My favorite quote is from Calvin Coolidge:
“Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.”
The first time I read the passage, I smiled and felt like Calvin was speaking to me. Growing up, I was never the sharpest pencil in the box, lacked any artistic or musical talent and was an average athlete at best. Regardless of my mediocrity, I found varying levels of success in college, in business and pursued an entrepreneurial path simply because I made myself get up a little earlier, work a little longer, and sacrifice more than most. President Coolidge may not have known it at the time, but he was also speaking directly to many of those people in pursuit of Multifamily Real Estate.
The Real Estate Hustle
The phrase “Real Estate Hustle” does not connotate “fraud or swindle” but instead is defined by Merriam-Webster as “to make strenuous efforts to ‘obtain’ especially money or business.” If you are interested in succeeding in MF (Multifamily) Investing, and you were not born with a Trust Fund, or recently won the Lottery, you may want to make the “Hustle” your new mantra.
Have you started looking for your first MF investment? Searching the MLS, Realtor.com and LoopNet at lunch hour, evenings before bed and all day on Sunday? How many rental analysis have you run on Bigger Pockets, only to be disappointed with the returns, the per unit price or the inflated projections by the Real Estate Agent? Do all the deals go to the insiders? Is LoopNet really where deals go to die? Often the search is long and fruitless. Deals seem to be happening all around, yet I can’t find one!
This is where the “Hustle” comes in!
The Hustle for me personally means…looking where others won’t look, calling people others won’t call and doing what others won’t do. A year ago, I decided to get very serious in my MF search and committed to getting my “Hustle” on! I won’t lie and say I never look at LoopNet……I still glance at it on a regular basis. I also sign up for notifications from all my favorite brokerage houses, Marcus and Millichap, IPO and Greystone to mention a few. However, this is no longer my main focus or where I spend the majority of my time.
Blog #2 I’ll go into detail on the steps I take in my personal Hustle for off-market MF real estate. Until then I can give you an example of the results when you do Hustle.
Six months ago, I decided to focus on MF in a local mid-size city. I pulled all the apartment complexes listed on Apartment.com and researched them (I’ll tell you exactly how to do that in my next blog entry). Thereafter, I drove the neighborhoods of interest and noted apartment communities that I did not find on Apartment.com. Keep in mind, those apartment buildings not advertised are often poorly managed and are in bad physical shape (those are the ones I want!).
One day, I planned on driving for dollars (hustle). Taking what is considered the “back way”, off the main thoroughfare, I drove past a 4-building complex hidden in between an old hotel and a diner. From the road I could tell the place was in rough shape, however it sat on a beautiful piece of property with a wooded descent to the area’s largest river. After snapping a few pictures and counting electrical meters (36 units or more), I looked up the owner in the county records and rattled off an introduction letter. Mailing the letter that evening, I waited for a full week to get a response. (This is where most people end the hunt and move on, i.e. “lack of Hustle”). Researching more about the owner (hustle) I found he was an 82 year old man, widowed. More research allowed us to match up his son on Facebook (hustle). I tried calling the older gent based published numbers found, with no luck, so I messaged his son on Facebook (hustle), and he returned his cell number. I called immediately! It did not take long for the Owner’s son to tell me that his dad was not physically or mentally able to care for the apartment complex in the manner that he did in the past. The family was interested in helping their Father sell and allowing him the opportunity to enjoy retirement. It took multiple meetings, deal modifications, backing out of the deal at one point due to several structural issues, another deal modification, and in the end a combo of bank financing and seller financing (monthly payments to the Owner for 5 years allowing him to better enjoy his retirement) to make the deal work. We even gave the Owner a life estate in his apartment, (hustle) so he could enjoy his summer months in the apartment complex he loved, with the neighbors he cared about, and return, without worry, to his Florida home in the winters.
You will not find this type of deal on LoopNet or Costar, nor will you find it sitting on your laptop while the football game plays on Sunday. Has your broker emailed you a deal $8k per unit below market with seller financing and no commissions? I doubt it. Deals like this are found by driving the road less traveled and looking for them (hustle), picking up the phone over and over and over (hustle), talking to people that may not “think” they want to talk to you (hustle), and asking for terms never considered possible (hustle). This is “the hustle” of real estate, and anyone can do it, even you and me.