9 Commandments of Multi-family Investing – Josh Cantwell- Ep 396

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Josh: A seasoned multifamily real estate investor and the host of the Forever Passive Income Maverick Mastermind, Partnering, and Coaching Program and Accelerated Real Estate Investor Podcast. With decades of experience in the industry, Josh has successfully invested in numerous multifamily properties and has a deep understanding of the ins and outs of the market.

In this episode, Josh discusses the nine commandments of multifamily investing. He emphasizes the importance of investing for immediate cash flow and highlights the concept of the “promote” in syndication deals. Josh also shares insights on securing long-term debt, having adequate cash reserves, and the significance of location in real estate investments. He concludes by stressing the need for multiple exit strategies and always getting paid when buying a property.

Key Takeaways with Josh Cantwell

  • Invest for immediate cash flow, focusing on generating income in the present rather than relying solely on long-term appreciation.
  • Be all in for 70% of the future value of the property to ensure a favorable return on investment.
  • Secure long-term debt with minimal prepayment penalties to avoid potential financial risks.
  • Maintain adequate cash reserves to cover expenses and unforeseen circumstances.
  • Partner with experienced operators to increase the chances of success and navigate complex deals.

Josh Cantwell Tweetables

“Be all in for 70% of the future value. That's the sweet spot."

“Partner with experienced operators. They can help you win deals and navigate complex transactions.


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Josh Cantwell:   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: All right, guys, so welcome back. And today’s call for our maverick multifamily mastermind and our forever passive income members is around the nine commandments of multifamily investing and the eight ways to get paid from your multifamily deals.

Josh: Okay?

Josh: And I want to make sure that we kind of COVID all the different fees that you can earn for syndication, and that’s another piece of content that.

Josh: You can be using when you are.

Josh: Delivering content to your investors.

Josh: I actually just had a call with.

Josh: A guy named Brian from Spark Rental. You can look up their website, if you want online called sparkrental.com.

Josh: They have an investor club, okay?

Josh: And their investor club is a group of basically limited partners, friends, family, colleagues, people that they brought together, they’re bringing.

Josh: Together, they bring them all into their investor portal. And then what they do is they.

Josh: Look for operators like you guys and.

Josh: Like me, and they collectively put their.

Josh: Funds together through their investment club.

Josh: And.

Josh: Then their investment club creates one llc.

Josh: So let’s say it’s half a million dollars or $100,000, and they got 20.

Josh: Guys that write a check for five.

Josh: Grand each and they raise 100 grand.

Josh: Or it could be 20 families, businesses, business owners, whatever, and they raise a million dollars and there’s 20 investors. So that’s $50,000 apiece. They collectively bring their money together into.

Josh: One LLC.

Josh: And then they write a.

Josh: Check to invest in a syndication.

Josh: So that’s their model, right?

Josh: And one thing I love about commercial real estate is it’s kind of like the wild, wild west.

Josh: Anything that you can think of that you can come up with, as long.

Josh: As you run it by an attorney.

Josh: And the attorney says it’s cool, you can do it. It has a lot less strict and.

Josh: Stringent regulations than residential.

Josh: So this guy Brian from Spark Rental.

Josh: He basically interviewed me.

Josh: I interviewed him and he’s like, hey.

Josh: We bring on an operator once a.

Josh: Month onto our platform, and me and.

Josh: My investor club, we interview an operator.

Josh: We come up with questions, and then we collectively decide if we want to.

Josh: Invest in that deal.

Josh: So I just did a call with them at noon today. So this is 2 hours ago. And some of the things that I’m going to tell you guys right now is exactly what I told to brian.

Josh: 2 hours ago, like word for word, okay?

Josh: So this is very useful information not only for your own knowledge, but for you to use with potential investors and limited partners and jv partners. Okay? So here we go. The nine commandments for multifamily apartment investments.

Josh: Number one, invest for immediate cash flow, not for long term appreciation.

Josh: That cash flow can come in the form of cash flow for your limited.

Josh: Partners and obviously for you as a general partner.

