The Fastest Way To Build A Six Or Even… Seven Figure Real Estate EMPIRE!
Even if you’re really, really good at it, residential real estate is a rat race. Whether you rent single-family homes or you’re fixing them up and flipping them, you’re participating in a transactional business–and one that can get exhausting.
Today’s guest, Chad King, knows this well. He’s closed over 450 wholesale fix-and-flip properties and did 168 residential deals in 2019 alone. This experience made him realize that he needed to make a change and pivot into commercial multifamily and syndication. Since making this change, Chad has purchased 635 units of multifamily apartments with no signs of stopping.
In our conversation today, you’ll hear how Chad took the leap, grew his portfolio after purchasing his first 14-unit building, and continues to find great deals today.
We’ll also discuss investing in the time of rampant inflation, why neither of us would have gone to college if presented with the opportunity now, and how to structure your finances to get out of the rat race once and for all so that you can build a portfolio that works for you.
Key Takeaways with Chad King
- How Chad purchased and converted a 21-unit motel into a luxury Airbnb–and how to structure a short-term rental deal.
- Why Chad believes that money actually does grow on trees if you create enough value to attract money with the proper mindset.
- How some failures can be a good thing.
- The value of taking a me-first mentality in dealmaking.
- Why people who are trying to save money are missing out.
- Why schools fail to teach cooperation, and turn out employees instead of entrepreneurs, and ultimately fail to give so many people the education they really need.
Chad King Tweetables
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Josh Cantwell: So, hey there. Welcome back to Accelerated Real Estate Investor. Hey, listen, I’ve got a great interview today with Chad King. Chad is a real estate investor and multifamily syndicator out of the Nashville market. He currently owns 635 units of multifamily apartments. He also closed over 450 wholesale fix-and-flip and rental deals in his career and realized back in 2019 after closing 168 residential deals in one year that he had to make the change and the pivot into multifamily because he just didn’t want to continue in the rat race and the transactional business of residential real estate. So, we’re going to talk in this interview about Chad’s pivot from resi to commercial multifamily and into syndication. You’re going to love that part of the interview and talking about some of Chad’s challenges in making the pivot. But here’s also what you’re going to learn in this interview. Number one, you’re going to hear about Chad’s most recent purchase and his conversion of a 21-unit motel to a luxury Airbnb outside of Nashville. That’s an exciting conversation. Number two, you’re going to hear from Chad and why he thinks money actually does grow on trees. Number four, about Chad’s me-first mentality. Number five, about why savers are losers.
You’re also going to hear about a whole conversation that Chad and I have around cooperation and why they’re not teaching cooperation in the school systems. This is a great talk about why school systems, high schools, and universities are only built to turn out employees. And why if we could do it over, neither one of us would have gone to college. And finally, you’re going to hear how Chad grew his portfolio, starting with a 14-unit, then a 21-unit, then a 49, then a 65, then a 93, and why he’s now focused on large multifamily syndications. I had an absolute blast interviewing Chad. This is a really high-energy interview. I think you’re going to love it. Here we go.
Josh Cantwell: Hey, Chad. Welcome to Accelerated Real Estate Investor, man. Thanks for jumping on. How are you?
Chad King: I’m doing fantastic, Josh. I cannot wait to dive into the conversation, man.
Josh Cantwell: Yeah, absolutely. So, listen, I would love to hear as an active investor syndicator, you’ve made this pivot from resi to big commercial deals and apartment syndications. We have a new year, right, 2022. So, I’m curious to see what you have cooking for 2022, maybe talk a little bit about some things you’re actively working on right now and also kind of some big goals. What are some big goals and objectives and things that you’re trying to accomplish this year?
Chad King: Yeah. So, we actually just closed on an old motel that we’re converting into Airbnb for short-term rentals. That’s a cooler project. We closed on it like less than a month ago. We got a 65-unit apartment complex under contract that’s closing in about 30 days and just really focused on more apartment acquisition. So, trying to buy a couple of deals a quarter for this calendar year, buying them right. I think we’re at the top of a market cycle, so we’re really just focused on underwriting them, find the right deals, and that’s what I’m doing, syndications for the larger stuff, taking down some of the smaller stuff that we can in-house, and just ramping up the apartment portfolio.
