On this Episode #26 brings forth the captivating story of Michael Mannino, a stalwart in the building and construction industry for over 35 years. Beyond his professional prowess that earned him recognition, including a prestigious award from Detroit Home Magazines for his staircase design in 2018, Michael's life is marked by multifaceted achievements. A devoted family man married for 32 years to Tammy and a parent to two exceptional kids, Michael and Lexi, he has led impactful mission trips from Kensington Church to Salt Lake City, constructed a house in an astonishing six days with Life Remodel in 2011, and earned a master's degree in martial arts, securing a 5th-degree black belt alongside winning multiple championships, including ten first-place titles at the U.S. Open and two ISKA belts, along with setting a world record. Michael's entrepreneurial flair shines through several multimillion-dollar businesses in construction, flipping around 20 houses annually, and venturing into multifamily property investments. His diverse experiences, from piloting an L 39 Albatross Fighter Jet to accidentally profiting $175,000 from an apartment complex flip, coupled with his engaging presence as a public speaker at various engagements, promise a compelling exploration of Michael Mannino's inspiring journey.
Married for 32 years to wife Tammy.
Raise two wonderful kids, Michael and Lexi
Have been in the building and construction industry for 35.
Won a award in 2018 to Detroit home magazines for staircase.
Lead three mission trips from Kensington Church to Salt Lake City Utah.
build a house with Life Remodel in 2011 in 6 days.
Master degree in in martial arts, 5-degree black belt. from 2011
to 2022 he has won 10 first Pl. at the U.S. Open 2 ISKA belts, one
world record.
Started several multimillion dollars, businesses in Construction Company in Michigan and Florida. flipping around 20 houses a year. Multifamily family investor.
Flu an L 39 albatross Fighter Jet 2020.
Accidentally made 175,000 flipping apartment complex.
Owned 1000 storage facility doors for one day.
Public speaker multiple engagements several times at General
homehelperssolutions.com
reciprocitycg.com
Copyright Disclaimer: Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational, or personal use tips the balance in favor of fair use
© Randy Stedwell.
Hey everyone out there in YouTube land um and Facebook and we have
it new at the moment with Instagram so I
want to say welcome give me one second here so I can try get that audio
back okay so um anyways what we're gonna do here is I have a um a wonderful
wonderful guest on here with me his name is
Michael and hopefully I pronounce that right so I'm gonna introduce him while I
bring him on I'm getting this feack Instagram give me one second
here
there we go all right so H anyways sorry about that everyone um I'm gonna bring
him on here he Mike Mano he is a wonderful gentleman that he has been
doing uh you know single family flips he's a contractor um and most recently he's
been flipping uh you know apartment buildings and I
I'm in my opinion I'm interested in that so I know you guys here are interested
in that as well and so uh without further Ado uh Mike how are you doing
today uh hi Randy thank for having me on I appreciate it no problem no problem so I
just kind of wanted to I I really appreciate you coming on the podcast and
um you know bringing your experience and kind of talking about the stuff that you do uh and I just want to ask you know
how did you get started in real estate that's a that's a great question
it was a long process I didn't I didn't jump into it real quick you know I bought my first house at
23 okay I think I I think I bought it for $50,000 and then uh I fixed it up and
then moved then built my second house and I sold it for I think hundreds so I
made I made close to 30 40,000 after what I put into it so that kind of got
me the bug and then uh I started building houses and that you know that's basically a big flip you know it's right
turning a piece of dirt into some place to live for
people and then I started to uh um I started to
[Music] oh looks like we lost him for a minute
all right while we wait uh for him to come back I give me one second
here I sorry about that everyone did you did I lose you there yeah you did so I
apologize profusely all right so you were saying you got
started and I bought my first house when I was 23 and then I uh started to then I
built my second house and I I made about 50,000 on my first house and I go this is kind of cool so when I started
building houses you know I hit a builder's license I started building that's kind of a quick flip it's not a quick flip it's a long-term flip you
know anywhere from three months to a year to to build a house and then uh and then sell and make money um but then O8
happened and uh I had a bunch of contractors here's how I got into
flipping I had a bunch of contractors a couple good guys that were you know that were working with me for years and I
didn't want to lose them you don't want to lose good guys right so a good friend of mine who's a real estate agent said
hey there's a house for sale right down the road in Oxford Michigan for 14,500 okay let's grab it you know put
my guys in there and you know have have them do something for a little bit make a little bit of money and then I was planning on renting it out for a few
years and then selling it for more money later right and then uh that house got done and no joke this is and you guys
can check this out I bought a house on Center Street knoxford 26 Center and
then right across the street my I wasn't able to do it but we were buying houses
on uh at the Oak County sale okay and I sent my wife and I said just you know
find a cheap house she goes there's one in Oxford directly across the street from the house that we have I'm
like no and she's like yeah we're on the I'm on the phone with her I said how much she goes 14,500 I bought two houses
on on Center Street in Oxford for 14,500 and I fixed them up uh rented
them out for a little while just you know the the rent I I was just anticipating the rent to pay the bills but I started making money out you know
then I bought another house and I bought another house and I bought another house and I kept my guys busy I just wanted to keep my guys busy and then uh and then
um what really happened was it just started going and going and going and then my son my son uh started to you
know get get older and he's work at McDonald's I don't want to work at McDonald's I want to quit and I said well where are you going to work you
know how are you going to pay your bills I made my kids you know I didn't make my kids I gave my kids everything they
needed and anything they wanted I had them work for so they would uh you know
if they wanted a car you know okay how you GNA get your car you want a cell phone how you gonna pay for the cell phone you know what I mean and then they
