5 Reasons Why Multifamily Real Estate ROCKS

hey hey everyone it's brandon turner host of the bigger pockets podcast and i want to talk to you about multi-family real estate i want to tell you how some of the different ways like four or five six ways uh that it can make you super wealthy uh and some of the reasons that i love it but also how you can get started in it and so uh if i just kind of go through all my random thoughts about multifamily uh to help you uh make decision whether or not you should jump into it so first who am i why am i qualified to talk about this my name is brandon turner host of the bigger pockets podcast like i said uh and i own a lot of multi-family i own somewhere around the 2500 unit mark right now i don't know it changes all the time uh because i'm buying a lot of property even in this crazy market like i'm still buying deals today so yes you can if you like this video as i go through this today will you do me a quick favor click the little thumbs up button if you're if you're liking it you're like oh that's really good advice click the thumbs up button or the heart or whatever it is below the video let the world know it's good all right so multi-family why do i love multi-family so much well first i love multifamily because it allows you to scale into millions of dollars of wealth uh almost like automatically in fact we just i just released a book recently called the multi-family millionaire it's actually a two-part book volume one and two and in there the reason we called it the multifam millionaires because in there we walked through this this concept that like multi-family over time obviously there's there's exceptions there's where it drops a little bit but over time real estate in general just tends to go up in value like it's like this right and so over time it tends to go up in value at the same time you're paying your mortgages off so if you were to buy a hundred thousand dollar house 10 years from now that house is probably worth 150 or maybe 200 000 right and your mortgage is paid down to let's say 50. that's great but it takes a lot of houses to build up a lot of wealth but let's say you bought a million dollar property today over the next few years that million dollar property climbs in value hopefully to 2 million dollars and you pay that loan down to zero you just basically automatically generated two million dollars in value and net worth to your life uh just by buying the property and hanging on to it now of a lot of caveats there you gotta buy in the right area you got to manage the property right and then people are like how am i supposed to afford a million dollar property hang with me we'll talk about that in a second but the bottom line i'm trying to make the basic concept over time value goes up mortgage goes down your net worth builds automatically and you're not the one like setting aside money every month to save that two million dollars right your tenants are paying you every month and you're paying the mortgage down from the money that comes in from the tenants and if you buy the right property not only are you paying the property off every month and you're paying all the bills like the expenses the water sewer garbage and all that stuff you're also making extra money we call that cash flow now this is great because not only is your property going up in value and getting paid off you're making extra money every month that you can live on like that you can use to live and move move around or travel or buy cool stuff or make a car payment or whatever i mean i wanted a tesla for the longest time but i said i was not going to buy a tesla until i could get a piece of real estate to buy it for me so what did i do i went and found a triplex i bought a three unit property the thing cash flowed like fifteen hundred dollars every month so what did i do i went and used that 1500 a month that i just generated to buy a tesla like it makes the payment on the tesla and so you can do the same thing for like paying your bills or paying your you know saving for retirement whatever cash flow is awesome so what do we have so far we have appreciation the fact that property values go up over time again yes they go down but on average they go up over time you have the loan getting paid down which is awesome it happens automatically when you have a mortgage on a property you have the extra money that comes in every month which is the cash flow and then you have tax benefits now boring right but tax benefits all that means is that the money you earn from real estate a is not taxed very much at all uh and b there's these like paper losses i don't want to go in the detail here i'll just bore you but there's these like losses you can get when you own real estate these deductions and this thing called depreciation and then we get more and more advanced and like cost segregation then all don't worry about that right now which basically it can you know consult with your cpa it can offset your other income so you make a hundred thousand dollars a year from your job and you pay 40 grand in taxes but potentially you buy real estate you make money in cash flow it's going up in value and it can offset that 40 000 that you owe the government taxes on your job potentially it's crazy and then there's leverage the fact that you can buy let's call it a you know a property first lowest zero down or three and a half percent down i mean i literally wrote a book a long time ago called the book on investing in real estate with no and low money down it's all about how to invest in real estate with no and low money down and one of my favorite strategies for that is to bring in partners the great thing about multi-family is it's kind of designed for that some people bring the money and you bring the deal in the hustle you make it happen in fact that's how i buy most of my real estate deal today i own a company called open door capital and what we do is we buy these big apartment complexes and big mobile home parks i love mobile home parks we buy them and we don't bring the money i mean i put a little bit in every deal just to make everyone you know know that i'm in it but like we raise most of our money from investors they put their money in we go buy the property and then we split the profits at the end uh not necessarily 50 50 but it could be and so multiple is kind of perfectly designed for the for doing creative no and low money down strategies so let's put all this together right so you can get multifamily for almost no money down if you do it right if you have the education you're learning you're growing you're reading the books like the multi-family millionaire and you're you're you're just getting good at this stuff right you can figure out ways to buy this real estate with almost no money down at the same time you get the tax benefits the cash flow the appreciation the loan pay down and and over time it just gets better over time rents tend to go up which means your cash flow tends to improve over time your systems get better which means the work that it takes you to run this whole thing gets easier