Josh Cantwell: Got it. So, fantastic stuff. Let’s talk about that conversion project real quick because that’s interesting. Obviously, Airbnb and local stays or extended stays, huge market, right? So, how did you guys find it? How are you underwriting it? And kind of what do you foresee that thing looking like over the next year or two as you make the conversion?
Chad King: Yeah. So, it’s right outside of Nashville, Tennessee, so it’s got a view of the skyline. It’s got a view of the skyline of Nashville. It’s about, I think, 2.5 miles. There’s a $2.5 billion development that just got announced that is literally right around the corner from it that’s breaking ground in 2023. So, it’s in an up-and-coming area. Just tired old landlord, mom-and-pop guy who was living in it, kind of renting the rooms out for $75 a night and probably by the hour on some other occasions. So, we bought it at a good price. We’re putting about $700,000 into it. It’s currently gutted and we’re redoing all the electrical on it. So, that should be ready and set to go by May 1. We’d like to be able to lease up coming into summer for the Nashville. Two clienteles are going to rent it out, bachelorette, bachelor parties, and then obviously we have kind of the working class that are going to come stay at that thing. But, yeah, it’s 21 units of short-term rental, so it’s a nice sized property and it’s going to be beautiful when it’s all finished and can’t wait to get rocking the place.
Josh Cantwell: Tell me how you structured it. So, it seems like a conversion like that and then going into short-term rentals, Airbnb is definitely going to be on the tougher side to get like traditional financing.
Chad King: Yeah.
Josh Cantwell: Well, tell me about that. How did you guys structure it?
Chad King: So, we got a I wouldn’t call it hard money but it was a bridge loan, 9%. We actually did a syndication structure. We did do a form of 506(b) because we only had to raise about 750,000. So, we actually just called a few people and did an operating agreement split. So, we did a 60/40 split between GP and LP. We kept 40%, gave the LPs 60%, and we just did it on a standard operating agreement. So, we raised the capital. We got funded. We were at like 90% of loan and purchase costs. It was high-interest rate and we had obviously paid all the interest upfront and then we’ll probably get out of that loan. It’s a 12-month term on that loan and we’ll probably hopefully get out in nine months, no prepay penalty or anything. So, once we lease up, we should be going into like maybe a small balance loan or a typical commercial bank lender with some fixed-rate debt. Once we can show that the property is renovated and it’ll reappraise and we can show some rental, once it fills up with Airbnb, we can hopefully get a better loan on it.
Josh Cantwell: Got it. So, help me understand like, what are you all into it for? What do you think that thing’s going to pencil out to be worth when you’re done?
Chad King: Beautiful. We bought it for 1.7. We’re putting 700 into it. We’ll be in it for 2.5. There’s no way it’s worth less than 3 million with the proximity to Nashville. We think once we lease it up and start to get it rented out, I mean, it should appraise right at around 3. And then with the cash flow model, short-term Airbnbs are tough because you can’t really do it based on the way apartments are with straight income minus expenses. There are some other factors that go in including RevPAN and seasonality and stuff. So, I don’t know, based on the income that it produces, we should be able to pull 3.5, 4 if we wanted to sell but I don’t think we’re going to sell that thing due to the proximity and the structure of it. It’s a long-term hold for us, a seven-year projected hold on it but it’s going to be worth 3 million once we finish it up, hopefully, get a new loan based on that value, be able to pull all our investors capital out, we’ll pay off the hard money loan, return all the investor capital, and then just hold that thing in perpetuity.
Josh Cantwell: Nice. So, are you going to be doing the leasing to all the bachelorette parties and then showing them the units when they arrive?
Chad King: Absolutely. That’s what I’m looking forward to most, being a married man with two babies I’m looking forward to it.
Josh Cantwell: Oh, really? Okay. There you go. Having somebody else do that part, right?
