What to Expect in Multi-family for 2022-2023′ with David Lindahl

In this episode of the Raise Private Money Legally podcast, host Kim Lisa Taylor, Esq. welcomed special guest David Lindahl of RE Mentor, who shared “What to Expect in Multi-family for 2022-2023.” Is it time to sit on the sidelines, or should you be getting your investors lined for upcoming opportunities? Listen in for guidance from the expert. Lindahl also had some exciting announcements you’ll want to know about.

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Kim Lisa Taylor:

Welcome to Syndication Attorneys’ free monthly podcast, where we talk about topics of interest to real estate syndicators with the opportunity for live questions and answers at the end of the call. I am attorney Kim Lisa Taylor. Nice to meet everyone. Before we get started, please note that all of our podcasts are recorded and may be used for future promotion, posted on our website, or broadcast in a podcast available to the public.

If you don’t wish to have your voice recorded, please schedule a one-on-one consultation instead of asking questions during the live podcast. Mostly, we do questions from the Q&A, so we’ll read them anyway. So, if you don’t want your voice recorded, you can still ask a question. If you have questions of me or our guest, please put them in the Q&A or raise your hand. We’ll reserve the last 15 minutes or so of the show for your questions.

Information discussed during this free podcast is of a general ,educational nature and should not be construed as legal advice. Today, our topic is “What to Expect in Multifamily for the Next Year” with special guest David Lindahl of RE Mentor. I’ve known David since 2007, the first time I went to the Multi-Family Millions bootcamp.

I was just blown away by the amount of information that I learned during that three-day event. Had never been introduced to multifamily in any way or any other kind of commercial real estate. Before that, I’d known some stuff about single-family, and I’ve been a real estate agent, but I was just completely amazed about this whole different world that Dave introduced us to during that event.

Went to his other events, actually ended up meeting my ex-law partner at Dave’s very first-ever Private Money Bootcamp and I just stayed in contact. I’ve gone to a lot of their different trainings. I’ve stayed in contact, and had a lot of Dave’s coaching students for clients. All of our most successful clients that have gone on and done many, many deals or gone from small deals to big deals have come through RE Mentor’s coaching program. And that is an absolute fact.

So, if you want to really launch and propel your business forward, you have to have not just a coach, but you have to have the right coach. So, that program has worked really well for a lot of our clients.

Dave has 26 years as a multifamily commercial real estate investor, 26 years’ experience. He also has a bachelor’s degree in finance and economics, which makes him particularly suited to talk about this particular topic today. And he’s completed the executive owner president management program at Harvard University. I remember hearing about that when Dave was doing it, and it was a big deal, right, Dave?

David Lindahl:

Yeah, it was a big deal. I was just talking to some classmates just before we get on here.

Kim Lisa Taylor:

It’s crazy expensive. And I just looked it up the other day and I was like $150,000 to get through it. But I’m absolutely certain that the value is there if you can afford it. All right.

David Lindahl:

It definitely is.

Kim Lisa Taylor:

Dave, thank you so much for coming back. You’ve been our guest in the past. We really appreciate that you always want to share your wisdom with our podcast attendees, but tell us a little bit about RE Mentor, and what it’s doing today, and how you got your start in real estate?

David Lindahl:

I got started way back in 1996. So, I was in a rock and roll band for eight years, burnt a lot of brain cells, and then decided I needed to do something. I started a landscaping company. The wintertime, there was no landscaping in Boston. I was living in a one-bedroom apartment, and I tell people, I saw “Get Rich Quick.” It was an infomercial, and I bought the course, and I got rich quick. It wasn’t actually get rich quick, but it was Carleton Sheets’ course, remember that way back then?

Kim Lisa Taylor:

Yeah.

David Lindahl:

So, I was in this course. I was doing cleanouts for banks in the wintertime, and that’s when I got this course, and I started reading it, and it basically said, go to your local real estate investment group. They’re everywhere, and know that there are people that look like you, act like you, who are just as broke as you. Now, they’re doing good through real estate. And that was true.

So, I went there and I started learning a bunch. Like every new person, I was nervous, and I was trying to find my way. And then, I started an interview with Harry Helmsley about how he started with nothing in New York City, and was buying and selling apartment buildings, and ended up owning the Empire State Building. And the statement that he said that got me was the biographer said, “Harry, what is it about apartment buildings that kept you going?”

And Harry said, “I always liked the idea that a group of people would pull their money together, the tenants, and give it to me so I could pay off the mortgage of my property. I liked the idea that that same group of people would give me money every month so I could pay for maintenance guys to swing the hammers and take out the trash. I liked the idea that they would give money every month so I could hire management companies to take their phone calls and collect their rent so I didn’t have to deal with them.”

And he said, “Now, I also like the fact that they would give me so much money that I could pay off all those expenses, and then have extra money that I could reinvest, put into a savings account, or just go out and have a bunch of fun with.”

And I was like, “Damn, if that’s really true, and I could do it with no money because I had none,” I was like, “I want in.” And I went to my real estate investment club, I told everybody what I was going to do. They’re like, “You’re crazy. Are you kidding me? Tenants, they got to trash the place. They’re not going to pay. You’re going to get foreclosed on.”

And in the back of my mind, they made me even more nervous. But I really believed it was true. And there was a couple of guys there in that group that were buying multifamilies. They didn’t really talk a lot. I started taking them out the lunch. One of them took me under his wing and that started it. And I bought my first three-family about nine months later after I got over the fear of doing it.

Within three months, I had three more. Within six months, I had nine. Within the first year, I had 11. Within the first three years, I had under just about 40 of them. And those were mostly three to six. It’s because I was afraid to buy anything bigger. While I was in the rock and roll band, my mother forced me to go to school. I knew I wanted to be an entrepreneur, so I took finance.

And then, I gravitated toward economics because my life was crazy, and economic showed me there can be order in craziness. So, I took the economics classes, and it really helped out because when we had got into Brockton, Massachusetts, when the market was down, and it was just starting to come up. New mayor came in.

They had just built the transit system to go into Boston, which meant that you didn’t have to own a car to move in to Boston, I mean to work in Boston, which was big. So, they had three transit systems, they had five new schools, new sidewalks, the mayor just changed. It was strong leadership. It’s something that we always looked for in markets.

I didn’t realize it back then, but I was just trying to get some money, earn some money. And so, after about a three-year period, we had made a lot, millions in equity, me and my partner, and then a lot of cash flow. And we realized that it was going to change. So, we needed to do something. So, I started learning about what moves the markets.

We wanted to find another market like Brockton was when we were first starting out. We could either get into a cash position or move the equity to another market. We decided we wanted to keep playing the game. So, we wanted move it to another market. We went to Montgomery, Alabama. So, we started following job growth. That’s the key to markets and market cycles.

We started following job growth. We found out that they were building a Kia plant down in Montgomery. 5,000 new jobs. Every time you have 500 or more jobs coming into a marketplace, there’s what’s called a multiplier effect. So, there’s ancillary jobs that are created to service the main job that’s being built. Like The Butcher, The Baker, The Candlestick Maker.

