- Hey, what's up guys, it's Clint Coons here. And in this episode, what I want to do is
introduce you to someone that I've been following, I was just really impressed
with his life story. This individual had 87 doors, get this, by the time he was 24 and he didn't do it with his own credit or his own money. This individual that we're
going to be bringing on today is Daniel Kwak, he's got
a great YouTube channel, a huge following. He talks all about various real
estate investing strategies that you can use to implement
in growing your own portfolio or about financial aspects of investing. So it's a real treat
to have him on because, and share with you some
of these strategies that he's currently using, that he's using to pass, to
put him where he is today. Daniel, thanks for coming on. - Thanks man, I really
appreciate this, is an honor. - Excellent, all right. So your story is so compelling, to be a 23 year old and go out
there as you were telling me and start investing and realize, this is a tough nut to crack if you don't have a great credit score and a big, thick wallet. So how did it all work for you, how'd you get this thing going? - Yeah, so to your point, I'll kind of just paint the
picture of where I was, right? So my family and I, we actually immigrated to the United States when I was
five years old, it was 1999. Which on a side note, I was a huge basketball
fan in South Korea. And when we flew to Chicago in O'Hare, literally the first person I
saw on TV was Michael Jordan. And I was like, oh, this
place is kind of cool. But nevertheless, I still
remember we were at Domino's, we waited 45 minutes 'cause I
had won a reading competition that got me a free pizza that was probably the size
of a Samsung Galaxy 20. And I still remember our
family like waiting 45 minutes and my dad actually
used to pair of scissors to cut the pizza into
four different pieces. And that was our dinner that night. And so many nights of
us sleeping in the car 'cause we couldn't afford
to pay the heating bill. And I actually remember we
were in the park one time and I saw my mom picking up
different plants and weeds. And I saw that on the dinner
table two hours later. So, life was definitely interesting, but when you're a kid, you don't really, you don't think that you're poor. You think everyone kind
of just lives this way. But I will say the Genesis
of why I do what I do today, why I get out of bed in the morning, why I will still to this
day read real estate books, just looking to learn new
things and looking to experiment and looking to constantly expand and grow. I remember when I was six years old and ever since I was a kid, I always had a tough time sleeping. And it was like about
1:30 AM in the morning, I looked out and I saw, we lived next to, let's call it a gentleman's
entertainment center, let's call it that. And I saw this man who was
probably about in his mid 40s, he was stumbling out and
he was clearly intoxicated. He had a really nice, shiny watch on, I still remember the street
lights bouncing light off of his really fancy watch. And he wore a suit that
was probably costing maybe between three to $4,000. And he got in the car, I don't
remember the exact brand, but I remember it did have a big L in it. So it was a super nice
car, he's driving away and of course he's swerving. And I looked over 90 degrees to my left and I see my parents
sharing a twin bed in a room that doubled as our dining
room table, as our kitchen and as also as our living room and also as my parents' bedroom. So the question that I
asked myself was, man, what would it look like if
my parents had the ability to produce the resources that
that guy who was stumbling out of the gentleman's
entertainment center had, or vice versa. Like what would it look like if the guy who was stumbling out
at 1:30 in the morning had the heart that my parents did. Because my dad was the type of man where he would give the shirt off his back even if it was his last shirt. So that's what inspired me
to want to do something big. So I'm a faith driven guy, I tell people all the times
that you can't serve a God that's so big and dream
so small at the same time. So at 17, I read an article
by Forbes Magazine saying that out of the top 1%
of people in the world, about 76% of those
people earned their money by investing in real estate. And so I said, man, like
that's what I got to get into. Except the only problem was
I had no money, as you said, I had no credit, no money, no nothing. Actually a commercial lender
at one point laughed at me when I was 22 years old and I told them I want to get into buying
apartment buildings. And this was after I told them my DTI, my credits and all these things. And when I first started
learning about real estate at 18, I had negative $187 and 65
cents in my bank account. I still remember seeing a
two credit card max balance, it was maxed out. And then, I still remember that night where I dug through the
dumpster looking for my dinner. So, it was a really interesting time and so you see that kid and
you're like, wow, that, okay, so that kid's going to
invest in real estate. Yeah, okay, like let's see about that. And then I learned this
really interesting concept that there's actually four
currencies in the world. There's time, there's
money, there's knowledge and there's relationships. And although I didn't
have the money portion, what I did have was time
and I had the ability to receive and gather knowledge and also gather relationships and network. And I had this core