Josh: I’ve got a lot of deals that I bought, and it created cash flow, and everybody got paid but me. Property manager got paid, the bills got.

Josh: Paid, the limited partners got paid, the.

Josh: Bank got paid, and there wasn’t a lot of cash flow left over in the first six months to two years.

Josh: For me, but I still invested for immediate cash flow, so that once those.

Josh: Other people were paid and I raised.

Josh: The rents, I knew that my day would come, and eventually I would be in the money.

Josh: Write this down. That’s also called in the promote.

Josh: You’re going to hear the word promote.

Josh: When you get to the promote, that.

Josh: Means that that term, the promote means.

Josh: That now you as a general partner, are earning and getting paid cash flow.

Josh: Over and above the limited partners, you’re getting the promote. So invest for immediate cash flow. Make sure you know when your deal will cash flow.

Josh: If you remember the deal I went through last week.

Josh: Right?

Josh: We modeled out for that deal, that 184 grand bay, the one in Brexville, the $37 million deal. We modeled that, and there was enough.

Josh: Cash flow, year one, that we could.

Josh: Pay all the expenses, all the debt service, a 6% preferred return, and there was about a seven and a half percent cash on cash return, which means the first 6% out of the seven and a half percent was going to the limited partners. So there was about one and a.

Josh: Half percent left that was available to.

Josh: Pay out to general partners and limited partners.

Josh: Well, that deal was a very traditional syndication, meaning I was giving up 70%.

Josh: Of the equity to limited partners, and.

Josh: I was keeping 30%, about a one.

Josh: Third, two third split. So there was about another 1.5% of.

Josh: Rate of return, or cash flow.

Josh: And out of that, the limited partners.

Josh: Got the first six. So there was one and a half.

Josh: Percent left, one third, two third split on the remainder.

Josh: So I would essentially get about a.

Josh: Half a percent.

Josh: And the limited partners got the other 1%.

Josh: So, limited partners, their year one cash on cash return was a total of 7%.

Josh: They got the first seven out of.
Josh: The seven and a half for me.

Josh: What did I get?

Josh: Well, I got number one.

Josh: I got the original acquisition fee, 2%.

Josh: Acquisition fee on 37 million is 700 grand. So I got some immediate cash flow, too. Trust me, if I buy that deal.

Josh: Which I’m not buying that deal, but if I did the $750,000 is immediate.

Josh: Cash flow, plus the other one half.

Josh: Of 1% of cash flow from the rents.

Josh: So that’s an example of investing for immediate cash flow. Also, if you look at some of.

Josh: My other deals, take 170 valley, for example. We’ve owned 170 valley for about 15 to 18 months now, and that deal.

Josh: Has been cash positive over and above.

Josh: The expenses, the debt service, and the pref return to investors. That deal is cash flow positive, about $10,000 a month.

Josh: Well, me, Glenn and Tyler, we own.

Josh: 70% of that equity.

Josh: So that deal is flip flopped where.

Josh: The GP owns 70 and the lps own 30. So if we wanted to take the cash flow out, which I don’t need the money, so I’m not taking the cash flow out right now, but it’s just sitting in the operating account. But if I needed it, if I.

Josh: Wanted it, we could take out about.

Josh: Seven grand a month. That’s called being again in the promote.

Josh: Or being paid out the promote.

Josh: In that case, the promote is 70% to the GP.

Josh: Let me stop there. Any questions on number one, investing for immediate cash flow.

Josh: Know deeper value? Great question, Rebecca. Deeper value add deals. Well, let’s put it this way. I always invest for immediate cash flow, but sometimes there’s not enough extra cash.

Josh: Flow for the general partnership to get paid. Sometimes the debt, the expenses, and the.

Josh: Limited partners get paid, but we don’t.

Josh: So I’m still investing for immediate cash flow. I’m just not taking any of it right away.

Josh: But I am modeling how fast I.

Josh: Can get into the promote.

Josh: I can get into cash flow.

Josh: So the answer, I guess, is 100% of the time, we’re investing for immediate cash flow. And so there’s deals that we disqualify because they bleed so much cash in.

