#179: How to Wholesale Apartment Buildings

 

Welcome to the Accelerated Investor podcast with Josh Cantwell. If you’re looking to retire early with forever passive income, you’re in the right place. This podcast is the go-to destination for real estate investors, both active and passive. And multifamily apartment investors, both new, intermediate and advanced. Now sit back, listen, learn and accelerate your business, your life and your investing with the Accelerated Investor podcast.

Josh: Hey, welcome back to Accelerated Investor. Hey, it’s Josh, and today I’m interviewing just an amazing entrepreneur, an amazing real estate wholesaler in both residential and commercial real estate. His name is Jamil Damji. He is the CEO and one of the founding partners of Key Glee They are a real estate investing franchise with over a hundred employees operating in 180 markets doing thousands of real estate transactions a year. He is also the CEO of AstroFlipping.com, and he is also the upcoming star of Flip This House Phoenix, which is going to be recording and airing in late 2021. Jamal has a fantastic story for you about how we got started in real estate when he formerly worked for the Yellow Pages. 

Josh: He’s also got a fantastic story about how he built his real estate investing business before the crash and had millions of dollars and millions, billions of dollars in the bank, only to lose it all and be back living with his parents, his girlfriend, his sister, their dog and their cat in a two-bedroom apartment, and then to rebuilding his business, to doing thousands of real estate transactions a year and being one of the top wholesalers in the United States. In this episode of Accelerated Investor, you’re going to learn Jamil’s top strategy for finding wholesale deals in today’s market. And I will give you a hint, a secret. It’s focused on struggling landlords. You’ll hear about that number to you feel about Jamil’s best strategy is number one technique for wholesaling and finding apartment buildings because they wholesale a lot of apartment buildings as well. And you’ll also hear from Jamil about what he would do differently after all that he’s learned and done in his real estate investing career. There is one piece of advice that I think you absolutely have to hear at the end of this interview that Jamil is going to give you. So I hope you enjoy this interview on Accelerated Investor with Jamil Damji.

Josh: So, Jamil, hey, listen, man, I’m so excited to finally have you on Accelerated Investor, thanks for joining me. What’s going on? How are you doing today? 

Jamil: I’m fantastic today. It’s a glorious day. I woke up, took a breath, had a fantastic morning, and Iget to chat with you. So how can it get any better? 

Josh: That’s right. That’s right, man. Well, thanks for making a few minutes. I know you’re busy. One hundred employees, massive wholesaling operation. One hundred and eighty markets, fantastic stuff. So we’ll talk about all that. But I love to hear from my guests when I have a guest on the show about what they’re working on today. Right now, like even this afternoon or tomorrow, what is something that they’re doing in their business that they’re excited about? That’s giving them passion, that’s giving them energy that they really excited for literally this week. So what do you have on your plate? 

Jamil: Love it, love it. So this week I’m doing a lot of work with my franchises, working with my team, really developing new strategies for our franchises to continue. As you see, we’re in the hottest real estate market I’ve ever seen. And because of that, inventory is low. We are very good at pivoting. We are very good at figuring out how to continue and have a continuous deal flow even in in start times. And so we’re really just figuring out some new ways, new and innovative ways for our franchises to get more and more and more deals done. 

Josh: Fantastic stuff. So tell me about that. What are some of the things specific, whether it’s digital marketing funnels, whether it’s direct to voicemail messages, text message, what is what are some of the strategies that you guys are working on today to find deal flow? Right. When I work with my students and speak to different audiences, the question’s always how do I find deals? And then if they’re a flipper or they’re investing in apartments, it’s where do I find the money? In your case, you guys are wholesaling a lot to those end buyers. So I guess what is working for finding deals? And I would ask you about finding buyers, but there seem to be buyers everywhere. But I’d like to hear your strategy on that, too. What are some of the maybe one or two or three techniques that you guys are finding that are working? 

Jamil: Love it. Love it. So right off the hop and finding more deal flow, as you know, with the moratorium that’s there, pre foreclosures are I have driven have dried up right now. Right. And so it’s not a deal flow that we can rely on count on for the next little while. We don’t know when the moratorium is going to get lifted. And so we’ve been doubling down on some other methods. So we’ve been doing some Facebook marketing that’s really worked. In addition to Facebook marketing, we’re also working on strategies with working with landlords that are in distress right now because of tenants not paying rent. A lot of mom-and-pop landlords, although they have cash, they’ve had cash flow and they may have an equity position in their property. This pinch has really hurt them. And because of that, we can come in and take over those situations, actually offer to take the tenant that’s not paying rent as a part of the deal, cash the landlord out in a way that’s equitable for them and have an opportunity for us once the moratorium is lifted and we can realize that profit. 