Chad King: No. We’re actually third-party property – so we’re doing third-party management for Airbnb as well. You pay a little bit more of a fee than you typically do with the property manager but they handle everything from leasing to getting people logged into the units with the door codes and the sign-out, sign-in, all that stuff. I’m a big believer in giving up that percentage to not have any headaches and not have to deal with people damaging the units and charging their card, and all that stuff is handled by the property management company that does strictly Airbnb. So, it’s not a property manager that we’re giving Airbnbs. It’s an Airbnb management company.
Josh Cantwell: Love it. Yeah, I love the fact that selecting the right kind of teammate, if you will, because the big commercial deals, really any commercial deals, becomes very much a group effort, team approach. Got to have a dream team to manage it all because finding the deals, structuring the deals, getting the capital, executing the business plan, that alone is a tremendous amount of work, as you know. It’s also worth it with like the upside in all the capital and the equity that’s on the back end but then the day-to-day management. So, like we asset manage our property managers really hard. I don’t think they like it but we manage them really hard. But that’s where the value is, right? It’s not actually being in the dirt, being outside the business and slightly above the business so that you can manage the people in the dirt. And then sometimes actually going and being in the dirt like in two days, we have a big leasing event this weekend. We got 25 units in one of our big complexes that are done with CapEx, hard turns, 8,000 a unit and we want to get them all leased up this weekend. So, we’re doing like a rent special and some concessions. So, you got to get on-site, right? Kind of getting side-by-side, elbow-to-elbow with your people sometimes to feel their pain, right? Because it’s not easy, right, property management. Listen, Airbnbs and bachelorette parties and bachelor parties and knuckleheads coming in there, and all their shenanigans. So, Chad, why did you decide to go the Airbnb route versus a traditional apartment complex?
Chad King: Well, because of the proximity to the city. You can’t stay in Nashville for less than $500 a night like anywhere close to Nashville. The demand for short-term rentals to be able to come to the city is really, really high. And our projections at even a very conservative nightly rate put our internal rate of return and our cash-on-cash returns like up north of 25%. So, when you look at the model, it just made a lot more sense to do short-term rental than what we could rent these things out for because it’s a motel. So, they’re smaller rooms, right? So, it just made a ton more sense to do the short-term stuff on this particular asset. We have a lot of other stuff that we do leases on in Nashville, too.
Josh Cantwell: Yeah, for sure. Is that your primary market or are you guys in other markets too?
Chad King: So, we own assets in five different states, seven cities but everything is pretty much within a three-mile radius aside from the stuff we own in Florida. Everything is pretty much within a three-hour radius of Nashville. So, Louisville, Chattanooga, Huntsville, some other markets in Alabama, Kentucky, North Georgia corridor is big for us. We love that Chattanooga to Atlanta and North Georgia corridor. So, those are the five states we like, landlord-friendly, southeast. I can get to it in a car within a couple of hours if I had to.
Josh Cantwell: Yeah. I love it. Now, if you’re listening to this like there was a bunch of tips right there in what Chad was saying. So, make sure you rewind, slow the tape down, relisten to that, proximity to home, southeast, landlord-friendly, get there in a day like diversified geographically but still be able to get to those markets quickly. Generally, the same style of property management, right? You’re not dealing with rent controls and those types of things. And again, the southeast is a fantastic area for growth and, obviously, you have the weather. So, there are a lot of nuggets in that that you may not have caught. I just wanted to kind of spit that back at you to make sure you were listening if you’re looking for some tips on where to go. So, Chad, help me understand the primary money making strategy for you. You were primarily a residential investor for a long time. You were chief financial independence in your late 20s. You were able to be successful at that, make the conversion. So, what do you spend your time doing today mostly as your primary method of making money in your business?
Chad King: Yeah. So, buying these apartment complexes, they have what’s called acquisition fees on them. Those are few and far between because if you close a deal a quarter, that’s just income once a quarter. So, I mean, honestly, I’m into financial markets, cryptocurrencies, stock trading as a way to make money. I like the idea of easy liquidity to multiply capital. I do hard money lending, those types of things that can make kind of quick cash and then obviously take all that active income and put it into passive investments. My wife and I are fortunate enough to put in the work that we are what’s called out of the rat race. So, we just focus on right now acquiring more assets to build our portfolio. And we do focus on active income because I do think active income is very important. So, we own a mastermind company. We have some other businesses. We still have some automated systems that focus on wholesale fixing of flipping homes. But most of my time is spent in the apartment space and we make those fees on syndications and acquisitions fees. And most of the time I roll my acquisition fees right into the LP of the deal because I don’t really want money. I want to just get money out.
