Welcome to creating wealth through pass your apartment investing podcast. In this show, we will discuss about best and worst experiences about pass you on at your apartment investing and I'm your host, pharma Christina. Let's begin the show. It is our guest is David popping from real estate. Welcome David. Hey, thank you for having me Sure. A little bit about David. David, a top millennial real estate investor speaker and entrepreneur. David is the founder of Real Estate lab on industry partner of Obsidian Capital. David started investing at the age of 19 in michigan, where he bought his first property in college at 12 unit apartment complex. Prayer to graduating with a finance degree at the University of Detroit mercy. David had quite seven million in multi family real estate holdings by the age of 24 years old, David has acted as a key principle with over 15 million in real estate holdings and has raised north of 10 million in capital, utilizing David's best selling multi family deal analyzer.

He has ventured into the tech industry through the founder of his new software company, Real estate lab. David has a background working in corporate auditing on investment banking and has been serial entrepreneurs since the age of 13. David is a member of a high level real estate group, the multi family boardroom composed of over 30 high level multi family owners and operators. So with that, David, would you like to add anything to your background? Yeah, I'm a multi family investor is pretty much all I do. I'm, I'm 25 now. He's been doing it for about six years and I eat sleep and breathe apartments. That's, that's all I do day in and day out. So I love it, awesome, awesome. Yeah. So what is sharing the thought process of getting into real estate and multi family at the age of 19? And what is the reason behind, you know, you got mindset and thought process? Yeah, so I always wanted to create, I just wanted to be wealthy, I just wanted to have freedom, financial freedom and be able to kind of do whatever I want to give to whoever I want it and you know, I'm not rocket scientists, you know, I didn't want to become a doctor, I originally went to college to be a dentist, I decided against, I decided to go to business after that and, and really I said, I'm real estate after meeting some people who I saw that were very successful in it and um, it seemed like a good path that really anyone can take and be successful.

And so I started listening some podcast about six years ago before podcasts were really a big deal. I listen to bigger pockets, you know, it's probably the 1st 40 or 50 episodes at the time. And you know, it inspired me and I learned about apartments and so I kind of set off on a path where I was just hungry to invest in and buy apartments from the start. So that's kind of how I got in. Cool, thank you. So you acquired two million years multi family at the age of 19. So what the shape that experience and did you face any challenges if yes, how did you work on those challenges? Yeah, I mean it was not one say it was extremely difficult, but it definitely wasn't easy being young and trying to buy apartments. Being the first thing is I had to get myself a base of knowledge and educate myself. So I started talking to a lot of brokers, started talking to banks and lenders and figuring out how the industry works, how the business works. I really wrap my head around the numbers side of things. I think it's really important, you know, run a lot of numbers to excel and trying to figure out, hey, how do I buy this property?

What prices, it makes sense. And so I built some financial models around that and spent a lot of time really understanding the numbers, which I think is a really key foundational piece for anyone trying to invest is You need to understand the numbers of this business. And so you know, once I got a hand on that, I just started looking at a lot of deals, practicing making offers and I got an offer accepted on a 12 unit apartment complex. And this was kind of just getting started. I was what end of 2016 and so minute offer got the offer accepted. And then it was kind of off to the races. Let's figure out how to finance and and fund this deal because I didn't have any money of my own at the time. God is how did you welcome the challenge? How did you raise the capital for that daily? So I wrote down a list of all the people I need to have money, which was not huge at first. And I started reaching out to people I would go to meetups, you know, any type of setting where there were wealthier people. I would try to, you know, get meetings with people, business owners, small business owners, other entrepreneurs and really just talk to anyone. I could. Doctors, dentists, attorneys, all those kind of people.

I just try and talk to him and tell him about what I was doing. And it was really just a lot of grinding and a lot of networking with people to find a couple in just five people on my first deal. Five or six people that were willing to invest with me. So I just kind of grinding and cold calling and meeting people and networking. How did you convince the investors that stage? You know? Yeah. I think the biggest thing was just using facts and logic. You know, I clearly didn't have a lot of experience at the time, but going in and talk to them and telling them, hey, you know, I'm going to buy this property for, you know, at an eight cap at the time, which wasn't crazy back then nowadays make caps crazy. But back then a cap was fairly normal. And I told him I'm gonna buy the 78 cap and I'm gonna increase the rents by 100 $250. Here's the camps that I'm going to show you and this proves that I can get the rents up. We're gonna put X. Amount of dollars into the property and when I'm done with it it's going to be worth, you know, 152 $100,000 more, you know, at the same cooperate because I'm adding value. And so I just kind of use logic and put a business plan together. And a lot of people said no and I don't know if it was because they didn't want to invest as much as maybe I wasn't talking to people that were as qualified as I thought they were or you know, some people, I'm sure we're like, hey, this kid's young and you know, it doesn't really know he's doing.

