Listen to hear Mike Vann discuss how he excels at his W2 job while building a powerful real estate portfolio. Mike has purchased duplexes, completed single family flips, bought both a 16 unit and a 55 unit deal for his own portfolio and now syndicates large scale multifamily communities alongside two business partners. It's not just about the money for Mike. Mike has a heart for serving and giving back! He wants to impact tenants in his properties, limited partners invested in his deals. And help new investors looking to learn how to buy multifamily. Most importantly he has a strong Christian Faith and wants to create a legacy for his children!
Table of Contents:
- Where To Listen To The Podcast
- A Midwest Guy With a Heart for Serving
- The Prime Time to Learn How to Buy Multifamily
- How to Buy Multifamily and Boost Your Cash Flow
- Syndications and Syndicators
- Learning How to Buy Multifamily Improves the Wealth of People
- How the Definition of Success Has Changed
- Real Estate Is Creative
- How to Reach Mike Vann
A Midwest Guy With a Heart for Serving
Darin: Mike Vann lives in Springfield, Missouri. He works in the medical device field by day and focuses on real estate at night, and during his spare time. This guy should be relatable to many of you out there.
He works a W-2 job and knew that he needed to do something more on the side. So he sacrificed his nights and spare time to educate himself, and then he went out and took action. He built a $6 million real estate portfolio on his own. Then he started to syndicate large scale multifamily with two business partners.
This guy is not just focused on making money, but he wants to positively impact others. He wants to create a legacy for his children. He's a Midwest guy with a heart for serving.
Mike and I know each other from a mutual multifamily mentorship group. This guy is salt of the earth. He's a Midwest guy. He passes the beer test from my standpoint. We just get along really well and just a good guy.
One of the things I really like about bringing him on today is I've had a lot of guests on the show who have done tremendous things, over 1000 units but a lot of them are full-time real estate professionals. Today we're going to be talking with somebody that still has a W-2 job. He’s found a way to get into real estate and to up his game while still having a day job.
At the Mercy of Surgeons
Darin: Mike, appreciate you coming on. With that, can you help us understand, what is your day-to-day job? What's your day-to-day responsibilities and how did you get involved in real estate?
Mike: I've been in the medical sales business for about 20 years now. The past 16 years with the same company in the medical device industry. We're in the OR three to five days a week depending on a surgery schedule. A lot of that's not under my control as far as when we're in the OR. I'm at the mercy of the surgeons and all that. But it's a great job, you help a lot of people.
Darin: You've said you've been there for 16 years. How did you get involved with real estate?
Mike: The first few years I was in medical sales, I was with a pharmaceutical company. They're known a lot of times for going through periods of downsizing. After a couple of times of sitting by the phone and waiting for that phone call to see if I had a job. Then I was lucky enough to maintain my job through those calls.
Darin: Of course, they're going to keep the top guys.
Mike: But I like to tell myself, you're just a number at the end of the day. Anyway, after making it through, I realized that I need to have a backup plan. You see the late-night infomercials with the palm trees and the fancy cars and big houses and Carlton Sheets telling you how easy it is to do, and you don't even have to have any of your own money. I thought, hey, I can do that.
Learning How to Buy Multifamily
Mike: I ordered his course and it sat on a shelf for a while till that next phone call came and then luckily enough I made it through that. But then dusted it off and went on driving for dollars and found myself a duplex, and that was the beginning. My first property was a duplex. Then did a few different things from there, whether it's fixing flips, lease options, and then started buying multifamily stuff.
Darin: That's awesome. One of the things you talk about is, you brought up layoffs, man, and we're in the middle of COVID right now. There's been a lot of people that have been impacted by that. I've been in a number of different corporate positions, in sales and in financial accounting and in different roles. I've also seen people that have been impacted by some of those layoffs during different economic down cycles.
It's a little bit of a misnomer, that a lot of people think that a W-2 job is completely secure. But at the end of the day, you're always at the whim of your superiors and they could leave the company. Either be laid off or decide to leave for a better opportunity. Then, all of a sudden, somebody comes in that's new and they want to bring in their own new people. And you could be out even though you're doing a fantastic job, just because there's new people that came in above you.
Mike: That happened to me at a previous job, actually. Everybody in the company knew I was set up for the promotion. A regional guy, new regional vice president came in. He brought his own group in for the area manager position that opened up.