So, that is some of the things that I do to make money. But it’s very important that people understand that you can make it and then you figure out how to keep it but you ultimately got to get into the multiplication phase, which I think is why most of you and your listeners end up going from resi to multi is just because you have to get it out of the making it, keeping it, and into the multiplying it. So, just focused on that right now.
Josh Cantwell: Yes. So many people, I think, have done deals like take a lot of chips off the table, spend it versus doubling down, putting it back into deals, letting that grow passively. You know, when I look at some of our passive investors and just our own accounts that have just put money back in, earning compounded interest on that type of stuff. Again, it’s not super sexy in the first one or two or three or four years but, man, when it starts to really take off year three, year four, and beyond, it’s like, holy smokes, man, this is really, you know. Those are definitely for my listeners. You guys know that’s some of my early regrets was just doing a lot of transactional work, a lot of wholesaling, a lot of fix-and-flip, and not putting it into long-term investments, made a tremendous amount of money and we’ve done well with it but I wish I had done it even sooner than we have. Chad, you mentioned financial independence, right? And so, so many people are trying to go for that. What do you think are maybe two or three things that you did right? And maybe you just mentioned one of them, which was the reinvestment. But what are some of the things that you did right that allowed you to achieve financial independence at such a young age?
Chad King: Oh man, that’s a great question. First of all, financial literacy is not something that’s taught in the education system. I have degrees in finance and accounting from a good university, right, Florida State, but it doesn’t teach you anything about financial literacy and the difference between assets and liabilities and good debt and bad debt. There’s such a thing as good debt. There’s such a thing as bad debt. I think what I did was really invest in my own financial literacy and got coaches, mentors around the concept of money. I had to remove a lot of limiting beliefs that I had that a lot of us, I think, don’t realize are in our subconscious about money and the fact that money does grow on trees, it is fake. You know, you need to…
Josh Cantwell: It’s us. So right. I love it.
Chad King: Money grows on trees, absolutely that’s the fakest thing in the world. So, when you look at it that way and you have this abundance mentality that if I go out and create enough value in the world, money will attract, it will come to me and it is currency that is meant to flow. It is not meant to be saved. It is not meant to be kept. It is not meant to be stored away. It is meant to be reinvested and applied. So, I think one of the things that you mentioned is having that abundance mindset and then understanding that, first, you need to invest in yourself. So, everything first goes into me, masterminds, mentors, coaches like courses, books, everything goes into me first to make myself more valuable, and then it goes into our businesses and then into assets, hard assets that produce income. So, changing that mentality around money, I think, is a lot of people’s struggle because they grow up – our grandparents were taught to save money and that was passed down and passed down. So, savers are losers right now, especially with where inflation is. I mean, we’re in the beginning of 2022, and you need to get your money working for you.
So, I did that at a young age. I started that at a young age and my wife and I actually sit down and talk about money. We actually just came out of our money meeting. Every week we look at our finances, we look at our statement of real estate owned. We look at our personal financial statement. And what we did really well was we were able to budget. In the beginning, her W-2 salary for all of our expenses and everything that I made would go straight into the fund to purchase assets. So, we’re able to really budget and get us to a place in our late 20s that was able to move the needle for us.
Josh Cantwell: Nice. I love it. How did you guys get comfortable with the downside? I think so many people want to make the leap into entrepreneurship, whether it’s in real estate or some other niche. And they’re constantly pulled back into the W-2 rat race because of like, “Well, what if it doesn’t work, right? The downside?” And ultimately, the people that are making it had to get comfortable with the downside, make the leap, kind of take a leap of faith, just do it even though there was downside. How did you personally get comfortable with the downside risk of failing and having it not work out and thinking, “Oh my God, I could go bankrupt. And what if we don’t make enough money from these investments? Or what if the investments go sideways?” So many people, I would love to see more people become entrepreneurs. I’d love to see more people take advantage of the market in the economy and all the ideas of, like you said, money does grow on trees and there’s so much out there that people can do. But their mindset gets in their own way of them going out and making the leap because the downside risk scares them more than the upside. So, how did you get comfortable with the downside?