belief, this conviction that I could use time, money, I'm sorry, time, knowledge and relationships to create something for myself, to create something huge and fantastic. And that's kind of what
sparked the information and the inspiration journey
aspect of what I did, of the blueprint. - So when you went out and you
started finding properties, I mean, we're talking about
this and we comparing stories, tell everyone about how you
approach the acquisition side, that how did you start contacting sellers, finding deals that were available. Because I think that really helps people that feel in this market
and particularly right now, you're sucking, I mean,
we always talk about you don't go to the MLS, right? I've heard you talk
about PropStream before, it's a great service
that people can utilize. But even then when you use PropStream, a lot of times you call them up and you've already lost those deals, they've already been sold. So explain what you did. - Yeah, yeah, yeah, yeah. So I tell people all the
time, markets may change, but people never don't. The great real estate investors I know, not the good ones, but the great ones, they always view every
single deal through the lens of what problems can I solve. And whether it's 2008,
nine or 2022 or 2024, there will always be people with real estate related problems. So for me, the harsh reality
and the philosophy I developed very early on that eventually trajectored and catapulted me towards
having a set of strategies that I use to gather deals
where nobody has access to. That philosophy, that catapult was, you never look for properties,
you always look for people. 'Cause if you're always
talking about problem solving and that's the Genesis and the mentality of how we actually build
a real estate career in an organization, well,
we got to look for people. The properties just happen to
be the asset that's exchanged, but really the business
is between two people. It's between a buyer and a seller. Buyer has a set of needs and desires to fulfill for his or her investors. And then the seller has
the same obligation, but they just have a set of problems that they need to be solved. So that's the question I
started asking myself is well, how do I find the best people? And so I looked at what my product was. And so I said, well, if at the
end of the day real estate's just like business, right? I have my marketing, which
ultimately is supporting my sales and then my sales which eventually promote and to close in my offer. So if I'm reverse engineering
and I'm asking myself, man, how do I find good deals? Well, I got to know what it means for me. What does that mean to have a good deal? And for me, my product at the time was multifamily buying hold and still is, it's apartment complex buying hold. And it's funny because
when people ask me like, "Daniel, how do you raise capital, "how are you such a good salesperson?" And the reality is, is I'm not. I'm not a good salesperson, but I just, I'm very good at creating a situation where people want to buy. So even with my investors
today and even back then, like one of the things I used to do is, I had an irresistible offer. I tell everybody, you need to
have an irresistible offer. And I used to give investors 100% of all the depreciation and like there's a lot of
other things that I did that really incentivize investors. But in regards to finding deals, I looked at my product, okay, it was an apartment complex, buy and hold, but another aspect of that
product was seller financing. And so for me, I couldn't
get bank financing deals, not only because of my age, my lack of experience,
but also my finances. They just weren't in the best situation. And so I started asking myself, okay, if I have to buy property
seller financing, how can I create a win-win 'cause remember it's about people, right? How can I create a win-win
for the other person on the other end of the table? And so I started, I spent
about a week researching all the benefits that seller
financing offers to the seller. And I got about a list of about six to 10 and I actually got it
down at three, right? So I compiled everything, all the lists, made a list as big as possible. And I took the best three
because psychologically speaking, I think the human brain actually
averages out the top three as opposed to the whole list. And so those three were
potential tax benefits. Number two was making money as the bank, which of course the
banks are the currently the richest entities in the world. So between the potential tax firms, you make money as a bank by
making interest of course. And all that interest is front loaded. All that profit is front loaded
'cause of the amortization. And then last but not least is the ability to still be involved with
the real estate industry, but have passive income. 'Cause for me, it's never
about the geographics or the demographics, it's
always about the psychographics of who I'm working with, whether that's an investor or a seller, I want to know how people think
and I'm obsessed with that. I want to know what helps
them go to sleep at night. I want to know what makes
him get up in the morning, 'cause at the end of the
day, my personal vision is to have, is provide
people a peace of mind. So even for all our
companies that my brother and I own at the end of the day is to provide people with
a financial peace of mind. So those are the top three things. And then those are the
benefits of the sellers. And then the question I
