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September 6, 2022

Growing Up On Welfare To Now Owning Multi-Million Dollar Multifamily Portfolio With Sterling White [EP117]

Do you want to know how to turn your life around? Sterling White is a perfect example of how anyone can turn their life around. Despite coming from a difficult background, he was able to focus on his goals and achieve great success. He utilized real estate as his wealth vehicle and now owns a multimillion-dollar multifamily portfolio.

If you want to achieve similar success, then listen closely. Sterling is going to share with you the secrets that have led him to this point in his life – so you can apply them in your own journey. This is an opportunity you don’t want to miss. Listen and learn!

Table of Contents:

Five-Step Process For Passively Investing In Real Estate
Five-Step Process For Passively Investing In Real EstateGetting to Know Vanessa Peters

Multifamily Golden Nuggets from Sterling White

Multifamily Golden Nuggets from Sterling White
Photographer: Dan Gold | Source: Unsplash

Darin: Sterling White grew up on welfare and chose to focus on how to build wealth by expanding his mindset and being creative. He loves to help others learn how to find deals. He lives in the Houston area. And in addition to building a multimillion-dollar multifamily portfolio, he enjoys studying various philosophies. Sterling, appreciate you coming on the show.

Sterling: Yes, I'm super excited. Everyone, go ahead and get your popcorn ready. Because we're going to drop some absolute bombs and golden nuggets. And grab a bag as well, a paper bag or plastic bag, if you're more eco-friendly because we're going to drop those and you'll want to pick those up as we go.

Darin: That's awesome. So just a little bit on how I know Sterling. This is actually the first time I'm talking to this guy. But he's all over social media and he's created an awesome brand for himself. He's been on BiggerPockets and he's a big contributor there. And so I'm excited to have him on and share with the audience here. So with that, typically first question I ask is, how many properties and how many units you're invested in?

Sterling: So at this moment in time I own just under 200 units. I was up to about 580, or just over 500 at one point. But over the years there's been a really great time to sell.

Everything Is Larger in Texas

Darin: That's true. And we'll probably get into that. Because I have a lot of different syndicators on the show and there's some that are like, "Hey man, I'm selling out and I'm sitting on the sidelines, waiting for the correction." There's others that are like, "Hey, I'm continuing to buy because who knows if it's two months or six months or two years from now when the correction comes." So hey, why don't we start off by one, you're in Indiana. Is that correct?

Sterling: Oh, I'm in Houston, Texas now.

Darin: Did you grow up in Indiana?

Sterling: Yes, I was born and raised in Indianapolis and just moved to Houston in February of last year. Everything I would say is on the side of everything being larger in Texas is true, except my toilet. It's the same size as the ones back home.

Darin: That's funny. On that note, so I'm in the North Dallas area and I'm an East Coast guy from Connecticut. I moved here probably, I don't know, 12, 13 years ago. And I remember the first time going to a restaurant and when I ordered a beer, they were like, "Big or small?" I'm like, "How do you order a small when you're in Texas? Give me the big." And it's massive. So everything is bigger in Texas.

Sterling: And the smaller one is above average size, I would say.

Darin: Right, exactly. A small is a pint or larger. So hey, talk about finding deals. You're also big on off-market deals. So talk about both. How do you source deals and how do you leverage off-market deals?

Sterling: Yes, but first I did want to just give everyone that is not familiar with me, just a little bit of background on myself.

From Welfare to Multifamily

Sterling: And I'll give the CliffNote, SparkNote version. So born and raised in Indianapolis, Indiana, not so good parts of the city. Grew up on welfare. Section 8 housing, food stamps, twin brother. Single mother, as I may have mentioned.

I remember at one point, Darin, is that every day you never knew that if you would actually make it to the next day. I remember at five years old, both my brother and I were sitting down at the kitchen table, eating ramen noodles and cut-up hot dogs. Then as soon as we go upstairs, a bullet comes right through the back patio where we were sitting.

That was just another day living in the hood. And from that, is luckily mother ended up moving us out of that environment. And that's why it's really key, the people you surround yourself with because what happened is I formed a new friends group. However, my brother went back to that old environment and stayed with those friends and we took a completely different trajectory in life. So that's one thing I want to share with everyone.

Fast forward, how I really got started in real estate was my friend's dad owned a construction company. This is while I was in college, so about 19, 20 years old. That's when I fell in love with it. But not so much being a laborer because I was a construction worker. Then I started reading books, Rich Dad, Poor Dad, which everyone is familiar with that book.

