All Things Small Apartments With Co-Host Robert Orfino

TRE 180 | Small Apartments

 

If you’re looking for an asset that is good to invest in these times, then small apartments may just be right up your alley. In this episode, Jason Bible and Robert Orfino take us inside their mastermind to talk about how they are figuring out the small apartment markets, especially in Houston. How do you estimate the rehab? How do you go about the plans for the property? What does it mean to have free and clear real estate that you owe nothing on? How long does the process take from buying to rehabbing to reselling? Jason and Robert these questions and more while tapping into lending, evictions, and getting started in real estate.

Listen to the podcast here:

All Things Small Apartments With Co-Host Robert Orfino

Let’s talk about real estate. You know you’re doing it right when one of your partners who has been a broker for a gazillion year looks at your deal board and goes, “Wait a minute, explain this deal to me. You bought it for how much? That’s a lot of value. You guys are doing pretty good.” I’m like, “We’re doing okay. Another million here, a million there.” I’m hoping we’ll get to announce that we’re officially in big multifamily.

It’s in receivership.

We’ll just get it under contract. At least we’ll be there. We’ll see how that all goes. My understanding is it’s ready to be sold.

Here’s how you guys get into real estate. First of all, who’s your perfect avatar for us, Jason?

What do you mean?

Who’s going to succeed the best here? What’s the best way in? That’s part of our Mastermind. We think if you’re already professional making $100,000 a year, you got a good FICO score, you got capital to deploy, then this is a great market for you. This is a phenomenal market for you. Hurry up. We’re going to talk a little bit about that. Before we get started, text MASTERMIND to (281) 401-9008. For you guys out there that are thinking, “These guys are doing it forever.” We got it. There is a way to accelerate your portfolio building, and this is the time to do it. First of all, a lot of the amateurs are already out of the market. The decks have been cleaned. A lot of the amateurs are off the table, including some gurus that got blown out the door. Now you’ve got the professionals sitting around. We’re still new to the game in the bigger picture.

Relatively speaking, for the amount of success we’ve had, we are relatively new to real estate. How many guys do you run into where we’re at or higher that are like, “I’ve been doing this for 25 years?”

It’s time for you guys to diversify your portfolio and get into real estate. Our goal is to make you a real estate millionaire, which is not very hard. What’s the quickest way to become a real estate millionaire?

Buy $1 million in real estate?

Buy $500,000 in real estate.

If you were to buy $500,000, you’ll end up at $1 million.

There’s a time factor here, 5 to 7 years. We’re out there looking at every day. We found a little honey hole. I saw one down there. It’s completely rehabbed. I think we can get it under $100,000. I think Section 8 is $1,400. The market rate is probably $1,300 to $1,250.

We’re already down there. I looked at a ten-unit and I’m like, “I think I could make this work.” I started looking at some other assets around there. I’m like, “We need to start marketing down here and see what else we could pick.”

We have an eXp team group with us, Club 45. I started the WhatsApp.

I saw that. I got the invite.

We got two deals. I’m going to need you to write up an offer and I need someone to write up a lease for me. We’re already feeding deals to our group and there will be more and more coming. We’re excited about that. We have this real estate machine. We’ve figured it out and it cranks along. You can jump on anytime you want and work it so you can get a couple of rental doors. Jump off, go back to your daily life, come back six months later, get on again and pick up some more doors. That’s the thing that we’ve built out here and we’re proud of. We’re happy to see these guys doing very well, making an extra $1,800, $2,400 a month. The guy has been in real estate for less than a year and he’s probably sitting on $400,000 worth of equity. It’s not a bad first twelve months.

It’s not bad for your first twelve months in any business.

It’s $400,000. Someone on one of our groups was like, “That single-family bleeds me to death.” I’m like, “What about the appreciation?” Unless you’re buying $5,000 houses in Birmingham, Alabama, there’s a great appreciation in this market.

Why are you getting bled to death? That’s usually the question I like to ask. Is it taxes? Is it insurance? Did you not do a good enough rehab when you first bought it? That’s usually what kills them. It’s like, “What kind of rehab do you do on the front end?” Did you not buy deep enough? That’s another issue too. Is there not enough cashflow there? There are a lot of questions here and the reality in single-families is you got to hold onto it long enough and make money when you sell it.

Time heals all real estate wounds.

It certainly does.