Josh: The first year or two that they don’t cash flow.

Josh: They don’t cash flow for me, they don’t cash flow for limited partners, and we do not do those deals. A lot of the stuff that happened in Phoenix and in Nashville, in Orlando, and know, even Dallas fort Worth and.

Josh: Austin, Texas, those deals did not cash flow.

Josh: Those sponsors were hoping for appreciation.

Josh: Well, guess what?

Josh: Interest rates doubled, and the appreciation that.

Josh: They hoped was there is not there.

Josh: So now they have no appreciation and they have no cash flow.

Josh: Right?

Josh: Great question.

Josh: Bruce says in that model, the investment club that you talked about earlier, if they are 70% lps that are the one LlC, how does the bank handle that? Since the LP LLC owns more than 20% of the deal.

Josh: They wouldn’t own 20% of the.

Josh: Deal, Bruce, because the entire.
0:11:04 – Josh: If I gave up 70% of the deal to limited partners, and then they wrote one check.

Josh: If they wrote one check, let’s say.

Josh: I’m raising 5 million, and they wrote.

Josh: One check for 5 million, then, yeah.

Josh: Then they would own 70%, and then.

Josh: The bank would want to underwrite them.

Josh: Like, if we raise 5 million, they might write a check. Their investment club might write a check for a half a million to a million.

Josh: So they’re investing roughly 10% of the 70%.

Josh: See what I’m saying?

Josh: So raise 5 million.

Josh: They wrote a check for 500. That’s 10%. So, in exchange for the 5 million, if I’m giving up 70% of the.

Josh: Deal for the 5 million, that means.

Josh: If they were to check for 500,000.

Josh: They’Re getting 10% of the 70%, they’re ending up with 7% of the entire deal.
Josh: You guys understand the math? Cybert’s like, yeah, I’m an accountant. Of course I understand the math. Come on.

Josh: All right, CoD says, to be clear.

Josh: Assuming an 8% prep, any cash flow.

Josh: That’S generated above the 8% is then.

Josh: Split between gps and lps as a promote. And the lps based on their equity stake and ownership. Exactly right?

Josh: That’s right.

Josh: Let’s do the math. Let’s say it’s 8% pref and a 50 50 split. Okay, well, if there’s enough cash flow that I’m paying out the 8% pref, but there’s another ten grand over and above.

Josh: After I paid the pref, there’s another ten grand.

Josh: We’re splitting that 50 50. GP is getting five grand. Lps are also getting five grand that they share, right?

Josh: They share prorated, based on their equity.

Josh: That’s right.

Josh: Okay, number two, let’s keep moving.

Josh: Number two, we want to be all in for 70% of the future value, okay?

Josh: And I can tell you guys, on Grand Bay two weeks ago, we were stretching.

Josh: We were beyond 70%, okay?

Josh: That’s why we tapped out at 37 million. That deal ultimately is going to go under contract for 38 and a half.

Josh: Whisper price was 35, and somebody’s paying 38 and a half.

Josh: So we tapped out at 37 because we would have been all in for more than 70% of the future value. To give you guys some numbers on that.

Josh: 184 units at 200,000 a door, that’s.

Josh: About 36 to 37 million. While the stabilized value in the future was about 285,000 a door.

Josh: So, if we’re buying it for 200.

Josh: A door and we’re putting in some capex and soft costs, blah, blah, blah, we would have been all in for.

Josh: About 220 a door, and it would.

Josh: Have been worth, in the future, 285 a door.

Josh: So that’s higher than 70%, right?

Josh: Okay, let’s do the math real quick, right? Get your calculator.

Josh: 220 divided by 285 is 70%.

Josh: 77.

Josh: So, again, I’m following my own rule. 70% of the future value.

Josh: So I’m penciling.

Josh: What’s my future value? In four years or five years, or whenever you’re penciling your refinance or whenever.

Josh: You’Re penciling your exit strategy, at that.

Josh: Moment in time, you want to be.

Josh: 70% all in, which means your purchase.

Josh: Your capex, your soft cost, your acquisition fee, you’re all in for roughly 70%. So, again, if I’m going to be.