I learned that the wealthy did not get that way by being laborers, they were actually investors.

The Story of Two Brothers

Sterling: So I started buying single families and partnered with someone who had the cash. Because I didn't have the cash, I actually owed the bank money. And then ended up scaling to 150 single families. Then in 2017, that's when I started buying multifamily.

Darin: That's huge. So I want to go back to your story real quick and relate it to a story that I was told when I was in kindergarten. We're sitting Indian style in the library of the school and somebody came in to speak and they spoke about two brothers. One very successful, the other one always in trouble, went into jail. They asked both of them a question, why do you think you ended up where you did? And they both answered it the same way. Because my father was an alcoholic.

So you ended up coming from that environment and decided you wanted something different. And so in order to get there, you needed to hang out with different people and learn different things. That's what I would say to listeners also is look, if you want to get into investing in real estate or starting your own business, whatever the case may be, whatever is in your gut, you need to get out and surround yourself with those people. Because your friends and family that are not investing in real estate, they can't give you the advice because they haven't been there.

Anyway, I just wanted to share that. Thank you for sharing that. And I'm very thankful to the big man upstairs that you followed that path. And congratulations.

A Single Family Nightmare

Sterling: One thing I also want to piggyback on when it comes to that is that same story that you mentioned. Earl Nightingale has a similar story with two individuals that say that. Is that easily, and this goes into the growth mindset versus victim mindset. I could have used that circumstance to say, "Whoa it’s me. I'm not meant to be anything because of this environment."

But I decided to say, "Well, I grew up in that environment. Hey, I can actually use that as fuel," which I still do to this day. That, hey, I never want to go back to that. Also, I want to be an ideal and a message for the kids in that environment that, hey, I know this is the common path that's pushed on you, drugs, illegal activity, all this. But here's the path that I took and here's the blueprint.

Darin: Yes, I mean that's huge. You can be an inspiration and a role model to those kids as another way. That's fantastic. All right, so let's get back to finding deals, off-market deals, finding deals in general, how do you source deals. It sounds like that's a scenario that you're very attuned at.

Sterling: Yes. And this started really when made the shift from single family. So having that many single families 150 or so is I would say, I wouldn't call it a nightmare. But it was quite a bit to be able to manage. Because one, it was self-managing, so there was a lot of infrastructure from the amount of employees and then also the transactions.

Multifamily Is a More Scalable Model

Sterling: So the 150 or so single families, it was about 110 to 120 transactions because these were a lot of one-offs. Lucky, maybe get a package of two or three. So in order to get to that one property, had to look at 10, 15, maybe 20. So it was a lot of volume with that.

Then took a step back and said, "Okay, now what's the more scalable model?" And then that's when multifamily made the most sense. Then made that shift and then started going through brokers. However, this was in 2017 where the market really started to heat up and people were paying 15, 20, 25% more than what we thought was conservative or even sometimes a little bit more aggressive of an offer.

And took a step back again and pivoted, which is when I really learned about entrepreneurship, and said, "Okay, well, why not beat the brokers to the punch and go direct to the owner?" Then that's when the process really started from there.

Darin: So if you're going direct to owner, I could be wrong. But I'm assuming that it's smaller-scale multifamily. So anywhere from 5 units to say 40 or 50 units. Because in my experience, the larger multifamily properties, 70, 80, 100, 200, 300 unit properties, the majority of that is brokered deals, whether it's off market or on market.

Sterling: So I would say yes to your question. However, in my situation, the first deal was a 46 unit, the next one was a 50 unit, then two 80 units and 156 unit actually all taking that approach.

Smile + Persistence = Closed Multifamily Deals

Sterling: What you said is that the higher the unit count you do go, the more sophisticated the operator. They'll say, "Well, I'll just list it on the market." But there is still some gems that are in there. And at that time, it worked out from a return on investment or return on time. Now it would be more even difficult to hit, especially once you get over or close to 100 units, or even I would say 40 to 50.

Darin: But that's interesting, I think you're the first person that really has talked about being able to find those direct to owner at that scale. At that level of 80, 100, 150 units. So that's interesting. What was the play with those transactions? Why did the seller sell to you versus marketing the deal?

Sterling: I would say a hundred percent, it was just my smile, Darin. That's all it was. I just said, "Hey, let's hop on a Zoom call." I smile, and they say, "All right, let's go. Let's rock and roll."

Darin: I told you listeners, this guy is smooth. He's a social media magnet.

Sterling: So in case anyone wants to replicate that, I'll figure out a way to mold my smile and then you can take that and insert it into yours.