So, Montgomery had a very small multiplier. It was three, but that still meant that 20,000 new jobs are coming into this area because of that car plant. But Montgomery had what was called a barrier to entry, all right, which are really good. Montgomery, it was the fact that it was surrounded by floodplains, and you can’t build on the floodplains.

So, when all the construction workers came in, and when all the new workers came in, demand started going up, but supply remained the same. So, that was a recipe for really good equity. So, we did well in Montgomery. We went to Jackson, Mississippi; Huntsville, down the Texarkana. And before I knew it, we were in 19 different markets around the U.S. buying properties, over 9,000 units. Crazy.

Kim Lisa Taylor:

Wow, that’s amazing. And then, how long did that take? So, you started doing that when, and how long did it take you to get to 9,000 units?

David Lindahl:

We hit the 9,000-mark probably, I think it was 2008, 2009. And we’ve been going in and out, selling in and out of markets now since then. But yeah, when it happens, for instance, when I bought… and we see this with, and I’m sure you see it as well, once people get into their first deal, it’s like things just take off. Because they’re getting their systems in place in order to do it.

They’re going to get their team in place in order to do it. But more importantly, they have the confidence like, “Hey, this actually works.” So, now, they’re more open to doing that next deal. A lot of the fear is gone, and they have their team in place, and they’ve done the legwork. Another deal comes very shortly after, and then another one, and you’re off and running.

Kim Lisa Taylor:

Yeah. I’ve definitely seen the first deal is always the hardest because you don’t have your systems in place, you don’t have your investment marketing plans lined up. But the second deal is easier. Third deal is much easier. By the fourth deal, you’ve got people waiting to get into your deals.

David Lindahl:

Yeah. But there’s also one other thing that has not been usually broken through yet. And that is limiting beliefs. People’s limiting beliefs as to whether or not they can do this business. And unfortunately, some people, their limiting beliefs beat them, but other people, they train on that. For instance, I had huge limiting beliefs, and I didn’t realize I was brought up lower-middle class.

My mother was a fish cutter, and my father worked two jobs to support the family. We’re in like all the good stuff was always for the other people. My family was really, really frugal. My mother was an envelope lady, she used to put the money in the envelopes for the budget. At the end of the week, she had… I remember when I was 10 years old, and when I first realized, it was like, “What are you doing, mom?”

She says, “Oh, I’m doing the budget. This is for food, and this is for gas, and this is for your kids’ clothes, and your kids’ lunches, and all that.” And outside the envelopes, it was three $1 bills. And I said, “Mom, you forgot to put those in somewhere.” And she said, “No, that’s my extra money.” And I was like, “You only have $3 extra after you pay all the bills?”

And she’s like, “Yeah.” And I was like, I thought I was like, “Damn, I think we’re poor.” But I never realized we were poor. We had a lot of love in our family. But that’s the mentality that we had. The mentality was that is for other people, and we’re just not going to get there. That this is our lot in life. And then, I listened to “Lead the Field,” by Earl Nightingale, somebody had given to given me that because they found it. Six-cassette set back then. Now, it’s free on eBay. So, if anybody wants to go check that out, it’s awesome.

Kim Lisa Taylor:

What’s the name again?

David Lindahl:

“Lead the Field.”

Three half hours. Yeah. And the most important thing is to listen and do what it says. There’s a shorter one by Earl, “The Strangest Secret.” It tells you to do one thing, and if you just do that one thing, your life will start to change. So, after I got into “Lead the Field,” and things started changing, that’s when Tony Robbins first came up with “Awaken The Giant Within.” Read that, did what he said, life started changing even more. And before I knew it, boom, my business is blowing up, my life blowing up, and life was good.

Kim Lisa Taylor:

I know that the one that worked for me was “Miracle Morning.” “Miracle Morning” was amazing.

David Lindahl:

“Miracle Morning” is awesome. Yeah. Take charge of your day, whether it’s “Miracle Morning” or whatever you’re doing, just get up and take charge of that day, get some sort of a routine to it.

Kim Lisa Taylor:

Just doing the visualization, that was the thing that was the most astounding to me because I took my pictures, and put them on my board, and I looked at them every day, and I did my affirmations and all that. And 18 months later, I had the house I envisioned, I had the car I envisioned. All that stuff just happened. It’s amazing.

David Lindahl:

Yeah. Anybody really wants to get into … let me share one more book. It’s from the Abraham Hicks, “Ask and It Is Given.” Have you read that book?

Kim Lisa Taylor:

I have not.

David Lindahl:

Okay. So, it’s a really strange book because she channels a medium, it’s like fufu stuff. But in reality, if you read it, you get the underlying message, which is all about the law of vibration. That is truly how you change your life.

Kim Lisa Taylor:

You just believe it and it happens. And I think it’s you believe it, and what happens is because then you do the things necessary to make it happen.

David Lindahl:

Yeah, right. That’s the law of cause and effect. There’re 12 laws of the universe, anybody listening, go Google “12 laws of the universe.” That’s how you become successful. But the law of vibration is all about everything vibrates. So, being in the same frequency of what you want, you will collect it, connect it, connect with it. If you’re in the frequency of being negative, then you attract negativity because you’re connecting to that frequency. But anyways, read that book, you’ll understand it then. It is a life-changer.

Kim Lisa Taylor:

That’s amazing. All right. Well, let’s get on to today’s topic. So, interest rates keep hiking and there was just another interest rate hike. What is that doing to the multifamily market?

David Lindahl:

Big. It’s really exciting. To see the Feds say that there’s not going to be a soft landing, that there’s going to be pain in the economy, that means we are going into the reset that we have been waiting for, for years now. So, it’s a really, really exciting time. It’s a time for preparation. It’s a time to get ready for the next long upside.

Because what the Fed basically says is “We’re not going to stop raising rates until inflation gets down to 2%.” And they said that “We’re going to raise rates, that we know that we’re going to lose about 1.4 million jobs in the economy.” And they know there’s going to be pain in the marketplace. So, therefore, they’re willing to go through that pain to reset the market in order to have better times ahead.

The Fed came right out and said “People are putting bids on houses without even seeing them for above asking price. We’re going to put a stop to that.” And they’re going to put a stop to that through “demand destruction” is what they call it.

Kim Lisa Taylor:

So, what does that mean? So, there’s going to be a reset, does that mean that the prices are going to fall?

David Lindahl:

Yeah. So, there’s few different dynamics going on right now. So, we do have a reset happening. Prices do need to fall because of the fact that interest rates are going up. When interest rates go up, cap rates go down. And so, you lose value in that sense. So, now at the same time, the country needs to build anywhere between 300,000 and 400,000 multifamily units per year.

And because of the cost of labor, because of the lack of labor, there needs to be approximately 740,000 new construction jobs. There are 740,000 new construction jobs opening up every year in the marketplace, but there’s not that many workers coming into the marketplace. So, there’s a worker shortage, there’s a supply shortage, so we’re seeing prices increase.

The developers, the builders, because of those two things, aren’t able to build at the rate that we really need to, to meet the market. So, what does that mean? That means that the inventory remains the same or increases slower than it should. And it means that people are either stepping inside, waiting for the reset to happen, or they’re competing against each other for fewer assets, which will drive prices up. But eventually, because the interest rate is continuously going up, prices will stabilize, and they start to decrease because of the increasing cap rates.

