe this owner owns only this.
It's interesting.
Eight of them, eight of them are being eight of them.
Yeah.
Basically these ones all.
Yeah.
So Vinny, is this somewhere where each individual address is its
own property, obviously, and then it could be broken up and sold.
Is that what's going on?
One owner has one loan against eight of them, and then the others are just.
They could be owned by the same owner or different ones, or how does that work?
Yeah, I'm trying to picture it.
Most of the time owner will buy everything, right next to each
other, like a whole lump sum.
And then it can be in a deed.
It depends on the deed, how they did it.
Is it individual addresses?
If it's beaded that way, you could sell them also separately as a piece
by piece, or I don't know if you could sell each unit separately, that's that's
called like condo conversions kind of thing, laws are there, and then you
have to have a homeowner's association.
If you're doing that, so is there, would there be like one umbrella loan over all
these properties or you think there's individual loans for each property?
Oh, no.
I'm really alone.
You can do umbrella.
Yeah.
Sure.
Because as many buildings you put on, of course, each building will have its own
lot size, which is there right there.
I see it.
And also the structure.
So they are actually giving you a loan on the whole unit, the whole
structure lot and the, oh, there is this guy Patrick right there.
Did you call him yet?
I was supposed to call him this morning.
I got sidetracked.
Please call him.
I'm going to call him tomorrow morning.
Yeah, now that we have these questions too, to find out about your property.
So we'll add those to the list of questions.
Please let's do it.
They want to sell, we want to buy if the price is right.
And if it makes sense, so I feel very see, I've never bought in Huntsville,
but one of my student, very nice.
My very good friend Robert Pereira is in Huntsville.
And he's doing, he's making hay, big time hay in Huntsville, Georgia and Huntsville.
Those are the two places he's in.
And he just I'll send him, he wouldn't mind sharing his info a little bit.
Let's see.
Arc is his company's name.
And right there.
There we go.
Arc Robert.
Okay.
Yeah.
But please go ahead.
Vinny, this city is growing over in the west side of town.
Enormous growth, such that it's straining Hey, Ricardo.
Where are you, man?
You've been missing the class.
It's the same link.
Vinny's Zoom.
Ha.
Vinny's Zoom.
I'll just send it to you again.
It's the same Zoom.
You got in Saurabh?
Yeah.
Everybody got in.
Yep.
I'll just send it to you again.
Let's see here.
I don't VZ.
There we go.
Okay.
I was wondering about that.
I said Ricardo was very excited.
And what happened?
Okay.
Let's go for it.
No, you were, see, the thing is we need to ask so many questions so that,
the, not to really bog down the broker.
But he wants to sell.
We want to buy, we have very valid questions.
How did it get to be 50 percent occupancy?
What happened, to this asset, give us nitty gritty because we
don't want to waste your time on our time, feel like that.
Franco.
And say that, you're representing a group of investors.
You are vice president of PNC bank, whatever.
You show your strengths, because the brokers will give you back answers.
Depending on how you portray yourself, if you're meek and this and that, I'm just
calling this no, hey, we analyze the deal, we met together, we are very interested
in this area, we know some of the people who are really doing good in Huntsville,
so we want to find out what's the real color on this, okay, yeah, no, I have no
problem doing that, but getting all this information today will be very helpful.
Excellent.
So that would be fantastic.
Fantastic.
So what Vinny, the the, , Vinny, the city's growing about one to
2% each year since about 2020.
Uhhuh, , Uhhuh, and actually what's happening is it's growing
so fast in certain districts of the city that they're fire and police.
are getting overwhelmed.
Ah, okay.
There's a busting at the seam.
I call it they're bursting at the seams, so there's so
many population is coming in.
Wow.
Yeah.
Which is a good thing.
Yes.
Which is a good thing, actually, you have Veloster there, you have
Toyota there, you have Polaris, you have GE, you have NASA there.
Awesome.
No, that's fantastic.
Fantastic.
What you're saying is what we looked at over here, this Huntsville deal.
You might get a lot of Florida people going out there too, right?
After all these hurricanes, people might.
Oh my gosh, Milton is there coming through now and elite
just passed, it's devastated.
That whole Tampa area and all these keys and everything.
Thank goodness we sold our two properties there in Cape Corral and in Punta Gorda.
Thank goodness.
Yeah.
I'm counting my blessings.
Hey, Ricardo.
How are you?
How are you doing?
We don't see your face.
How are you bro?
Yeah, there you are.
There you are.
Yeah.
Join us.
So this is the deal I sent to all of you and we were just
analyzing and they met yesterday.
Daryl and Saurabh and Franco look at the deal and so forth.
So we discussed what to ask the broker, what questions, we need to be asking.
So what's the fair price?
If it's 50 percent occupied.
Where is my detailed underwriting where you go with the 50% or you could even
do it in the quick calculator too.
Yeah.
Same thing.
I did it.
And basically it's like 700k.
See, look at that.
And they want how much they want 2.
4.
They want three times more, three times more.
See, that's the beauty of coming in a mastermind that you don't
overpay for these properties.
They, it's like a bride.
They try to give you operating memorandum, so snazzy, everything pictures and,
naive buyers investors will just look through it and don't even know.
That's, Hey, it's worth so less than what they're asking.
So anyway, So I did change the, once the property is completely rented out at 800
unit, that's when we're getting at that 2.
7 number, but without that, if we just look at.
The current occupancy, which is 19 units.
Yep.
730.
Oh there is a something to be said that, maybe a million might be good
for them to get, because, Hey, your property is not, it's not renting,
I'm the thing is, Stellar wants to you to pay high price as if you have
put your business plan into action.