they'd look online and say well if I get on your plan to be another $10 a month okay how you going to pay for it well I'm cutting the lawn for $25 a month I'm
doing it four times a month so I'm making I'm like all right cool we're
we're good to go so uh my son quit McDonald's one time and I go where are
you gonna work how you gonna pay your bills you he didn't have any bills I was just like trying to go yeah and he goes
uh I don't know you'll find me a house to flip I'm like all right two weeks later I find
1333 cardigan Street in Oxford Michigan I'm like go ahead and he he hopped in
there and he uh that particular uh experience was that
he hired a bunch of his friends to help him and they all fell down they all didn't want to work they all didn't want
to do the work and he started doing the work he started loving it and he saw how much I made on the property and he's
like I want to flip houses right like all right so the how we were buying houses at the time were tax sales or
real estate you know real uh real estate uh professionals that were friends of ours and then we uh we found another
house found another house and then we went to uh seven figure flipping and we turned it into a business basically we
uh started uh we started getting uh we learned how to
get oh looks like we lost him again looks like we lost him again I
think his internet connection is uh a little little lacky here sorry about
that that's all right um um we started getting the capital together and we started getting cruise together now
we're flipping around 20 to 30 houses a year in Michigan oh that's awesome so you
started with seven figure flipping you you said you went to seven figure flipping did you join seven figure
flipping pardon uh did you join seven figure
[Music] flipping oh it looks like it's lagging
can you hear me Mike can yes I can now okay I'm sorry uh sorry did you join
stuff and figure flipping we did um and that got us uh
that got us to the 30 houses a year so we're doing anywhere from 20 to 30 houses a year now we made it a business
and then uh the stuff we learned from that particular uh coaching group taught us when what we're doing a multi family
you know we had a wholesaler come up to us and say Hey listen we got a eight unit in Burton like all right let's grab
this one there wasn't much to doe on that one so we just fixed up a little bit and then though we sold that one um
we got one in Flushing that we still have and that one was a train wreck yeah
you want to talk about a train wreck we walked in and the guy just didn't take
care of it it was 11 units and we were gonna buy it for like 375,000 and I
think we got ripped off on it the uh the handles I'm not joking the handles for
the showers were vice grips on some of the units they lock down the vice grips on
it and it would turn the shower on and on in the shower so the the vice grips were rusted the place was
trashed and we literally had to go through there and do everything yeah
everything in the unit so we put in new floors cabinets counters tops bathroom
vanities new tubs new surrounds new flooring new
um doors casing and base and painted the entire place like everything we put like
12 Grand into each unit the only thing we didn't have to touch with the boiler
system we did new roofs we fixed all the windows it was it was everything but now
we have a unit you know the they weren't paying we got that one during covid they weren't even paying they weren't paying
anything two out of the 11 were paying and they were paying
$600 so now we're we're up and running and it's uh and we're making $1,000 a month per
unit okay so you're making you know roughly
about I you know a little bit over $100,000 a month in net of
course 10,000 a month00 10000
now we're doing about now we're doing about 30 $40,000 on that property okay
so and then we're we're going to sell it too so you know I think you're talking about you know fixing up and selling that's kind of what we're doing right
now we got one in red for we got a 17 Unit we're doing the exact same thing too so how do you go about um estimating
like valuing these multif Family Properties because there's a lot of uh
confusion and there's a lot of uh you know everyone does it differently on how they estimate you know what to
pay for for these multif family units because you can't do it like a traditional home and comp it you know
like oh yeah there's one right down the street that sold for 17 million you know that's gonna be worth that after it's
done you know so you know how do you go about uh actually running the numbers on
on these units that's a great question it's just like you said an actual
evaluation of a um of a multif family is a lot different than um a single family
house single family house like you said there's cops right yep that's in the equation but that's not really part of
the equation it's really hard to explain but let me try and give you a quick a
quick uh five minute e explanation of a a math equation that's forever let's say
you have a property and then how it's making it's called the noi so how much
if it's if it's bringing in 100,000 a year and then typically your expenses
are around 50,000 a year so you're making 50,000 a year that's the noi the
noi divided by the cap rate is what you should pay for the property and the cap
rate anywhere to seven what is net operating income net operating
income okay so that's how much it makes pass expenses okay okay so your your total
cash flow basically which you're getting not to cash your your your total profit from the property um and then you you
divide it by the pro the um the cap rate of the area so those are
your comps what are selling for what is that property selling for cap rate so it
is part of the equation but it's really not part of the equation it's very difficult to understand but um that's
and so you asked a great question how do you how do you value a property I value the same way a bank does you know if A
bank's going give me money on it I'm gonna evaluate the way they do it that make sense oh yeah so so the noi is a
net operating income net how much you're making off the property divided by the cap rate you know Point 04 to
07 or 10 you can even go up to 10% 101 is
10% um that's what the value of the property's worth minus the cap X expense
so cap X expense is kind of like uh your uh rehab expense and it comes to single
family so I'm going to try and relate know single family to to family
so the the property that we bought it was we got it for a steel we got it for
a steel but he was losing money on it okay two out of 11 people are paying and
your taxes are you know ,000 a year you're not you're not you're losing money you're paying money to own that
property so we solved this problem by taking over we bought it and we bought that one we you know we had him in the
deal a little bit too so uh we I think we I think we paid 375 we gave him a
hundred and uh he carried the note for a year for 250 and we paid him interest
during the time frame right we came with us I think with 6% interest we paid them interest on it so it's kind of a seller