Josh: Worth 30 million in the future, I.

Josh: Want to be all in for 21 million. If I’m all in in the future.

Josh: For five, my future value is 5 million.

Josh: I want to be all in for 3.5. If my future value all in is 3 million, I want to be all in for 2.1. Okay, so figure out what’s your stabilization date for me?

Josh: You guys know my favorite is 42 months. That brings me to point number.

Josh: 342 months is when I want to be.

Josh: That’s my preferred time, somewhere between 36 and 48 months. So 42 is my default. I want to return lp capital in 42 months. So at 42 months, I want to be 70% all in. It’s no different than a rehab, a.

Josh: Fix and flip on a fix and flip.

Josh: What’s the rule of thumb?

Josh: You want to be all in for roughly two thirds, right, Steve Nomera.

Josh: Two thirds.

Josh: You’re going to sell a house for 300 grand. You want to be all in for about 200 grand, maybe 210.

Josh: Right?

Josh: Same thing with apartments.

Josh: It’s just instead of selling the property in three months or six months, we’re.

Josh: Holding it for 42 months, and we’re letting those rents grow.

Josh: We hit 42 months, then at that.

Josh: Moment, we want to be all in for roughly 70%. Why do you guys think 70% is so important? Anybody know why 70% is so important?

Josh: Yeah, you want to be right. John Sprinkle.

Josh: Got it right.

Josh: Cash out, Refi.

Josh: So a lot of banks will allow.
Josh: You to go to 75 or 80% right, Steve?

Josh: That’s right. So 75, 80%, they’ll let you get out. But some banks, depending on the debt.

Josh: Service coverage ratio, your proceeds on the.

Josh: Refi is going to be constrained by.

Josh: Your debt service coverage ratio. The debt service coverage ratio usually has to be 1.25%. So it’s not a hard rule of thumb of 70 or 75 or 80 or 65% loan to value.

Josh: The hard and fast Rule is a 1.25 coverage ratio.

Josh: That coverage ratio will determine your proceeds, and the proceeds at the refi is going to fall between 65% to 80% of your value. So that’s why I say 70% and.

Josh: You’Re going to be safe.

Josh: Cash out refi. John Cybert says financing. That’s right. Right. Same thing with single family homes.

Josh: Right.

Josh: You’re buying it. You want to refinance, you want to.

Josh: Turn it into a rental, you want.

Josh: To fix and flip it. You want to be in at 70%. Apartments are no different.

Josh: Yes.

Josh:Okay. Debt service coverage issue. 1.25%. In the case of single family home these days, lender is considering rental income. They are calculating only tax and insurance. They don’t include any other expenses to calculate debt service coverage in the single family home.

Josh: Right.

Josh: No, commercial is slightly different. Great question. I’m going to write on the screen.

Josh: Let me try this. Let me see if I can draw. Draw a squiggly line in pink. Okay, so let’s say my gross.
Josh: Can you guys see this? I’m getting fancy with my pink.

Josh: Let’s say my gross income is 1 million.

Josh: Let’s say my expense.

Josh: Is 500 grand. Wow, that actually looks nice.

Josh: This is actually better than my real handwriting. My real handwriting is terrible. So my noi.

Josh: Is 500,000.

Josh: They base the debt service coverage ratio, Steve, off of NOI. Okay, so give you an example.

Josh: If my new debt payment at the.

Josh: Refi for principal and interest, right?

Josh: So this is going to be off.

Josh: Of an amortizing loan. Let’s say my debt payment is 400,000.

Josh: So you take 400,000 divided by 500,000. I’m sorry, 500,000 divided by 400,000. And my NOI is covering. Notice the NOI is above. This is an easy way to think of it, guys. The NOI is above the debt in the line. In the calculation of your financials, you have your gross at the top, then your expenses, then your net, then your debt.

Josh: So an easy way to think about.

Josh: This mentally is my NOI sits above my debt.

Josh: It covers my debt, okay, it sits above the debt.

Josh: So it covers the debt, if you will.