Chad King: Well, listen, the uncertainty never ends, and even to this day in entrepreneurship, like there are still uncertainty, still get punched in the face. And I think what people need to understand and what’s not taught is, number one, failure is a good thing, right? And we’re taught in the school system that failure is bad, cooperation is cheating – and all those things are not true in entrepreneurship. So, it’s the complete opposite. Every failure you’re going to make is getting you one step closer to where you’re supposed to be, and partners are really important. Partners are the reason that we’re able to get to where we have to get to quicker. And I would say also for entrepreneurs, you have to build a plane on the way down, and the marketplace doesn’t reward those who don’t take the leap. If you stand in there at the edge of the cliff, looking over, waiting for the plane to arrive, or waiting for the path to clear, it’s unfortunate but it’s never going to happen. You have to jump and you will learn the skills you need to. And if you get some bumps and bruises on the way, that’s part of it, but the path doesn’t clear up until you start walking down it. And you’ve got to build the plane on the way down if you’re going to take the jump.
So, to get comfortable with it, though, you have to be comfortable in the uncomfortable like you have to understand that discomfort is your friend. Discomfort is the trigger that you are growing and moving forward. And in entrepreneurship, that is all there is. There is the next step forward and making the next best decision. And a lot of times that decision is going to be rooted in your own discomfort. So, changing your mentality around it and understanding that if I fail, I’m just one step closer to success, then that’s all you need to know and you just keep pushing forward and taking action.
Josh Cantwell: I love it. I love the comment you made about cooperation because, as you know, and our audience should know that large commercial deals whether it’s large Airbnbs like we’ve talked about or apartment syndications or other types of commercial deals or office to multifamily conversions, it’s a team game. It’s a dream team type of thing, right? And we’re taught as entrepreneurs to be very comfortable doing JVs and finding partners and finding people that can help us and we can provide value to. But the traditional schoolwork, traditional school sense teaches kids that cooperation is cheating and you can’t share with other people. And, man, if there was one thing I could change about the school system is that they would embody and embrace that. Why is the traditional school system say, “Do it on your own. Learn it on your own. Don’t share. It’s cheating?” It’s because the traditional school system is completely globally outdated. It’s completely based on memorization. And if whoever the better person to memorize is the person that got the better grade. That’s really what it came down to, not what people could learn or not but of memorization.
So, globally, the education system is outdated. And so, I would love to see kids at school age, my kids are in eighth grade, sixth grade, and fourth grade, I’d love to see them be taught cooperation instead of memorization because that’s what translates into the real world. That’s what, Chad, you and I are doing everyday, right? You’re smiling. Tell me what you’re thinking.
Chad King: Oh, well, we could go down a rabbit hole in the school system but it is so antiquated and you hit the nail on the head. I mean, the school system is designed to produce employees, not entrepreneurs. That’s what it’s designed to do. So, when it takes you through, it teaches you the skills that it needs to spit you off as out of college, as an employee. I mean, even looking back like I would not have gone to college knowing what I know now. I would tell my younger self, “Don’t go to college. Just get into sales like you did and then get into real estate like you did.” And I would be four years ahead of where I am right now because it just teaches you to clock in, clock out, and get your paycheck, trade time for money, and it teaches you just the very basic skills that you need to be an employee. And the other beef that I have with the school system is it teaches you at the end of whatever you do, high school, college, it doesn’t matter, it teaches you that that’s when your education ends. And honestly, self-education or the education that you do after you get out of schooling is the most important education you’ll ever get. You know, going to YouTube University and asking Dr. Google things and doing and self-learning is what’s really going to allow you to be a phenomenal entrepreneur. So, I think too many people stop education or stop learning after school stops, and again, that’s a problem with how antiquated that system is.