asked myself then was, well, who resonates with these benefits? Like who are the sellers and the landlords that really resonate with
potential tax deference, with making money, having their
money make money for them. And then also continuing
to receive passive income and after a lot of great conversations with my mentors and with myself
and just a lot of research, I found out that I'm
going to be very careful. Seasoned landlords were
the best people to target 'cause these are individuals
who own properties for more than 27 and a half years, they've had so much, and
depreciation recapture, our closing is going to be
quite interesting for them. But on-- - Hold on, you wanted to be
a nice about, I'll just say, you say look for old people. That's what you're looking for. Old people like me, well
maybe a little older than me. Like my father, my father's-- - I don't think you're an old guy. - Yeah, but my mom's always, she's like, "You need to get rid of these properties "because you're always out there, "you're working on them
and they're a hassle." And I keep telling my dad, "Don't worry about it,
I'll take them over dad. "I'll just give you the
income and I'll manage them "and run them for you." But you're right, that's the mindset. It's the older generation
that wants out, sorry. - It's the psychographics 'cause I mean, even to your point Clint, I mean like 90% of all
these older landlords, always 90% of the time,
they had a wife, who's like, "When are you going to
sell those properties, "when are you going to
get out of the game, "when are we going to be able to travel?" And it just always made me chuckle 'cause I used to always have great banter with those individuals. And I used to, I made little jokes here, like don't worry, Mrs. Johnson I got, I'll make sure your husband
sells me those properties. - You target the wife 'cause
she'll make the husband do what you want. - That's right and so, I
targeted older landlords, that is exactly what I did. And so the next question of
course I asked was, well, for me, what are the best
ways to find those people? 'Cause obviously conventional
mainstream wisdom in the world of real estate investing is for everyone to do
direct mail campaigns and hey, go on Zillow or use a wholesaler. And for me, when I look at the individuals that I was targeting, I saw a different set of channels of being able to find properties. So one of the things I did and I know you and I were
talking about this off the air, but it was building relationships
with property managers who were 25 years in the industry. 'Cause I knew that those guys
had a group of their buddies who also own properties
for 25, 30, 40 years. And so I started reaching
out to property managers and I decided to create
a little arrangement between myself and them. So I went up to them I said, "Hey, what's the minimum number
of units you have to manage "in order for your office to stay afloat?" And I would target
these property managers, I had between 100 to about 600 units and under management. And they would always
gimme a different answer, it's like, "Oh, I need at least 175. "I need at least 187,
I need at least 196." And I asked them like, well, how would you like to have a situation where you never go below the number you're at right now for management? And they're like, "Go on, I'm listening." And I would say, "Well, next time you have a
client that wants to sell, "have him call me first." 'Cause I've got investors
I've raised capital with, I've got this and I'm looking
for properties in your area, have them call me and I'll keep
you as the property manager. And worst case scenario if
you and I don't work out, if I don't think that you're
that great of a manager, you can make your commission
by being the broker. And so they love that idea 'cause for them it was
such a win-win scenario. I was creating situations
where people wanted to buy, not situations where I had
to completely sell them. And so that was one and I think I got 64
units off of that strategy of building relationships
with property managers. And then the second one was
actually calling for rent signs. So again, it goes back to
the psychographics, right? Because I said, well, older landlords probably aren't going
to utilize technology like apartments.com or Zillow,
I'm sure a lot of them do. But for the most part, older landlords don't really
utilize a lot of technology. So one of the things I used
to do was for three hours on a Saturday morning, I would drive around the neighborhoods that had a lot of
multifamily and apartments of what I was looking for
my avatar and sure enough, either A they had a for rent sign out or B, the landlord would
actually be in the premise, working on the property and
to my, because of my research, because of my setup that I'd done, probably about every
three out of four people that I either called or
met while I was there, were probably 65 and older. And so that was a great way
that I found properties. I'd actually did a couple
deals through that. And last but not least, I
used to look at newspaper Ads. So if you go on the newspaper, I would see these for rent Ads
that were, they were there. And again, same thing, sure enough, a lot of these guys
would be 65, 70 or older. So, I think my tactic
of looking for people and not property, has just
really paid off for me, 'cause it allowed me to
be efficient with my time and serve the people that
I was looking to serve. - Yeah, I got an acronym for you. So here's your strategy, It's called BOLD, Buying Older Landlord Deal, here you go. - [Daniel] I love it. - So the thing about that, what I like is that not only