we call it a seller Finance deal oh yeah so we gave 100 and we put 150 into it and then uh we refinanced it and uh paid
him back paid everybody back and now we're just you know collecting collecting money and the cost
segregation on it here's another cool crazy story on that too I uh cost
segregation is is just basically another math equation on the property of anything that um is in the property that
is depreciated you ever do a cost segregation I've never done I I don't
own properties I just whale at the moment but I've heard of I've heard of people doing a cost segregation so but I
don't know exactly what entails in that would you like to talk about it or
you want to talk about let's talk about this is why what's what's a cost
segregation great segment oh I love this I can talk about I can talk about real estate forever I love real estate that
that's every time I I should have said I started this podcast with I love real estate here's why I love real estate
cost segregation we bought the property and then now it's a new evaluation now the new evaluation let's just say it's a
million dollars okay right so a million dollars um there's the property itself the land it sits on and everything that
the the property owns all 11 units so all 11 units are going to lose the value on certain things countertops cabinets
and we put all the new stuff in countertop cabinets you know the windows the roof you know we put a new roof on
there so all that loses value so you depreciate the property of you know not
the land but you know the roofs you know the brick on the house you don't do it but the inside like you know the
countertops and faucet sinks and all that so let's say it's a million dollars you could ceg we ceg around I think on
that one $129,000 so we turn the papers in to our
accountant in our accountant um you cost seg that much money for 27 years but for
the last few years you're only able to say take 100% depreciation in year
one now last year was 80% this year is 60% so you can only take 60% of the of
the 120 129,000 okay so me and my partner split
the first 60,000 we make that or I think it was we hit was 79,000 we split between us three uh us three partners
and uh the first $25,000 that we made that year we didn't pay taxes
on so you made say your third of that you said
120,000 yep okay so you made basically you got
$440,000 of income taxfree that you made yes yes so instead of having to pay
Uncle Sam uh on $40,000 worth of taxes you got that because of the cost
segregation and that's just for that one property imagine you have multiple and I'm sure you guys do now you can add on
top of that that is how I'm I I'm not political and I'm not saying I'm political but that is exactly how Donald
Trump didn't pay any taxes so right there so I it it's you know I
understand it now and I and I don't wanna I don't want to say I don't pay taxes but
so you're self-employed right I I still have my day job at the moment but I my
business is self-employed correct okay so self-employed people have to put away their taxes yeah I put away my taxes for
last year a huge amount a huge amount huge amount um I got 90% of it back
because of two cost aggregations that we did wow that see that right there that's
awesome and that's why people should be getting into real estate not only for the cash flow but also for the
depreciation as well um I actually had a friend of mine come to me about a rental
property that he had and he was really worried because um it was a brand new build he
got a really good raid on it when rates were really low and then all of a sudden he gets hit with this huge tax bill
because well tax got reassessed at I think it was like a year and a half or two years later and interest rates were
up now and and so on and so forth and he's like is this worth it to even keep
so I'm like well let's run the numbers so I went through my little deal calculator and by the way if you need a
deal calculator um I do to have one of my website uh if you put on the coupon code newsletter you get it for free so
uh with that being said we ran through the numbers I looked at it and I said okay
based on this you're losing $100 a month
okay I said you're losing a $100 a month based on this right here right now now they're like oh should you go
sell this right now he's thinking yes yes oh my God I can't be losing $100 a
month I said I want you to hold on for a minute I said how much did you buy the
property for he's like 440,000 like he gave me the number and so I did the math
I said for every year you can write off almost 15 grand worth of
taxes is that worth $100 a month yeah okay that's that's one okay
that's one one property yeah that's one aspect of that property yes that's one
aspect of that property the other aspect is I told him guess what next year raise
the rent by $100 that right there how many unit now you're breaking even and you're still
getting the D tax depreciation well guess what the next year rents might go up after that you
know raise them up hey you want to give him a break only do it 50 bucks you know depends on where they cont is and
depends how many huh how many units is it uh it's it
was just one single family house it's like a four bedroom house so there's
three ways to make there's three ways to make money on a property okay there's uh
cash flow right where it's negative right now it'll be POS it will be positive next year yep right he's also
the tenants are paying down the the uh mortgage yep right so they're paying down the
mortgage right that's two different ways right you're not going to cost like that
if you got a multi family you want to cost I get that you probably don't want to cost it you could but it especially
pay 400,000 for you could do it um and then is the house gonna you know typically yep in five years from now is
the house be worth more or less it's gonna be worth more so there's three ways to make money now if you're in a
multif family there's four ways to make money there's actually five ways to make money you can you know on top of the
three ways of standard Asar you know uh single family residence um on top of
that you can do a ceg you generally want to do a ceg if it's over you know $600,000 is typically a good number
because the C that study is around three grand and I and I have a perfect guy um
this that's a funny story I was looking around for a CET guy one of my Brokers
out in Michigan goes yeah I got this guy Terry J I looked at him and I go Terry Jud huh I went to high school with a
knucklehead named Terry Jud and uh he goes I don't know call him up I called him up and I'm like did you go to Henry
Ford II he goes yeah dude it's Mike minino he goes oh dude what the hell's wrong with you I'm like well I'm in the
crazy real estate business too now and he goes ah we haven't talked for 40 years and now we're doing business
together and he did two of our ccts um but also in multif family here's
another way to make money that this is the that you know these are unbelievable reasons to