The Flipping Stuff
Mike: That's what caused me to leave the job and go on medical sales.
Darin: Look, there's a piece of me that can't fault the person that comes in because they've probably developed a team that they trust. They may have done it in two or three other companies. And they just take that same team and go redo what they did.
Mike: The known versus the unknown. He was de-risking his option.
Darin: One of the things I heard you say was, you wanted to trade another way of making some income. That was one of the reasons why you went after real estate. You started with a duplex, and a lot of people, that's the way they get started. They buy their single family or they buy a duplex. That's a common theme.
Some people stay there, and they just stay owning a few duplexes or owning some single family, but you decided to go bigger. I recall you ended up buying some property that was a little bit larger, but you did that before syndication.
Mike: I went from that duplex and then bought a few single family homes and mostly was into flipping. I had a background in construction. My family had a construction company. I cut my teeth doing that kind of work. So, the flipping stuff was natural to me. When I moved to Springfield back in 2005, got into the market a little bit.
I started doing some flips and flipped a few houses. Then 2008 hit and because I was not as educated as I should have been, I stopped. My thought process was if no one can get credit to buy my flips, then I need to stop flipping.
The Prime Time to Learn How to Buy Multifamily
Mike: In all actuality, that was the prime time to start buying for buy and holds. Yet, I didn't know that.
Mike: After I stopped, I had time to start educating myself around 2009 or so. At the end of 2009, I started putting feelers back out. I realized I needed to get back in the game. I put feelers out, talked to my contacts in the banking industry and the real estate brokers I'd met in the past. I put the word out that I was looking and wanted to buy some properties.
A friend of mine was the president of a bank and he actually had a broker come by. I talked to him about a bank-owned property from another bank, not his. He's like, "I know a guy." So, he called me. I called the broker and ended up buying a 16 unit bank-owned property and got a phenomenal deal.
Darin: One thing you said there was, you told people that you were looking. That's something that's so important if you want to get involved in anything, if you're starting your own business. Or if you're getting into real estate, if you're making a career change, you need to tell as many people as you can. Shout from the rooftops, because if people don't know you, or don't know what you're doing, they can't help you.
There's some people that are out there who just legitimately want to help you. There are other people that will be judging you and will be looking at you. And there's probably some people that are looking, they're jealous, and they want you to fail. But there are legitimate people that would like to help you if they know.
Taking Action and Making the Call
Darin: What you did was you told a lot of people and then that bank president knew you were looking. He told you and then you took action and actually made the call. It led to a great 16 unit deal. From my recollection, you did pretty well on that deal.
Mike: Yes. It was a five-year-old property townhouse style. It had just been built by the builder and he managed it and did that poorly. He was a great builder but not a great manager. The bank had taken that back. So, I bought it and cured some deferred maintenance on the property and rented it. Got it filled up and raised rents over the years and then exited that property.
I'm a buy and hold investor personally, but when the opportunity came to sell it to the guy who had bought the properties on either side of me, I named my price, 785 and he bought it. I was like, "Oh, no. Now, I actually have to sell it."
Darin: You had a decent profit on that deal.
Mike: I did a 1031 into a 55 unit apartment complex down in Arkansas which is about three hours away. But it was in my hometown where I grew up, down in Fort Smith. Knew the area, it's a great area right across from the highly-rated junior high school and next door to the highly-rated elementary school.
Actually found that property through a Facebook group that I was part of. I bought it directly from the owners and that was an interesting story. I bought that property just before you and I met. A couple of months before you and I met through that mentoring program.
Things I Wish I Had Done Differently
Mike: Like I told you before, I learned a few things that I wish I had done differently. Or had known prior to buying that 55 unit. But was able to take those lessons that I learned quickly, implement them and make the changes I needed.
Darin: What were some of those lessons?
Mike: First is financing. I’d done everything through a community bank, commercial lender there that I was friends with and developed great relationship with. He says he'll finance me pretty much anywhere I want to go. It was a recourse loan.
It's also limited. I did get 80% financing leverage and even financed some construction costs for me as well into there in addition to the 80%. But it's a recourse loan, and it's only a 20-year amortization. So, my payment's a little bit higher.
Darin: That makes a big difference.