Darin: That's funny.

Sterling: But I would say one of the things is that I was very persistent and then also creative was the thing. Then also doing that over a longer duration of time. So I was very targeted in the list, so targeting C class properties built around 1970. You could even say D class, but those age of properties in C plus to B minus to B locations. So very niche in that.

Creative Ways to Follow Up

Creative Ways to Follow Up in Multifamily
Photographer: Luis Villasmil | Source: Unsplash

Sterling: Then pulled the list, and then the primary touchpoint was cold calling. On top of cold calling, let's say an owner, they would mention, hey, not interested in selling right now. Because there are different types of not interested. So if they would say not right now, I would take different angles as a way just to stay top of mind. As an example, I would send a Rubik's Cube to owners with a small note that would say, "Hey, let's figure this out," as a prime example of a way to follow up.

Then also I would do personal visits. This was an 80 unit that I acquired in Louisville or however you want to pronounce that. So it would be Monday and then I would follow up with one owner and say, "Hey Bill, I'm actually going to be in town this upcoming Thursday. I'm going to enjoy putting my hand in your hand. I'm going to be grabbing some coffee. I can go ahead and swing by." So I would use that as a follow-up and then I would follow up with all the other owners as well.

An additional way, and this is one gem I would say is the value-based follow-up. Because on that one property, there was an owner right across the street and he needed some help with his renovations on his parking lot. So I helped him with finding a vendor as a prime example. So these are all the creative ways that I ended up learning to give you the upper hand over the competition.

Do Multifamily Business with People You Know, Like, and Trust

Darin: That's huge and that's creative and that's hustle factor too. And at the end of the day, people are people. People want to do business with people that they know, like and trust, and that goes for the seller. It wasn't really said, but part of it is you built a relationship and built the trust before a broker got to that seller and built that trust. Their job is to get out there and cold call and get those listings and you beat them to the punch.

It's the same thing on the broker side. I mean, look, if you are going after the larger deals and you want to use brokers, brokers are going to work with people that they know, like and trust. They're going to feed the deals over to them.

Then passive investors, they have a choice. When they get into the game and they want to invest their 50 grand or 100 grand, they're going to see a bunch of deals. Then they’re going to say, "Okay, who do I want to invest with?" Some people are going to want to invest with Sterling. Some people are going to want to invest with Darin. And some people are going to want to invest with somebody else. That's fantastic.

That's what life's all about. It’s you do business with people that you know, like, and trust. So I love that you spent the time and then you were paid for it basically because you bought deals, I'm sure at a much more attractive price than the marketed deals.

The Dilemma People Need to Face in Multifamily Investing

Sterling: And that's the dilemma that most people face is there is a lot that goes into this. A lot of follow up, a lot of rejection, which most people, they don't enjoy that. Which I would say you've got to detach from earth because there's rejection everywhere. But this is even more tougher I would say.

Darin: I recently met with a broker and I'm predominantly invested in multifamily, both LP and GP. But I'm starting to look at the RV space. And so I met with a broker and I'm like, "Look, everything I'm reading, if I went direct to these RV owners, I probably would get a better margin."

The broker was like, "Yes, you would. If you want to spend the time to do that, then do that. You have to set up the systems and processes and the time. Or you leverage the relationship with me. You're not going to get it at the margin that you would've, if you went direct. But you're not going to have all the headaches." So it's a decision point as well.

Sterling: Yes, and that's what I was actually going to go into and give you a prime example. The 156 unit that was acquired, this was just over $6.2 million. And this is in Indianapolis so properties are much more affordable. A broker minimally would've listed that for $7 million and I'm sure it would've got bidded up more than that.

The Risk of Uncertainty in Multifamily

Sterling: So that's just a prime example on the savings that you get. But then it's all the time invested, and then also the uncertainty. Because with these deals, you just never know which one you can end up getting under contract. So there's that aspect as well.

Darin: What do you mean by that piece, that end piece about you never know when you're going to get one into a contract?

Sterling: So let's say, when expanded to the Louisville market. From Indianapolis to Louisville, pulled all the apartments that were between 75 to 160 units and started to do the outreach and the prospecting is you don't know which one you could, or it could just not end up working out at all. So you have that risk of the uncertainty of that. So that's the other aspect.

Darin: Yes, but you have that uncertainty on marketed deals too. I mean, you have 30 offers and then-

Sterling: But you don't have as much as the time invested into that. So that's the other aspect.