Unlike those other people out there, we do not recommend you to go out and buy a lot of properties and retails with tenants already in them. We think you need to do the distress and do an aggressive rehab. There is a way to make it perform better, to be more durable, and to look better to get the highest rents. Once you do that, then you set yourself up for success for the next 5 to 7 years. We’re talking about broken windows or at some point, the air conditioner freezes up because you’re running it too high. Maybe the toilet gets clogged for some stupid stuff that gets flushed down there. It’s nothing big. We put all new hot water heaters in our stuff and go for the next 5 to 7 years. That allows you to run that appreciation right up. I bet harder reports out.

Time heals all real estate wounds. Click To Tweet

I would look because it should be now. I pulled it up and I’m refreshing accordingly.

The Houston marketplace was up 11.4% from January.

It is an annualized rate of 22%.

On top of cash on top of that, and then we’re able to leverage the buying of that. Your $20,000 picks you up $100,000 house. That $100,000 house appreciates 22%.

This is year over year. This is not month over month. If you’re looking at month over month data, the numbers are ridiculous because when the pandemic first started, we didn’t sell that many homes because we were locked down and everybody was freaking out. The total number of sales year over year is up to 16%, and listings are down almost 18%. That’s a near 40% Delta. My guess is if that continues through the summer, we’re going to see an annual appreciation. It would not shock me if we were at 20%. Your $100,000 house is now worth $120,000. You’re $200,000 houses is now worth $240,000. Don’t be surprised when you see big numbers coming out of the Houston market. When you get that tax bill, keep in mind, part of that is because your house has appreciated quite rapidly. You’re making a lot of money.

We believe if you guys could pick up ten doors over the next three years, work with them. At some point, you can walk away with 5 or 6 of them free and clear, and that becomes a great thing. $10,000 a month cashflow on $1 million worth of assets that are owned free and clear. That’s the end goal for our Mastermind.

Let’s talk about small apartments. We’re shifting our focus inside the Mastermind. A lot more people are coming who want to figure out small apartments. They’ve come from other groups. They’ve got six interpersonal names. They’ve never been able to crack the small apartment.

We’re building these little partnerships inside our Mastermind group and working with our members as general partners. This is how it works. For the most part, Robert and I will go find a deal and then we’ll say, “Who wants to be a general partner on this deal?” We’ll go and we’ll take them through the whole process. It’s like, “This is what the contract looks like. This is how we estimate the rehab. This is the business plan for the property.” In some cases, Bob is the first one we’re trying this with where he said, “I think I got a deal. You guys come look at it.” We look at it and we’re like, “You want us to be GPs on it?” He said, “Absolutely.” Now we’ve got people in our club that are grabbing us and saying, “Come look at this deal and I’d love to partner with you guys. Let’s go do a deal.” I think it is fun.

That big picture, and Bob’s deal is perfect for it, is at the end of five years, whatever it is, we want free and clear real estate. We want real estate we owe nothing on.

Let’s talk about that for a little bit because that’s so contrary to what everybody talks about in real estate, “You could leverage it up and you get these high rates of return.” I’m like, “Yes, but I like stuff free and clear.” I get a little Dave Ramsey issue at some point where I’m like, “Free and clear real estate is hard to get taken away from you.”

Not the whole portfolio, but a decent portion of it. Whatever that number is. One of the first things we do in our Mastermind is we ask folks, “Tell me what your number is. What do you need to survive?” Everyone in California who joins is going to be at $25,000 people here in Texas will be a $10,000 to $15,000. This is what I need. I’m like, “Let’s figure it out.” How do we get you $15,000 a month on free and clear real estate in 5 to 7 years?

It’s about fifteen rental properties.

That becomes the puzzle that we have to figure out.

Here’s what’s fascinating to me because I’ll get people from all over the country, particularly on the coasts. They’ll say like, “No, it’s way more complicated.” I’m telling you, it’s not. Let’s open up. Let’s get a napkin here at the bar and let’s get a pin. How much do you need to make a month? $25,000 a month. That’s $1,000 a door. You need to net about $1,000 a door in the next 5 to 7 years. That’s going to be somewhere between $1,500 and $1,700 a month rent per house. No mortgage, it’s just taxes, insurance, and setting aside some reserves for make-ready expenses and those sorts of things and capital expenditures. You sit down and do the math. You go, let’s say $25,000 a month, “I only need 25 of these.” It’s no more difficult than that. How do we get 25 free and clear it? We buy 50. I get it. When people hear that, they’re like, “50 houses sounds like a lot.” We got people in our group that are buying 50 houses like it’s going out of stock.

We’ve already got people over 100 doors.