join real estate I love real estate I absolutely love real estate let me give you the best one um we found this
property in North Carolina uh the guy was putting a roof on it I said hey you want to sell he goes yeah he go give me
a number he gives me the number 16 units and he um we bought it for $850,000
yeah so good deal around 58,000 a door right and he was charging he was
charging 600 a door okay so that you know you know what the 1% rule is the 1% rule is just
basically for your for the people in there you know the people that don't know um if you have rents that are $600
and you're buying the units for $6,000 a door that's 1% per month of the actual
cost of property that's great that's it's a good deal and depending on interest rates you might want to go one
1.25 right now because interest rates are at 67% but um that's a that's a good
deal they call it the 1% rule um well we got this one that's a let me just
interrupt real quick that's okay for most areas but when you get speaking of
Detroit specific big different numbers okay so
I'll let you continue I just wanted to emphasize that because in the Detroit market and people's going to think about
that in inside Detroit proper and you can't do that so no no no no no you
gotta get more um and you know you're you're gonna have more problems with a Detroit property but you're gonna you're
not going to make 10% you're going to make 15 20% you know you're supposed to make 15 20% of money if you're putting
into Detroit um but that that rule of the thumb is just generally for outside of outside of the trade area and uh uh
here's here's here's a re here's here's one of the the greatest things about real estate um
we fixed up units you know people started leaving we started fixing them up we got like we put seven air conditioning units in because in you
know in the South the AC is like the heat up north you got to have a furnace you don't have to have an AC you got to have an AC in the South you don't have
to have a furnace um but the AC furnish unit is around seven Grand we put about five or six of them in there uh we fixed
the black top we uh fixed all the units that people were uh moving you know moving out of and then we started
raising the rents to $1,000 a door right so now uh he was getting 6 * 16 is
uh 990,000 a year and we're making a buck 60 average you know that's the
that's not the the total but that's how much difference we charged versus what he charged right now we uh we started
fixing them up we raised the rents we're going to the bank for a refinance now
and then we estimated out you know what that noi divided by the cap rate is how much
the property's worth our noi went big time right right we went about 40% more
than noi so the property is not worth the the
900,000 we thought it'd be 1.6 we were wrong we were wrong the bank evaluated
at 1.72 so now so we're going to pull out a million dollars we don't want to take a
lot so if we take a million out we pay off the $600,000 loan because we had to put some money down you know that
$400,000 that we're going to split between us three guess what that's non- taxable
because it's debt yes so another reason why I love real
estate 100% now make a big chunk of
change and not pay taxes on that that is awesome
uh now one thing you said is the cap rate how are you figuring out the cap
rate for that area for you know um are you is it just based on what other
apartment buildings are selling for so yes great question a cap rate is
generally determined by the the sales of properties in the area um okay how you
find that number is um I have a c uh account and Cy account I can I can
put in uh to the area and then find the
demographics of the area and then I can find out what the cap rate they're selling for in that area and then I can look what's sold and
then what the cap rates were for that particular sale and so you average it out for you know the size unit you know the small 30 units you know to the 100
units um so it all depends on you know the you know the cops for that area what
they're selling for in their C but an easy way is there's always brokers in multif family you know there's the
Marcus and mil chap there's CV there's all these Brokers for uh um multif
family and you can always call them up and say Hey you know I'm in your area I'm looking for the property what's an average cap rate around there okay and
then if you go to a mortgage the mortgage company will know what the cap rate is because there's there's a um a
software called co-star and they have access to coar that really gives a real defined cap rate for the area
okay yeah so somebody told me before that how they figure out the cap rate at
least the current cap rate would be what the current cash flow is or not cash
flow sorry what the current profits are basically the return on investment the ROI so okay cash on cash return I guess
you can call it um you know so you take your your your net whatever they're
they're getting after expenses and everything and then you divide it by say
the total purchase price that they're asking for you know right or you go
backwards if you're trying to find the cap rate you know so on so right right
if you got the cap rate and you're trying to figure out the purchase price through the cap rate so a neat way
you just you just added up on a on a calculator but it's just basically if you're getting um if you're making
$10,000 M uh 10,000 noi so noi I was talking about the net operating income
so the pass all expenses except mortgage okay not including the mortgage
let's say it's $10,000 and your C rate is 10% you got to buy the place for
100 okay okay you see what I'm saying you times that by 10 and that's your cap rate now if it's seven you know if it's
cap rate s you got to get for 70 okay so and yeah I've had some multif
family um people come to me and they're like yeah you know this is a a six cap
rate and I go book mortgages are at seven and eight percent I'm gonna lose money as soon as I as soon as I mortgage
that property okay great perfect so can I I'd love to explain that for your for
your 100% because I'm interested myself so okay that is that is what we call in
the industry um um a negative uh negative interest rate
so you're you'd be paying your your cap rate wouldn't make your cap rate is four
five six% and you're going to be paying six and a half percent 7% for the mortgage right so it's a loss right
that's inverted so that's the the interest rate is not above the cap rate the interest rate is not below the cap
rate I said that wrong so um that's certainly a sign of recession okay okay so in our industry
um last year people were were were throwing money at apartment complexes in
ways you can't imagine I mean just we were putting a bid in they like
and they they go hey how' the bid go and they're like oh you know we got we got well over and they're going hard on
their money I'm like going hard on their money he goes yeah I go are you serious he's like yeah going hard on your money
now let's talk about a a million dollar asset