Josh Cantwell: Yeah. Look, I mean, you would think if you went to Florida State, I went to a small liberal arts school called Baldwin Wallace University somewhere between 20,000 to 50,000 a year no matter where you go. You would think that they would spit out apartment investor entrepreneurs with all those amazing finance classes, marketing classes, sales classes that you could take and you got four years to freaking learn it. You would think they would just spit out entrepreneur after entrepreneur after success, of people making half a million, million-plus more dollars a year. But what they teach you is get enough of an education that you could go work for someone else. It’s really sad. I’m so glad we’re down this rabbit hole. I haven’t had this discussion with a real smart dude like you in a while. This is great. I mean, this is really, guys, what it’s all about. And for those of you that already have maybe a job, maybe you’re in tech, maybe you make a huge income. You know how many people, Chad, that you and I talked to who are limited partners that are, like, “God, I wish I could do what you’re doing. I’m stuck in a W-2 job.” They might make $400,000 a year, $700,000. It might be a doctor, whatever. They’re like, “God, if I could start all over, I’d do what you do.” Especially if you’re young, man, take this information. YouTube University, I haven’t heard that before. I like that one. That was good.
Chad King: Everything you need to know is it’s in a book, it’s on YouTube. The greatest thing about the time that we live in and that I’m just so grateful for the time that we’re in right now because everything you need to know is right here on this little device that’s in your hand. The problem is people don’t use it the right way. They get caught in these bad algorithms looking at other people’s lives, looking at trash on the internet, clickbait stuff, and they’re not intentional about their algorithm and what they’re seeing on that device. And they’re not using this device the right way because, and I have zero sympathy for people who are poor mentally and broke who are sitting on an iPhone playing Candy Crush. They’re not using it the right way with the abundance of information that’s out there. You can learn any new skill you want. I mean, it’s incredible. It’s incredible the time we live in and I don’t think enough people are taking advantage of it.
Josh Cantwell: Yeah. No doubt. Chad, I wanted to ask you about your early start in real estate. Whether it was resi, starting in resi, and getting going, or the conversion from resi to multifamily in apartments, what were some of the early challenges that you experienced? What were some of the early roadblocks, choke points that you experienced? And then how did you get through them? Like what happened? How did you get to the other side?
Chad King: Yeah. I mean, what comes to mind when you say challenges was going from I was selling copiers at Xerox out of college, so I sold copiers door-to-door and ultimately just left cold turkey, got into real estate, and my first year was just that tradition like first year in entrepreneurship, just get in your face, just be in. And people celebrate when you come and start your LLC and they realized like, “Hey, the marketplace doesn’t care that you are now “an entrepreneur.” It rewards activity, it rewards results. So, I think that first year, I mean, I didn’t do my first deal for eight months after I technically became an entrepreneur. So, those first eight months were just riddled with failure after failure, deal under contract that fell through, another one under contract that fell through, constant doubt in your mind. I mean, you’re going to fight that hard. Like, should I just go back to that W-2, man? Now, I was making six figures. What am I doing here? Now, I got no money coming in. I think some of the challenges that you’ll face is just realizing that the market doesn’t owe you anything. The marketplace doesn’t care what color you are. Doesn’t care. It doesn’t care anything. The marketplace does not give a sh*t. It just rewards those who take consistent, persistent action at a massive level and those who continue to pour into themselves and create more value.
And that’s what I had to learn the hard way. And I think looking back, my biggest challenges were that I didn’t invest in a coach or a mentor. And I thought that I was going to reinvent the wheel, and I thought that I was going to like figure it out on my own. And if I could go back in and talk to myself becoming an entrepreneur, I’d say, “First thing you need to do is get yourself a coach, get yourself a mentor, get into a group and cut your learning curve in half because you can take all the experience of the people in that group or your mentors’ experience and accelerate it and get to that place 10x faster than you would trying to figure it out.” I spent eight months beat my head against a wall. I could have just hired a freaking coach and saved all that money I’ve wasted on frivolous marketing. And he would have just said, “Hey, don’t do this. Just do this. There’s a blueprint laid out.” And a lot of the times, that’s the case for entrepreneurs. Somebody has already done what you’re doing. Just go get the blueprint and just do it and you’ll get the exact same result. And that’s what it’s all about. So, that was one of the biggest struggles that I had trying to recreate the wheel when I first got started. It was a huge mistake. It cost me ultimately a lot of money and a lot of time that I could have been going faster.
