James Bryant joins Jerome Myers on the Myers Methods Presents Multifamily Missteps Podcast to launch this new concept. We learn that these projects don't always go as planned, the four steps of the Myers Methods of multifamily investing, and why they believe there is a need for this type of programming.
James believes that how you respond to missteps is more important than having them and we are using this as an venue to learn how people are transforming obstacles into opportunity.
In this weeks show we learn about:
- not raising enough money
- what happens when you don't turn on the utilities during the physical inspection
- why you must go in every unit
- what we should expect in future episodes
- why people should go tuna fishing instead of trying to take Moby Dick down the first go around
If you are interested in getting more multifamily investing education go to www.myersmethods.com
Say hi to Jerome
Say hi to James
James Bryant joins Jerome Myers on the Myers Methods Presents Multifamily Missteps Podcast to launch this new concept. We learn that these projects don't always go as planned, the four steps of the Myers Methods of multifamily investing, and why they believe there is a need for this type of programming.
James believes that how you respond to missteps is more important than having them and we are using this as an venue to learn how people are transforming obstacles into opportunity.
In this weeks show we learn about:
- not raising enough money
- what happens when you don't turn on the utilities during the physical inspection
- why you must go in every unit
- what we should expect in future episodes
- why people should go tuna fishing instead of trying to take Moby Dick down the first go around
If you are interested in getting more multifamily investing education go to www.myersmethods.com
Say hi to Jerome
Say hi to James
James Bryant: 0:00
you know some of the residents when you first go in and you start talking to the residence, they don't want to necessarily talk to you. Even though you're coming in and you are saying you're gonna fix this property or you're gonna be the new owner or you're looking at it, they're kind of still looking at you a little weary. I remember we were talking to one lady. I forget what unit Waas and we were there probably for a bit 15 minutes before she realized that we were actually there to help, Not necessarily to try to find ways to a victor or do something else. And she was like, Oh, so you guys are here to help Oh, while the bathroom upstairs is leaking and you know the light isn't working correctly. And the film, I mean, she started talking about all of these things.
Jerome Myers: 0:47
As an operator, I know other investors are romanticizing multi family invested, and I'm looking to learn from other investors. Mistakes. I know you are, too. You found the right place. Welcome to Myers Methods presents multi family missteps. Everybody, welcome to Myers Methods presents multi family missteps. James has joined me today because I didn't feel like it would be right to have other people come upon the podcast and start talking about their Miss Tessa multi family without us going through and talking about some of the mistakes that we've had in our journey in the multi family space. James, how are you today, man?
James Bryant: 1:41
Man, I am excellent. I choose to be happy. I choose to take the day for what it is, and I choose to get the most out of what today has to offer.
Jerome Myers: 1:51
It's all online set, and it he's going to be able to get a dose of that mindset just about every day. I think they're hitting the fan. You know, this pie cast is being born out of me, listening to about 40 hours of constant every week and hearing people go on show after show after show and present the H G t's. The story. A multi family investing I can tell you is Operator, that it doesn't always go as planned, and more times than not. I have all kinds of surprises. And so James and I are about transparency we like for people who actually know what's going on in the business because we don't want to sell anybody a dream. And so if you guys don't know or if you do know, back in the fall of 2019 we launch Myers methods, which is our education platform. We took the cohort of our individuals through the course, and now they're part of the pack and they're out seeking bills, and they're on the hunt. And so, James, you know, I don't This is a scripted. We never know when the camera and we hit record. Man, what do you think?
James Bryant: 2:59
I think it's an excellent idea, Premier Li, because you go in a lot of back ask you hear these people tell them about how they, uh, made certain amount profits. Everything went great or their waas a horrible issue. But they never tell you how they actually fits the issue. They just say, Yeah, yeah, yeah, something happened. But now everything is great and really the secret sauce, all of the magic, all of to me. The profits are made from the operational side, where you're able to look at those missteps and transform those obstacles and opportunities for profits on and to really be able to help walk people through that. Things are gonna happen in any deal. Things are gonna happen. But the question is, how are you gonna respond to that? It goes back to what you were saying about mindset, but eventually those thoughts have to matriculate to actions. And the action's what are what you do when you haven't missed up. That's gonna be the thing that will transform that obstacle into an opportunity.