Jamil: And so we’re really pivoting in that stance right now. We’ve been doing a lot of work, taking a lot of occupied properties over actually, I’d say about seventy five percent of the deals we are doing right now have tenants in them that are not paying rent. And because of that, we found some glorious deal flow in that aspect. So it’s really good. In addition to that, we are a business-to-business wholesale operation. And so that might sound interesting to some of your viewers, like how do you be business to business? Right. So Quigley, which is my company that I founded with Josiah Diagrams running into my sister recriminatory, what we do is we essentially noticed a gap in the in the space of wholesaling around 2014. And what we were seeing is that I was showing up to the same appointments as many of my competitors, these same buy appointments. And what was happening is these deals would get contracted and then 30 days later, title would not convey. And when we saw that, we we realized there was an issue. Right. There was an issue in that a lot of the training, a lot of the people that are out there showing people what wholesale is about are leaving them at the contract or leaving them at the contract. And they’re also not really training people on how to understand value correctly. 

Jamil: And so people are locking up deals too high. They’re canceling on sellers. Sellers are getting upset. It’s tarnishing the reputation of the business model and so on and so forth. So we’re seeing this massive problem with wholesalers being unable to move their deals. And so what we did is we started doubling down and focusing in on building the best buyers lists out there. So in 2014, when we founded Key Glee, we brought to the marketplace the ability to sell for more to sell to a more sophisticated buyer whose appetite was different than your regular fix and flipper. There’s guys that are interested in in cash flow. There’s guys that are interested in appreciation. There’s guys that are interested in capital protection, you know, and you have a physician who’s sitting there with a million dollars in the bank and inflation is going where it’s at right now. That’s a dangerous spot. And as you’ve seen over the last little while, especially through the coronavirus, the stock markets can be volatile. Crypto is also volatile, and we really don’t know where it’s going to go. 

Jamil: And so what’s the safest place right now? Well, I see if the hedge funds and private equity are taking a position in American housing the way that they’ve been. And it’s safe to say that with that many hundreds of billions of dollars in the market that your average physician with a million dollars in the bank would be protected in. Same fashion and so what I’m what I believe we’re seeing right now is an artificially propped up market with private equity in the space. There is a housing crisis. We have an inventory crisis. We’re taking advantage of that by helping wholesalers sell for higher. We’re helping landlords get out of their situations. And because of that, our deal flow has been uninterrupted. 

Josh: Nice. I love it. So it’s interesting. So if you’re a buyer taking one of these properties and we do this with apartments all the time, when you’re buying a single family, a duplex, a quarter, a two hundred unit apartment building, that’s one of the questions that we’re asking during underwriting is, is are the tenants paying? Right or the tenants paying the freaking rent? And in a lot of cases, you’re right, the landlord is feeling the pinch. And what we found is that when we take over a building, that the government’s actually done a pretty decent job of kind of working both ends of the spectrum. So I’d like to get your take on this, too. So the government’s basically said, OK, eviction moratorium, you’re not going to kick anybody out. 

Josh: But there’s a loophole to that, which is if the tenant is on a month-to-month lease, you can evict them for cancelation of the lease and non-renewal of the lease. So we’ve done that multiple times. We’ve been able to get evictions through. But if somebody is on an actual lease, then the government is work the other end of the spectrum, which is they’ve set up these slush funds to help people with their eviction payment or that eviction payments. But they’re the rent payments. And we’ve gotten several not a ton, but we’ve gotten a check for five thousand dollars thirty-two hundred seven thousand dollars. And so if that buyer knows, I can take advantage of the fact that take advantage. But, you know, it becomes their advantage that the current landlord doesn’t know that there’s options out there. Position that deal to say this new landlord is a little bit more sophisticated. Maybe they’re a private equity buyer, maybe they are a landlord with one hundred doors that knows how to play the system. You’re basically taking a mom-and-popseller that may not know what options are out there and essentially wholesaling that deal to a bigger, better buyer who can then navigate that eviction process. So sounds like a lot of your deals are kind of moving that direction, is that right? 

Absolutely. And actually, you just taught me something today. I didn’t realize that there was that type of availability of assistance from the government. I know about the SBA loans and the puppy that was available for many people that were suffering through the pandemic. But I wasn’t aware of the situation with there being an availability of funds for landlords that are in in a pinch. So that is going to be something that I’m going to do some heavily heavy research into. Perhaps we can talk offline about it so that I can travel in my area. 

Josh: It’s called I think it’s either Cleveland because I went to Cleveland or Cuyahoga County. I can’t remember which one it is because that’s where Cleveland’s out. But Cleveland or Cuyahoga Housing Network, and it’s essentially an organization that’s gotten money from the government that if you make the right application and you say that you’re having a hard time due to covid, you can get a pretty substantial amount of rent. We just got a check for one of our tenants who was behind three months and they prepaid the next two months of rent. So because they knew it would be a while to the tenant got their job back. And so if you could add that to your service to just educate your buyers. Right, so they can get this money and maybe they buy the property, they still rent it out, and eventually maybe they evict that person, they move out, then they could turn that into a better rental or a rehab or something along those lines. And yet evicting when people are on month to month still is happening because it’s just eviction for non-renewal of a lease that’s worked for us as well. 

Josh:So help me understand when you’re so deals from landlords makes a lot of sense. What do you think, Jamil, is going to happen, let’s say, at the end of this year? 2021 or 2022. You’ve got to be looking your chops thinking that there’s going to be distressed assets coming down the pipeline. 