And so I went through a lot of that and and finally settled on a couple of people that invested with me and trust to me and to this day actually still invest in a lot of ideals and I've made them quite a bit of money. So it just, it took a lot of nose to get to. A few yeses, got it. And I was still holding that property or realities solely. No, I sold that several years back, tended to sell a lot of my properties in this upward growing market as cooperates and compressed so much. Okay, cool. And so what is your investment philosophy now? Yeah, I'm very opportunistic. So I don't box myself into, hey, it's got to be x mounting units. I do focus on specific markets. My markets are mainly texas, metro Detroit michigan where I'm from. I live in Austin now. So I focus a lot on Austin and then Indianapolis, I know very well Indianapolis as well. And so I tend to focus on those markets and I'm just really opportunistic whether it's a 20 units, 70 units, a 250 unit deal A B or C class if I am buying it at wholesale pricing, meaning I'm getting it for a good deal relative to where the market pricing is.

That that's when I'll buy. Really doesn't, I don't have too much more criteria than that. I just look for, hey, I'm buying this for seven million and it's probably worth eight million. Today I put a million into it. It's gonna be worth 10 or 11, you know, or more. What can I buy that's at a discount to the market. And can I add some value to that, improve it and create a spread of profits for myself? Or if I'm buying it with investors for myself in the investor's got it. And how do you source your deals? Pretty much all off market nowadays. I used to work a ton with brokers. I still will honestly spend months since I've looked at a deal from a broker. They'll probably six or seven months. I by almost all my deals from direct mailers cold calling or relationships that bring me deals either online, social media, people I meet. Um, I run a big real estate community so I got a lot of leads to their, it's all director owner stuff though. I don't really do any on market nothing with the calls for offers. I don't bid on any deals. All off market stuff. Cool. And Alicia reason behind now jumping into south very industry side.

How is that going? You know the software? Yeah, Southwest side. So I built as as kind of mentioning I built financial models to underwrite apartment deals and ended up putting it online after some people wanted to buy it. And then I have tons of people buying them from me, just tons of people. And so I decided that hey, there's a better way for people to underwrite deals. And it involves some form of software and that could allow us to track the deals. Were looking at underwrite them quicker, more accurate data, reading the financial statements and helping him put that into the spreadsheets, all that kind of stuff. And so I decided to years ago to embark on this journey and start a software company and we actually just launched our beta and within the Next few months by the end of 2021, it will be fully at production line at real estate lab.com. And it's for multi family investors who want to under eight deals and are acquiring properties and want to track their portfolio in the pipeline, all that kind of stuff. It's, it's kind of encompassing acquisitions platform.

So how exactly that works support if we get a deal or if you get a financial data from the broker, what are the next steps, you know? Yeah. So you sign into your account and you can just add a property to your database and you can put details at the address number of units. All that you can open the analyzer right through the web browser, will open a template the analyzer, the financial model that have created. You can underwrite the deal there. If you have the financials from the broker, you can upload them in excel format. Either rent roll or T 12. It will read the rent roll, it will pull the unit mix and the current runs out. It will input them into the analysis for you and then analyze a spreadsheet. If you have a T. 12 it will read the T. 12, help you reformat it And it will input all the T. 12 operating expense data into the spreadsheet for you as well. So it saves a lot of time from having to go back through and re input and change and go through salad. It will read it for you and help you and put it into there. And then you can finish make some assumptions in the underwriting model. You can make your assumptions and kind of settle on a price that makes sense and a plan that makes sense.

And then you can actually create louise and send letters intense and offers directly through the website as well. And then eventually our goal is people can get their deals finance and funded and all that straight through the platform. Awesome, awesome. And thank you. Thanks for sharing that. Yeah. And if you look back now on, how are you feeling about your journey and what did you learn? Yeah, I feel great. I'm glad my 19 year old self worked his ass off and decided to really push for, you know, wanting to make a difference and get myself and do different situation than where I was at. And so I'm really grateful for that and grateful for a lot of people have been able to meet and be around and inspire and influence and people have been inspired by, you know, I've learned a lot, I've learned how to pick the right partners in the wrong partners, how to find people that their values align with yours and how to work with others, create good relationships in business. You know, doing the right thing is always the right thing being a having good character and integrity is how I've always operated.

And it's paid a lot of dividends over time treating your investors money like your own. You know, I think is really important. Never lost an investor's money of in fact, I've always exceeded expectations. Investors never once have I come in under five underwritten a deal to, and I think that's thanks to just being conservative and finding really killer projects to work on. And so, you know, it's, I'm extremely diligent what I do and I think you have to be in this business. You have to be really attentive and, and do your research and put in a lot of time and hard work. And it will certainly pay off if you do. Yeah. So true. So true. And thank you. Thanks for sharing that. Yeah. And would you share any of your best multi family real estate experience so far? Oh yeah. My best deal, you know, out of all deals I bought bought anything from a 230 unit down to, you know, an eight unit. And my best deal is a 20 unit property. I still hold it. I bought it for 1.26 million a year and a half way. I bought a year and a half ago. It is now worth $4 million. I had 630 k of investors on the deal by the end of this year. I'm refinancing them completely out of the deal alone at my own.