Josh Cantwell: How about you pivot into commercial? When did that happen? When did you know that the resi space you were ready to make the leap into commercial multifamily? And what was the first couple of maybe months or a couple of deals like making the pivot? And what would you say as you talk to your story? What would you say to some of our audience that’s trying to make the same pivot?
Chad King: Yeah. So, the pivot from residential to commercial was that of high transactions. And like 2019 was the year that I really made the pivot because we did 168 deals. So, that’s a good amount of transactions in the resi space. That created a lot of active income, which was great but, obviously, we talked about how cash is trash and cash flow is king. But the other thing that did was once that year was over, I picked my head up and I was like, “Oh my God, I got to go do it again,” because it’s all transactional. So, ultimately, had to make a conscious decision to get more focused on acquiring apartments. And I would say, looking back to answer your question, the biggest thing that I lacked was courage, and the biggest thing that I lacked was just an abundance mentality knowing that I started with a little 14-unit. My first apartment complex is a 14-unit, and then I got a little courage and I bought a 21 and then I got a little more courage, I bought a 49 and then a 65 and then a 93, and just kind of got bigger and bigger. But the person who could syndicate into a $10 million syndication was already in there in the beginning. He just needed that courage and had to do those stepping stones. So, I would encourage everybody to think when you get started, especially making the transition, you have everything you need already inside you and you’re only limited by as big as you can think.
And I was thinking so small in the beginning and that’s why I got a small deal. And then I started thinking bigger and I got a little bigger deal. So, think big. I mean, there is no shortage of money on this planet, especially that wants to go into multifamily apartments so you can find a good deal. You know, the money will come to fund it as long as you’re talking to the right people and in the right circles and in the right rooms. So, I think courage is probably the biggest thing that I would give myself is just go big.
Josh Cantwell: Yeah. Courage is action in the face of fear, right? There’s no such thing as the absence of fear. You know, the fear is always there. Courage is action when fear exists in the face of fear. So, many great nuggets there. Chad, I’d ask you for more advice but you’ve already slung out tons of it. So, let’s wrap up with our final five couple of quick questions, couple of fast answers. Let’s talk right now about today’s market, 2022. What do you think is going to be your top acquisition strategy or way to find deals this year?
Chad King: Direct-to-seller campaigns.
Josh Cantwell: Okay. Such as what? Like making up on phone calls, text messaging, letters? What does that look like?
Chad King: It’s a combination of letters, cold calls, texts, and emails. It’s a cadence that we alternate and it’s designed to build a relationship with seller. So, a combination of letters to build credibility, then following up with text and email blasts and ultimately cold calls and working them into a cadence. Not shooting from the hip, having a really targeted marketing campaign, and then also getting very, very granular and clear on what type of assets we’re trying to buy, not a shotgun approach in multifamily. Unlike resi, there’s typically not distress. You’re not going to find fire sales. Nobody’s letting these things go for 50 cents on the dollar. So, you need to be credible. You need to have your sh*t together, and you need to know what you’re buying and know how to have those conversations. So, direct-to-seller stuff, I love that.
Josh Cantwell: Grandma always said sh*t, damn, and hell weren’t swear words. So, those are good on this podcast. GG Fran, who’s still alive 94 years old, she kicks ass, a little farmer girl. She was all for swear words, man. She loved it. Hey, Chad, so favorite way to find money, right? You’re doing syndications. You’ve got some resi stuff going on. You’ve got this conversion. How are you recruiting some of that private capital to fill up your capital stack?