Jerome Myers: 4:02
Amazing. So, you know, we've got a four step process. We find ills, we fund them, we fix him and we flip him. Over the past few weeks, we've seen a whole lot of variations off says that we've been touting since last year, when we first did our first educational seminar. And so finding the bill is where you decide whether or not you have a lead or right, and they have the same letters. But they are not the same thing, right? And so there's a lot of opportunities and missteps that happened there. But most people don't hear about him or talk about him because that deal leads never get bought. It's only does end up getting the bank's step in and prevent you from buying a lead that you think is a deal. Then when you get into funding, there's so many things that could go wrong during your due diligence period, you can miss something in your model. You can not underwrite something that was presented by the cellar correctly. You can not turn on if the utility is what you're doing. Inspections during your duty, you can not raise enough money to do your deal. There's just so many things that can go wrong in a funny face. The crazy part about it is, you know, that's usually 2 to 6 months. And so there's a whole lot of people who either don't get into the deal and so they don't get to share the story. You don't really find out about the struggles that happen. You know anybody who raises money knows that there's a whole lot that goes into making the sausage, and nobody actually talks about it. And then you get into the fixit phase and you know, people talk about filling it well. There's a whole lot of stuff that happens before you get occupancy, and so how do you actually work with your property managers? to get these things performing in the optimal space. And then the final thing is flipping it and flipping It doesn't mean so that you can refinance it a cz well as Sally, just depending on what your exit strategy is. And in that space, you could do a whole lot of things wrong. Go under contract with the wrong group, Ms Report your financials. There's just a ton of opportunities to stumble on Bump your knee or your foot as you're going through the process. And so you know what? All that said, You know, James, let's talk about some of the challenges that we've had and maybe one or two of these things. You know, this podcast is meant to be, you know, pretty short 25 minutes or less. And so let's just give these guys a little bit of constant, and then we'll start bringing other operators from around the country on so that you guys can learn from their experiences as well.
James Bryant: 6:35
Well, I think it's cool because we have slightly different perspectives. You know, your perspective is as an operator. My perspective is as a partner, investor and key principle. And so for those of you that are being seasoned to be key principles. And you're coming with your balance sheet and you want to help, You know, make that deal move forward. Then you need to understand what you're looking at in what some of the missteps are that can happen just because the operator comes to you and says, Hey, these numbers look great in its 100% occupied, and we're gonna be ableto buck prints up. Ah, $100. Day one doesn't necessarily mean that Vested Cates s. Oh, yes, this is educational. Yes, these we're gonna talk about missteps, But keep in mind, the different perspectives was which we approach. Uh, you know, the topic. So, man, uh, where do you want to start? Mr. Myers? Um, you want to start at the 1st 1? The first property could be purchased in Greensboro.
Jerome Myers: 7:41
Yeah, let's do that. Because I've got all kinds of Mrs I probably have an example for every part of the process, right? Great for finding the deal. Um, this one was pretty simple, you know, it was direct mail. Uh, the seller met me on sight after he received in my piece, and they're calling me. We walked through the property and he showed me a couple of vacants, but he didn't show me everything right. And so I didn't know if I had a lead or a deal. But I was able to get what he was looking for from a purchase price perspective as well as an overall Phil for what the community looked like. What I didn't know was there were two units that were down and the third that should have been down. But I didn't really know how to tell it was down because the utilities were off. And so I think that in the funded phase, when we're doing the due diligence, I think that piece was the one that was the biggest struggle. We had a unit that had a broken water pipe and because we did not turn on the utilities during the due diligence phase, we didn't know that the water pipe was broken. And so when we closed and we started fixing the property and we went into that unit to bring it back online, we turned the water on water, came through the wall, ran down no to the first floor and ruin the whole kitchen, the floor cabinets, everything. And so we had a budget budgeted for doing all that stuff because it was in good condition when we purchased the property. But, you know, that was a pretty big hits. Who are we have budget. Um,
James Bryant: 9:16
And if I'm not mistaken, Jerome, that the previous owner were using some of the things from those other units to replace stuff in the units that were occupied, It was It was like a scrap area, you know, repurpose in refrigerators, a reaper repurpose sing the, um, you know, the oven or the stove on one of the units, I think was just straight up, uh, boarded up.
Jerome Myers: 9:47
One of them was boarded up. Yes. So unit. He was bored, not Unit E. Yeah. Unity was boarded up, and so that part was crazy because there was a leak. And there the whole floor was covered in mold. And so we We found that out during the actual due diligence period during the inspection. We haven't went in that unit before. We thought that, you know, somebody may have been living there. The curtains were down and we just didn't want to disturb the tuna on the previous walk throughs. Well, what we did when we did actually going we have to go in through the back. The door was boarded shut. They had to do before, but it is going across the front door. It been kicked in before, is what happened. And so they just took the unit down and just left it. Um, unfortunately. So what? So, guys, is your host your own? I just want to let you know we lost my methods in the follow 2019 with ambition to inspire a new breed of If you are interested in giving in a multi family are scaling your current business up over to our Web site at my methods dot com grabbing free forceps guy how to get. Now, let's get back to the O. So you know, we're looking at the numbers we like. Amanda's property is amazing, you know, rents there below market rents by at least 100 bucks. Maybe even 100 and 2500 and 50 bucks. The owner right now is only collecting about, uh, 70% are no. 60% of what we think the property can collect it. So let's go in and grab this thing, and we bought it at a reasonable Capt Ray on the existing financials. But, you know, there were a ton of what I call hidden surprises when we actually got into it and thats why apartments wild animals now?