It’s not impossible. Where the challenge is, are you working with a group that has a process set up where you can do that? Let’s take it to the people that need to do $10,000 a month in the next 5 to 7 years. That’s just buying twenty rentals properties. It’s not any more difficult than that. I get it that it sounds like this monument is gold, but it’s not.

It’s twenty doors and we’re going to do it for over five years. That means you got to buy one quadplex a year. That’s it. The problem is that guru on stage makes it sound so sexy and complicated. You could never do it without them. You’ve got to buy the program, and then it’s all about making money in the next 90 days. If people don’t make money in 90 days and they get pissed off and frustrated, they leave and quit.

There is no money to be made in real estate in the next 90 days. That’s not how the business works.

Don’t come to us if you’re looking to get a check in the next 60 days.

It’s like, “I got Jason. He understands how I’m going to wholesale this stuff. I’m going to make $1 million in the next six months.” I’m like, “No, you’re not. I don’t think so.”

Good luck to you. Become a real estate agent. You’ll have a better success.

Let’s go down that rabbit trail a little bit. If you need to make money in the next 90 days, you need to become a professional real estate agent, not a wholesaler. Don’t tell everybody you’re an investor. You’re not going to be a flipper. None of that nonsense. If you want to build an income in the next 90 days, become a real estate agent. That’s the best way to do it. It’s the only thing that’s viable. I’ve run a wholesaling company before. I’ve flipped 600 houses. The reality is between buying the property, rehabbing the property, and reselling the property. It’s about a 3 to 6-month process. It’s much easier to become a real estate agent, take out a couple of listings, buy a couple of houses with clients, sell a couple of houses with clients, and then picking up 1 or 2 quadplexes, duplexes or triplexes a year. After 5 to 7 years, you’re going to be doing pretty well.

TRE 180 | Small Apartments
Small Apartments: There is a way to make your property perform better, be more durable, look better, and get the highest rents. Once you do that, then you set yourself up for success for the next five to seven years.

 

The sad thing about the real estate professionals is they don’t use the product that they sell. They don’t buy enough doors to retire. The saddest thing is to see husband and wife real estate team in their 60s pulling up in their fifteen-year-old Cadillac, trying to sell me a property. I’m like, “Why didn’t you buy these houses?” Be a professional real estate agent, as well as an investor, and those combinations will make you prepared for what you need to do.

Real estate agents are literally in the middle of it. They’re working with people. It’s deals and then they’re in the middle of money because they ended up working with clients that have got extra dollars they want to deploy into real estate. Mark Dotzour, much to his credit. One of my favorite things he said is, “Out of all the assets you own, what do you know better than the single-family house you live in?” The answer is none. I know the house I live in as an asset class better than I know my stocks, my bonds, my company that I’m buying, discounted shares, all that stuff. I know my single-family house in this neighborhood better than I know any other asset class. Why don’t I buy more of those?

That’s his argument for getting into real estate. If I know this neighborhood and the school district well, you volunteer at the schools, you’d sit on the HOA board. Why wouldn’t I buy more real estate in my own neighborhood or close to it that makes financial sense? Warren Buffett always says, “Invest in the stuff that you know.” I’m like, “I know single-family real estate pretty well because you live here.” It makes a lot of sense to buy those assets. It’s no more difficult than that.

People come to us for that. Sometimes they’re a little behind like, “My credit’s a little down.” We got to spend some time. We’ll hook you up with the right person and fix your credit. I’m going through the same thing because I can’t tell you how many loans I’ve applied for. It’s a lot, but all those inquiries hit. We work with someone to remove the inquiries if I don’t get the loan. If I didn’t get the loan, there’s no reason for those inquiries beyond there. We get those pulled and my score goes up, I’m ready for another round of financing and we keep moving on. We’re moving into the commercial world where hopefully, my credit loan will be pulled once a year, but we show everyone that. “Come along this way. Let me show you how to do this.”

The good thing is the loan market has opened up.

Loans are crazy now, aren’t they?

Almost back pre-COVID, I think we’re off by about 0.50%.

Half percent and the reserve requirement.

It is a big thing now. Some guys want a full year or six months, depending on where your credit and your experience lies.

I’m willing to bet if things continue to improve like they have, they’ll probably drop that. It’s like, “I got to put up six months of payments upfront. It a little ridiculous.” We’re going to see that change here. You’ll start to see rates continue to get more competitive and you’ll start to see some of those other underlying requirements go by the wayside. This is the feeling I get from bankers. If we survive this, we’re almost invincible. There will be the next real estate crash. They’re looking around going, “That worked out well.”