Mike: It was such a good deal even at that, I still make pretty good cash flow on it. But something else I learned that was probably even more important was the fact in the asset management piece of it. My thought at the time was, if I'm going to charge more rent, I've got to have a nicer product for the person to live in.
Darin: Which makes sense.
Mike: I started rehabbing the interiors of the units. But we weren't really getting any new renters, much less people that wanted to pay the higher price. Like I said, I'd been to a meeting with you guys. We had met and talked to some other operators there. I quickly learned that the first thing I should be doing is investing property or money into the exterior renovations to be able to drive more traffic.
Giving a Better Community List
Mike: There's a couple of things that actually let the people that currently live there know that you care. That you're willing to invest money into the property to give them a better community list. So they can go out and tell their friends and help you create community.
Mike: Second, it helps erase the stigma from the neighborhood around you that you're taking this property and improving it and putting money into it. All the people that drive by and see that every day know there's a change going on. So, it attracts you into the property where they can actually get there and go see the inside of the units that you've already done.
Darin: I wouldn't have known that either until I got involved with this group and other operators. It makes sense because you could almost picture driving down the road past a multifamily property that just has not been touched in years. You go buy it and you're like, I would never drive into that place and look to rent.
But then all of a sudden, if you're driving by there one day, and it's got a fresh coat of paint and they're putting up new fencing, then all of a sudden, it triggers something in your head, wow, they're investing money. That place could turn out a lot nicer than I thought it ever could.
Mike: I proforma’d that at a certain level of rent, and was actually almost able to double that.
Darin: Double what you thought you were going to get? Give me an example, like a one-bedroom or a two-bedroom, either one. What was it when you came in, what was your pro forma? What is it now?
How to Buy Multifamily and Boost Your Cash Flow
Mike: Whenever I came in the one-bedroom, I think it was 365. Then 425 for the two bedrooms. I was thinking 485 for the two bedrooms and maybe 395 to 405 for the one-bedrooms.
Darin: So, 365 to 405 you were thinking for the one bedroom. What is it now?
Mike: Now, the two bedrooms are 565 and one bedroom is 515.
Darin: And you thought you were only going to get to 400, 405. That's huge.
Mike: It helps with that 20-year amortization, being able to increase rents that much really helped cash flow. When I refi it on a longer note, then it'll really boost cash flow.
Darin: There's probably a good large percentage of people that are interested in real estate or know real estate. But there's probably some people that don't know everything about real estate. We just threw around a term earlier, 1031.
What all that is, it's a tax law that allows you to take the gain in the property and roll it into another property that's either the same size or larger and not have to pay tax on that gain. Would you mind if I asked you what you paid for that 16 unit?
Mike: I paid 1.4.
Darin: No, the 16 unit.
Mike: Oh, 16 units, 450,000.
Darin: 450,000 you told me you sold it for 785,000. So, you made 335,000. If you were to pay tax on that, you'd have a six-figure tax bill on that, most likely. You were able to take advantage of this tax law, 1031 exchange and not pay tax on that.
Creating Wealth Out of Thin Air
Darin: That allowed you to leverage into a larger property because you were able to take all of that gain and roll it in. You went from a 16 unit to a 55 unit. That's a big jump.
Mike: It is. Really did all that with very little additional money out of my pocket.
Darin: It's amazing. I have only gotten into real estate two and a half years ago. When I talk to real estate investors and just hear the wealth-building that has happened and how it compounds because it's so tax-efficient, it's really incredible.
Mike: It's amazing that you can create wealth out of thin air with real estate. Just by finding a piece of paper, you can create equity.
Darin: Right, but what's one of the biggest challenges for people?
Mike: Taking action.
Darin: It's fear and taking action. The fear holds people back from taking the action. Some people will go through the process of getting educated, reading books, listening to podcasts. Maybe even going to meetup groups. But, actually pulling the trigger, look, I was one of them. I started my business in 2007 and that was scary.
I wanted to get into real estate a lot sooner, but one, I was focusing on the business. Two, whenever I would look at real estate, it was just different for me. Like taking that first step, doing that first deal was scary. But then you learn from it, and then it's not as scary.
Mike: For sure. Even though I'd been investing for years but before when I bought that 55 unit on my own, man, my knees were knocking.
Darin: I'm sure they were.