Kim Lisa Taylor:

So, it seems to me there’s always some kind of a lag between when the prices adjust, when the interest rates change, or when something happens in the lending world, lenders stop lending like happened the last time. And the sellers actually catch on, and realize they’ve got to do something with their pricing. Is that what you’ve seen?

David Lindahl:

Sellers always catch on last, right? It’s like grasping on to the falling knives. They know what somebody got just last month and they want to get the same thing, but the market’s changed. And then, they wait, they’re firm about that price, and the market changes again another month later. And then, all right, in their mind, they’re okay with the fact that they are going to get that lower price.

But the market’s moved again lower. So, you’ve got sellers out there that are chasing lower prices. But you’re right regarding the lagging indicators, that’s probably about two quarters. So, the rate hikes that happened yesterday, we’re going to see the effects two quarters from now.

Kim Lisa Taylor:

Yeah. I was thinking it was at least 90 days, but yeah, you’re probably right. It’s more like one to two.

David Lindahl:

Yeah. One thing we will see is we’ll see the interest rates increase immediately because they increased that rate. And that will mean that the lending rates will go up as well, which will dampen them.

Kim Lisa Taylor:

And which means that less people qualify…. And we need more guarantors, more sponsors on a deal, right?

David Lindahl:

Yeah, absolutely. Not only that, there’s more negotiations going on. For instance, we’re negotiating two deals right now. And we had a good indication, they gave us a good indication that the Fed was going to raise between 0.7 to five and one. So, you place your offer, but then it’s always contingent upon what you can get for financing, what’s available.

Kim Lisa Taylor:

And so, the typical cycles go for what, eight years? … Are we going to have to hold onto these interest rates for eight years before anybody’s going to be able to refinance their properties? If someone buys something now, is it going to be eight years before they can refinance, or is there going to be someplace within that there’s going to be an adjustment?

David Lindahl:

No, no. Actually, if somebody buys something out at these higher interest rates, I think you’ll start seeing interest rates start going down sometime 12 months from now, 12 to 18 months from now. They should start going down again. And when they start going down again, there’s the opportunity right there. So, you get yourself ready for this reset because then there’s a long upside run.

From 2010 to now, last year actually, we’ve just seen people … actually, we started doing one-off deals because I was afraid of this market about three years ago because it should have reset before the last election. And it didn’t with the election, and then COVID happened, and that was a whole another set of dynamics.

So, I’ve been nervous about the markets, even though there’s opportunities out there to do one-offs. There hasn’t been the opportunity to go into a market, place a flag, and do four or five deals and stay there. So, when you’re buying now, and it’s much like when I first started buying way back in 1996, back then, I was buying interest rates at 15%, 16%, 17% if you remember those days.

And then, all of a sudden, the rates start going down, and I’m refinancing my properties, and I’m getting all this additional cash flow just because I’ve refinanced into a lower rate. And the cash flow increases the value of the property. So, that’s going to be another opportunity. You buy conservative now. You buy with good numbers.

The thing you do now is you’ve got to be really conservative in your underwriting. You got to be taking a look at, okay, so what happens if occupancy dips? What happens if concessions go up? What happens if revenues dip? And you got to put that into your underwriting. And when you put that in your underwriting and you’re in good markets, you’re going to look at markets that have historically done well in down cycles.

And the market cycle itself in those markets is shorter. A market like Dallas, Texas, a market like Salt Lake City, Utah, the good markets to be looking at right now are Dallas, Salt Lake, Atlanta, Charlotte, Orlando. Those are some of the best markets. And even though they’re some of the best markets, you’ve got to be looking in the right submarkets in those markets as well.

And inside those submarkets, you’ve got to be buying the right properties, which are typically B assets. Value adds right now, there’s a lot of people that are going to get hurt. And you’ve probably seen it because you’ve done a lot of deals, but there’s a lot of people over the last couple of years that the primary returns were coming from the value add that was going to take anywhere from 12 to 18 to 36 months to execute.

When I started seeing those deals start coming in, I was just like, you got to be careful. You got to be really, really careful. So, those deals are actually going to come back on the market. Because people, unfortunately, they’re going to lose those deals. It’s just the wrong time to do things like that.

Kim Lisa Taylor:

And I think the other real risk, because I’ve been warning people about are bridge loans, short bridge loans.

David Lindahl:

Yeah.

Kim Lisa Taylor:

Because if you get to a point where you’re at the end of your bridge loan, and you can’t refinance, or because the interest rates are still high, you’re going to be in a world of hurt. And you may end up losing that property to the bridge lender.

David Lindahl:

Yeah. A year or two years ago, getting in by bridge loans was the thing. Getting by the bridge loan, and then you get in cheaper, you get additional cash flow, you can make these deals pencil out because of the bridge loan. But now, the risk of the bridge loan is coming to fruition the fact that rates have actually risen.

Kim Lisa Taylor:

Yeah. Right. And what I saw in the last recession was that the people who had overleveraged their properties, and had short balloon payments were the ones that actually ended up losing their properties. Was that your experience too?

David Lindahl:

Yeah, absolutely. During the last cycle when Lehman Brothers collapsed, it was really nobody predicted that cycle was going to end so fast. And we had bought a lot of deals between 2006 and 2008. We were averaging a complex and a half a month during those times, crazy times. The deals that we did in 2008 near the crash were, I wouldn’t say they were riskier than 2006, 2007.

But just the numbers themselves in those deals, and the feeling that wow, everything is going right, the deals are coming in, we can underwrite it at this, and we can be a little bit aggressive. Once we started getting a little bit aggressive, we got a little bit aggressive late in the market, and those were our most difficult deals for our 2008 deals from the last cycle.

Now … you focus on the deals that are giving you the hardest time to make sure that you didn’t have to do any capital cost of your investors. So, the investors get their returns. And then, you almost forego everything else. I wasn’t really buying like I should have in 2010 because I was more concerned about the deals I bought in 2008.

So, I learned that lesson from that particular cycle and I wasn’t going to do it again in this cycle. So, we’re out there buying one-offs, but they have to meet the right criteria. We take them under excruciating underwriting to make sure that they’re going to weather the storm, or they were going to weather the storm that we thought was coming and now is here.

Kim Lisa Taylor:

So, the model that I’ve seen most of our clients using for say, the last year, has been 70/30 split and 8% preferred returns. Is this market somewhere where our clients should be thinking about re-educating their investors and maybe offering a different preferred return or different split?

David Lindahl:

It all depends on the investor universe that a particular indicator has. I know guys out there that are doing 6% preferred return for their investors, but their investors are made of people with the 401(k)s, self-directed IRAs, and they’re happy with that return. I know international investors that don’t want anything less than a 10.

So, yeah, it’s not so much as a re-education of your investors, maybe it’s a repopulation of your investors. One of the things I learned as a syndicator is you educate your investors as to what you’re bringing them. There was one time, we were always offering 8% cash-on-cash return, and then we went to this flurry of four or five deals where we could offer a 10, and 11, and we did.