Darin: I get your point there. So are you still doing that outreach or have you pivoted again and are working with brokers more?

Sterling: So at this moment in time on the acquisitions, I've completely peeled back when it comes to that. Because the return on time just was not there.

Darin: So you're going after the larger deals and you're leveraging brokers?

Sterling: Correct.

Wait-And-See and Then Diverse

Darin: So maybe you can talk to it because you've gone through it. It sounds like it could be a phased approach for some. I would like you to talk about mindset. Mindset, you can believe that you could only buy a duplex or a fourplex or a 8 unit and can't really buy a 40 unit or an 80 unit or 200 unit. But your mindset can also expand with time.

So it could be such that if an investor doesn't believe they could really achieve taking down a 100 unit. They just don't believe it in their head. They don't think that they could find the right partners and learn it. Well, maybe this outreach is a good approach to, hey, get a deal that's done, that's in a smaller 20 unit or 30 unit. And then if you're starting to go larger, maybe you pivot just like Sterling did. What's your thought on that?

Sterling: Yes, I would say that. And one thing I do, just want to backpedal as well that, Darin, when it comes to the acquisitions of properties, I pretty much put everything on hold all together. So on the wait-and-see and then diversing over the years to see if there is a correction that's going to happen. Because I have started to see a slowdown. So that's one thing I also want to premise.

Brainwash Yourself to Succeed in Multifamily

Brainwash Yourself to Succeed in Multifamily
Photographer: Brad Barmore | Source: Unsplash

Sterling: But also what helped me is through listening to Earl Nightingale, Jim Rohn, Tony Robbins, Norman Vincent Peale. I had so much positive reinforcement with how I ended up viewing the world. And just going out there and making things happen. Because originally, where I came from, the people such as my mom did the best she could with what she had. But it wasn't the information that I actually needed. So I had to remove a lot of that garbage, for lack of better words, and replace it with more empowering.

So when I started that transition from single families to the first deal. It was a 46 unit. It wasn't even daunting for me to be able to do that. And then after that it was a 50 unit, then it went from an 80 unit to an 80 unit and then doubled that to 156 unit.

At no point in time, I ever thought that, man, this is going to be daunting of a property. Because I just brainwashed myself to just saying that, okay, whatever this is, this obstacle or challenge, I'll figure out a way. This is why it's key to have the right people around you as well because the people around me were on the same page when it came to that.

Darin: Yes, that's huge. When you have other people on your team that have been like, "Look, this is another one of those, I've done this before. We got this." That gives a lot of confidence versus going at it yourself.

So talk about social media. I'm interested. I saw you said something about omnipresence in digital marketing. So talk about how you approach social media and your digital marketing and your brand and all of that.

Omnipresence

Sterling: I learned the omnipresence from GC. I call him GC, but Grant Cardone. I had him on the podcast a while back. This is one of the concepts he talks about is just being everywhere so people can see you and get familiarized with you. It's very similar to what Coca-Cola does with all their advertisement everywhere.

I remember being on the podcast, this was John Casmon's podcast and he really hit the nail on the head. That everyone's got a personal brand, whether they know it or not. And with social media, you can shape your personal brand and how people perceive you. So that's what all these tools are. How I view them for, versus going on there and being a consumer of the product is figuring out ways how to exactly leverage it.

How I view it is content marketing. One book that really hits the nail on this too, and I keep using that example, hits the nail on the head, but Jab, Jab, Jab, Right Hook by Gary Vaynerchuk.

The jabs are essentially the content marketing. Being value based in your messaging or five tips to put together syndication or just sharing your story. Then in essence your right hook is, hey, this is the upcoming deal that I had to invest. But from experiences, when you create so much value for people, you don't even have to actually go for the right hook.

Darin: What's your advice because I've had people say, "I want to get my first deal. Or I want to go full cycle before I start putting something out on social media." I'm like, "Look, there's people in your network that are not in my network, that are not in Sterling's network, and they want to learn."

Understand Your Weakness

Darin: And they may relate more to you if you start saying, hey, look, I'm starting to look at real estate deals. They go along in that journey with you versus all right, you come back and you start posting and you already have five 200 unit deals under your belt. They may not be able to relate to that because that's not the position that they're in.

Sterling: That is a great point. I believe that person is just looking for a way to weasel out, or as an excuse, maybe not though. What I've learned, and this is exactly how I started before I even had my first deal was I was just documenting the journey.