Josh: So if I take 500,000 divided by 400,000, I get a 1.25 ratio. That’s called debt service coverage ratio.

Josh: My debt service is here, it’s being.

Josh: Covered by my noI.
Josh: So I take 500,000 divided by 400,000, I get a 1.25 coverage. And then the bank is going to.

Josh: Say, okay, now they’re going to take that payment and they’re going to say, how much proceeds, how much of a loan can I give you, Mr. Real estate investor? How much can I give you in total loan proceeds? And based off of that, let’s say.

Josh: At a 6% interest rate.

Josh: Take the dollars of proceeds times the interest rate, that’s going to give me my debt payment.

Josh: You see what I’m saying?

Josh: That’s how the calculation is made to.

Josh: Say, okay, I can give you a debt payment of 400 grand a year.

Josh: If I do that, off of a.

Josh: 6% constant 6% interest rate, how much.

Josh: Proceeds can I give you on your new loan?

Josh: And that we want those proceeds to.

Josh: Be 70% or more.

Josh: Let me stop there, because that was a lot of math, but I think, again, 6th grade math.

Josh: Right, 6th grade math.

Josh: So you take your gross, how much you’re getting in total income, minus your expenses, you get your noI, and then you take that times a 1.25. The other way to do it is to say 500,000 divided by a 1.25. The other way to do the calculation is do the reverse. Take 500,000 of NoI and divide by a 1.25. That’s your debt service coverage ratio. That will give you your allowable debt payment. You see, I reversed that, Steve.

Josh: Yeah, I totally understand. Okay. Therefore, these days, if I do the same way in the single family home, there’s no way to get that 1.25.

Josh: Yeah, because.
Josh: Lender is using only tax and insurance. There’s no other cost involved in that. To calculate debt service coverage ratio in single family home.

Josh: Yes, I’m with you. I’m with you.

Josh: So in multifamily, we’re going to have taxes and insurance. Yes, but property management fee, payroll, leasing, utilities, GNA, LNP marketing, all that stuff.

Josh: Right.

Josh: That’s the only way it’s really that different, is just adding those extra fees. But it’s a similar style calculation, but commercial. Just adds the extra expenses.

Josh: Okay, I have a question. Can you repeat the very last formula that has to do with the 6% pref and the proceeds? One more time, please.

Josh: Okay, so the 6% in this is not talking about the preferred return to limited partners. This is the interest rate on the.

Josh: Bank loan.

Josh:: When you did the formula to determine how much a loan the lender would give you based on the 6% and the proceeds. What was that formula? I forget.

Josh: Okay, so if your NOi is 500,000, divide by 1.25, and that will give you your allowable debt payment. 400 grand.

Josh: Okay.

Josh: So now you have to go to a commercial mortgage calculator, and you have.

Josh: To find out how much loan amount.

Josh: Times 6% interest rate is going to turn into a $400,000 annual payment. Okay, the reason why this is a little bit complicated, Rebecca, is because it’s amortizing. So you need an amortization schedule. If it was interest only, it would be easy, right? Because you’d take 400,000, you would divide. Do the calculation with me. 400,000 divided by zero, 6400,000 divided by zero six. That would be 6.66 million of loan proceeds.

Josh: So if I got loan proceeds of 6.7 million and the interest rate on that was 6% interest, that would result in a $400,000 payment. But remember, that calculation is a little too simple because that’s based on interest only. So the only way you can do this where you have an amortizing loan, which means you’re paying principal and interest is you need a mortgage calculator. You need to go to just commercialmortgagecalculator.org,

Josh: and you can solve for that.

Josh: All right. Okay.

Josh: So three to five year return of capital. Step number three. You guys understand that? I think we can move on past that. Number four, secure long term debt.

Josh: Okay, let me clear this out. Clear off all my drawings.

Josh: That was actually really good.

Josh: I was really proud of that pink scratch.

Josh: But this is cool format, right? Like, when I was a kid, when I went to college, there was a professor on a whiteboard or a professor.

Josh: On a chalkboard drawing the same shit, right?