Things You’ll Love About Learning How to Buy Multifamily
Mike: You talk about taking action. One of the things that I like about what we do now as syndicators is, people that do have a great W-2 job. Or they like what they do and they don't want to invest the time in going out buying a property, managing a property, and all the other things that we do.
By offering what we do as syndicators, allowing people to have a fractional ownership in an apartment building, and invest the money that they have earned through their W-2 or their retirement fund or whatever the case may be and giving them a good return on that money allows him to accomplish the best of both.
Darin: I couldn't agree with you more. That's one of the big whys in terms of why I even started this podcast. One of the things I love about the real estate business and the syndication business, and my other business, all of the income and all the profit comes to me and my family.
I syndicated a 76 unit deal, and we had 44 limited partners. The thing that gets me excited is as we increase the value of that property, I'm helping increase the wealth of those 44 families. That really charged me up, and wanted me to get the word out to more people.
I've been around a lot of wealthy people. I'm 50 now, but I was 48 when I got involved in real estate. I didn't have one person offer me the opportunity to invest in one of these deals.
I was one of the guys that you talked about, I was making really good money, I was paying a lot in tax.
Igniting the Fire and Clicking on the Light Switch
Darin: I would have loved to have taken some money instead of putting in the stock market, put it into these deals. But I just didn't know about it.
It's like a hidden world. You get so many different offers to invest in all these different deals. But until you get involved with a lot of like-minded people, you don't even know that these opportunities exist.
Mike: Everybody has the opportunity, typically to get into a 401k or some kind of mutual fund through their job and so forth. Even though I've been in real estate investing for all those years before I joined the mentorship group, I never even knew what a syndication was.
I didn’t know there was the ability to find the opportunity to invest, to pool money together to buy a large apartment building. Through your podcast and other content creation on social media channels and things like that. Even getting people to know that this is even an option is great.
Imagine the 44 families just on that first deal that you did that just beside the money that you're going to make them, think about how you're going to affect their families and their kids for generations. Potentially by igniting that fire and clicking on the light switch for them, on what this can do for them and their kids and their grandkids even.
Darin: One of the investors, he's been doing it for a long time, and my deal's not the first deal he's invested in. He's created an LLC, and he's gotten his adult children to be members of that LLC.
Syndications and Syndicators
Darin: He's exposed his children to it because he saw the power of it. I think it's just an amazing vehicle, and is very tax efficient.
Now, you mentioned a few times syndications and syndicators. A lot of us know what that is, but not everybody does. That word can be intimidating without knowing. You did define it. It's just a group of people that come together to buy a larger asset than they could buy on their own. But it's an intimidating word if you don't know what it is.
Mike: Depending on what shows you, it could be a crime syndicate.
Darin: The other thing that I didn't know and a lot of people don't know is that you can actually invest with your retirement money. I didn't know that. The bulk of people, the bulk of their investments are in retirement vehicles, whether they're IRAs, or 401k's or whatever. I passively invested in seven deals. When I went to invest, I was given the option, hey, you can use retirement money.
I was like, "How do you do that?" They're like, "Well if you have an IRA, you set up a self-directed IRA. There are certain companies that specialize in that and you just transfer the money over there. Then that money gets used to go into the syndication. It really just opens up a whole other world."
I still have money in the stock market, but I'm so glad that I pulled a lot out to put into these hard assets that you could drive up to. It also gives me the ability to talk to the people that are actually running the deals. I can't call up the CEO of IBM if I invest in IBM stock.
Outwardly Focused Versus Inwardly Focused
Darin: Now, you do 55 units. You're making a lot of money for you and your family. But now, you joined the group and you say, "Hey, I'm going to get into syndication." You decide you're not going to do it on your own this time and my understanding, you partnered with a couple of guys. How'd you meet your partners? How did you guys decide to work together, and what kind of deals did you go after?
Mike: When we joined this group, we go to these networking events, and so forth, and have beers with great guys like yourself. The reason you join a group like this is to get around people who are doing what you want to do and are where you want to be. We join this group, and we meet these people, and form partnerships. I met a few different people that were operators and so forth.
I formed a couple of different partnerships. I’ve done some deals with a couple of different partnership groups before I met my current partners, Carl and Rodney. We had known each other socially through the group and we had talked about doing deals together.