And then also, I was on BiggerPockets in the forums, helping people who were where I was. Let's say they haven't even made a decision just yet to invest in real estate, but they're considering it. Or let's say they want to be in Indianapolis and they're looking at X, Y, Z zip codes, that's another way I would provide value and say, "Hey, just from my personal experience, I would consider that a C type neighborhood based upon these things." So those are ways you can also be of value to people.

So it's just understanding your weaknesses that you do have. And yes, it would be good and optimal in a way to get to that point to where you've closed on the deal. Then you could provide those success stories. But there still are people that are just beginning that you can also help as well. That maybe you're just two to three steps ahead. And they would really enjoy that knowledge that you have as you're just two to three steps ahead of them.

Light the Fire Underneath Someone Else

Darin: Yes, I completely agree. And I think that for me, and I think a lot of investors, I don't know if you went through this also. But when you first get in, you're thinking of it as how do I grow my wealth and my family's wealth? And then as you learn it and you start giving back, whether it's a podcast or a book or posting on social media or talking at conferences, whatever the case may be, it's like this ripple effect that you don't even realize.

So for listeners, man, you're just thinking about getting your first deal. But three years from now, there are going to be people in your network that are going to be asking you how you did it. Then you're going to help them.

Sterling: Yes, and you never know what you could share at the stage where you're at, that could just light the fire underneath someone else. And I've had people that I've been on their podcast and they say, "Hey, from those early days, Sterling, you really helped me get through some tough times and all that." And I'm just thinking, I was just sharing my story. Well, I'm glad that was able to help you. But people don't realize the impact that they have on others.

Darin: Yes. So there's wealth, financial wealth, and then there's just being a person that can help another person. Even when there's no financial gain to it. It just brings so much joy. So that's huge. So how do you find investors?

How Sterling Finds Multifamily Investors

Sterling: So this goes back to the digital marketing. So the content marketing 101 is just pushing out content. So there's one or two ways I would say that you can go about it. There's other ways that you could do, but there's the outreach, so the outbound, and then there is the inbound. The inbound takes more work, but the leads are more quality.

What that is, is such as, Darin, your podcast is a content marketing strategy from the inbound side. So an investor listens to your content and they decide whether or not, okay, well, I enjoy Darin, his content. He knows what he's talking about. He's also got a great smile, all these different things. And they decide, okay, well, let me invest with him. So that's a form of inbound marketing adverts.

Then the other approach is the outbound marketing where you're let's say, what I do on the acquisition side for multifamily is calling, let's say investors, a specific list. But just to go back full circle on everything. That's what I've done is just the content marketing. Putting out my messaging and story and then also value-based content. And that's a way to get investors into the funnel.

Darin: There's a twofold approach to it. One is each of us are syndicators that look for investors also, but we're also looking to help. I didn't know about this until four years ago that you could even do this. Invest in these large multifamily deals and I want to let more people know that they can do it.

Invest in Multifamily and Earn Passively

Darin: They don't have to just put their money in the stock market. And the returns are better and I feel like it's a safer place to be investment-wise, capital preservation-wise. And you have to be on somebody's investor database in order to get invited to a deal.

Sterling: And also exposing yourself to that also helps too in making the decision. Because this goes back to really the example of surrounding yourself around the right people. But also, taking the initiative too, because I always thought you had to exchange time for money, as an example. I never thought that you can invest in a property and earn money passively.

And then also the wealth building, that was never taught to someone who was in the environment that I ended up coming from. But it wasn't until I started exposing myself to the different books, going to the library, all of that, and then putting myself around the right people. That's when I was able to obtain different knowledge and information.

And then that's how, I would say for listeners too, how you're able to come across this. Because most of the time, investing in real estate, it used to be only for the wealthy in a way. Not being able to do it through syndication, but now we've since opened the doors up for that.

Darin: Absolutely. It's a whole another world. Look, I'm 52. You're younger than me. What are you, in your 30s?

Sterling: 31.

Jump Out of Your Comfort Zone

Jump Out of Your Comfort Zone
Photographer: Belinda Fewings | Source: Unsplash

Darin: I wish I had started way back when. I applaud you that you've gotten into it at such a young age. You have all these years of compounding of your investment and just rolling it over into, and growth ahead of you. So that's fantastic.

What about fear? I mean, people are afraid that haven't done real estate before. Even just doing your first single family, it's a much larger investment than buying a stock on the stock exchange. You could buy 10 shares or 50 shares. How do you get over that fear?

Sterling: So this is one hack that I do, not sure if I would recommend this for people, but it's worked for me.

Darin: I did this, but don't do this at home, boys and girls.