you finding the older landlord, many times you, I would look at them to see what properties they own. The older the properties
are going to be, the better because they're having to
put in more maintenance time, which makes their life more difficult. So if you can find someone that's older that has maybe 15 properties, maybe it's not a multi-family deal. I hadn't thought about that. That's even better because
they have several apartments that they're having to manage. You can get in there and
talk to them like you did. And so how did that conversation work? When you approached them, typically what was it like? - Yeah, so Clint, I'll be
honest, there was a barrier. Because they saw me, they saw a guy who was a third of their age, at the time I was 23 when
I was buying an apartment, a month at that point. And they just kind of saw this kid, and so the sales aspect
was fairly difficult. And especially with the
seller financing conversation, one of my biggest obstacles
was, hey, like, can I trust you? And it all, it actually all started because these sellers started
asking for like 40, 50% down. And I started asking myself why, like why were they so stuck on getting a bigger down payment? And one day I just got so frustrated I was like, and I think the
landlord I was talking to, his name was Mark. But I was like, "Mark, is it possible?" Or I was like, "Mark, if
you don't mind me asking, "are you asking for a larger down payment "because you want me to
have more skin in the game, "because you don't really trust my ability "to run this property?" And Mark, he was a very direct guy. He was like, "Yeah, like I'm
worried that you're going to run "this thing to the ground "and I'm going to get
the property back four "or five years later "and I'm going to have to end
up putting hundreds of thousands "of dollars to fix it up." And so that was great because
whenever you are negotiating with the seller and you
identify the real reason why they're doing something,
that's always a bonus. 'Cause for me at the end of the day, like again, I always care
about the psychographics of what that person's thinking. So I said, "Well, Mark, would it be fair, "would it help ease your
mind if every two years "or every year or every three
years, whatever you decide, "I will subject to an inspection "and you and I split the inspection cost. "You can pick the inspectors, obviously, "as long as it's not somebody
who's extremely biased." And I'm subject to an
inspection every two years and there's a certain
standard that I have to uphold because my strategy is
actually to fix up the property a little bit and raise the rent. 'Cause that was a very
primary strategy of mine, was obviously the value
add, even back in 2017. And I'll be honest with you and I think this is a great
transition to the conversation. Back in 2017, I thought the
market was going to crash in 2020. That's what I thought. I thought the whole, the housing market and the stock market was going
to completely crash in 2020 because I was telling myself and a couple other friends of mine, like there's no way that
these tenure treasures that are issued in 2010 are
going to be able to be paid back. Like there's just no way,
like something has to happen. Either has to be a, historically speaking, there's either usually a
war or a big market crushing or a pandemic, which look at that. But when I had converse, going back, but when I had conversations
with these sellers, that's one of the addendums
that I used to offer in the contract, with the
contract for deed was, hey, every two years I'm
subject to an inspection. And I actually found out that these guys like actually preferred a 5% down payment or a 10% down payment,
'cause it meant that their money was going
to accrue more interest, which is more profit for them. And not only that, but their monthly payment
was going to be bigger, meaning that they could go
to Italy if they wanted to, move down to Texas, do
whatever they wanted. And so I've actually done a couple deals where I put no money down like whatsoever, which is pretty neat, I got to say. - Yeah, I mean another way to do it too, if you weren't looking
for an apartment building, but let's say you found
someone that has 15 homes. And you want to buy all 15 and they're unwilling to sell you all 15. What we've done before is said, all right, sell us this many properties, give us an option to buy the remaining and we'll record that option
against the properties. And so if this doesn't work out here, what we're telling you
is going to work out, then you're not going to
sell me these other deals. So there's different ways
to put this together, to give the seller some
confidence that if they, it's a try and buy, is this person really
going to be able to live up to what they're telling me? So you got to be creative, that's smart. - Yeah, and obviously I
mentioned this before, but it just, for me, it all went back to, how can I provide a better peace of mind for this individual 'cause
everyone's motivated and they feel safe, their risk is mitigated in different ways. So I love that, I love buying a portion and then doing an option contract on, I'm going to steal that if you don't mind. (chuckles) - Yeah, we did that one. It was going to be on a
220 property portfolio. We ended up going through with it. We ended up buying down in Houston. This was a few years back in
2000 and actually think 2018. And I don't know, I look back on it. We would add a lot of cash flow,