And then, we came back with the regular 8 and we couldn’t fill it. It was hard to fill. Yeah, it’s like, “Why isn’t anybody taking this deal? It’s a great deal. Wait for your next 10.”

Kim Lisa Taylor:

One 10. Yeah.

David Lindahl:

You told them it was going to be an 8 knowing that it was going to be a 10, and then just had really happy investors out there during and after the deal. So, we learned our lessons there on that one. Here’s a couple other things for syndicates that are listening. Another lesson I learned is when you have multiple deals, you segment your list, and you only expose parts of your list to a particular deal.

Because what we did is at one time, we had five deals going on at the same time. We had a really hard time filling them even though before that, we had filled a ton of deals. And I said to Jeannie, who is our investor relations coordinator over here, I said, “Jeanie, what’s going on?” I said, “Why aren’t these deals filling?” She said, “Well, people just can’t make up their mind.”

And then, I got it. A confused mind says no. So, people weren’t sure which one to go into. And then, the third lesson I learned is when you train your investors to come in off of doing one-off deals, it’s really, really difficult to establish a fund. Because we had to do a $20 million fund. We had raised far more than that prior to that. So, we didn’t think it was going to be a problem.

And then, all of a sudden, it wasn’t filling. And it’s like, “Why isn’t this thing filling?” So, we’d call investments and say, “Why aren’t you filling?” And they would say, “Well, put a couple properties in there, let me see what we’re going to do, let me see the groceries.” And then, I’ll consider going into the fund. So, when we realized that was happening, we put four properties in that fund relatively quickly and then we filled it.

Kim Lisa Taylor:

Yeah. I have experienced that again, and again, and again with clients that come to us, and want to do a fund. And the first thing I do is counsel on should you really do a fund? We actually have an article about that on our website because a lot of people shouldn’t do a fund. And then, it’s a matter of deal flow.

If you don’t have deals coming hard and fast, you’re going to have a hard time filling your fund. And you’re still only going to raise the money when you need it for a deal because you don’t want millions of dollars sitting there not getting a return. Because eventually, your investors are going to want it back.

So, that’s what I tell people. So, yeah, it’s very hard to go from specified offerings to fund. We’ve had multiple clients that have said the same thing you just said, Dave, that they tried to go to funds from their specified offering model, and the investors didn’t like it, and they ended up going back.

So, the specified offering model works. You’ve got one property under contract, you’re raising money for that deal, people can look at it, they can do Google flyover, they can make sure it’s a for-real property, and they feel more comfortable investing that way.

David Lindahl:

Yeah. And I think the mindset of a syndicator that hasn’t done a fund before, but has yet struggled to do one-offs is the fact that, “Hey, I’ll raise this fund, and I’ll have all the money ready to spend.” But reality, you still have to raise the money, but now you’re raising it for something that people can’t see, it becomes even more difficult.

Kim Lisa Taylor:

That’s right. And then, there’s people that have abused funds, and they always make the news. And so, people get this image in their head of you standing next to a private jet, and driving a fancy car while they’re still driving their Toyota, and they’re not getting the returns as you promised them. So, you have to overcome that.

So, all right, what about your holy trinity, Dave? Can you tell us about that, and is it still alive and well?

David Lindahl:

Yeah. So, one of the things we teach here at RE Mentor for newer investors, is to look at deals conservatively when you first start out to make sure you’re successful. You’ll make your biggest mistakes in your first three or four deals. So, you don’t want to make a mistake that’s going to knock you out the game.

So, the first decision you have is whether you’re going to do what’s called a “momentum play,” a deal that cash flow is closing or a deal that’s a repositioning. Less than 85% occupancy, and you have to do some sort of a lift, tenant profile, and also some sort of a rehab to the property. So, momentum plays are always the ones we have people start out with.

And then, we have them start out with a conservative formula in order to get into these deals. And that is a capitalization rate of 8+, a cash-on-cash return of 12+, and then a debt coverage ratio of 1.6. And when you have those three ratios aligned with each other, that means that you can bring your investors in the deal, give them an 8% cash-on-cash return first year.

And you get to carve out 25% of that deal for yourself. So, it’s a good conservative model to start. Now, is it working in today’s marketplace? It still does. One of the questions I’ve consistently gotten through the years, because this is the model I use as well, but I’ve consistently gotten through the years is in different markets, it’s “Dave, this is a really tight market now, how do I change the trinity?”

And the answer is you don’t. You just focus on deals that meet that trinity. Now, after you’ve done a few deals, three or four deals, and you’ve got experience, and I call it “building your real estate gut,” after you’ve built your real estate gut, and you’ve executed on a value add, maybe the value add is to raise the rent or value add to increase occupancy.

After you’ve executed on a couple of those, and you really understand how to do them, then you can start playing with that trinity. Then, you can go in a little bit light knowing that you have a value add that you’re going to execute within six or seven months to bring those numbers up there, and your investors are going to be okay with that.

So, you go in conservative, you get some deals, some good deals that are working under your belt, and then you can start adjusting the models to the way you want to invest.

Kim Lisa Taylor:

So, can you go ahead and just give us your three numbers again?

David Lindahl:

Yeah. Cap rate of 8+, the cap rate covers you as the investor. It’s your unlevered unlimited return. The cash-on-cash return is a 12. That tells you what your cash flow is going to be during the year under the deal. The investors get 8, you get 4% of that. That ends up actually being 25% of the deal.

And then, your debt coverage ratio, which tells the bank how many times your cash flow is covering your debt should be at 1.6. So, you need an extra 60 cents left over from your debt coverage in order to be conservative into a deal.

Kim Lisa Taylor:

Excellent.

David Lindahl:

And especially in times like these, if somebody’s going into a deal at a 1.25, which the banks are offering for debt coverage ratio, that is not being conservative in this market.

Kim Lisa Taylor:

That’s good to know. Everybody always thinks, “Well, the markets change, the numbers have to change,” but if you stick with the solid principles, you can’t go wrong. You’re less likely to make a fatal mistake.

David Lindahl:

Don’t be afraid to do less deals. I’ve got a partner a couple years ago, he’s like, “We have to do deals, we got to do deals.” It’s like, “No, we don’t got to do deals.” I said, “The last thing you want to do is do a marginal deal that comes in, and then have to really work and worry about that deal to make sure that you’re going to get the returns that you forecasted for your investors.”

That’s not what life is about. I’ve been through that. My worst deal was a 400-unit in Huntsville, Alabama, and it was a repositioning, it was my fourth deal, fourth deal out of Boston, and it was 46% occupied. And I thought, “Oh, no problem.” I’ve done some successful deals already. I had about 800 units in Boston, but they were on three to six units. And I was like, “Oh, no problem.”

What I didn’t know was just enormous. And that deal, which I brought investors in, I thought it was going to take me two to three years, get everybody like a $3 or $4 million profit. It took six years because I didn’t want to do any capital cost. I took $4 million out of my pocket over those years and just broke even at the end. It’s like I didn’t need to do that deal.

I could have gotten into so many other deals. Momentum plays that I had to pass up on just because I had to focus on this deal. So, that’s the lesson. The lesson is you don’t have to do deals. You take the deals as they come. Entrench yourself in a market, decide which market you want to go into next, build your team in that market, and then when the right deal comes along, it will come.