Josh: I do. I think there’s going to be some distressed assets coming down the pipe. But at the same time, I’m looking at what’s happening in the market right now and I’m looking at where the liquidity is. Right. And I went through the downturn. I got into real estate in 2002 so I rode the wave up and I found the crash down. And because of that I’m have firsthand experience of the market conditions that created that and how that all took place. Right. I don’t see those market conditions again. There are different conditions right now, completely different. We have different regulations. We have different players in the space. And I don’t my heart doesn’t truly believe that the private equity positions that are exist in American housing right now are going to allow for there to be a surplus of distressed inventory once the moratoriums are lifted. I think what’s going to happen is what? Creates a depression and pricing is a lack of demand, and that demand is artificially being created right now by private equity, and because of that, I think that we’re going to see an increase in supply, but we’re going to see the ravenous private equity and cash buyers that have been waiting, coming in and taking that inventory off the market before we get a depression in pricing. 

Jamil: And so I think there’s going to be an opportunity, but I don’t think it’s the same opportunity that that some people believe that there’s going to be a depression in pricing. I think that that is still a ways away, of course, once the institutions start leaving the market. And the market returns to the natural wave function of cyclical spikes and depression spikes and depressions, and once that starts to happen again, then we can start seeing, OK, there is possibility of a depression or some form of price decrease around the corner. We’re not in that space right now. 

Josh: Absolutely not. There’s been too much money pumped in the system. The one the last correction of 08, nine, 10. You and I were both in the middle of it. What happened with that? And again, you see this where distress creates people who are entrepreneurs. Distress creates people who fill that void with a new business model. And President Obama also signed in the Jobs Act in 2010, 2011. 

Josh: It’s allowed now private equity companies, private equity funds like mine, guys that are going to syndicating deals like we do that are able to raise a lot of money now through reggae, plus you D, 506B, 506 C, all these offerings. And so it’s making real estate investment on a passive basis more available where doctors, private equity companies, even institutions can pool their money and go in and buy, whether it’s single family homes, duplexes or even apartment buildings. So it’s just the market is smart, right? Entrepreneurs will find a way to create models, to take advantage of where they see a gap in the system. The gap in the system before was that there was all this inventory, prices were low and all of a sudden you saw all this capital seeking yield and people started buying that. That whole new model is not going away. There’s now billions of dollars there that did not exist in two thousand, eight, nine and 10. That money is still staying there. 

Josh: I mean, look at now, if you have cannabis funds that don’t necessarily invest in cannabis, but they’re investing in the real estate to support the cannabis business. Right. You’ve got real estate funds that are investing in industrial parks to support the shift to your home business. You’ve got all kinds of rental properties that were in the past only available to the mom and pop that we’re going to move in now. It’s a business to own portfolios of rentals. So this next 12 to 18 months, I feel like, is going to create some opportunity. And there’s going to be new innovation, right? People that create new things because of what corvids done to the marketplace. What’s your take on that? 

Jamil: I love that you said that because it’s a theory that I have about this innovative capacity of entrepreneurs to come in and reposition and see what’s there and how can I recreate what is in what suffering right now, you and I can agree that commercial real estate will suffer. And it’s and it’s suffering. It’s suffering tremendously. The strip malls are not having the same walk traffic that they’ve had before. Businesses are closing their office or the office retail. There’s so much depression in that space companies are going virtual and they’re seeing that their productivity had after a little while of normalization in life and people getting back to a routine, but working from home, it was completely acceptable to do that. And because of that, because of that, we’re seeing that there’s a massive vacancy vacuum right now in that space. What I think is going to happen is that innovators are going to come in and they’re going to find a way to reposition that commercial real estate into mixed use because we have this housing situation, because we have such a housing shortage. How do we get new inventory onto the market when there’s just no space? We can recreate the space that exists, recreate the space that exists. And I think what we’re going to see is they’re going to find commercial spots where a mixed-use functionality can survive. And you’ll see that commercial strip mall will start to elevate its way up into mixed use, commercial and residential. 

Josh: Yeah, I love it, I think that’s great, you know, there’s a big mall, kind of a luxury mall in the city that I live in and everybody’s wondering, like, what’s going to happen to the mall? Because it’s such sort of such a huge anchor for the community. And I’m not really worried about it at all because some entrepreneur or some innovator, somebody that can raise capital and knows how to structure deals is going to come in. And like you said, there’s a shortage of housing. There’s a shortage of especially in the Midwest, of new apartment buildings. Now, if you’re in Arizona, you’re in California, you’re in Texas, Florida, they’re building apartment buildings like crazy. But the Midwest is a lot of older housing stock and a lot of older apartment stock. People want new. So you take that mall, it might turn an outdoor shopping instead of indoor with some new high rise apartment buildings around that. That’s what we’re talking about. Mixed use. We’re definitely in lock step there. It’s fantastic stuff. So, Jamal, I wanted to ask you. 