right before you go on I just want to anybody who's watching if you have any
questions throughout this entire process go ahead and put them in the chat and we'll answer them as we go so I at least
want to let you guys know that put them in the chat we'll answer them as we go if you're interested you know if you
have any questions on anything that we're talking about I'll bring them up right on the screen we'll answer them as well so I I'll let you continue I just
want to bring that up in a minute yeah uh thank you I appreciate that any guys have any questions please let me
know I just love teaching um been a teacher for many years um they were
going hard on their money which is insane to me so I just I just said fine you don't take the offer so we put an
offer in the property somebody else puts an offer say a $3 million property they put it for 3.2 right they really want
the property so going hard means you know the the earnest money deposit yes
on on a single family house yep the second you put that down and you know you know it's $2 to $5,000 on a house
right yep an apartment complex generally $50,000 okay right they're putting the
money down and saying if we don't buy that property you keep the you keep the
50,000 that's how crazy was going last year so people were buying and selling
and and I was looking at the numbers and I know they were going to lose money yeah knew they were money I just felt
bad for him I'm like sorry you bought it for that because I was stretching get my offer in yeah we're getting out and hard
money and then uh now this year uh there's been a 70% decrease in
transactions from last year I'm sorry from last year was you know now we're in
2024 last year 70% decrease from 2022 because of people that are smart
know that you're going to pay more you're going to be paying a month every month you got to pay money and your friend was paying $100 a multi family
you're paying $1,000 right so what's going to end up
happening is the um the people are going to end up losing it and they're going to have to sell it and then that's what
I've been waiting for for the last actually two years I went through 08 and that's where I made the most money I've
ever made in my life 9 10 11 wow I bought real estate for the depreciated rate that they actually were
at the time so that's coming again and I am just so excited about it I'm trying to get all my family and friends anybody
that wants to invest on this uh on this adventure because I can tell that it's going to be
relatively soon it's going to be really really nicer and easier to buy multif family and you can make more money and
the the one thing I I do want to I do want to tell that everybody that's out there um the government does give you certain
tax advantage to be a real estate investor we don't pay a lot of taxes personally but with my properties I
average it out we're paying around $40,000 with my current properties right now per year in taxes so we pay a lot of
taxes but we don't pay personal taxes that's why the government gives us such a deep break on
it got it yeah so you're paying you're still paying the taxes that that bring
up the areas bring up the you know but your personal taxes are a little bit
different so we we just we have to account for those property taxes in that
area and we account for that in our numbers you know uh is there a I know on
single family like I can go to uh Michigan's website and get like an
estimated value of the UNCA taxes before I purchase the property okay
there there is the you do the same for M family yeah here's a little here's a little uh uh Pro tip um
we make the phone call to the township okay you know this property and they're like yeah and what's nice about
that phone call that 10-minute phone call um if we were to buy it for $3 million what would our taxes be oh it'
be the millage is this 3 million you'd be paying 14,000 a year so what's nice about it is
uh you know um some townships you know the the rural townships they don't keep
up with the value of the property they don't increase it every year right so
you could get hit with a big number and we've had a few of them say yeah that one's going to be a little bit and then a few of them say no that one's not
going to be much because you know we we we kept up on the increase in in uh property value so yeah you're going to
be good so it'll be nominal you know you're paying 10 you're gonna pay 11 like okay cool but make that phone call
to the township the assessors department and they'll give you the information you need so do on multif family do they cap
the taxes just like they do on single family where it only can go up so much per
year uh no it only goes up the value of the property so that's that's the that's
the downside of the you know that that particular rule is applicable for homeowners I
don't think that works real well if you're uh if you uh own
the the property as an investment it still works as an investment you're just paying investment prices they still can
only go up 5% per year property so well yeah calling the
calling the township I I to be honest with our our flipping business I don't do a lot of the business I don't do a
lot of the work on that we have a bunch of amazing people we got Olivia she knocks it out of the park and we got David Gardner that gets the property so
I really don't see that part of the business as much but um the multifam is where I've been concentrating on that's
awesome you know so another thing is it you know so you're how are you finding
these apartment deals um you know how are you coming across them how are you uh you know
apartment deals are pretty hard to find and are you buy them buying them in
really bad shape like have you done a complete gut you know on an apartment I
mean I know you said you done a couple but are you are you trying are you making that a regular thing like just
curious well great question um we don't so what we're looking for what I'm
looking for is either there's there's three kinds of uh terminologies we use
for uh for multif family there's TurnKey buy you know the property or
turn key is have built within the last five years Capa is any improvements we have to do to it and uh no no
improvements it's running great uh the numbers work we just plug and play buy
it let the tenants pay down the mortgage right um then there's value ad that's
where um that's where a flip is needed so
those are called value ads so you you come into the property it's built in the 80s and never touched you got to put new
cabinets in you know you got to put new countertops you got to put new SNS in you got to put new F new B just total
gut job and uh anywhere from we put anywhere from 10 to 15,000 per unit in there for
something like that then there's a heavy lift a heavy lift is is
heavy um that's where you might have to rebuild some things pull permits you know get all new heating cooling units
and all of that particular I mean just everything now you're put you can put up to 25 30 depending on the size of unit