And that deal will come along through relationship building. Relationship building, or you might do some direct mail campaigns as well, two good forms of deal sourcing.

Kim Lisa Taylor:

That’s great advice. In fact, that was the next question I was going to ask is, what should people be doing to prepare for changing times? Anything else you’d add to that?

David Lindahl:

No, it’s just for those that are just starting out, just go through the process of building new teams, of selecting new market, of going into that market and looking at deals, analyzing deals. Get your systems in place, and then a deal will pop. It isn’t a market where a bunch of deals are going to come on. That’s going to come a little bit later, maybe a year from now.

But you do one or two deals from now and then, maybe three, and you build your real estate gap. And you’ll be prepared because see, in a market back in 2009, 2010, after the 2008 financial crisis, all right. So, deals started popping onto the marketplace, people started getting foreclosed on a 60, I think it was 62% of all commercial mortgages went underwater back in 2010.

It was huge from the effects of the financial crisis. So, the deals that came in in 2010, they were numerous. As the financial crisis went through 2008 and half of 2009, there wasn’t a lot of opportunities in the marketplace, but there were opportunities. At the end of 2009, 2010, that’s when everything started popping in. So, there was two types of deals coming in.

And they look very similar. One is a goal of mine, you’re going to make a ton of money, it’s going to be an easy deal to do because you bought the right deal, the right place with the right numbers. The other one is a landmine. There was something inside of that fill that you didn’t understand or see, but it looked like a really good deal going in, and it exposes itself within that first year.

And it’s like, “Oh @&*#.” And then, you have to deal with it and work with it. So, building your gut before the opportunity of all these other properties coming onto the marketplace is smart because you will recognize the landmines from the gold mines.

Kim Lisa Taylor:

And one of the things I tell people is if you want to really get experience, you haven’t done a deal before, team with somebody else who’s done deals, and you can leverage off their experience, and really propel yourself forward versus trying to learn it all from scratch by yourself. And that’s both using a coach or just participating with somebody who’s more experienced that’s done a few deals.

David Lindahl:

One of the things we’ve seen through the years is that people that come to the Multi-Family Millions bootcamp, most of them are people that want to be active investors. But then there’s a good percentage that are passive investors. But they want to know how to analyze a deal. They want to know how to analyze a team. They want to know how to analyze a market. So, they’re the smart investors. They want to understand everything before they hand their money over to somebody else.

Kim Lisa Taylor:

Yeah. And that’s why I wrote my book was not just for active syndicators, but also for people who want to passively invest. Because if you learn what the syndicators are supposed to be doing, and the sponsors are supposed to be doing, then you’re going to be able to figure out whether they’re doing it.

And the last chapter is all about 10 things you should know or ask before you invest in a syndicate. So, that’s all good stuff. So, you’ve mentioned a couple times that you have to get your systems in place. What systems does a syndicator need to get in place?

David Lindahl:

Well, certainly, you’ve got to get your capital raising systems in place, and how are you going to do it? How are you going to expose yourself out into the market to entice people into your deals on a regular basis? To build your list, as I say. One of the things that’s changed in the recent years is social media. There’s a lot of people now going on to social media doing their own podcasts.

It’s really smart. People get to really know them through their podcast, and the different posts that they’re doing, and they get comfortable with them. And then, before you know it, they’re getting more people on their list. But then there’s just the regular grind. It’s going into now the business meetings are starting to open up again. So, it’s going into the business meetings.

It’s being in social groups, and knowing what to say, which is basically, if you’re in any type of a social situation and somebody says to you, “Hey, what have you been up to?” It’s like, “Oh, I’ve been investing in emerging real estate markets.” And they’re like, “What?” And basically, just by saying something where they say in their mind, says, “What? How do they do that?” Then, they’ll take you down the road with their objections on what you’re doing. But the questions they ask are actually asking their objections. You handle those objections and they will close themselves usually at the end. It’s like, “Hey, if you’re ever looking for a partner or do you have partners, let me know.” It’s like, “Okay, I’ll put you on the list.”

And some people, they disqualify themselves. They’re like, “Okay, that isn’t…” a couple of questions, and then they talk about the fear that they have, or …

I never try to talk somebody into investing with me. That’s the last thing you want to do because I will certainly answer any objection that somebody might have that they want to ask me. But if then they say, “No, that’s not for me,” I don’t try to talk to them and try to convert them in.

I want people that want to be investors. The people that you have to convert in or the people that put in the least amount of money in any particular deal, they’re always the biggest pain in the ass. They’re always the ones that they don’t quite understand it, or they were nervous, and they’ll be nervous all along, and it just doesn’t make investing fun.

And if you’re a syndicator, see, the repositions, people that buy properties less than 85% occupancy, and reposition them up to the market, and syndicators have a burnout point. You can only do it for so long because there’s so much stress involved in both of those skill sets that you eventually burn out. And you burn out faster when you bring the wrong people into your deals.

You always align yourself with your investors, but if you’ve brought the wrong people in, it just becomes a nightmare — or it can be. There’s always somebody who’s the smartest person in the room, but yet, they don’t know anything. Do you know what I mean? And they’re really good at convincing everybody else.

Kim Lisa Taylor:

Yeah. You have to be careful both making sure they’re financially qualified, but also compatible mentally.

David Lindahl:

Yeah. You can be married to these people for the life of the deal.

Kim Lisa Taylor:

That’s right. That’s right.

David Lindahl:

And I had one deal in Texas with investors … I don’t know why there was such a cluster of investors that were very difficult to work with. They micromanaged everything, which I don’t have a problem with investors coming in, and looking, and asking questions, and going to the property. And we go to meetings. Whenever there’s decisions to be made, it’s always a group decision.

And then, if all of a sudden, it looks like it’s going in the wrong direction, then I try to sway to what the right decision should be. But these investors, every month, the statement that went out, you have a variance. If anything is 10% above or 10% below what the forecast was or what the budget was, that’s just a natural variance.

These people, they’re like, “All right, how can we spend an extra 40 cents on paperclips this month? What happened there?” It gets soaked at night, not being facetious, but it gets so crazy. So, I sold the property, and we got a really good return on it. And so, when I told the investors we were selling the property, they were happy because they were getting such a big return.

And then, they said, “Well, where are we going next? Where are we going to put our money next?” And I’m like, “Nowhere.” In the back of my mind, it’s like, “Nowhere. Not for you people. You guys aren’t in any more of my deals.” I want the deals to be fun.

Kim Lisa Taylor:

Yeah. You’ve got to be careful about people like that, and I’ve seen that happen too. All right. So, what about any other asset classes besides multifamily? Do you have any opinions on about any of those?

David Lindahl:

Yeah, storage. Storage is good. Right now, it’s somewhat recession-proof. COVID did have a big bump in the market. You got to be careful about that. People stored a bunch of stuff. That asset class saw a rise, but I like storage because it is somewhat recession-proof. It’s the time to be learning multifamily. The amount of deals in multi-amily aren’t as great as they will be a year from now.