Go check out Jet lending. I believe Rob Trigg did a quick 7, 8-minute video about the difference between loan-to-cost and loan-to-value. That is a big difference in our world. Prior to COVID, it was all loan-to-value and now it’s loan-to-cost. In the commercial space, it’s loan-to-cost, loan-to-value. It took me a while to get my head around what the guy was saying to me. I’m like, “You’re only going to fund 56%, why am I having this conversation with you?” Let’s go to a fancy place to eat. Let’s all have drinks, then at the end of the day, they dropped the hammer, “We’re only going to fund about 56%.”

Most banks are loan-to-cost. They want you to put 20% down. That’s the simplest way to get to it, but if I already have 20% equity in there, plus their 20% down, net closing costs and everything else, the bank is exposed to 56%. Of course, a bank will do that loan. Are you kidding me? Who wouldn’t? We’ve got a couple of lenders that are still doing that. All that stuff is changing rapidly over the next few months. I wouldn’t get too wrapped up on, “You don’t have to refi anything right now.”

The first station we’re seeing out there is this. I went to Fortune Builders and they told me, “This is how loans work. It’s in my book.” The finance world changes every day. It was just a waste of ink. It just filler in your book. “We’re not getting loan-to-value?” “No, you’re not getting loan-to-value right now.” “How come I’m not getting loan-to-value?” “Because the banks don’t want to take the risk. That’s how they’ve reduced their exposure.” “Who has it?” “I’m telling you, nobody has it. It’s the trend now.” On hard money, you can find loan-to-value. On long-term financing, it’s very difficult.

That’s for non-QM. Do Fannie Mae still do it? Absolutely, but you’ll be out of that Fannie Mae. There’s no cash-out.

That’s another thing. “Robert, I’m looking to cash out some of these stuff.” Good luck to you. I don’t know when that’s going to happen.

As much as the disdain I’m going to have for this vaccine, if there’s a real vaccine that gets produced or something they call a vaccine, you will see the debt world all of a sudden open back up. The question is why? If you’re in the debt business, 60% of global debt earns less than 1%. In any case, a global debt is so cheap it makes mortgages attractive. Who wants to buy Brazilian bonds at 1.25% when you can lend your money in real estate at 4%, 5%, or 6%? This is one of the reasons why we keep saying get into real estate now when the debt is so cheap. It’s going to continue to get cheaper as more debt floods the system and demand stays relatively the same. It makes a lot of sense to buy real estate, ride that appreciation curve up, sell half your portfolio a couple of years from now, and have the other half free and clear.

One of the things we’re working with our Mastermind people is the Fannie second. Not your first house, your vacation home. Your vacation home understands and accepts that you will be Airbnb-ing it from time to time. That is the best Airbnb loan on the market. You’re hovering around 4%. The problem is it has to be 100 miles, 90 miles away from your homestead.

It does and your DTI has to be such that you have your primary and your second home to handle it.

That is a fantastic loan for people that want to get into Airbnb. That’s part of the stuff we go over in our Mastermind.

I think everybody have at least one Airbnb with the Fannie Mae loan and a couple of quads. That’s a good base to get things started.

I can’t wait to refi that Corpus house.

We’ve got that one that I can’t wait to start a rehab on. That’s going to be fun. That little 400 square-foot job. How many beach houses we have?

Free and clear real estate is really hard to get taken away from you. Click To Tweet

Around 11 or 12. Shouldn’t it be fifteen? I think we found a JV partner for the one down in the hunting ground. We bought a straight-up beach condo and got it through a lender. He said, “I’m going to fund 110 of the 150.” I’m like, “Perfect, take it.” $40,000 down. The thing will grow $6,000 a month in peak season. After supplies and management, I’m going to be sitting at $4,000 for six months. Call that $20,000. On average, I’ll be making $2,000 for the other seven months. $14,000 plus $20,000 is $34,000 on a $40,000 investment.

Everyone’s bragging about $400 a month in cashflow at rental. I’m like, “Whatever.”

I guess we can talk about real estate in the last segment. We’re buying a bunch of stuff.

Evictions are back here in Harris County.

This is a good question. Evictions are back but then when I saw Trump pop off, “Look in the legislation. We’re stopping evictions.” It said federal eviction, so I assume that means Section 8. I didn’t understand it but it had that word, “federal evictions,” I’m like, “What does that mean exactly?”

What I believe that means is if your mortgage is backed by the federal government, they can’t evict. None of ours are.

I was having this conversation with a lender. It’s like, “What happens when they stopped paying rent for an extended period of time and then the borrowers run out of money?” I’m like, “You got a problem, don’t you?” You might want to start having that conversation with your borrower.