Josh: You’ve innovated a lot, you’ve started in two thousand to your company companies, done thousands of deals, you know, hundreds of employees, one hundred and eighty markets. The audience that listens to my interview on my show is kind of a combination of both residential and commercial investors. And so for those all those entrepreneurs, they’re always curious to hear how somebody got started. Right. Like, what were some of the hoops they jump through, like for those people who are either just doing a few deals and it’s kind of a side hustle, but they want to make it more full time. Or the people who are in residential or pivoting to commercial and commercial feels like they’re kind of restarting. What was it like for you when you first got going? What were some of the challenges that you faced? 

Josh: And then secondly, a lot of businesses will have kind of a reinvention period. Well, they have some success. And like when Kevin O’Leary was on my show from Shark Tank, he talked about the five million dollar mark he talked about. You know, most businesses can just hustle. You have an entrepreneur that just bust chops and works 80-hour weeks and builds the business to five million. But then at five million, the business has to switch and change. You’ve probably in your growth, had the growth and scale and all the fun and excitement and chaos of that. But then you probably hit a spot where you had to reinvent. So tell me about how you got started and then tell me if there’s a spot where you had to reinvent your company. 

Jamil: Oh, my God. First off, Kevin O’Leary, of course, would say that because he’s so smart and he’s seen so many things and he understands so much. And you just said something to me that I hadn’t really put a definition on and I absolutely had that reinvention spot. So we’ll start at the beginning. Sure. So two thousand and two. I mean, a media company, I’m a partner in a media company, and we are trying to convince business owners that they should move to the Internet, that the Yellow Pages are going to disappear, putting their businesses on the Internet, get a five page website from us for six hundred dollars and your business will explode. And I was going through the Yellow Pages calling everybody in the Yellow Pages to see if they’d want to get online and what was happening in that businesses. Because I was a brand-new entrepreneur, I didn’t understand my costs every five hundred dollars, actually, with six hundred every six hundred dollars website we’d sell cost me seven hundred dollars to make. 

Jamil: And because of cash flow and because you don’t really know what’s going on and you’re figuring it out and you’re bootstrapped. And I was losing money every time I made a sale and I was so I didn’t even know that I should be sad, not happy right now. So I’m in this situation where I basically just paying my bills based off of what cash flow came in that week. And I walk by my business partners office and I overhear conversation he’s having with his dad, who happens to be a homebuilder, and they’re talking about a deal that they’ve just completed where they made one hundred and sixty thousand dollars. Now, I grew up in very limited means. My mom worked as a data entry operator, and then she once she was laid off there, she went into a meatpacking factory. My dad worked at a truck stop. And so I had you know, we grew up very limited. And so when I hear one hundred and sixty thousand dollars in profit, I stop. Exactly. So I interject myself into that conversation that I ask, how do I get involved? What are you guys doing? And very quickly, I was told, listen, Jamil, this isn’t a conversation for you. You have no money and you have no real estate experience. So how could you help? But I said I’m hearing you say that you need more building lots. What are these lots like? What are you talking about? 

Jamil: And his father jumped in and said, look, I buy these old houses that are on fifty by one hundred- and twenty-foot lots that are zoned R2 that are in the inner city of the city of the of the city I lived in at the time. Calgary, Alberta, Canada. And if you can find me one of these lots, I’ll pay four hundred thousand dollars for it. I’m desperate. I need as many and as often as you can find them, just bring them to me. So I leave the next day I’m walking my dog. I so happen to be living in one of those neighborhoods and I’m renting. I’m renting in that neighborhood. I rent the upper suite. There’s a basement. Sweet, sweet. I’m renting the upper suite. My dog and I are walking and I walk by a house that I actually tried to rent three months prior. Couldn’t afford it because it was two hundred dollars out of my budget. For rent sign is still on the lawn. So I call deepen my voice a little bit because like a brand new person, I think this person’s going to remember me, but she doesn’t. And I ask, I notice your house has been for rent for a while and you haven’t been able to rent it. Would you consider selling? And the answer was for the right price. And I asked, will that be? She said, three hundred and fifty thousand dollars. 

Jamil: And now I’m thinking I have a fifty-thousand-dollar problem. How do I solve this? There was no wholesaling. There was no guru that I could follow no one to teach me anything about this. I knew I could buy something for three fifty, sell it for four hundred. I have no money. How can I make this work? And I do what I know. I go back to the Yellow Pages and I start calling lawyers, real estate attorneys. And I get all the way to s. in fact, not only to ask, but to study, because the attorney who answered was David Steed and he was so new that he didn’t have a secretary yet fielding his calls, OK. So he is he is a very, very open with me, very vocal with me. And he tells me that this is an easy solution. You just need two contracts. You need to be as a buyer on one and make sure that your name is and are assigned and then you’re the seller on the other. And you bring those two contracts to me once they’re filled out. 

Josh: Sounds like he’s a real estate guru. 

Jamil: Man, look, he understood it. He understood it really easily. And he said, bring me those contracts and a few weeks later, I’ll get you a check. And it’s what happened. So my first real I accidentally stumbled into it by by interjecting myself into a conversation and walking my dog. 