After I'd done a couple of deals with other groups and then did a couple of deals of other groups, we were like, "Well, let's do a deal together." We set that as our focus towards the end of 2018. By early 2019, we had found an asset to purchase together.
Darin: You picked the two partners. What was your criteria for picking Carl and Rodney?
Mike: Have the beer test. You want like-minded individuals. You want guys that, for me at least, it's important to be outwardly focused more than inwardly focused.
Giving People a Better Lifestyle
Mike: I believe we're all here for a higher purpose, which is to help other people more than ourselves. These guys have the same mindset. Everybody likes to make money, but that's not the only thing we're in it for.
Being able to take an older rundown asset, and improve that for the people that live there and giving them a better lifestyle is important. That was a big part of it. They're just nice guys you like to hang out and have a beer with.
Darin: You pick your partners, the next step is you have to decide. "Hey guys, where are we going to focus? What market are we going to go after?" How'd you pick the market?
Mike: I live in Springfield, Missouri, Rodney lives in Oklahoma City, and Carl is in DFW. We have a triangle around what we call the Mid South; Midwest and Southern states. These areas are great landlord-friendly areas that you can still get decent cap rates.
That generates some good cash flow. We wanted to invest in an area where we could have strong market fundamentals. At the same time, we could drive there within a few hours if needed. Because we were very active owners.
We found this asset in the Tulsa MSA, the first one that we had bought together in a town called Pryor, Oklahoma. A town of 10,000 people, probably 40 minutes east of Tulsa.
A place I never would have imagined buying an apartment complex but Google was there. It has an interesting story. They came in about 2011 and invested probably close to $2 billion in that economy.
Darin: In that little 10,000 population town?
An Abundance Mindset Versus a Scarcity Mindset
Mike: There's a mid-American industrial park, has about 80 companies there.
Darin: I saw that deal come across my email. But you gotta be shouting that across the laptop to let me know that. I did not invest in that deal, and it sounds like I should have.
Mike: It's killing it. Our pro forma was 12% cash on cash and we're kicking that out. Just like everybody, we pulled back during this COVID stuff to see how things were going to go. But we've increased occupancy and had record collections every month since. We have made the decision to start reinitiating distributions and we'll kick it out here next month.
Darin: Good stuff. You mentioned surrounding yourself with like-minded people. When you're in our group, and when you're looking at social media that we focus on, on multifamily and whatnot, you see that type of stuff over and over again. Surround yourself with like-minded people but it is so true.
When you get around, and you're in a room with all these people, that guy's done three deals, five deals, six deals. He owns 500 units, 1000 units, 2000. It all of a sudden makes it less scary because you have all this knowledge, all this education and all this success surrounding you and cheering each other on.
That's something that I've been in a number of different industries and I've never seen anything like this multifamily industry where people just help each other. It probably goes from the standpoint that you really have to partner with people. Just one person after the other person helps the next guy, and I love that.
Mike: Completely an abundance mindset versus a scarcity mindset. It's a team sport like we always hear, and it really is.
How Faith Impacts the Day to Day Business
Mike: You maybe even competing against some of the guys that you know for the same deals. But at the end of the day, you still go have a beer and congratulate them.
Darin: During, I don't want to, I want to win. Then after, regardless, win or lose, then let's go out for a beer. You didn't use this word, but I know you, I've heard you talk about it. When you mentioned outwardly focused, it's pretty apparent. Talk about faith in your life. How faith impacts your day-to-day life and how you do business?
Mike: Faith is very important in my life, and it always has been. I've always felt the presence of God with me throughout my whole life. Even when I was at points in time where I was furthest away from Him. I always felt His hands around me, pulling me back towards Him.
It's very important to me, I was raised in the church with my grandparents. I was raised with a single mother. She wasn't really involved in church, but my grandparents were. So I'd spend every weekend with them. Spend summers with them in vacation Bible school and all that stuff.
Faith has always been an important part of my life. I got married when we had kids. We were going to raise our kids in the church. We've done that. Throughout that process and as maturity, you realize that it's more important to serve others than yourself and you actually get more out of it. Mission work is a big part of what we do, and we've involved our kids in that.
Darin: How do you do mission work?