I see it on Facebook all the time. It’s like, “Our tenants aren’t paying. Landlords are losing their property.” I’m like, “Did you forget that ten minutes section on reserves?” We have a total of five people that weren’t paying through all this.

Tell that little story.

Evictions happen and I get on the phone. I’m like, “File them. Let’s go.”

We filed a three-day notice on them.

By Wednesday, there are notices on every door that hadn’t paid. By Thursday, 3 of the 5 said, “I can get caught up.” Of course, they did. They were making more than us a month. With a husband and wife, unemployment and the bonus money and all that other stuff. If I wasn’t refi-ing the property, I would say I don’t want their money. I’ll let them get caught up and then we’re going to redo the lease, take another deposit and get all that stuff done.

That makes a lot of sense.

Two of them will be out, three will stay.

Probably we’ll have those two replaced in a week.

Corpus is booming. We’ve got nine on the market and two we just leased. Of the eleven doors that were open, two were leased.

I was joking about our flips with Audrey being over there. I was like, “This is an $800,000 house. Our rentals look like this. It’s the same stuff. It might be a little bit different fixture.”

It had fancier backsplash and no stand-up showers and glass door.

It’s about the same stuff. It is that location that drives the value of real estate. Maybe a better way to put it is we over rehab our affordable housing.

We make it more durable is a big thing.

The more durable they are, the less phone calls, all that stuff.

TRE 180 | Small Apartments
Small Apartments: There is no money to be made in real estate in the next 90 days. That’s not how the business works.

 

We have a 10:30 walk with the contractors.

They started on the Heights one. We had all this rain here. I think the foundation got done, but roofing seems to be a real challenge because it’s raining every day or every other day.

We got to get the electrician over there to clean up everything to make sure it’s good. The plumbers all is going to come and do his thing, but the foundation was a big thing. It’s leveled and it’s good. We’ll probably going to have to call foundation check to come in and check it off. The first draw there and the contractor that’s finishing up our office building will move over there to do the finished work.

That’s going to be a beautiful place when we get done with it.

We’re through the electric, foundation, and roof on the nine-unit on the loop.

What did they do for the roof? Did they replace the whole thing?

No. He patched it and roll the topcoat on it. It’s a flat roof. It’ll be good for ten years. The next hurricane that will come through will pull up an edge somewhere and we’ll have to go back up there. Flat roofs are easy. You can foam them and paint them for the most part. That one’s going good. We’ve got the first draw. Jet thank you very much. Go out there and take a look. The contractor is starting there. We’re going to be blowing through those nine units.

After demo, when I walked through them, I’m like, “These are going to go quick.” They’re big but they’re going to go fast.

We did come up against a problem there. We found some termites. The termite inspector said, “They’re not subterranean. They just like your wood.” We’ll pull the siding off, let’s fix what we got to fix, and take care of it. That’s a little setback there, but we’re happy about it.

The framing is cheap, especially at the phase we’re in. We had a property years ago that got termites. Every deal I’ve ever lost money on are big houses that don’t need a lot of rehabs. Here’s a classic example, a big house. It didn’t need a lot of rehabs. I’m looking at the house one day and we went around. I’m trying to remember how we even found it. Whenever you get a house inspected, the weep holes on your brick, you want to make sure that it’s above the ground because weep holes allow your house to breathe at least in Texas. That’s where the roaches get in. It’s where the termites get in. Lo and behold, we had termites all one entire exterior wall on two floors. We ended up having to reframe that whole thing. We ended up making money on the deal. It was on the kitchen side. We’re tearing the kitchen out. It is such a mess. We got done with it and sold it. Most investors would have not said a word, it would have passed.

No, you can’t mess with that.

Most investors would just walk. No one would have ever noticed it. We just happened to notice it because of something in the attic.

We could put some serious chemicals on the side of that building, killed everything active, and just covered it up.

It’s like, “We’re not doing that way.”

The replot has become an issue. Stay tuned. I do want to say this though. Our Mastermind is doing fantastic. Track us down. We’re going to push the Mastermind and we’re going to push it for people in California and the Northeast to start bringing some of that money here. When they’re deploying that capital here, it’s a great opportunity for everyone. If you’re interested in joining the Mastermind, it’s a very active real estate landlord investing workshop. We are active almost every single day. There’s something going on in our group. We have WhatsApp channel that just flies. People are flying through this stuff. Here’s the deal. If you’re a professional and you make six figures or more a year, if you have a 700-credit score or higher, and you have about $50,000 to deploy, then come talk to us about the Mastermind. Here’s the reality. If you don’t have a good W-2 job and you don’t have any capital, it’s hard to do real estate.