But at the same time, the storage, you get entrenched in storage as well. And I always told people ever since I’ve been teaching that storage would be a good 30% of your portfolio. If you had to a storage portfolio of 30% of what you own in multifamily, that’d be a good ratio.

Kim Lisa Taylor:

That’s nice. I think storage is alive and well as long as Amazon is doing well.

David Lindahl:

Yeah.

Kim Lisa Taylor:

All right. So, what would you tell somebody who’s brand new to syndication? How would they get started?

David Lindahl:

Well, the first thing you do is learn how to invest properly. Before you start talking to investors to come into your deals, you really need to understand deals. When people come into our mentorship program, I do the live onboarding with them. And the two things I talk about are mindset, which I talked about before because I know in teaching for 20 years, mindset is going to be the difference between those that make it and those who don’t.

So, that’s why we stress it, and we have all kinds of trainings on it. The second thing is underwriting. The people think, “Oh, I’ve got to have a relationship with a broker, and I’ve got to go out, and I’ve got to start getting deals coming in, deal flow coming in.” It’s like, “No, no, no.” You’ve got to understand what good underwriting is and how to do it before you start talking to a broker, or an investor, or a sponsor, or a bank.

Because they know what good underwriting looks like. And if you show them underwriting that’s not good ,if you’re missing things, they’re just goig to check you off on their brain. So, the most important thing is learn what good underwriting looks like. Now, here’s the thing with that, there are some people that are good in math and some people that don’t like math.

I’ve never been a math person, but I realized in every business, there are certain things that you need to know about. So, I learned how to do good underwriting. I did a lot of underwriting at the beginning so I could really understand it. And then, I was able to give it off to somebody else. The only thing I do now is I approve underwriting. Somebody will say this is a deal. And I’ll say, “Okay, send me the underwriting.”

That’s already been through somebody else on my team. Somebody with a deal will bring it to us and they’ll say, “Hey, I think this is a good deal.” And then, it will go to a team member, they’ll review that underwriting, and they’ll do their own thing. A lot of times they kick them out because the underwriting didn’t work out.

And then, if it’s good and it looks like a deal, then it comes to me. And that’s the way I like it because I can focus on, I’m a good relationship builder. That’s my strength. So, that’s what I focus on.

Kim Lisa Taylor:

So, learn to develop relationships, get your mindset squared away, learn how to underwrite. And so, I think the building relationships is the third. First, the mindset, then the underwriting, and then start building your relationships with your brokers, your investors, reaching out to sellers. Is that what you would say?

David Lindahl:

Yeah.

Kim Lisa Taylor:

Yeah. And I would add to that, get a coach.

David Lindahl:

Yeah.

Kim Lisa Taylor:

You’ve got to get educated. And I talk to a lot of people that are like, “Well, I just read some books or I watched this podcast.” And I’m not sure that’s enough. I really think that the people that have been most successful, and have come back to us again and again to do more and more deals have always started with a coach.

And I can’t stress that enough because the people that haven’t done that, they’ve done one or maybe two deals, and then you just don’t hear from them anymore. They’re not doing deals, either because they bought the wrong thing, or they got burned out because they did something wrong, and they just don’t do deals anymore.

David Lindahl:

Here’s the thing with a coach. The coach, through our different events that we have, we offer coaching programs. And the one thing we learned is people join because they want to be held accountable because they know that they tend to drift off or they want to be successful faster. And there’s no way to be successful faster than to be with somebody that’s already done it, and have them oversee what you’re doing.

And two, sometimes we have people, some of our clients that are not putting in offers because they’re afraid. And it’s the coach that says, put that offer in because all of a sudden, they realize like, “Oh my God, I got to take the next step. I’m going to get this deal done.” Then, more fear starts coming in. But with anything, I made my biggest mistake, I was fortunate.

One of my hard money lenders was my first mentor, and he’s the one that taught me to be a very conservative investor. But one of the things he told me was don’t invest outside of Massachusetts because you don’t need to increase that risk of not being at the property. So, he didn’t really understand how to be a national investor and go after emerging markets.

So, I found another person to mentor me through that. But it wasn’t until after I did that deal in Huntsville, and I wish I had that person before I did that deal in Huntsville because they would’ve told me, don’t do that deal. It would’ve saved me six years of my life, $4 million out of my pocket. But from my limited knowledge that I had at the time, I thought, “Hey, I could do this. This is a no-brainer.”

I didn’t know what I didn’t know. That’s the other thing. So, walk on it. If somebody is willing to lend you a hand, take it. Especially in this business, I have seen so many people come in broke through our system here and in multifamily itself. And in a very short period of time, two, three years, they get so many different deals under their belts and their lives changing.

And over here around Christmas time, they send chocolates, they send these great letters about how they’re able to spend time with their dying father, or how they were able to take their children out of a one-bedroom apartment in Los Angeles. I’m thinking about a woman whose husband was killed in Iraq, and she was destitute, and she realized she was going to get evicted if she didn’t do something.

She started buying multifamily. And a few short years later, she’s owning 123-acre horse farm north of Dallas. And that’s where she’s raising her kids. And so, just the amount of change and the quickness of the change in somebody’s lives that this business can do. My mom used to work here, and sometimes, I walk by her office and moms love to tell people what to do.

But she’d just say, “You got to do it.” It’s just amazing. People come in here and they have nothing. And two or three years later, they’re rich. And it was just so amazing to her or my Aunt Edna, they both used to be here. And they’re just at the family parties, they would just talk about it. So, it’s amazing.

Kim Lisa Taylor:

Yeah, it is pretty amazing. And I’ve seen that same thing happen with our clients as well, that the changes are pretty profound. I’ve seen people start buying $3 to $5 million properties, and six years later, they’re buying $30 to $50 million properties. And then, their lifestyle has completely changed. And these are people that have come out of Dave’s program. So, all right, well, we’ve got some Q&A, but before we go to the questions, I want you to tell us about some upcoming events that RE Mentor is doing.

David Lindahl:

We have Ultimate Partnering in Phoenix, October 21st. Yeah. Kim is always there. She’s going to do a presentation this year as well. But Ultimate Partnering is we’ve been teaching since 2002. We have our alumni students come back, people that have really, really done well. And then, we have newer people that have never been to the event as well.

And they get to mingle with each other. They get to know each other. The one thing about our community, it’s like a big community of love. Everybody wants to help each other, help each other become successful. So, at that particular event, the one remark that we get from other people that have been to that event for the first time is, “I can’t believe there are so many people doing deals. I’ve never been into an event where there’s so many people doing deals.”

So, at that event, you’ll be able to meet money partners. They’re alumni students that have done very well. They’re looking to sponsor other people’s deals and bring capital. There are people that are bringing deals. There’ll be a ton of deals there that you can invest in if you’re looking to invest in deals.

And then, there are business partners. We’ve had so many different companies being formed from Ultimate Partnering. I think of the Quantro Group. They came in 2009, five of them got together. It’s unusual that five people will get together and build a company. But between 2009 through COVID to now, they have done over 24 deals together. And they all met at Ultimate Partnering.