Learning How to Buy Multifamily Improves the Wealth of People
Mike: Variety of different ways. Involved in little projects here and there with the food pantry. We do a lot with the homeless community here in Springfield. We've done a couple of international mission trips. One to Ecuador, and one to Brazil. That was a lot of fun.
It's really more rewarding actually doing the work than it is writing a check. A lot of people can write a check, but your time is the most valuable resource we have. Donating that along with the check makes it that much more impactful.
Darin: I'm feeling like accountability is on me right now because I am a check writer.
Mike: There's nothing wrong with that.
Darin: I believe in the Big man upstairs. I try to start my day by reading a chapter of the Bible every day and praying. I go to a Christian church and tithe and I feel like you. Everybody has ups and downs in life and different crossroads decisions and I've turned to God to help me. When we talk about fear, help me push past the fear.
You don't know what's coming, He does. But I have tended to be the guy that focuses on writing the check and not going out and doing as much as you said, going to the food pantry. I feel like serving is talking with other people and helping them, motivating them to better their lives. Also, in these syndications to try to improve the wealth of other people. I feel that that's where my service level comes in.
I've been living in Dallas for over 10 years and I was Deacon in a church down in South Florida. I remember being part of a men's group there.
The Sacrifices You Have to Make
Darin: One weekend, we all went to an old church or something, and we all painted for a day. It was all the guys from the men's group. I'm still part of a men's group on Monday mornings and now. But going out and doing that, I remember there was a camaraderie that was different.
Mike: There's a different feeling.
Darin: It was a different feeling. I don't know why I don't take advantage of that more. I guess you're putting the fire in me. It's like, people know that, if they work out, they're going to have more energy. They're probably going to eat better.
Mike: I don't work out.
Darin: Well, you should.
Mike: You're right. My wife is doing that for both of us. Early on, I didn't have money. All I had was my time to give. Just over time, I implemented the other.
People serve in different ways. Whether it's out swinging a hammer or whether it's ministering through conversation. Don't feel bad about not being able to swing a hammer, man.
Darin: No, I get it, and I'm not a handyman. I change the light bulbs in my house and that's about it. I've got golfing buddies that make fun of me all the time. Talk to me about some sacrifices you've had to make in your life to better your life?
Whether it's climbing the corporate ladder or whether it's trying to find another revenue stream like getting into real estate. Or it's your wife deciding to train for something or just become better fit. There's a sacrifice that takes place. Talk to us about some sacrifices.
Advice to People Who Wants to Learn How to Buy Multifamily
Mike: Probably the biggest physical sacrifice has been sleep. Early on, especially as you're building your business and educating yourself the last thing I want to do was sacrifice family time. A lot of my education and learning and work I would put in would be after hours. I found myself up till 1:00, 2:00 in the morning, getting up at 6:00 and doing it again.
Darin: That's an important point. We talked about earlier, you still have a W-2 job. You're working during the day, you come home, you have dinner with the family. Talk about school, whatever, try to have some family time. Then, you have a choice at that point. You could watch Netflix.
Mike: I don't really know any good TV shows that are on anymore.
Darin: You can watch Netflix, you can get in bed, you can lounge on the couch, watch sports if sports were on. There are no sports on. Well, actually baseball just started again.
Mike: That part for me was balanced.
Darin: But, you choose to, instead, invest in yourself, read books, listen to podcasts, educate yourself. Then now you're in a different realm where you're actually partnering with two guys. I imagine that you're underwriting deals late at night.
Or you're reviewing emails from your partners on how to handle certain situations, whether you want to pursue a deal. That's a sacrifice. There's a lot of people that would like to get into multifamily. They can't just jump from their job. How do you do it?
Mike: Luckily, the job that I have does have some flexibility. I'm not tied to a cubicle from 8:00 to 5:00, if I'm not in the OR.
Growing up With a Single Mom
Mike: I may have a couple of hours downtime, I can make some phone calls, things like that. Use vacation time to go do property tours, things like that. You just have to be very intentional with your time, and schedule it out.
Darin: That's a great word, intentional.
Mike: Being able to prioritize the things that are important to you. Being intentional about scheduling those things in a manner that's not going to interfere with your primary objective of faith and family.
Darin: You mentioned growing up, you grew up with a single mom. Can I delve into that a little bit? Your father wasn't around?
Mike: No, I never met my biological father. I've never even seen a picture of him. I was about a year old and then they got divorced, and that was it.