You can do it but it’s going to be very frustrating in your first two years. We would prefer not to work with people who are constantly frustrated. We want to work with people that are trying to figure it out so they can deploy their capital in the right way. That’s what the Mastermind does. If you make six figures a year and have a 700-credit score or higher and a $50,000 capital to deploy, you can join our Mastermind. Our goal is to make you a real estate millionaire. You may already be a millionaire somewhere else, but we want to make you a real estate millionaire with cashflowing properties, free and clear properties, apartments syndications, all that good stuff.

A little programming note here. Start moving to YouTube because we are going to abandon Facebook. I’m going to tell you guys that now. The reality is that Facebook is not a great distribution model for us anymore. YouTube is going to be the place to be. It’s the Texas Real Estate Radio Network page on YouTube. Subscribe there and hit the notification bell. That will tell you when we go live, but pretty soon everything’s going to start transitioning there. Even our little lives that we do, we’re going to do it from our phone on YouTube.

We’re setting up our Patreon on account. We have a silver, gold, and platinum level. For everyone whose subscribes and sets notifications, you’re going to get access to a drawing to be in our platinum group on YouTube. We’re going to record some special videos specifically for those people.

We’ll continue to do our webinars in the evening. We are going to continue to put those into our Mr. Texas group in Facebook. We’re going to use our Facebook group as a means to continue to do this stuff, and then all of our public stuff will be on the YouTube site.

The people that have 1,000 subscribers to the COVID market update, those people will start going directly to the YouTube feed.

We got over 1,000 RSVPs for our market update that we do Monday, Wednesday, Friday. Facebook is fine for Facebook groups, but the other stuff that we do on Facebook doesn’t work well for us. It makes more sense from a distribution standpoint to be on YouTube. To give you guys an idea and some stats. YouTube is the second largest search engine next to Google. Rob watches everything on YouTube. I watch everything. That’s where we live now. I don’t even have cable. I can’t remember the last time I had cable. If I can’t go to my Apple TV and talk to the microphone and take me where I want to go, for us, it’s not a great model for us to grow our business nationally. It’s much easier for us to do it on YouTube than it is for us to continue to do it Facebook.

YouTube is going to be a lot better for us than just Facebook. Plus, we’re finding a lot of people don’t want to log into Facebook. We’re getting a little bit of, “I don’t have a Facebook account,” which is fine. We’ll be pushing the Facebook group if you want to interact with us and then our YouTube channel if you want to watch our shows. Somebody sent me a message that Joe Rogan is building his new studio. Does anybody know where Joe is at? He’s he loves Houston, but he said the weather is repressive there. He does so much UFC stuff here, but my guess is he’s going to end up in Austin, but he mentioned Dallas as well. I’d love to know who knows where he’s at. It’s got to be Austin or somewhere in the Hill Country.

If you want to build an income in the next 90 days, become a real estate agent. Click To Tweet

My guess is he’s in the Hill Country.

What’s funny is at least I haven’t seen any news where someone seen him out looking at real estate or eating lunch somewhere. He’s a famous guy now. I’d be interested to know where he’s at.

He might have gone to Dallas. The airport was a big thing for him.

He’s always flying on LAX. With the deal he got, I wonder if that comes with maybe a private plane because he’s making that money. You don’t have to be at any of the major airports, just a smaller one that’s got the little Cessna. Was it $200 million or $100 million?

We don’t know. It’s probably nine figures.

Tim Pool claims it’s twice as big as whatever was reported. I hadn’t watched Tim in a while, but I’m seeing all the stuff.

We don’t know where he’s landing, but we do know that a lot of people are moving to Texas.

That’s the real story. Everybody’s moving to Texas.

There are some Facebook ads being run against people in LA that might be moving to Texas. There is a real estate group out of Austin that is very smartly doing some PaperClick ads and trying to get clients that have come in, “I’m thinking about moving to Texas.” We’re the same way. We welcome everyone to come to Texas. I do at least. There’s one person up in Dallas who every time we post something like that he goes crazy. He’s like, “Keep them out of Texas.”

What I find fascinating is when somebody says that “I don’t want you to California up my Texas.” I’m like, “Are you telling me you don’t have the capability of changing people’s minds?” That’s what that means. You don’t have the confidence to say, “This is nice. By the way, this is why it’s nice.” It’s because our state legislature only does stuff every other year. You’re here because your business is here and for the most part, this is a business-friendly environment.

