What is happening YouTube. It's Matt Faircloth. Welcome to our Mentorship Monday Program.
Whether you guys are watching live or watching the recording of this program, I appreciate
you. Thank you. Thank you. Thank you. What I will thank you guys even more for, is to
shoot an email to helpme@derosagroup.com. That is, helpme@derosagroup.com. For my Mentorship
Monday Program, as you guys know, you've got my beloved cohost, Mr. Justin Fraiser. Justin,
come on in and join everybody.
Hey.
How are you today, buddy?
I'm great. Happy Monday.
Let's hop into our first guest. Who we got Justin? Who's in the hot-
We have Cedric. Hey Cedric. What's going on, man?
What's up man?
Hey Matt. Hey Justin. How you guys doing?
Good, man.
Doing great.
Good, good, good. So I see Cedric is a man from Philly, because that's my old stomping
ground down there. What can we do for you today? How can we brighten your life? What
is your question for Mentorship Monday? What you got?
Okay. So my question to you is, in about three years, I can retire from my nine to five and
I currently invest in single family homes, however, in order for me to continue to do
that, it would take quite some time for it to substitute my current income. So I know
multifamily is the way to go. So I've researched various multifamily gurus across the country
and I came across one, been interviewed actually by one of his mentors and his program. I mean,
it sounds great. It came with a guarantee, but then it got to the price.
Listen, well let's talk about it a little bit further because I got a short answer,
but I want to discuss it. Right? What all were you going to get for 30 grand from this
guru?
I was going to get 12 months of mentorship. I was going to-
One-on-one?
One-on-one.
With the guru or with one of their people?
No one of the mentors.
Uh-huh (affirmative). Yeah. Okay.
Not the guru. No, not the guru.
I met some people that mentor for some of these gurus man, and these people, you shouldn't
be teaching anybody to do anything, these guys don't have much real estate at all. And
they're just like, it's more about the willing versus the able. Folks are willing to mentor.
But anyway, so you get 12 months worth of mentorship from one of their people. And then
what else do you get?
You also get to go to one of their live events, a Facebook group.
Well, hey right there, you know?
Yeah. And you get their network, as it was presented it to me, you get their network.
And they said that even though it's only 12 months, then you can still plug into their
network after that.
Right, right, right. They're not going to make that Facebook group go away. They're
not going to stop all that stuff. I'm not saying don't do it, but I'm saying that I
believe that there are other paths to get where you need to go. You are right. That
money would likely go better if it were invested in a deal because here's the deal, Cedric,
I've been doing this for 15 years. I took one guru class when I first got started that
was of some value. And I took another one where the guy was just like, he spent one
day teaching and the second day all he did was bring in other people to pitch to try
and upsell you to new stuff. And so I'm not the biggest fan personally, because it just
feels a little slimy for me participating in those things. I'd rather just learn myself
and talk to people that'll teach me and stuff like that.
There is something to be said, especially if it's a well polished program where you
get the network and you get the people and you get the resources and maybe you can get
it on a deal that they're doing or something like that. So there is... I don't say it's
completely worthless, but I don't think that most of those programs are necessary to get
where you want to go. And I think that you could end up getting where you want to go
by finding someone and adding value. Let's say you're like, "Okay, I want to get multifamily."
All right, well you could find somebody who already owns a bunch of multifamily and says,
"Hey Joe Smith multifamily guy, what do you need?" "Well, okay. I need deals." All right,
go out and find Joe Smith a deal. Find out what kind of deal he's looking for.
"Okay. What do you need?" "I want a hundred unit apartment building." All right. And then
go and shake the tree as hard as you can and help them find a deal and talk to brokers
and talk to people to help them get where they need to go and make a deal with Joe Smith
that if you help find a deal, or if you help him raise money, or if you help manage the
project, help him do something to bring Joe Smith's business from here to here, then he's
going to give you a slice of that property, a slice of equity or a slice of something.
That by far is a better school than paying somebody a bunch of money, which is my personal
opinion. But I think that you walk out of there with a good network and with all those
different things. There's certain things like the Facebook group and stuff like that, I
mean, take it with a grain of salt, I don't know how many people are in the Facebook group.
DeRosa Insiders is a Facebook group too, which we're very active in and we're not charging
30 grand, so...
So listen, if we're talking about roughly 30 grand or so, and your choice is buy a house
or a guru course, I'd take door number three, which is use that money to get into a multifamily
deal, like what Matt was saying. So find someone that is looking for deals, 30 grand will get
you a down payment on that property. It'll get you the legal. It'll get you... There's
a lot of ways you can use that 30 grand to get a property under contract and then go
to someone that's more experienced and say, "Hey, I've got this deal. Here's why it's
a deal. Here's the underwriting. Here's all the numbers. I don't have the experience or
the credibility." That was me, I didn't have experience or credibility. And that's why
I called this guy when I wanted to get my first 40 unit done.
Exactly, so he talked me through it, but I had about $30,000. And this is funny because
this is not preplanned, I swear, but that's exactly what I did. And so I was able to fund
our legal costs. I was able to get the property under contract. I was able to fund some of
those things, the inspection, all those things. So I was able to find the good deal and bring
value to someone that was then able to help me bring it across the finish line.