Darin: Single mom, but you spent a lot of time with your grandparents? Who would you say provided the male influence on your life? Was it your grandfather?
Mike: Grandfather, for sure. I spent every weekend over there pretty much because as a single mom, she wanted to be out. Do what single people do. I spent a lot of time with them. They're the reason that I have a foundation of faith. Taught me a lot of the lessons that a young man needs to be taught growing up. I learned those from my grandfather.
Darin: Wow, be thankful that you had that. Not everybody who grows up with a single mom has that great foundation and support. Are your grandparents still living?
Mike: No, my grandfather passed when I was 21. So, 30 plus years ago, and grandmother was a few years after that. But my mom is still alive.
The Other Side of the Train Tracks
Mike: She got remarried to a guy when I was about 21, 22. He's a great guy. But he had a construction company. That's where I learned a lot of stuff about how to swing a hammer and all that kind of stuff.
Darin: Growing up, you may have one of these moments, you may not. But growing up, was there ever a time when you thought to yourself, I'm going to be successful? What did that look like?
Mike: Growing up poor, I was in a school district where there's a brand new school and lived in a neighborhood with track homes. Basically every third house is the same or whatever. My mom had gotten remarried, and they got divorced when I was in third grade. He wasn't really involved that much after that point either.
They did have this house that they had bought together. In this track home, this newer neighborhood, but it was actually just a spec home, little old house. On the other side of the school district were the big houses.
Darin: The other side of the train tracks.
Mike: Exactly. I played sports with a lot of the kids that were in those families. And I saw their intact families and the vacations they would go on, the houses they lived in. The cars their parents drove and the clothes they wore and all the nice stuff.
How the Definition of Success Has Changed
Mike: I always said to myself, I'm going to have that. I'm going to have a family and I'm going to get married one time in my life. I'm going to have nice things and provide for them the things that I see my friends doing.
Mike: I always knew or I was always driven, and had faith and commitment to be successful. But the definition of success has changed over the years. Used to be about a dollar sign and now it’s about a legacy.
Darin: How would you define legacy?
Mike: Having children that are outwardly focused. Having a legacy of being known as a giver, not a taker. Someone that loved their faith and family.
Darin: Wow, you're raising up your kids right. That's awesome.
Mike: You can provide them with the tools hopefully and whether they use them, it's up to them. They're not angels by any means, but just try to do the best you can.
Darin: How old do you think you were when you started to visualize all that? I'm sure you could picture it in your mind.
Mike: Fifth grade, probably. When I was in grade school I wanted to have that money. They would just be like, we go to the mall and do stuff. I go to the mall, eat the chips and salsa at the restaurant that was free.
Darin: That's what started your motivation. But as you mentioned, as you grew up, and you matured and your faith grew, your definition changed. That's admirable, and the fact that you're passing that on to your kids is also admirable. I try with my kids to instill the Christian faith.
Helping People Get Started With Knowing How to Buy Multifamily
Darin: But I'm probably guilty of talking more about, hey, start your own company versus working for the man. They're probably tired of hearing that. But they won't be able to tell me later in life that they didn't hear it, that's for sure.
Mike: You’re a good role model for them, you've done it. They've seen the success that you've been able to do, telling them exactly what you've done. And they've seen what the results can be.
Darin: They've seen both the good and the bad. Before starting the podcast, I was locked and loaded on a 210 unit deal south of Dallas. I thought we were going to win the deal and we came runner up. It really was disappointing because we put a lot of work into it. You know how it is when you put a lot of work into a deal and you don't get it.
They saw all the work I was putting in, they saw I didn't get it and they saw I was disappointed. It took one or two days to be bummed out, then I shifted gears and went down to a podcast conference. I learned how to get this thing started. Now, I get to talk to great people like you.
Help listeners know, if they want to get involved in a passive multifamily buy, how do they go about doing that?
Mike: Well, first of all, I would become educated.
Darin: What would you do to become educated?
Mike: Read books, listen to podcasts, learn how to underwrite and how to ask the right questions. Because anybody can make any deal look good.
Be an Educated Investor
Mike: But you have to know what assumptions they're making to make that deal look good. And if those are valid assumptions.