You can do whatever you want here but you just have to pay for it. You got to pay the city and some guy legally. It’s not Louisiana.

I know a guy here in town that had an inspector said, “We can take care of this right now.” He was like, “What do we need to do?” It wasn’t until like a day later where he goes, “Wait a second. That guy was asking for a bribe.” He was so confused.

We’re working on his commercial building and everyone’s freaking out like, “We got to pull a permit.” It’s like, “I pull every permit required.” The inspector came out and was like, “Okay, and?” “He failed us.” “Why?” “The drain was a little off.” “Fix the drain.” He comes out the next day. He doesn’t even come out. Just take a picture, done.

They’re pretty good to work with.

It’s a disservice to the people that did pay to join the Mastermind.

You’re exactly right. It’s helped too since we’ve been quarantining, it’s not like people are grabbing me at networking events in happy hours. It’s like, “Call me tomorrow.” Seriously, it’s $10,000.

We have an open Q&A, the first Monday night of every month. We’ll happy to answer your questions there. If you decide you’re going to do Airbnb because we’re doing Airbnb and you’re not doing it the way we do it. If you have questions, my answer now is always going to be, “Join the Mastermind.”

I will tell you, $10,000 is nothing in real estate, which is the problem.

If they don’t have the $10,000 to plan out the next 5 to 7 years, it’s not the people we want in the Mastermind anyway.

Don’t get me wrong, $10,000, I’m not calling it chump change. If you got $50,000 in a checking account, it’s 1/4 of Tesla. The reality is in your real estate career, $10,000 is nothing. In fact, even in your professional career, what is a semester of college costs? What do you get out of that? Almost zero. You have to string together 4, 4.5, 5 years of undergrad even to get a degree where you can get a job. People are like, “$10,000.” I’m like, “If that’s too much, this is not for you. Get out of real estate. Real estate is not for you.”

We have two AC units that go down the same month.

You have two ACs that give up the ghost and it’s like, “What? This is real estate.” There are times you’re going to get hit with stuff. The upside as compared to that $10,000 is enormous. If you don’t make $10,000 back on your first deal, you screwed up somewhere big time. I want to go through all of them. I’m thinking through all of our people’s deals. Every deal, if they don’t make their money back on their first deal, it’s just an equity.

TRE 180 | Small Apartments
Small Apartments: If you don’t have a good W2 job and any capital, it’s really hard to do real estate.

 

It’s usually buried there in equity. We brought some good deals. No one has complained about any of the deals on our Mastermind. We had the agents doing retail stuff. Not the wholesale stuff. None of it.

It’s been a great experience. At the end of the day, it’s $10,000 and join or you can sit on another boring webinar from some guru that’s trying to pitch you a $599 program. They can blow smoke up your rear about all the foreclosures that are going to not happen. There are no foreclosures coming. Let’s blow the foreclosure thing to a million pieces here. The President sign an executive order circumventing Congress to give you, the unemployed American, more money. Do you think that anybody’s getting foreclosed on in the next three years?

Certainly not in the next three months.

The Congress and the Executive Branch are tripping over themselves, printing so much money. In fact, the article I posted on Facebook, the Treasury’s cash balance is $1.7 trillion. It’s 100 times higher than it ever has been.

They did like a $600 billion program. They haven’t figured out how to give the money out yet.

That’s the point. They can’t give the money away. Do you think anybody’s losing their homes? It’s not happening. The forbearance program will last for at least a year from the time they get the forbearance.

This whole storm, it’s chaotic out there. We see a very clear path and we are lining up our Mastermind students to take advantage of this stuff.

You’re probably wondering, “You are nationally syndicated so you bring on 100 Mastermind students.” No, we’re bringing on five. We can handle about 5 to 7 a month.

There’s an onboarding process. We’ve got to get their financial straight. We’ve got to look to the future and make sure everything’s set up the right way. They’re interested in deals. We’ll have some deals on deck for them to get their first couple of deals, get went, and get that under their feet. The next month, we’ll try and bring another one.

It’s 5 to 7 a month. That’s what we bring in.

If you’re looking to join our Mastermind, text (281) 401-9008. You go to our website MRTXRE.com. Look at the tabs for Mastermind. We’re no longer doing classes, Jason. Technically we’re going to do one live one a month, but that’s it. I’m focusing on something else.

What are you focusing on?