Josh: Nice. Yeah. Yeah. You just don’t know how you’re going to get into it. I remember the first deal ever did we went to a training. I remember it was in Indianapolis. It was like a multiple streams of income training. This is back in like 2003. And we talked to the guy at the front of the room are like, this is what we’re thinking. And we’re in Cleveland. It’s already kind of getting a little bit, but there’s a lot of foreclosures and foreclosures because there were all these companies that left town. There were like these big Fortune 500 companies that merged or left. And we had started doing some direct mail marketing. And all the leads that we were getting from our direct mail marketing was like, yeah, I’d love to sell my house. 

Josh: It’s worth one hundred. And I owe 110.Right. So we’re like, oh, we’re going to do here, so don’t forget the first deal, right? No matter how much money you make, the fifty thousand in my case, the first deal I ever did, I made six hundred and thirty-three dollars. Right. But it’s the lessons that you learn because in that case, a little condo, we got it under contract, negotiated a short sale. I’ll never forget the guy was a minister and he was worked at a church, was the nicest guy ever. And when we showed up at the closing table, we figured out what you figure it out to contracts. But we also had to negotiate with the bank on the first mortgage. We got that done. 

Josh: And I walked away from the table with six hundred thirty-three bucks. But I remember how, like, this minister was so grateful. It wasn’t just about the money for us. We had to learn a new skill and we had also helped out somebody. So a big part of it. And then it became OK, well, now we know how to do it. Now how do we make this a business? Because me and my old partner, my buddy Greg, we were both used to making like big six figure incomes because we were financial advisers before we got into real estate. We both made zero money for like ten months. When we got into real estate, we had no clue what we were doing to scale this business fast. Right. We’ve got to start building this company to the point where we can make money with it. And we’ve got to get in a situation where we can grow it and make a living from it. 

Josh:So when you realize what you did was something that could be repeated, what was your kind of next move to kind of start to create something that you could repeat the process and start to scale the business and actually replace your other income from the Yellow Pages and now start to build a real company? What were some of the things going on in your mind and the reason why ask for Jamil is because now I know you teach this to other people who are doing the same thing. So what did you go through and what kind of advice would you give? 

Jamil: Well, I doubled down on what I did. Right. I think the thing that happens a lot of time when you get initial success in the business is you’re like, great, this is amazing. Let’s go do something else. Go try something else that’s going to that’s going to have the same effect. And that’s crazy. Right. Right. 2 plus 2 will never equal five. It’s four. Right. And so I realized that and I said, well these rentals, these landlords that that they’re the people that I’m going to go after. So I’d buy the I got a subscription to the newspaper because that was still a thing. And I’d get into the classifieds. The only section of the newspaper I cared about was the classifieds. 

Jamil: And I’d get into the rental section of the classifieds and I would just call them down every day and I’d ask if the landlord was interested in selling instead of renting the property. Nice. And not a lot of them said yes. A lot of them said no. But every once in a while, they said yes. And every once in a while, I’d get a big check. And then what I noticed was you talked about scale. How did I scale that? Well, I again, it’s just me and my sister at the time. So scale we weren’t really looking to hire people, but I started looking at bigger projects and I noticed that these developers now, because in my mind have put it together, these are the people, the builders, the developers. These guys need raw material. They need the project. They need somebody to find them. The project, they have no time because they’re in the project. So what I did is I started looking at apartment buildings and I would just walk this, walk the streets, drive up and down, and I’d see all the handwritten for rent signs on the apartment building. You see this 30-unit apartment building and the janky for rent sign. That’s the guy’s name is Doug, you know, stuck in the ground there and Doug. 

Jamil: And I’m like, Doug, what’s up, man? You have so you have some vacancies. I do. Well, how would you like to just sell the building? Because I’m looking to buy one and you’ve got some vacancies, and I’m sure that’s a pain in the butt. And it looks like the building could use some maintenance and some things. Let’s talk about it. And again, not all of them would say yes, but every once in a while, someone would I would contract that building and I would now make one hundred thousand dollars every time I’d sell the building. And I went gangbusters with that. Right. So I was just spending my day cold calling, cold calling, cold calling, cold calling, wholesaling these houses wholesale in these apartment buildings. I got to a point where I had millions of dollars in the bank and I’m twenty-six years old. Right. So I do all the things that twenty six year old does with that kind of money. You buy cars, you have a you get in a relationship. That’s probably not right for you. You do think you’re crazy. 

Josh: The bill, going to the bar. 

Jamil: You do the wrong stuff. Right. But I’m, I’m looking at it and I’m still seeing that I want to do more. And I have this idea that I well, what I’m doing right now is prospecting. But I want to do what these guys are doing. I want to be a developer like them. I know nothing about development and but because I’m young and because I have this energy and I have this decided, this unmatchable confidence that’s probably not built on reality and unhealthy confidence, there’s no such thing as unhealthy confidence, but it’s just got to be channeled in the right way on a one hundred percent. So I decide, you know, the next four buildings that we get under contract, we’re going to take them down and we’re going to do the project. And this is two thousand six.  And so, of course, I need leverage for that because I have cash. But this is a lot. This is a lot. Right? These are big projects. And so I go to mom and dad and I say, Mom and dad, you see me? 