Have quite a bit of equity in that. And so that was kind of a, I bought it from a mom and pop seller and I just got a really solid deal on it during Covid and you know have managed it. I brought the rents on average from 800 bucks to 1600 a unit. So I've doubled the rents effectively over a year. I've put about 25,000 unit into that project. And so you know, I'll be all in 2.2 million. I've put no money into the deal and I'll be 100% owner by the end of the year and it's worth about double what the debt is. So that's probably the best deal ever. Awesome, awesome. Which market is that? That's in city called royal oak michigan. Okay, awesome. Yeah, it's almost 3.584 X yep. That was a good, good project. Yes. And so would you also shared any of you ever what I start challenging experience on any of multi family deal. Yeah. Any project like lose money or I had like a bad experience. I have been under contract on deals and fell out. I mean maybe I could share that. I went under contract on a deal and I lost some earnest money because I didn't feel comfortable doing the deal at the end of the day I think I lost like 25 or $30,000 in earnest money and it was just a really hairy deal.

It was it was a ton of work basically needed to be brought down to the studs and then completely rebuilt. And I underestimated the costs significantly on how much it would take to renovate and so you know, I didn't feel comfortable buying it. I tried to re trade we they got they came down a little bit on price but not enough. At the end of the day I walked away from the deal which could have ended up being a really solid deal, but I was more interested in focus on deals that I felt were really guaranteed winners. And and this one to me, as much as it could have been, a great opportunity was still somewhat of a toss up. So I walked down. The deal lost about $25,000 maybe a little bit more. Not, you know, but to me that was worth it. I didn't want to go in there and put my investors in a position to potentially lose money out a deal when there could be good upside. I really like doing winners that I feel 100% confident in. So that was a situation where lost money but worked out for the best. Got it, yep. And what is your current focus and share something you're exerted about now? Yeah, So I split my time half and half between my software company, real estate lab and um, to pin holdings, which is my real estate arm.

I'm really excited for a couple of things this year. I'm, I'm selling a 28 unit. I owed him 1031 ng all the proceeds into a 52 unit building. So kind of stepping that one up, that's a joint venture between myself and a friend. I'm excited to launch our software to market publicly by the end of this year. I mean, I think it's really going to change the multi family industry and give people a way to underwrite deals in a much more easier fashion and track all the deals are looking at and enable people who aren't very analytical to be able to get in and start buying apartments who are otherwise they'd be a little intimidated to or and then help experience people just do more of it and in a better way. So really excited for that. Cool, cool. And anyone advised that impacted you, David, you can never go broke taking a profit. You know, if you've got something and it's not saying sell everything, but like, hey, if you've got the opportunity to make a profit and hey, maybe there's a better chance you can make more in the future, You know, don't be greedy. It's never a bad day to take a profit. You'll never go broke taking a profit. So, you know, folks are not, and I think, you know, at the end of the day, you're investors will be happy and things will go well for you and you'll always be in a safe position, so guarded and any of your personal habits that are helping you to be successful, I worked my ass off all the time.

I'm always working. If you cannot work everybody else, you will see yourself surpassed quite a few people and you know, you, you will grow up a lot faster than you ever thought you could. So work your butt off could so anyone book that impacted over life and what we're rich dad, poor dad, it got me addicted to real estate. Cool, awesome. So how are you giving back to community? Yeah, I like to donate to various organizations. One of my friends kind of philanthropy organization, it's called disabled outdoorsman based out of saN Antonio and they help well that have disabilities get out, really enjoy themselves in a way that other people can't, they take them hunting and do a lot of cool outdoors activities with them. So I give back to that a few other organizations that I'm passionate about. Um, and then I spent a lot of time that maybe doesn't make me money. You know, I'm a big fan of getting paid what you're worth and definitely charged for your time at the same time, I, I spent a lot of time, it doesn't make any money. That's really focused on just helping other people, especially young people get into this industry and and inspire them to know that you don't need to have money to start.

I didn't have any money when I started. You don't, you don't need to come from a wealthy family or this or that to get into this business, right. You know, and anyone can really do it if you set your mind to it and you do it right. I like to inspire other people, especially younger people that this is possible and you know, anyone can do this. So I enjoy doing that awesome, awesome. And how can listeners can connect with you, David? Yeah. The best way everybody's got instagram nowadays would probably be instagram at real estate Jedi or you can find me on linkedin or facebook David to pin have a Youtube channel as well. So it's sort of David Toobin. There's a number of ways to connect with me. Sure. And thank you, David. I really enjoyed the conversation and thanks for adding value to the show. Yes, sir. Thank you as well. Thank you. If you like the show, please subscribe, share, rate and review and if you want to connect with me, please send me a message info at Bouchard capital dot com. Thank you for listening, creating wealth through pass your apartment investing podcast. I hope you learned something from the show.

See you in the next absorb. Thank you. Any information provided from these shows or educational purposes only. As always, please consult with your own C. P, a legal and financial advisor before investing