I’m focusing on the side hustle. A woman who’s probably going to join the Mastermind is on a phone talking. She said, “I know you guys do this Ambit thing.” I said, “Yes.” I focused on affiliates. She’s like, “I have 120 doors throughout the Midwest.” I’m like, “Great.” She’s like, “How do I get all of them to join up?” I’m like, “I didn’t even think about that. I’m such a dumb ass.” I’m like, “I’m sure you can leave a flyer in everyone’s mailbox or when you’re writing a new lease, you just put that flyer in the package.”

The group you and I know, when they close a loan, that’s exactly what they’re doing. It’s like, “Here’s your electricity.”

Here’s the big thing. What if we say, “If you sign up, we’ll give you a $10 Starbucks card?” Where do we send the Starbucks card and thank you card from? Banner Season. I’ve got 1, 2 working. For us, we’ve started looking at the side hustle. I know some people were just like, “I would focus on affiliates, just getting people into to sell this stuff.” We’re going to be working with Ralph at Ambit on how to build that new tenant flyer and what that looks like and make sure we’re complying with all the FTC rules and everything like that. Another little ad hoc to your real estate business, a little side hustle, that’s going to produce a couple of hundred dollars a month. If you become an eXp agent and you’re doing 4 to 10 transactions a year, that’s more side hustle, that’s three more revenue streams with eXp. This business in and around real estate is very lucrative, but there’s so much out there.

If we survive this pandemic, we're almost invincible till the next real estate crash ten years from now. Click To Tweet

It’s all scattered and confusing. I think that’s what the Mastermind does. We sit down and say, “Do you have this, this, and this?” No. “Let me explain why you need this because of this. Who does your taxes?” I just take it to my friend. “You have your taxes on by this guy and I’ll tell you why. How many LLCs do you have?” I don’t do anything LLCs. “We got to start. How about little side hustle?” He’s picking up an extra $300, $400, $500, $600 a month. Let’s do this. We run through it all. Get it set up so it’s a well-oiled machine that’s start running over the next 5 to 7 years. It doesn’t happen in the first week. It takes time because all of our people in our Mastermind are wildly successful at something else.

You don’t get wildly successful overnight. It takes the first 4, 5, 6 years where you get things going. Everyone’s asking for instant success and I’m like, “That does not how the real-world works.”

Coming through our Mastermind, getting your doors, getting a little side hustle, maybe getting your license so you can buy your own deals or buy deals for your friends. Build a little agent team underneath you. There’s a lot that is going to make it strong over the next 5 to 7 years. We passed a year one. We’re now in year two. There’s plenty of time to get in guys. We’re going to talk about this most of the month because it’s a perfect time to get in. If you’ve been waiting now is the time. It’s not going to get any better. The market is primed and we are now getting people bringing us lots and lots of apartment deals.

People in Southern California, we want to let you know that we’re coming out there. I can’t wait to get back. I miss it but don’t let anyone at Texas know that. What we’re coming back to do is we know that there are a lot of real estate investors in the Southern California market that have looked very hard at Texas and have made investments into Texas. Some into apartments around Dallas when that was exploding years ago. Some into low-income housing down here along the Gulf Coast. Some into Austin, which is a very familiar to the Southern California market. We’re letting you know that we’re going to bring our Mastermind to Southern California. We think we’re going to get some things. We’ll get through the COVID crisis and we’ll get back to somewhat normal. We’ll do some of it on Zoom, some of it in person, some of it out here, and some of it out there. We want to let you guys know that we are going to be talking directly to a lot of California investors.

If you want to find out more about how you can invest in Texas, shoot us a text at (281) 401-9008 and put MASTERMINDCA, so I know you’re from California. We’ll get back to you and we’ll talk to you about what we’re looking for. The returns are still fantastic. We still believe the market will be strong. We still focus on that low-income housing, low price, under $150,000 price point. You can find them right here in the City of Houston. We already have some people from California to come out about 3, 4 times a year and they’re building out their portfolio here. This is still a very strong market. We want to put a little Mastermind together, both online and in-person once we can and get in the same room. We’re going to look to do that very quickly here. Who we’re looking for? We’re looking for individuals that make over six figures a year, have a 700 or better FICO, and have capital to deploy. If that’s you, which is mostly everyone in Southern California, and you’re interested in deploying some of that capital here into Texas to buy some properties you want to work with Mr. Texas Real Estate, (281) 401-9008, text MASTERMINDCA and we’ll get back to you.

Important Links:

  • Rob Trigg – How Hard Money Works with Rob Trigg
  • Facebook – Mr Texas Real Estate – Jason Bible and Robert Orfino

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