Jamil: I’ve done so well. We have all this money. I bought you this beautiful home on the lake and I bought myself this home on the hill. And I got you a car and I got me cars and life is great. Will you cosign on these construction loans with me? Yeah. And of course, my parents said yes. Right. And so 2008 rolls around, credit crunch. Banks start, they start. In fact, all of the units I had presold these condo conversions I was doing, I’d presold all the units to get the financing. The bank decided we want to relook at all those pre sales that you have because our lending qualifications have changed. And that’s what they base their initial construction loan on. And so when the bank reevaluates what they made their initial loan on and changes the terms, guess what happens to the construction loan, they call it. 

Jamil: So now I’m sitting in a situation where I have loans called on for buildings. I have no income coming in for debt service because these units can’t sell, because the bank is not qualifying these buyers any longer and I’m literally being I’m stuck in this leverage means. And that was that I would be bankrupt if, in fact, we didn’t bankrupt. We went to zero. We went to negative. Right. And I ended up having one point eight million dollars in judgments, which I’d love to say I never bankrupted on. I paid every penny back. Good for you. I paid it back. I, I the last I think I paid the last payment back in like twenty sixteen was when I sent that last chunk of money back to the creditor and called it a day. But I paid all that. 

Josh: That speaks to the kind of man that you are to do that. So many people would have just folded up and filed for bankruptcy and said I just, I want to put this in the courts. The legal courts can handle it to step up and then rebuild. Right. So now you’re let’s start to talk about the rebuild. Right. Because now you’ve learned you’ve learned what it’s like to be twenty-six with a bunch of money, the mistakes that you made you learn to develop and some of the stuff in there that you realize that you’re not as in control as you want to be. We do tons of value at apartment repositions. I was just at one of my buildings this morning. And, you know, it’s a little bit nerve wracking for me. Every month we’ve got to send reports to the lender on occupancy, the units that were turning. But this is the business that I’m in, so I’m comfortable in it. But it’s always just a little bit like that. 

Josh: I know I own the building, but do I am I really in control? Right. You have that sort of unnerving feeling. We do a great job of syndication. We’ve got very low leverage, so we’re in a good shape. But now you’re coming out of this developing experience and now twenty, eight, nine, ten wears off and now you see that there’s all this inventory and now there’s going to be new opportunity, which is about ten years ago. What happens from there? How do you rebuild? How do you get your mind back in the game after going through such a devastating experience? 

Jamil: Well, when the market crash happened and we lost everything, there was a moment where it was my mom, my dad, my sister, her husband, her my niece, our one-hundred-and-fifty-pound dog and cat, all in a two-bedroom, one bath apartment. Wow. Right. And sweetest days ever because my mom was cooking. We were all there on basically laying on top of each other. It was a Charlie and the chocolate factory house, basically. Right. We’re all just living there. And the bed. That’s where it’s and it’s OK. You know, we have each other. We have each other. And never once in my parents or anyone say your fault, you know. And so my sister, if she goes back, she starts to get her bearings and some sober living situation. She’s able to do some deals with the Canadian government where she can reposition these really terrible buildings into sober living. And she does a great job there. And I decide to go become a comedian. And so I move to Hollywood and I start doing standup and sketch comedy, some of which you might see in my some of the content I create now. 

Josh: I love some of the Facebook videos and things. Even my one of the guys is a good friend of mine who writes some copy for me. He’s like, dude check out this guy’s video, the Astro Flipping and then the one you were hiding behind the tree. It was great stuff, man. Good job with that. 

Jamil: Thank you. Thank you. So I get to have an outlet for it now, but that’s where those skills developed was that time I spent in comedy in Hollywood. And and so I write all that copywrite, all those ads. I just enjoy it. It’s a part of what I do. So I take that little hiatus. But real estate is where I’m at, right? I’m I can tell the stars are aligned for me in real estate because I, I when you look at the synchronicity of what got me into it, there is a higher power there. There’s something more there. There’s a draw that’s in my DNA. Right. And so and so I’m just naturally drawn back to real estate. And so in two thousand and it was actually twenty twelve. I’m looking at the short sale market in Arizona and I can see I can buy these condominiums in Phoenix for thirty thousand dollars that I can rent for eight hundred and fifty a month. 

Jamil: And you tell me where in the world you can buy something for 30 grand and get eight hundred and fifty in cash flow from it. That’s a Ponzi scheme, right? Right. If I ever advertised that somewhere right now, the SEC would be banging on my door saying, exactly what are you doing here, sir? Right. And so when I see returns like that, I am interested. Right. So I start looking at Phoenix. I start getting involved in short sales and writing contracts, as you know, because you did it, short sales were like literally a fifty fifty. You would write an offer. You didn’t know if the bank was going to approve it, you didn’t know what was the process. And so you would write more often than you could buy home. Just because there was you had to cast a wider net, it’s like a funnel, you throw all these opportunities in the top and then you get what you get at the bottom, right. And so there I was writing these offers and these two properties. I end up coming to fruit. The bank approved the short sale and I can’t close on them because there is I’ve already closed on other ones that banks that had approved the month prior didn’t have the liquidity. And because I understand wholesaling and I know that you can sell a contract, you can sell potential, you can sell your position. Right. I do what I know how to do. I get on the Craig’s List and I write an ad and the phone rings in 15 minutes. And that’s individual, individual and man. 