but the Houston properties, the package we bought down there, they've all tripled since then so. - I was going to say. - Yeah, that's right. - That's awesome, man. Well, thank you for that. And look, I'm here to learn too, man. I know I'm the guest, but I'm looking to learn
every minute of the day so. - Yeah, I mean investing is so fun. So you got this FORCE strategy. - Yes Sir. - So tell me a little bit about that. - Yeah, so for the way that
we even came up with the name was the first movie my
brother and I watched when we first came to the United States was "Star Wars" episode
one, "The Phantom Menace". And so we were always
big "Star Wars" fans. So really FORCE stands
for, you Find the property, you Owner or finance it,
you Raise the capital, and then you Cashflow it,
which it's about management and E is Expanding your empire. One of the things I noticed a
lot with real estate investors is they're really good at doing deals. They don't know how to build a business. Which, with my years of
traveling and teaching and training real estate entrepreneurs, and even for me as a real
estate investing coach that helps people accumulate
a rental property. I mean, that's one of the most
number one common obstacles. There were common mistakes that
I see a lot of people make. I've got a friend of mine who was a pretty well
known real estate figure. I won't say his name, but I'll say he's got a
great beard, how about that? And him and I were having a conversation about this the other day, how like, and I asked him like, "Hey, if you have to start all over again "like what type of books would you read?" And he actually told me, and he is a very well
accomplished real estate investor. And he goes, "Honestly, I
would start by reading books "about business, just general business." 'Cause it's not enough
for someone to do deals, but you got to be your own CEO,
you have to be your own CFOs, your CIO, I mean HR, like you name it. And that's one of the things I noticed that a lot of people
kind of struggle with is, is they know how to do deals, but they don't really know
how to build a business on the back of that. So that's what the four
strategy is all about. It's all about from A to Z,
let's find it, okay, great. And then, buy it, owner financing or raise the capital and then manage it. 'Cause I think a lot of times people over romanticize the acquisition
of a piece of real estate, but never the execution
of a business plan. So I mean, I'm a lifelong martial artist. I love martial arts, I'm a huge UFC fan. And one of the things my
wrestling coaches would tell me is like, 'cause he used to
teach me using business. 'Cause he always knew I was interested in entrepreneurship, in business. He goes buying a business or buying a piece of real estate's like, it's like a take down. You can have a great take down,
you could do a blast double and you got a flat on their
back, you got great positioning. But what you do with it
afterwards is more important than even getting the take down. If you can't record damage, then you can actually get submitted, like with the person being on their back. And so that's what cash flow is all about, the management portion and then of course, how do you build off of that momentum and actually build a business around that piece of real estate. So that's the FORCE strategy, Clint. - Nice, it's something
that we teach as well in our events is that real
estate investors need to treat their investing like a business. And focus on the high value work that's going to make you money and not so much on the low value work. 'Cause you see a lot of
investors get caught up in doing things that they
shouldn't be doing on their own, like their own books and tax returns, setting up their entities. And to some extent, it's the rehab of the property themselves. I mean, if you're out there finding deals, do you need to be out
there holding a hammer and re-texturing, repainting the interior or you better off finding that next deal and hiring that out? And sometimes people get in their way 'cause they don't see it as a business, they see themselves as an investor and they become trapped and they don't, they're unable to scale. So when they hear your story,
87 doors within a year, oh, that's impossible. Not if you have the right systems in place that will allow you to
expand upon your talents, like you were obviously able to do. And I think that's key and so
many people don't teach that. Like you said, what you're doing
is teaching that other side to understand it from that perspective. So that's really, really important. - [Daniel] Yeah, I would agree. - What are your thoughts
on the market now? - Yeah, so obviously one of the things I've done to really understand, I've been blessed and my
mentor, he's pushing 75 now, and he's seen four different
market corrections in his life. So, I'm 27 years old, I've never been an active entrepreneur, an active investor during a market crash. I wish I would've, I mean, like if I would've gone back and told, let's see 2008, I was 14 at the time, I think I was a freshman in high school. I'm really mad at my
freshman high school self that I didn't buy properties at the time. Instead I was busy playing basketball. That's like, but one of the things I think about the market now is I follow a lot of different channels. I like to read a lot of books and a lot of reports on what's happening. And for me, I get very nervous. I talk to, I have a couple friends of mine who are pretty high up in
national mortgage companies. And one of the things that