and where it sits you can put 25 into that unit so then you get them for a cheaper price like we bought we've got
something uh we got a property in Redford we're fixing up we're doing all the units 17 units and um I think we
bought the property for $113,000 a door and it was it was
unbelievably trashed and we're putting probably 10 into each one for a total of
25 per unit still Ste it is cheap but it
it's such it's such an amount of work like yeah if you ever to rehab you know digging into something this why I don't
like the the the heavy lifts you dig into something and then you have to keep
digging like the floor was you know buckled just put a piling in there and
lifted up you go in there and look and the the the the sewage is waste the
sewage waste pipe broke and it's draining into there and making a puddle and draining down in there so now you
got to fix the pipe and you got to fix the G the the sewage inside then you got to put the St and post and then you got
to fix up the floor so there's always the the nonf fun ones you want to play with and that that's that's a heavy lift
but um you know what I'm doing what I'm doing now if you don't mind me talking about that part um I'm combining I'm
combining my um my love of building with uh with multif family we're looking at a
a 189 unit in uh pville North Carolina
and we're thinking about building aand new Department complex wow that's awesome now are you
obviously you I mean where where is it you live is it up here flid right now I
I just moved from uh Clarkston a year and a half ago okay so I live in clar
where I'm currently residing so oh you yeah so right off Dixie Highway so nice
I was off B Navy oh nice yeah um so you
moved down to Florida what part of Florida Port Richie it's about a half hour about 45 minutes north of Tampa oh
okay I wanted to get involved I want to get involved in the multif family here but it the prices are just insane
they're like just people are going crazy on the prices and now the insurance is killing everybody so I'm just waiting
I'm just gonna so how how are you doing the renovations while you're in
Florida so like are you just running a team and and just Con in constant
communication do you come up every now and then um you know what is it you do
great question so I would never recommending flipping
anything that you're not there on site okay because of my 35 years of
building in Michigan I have all kinds of great Crews and we have a standard pricing sheet we hand to our contractor
and we say want flooring cabinets and and uh paint off in this one okay and then they put out footage and then they
fill out the list and then they take pictures afterwards they send it to me and then once in a while they come out and you know see everybody and then I
just go check out the units and then we have this this neat little system called company cam this is a great one uh
there's another uh gold Bottom I want to give you company Cam and what it does is
uh yeah company cam my guys can take pictures and videos and then I can see it right after they get done putting in
company Camp you open up the app you take all the pictures take the video and they call me up and this happened today
we're looking at a property in Holly and he goes what do you want me to do with the the
uh uh upstairs or the the um
Rafters they had some raccoons living there for years so there's just poop
yeah all through the insulation and rafters I'm like clean it out spray it and put new insulation in there okay you
know they're asking me on the phone what to do but you know if you haven't been in building for 30 years don't don't do
that yeah because you know a contract these are contractors that have been working with me for 15 20 years these
are all my friends I I I gave them the keys to my house when I wasn't there you know hey go fix this up and you want to
stay there stay there these are people that I really trust and and and enjoy um
but I wouldn't I wouldn't do a flip in another state with with you
know maybe a house or something like that that I could drive out there every month but I would never never do an
apartment complex I have to go to the apartment complex live around the area for a couple months set the guys up and
then you know I can go back home and then come back every couple months every month or so but yeah in our in our group
s figure flipping they uh yeah we're remote flipping let me know how that works out
for you and and they go no we're not you year later they're like no we're not remot cin no more okay right by the way
I had um about in episode 24 we actually had Bill Allen who's the CEO of seven
figure flipping yeah I know Bill well yeah so we had him on the episode uh on
the show and brought him on and watching so that did he mention did he mentioned
about flipping out of state he has yes he can do it though that so I
wouldn't recommend a new guy to do that so he he lives in um he lives in Nashville area and he flips in uh in um
Pensacola yes that guy that guy can do it he's you know one very few people but
I don't recommend other people doing that starting off that's a horrible because he can just hop on a plane and hop in his plane and get over
there there you go you know there's a problem I get to fly let's work this out
right um that's a cute story with Bill that uh that um I want I'd like to share if
you don't mind so you know he was the leader of the group and uh I talked to him once in a while and then one time I
I said to him this is a really cool story about manifesting you know if you want something tell everybody you want
it I want this I want this I want it I'm talking about building a new 200 unit apartment complex yep I guarantee you
within the next two years I'll be building a new apartment complex so I told Bill one time I said I want to fly
a fighter jet and he goes and he's a pilot and he
I've never I've never fall the fighter jet I go really he goes yeah I was a
helicopter pilot and airplane pilot and I go that's cool I go I want to fly one
I want to fly one he goes there's there's ways of doing it you know you gota you got to just you got to just you know look
around on a crazy note we were coming out to hampa a few years ago during
Corona like like the day we got back from Corona we got back from Tampa went
out to eat that was the last restaurant that was open for the year and a half that we had to go through it wow it was
Bonefish I'll never forget this but I'm in Tampa and a friend of mine was coming out and my wife's looking on her phone
and she goes uh I go what's should to do when Jason comes out here she's looking on her phone she goes ah Bush Gardens
this fly a fighter jet I grabone pull out of hand I go what and I looked and I
go it was fly a fighter jat and I called the guy up and I said hey I want to fly a fighter jet and he goes uh
he goes uh what's your flight experience I said I fly RC airplanes can you fly RC airplanes he goes nope that's a lot
harder than flying a fighter jet I go all right and uh long story short it was