And then he did a 40 unit apartment building deal, Cedric, right? So, at the end of the
day, you can use that 30 grand you got or more, whatever it is you got, to go out and
do a deal or you could have somebody talk to you about doing deals and that. So I'd
much rather put it to work and do deals. All that said, I know people that have chosen
the guru path and they've been, you end up becoming the coach, you do that. You take
the mentorship program and give them the 30 grand and all that, before you know it, you
end up becoming their coach and you get compensated, before you know it, you're up on his stages
and stuff like that. So there is a path to success there. I just don't think it's necessary
to go that route.
I always tell people when they ask me, "Should I buy a program?" It's like, look, I'm not
a fan because that's not my path, but there are people that have been successful doing
it. And if you feel like you found a program that meets all of your needs and you cannot
overcome the hurdles that it is going to help you overcome in any other way, then I would
consider it. But for you and your approach, I think there are many, many other ways that
you can overcome the hurdles you have, whether it's learning about multifamily, finding the
right people to help you get there. There are other places that you can do that for
sure.
Okay. Sounds good guys.
Another Matt, I've had it up to here with all the Matts. What's going on man?
All these Matts. Wall to wall Matts.
Hey guys.
Welcome to Mentorship Monday. What can we do for you?
Well, thanks for having me. I appreciate that. I live in Raleigh, North Carolina, which I
think is a hot market for multifamily. A lot of interest to buy here and cap rates can
be under five. And so wanted to get your perspective. If I'm looking for what I would say is slightly,
not fourplexes, but 16 units, 30 units, that sort of thing. What would be your thoughts
in terms of techniques to use in this type of market to try to unearth deals that have
reasonable numbers?
And you want to stick to what, like 10 to 30, is that kind of your range that you want
to be in?
Yeah. I mean, I would say I'm trying to just stay somewhere 10, 30, maybe 40, to the previous
conversation with Cedric, there's various folks that I network with that I think if
you found a 70 unit or even a hundred unit, they would be interested in partnering with
me on that. This is my first multifamily deal that we're talking about, trying to stay kind
of in that, I don't know, call it 10 to 30 range, something like that.
Yeah. Have you started shopping for deals in Raleigh yet Matt? And you've found it to
be competitive, low cap rate, that kind of thing in Raleigh at that size deal?
Absolutely. That's what I found, so for example, one that I reengaged with just in this last
week, he's like, "Hey, there's these two you should look at." And they were both 4.5 caps
based on a 16 unit and a 24 unit.
See, I thought the caps would be lower, Justin in Raleigh, or higher on that size deal, Matt.
I'm surprised to hear that it's still that competitive. I mean, Matt, we've shopped on
larger deals. We've shopped, and we hope that if you find 150 unit deal, you call me and
Justin because we love to work with people on deals that they turn over, but we've yet
to find anything that makes sense in the Raleigh market. As you said, because it's a booming
market, we'd love to be in there, but same problem you've had, just the cap rates don't
make sense. And you'd have to just buy in and crush your fingers and hope the market
goes up in appreciation and that's where you're going to find your value.
One option is to kind of sit and wait for the right deal to show up, and it could be
off the market, whatever. Option two is to farm the market and find your own deals. I
just put a video out on my YouTube page. It's about finding tired owners. It's got a picture
of a really sad looking guy and then a picture of me going like that next to the guy, right?
So watch that video map because that video talks about how, it gives an equation, "Do
this, this, this, and this." It gives an exact equation on how to find tired owners. That's
option number two, try and find someone off the market, not through a broker, because
the brokers are the ones that are guilty of these properties getting marketed at four
and a half percent capitalization rates, right? It's not just because the owner is being guilty,
because the brokers have gotten into the owner's head that, "I can get you 150,000 a unit for
your property."
Option three is what I would do. I probably would do one and two also, but I would also
consider some more tertiary as they say, and that's a nice way to say, not as nice markets
around you, but areas like Fuquay-Varina that are commutable to Raleigh, Durham, to where
you are, but they're a bit outside the bubble. I mean, Fuquay-Varina's kind of in the bubble,
but maybe a step or two outside the bubble, bit further. There is some expansion going
on. The problem you're going to have is that in the south, you got these city mega epicenters,
and then you've got the burbs that are expanding and then you've got nothing outside of that.
You got a bunch of farm land. And so there's probably not going to be this 16 unit that's
been there forever.
I want to say that I went to a meetup here in New Jersey, a multifamily meetup just pre-corona.
Everyone went around the room and talked about what they were going after. And I would say
90% of the 30 people there said, "I'm looking for multifamily in North Carolina." North
Carolina, South Carolina, whatever. And so what do you have that they don't is local
access. So lean into that, the ability to drive around without having to get on an airplane.
The ability to know the neighborhoods like the back of your hand. The ability to see
that this property's got the weeds overgrown or whatever, that I can't see from New Jersey.
So lean into that and take advantage of that because that's the way you'll beat out money
coming in from the north or anywhere.
Thanks for having me on. Thanks [crosstalk 00:11:57].
One last time guys, the email address is helpme@derosagroup.com. That is helpme@derosagroup.com. Send us a
line to that email address and we will have you guys right here on the program to ask
questions live and to win a free DeRosa Insiders membership for one month. Can't wait to have
you guys here. Justin, come on back and we'll close it out, man. Thank you for watching
guys and have a great and profitable week.
All right.