they've been telling me is, they get really nervous at the fact that a lot of their mortgages, actually the appraisal value
is starting to be lower than the loan amount and the loan balance. And one of the things that
I've been hearing from them, 'cause as much as I love media outlets, I'm not really big on following
media like CNN or Fox. I don't really watch them, I'd much rather get my data
from the actual source itself, which is the people working
in the industry day to day. And one of the things that I'm hearing, kind of all across the board is, a lot of these mortgages
starting to be underwater, a lot of loan evaluation ratios starting to go above 100%. I met a mortgage guy the other day where, they were doing apartment buildings, they were doing commercial
loans for apartment buildings for three years now, they've been doing them on stated income. So it just, it makes me really, really scratch my head slash nervous. I think a lot of investors
today are buying properties based on speculations of
rents continuing to rise. And obviously that's been built, the rent bubble as I'll call it, the increasing rent has really been built on the back of a housing market that's priced out a lot of tenants from entering the housing market. I'm one of those guys who believe that we've had a very much of
a false lack of inventory in the housing market. If you look at government intervention, if you look at programs
because of the pandemic of stuff like the foreclosure
moratorium that's, I mean, that's kept millions of homes
from reentering inventory. And I'm also paying attention to a lot of these canceled contracts that are happening within the house, the single family industry in
states like Texas and Arizona. So I think inventory eventually
in the next coming years, potentially in the next nine months, will continue to balance itself out. I think personally that rising rates are going to decrease strength
in the home buying pool, 'cause really that's my
generation, the millennials. We're the ones now, we are
the primary home buyers now. I think that the age range of
the millennial now is what? Like 26 to 41 or something like that. I mean, we are the prime home buyers. Like we are the ones that a lot of people are looking to sell their home to. So I don't think the liquidity
and the financial strength of millennials is as strong as a lot of these home
builders think it is. So, I mean, for that reason, I don't think rent is going to
continue to skyrocket as it has. If anything, I think it's going to go down because a lot of these
individuals who are going to, a lot of the millennials have
been waiting in the sidelines to enter the housing market, who are going to start going into. And obviously when that happens, the first individuals in the tenant pool that tend to leave are class A tenants. They're typically the first ones that tend to enter the housing market. And then, who knows, who
knows what we'll see, but all I know is we've seen
a lot of class A apartments being built the last two, three years. - Oh yeah, they're throwing
them up all over the place. I was just down in Austin last year and I just couldn't believe
how many apartment buildings were going up as we were driving around. 'Cause my daughter was
considering moving there with her boyfriend. And I was thinking the same thing is that, once this starts to settle
down, you have more people, more supply out there,
the rents that they think they're going to get off of these deals, what they're financed on,
it's not going to materialize. Because once you have
more supply in the market, it's going to drive that back down, especially homes or people are moving in and buying the properties
that, as you said, that shadow inventory
that's been locked up there. There's so many factors. And then you've got the rent moratoriums that a lot of cities in the blue states have imposed upon landlords that, how does that factor in once those kick in and they can start charging
the full rents again like they intended to,
so you got to be careful. That's why I personally
think single family, I've always liked it,
older, single family homes, even though your CapEx
can be a little higher. But know your market,
what your tenants expect and go from there. - Yeah, I mean, even in
my home state of Illinois, Illinois is not necessarily
the number one destination for people wanting to move. I think we're actually number
two in people moving out. But yet, even if you
were to draw where I live and you did a 10 minute radius, like a 10 minute drive radius, they're building about 3,400
units and they're all class A. And a lot of the feasibility
studies that I know that these developers have
made their decisions on is predicated on a continued rise in rent. I mean, like I have a buddy of mine who's now my business partner who is responsible for
a 364 unit development. And they're charging
$3,600 for a three bedroom, and even at that price point, their margins were pretty slim. And I don't know how much is that, how much of it is sustainable. So I mean, even like,
and there's a parallel, an interesting parallel. 'Cause even looking at the
stock market, I mean like gosh, like how many company, what percentage of
companies in the S&P 500 actually make money? I think the statistic that
I saw was like 40% of, are actually currently losing money. And so like, I mean, it's just been propped
up by false predicated, just kind of false value in my opinion. So yeah, it'll be really
interesting to see 'cause I know a lot of