his his anniversary and I went to the wrong place I went to Tampa it supposed to be a clear water Airport long story
short I got on there I got to fly a l39 albatross spider jet for the uh for the first time and if you've ever been
upside down in a jet it's a super cool thing for been but I've always wanted to
be so it's a riot I've always right alongs and and I have wanted to uh learn
how to fly myself so it's you know it will happen one day I will say that okay
take take a shot it's a riot you can go to the oen airport and take a and take a a trainer flight and they'll they'll
show you how it's not I know how this sound not that hard yeah it's not that
hard so but uh so we'll get back to the to the real estate stuff um you know and
the biggest thing how are so I guess I asked the question but we really Haven to answer because we got off track a
little bit how are you finding the multif family deals great question so um
you do some wholesaling yes do you do
mailers I I do not do mailers I mainly co-al okay co- call so if you we do
mailers and Co call for a single family we do mailers and Co call for for a multif family we do uh um any
advertisement we do for single family just taught us how to advertise for uh multif family and what I usually do is
I'm I'm looking on I'm looking for and there's online there's loopet there's Zillow you know and what I look for is
the the Diamonds in the Rough the ones that um that don't know what they have
yeah first off I look for the 1% rule if it's close to the 1% rule I've seen I've
seen I'm not joking I can't I can't make this stuff up from single family to multif family I
thought I'm stepping up to a more professional industry yep get more money
and these guys have been doing it longer and these guys know what they're doing right
uh one this one kid comes up to me and goes hey man there's a there's a 26 unit in um
um gilburg Michigan that's too far away I I don't want to drive out there to flip it me and my partners are driving
by and we're going to look at something in Ohio and uh I go hey gilburg I go I call that guy I called the guy up we we
pulled off the road we saw the apartments and it was there was uh old
AR Barracks from like 50 East that water was flooding in the basement and I'm
like you I told my partners I'm the rehab guy I'm like nope I don't want this my son's my other partner he goes
let's train wholesale up like all right sounds good so uh I think we got up for
I think we got under contract for 625 and we sold it for eight uh 850 or
something like that made $175,000 and didn't even touch the property but here's the kicker this is
why this is why I told you that story to tell you the the best part about this story uh they told us it's a 26 unit
it's advertised online for a 26 unit right yep we go in and I'm talking
to the property manager I go all right you got five five five five you got 20 units I go there's six in that building
right there those are one bedrooms she goes no there's eight that was my look that was exactly
my look Randy I'm dead serious I just looked at her I go how many how you saying she was 28 I'm like oh okay and
so the were wholesaling it too you know we had another inspection with him we walked it with him and he goes
yeah is there six in that unit there I go I go no actually there's eight I go but if you don't want them we'll take
them and he looked at me
he and so uh we flipped that one and uh and we we wholesale that one we bought
it you know we double closed on it probably shouldn't know but we did and uh we made we made 175 and we gave the
we gave the guys that were working with you know the guy that found us the deal 25 Grand okay awesome yeah I'm currently
working with some new wholesalers at the moment and um you know showing them how
to cold call how to do things properly things like that so I'm actually a
systems guy myself so um my day job is in the automotive industry and so I I
like to develop systems so I'm kind of showing them how you set up in the
beginning where it will set you up in the um in the end where it'll be easier
for you to just plug and play your systems you
know that that is that is how we that's how we flip 20 to 30 houses a year in
migan yep so just you have a system in place you know you have the you have the
people that lend us the money we have the people that find us the deals and then we have the contractors do it and
we just take it from one stage to another most definitely so um with that
you know with that being said and we're coming close to the end I don't wanna um
I want to be respectful of your time as well because we can sit here and talk about real estate all day long and you
know what we might bring you back on and you know what we might you know what I might fly down to Florida just to
interviewing you person you know so I I happen to have a boat on the Gulf of
Mexico if you want to do it on a boat I would suggest old months of
Michigan I I I think we could do that so okay um 100% but you know where you
what's your plans for the future you said that you are building brand new um
brand new multifamilies and where is that going to be and uh you know how then you should
ask why what's okay yeah why why are you doing brand new builds where is it gonna
be and how can the people here help you in any of your future
endeavors well I want to add value to God's been so good to me that I I just want to help other people and teach um
helping me uh there's there's people that so in The Syndicate on a multif family the only thing I need
nowadays is people to invest in the properties so people want to make passive income uh great passive income
and get you know if you're a real estate investor you can get depreciation off the property too and if you have a $30
million deal there's a lot of depreciation on a $30 million deal yes
um depending how much money you bring to the to the table um you might never have to pay tax weend I have a friend of mine
that is is $40 million in U uh in the rears on taxes so he can
make the next $40 million he's going to make he's not going to be able he's not g be able to pay tax on
that okay so all the if people want to invest I started a a fund uh Arc
Investments Ventures and um we're going to be building multif family through the United States why do I want to pick
North Carolina you have that property in North Carolina it's a 16 unit we got for
a great deal our taxes are $6,000 wow our operating expense our
operating expense we batting around 38% I'm actually surprised that your
taxes in North Carolina are only $6,000 to be honest so um that's crazy because
I actually used to live I lived in Raleigh um for a little bit and I have
family that lives in Charlotte I lived in Charlotte a little bit as well you picked up two highest you pay the two
highest taxes in that in that state yeah so that's why I was kind of
surprised you know yeah you piic you picked the two highest place the highest is Charlotte the next is Raleigh and
Raleigh's catching up too um where you where you place something