So, networking is what it’s all about. And then, there’s great education from the front of the room as well. So, that’s ultimatepartnering.com if you want to take a look at that. And then, we have Multi-Family Millions bootcamps on a regular basis. You can go to rementor.com or call the office, (781) 878-7114, and they’ll tell you when the next one near you is going to be.

Kim Lisa Taylor:

And Private Money Bootcamp.

David Lindahl:

Yeah, Private Money Bootcamp is next weekend.

Kim Lisa Taylor:

That’s right. That’s right. In Washington, DC.

David Lindahl:

Kim teaches the attorney side. When she said I was at the very first Private Money Bootcamp, I didn’t do that bootcamp until we were … when was it, 2007, right?

Kim Lisa Taylor:

Yeah.

David Lindahl:

Five years after I started teaching. Why? Because I was afraid that people were going to misinterpret something I said from the stage. And then, I’m going to go up, and screw up a deal, and then they’re going to go back to get me. And then, I finally thought, “Well, you know what? I’m going to have an attorney just teach everything. In that way, if somebody comes back, they can go back at the attorney.”

So, Kim teaches the attorney part, and then Bob Bowman, one of my partners, he teaches the dialogue that you have, where to find your investors, and how to talk to them, what to say, when to say it. It’s great. It’s a really, really good event.

Kim Lisa Taylor:

Yeah. Yeah, it’s a great event. I love that event.

David Lindahl:

You would have to call the office for that.

Kim Lisa Taylor:

Or it’s all available on your website as well. If you go to RE Mentor, and then go to their live events page, you can sign up for any one of those.

David Lindahl:

I have a new website called passivefornow.com. And that’s for passive investors. If you want to see the deals that we’re doing, you can go in there, you can sign up, and then we’ll show you what we’re doing. You don’t necessarily have to invest with us, but if you’d like to see what’s going on, do that. If you want to be an active investor, go to rementor.com, or a good passive investor, also, rementor.com.

Kim Lisa Taylor:

All right. Well, let’s get to our questions. So, someone asks, “I’m in the middle of a negotiation, can you send me a replay?” We do send out the replays, but it usually takes us a little while to process them, so maybe in a week or so.

Let’s see. Brian asks, “I bought a small multifamily at a 7.75% interest rate with a 30-year debt service coverage ratio, or I guess 30-year maturity. I was hoping to raise rents and refinance next year based on the Fed’s commitment to raise interest rates, and anticipated reduction of value, and increase gap rates. Do you think that will happen or should I just plan to hold it through the market shift?”

David Lindahl:

So, that’s such broad information. It’s hard to analyze because there’s a lot of questions that go on there. What market are you in? Where are your rents comparable to comparable properties in the area? I’ll be happy to analyze that for you. Call the office, (781) 878-7114, and I’ll be happy to sit down with you and analyze that particular deal in that particular market.

Kim Lisa Taylor:

That’s very generous with you, Dave. All right. Lewis asks, “What is the name of the last book that Dave mentioned?” I did put the books that Dave mentioned in the chat, so if you can access the chat, go down to, open up the chat, and then if you look at the three dots that are just the right of where you would type your question, you can right click that and copy that chat. So, just look in the chat.

Let’s see, Catherine asks, “How likely is an investor going to invest when there’s no pref return being offered?”

David Lindahl:

Very unlikely because the pref is pretty much the standard.

Kim Lisa Taylor:

I guess I would say, if you can show with your underwriting that they’re going to get at least as much as you would offer with a pref or more within the first two years, then you probably can offer that. You can do a straight split deal. But if you’re underwriting only shows that they’re going to be getting 3% or 4% for the first couple of years, that’s going to be a really hard sell.

David Lindahl:

Your last point was really important. That’s true. Because people don’t like to not have cash flow during the first year, especially if you’ve trained them to have cash flow. But just let me reiterate one other point, is remember, you are competing against other people and other people’s deals. So, especially nowadays, where social media is so prevalent, and there’s so many syndicators out there.

And they’re not looking to sell any type of training, they’re just looking to get people into deals. They’re providing content, and they’re bringing investors in, and they’ve got deals that they’re providing on a regular basis. So, know that you’re in competition. If you have your own investor list and they’re trained, then you can certainly offer something like that. But just know the marketplace that you’re playing in.

Kim Lisa Taylor:

Okay. Amran asks, “Dave, what’s your take on the DC metro market?”

David Lindahl:

Yeah. I like DC. The fact that DC always has a big change usually every four years because of the politics there, that’s big. It’s usually the first market to come out of a recession, so that’s a plus as well. Actually, you know what? The first market to come out of recession is actually Minneapolis, Minnesota. Why? I don’t know, but it usually is. So, if you’re around that area, but DC, I like.

And here’s the thing with DC, you’ve got Richmond in the south, you’ve got Baltimore over there, I guess, on the east, and they usually lag DC by about a year. So, you watch what’s happening in DC, and then you get ahead, you go into one of those other two markets or both of them, and you jump in, you get into the right submarket, and then you start playing the submarket game.

We call it “being ahead of the herd.” Some markets always rotate the same way in every cycle. So, through a local broker, they’ll tell you how the submarkets rotate. So, it always usually starts downtown. And then, after downtowns yield out, then the herd goes to the next submarket, and then the next submarket. So, the game to play is first, see what’s going on in Washington.

Realize, okay, this is going to happen in Baltimore, Richmond in a year from now. And then, jump into that primary submarket, start buying a bunch. When the herd comes, sell to the herd, and then buy into the next submarket or the next one after that.

Kim Lisa Taylor:

That’s fantastic. Okay. So, Nico asks, “What about RV parks?”

David Lindahl:

RV parks?

Kim Lisa Taylor:

Yeah.

David Lindahl:

Yeah. They’re mobile home parks, the RV parks. RV parks are a little bit different because you can actually drive them away. I have not invested in RV parks. I’ve had a lot of clients that have taken our apartment information and used it to invest in mobile home parks. But I personally have not invested in either, so I’m really not qualified to answer that question.

Kim Lisa Taylor:

Yeah, it’s very seasonal. So, if you’re going to want to do RV parks through, you’re going to want to get training from somebody who specifically trains people how to buy RV parks, what the deal is with those. Let’s see. We have someone who asks, “Given the high inflation rate, what percentage are you underwriting for expense growth rate in your line items over the next few years before buying a property?”

David Lindahl:

That’s a really good question. It’s usually a three and a two. A 3% increase in income and a 2% increase in expenses. That is market driven as well. The thing to do is to get a good lending broker. We use Eric Stewart, he’s awesome. And every market has their own expense rules of thumb.

So, depending on what market you’re in, Eric will tell you, “Okay, this is the way you look at that market expense wise. This is the way Freddie Mac and Fannie Mae are going to look at this market expense wise.” That’s how you’ll dial in those numbers. So, that’s the best advice I can give you there.

Kim Lisa Taylor:

Okay. And I would also vouch for Eric. He’s amazing.

David Lindahl:

What company is it? Atlantic Capital or something like that?

Kim Lisa Taylor:

Yeah, Atlantic Capital. Yeah. Be happy to refer anybody to Eric. He helped us. We had a property that just could not be refinanced. It stuck with us for two years and finally … it was crazy. We had that property in Ohio at a time that Ohio lenders weren’t lending to out-of-state residents. And then, we ended up buying a house in Ohio for my stepdaughter to live in.