Be an educated investor. Don't just invest with your buddy that you like. Know what you're investing in, and why you're investing in it. What the upsides are, what the downsides are. But that can all be done through content, free content for the most part.
Darin: There's so much available these days, from Google and podcasts and books and private Facebook groups and free webinars. I would encourage people to get out and actually meet people.
Mike: Once we're able to do that again.
Darin: Today I had lunch with two other real estate guys. There are some people that are willing to get out there and some people that aren't. In any event, there's an app called Meetup and there are free meetup groups. You download the app, you put in either multifamily investing or apartment investing.
In most major metropolitan markets, you will find Meetup groups that just focus on multifamily. You can go and meet with syndicators and you go meet with other passive investors. I would encourage you to do that. Mike, what do you do for fun outside of real estate?
Mike: I played golf once this year. I used to do it more often, but between the day job, the family.
Darin: I play like once a week.
Mike: That's nice. I'll be there one of these days. Once I can ditch the day job, then I'll have more time.
Darin: What's the timeframe on that? You know what, somebody may be listening. Who knows if you want to answer that one.
Different Asset Classes in Real Estate
Mike: The blessing and a curse about a good W-2 job is it's a great job, but you have to replace it. I'm hoping within the next 48 months.
Darin: With that, what is the big stretch goal for Mike?
Mike: To retire in 18 months. From my corporate job.
Darin: Will you still do real estate?
Mike: Always. I'll do real estate till I die.
Darin: That's interesting because I met with a life insurance guy a little while ago. He was like, "Hey, Darin, let's back into this thing, when do you want to retire?" I was like, you know what? Before this real estate thing, I would maybe have had a date.
But I'm like, I don't want to stop doing deals. It's fun, I meet great people, make money, and improve properties. Why would I want to stop this? You know what, put on the max thing, I don't want to retire.
Mike: You retire from something you don't like.
Darin: Right. The other thing I like about real estate, which wasn't always the case in the corporate world for me, was that there really is no ceiling. In the corporate world, when you're in sales, you look at all the sales guys ahead of you.
You're chasing them and once you get to be where you're one of the top guys, it's hard to continue to exponentially go up. But in real estate, you could either always go bigger, or there are all kinds of different asset classes.
You could learn multifamily. Do 50 unit, then 100 unit, then 200 unit, then 500 unit and 1000 unit. Then you could decide, you know what, I want to do a shopping complex.
Real Estate Is Creative
Mike: I want to do an office building and I want to self-storage or I want to do mobile home parks. There are so many avenues to go with it that I love that because I love learning. At the same time, trying to make money and trying to do something I haven't done yet.
Mike: You're only limited by what's between your ears.
Darin: Mindset. You hear that term used a lot, but it's real.
Mike: Something else about real estate is the creativity, the way that you can structure deals. The types of deals you can do with financing, just all kinds of creativity you can put into real estate. Not only on financing, but as you rehab these places. It's really cool. It's so much fun.
Darin: It sounds really weird to a lot of people because I heard that before too, before I got involved, real estate is creative. You're just buying something, what's creative about that?
Mike: Like the toilet's all you do.
Darin: But it's true. Every property, a different owner could look at it differently what they're going to do with it. I don't know if you've read Sam Zell's book, Am I Being Too Subtle?
He's a billionaire, real estate guy. He talks about that creativity. He still loves doing deals because he looks at it like there needs to be an answer to every deal. That it has to be a way to figure out how to make it work for all parties. He loves that puzzle of trying to figure that out.
Mike: That's the most fun part.
Darin: I say that I think the journey is more fun than the goal.
Connect with Mike
Darin: Not knowing whether I could start a podcast, not knowing whether I could get my first syndication done. That's where your juices are flowing, when you're just doing the same thing over and over again. For a guy like me, it gets boring, I want a challenge.
Mike, I'm going to wrap it up here but I really appreciate you coming on the show. If people want to reach out to you, what's the best way for them to get in touch with you?
Mike: Feel free to reach out via email at Mike@tridentmultifamily.com or visit our website, tridentmultifamily.com. We're on social media; Facebook, LinkedIn, follow us on there or just give me a call 417-576-8850.
Darin: Listeners, this guy is a great guy. I know both his partners, they're great people as well. If you're looking for somebody to learn from, check these guys out. I hope you enjoyed that one. Until next week, signing off.