is more maybe more important than what you put in there okay so we're we're
betting at 38% um uh what we own or uh 38% of what we
make we pay out to the property so that's their expenses in Michigan um
that 11 Unit were paying 12,000 a year in taxes and the insurance and water and
gas is well we have gas in Michigan that we have to pay for the property because it's boiler system in North Carolina
there's just an electric bill that the tenants pay yeah so all the way around
it's it's just cheaper to have a a a Southern state well depending on the
state I can't say that yeah depending on where you put the property but um
yeah my brother actually says start coming to Tampa I'll work with you is he
in Tampa he lives in Sun City which is just outside of Tampa so nice what he do
yeah so he uh so right now he uh just works at a a
job just to make some income that's it um he works at a uh Texas Road House but
he's looking for a different Avenue at the moment so hopefully it's real estate haven't get in touch with me yeah I most
definitely so and then uh uh he said he was in construction
so um and then he he used to do demos honestly it's like he used to do a
lot of cleanouts things like that and my sister said I'm in invite your sister as
far as going to going going on the boat that's when she was talking about that
tell her to stop on by man it's gonna it's gonna be horrible the weather is always hot I jumped you're gonna love
this being from Michigan yeah um I A friend of mine came in I let him use my
house because I came to Michigan for like August July and August and then I
had to fly back in we're doing clip and I had to check on a guy and I I hung out with my friend I took him on my boat and
I jumped into the water and I jumped on going ah he goes what I go the water's
too hot yeah so there's there's that those
are problems out here too so water's too warm water's too warm yeah in August so
don't come out in August okay yeah it's kind of hot then
so yeah so but uh yeah it's it's crazy I
want to do more markets right now I'm just in metro Detroit um and that's
Detroit proper that is all all three counties that we have I'm also I'm
starting to dabble in a little bit of gennessee County um and and also some
wash now County as well so um you know so I deal with all those markets but I
also want to start getting into some some other markets virtually as well so
um well if you want to get into North Carolina you know somebody that wants to be in that area North Carolina
Tennesse I actually do because I want to get in like the Charlotte area because I have family that still live there so um
on the ground yeah exactly so um here's my brother here uh he's a Glazer he used
to be a Glazer when he was up here in Michigan so uh nice Windows he did commercial work
for Windows so nice very nice yeah but
uh so you know how is it I'd love to
actually you know get your opinion on some Detroit
multifamilies okay that like I I get a lot of Detroit multif family that need
full rehabs full guts okay okay and I'd be interested to see where
you or maybe some of your buyers would be at on a property like that you know
that's that's a that's a great that's a great idea so you know when we start
when we start to do a flip we start with the arv yep minus our profit so we go we go
70% and then 70% of arv minus rehab and that's what we do so I would suggest you
get people that buy in Detroit find out what they're looking for and what they how much they want to pay for it yep you
know and then how much they cost to reh have a unit yeah a lot of people for multifam
what I've heard from some buyers is usually 45k a door with that's all
expenses included all expenses as well as you know Ren
everything so 45 a door yep okay that's
that's a good number to start from and that's a rough estimate because different areas could be a little bit different so but um you know the more
war zone areas they may not even want that or has to be a lot less you know um
that's why that's why I'm trying to coach you into finding people that you know where do they buy what do they want
so I have a friend of mine Johnny I call him Johnny Versace and if he hears this I'm I'm actually going to send it to him
now uh Johnny Versace his name's not Johnny Versace what I've been calling that for 30 years so he always goes that
he goes that damn minino um he he uh he buys apartment complex I he has 300 in
Detroit okay so just my coaching to you is take him out to lunch yeah go see his
property and say what are you looking for and how can I help I would love an
that'd be great um and then I would love to you know we
love I'd love to continue these conversations with you also another thing I'd love to do is actually invite
you on with my coaching with my coaching group um and then we can kind of go over
um some things with my coaching group so we can set that up off off camera as well but uh you know I I'd be interested
in that if you're if you're interested uh and kind of I'm here to I'm here to help in any way shape or form if I can
add value to you or your team please let me know how that's awesome so with that
I really do appreciate everyone coming out I want to be respectful of your time
we did go over about four minutes for this uh you know and I I'd love
to uh you know we're going to speak without we're going to have another introdu we're going to have another interview with you possibly um in person
maybe on the boat you know in Tampa so and you're not gonna twist my arm on
that one so we'll get that one you know we'll
we'll need to make some uh uh you know we'll need to make get a camera guy out
there and do all that you know so maybe I'll I'll tag along some of my family to do that you know but I love to see y all
out there and I really look I look for forward to speaking more and going from
there from what I hear the Michigan Washington game right now we Michigan is
up go Blue so nice yes oh I I I I want
everybody to thank me okay I want everybody in the Michigan to thank me
because I finally learned after 57 years on how to get the
Lions to win I had you to move [Laughter]
away that's the only way they've won in the last 57
years I'm rooting from from Tampa I swear oh I am too I don't I don't do
fantasy football that's my brother he does that I don't do any of that but the only thing that I do is it the only
thing that I do is just keep up on the Lions so yeah my brother he moved away
as well so he did the same thing you how long did he move maybe me and him moving
you know made the LI win exactly so but uh you know I look forward to our next
conversation I look forward to helping everyone else out here if you do want a
JV on any deals and if you do have any deals my number is right here at the bottom contact me email me um we'll go
from there let's all do deals together Mike just hold on for a minute we'll stick I'll have you stick around until
we go all right thanks very much and I appreciate you guys thank you have a great day let's all do deals