Josh: Now we can do it virtually. I can draw on my little chalkboard number four. So secure long term debt, right? So little or no prepayment penalties. Want the longest term debt we can.

Josh: Get with the lowest amount of prepayment penalties as possible.

Josh: Now, getting long term debt with no prepayment penalty is very difficult. Okay. Usually the bank.

Josh: The longer term, you want the longer.

Josh: The prepayment penalty because the bank wants to keep that on their books.

Josh: They want to keep that loan on their books and.

Josh: Okay, but that’s the goal. Secure long term debt, where did everybody screw up?

Josh: Well, in 2021, 2022, a lot of.

Josh: Investors did not secure long term debt. They got bridge debt, they got floating.
Josh: Rate debt, and then that floating rate floated and it varied and their payments.

Josh: Went sky high when interest rates went up. I have very little interest rate risk. I have very little debt risk on my books.

Josh: So that long term debt can be in the form of a fannie Mae.

Josh: Freddie Mac or HUD loan, or it.

Josh: Could be in the form of a bank loan. Remember, the downside to bank loans is that they’re going to be some recourse. Fanny, Freddie, Hud, they’re all non recourse. Bank loans are going to have some recourse. But I would rather.

Josh: Me personally, I would rather have. I would rather have the long term debt on my books with recourse than short term debt. Non recourse.

Josh: Number five, have adequate cash reserves. So when we go to underwrite a.
Josh: Deal.

Josh: We want to have cash reserves. Now, this is a little bit of.

Josh: A moving target because you say, like.

Josh: Okay, let’s say my expenses are $100,000.

Josh: A month across all the expenses on.

Josh: A deal, or $10,000 a month, okay.

Josh: You really want to have six months. It’s no different than what people say in your own personal finances.

Josh: You want to have six months emergency fund, okay? So the same thing here.

Josh: If you’ve got 15 grand a month of expenses, and that includes your taxes.

Josh: Insurance, payroll, maintenance, utilities, blah, blah, blah.

Josh: 15 grand a month, then you want.
Josh: To have six months of that just sitting in your cash reserve account, savings.

Josh: Account, checking account, whatever, you want to.

Josh: Have 90 grand extra just sitting there, which means go raise an extra 90.

Josh: Grand from your investors, give up a.

Josh: Little bit of their equity, your little.

Josh: Bit of your equity, so that you.

Josh: Can have cash reserves, okay? Number six, have an experienced operator on the GP, okay?

Josh: So again, for those of you that.

Josh: Have never done a deal, network, network, network, network.

Josh: Find friends, financial friends that you can partner with, okay?

Josh: I wrote yesterday, I wrote three new lois on 320 units. The total offering was about 16.7 million.

Josh: And that’s how I was selling the broker.

Josh: It’s a new broker I’ve never transacted with before.

Josh: And I said, look, if your seller.

Josh: Wants to get this deal closed by.

Josh: The end of the year with no.

Josh: Frills, no problems with a smooth closing, get a PSA done, get through 30 days, due diligence, close in 30 days.

Josh: After that, and get it done by the end of the year. I don’t know who else you’re going to pick besides us. We’re not the highest offer.

Josh: I know that.

Josh: I know I’m like in third position.

Josh: But I feel like based on my.

Josh: Reputation, I should be able to win that deal.

Josh: So having an experienced operator on your GP team who’s done it before will allow you to win some deals that maybe you wouldn’t otherwise win on your own. Number seven, location matters. Midwest, south and southeast. Again, we do not invest in the northeast. I would never invest in New York, New Jersey.

Josh: They’re uninvestable.

Josh: I would never invest in Chicago.

Josh: It’s uninvestable.

Josh: I would never invest in California, Seattle, Oregon, Washington.

Josh: It’s uninvestable.

Josh: Most of it is because of their politics. And I’m not here to play politics.

Josh: You guys know I’m a pretty conservative catholic schoolboy.

Josh: That’s how I am. So my politics reflects that.

Josh: But I’m not really talking politics here.

Josh: What I’m really talking about is just.

Josh: The landlord friendly rules. I want areas where I can do.