James Bryant: 11:41
Yeah, and I would say that this is one of the things when you're looking at your due diligence that there's a big difference between physical occupancy and economical occupancy. Who's actually paying right? You know, just because a unit is physically occupied doesn't mean that people are actually paying the rent or colonel in the ribs.
Jerome Myers: 12:04
It's true. And when you're buying from Mom and Pops, you know the delinquency reports aren't very good, and they don't actually show you how many times people have been late or any of that other stuff. And so, you know, having an accurate understanding of what is happening at the property before you get into it. It's tougher on some of these smaller properties and part of the reason why we wanted to have these conversations as we believe that the majority of people are going to come in and they're gonna go tuna fishing or even dolphin fishing when they come into multi family. You're not gonna go out there and hunt Moby Dick, Not on their first, Still. And so you know, a lot of the luxuries that folks have their taking down these 100 or 100 and 50 plus, you deals, um, you don't have those on a smaller properties. And so we want to help people figure out if you're going to go do your first J V or your next Davey. What is actually happening at the property before or things that look out for is kind of buyer beware type opportunities for you guys.
James Bryant: 13:04
Yeah, I mean, is a key principle, you know, looking at the numbers during the review running amok, running my own underwriting model. They've been looking at the underground model that you ran on Dhe, then trying to bring all of that together to make sense of what the owner provided to us in what the actual bills and numbers were saying. That was a task in and of itself, making sure that we combed through and don't miss anything from a modeling perspective. But back to the actual physical property. I think you know, one of the things is making sure that you do not underestimate the amount of money that you need the race in order to do the repairs. That's Ah, big One. As Jerome said, one of the missteps Waas not knowing that the water I was broken in the one unit. Another part of that is looking at what the physical occupancy is for his economic occupancy A's, and then you really have no clue for what all of the deferred maintenance issues are. You know some of the residents when you first go in and you start talking to the residence, they don't want to necessarily talk to you. Even though you're coming in and you are saying you're gonna fix this property or you're gonna be the new owner or you're looking at it, they're kind of still looking at you a little weary. I remember we were talking to one lady. I forget what unit Waas and we were there probably for a bit 15 minutes before she realized that we were actually there to help, not necessarily to try to find ways to a victor or do something else. And she was like, Oh, so you guys are here to help. Oh, while the bathroom upstairs is leaking and you know the light isn't working correctly. And the film, I mean, she started talking about all of these things that were going on. I think we, you know, took over the unit. Some of the units, the air filters were severely clogged, like like the tenants didn't know to change them. And the maintenance folks didn't offer to change them. The maintenance folks didn't say, Hey, you may need to change of filters because the filters, they work in a convenient place, you know, for them to be replaced. And so being able to come in and look at the property and understand what some of the ongoing mates misdeeds are is important not just for you, but for the health of your tenants being able to eat even if you don't physically go do it. But to tell Lieutenant what the recommended meet Mrs Well, in that particular air filter, you know, you probably need to change your air filter every 30 to 90 days. It's not for a building. Safety reason is more so for the safety and health of your tenant.
Jerome Myers: 15:57
Awesome. And so, like we promised this thing is only gonna be 2025 minutes long. And so we're gonna wrap this episode at the inaugural episode of Mai's Mathis presents multi family missteps. James, I appreciate you jump in oil with me, bare your soul a little bit, pulling that band aid off and re exposed to some of those wounds from, You know, these battle scars we have, man, it's just exciting to have a partner like you in the space. And I look forward to doing many more of these. Got tremendous response on Lee then yesterday over is close to, like us over 2000 views on the post had a number of different operators from all over the country get tag and violence here to go ahead and join. And so it looks like we're going to be booked out for the next three months already. I think Corona virus might be helping out with people being free to Dubai with that man. Any closing thoughts of urine?
James Bryant: 16:52
Hey, listen, everyone we have this stuff going on with the Corona virus. This is serious, you know? Stay in place. Do what you know. The positions and stuff are telling you to do and why you're staying in place and your hunker down. You have to choose how you respond to this so you can choose to be sad. You can choose to kind of glinting yourself and really be isolated. Or you can choose to be happy to look at this opportunity as an opportunity for you to learn an opportunity for you to grow an opportunity for you to reach out on the phone. Virtually to those people that are closest to you, those people, that means something to you. So don't let this social distancing make you become to distance.
Jerome Myers: 17:38
You made it to this juncture. So you really love what we shared on this episode of Meyer's methods presents multi family Mr Do Us a Favor. Give us a five star rating, give us a review and share this with somebody who's interested in the way