But you as a shrewd buyer want to say, Hey, it's not worth it.
The appraisal from my bank is not going to give me even the loan on this one.
Yeah.
When there's this, when there's this much vacancy, wouldn't it behoove the
seller or the broker to let us know why?
There's so much.
Totally.
That was my first question I asked you guys.
Be the biggest detective to find out how did this property get to 50%.
We want to know.
As new buyers, we want to know what went wrong and let's what if there's
a reasonable, so what if there's a reasonable explanation like, we rehabbed
or we did, let's say there's something very reasonable on why there's 50 percent
vacancy and it makes a lot of sense.
Okay, good.
How do you then restructure or offer?
What would you do?
Wonderful.
Then next thing you want to do is call a property management company locally in
that zip code to find out if they manage in this range, 32 units, 36 units, not the
thousands of units like I do now, right?
So you want to talk to them, get them involved.
Hey, we are out of state owners.
We are looking at a property.
We want to ask your opinion.
This again, you don't want it's already listed on this on outside, so
it's not that it's off market deal or anything, but you can tell them the
address property management company.
We'll tell you a lot about the area.
It will tell you a lot about that property itself.
I'm telling you it's the state.
It's a team sport.
I call it commercial investing is not a solo game.
It's a team sport coming into mastermind coming in here, getting
other people involved because you want to ask everything and everything
not pay high price, but what's your business plan into action.
Now, by the way, I was just saying something, Hey, my lender
is not going to give me loan.
Guess what?
Nobody's going to give you loan on this property.
It's 50 percent occupied.
Hard money lenders might give you money no, they won't.
Not at all.
Maybe 60, 40, they might say, Hey, LTV of 60, 40.
We might you bring 40 percent of the money.
That's a lot of money to be putting down, so that way it will not make sense.
The cash and cash cannot really hold true if you're putting so much money in equity.
What's cash and cash?
That's total net cash at the end of the year.
Divided by the total money that you put into it, closing costs, down
payments, rehab money, whatever it needs to be put into it.
So the cash and cash will be negative, maybe, because the occupancy is 50%.
So I think, ask some questions, brother.
And then we could come back and say, discuss it again next Wednesday.
Because when did it got listed out?
And we look at so they're under the water.
Actually the thing is, if this package came out, I got it today or no couple
of days back, I sent to you guys, right?
So it took them about a month to put this package together.
So seems to me that they've been talking to the seller for about two, three months.
Hey, we need to sell this property.
Maybe somebody I don't know what happened why they want to sell it and so forth,
but we need to find out the real deal
All right.
What should we talk about next?
So this is good.
I'm glad you met yesterday and discussed it again, I do I'll go ahead.
Go ahead.
Yeah, go for it Yes, i'm winning so with that deal that is that's 50 occupied,
and the lenders is they're not going to give you money, is it possible seller
financing, and now and how would you go about increasing the occupancy?
Can we buy this deal and salvage it?
That's the key.
That's the real key.
Actually, today I interviewed one of my students.
Paramod Singh is his name, from Chicago.
And he's doing very well.
So he came on my podcast.
If anybody's interested, I'd love to give you the whole interview.
I interviewed him today.
And he's doing very well.
He got the whole 76 units, I think near Chicago in Urbana?
For zero money down.
He took over the mortgage.
That's all he did.
This is the, yeah.
Why was the seller selling at because he was in the, under the water.
He was not able to pay the bills.
The occupancy was very low.
Just like what we are discussing.
Ricardo right there, brother.
As a matter of fact, you know what?
This will be good one though.
Maybe we could just talk.
I can show you guys a little bit.
Go ahead.
Keep on talking.
I'll open it up.
I think I saved it in my Dropbox and we'll just watch that
interview just a little bit.
It will be very good for us to do that because it's all in learning
how to put the deal together.
He's going to buy that property in 2027 after he's stabilized it and everything.
At the price that he locked in today.
On a similar 3, 000, 000, 3, 000, 000.
I think he said, no, go ahead.
Shut up.
Yeah.
On a similar note, like basically I was thinking like, so I had a,
the deal in Fargo, North Dakota.
I think we were talking about that earlier,
basically I gave him my numbers we talked about it.
I got the data for September as well for September.
They were cash flowing 0, not 0, 7.
50.
For all units.
So I showed the data and I told him that, Hey, like 1.
3 million is the price right now.
I'm going to offer you 1.
3 million and yes, he has a mortgage of 1.
2.
So I'll give you a hundred K extra right now.
mortgage.
But he has in his mind thought of a value, which is basically 1.
6, because that's that he refinanced in into two years ago.
So he already has that value in mind.
And.
There are different ways of valuation, valuating properties, like one is the
net operating income that is there today, the way property right now, but
then another is the replacement cost of the property and how much is the
intrinsic value of the building, the land.
Exactly.
Sure.
So the credit union that lent to him two, two years ago, they gave it to him for 1.
6 million property valuation.
And he's sticking to his gun that he sell it at 1.
6 or maybe a little bit less at 1.
55.
So I know for that, that I'm not paying 1.
55.
1.
2 and 1, 1.
23 and 1.
55 and the down payment right now.
And he wants, and then we assume the mortgage.
So I've said no to him because we're in a position of power right now,
because he needs the winter is coming.
He needs to, yes, before that for his side business.
So I've said no to him, but I'm thinking, what should I say to him next?
Should I wait?
What's the next negotiation tactic in here?
that's all for this episode of the investor impact.
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