Josh: Business, I can be a capitalist, I can execute my plan.

Josh: And I’m not going to have to.

Josh: Take twelve months or two years to.

Josh: Freaking evict some tenant who’s.

Josh: Playing the game.

Josh: I had to do a foreclosure last year on one of our last and final assets in our fund. I had to do a foreclosure.

Josh: It took two freaking years in Seattle.

Josh: I don’t know how you own real.

Josh: Estate in Seattle if it takes two years to foreclosure.

Josh: Okay?

Josh: Also, the Midwest, the South and the.
Josh: Southeast are not boom bust markets.

Josh: Both coastlines are boom bust.

Josh: So I invest in cash flow, stable markets.

Josh: Midwest, south and southeast.

Josh: Number eight, equity and perpetuity. So if we refi and again, we stick with number 270 percent of the value and a 42 month return of principal, that usually means I can refi.

Josh: And have equity and cash flow in perpetuity. Keith, Washington, what do I suggest for.

Josh: People who are in those states? You’re in Colorado. Again, I’ve said this multiple times on podcasts, coaching calls, webinars. Invest in the Midwest, the South and the southeast. Team up with another member, Tony Gillingham.

Josh: Great point.

Josh: Team up with another member who’s investing in those markets.

Josh: Get in a plane, get in your.

Josh: Car and go to those markets, guys. I talk to brokers all the time.

Josh: In Ohio.

Josh: One broker told me last week he had an offer on a building. He had 19 offers on one building.

Josh: And 17 of them were from buyers not from Ohio.

Josh: Two, me and one other guy were.

Josh: From Ohio offering on Ohio deals. So this is very normal and customary.

Josh: To invest in commercial real estate outside.

Josh: Of where you live.

Josh: I say live where you love and invest where it makes sense. Live wherever the hell you want. Live where you love. Okay, I don’t love Cleveland, but I’m stuck here, right?

Josh: Wife, kids, mom, grandparents, volleyball, high school. I’m stuck.

Josh: So I love it.

Josh: But I love it. Anyway. Cleveland’s awesome.

Josh: It really is a lot of great things here.

Josh: Nothing better than a fall fire with a hoodie on.

Josh: I freaking love that shit.

Josh: Sprinkle knows what I’m talking about.

Josh: Gillingham knows what I’m talking about, right?

Josh: Nothing better than so.

Josh: But invest where it makes sense for me. It also happens to make sense to.

Josh: Invest in Cleveland and Columbus for you.

Josh: Guys in Colorado, go to St. Louis, go to Oklahoma.

Josh: And number nine, have multiple exit strategies. Again, number nine is a result of number two. You can have multiple exit strategies if.

Josh: You keep your basis low.

Josh: If you’re all in for 85% of the future value, well, you have no.

Josh: Choice but to sell. And finally, the bonus commandment is always.

Josh: Get paid when you buy. Always.

Josh: Take an acquisition fee of between two to 3%.

Josh: Always without question.

Josh: You don’t have to explain it if.

Josh: You’Re going to give up 30 or 50 or 70% of your deal to a limited partner.

Josh: Look, I might offer on 50 deals.

Josh: Before I buy one or two or three. I want my acquisition fee because I didn’t just buy those one or two or three. I also had to vet out 47.

Josh: Others and disqualify those. So I want paid for all that time and energy to find a good deal.


Josh Cantwell: Well, guys, there you have it. I really enjoyed that episode with Liz. Man, being responsible to others is such a motivator. Giving to others, I feel so good about myself, right? Such and such a good place when I give to others. Number three, making a new decision. I remember when I was diagnosed with cancer and came out of my hospital bed and had an opportunity to restart my life, I had to relearn how to eat, I was not going to go back and redo my life the way I had been doing it, so making that decision. And then finally, as Caleb and I mentioned, don’t quit.

Guys, listen, everybody can do this business. Everybody can be successful. Everybody can be a multimillionaire with real estate. Keep getting your education, keep listening to podcasts like this. But most of all, go execute, raise capital, make offers. Don’t quit. We’ll see you next time on Accelerated Investor.

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