Josh: Now you’re in the mutual YellowPages. Craigslist, correct? Correct. 

Jamil: And I get a call within 15 minutes is really charming. Individual by the name of Tim Olin gives me a call and says, I like these houses and I like the numbers. I think I’ll take them. And it was that fast. And I made eighteen thousand dollars on those deals. Right. And on that call he said, Why don’t you come out here for a week and hang out with me and just see what we got going on. It sounds like you have a real knack for this and you know what you’re doing. So you should just come and see Phoenix, come look at it, you know? And I’m like, well, I have some property out there already, but I’m in L.A., but I’m a comedian, which means I’m unemployed, so sure I’ll come out. So I come out and spend a week with the guy, takes me around all of his projects. I see everything he’s got going on. I’m hooked. I need to get back into it. So on my birthday, December 12th, 2012, 12-12-12, I’ll never forget. I’m bawling my eyes out, leaving Hollywood in a U-Haul on the town, driving from L.A. to Ph0enix and I end up in a haboob. If you don’t want to have a little bit of the sandstorm, we get these sandstorms and they’re called haboobs. And I’m on the 10. I can’t see even an inch in front of me. I’m scared to death. I think it’s the apocalypse. I don’t know what’s going on. 

Jamil: And I think this is a sign I’m making a big mistake. But I trudge just forward and I keep going. The haboob clears and it’s so metaphoric. It’s foreshadowing in all honesty, because you really can’t see where you’re going sometimes and you have to have faith and trust that the road will unfold and things will clear up for you and will be a wide stretch of highway in front of you that you can race down and life will be great. But you got to get through the storm, right? And there I am. I can make it through. I come to Phenix and I this has changed my life. The city is amazing. And just like the Phenix from the ashes is how I felt is what we did. We get back into wholesaling out here. 2013 I meet my two current business partners, Josiah Grimes and Hunter Runyan and two young cats, really, really smart with systems and technology. And we’re able to take my knowledge of how to acquire property, their systems on how to scale. And we build this amazing company called Quigley, which is now a national franchise operating in one hundred and eighty markets and doing phenomenal. 

Josh: Phenomenal stuff, man, what an amazing story. So if you were going to go back and sort of grab yourself by the shoulders and shake yourself and say, listen, young Jamil, this is what you should have done different, here’s some advice that old Jamil is going to give young Jamil. Here’s some things you should do differently. Or if you have a student of yours and he got thousands, hundreds of students all over the country and got amazing programs and systems, you got one hundred employees, franchisees. Get a lot of people that look up to you. What kind of advice would you pass along to them or your younger former self? What would you do differently or what is something that you did right that you want everybody to know about? 

Jamil: Well, honestly, I have been asked this question before. My answer is contrary to what a lot of people will say, know, give me a time machine. And the only thing I tell myself is you’re exactly where you’re supposed to be. 

Josh: Oh, I love it. I love it. 

Jamil: Everything you’re doing right now is going to lead you to the best stuff in life you could ever imagine. So be you be true and go do it. 

Josh: Yeah, be in the moment. That’s it. Wherever you’re doing it, there’s a reason why you’re there, where you’re at. 

Jamil: You’ve got to learn what you’re learning right now. You’ve got to go through what you’re going right through, what you’re going right now. We live in a divine world. You are a divine human being. You are connected to every person on this planet and you truly are. And anything and everything you want, all your dreams are available to you. If you believe that that you can move mountains, that you can bring the opportunity that you want, you can bring the people to you by believing in yourself and believing in your power to be able to do that. But you have to have that faith and you have to stop being in fear. But however, we got to learn that you’ve got to learn that. And if you’re in a spot right now where you’re looking at your life and it’s not ideal, it’s not what you want it to be, I can tell you it’s very likely a product of how you think and how you feel. That’s it. That’s right. Shift the energy and you’ll shift how it looks. 

Josh: I love it. Jamil, fantastic stuff. I wanted to ask you one question specific to wholesaling, specific to wholesaling apartments. I love apartments. We own over three thousand units. I love to hear strategies about how to acquire apartment buildings. You mentioned earlier, didn’t know any better. You just saw the for-rent sign, the little janky sign in the thirty unit. And a lot of times the biggest spreads are in those smaller apartments like the fifty and under fifty units and under deals because those are the where the mom and pops operate. When you get one hundred units in over, you’re typically talking about a five-million-dollar deal to a ten million dollars or more. And the commercial brokers are in that space and it becomes a little bit more professional. There’s smaller spreads. So what other advice or what kind of strategies would you use or are you using with your franchisees specifically to wholesale and find more apartment buildings to buy? 