And as soon as we owned a house in Ohio, then all these lenders said, “Oh, you own property in Ohio, we’ll lend to you.” So, two years later, Eric helped us. Yeah. So, you can’t get financed in a certain market. Maybe you have to buy a house there. I don’t know. That’s the word for us. It was crazy. Okay, what’s next? Steven asks … You guys have to keep your questions shorter.These long paragraph questions are really hard to answer in a call like this. So, I think we’ll have to skip your question, Steve. It’s a little bit too complex for this venue. Okay.

David Lindahl:

Email it over.

Kim Lisa Taylor:

Yeah. If you want to email it over? Where would they email that then?

David Lindahl:

They could email it to Jeanie, jorlowski, J-O-R-L-O-W-S-K-I, jorlowski@rementor.com. Reference this podcast and I’ll go in. After I leave here, I’ll go in there and say that we may be getting some questions.

Kim Lisa Taylor:

All right. Okay. So, here’s an anonymous attendee asks, “What are your thoughts on the California market, specifically the Bay Area, San Jose, Santa Clara, San Francisco, regarding the trinity formula?”

David Lindahl:

Well, again, the trinity works in every phase of the market cycle. It’s just the amount of deals that work can get in, and the trinity actually works. And the deals are going to be fewer depending on the phase you are. But those markets, the California markets are always good. Rent control in the entire state right now is something that’s a little different.

But if you can, during this reset, usually during the resets, markets like San Francisco and San Jose, the cash flow, they have an open window of cash flowing. San Diego, Los Angeles, which is those windows open and closed very short periods. So, when you can buy, buy. I’ve got a student, Jose Bellman, he’s been killing it in San Francisco for the last five or six years.

He’ll be on stage actually at Ultimate Partnering. He’s going to talk about how he does it, but that is one of the tightest markets in the country, and he’s just getting deal after deal.

Kim Lisa Taylor:

Okay. Manny asks, “What are your thoughts… “let’s see. That’s the one we just answered. “Can you repeat the name of web page to be a passive investor?”

David Lindahl:

Yeah. Passive for now, passivefornow.com.

Kim Lisa Taylor:

Okay. And let’s see, somebody said they had trouble trying to open it, passivefornow.com. So, you might want to look at that, Dave.

David Lindahl:

Hold on, alindogroup.com. We’re actually in the process of building passive for now, but if you go to alindogroup.com, that is the previous site going up to that. You can sign up a form and get the information.

Kim Lisa Taylor:

Okay. Andy asks, “What are the emerging markets you’re looking at right now?”

David Lindahl:

The ones I just mentioned, if you weren’t here, I’ll say it again. We’re very interested in Dallas, Salt Lake City, Utah, Orlando, Atlanta, Charlotte, and this one, I can’t remember. But those are the markets that will reset the fastest. They’ll have the shortest downtime. They’ll come out fastest and strongest.

Kim Lisa Taylor:

Minneapolis and DC were the other two that you answered.

David Lindahl:

Yeah. Minneapolis and DC are probably the first ones that are going to move.

Kim Lisa Taylor:

Okay. Gretchen asks, “Do you think there’s still any deals to be made in Phoenix metro?”

David Lindahl:

Yeah. As a matter of fact, I was just looking at my list, because I did have a list here of markets. Phoenix and Tampa are also on that list. The thing with Phoenix is it has 18-month cycles. So, it cycles really, really fast, which is good because understand how to play the cycles. The four phases of the cycle are just the emerging phase, and you can play quite a bit in Phoenix. So, Phoenix is always an exciting market, yeah.

Kim Lisa Taylor:

How about Florida Space Coast?

David Lindahl:

So, from Jacksonville down the Cape Canaveral, there was a time, I think it was about two years ago, that the amount of job growth that was being created in that space was highest in any area in the U.S. But it hasn’t come on my radar in the last year, year and a half. So, I’m really not sure as to what’s going on over there right now.

Kim Lisa Taylor:

All right. So, we have one more question. “Who was the debt broker that we mentioned?” That was Eric Stewart of Atlantic Capital. If you need a referral to Eric, you can email me, kim@syndicationattorneys.com, and we can get you that referral.

So, Dave, thank you. This has been completely amazing, as always. The amount of information that you are willing to share with people is just mind-boggling.

And I hope everybody got a lot of value out of the podcast today. If you want information about RE Mentor, go to rementor.com. If you want information about us, go to syndicationattorneys.com. There, we have an entire library of over 60 different articles, a bunch of frequently asked questions, all of our previously recorded podcasts.

Also, podcasts that I record for other people where you might learn more of a broad overview of syndication where they’re asking me questions. Those are all posted there. You can get a free copy, a free digital copy, of my book. I am coming out with a second edition within the next couple of months. And if any of you don’t know, Dave Lindahl wrote the foreword for my book.

So, that was an amazing boost for us as well. But at syndicationattorneys.com, if you want, you can schedule an appointment with me or any of our staff, and we’re always happy to answer your questions about syndication as well. So, thanks so much, Dave.

David Lindahl:

Can I say one more thing, Kim?

Kim Lisa Taylor:

Yeah, go ahead.

David Lindahl:

Wait, wait, wait. Years and years from now when we’re old, and gray, and we’re sitting on the front porch, my front porch and we’re reminiscing, I’m going to say remember when I was your first YouTube guest ever.

Kim Lisa Taylor:

That’s amazing. All right. Yeah, you can go to our Raise Private Money Legally podcast. There are over 60 podcasts there already. We’re happy to have you follow us on our podcast platform, and it’s been an amazing journey for us as well to ride along on Dave’s coattails, and learn from Dave, and be able to help our clients become successful.

And I think we share a lot of the same clients. So, that’s just been an amazing journey for all of us, I think. But all right, everybody, have a really great day, and we’ll look forward to seeing you on our next podcast.

Are you ready to raise private capital?

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★★★★★

“Very useful, no-fluff knowledge!!!!”

Kim Lisa Taylor explains in simple language all the concepts of Syndicating a deal and do it right!!! She and her team members are true professionals. She has prepared over 26 PPM & Docs offerings for me and my companies. I highly recommend her services‼️‼️‼️🙌🙌 Thank You! Kim.

Vinney Smile Chopra
CEO of MONEIL Investment Group

★★★★★

“Kim is phenomenal and highly qualified”

Kim Lisa Taylor is amazing at what she does: representing her clients and holding the highest fiduciary interest for her endeavors. A phenomenal and well educated individual, I recommend anyone to look into her podcast and legal services seriously!

Apple Podcast Listener

★★★★★

“Great info!”

Attorney Taylor provides excellent information that even seasoned capital raisers tend to overlook or need a refresher on. In fact, the semi specified offerings are another way for structure that I will be looking into. Thanks Kim! These pods are great!

Kevin Dureiko
Principle Fund Manager at BirchDobson.com

Are you ready to raise private capital?

At Syndication Attorneys LLC, we are committed to your success – book a consultation with one of our team members today!