Chad King: Just talk about what you’re doing. People aren’t talking about what they’re doing. And I’m not a huge fan of social media the way it is right now but you have to be talking about what you’re doing on social media. You’ve got to be talking about what you’re doing with friends and family and your network. And the cool thing about raising money, especially in apartments, is you don’t have to ask for it because you’re providing opportunities for people. So, raising capital is sometimes this daunting thing. People are like, “I don’t want to raise money. I don’t want to ask people for money.” Well, you don’t have to ask people for money. You’re providing an amazing opportunity for people that a lot of times are having money that’s sitting in a bank that’s earning half of a percent and that’s getting chewed up by inflation right now and it needs to go into it. So, it’s actually your duty, your obligation, and your responsibility to present them with opportunities for capital. But you need to talk about what you’re doing, both online and wherever you’re at, at events and everything like that. Just talk about what you’re doing.
Josh Cantwell: Love it. Absolutely. Chad, two questions around mentorship. We talked a lot about coach, mastermind groups, mentoring. Who do you think is maybe the mentor that’s had the biggest impact on your life? That’s the first question. Second one is what kind of advice did you get, maybe from that mentor or other mentors, some of your favorite pieces of advice that you’ve applied in your life?
Chad King: Oh, I mean, when you say the word “mentor” like a lifetime mentor, my father comes up and he was a military guy for 30 years, retired captain. And the big thing that he taught me was integrity. Because in this business, in entrepreneurship, in real estate, multifamily real-estate, you have to be the person that does the right thing even when no one’s looking and taking care of your investors, taking care of your fiduciary responsibility to your lenders, to your investors, and having integrity when you operate is what’s ultimately going to give you the staying power in this space. You can come in here and make some money but if you don’t have any integrity, it ain’t going to stay. You have to do what you say you’re going to do. You have to follow through. You have to be willing to roll your sleeves up. He also taught me hard work. I mean, you have to be willing to roll your sleeves up and get your hands dirty. You mentioned getting into the weeds with some PMs, like doing those things and having integrity when you do it I’d say is the ultimate thing that I learned from my mentor.
And then my other mentor in the space, in just real estate, I would say his name is Bill Allen, owns a company called 7 Figure Flipping and he probably taught me the most about real estate so both single-family and just helping me accelerate into growth. He was one of my early sponsors and guarantors on some of the bigger stuff, knew, like, and trusted me, and was able to sponsor some loans so I could do some bigger deals for ourselves.
Josh Cantwell: Love it. Chad, listen, you’ve been a wealth of knowledge, energy, insight today. It’s been an absolutely fun interview, getting to know you a little bit better. Where can the audience get to know you a little bit more, maybe connect with you on social media, your website? If they want to JV with you or invest in your deals, where can they reach out?
Chad King: Yeah. So, if you get me on Facebook at Chad King or on Instagram @mrchadking, you can follow me, shoot me a message, and we’ll reach out to you to get you on the investor list. I have a mastermind group where we teach people how to buy apartment complexes, 7FigureMultifamily.com. We’re doing an event here in June in Nashville, Tennessee at MultiFamilyLiveEvent.com. You can put those websites in the show notes but come find me. We put a ton of free information out if you’re just interested in getting some more stuff or come to one of our events and look into our mastermind.
Josh Cantwell: Fantastic stuff, Chad. Listen, absolute blast today. Thanks for jumping on with me today on Accelerated Investor.
Chad King: Yeah. It was a great conversation. I feel like it flew by. I went down some tangents but the conversation flew by. It was a great time, Josh. Thanks for having me.
Josh Cantwell: You bet.
Josh Cantwell: Well, there you have it, guys. I hope you enjoyed that interview with Chad and I. If you would be so kind to leave us a rating and a review, I had a blast during that interview. I would love to hear that you enjoyed it and that it was meaningful for you and that you found something in it, that it was motivational, or that it was worth the time and the effort to listen to it. It would mean so much to me if you would leave us a rating and review on iTunes or Spotify or YouTube. Please do that, jump on that. I’d be so grateful for all of you that leave us a rating and review and let us know how we’re doing. It means so much to me. And, obviously, Chad and I talked a lot about mentoring, mastermind. He mentioned his own mastermind in light of that. Definitely check that out. And as well as if you’d like to jump into my mastermind and learn more about how to get coached and mentoring and partnering with me, Josh Cantwell, go to JoshCantwellCoaching.com. Thanks so much for being here, and we’ll see you next time. Take care.