Jamil: Agent outreach baby. Leveraging relationships like you had mentioned, that the brokers are in the higher space. But those are the big those are the guys in the in the in the tight suits. Right. You know what I’m talking about. High here type, right? Oh, yeah. Those guys are the ones trading those units. Fifty and above. Right. But the guy who wears sneakers and jeans and is a little sloppy, that guy, he’s got all kinds of opportunities. He’s talking all kinds of people. He’s got all kinds of hustle in them. And nobody wants to talk to him because he doesn’t have the high hair or the tight suit. Yeah, well, leverage those relationships. Call those guys, be their friends. Let them bring you opportunities. To heck with the guy with the with the fancy car of the high here in the tight suit. Go talk Sloppy Joe. He’s got your deal. 

Josh: Yeah. Yeah. That is fantastic stuff. I am cracking up. You have to go because most of my business partners, Tyler, he’s the fancy car, the high tide suit guy. I’ll make sure he hears this interview tomorrow. He will be cracking. He will be cracking up. Listen, I know you’re a busy man. Thanks for making some time for us on the Accelerated Investor podcast. If our audience wants to learn more about you, about quickly about Astro Flipping, where should they go to get some more information? 

Jamil: Love it. Check out my Instagram. It’s at @JDamji. Also, I am going to be the star of Flipping Arizona on A&E. Yeah, we’ll be airing August. My partner, Payson Maubee and I will be out there flipping houses so you can find us on our show. Hopefully we run more than one season, but we do have one season commitment, so that’s going to be fun. In addition to that, if you want to find out how you can learn from me, AstroFlipping.com and beyond that, I wish you all tremendous success. Every one of you deserve it. 

Josh: Fantastic stuff. Jamil, thank you so much for joining us today on Accelerated Investor. Appreciate you. So, guys, there you have it. I hope you enjoyed that interview with Jamil Damji. I really enjoyed his advice about what he would do differently, which was essentially nothing. You are exactly where you’re supposed to be in life. So look around, enjoy it, smell the roses and enjoy the life that you’re living today.

Josh: I also enjoyed his advice and a story about how he built his business, lost it all and rebuilt it, and also love the fact that he’s going to be a star on A&E. Flip This House Phoenix That’s going to be fantastic. So look out for that and his advice on how to find apartment buildings. Remember calling those for rent signs at all the apartment buildings and finding out which ones are for rent. Again, you’re getting a lot of people that say no. But when you find an apartment building where they say yes, especially in that mom-and-pop space between 10 units and 50 units, you know, working with the average Joe Broker. Average Joe owner is a fantastic way, especially to find those smaller apartment buildings where there’s a lot of big spreads. So I hope you enjoyed that interview. If you did give us a five-star rating and a review in iTunes and make sure you subscribe so you catch all the episodes of Accelerated Investor.

You were just listening to the Accelerated Investor podcast with Josh Cantwell. If you enjoyed this episode and learned something new, help us build the A.I. community by leaving a review and five-star rating on our iTunes podcast channel. Also, don’t forget to subscribe so you never miss another episode. To see passive investing opportunities, visit FreelandVentures.com/passive. To start your journey toward the lifestyle you’ve always dreamed of with multifamily apartments, apply for one-on-one coaching with Josh at www.JoshCantwellCoaching.com.

You might’ve seen some of Jamil Damji’s hilarious ads floating around social media. He takes his comedic background and marries it to his real estate genius for some amazing content that entertains and educates at the same time. As the owner of AstroFlipping and Key Glee, Jamil has over a hundred employees in 180 markets doing thousands of real estate deals a year. And now he’s getting ready to launch Flip This House: Phoenix on A&E.

Jamil started wholesaling homes in Canada in 2002, and he was on top of the world when the bottom dropped out of the real estate market. He shares an amazing story of how he found himself in a two-bedroom apartment with his parents, his sister, his brother-in-law and his niece trying to rebuild his life. Jamil came back smarter because he believes that the best real estate investors can innovate when the market shifts.

The pandemic presents a unique problem in real estate, and Jamil is determined to find solutions. He shares how he’s finding distressed landlords and cashing out those who are in a pinch. At the same time, he’s building the best buyers list possible so that he can wholesale these properties out to real estate investors.

Tenants who aren’t paying their rent, for whatever reason, are putting landlords in a terrible position. We’ve personally found some loopholes for the eviction moratorium, and we’ve also found programs that help tenants get current with their rent. Jamil’s discovered that mom-and-pop sellers may not know what options are out there, so he can wholesale an apartment complex to a larger, more sophisticated investor who’s aware of the government programs.

Don’t miss Jamil’s show Flip This House: Phoenix in August, and connect with him on Instagram or one of his websites.

What’s Inside:

  • Using a variety of marketing platforms, Jamil’s still building out his buyers list even in this tight market.
  • We talk about a variety of resources for small landlords, including some local rental assistance programs.
  • How Jamil and I see some of the apartment scarcity problems get solved with mixed-use spaces.

Mentioned in this episode​

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