people are building class A all across the country, I
mean even in my home state where people are leaving
and I just don't know if I'm very confident in that
investment strategy right now. - [Clint] So, I'm sorry,
catch off with something else. - Yeah, no, the last thing
I was going to say is, what we're looking for, our partnership is we won't buy anything
unless there's intrinsic value, unless there's earned
appreciation and not or, and the cash flow right now as it is, the income as it is, is sustainable to give us a pretty good rate
of return for our investors. So that's, we won't even touch a deal unless we can have intrinsic value and the deal works as a stance right now. Even if the rents aren't
able to be raised. - That's exactly right. And that's where you get into trouble when you think you're going
to make it on the come side of that bet and it's going to pay off. And I was wondering about
this just the other day, I was talking, so my daughter
and boyfriend ended up living in Denver in class A
apartment building, moved in, it only been opened for about six months. And they, I thought it
was fairly high rent what they're asking for a one bedroom. Well, five months ago when
those initial tenants came in, when they came up for renewal, they almost doubled their rent on them. And so they started, and then you started this mass
Exodus out of the building. And so my daughter assumed the same thing that they were going to double her rent. And when she went down to talk to them because they're coming up
on their year, they said, "Oh no, no, no, we're not, "we're going to raise your rent $40." And she said, "But I thought." They go, "Oh, we're not,
we're no longer doing that." So I know it's an isolated occurrence, but they're starting to see
that you just can't demand that from people 'cause there's
more inventory out there, there's more options for them. And so that's going to be hard
to make their numbers work I think for this particular property, if that's what they did
when they financed it. - Yeah, and even, so my wife and I, we went from living in a
four bedroom house to renting so that we actually moved
from a four bedroom house to renting in 2020, like
right in the beginning, before everything happened. And right now for our
three bedroom, two bath, which we actually between her and I, we actually enjoyed renting more. But we're currently paying 22
right now for our three, two. And we got a notice that
they're raising it to 3,400 and that actually is what prompted us to like move to a townhouse
that we're moving to now. So it's just, and like they're
losing really strong tenants, 'cause like, could we afford that? Sure, but I mean, at that
point it's just stupid to stay. Why would we do that? Our mortgage payment between taxes, insurance, like everything PITI is 2,600, for the place that we're buying. So again, to your point, I'm just seeing a lot
of offering memorandums where people are making the assumption that the Cap rate is actually
going to be lower five, seven years from now in
their exit than it is today. And I'm kind of just going, I don't know if that's going to happen. I just, I don't know, I
just don't see that data. - Yeah, so find your
market and figure it out and make those investments. Well, hey, it's been a great interview. - [Daniel] Thank you. - You've got a ton of resources. So is there anywhere
that people are watching, if they want to learn
more on how you train and way you look at evaluating properties, where they should go? - Yeah, so we actually have
a free real estate course. So I think it's about 40 to
50 hours worth of content. And my brother and I
have recorded everything from a mini raising capital course. I have free meetups that talk about that. So really, if you just go to thekwakbrothers.com/freestuff, or even if you just go
to thekwakbrothers.com, there's a tab in there
that says Free Stuff. And I mean, all the way at the bottom, it's called Base Camp and
that's the free course. I have a free book that they can get. We have a free meetup every other Tuesday, first and third Tuesday of the month. And even if people just wanted to say hi, I've gotten in a lot of
trouble for doing this, but I like to give out my
personal email address. So even if people just want
to say hi, to say what's up, hey, you hope everything's doing well or share some really
crazy real estate stories, my email is just
daniel@thekwakbrothers.com. - Perfect. - So I love-- - Well, we'll have that information in the show notes as well, so they can just click on it
and it'll bring them there. But it's been great having you on, I mean, this time went so fast. You have such an interesting
story in the inside. I think that people glean from this is our BOLD strategy, right? - That's right. - How to go out there. Yeah, anything else you
want to say in passing? - No, I actually, this was,
and I hope this was recorded and I hope people listen to this part, but I do a lot of these podcasts. And this is probably one
of the ones I've enjoyed, one of the ones I've enjoyed the most. So this is really cool, it's very like, usually other podcasts
I do is very structured and very like, for me, I just like it to be
kind of go with the flow. 'Cause really, even as a
real estate entrepreneur and an entrepreneur in general, you kind of have to go with the flow. You have to adapt and you
have to kind of make pivots, so I really enjoyed this podcast. I hope more people subscribe
and listen to this. - Great, thanks Daniel. Good talking to you. - See you Clint.
