How to build multifamily team when you first get started?

[Elijah Artman]

How to build a team when you first get started in multifamily / apartment investing? what course do you take to get started and really start implementing the idea of go out and finding deals. What’s the first thing that you do to get it started?

[Vinney Chopra]

Hi @Elijah Artman
First of all building the list of investors then we are segregating the emerging market. You’ve got to figure it out where you're going to invest; in your backyard or out of state or where you think your money will flow, that's my keyword. The investor’s money has to flow to where you will be syndicating. So you want to find out as much information as you can about that area through Chamber of Commerce, through the economic study, talking to the brokers. And one of the ideas which I had been sharing all over is that the operating memorandums have a lot of information in the last seven to ten pages. That can tell you a lot of different reports about the area. So you have to determine which area you want to buy, maybe there are two different areas but then comes the premise of finding and building relationships with the brokers.

How do you find brokers? You find brokers by Googling, actually, you could just Google the name of the city or the smaller city which is outside the big metro city just say “multifamily brokers” or “multifamily property” for sale in the city’s name and state and then put Loop Net right next to it in the Google. Now you will come across these listings in that city or around there in Loop Net and their won’t be much good stuff at all, never there is.

What you're trying to really look for is who are the players? Who are these brokers who are in the 7 unit, 10 unit, 8 unit, 12 unit, 50 unit, 150 unit? So you draft a small email and you copy and paste. So what I do is I just paste the same message to thirty brokers in one area. It takes me so little time, but I say “Hi, I'm Vinnie Chopra and I have been investing and purchasing multifamily blah, blah, blah and I have the equity which I would like to talk to you about the property that you have listed and some others off market deals you might be bringing.” So right from the start you are putting an offensive attack to let them know “Mr. Broker, I’m here to stay, I’m here to purchase property where and then I want to get to know you and love to talk about this listing that you have now, but more so also the other listings that you will have in the future.” Of course it's by  they’re not going to give you the off market right away, but you've got to start right from the first impression and then after ten days you go again call them, text them, e-mail them “Hey. by the way, I'm Richard or I'm Tim, I'm Vinnie and I just want to follow-up for sending me that property or I looked at it and it really doesn't fit my criteria, and why does it not secure criteria.” See, the brokers like to know if you are talking to them in sense. They can figure out a lot of people who are just novice, but you got to fake it till you make it -- I call it that. “Fake it till you make it,” so you've got to really come up with confidence and come with a great strategy so that they get interested in you and you give them feedback and you send them a small gift or find some article that their company or their branch got some special recognition; I will copy that and send it to them, “Hey, you know what, Bob I was just thinking about you; I came across this article…” Now he thinks, “Oh boy, over here Vinney is thinking about me.” That’s how you build a relationship. So that's where you start building with the brokers. Now, you might ask me, “Vinney, I would like to actually have all my students take an excel worksheet and write down the area they’re going to penetrate and also the broker’s name, their phone number, their e-mail in the next column, and then the brokerage house, realty house that they belong to and then you put ten different columns: first contact, second contact third contact, fourth contact, fifth contact. What that means is you’ll write the date when you talk to them or email them and in that new cell you write down what did you talk about. It’s small CRM, but for brokers you can do it in excel; it’s so easy. And I would love to send you -- I think I have mine which I used to use ten years back. Now, all my brokers are in my Iphone, every single one. I can just say Houston -- all the brokers. I say Houston brokers and just search for that, all my brokers will come; their cell phone numbers, their e-mail address, their wife’s name, their son’s name, their cat's name, everything because you write it down or they went on vacation in Italy they talk to you about it or they want to or things like that. Personal information is very, very big for everybody, not only the brokers but with investors also. You want to get to know them, sit down with them and you write down notes. I like to use IPhone or Android very, very nicely because I used lot of different, like, Job titles and departments and all those special fields, guess what, I filled them all with their personal data. I write they have two children, two sons, one is in this one is that because then you can bring that out to them and they feel special because you took the time to take down their information, so that's one-on-one clientele building, relationship building.

So what you asked me was how do you go about starting the business. So first of all, you definitely got to get the spinning of the plate with your influence, your circle of influence which will be starting from your relatives, your family, and then you say some of them might be more open to others in investing with me; as you get more and more knowledge you want to put together some Power Point presentation. I don't know if I showed you mine and maybe you were the one I was going to take out one of the logo and send it to you or something. I'll try to take that logo. I did that presentation about four or five years back. It needs to be updated. I don't need it anymore because my base is built now and then my word of mouth brings clients. I just increased from 84 clients to 115. Oh my gosh! 15 plus 16; I got 31 clients more just my word a month, and also some they heard me on my podcast so they went to my website. I mean, one of my clients I couldn't believe it, he wrote down he said, “Vinney, I want to invest half a million with you.” He liked me so much; my sincerity in my podcast. I couldn't believe it, I just couldn't believe it, but I talked them down to only do three hundred thousand, which is they said we’ll do the minimum of three hundred. And then I just got an e-mail, they said, “Vinney, we wish that we had known you earlier,” I said, “No problem, we’ll be coming out with some more good stuff.”

But anyway, so let's go back to your original question. How to build a team? Okay, I would say if you want to find or you might already have your financial statement and your net worth statement -- you've got to have that right to the tee, and then you figure it out how much liquid money you have and then how much net worth you have because the loan amount has to be less than your net worth that the lenders look at. Your net worth should be more than the loan amount and then the liquid amount should be about six to eight months of the mortgage payment – minimum. And that after you put down any money for other stuff which is the net cash left. So that way you can seek out if you need to… you know if you're going for four plaques or small units number and if you think that it will happen for you for 30% down or 25% down, most of the time that's what they will take from somebody brand new. And now with my more savviness I can go 80- 20, sometimes sellers financing can also get you the loan. Sellers can carry back, you know it, you’re a very, very accomplished broker.

So the key thing I'm trying to talk to you here is the lending phase of our thing. Two things are very important in syndication; one is investors flowing their money to your deal, where you are buying it in that emerging market, totally sold on it, and the second thing is the loan broker or the lender who will give you the loan. Those are the two most important things and then the rest is easy; the legal structure, the L.L.C., the syndication part of it, that's not hard. So there are two things now; the money from the loan from the lender, the money from the investor and then the good property. I call it “all in one” because your first investment should be so strong and so great returns are coming to your investors that they will tell ten more people about it. When you send them that quarterly check (passive income), they will talk and say, “Oh my gosh! Talk to this person, they just send me this check; next check – Q2, Q3, Q4, like that. That’s how you’re able to build more and more. Then you're showing your success in the profit and loss statements, in the occupancy reports to more investors.

So syndication is a marketing company, it's a marketing business that's what it is. You're marketing yourself to the investors, you're marketing yourself to the brokers, you're marketing yourself to the loan lenders, local banks, all that. So what do you think from things which I’ve covered, do you think I missed something or what do you think in your mind? Those are the three ingredients and then, you know, I say five plate because then the other part is the takeover and also the due diligence in your team, which is you can hire them after interviewing and then of course the property management company you can hire them. It's very hard to find a very good one -- I will say that. And we self-manage ourselves for that very reason. So you can make it as simple; you can make it as complicated.