and easier now some of you are saying well i don't want to manage tenants i don't want to deal with toilets i don't deal with toilets i live in maui hawaii i surf and i play with my kids a lot i haven't dealt with a toilet in years so like again another reason i love multifamily multi-family allows you to like it's designed for those people to handle those roles you don't manage a multi-family yourself necessarily you could if you want to save some money but you can hire managers and property managers and maintenance people to handle this stuff even on the small scale you can hire a property manager to look over to a duplex another great benefit of multi-family you can do what's called house hackings where you live in one unit you rent the other units out uh and you can live for free so like i did it on my very first prop my rental property i lived in a duplex lived in one half rented the other one out and i live for free i do it today in hawaii i live in one unit and i rent the other two units out i live in a three unit property but it's like a two million dollar property overlooking the ocean in this crazy cool area uh there's a million ways to do that so it's one more benefit to multi-family can you tell i'm kind of obsessed with multi-family real estate i just think there's so many benefits to it i'll go as far as to say it's hard to not become a millionaire through a multi-family if you just don't screw up bad you're going to make millions of dollars to real estate if nothing else just buy a few million dollars worth of real estate bring in the partners or the creative financing if you need to and then let it go up in value over time and pay it off over time like it's like automatic millionaire status um imagine if you did it with a lot of properties i mean imagine you started with a duplex and then you maybe the next year you bought you you ventured out and got kind of you know out of your comfort zone and bought a four unit property and then maybe a little bit later you're like well this is getting pretty easy now i can buy a 10 unit property you save some more money then you buy a 20 unit property and before you know it you've got hundreds of units in each one's each unit you own each rental apartment you own is spitting out 100 or 200 300 a month in cash flow in profit and like your systems are getting better so you're hardly working you're just getting wealthier and wealthier you know getting wealthy for wealth's sake is you know whatever maybe you want to do it maybe you don't but what i love about wealth is it gives you the ability to a buy your time back so you can spend time doing what you want to do versus what you have to do and the second thing wealth is good for is for helping people like i plan to like i would say i want to earn big i want to give hard in other words i want to give money away in the meantime but i want to die broke i want to generate hundreds of millions of dollars in my life that i'm going to then give away to people who need it a whole lot more than i do uh in the meantime i get to live kind of a cool life in hawaii and i get to do all this cool stuff but i don't you can't take it with you right there ain't no like u-haul like being pulled by a hearse like it's it's over like so give it away and again multi-family allows you to scale up massive income and wealth in a fairly simple proven tried and true not necessarily quick but very assured way uh i just think multi-family real estate is like the coolest best business model in the history of mankind i love it and that's why i do so much of it so should you invest in multi-family real estate yes i think you should i think everybody should if let me give you a couple ifs number one if you understand that this is not get rich quick it's gonna take some time it's gonna take time for property values to go up for rents to go up and for properties get paid off it takes some time does it take 50 years no i believe anybody can make a million dollars in under 10 years some under five uh so if you as long as you have a longer term horizon as long as you understand that it's not going gonna be problem free you're gonna have to put some work in you're gonna have to read some books uh attend some webinars maybe like watch some youtube videos you're gonna have to do some work in order to make this thing work but if you're willing to do that work willing to put up with some of the hassle willing to daily improve to always find ways to improve uh and willing to invest into to grow outside your little comfort zone you're gonna do great you're gonna be amazing you're gonna look back on this date ten years from now you're gonna say wow i remember i watched that video from brandon turner from bigger pockets back like a decade ago and he was like you should buy multi-family and i made this one little change in my life and i started going that direction instead of the direction i was going and now when i look back that's the day that is the moment that everything changed in my life and i am now a multi-millionaire and i'm giving thousands away to charity every month and i'm with my kids and my family and i'm traveling the world and i'm doing all this amazing stuff because of the decision that i made back when i watched that video years earlier that's what i want for you look i've been poor i've lived in a crappy 400 square foot house i even like slept in my car for like like i don't know half a year of my life because like like i wanted it was a long story i did uh i rented this crappy apartment rented out a bunch of guys i didn't like uh and i was broke and so i just ended up sleeping in my car every day and working an overnight job like yeah overnight job anyway long story don't go in that but i've been there in that sucky like broke life and i've been in the life that i'm at today where i get to spend so much time with my kids i get to watch them grow up and it's i get to spend time surfing and traveling and i'm not saying that being rich is going to make you happy but neither is being like being poor like it it just gives you the freedom to buy your time back so that you can help other people and i love that about multi-family real estate so go out there enough from me you know what to do pick up a copy of the multi-family millionaire first of all uh volume one and volume two biggerpockets.com store and then go out there and make a shift make a change and buy some multifamily for biggerpockets.com my name is brandon turner signing off [Music]

Channel: BiggerPockets

Views: 97,610

Keywords: multifamily real estate investing, multi family real estate investing, investing in multifamily, multifamily real estate, multi family real estate, multifamily investment, investing in multifamily properties, benefits of multifamily investing, real estate investor, real estate, how to invest in real estate, how to invest, investing, invest, real estate 101, real estate for beginners, how to buy a rental property, rental property, get rich, brandon turner, biggerpockets, investor

Id: VZUOh5xpqMI

Length: 12min 23sec (743 seconds)

Published: Tue Sep 21 2021