Sterling: Yes, only suitable for TV and entertainment purposes. So I do things out of my comfort zone, such as I am petrified of heights. At one point I jumped off a 60, 65-foot cliff. I will never do it again. Into water, of course, not just random into the ground. That wouldn't be good. But I do those types of things and also doing bungee jumping, as a way to step out of my comfort zone in other areas of life. Because that also translates to real estate.

How that works is, let's say on the acquisition side, I will literally, Darin, call an owner, they will hang up on me and say, "I told you last week." Or they'll say something not very nice, because they may not be in a very good mood. And this is someone I've been following up on.

What Stepping Out of Your Comfort Zone Can Make You Do

Darin: And they couldn't see your smile over the phone.

Sterling: That's what it was. I tried to really open the smile up to where they could hear it and feel it, but it just didn't work. So I would then, the next day or even let's say a week later or so, I would just show up in their office. A lot of people would get very uncomfortable to do something like that, such as following up. I've never been thrown out of someone's office, but that's because I've done things in other areas to step out of my comfort zone.

So that's one hack that, okay, if I can jump off a 60-foot cliff that I'm petrified of heights, I could buy a single family house by of course protecting your downside. But that's how I view it.

Darin: Yes, that's cool. I like that. I would tell people think back in their mind and you can image different circumstances when you were afraid. You did something and it turned out good, and then you build off those events. And that's what you're doing with getting in uncomfortable situations. You're building up those memories of man, I was scared to jump, I jumped. I was fine and I'm glad I did it. I don't know if I'll do it again. But then continually getting out of your comfort zone, pushes you to new boundaries.

Using Negative Experience to Fight the Fear of Multifamily Investing

Darin: I've seen that with so many different successful people that when they reach one goal, they set the next bar higher. It's not always about, I need to make more money or have more units or build a greater wealth. But some of it is never written a book or never spoken on stage or whatever the case might be. But these people push the boundaries of getting uncomfortable. So I love that.

Sterling: And you can also use a negative experience too. There's times where I wouldn't often want to do this because that's a different place to go into. But there's been times where, and I remember I wrestled back in high school. The most I would cut was 10 pounds in one day. Definitely would not recommend that, very dangerous. But there was one point where, I wouldn't call it the championships, but there are sectionals, regionals, and then there's the state championship.

I was so afraid to show up to sectionals, which is, I win that match and the second match. Then I move on to the next set to then go up to the top, being the state with the best elite wrestlers. And from that is I didn't even show up, Darin. I was so scared of that.

I remember showing up the next day in school and was just being, I wouldn't call it bullying, but everyone just called me a quitter. Then also when I was in that moment, I woke up and I was ready, but I was just too scared. I knew that feeling afterwards, when everything was done is I should have just ended up doing that. That was a feeling that I never want to go through that again.

You Have to Pull the Trigger

Darin: I think there's something you can grab out of that for sure. It's like my kids ask me, "Hey Dad, do you have any regrets?" And look, I've made mistakes for sure, but regrets? I'm like, "You know what? The one that sticks out is in college, I went to the University of Rhode Island. I would, every now and then, go down to the baseball fields and watch the team. And I'm like, I'd like to try out, but as a walk-on. But I was afraid to get cut or whatever and I didn't do it."

I said, "That's the only thing that I'm really regretful of is that I didn't try." If I had tried and I got cut, no big deal. Yes, it would've been a bummer at first. But the not knowing looking back is probably the hardest thing. And look, we're in this real estate world, there are a lot of people that want to do it. They've heard other people, but they're so afraid. And I want you and me and other people to help these people off the ledge.

Now look, we are at a difficult part in the real estate market in terms of interest rates rising, with really high valuations, and is now the best time? But it's like, if not now, when?

At some point you're going to have to pull the trigger. And so how do you coach people that come to you and they want to do their first deal? How do you coach them to make that first step? That's a hard step.

The First Step

Sterling: So the first is to make the decision, that's first and foremost. And I would say many people who have made that decision. What ended up working out for me is I ended up partnering with someone because I didn't have the cash. I made the decision I wanted be in real estate, and this was when I was shifting from the construction side and being a laborer that, hey, I want to start buying single families.

But I understood my weaknesses was, hey, I don't have any cash, I don't have any credit, which credit isn't too much. I actually owe the bank money because I would just always withdraw it. Just not being financially smart at my younger age.

Darin: We were all there.

Sterling: Yes. There was this person that I formed a relationship, and this goes back to the relationship aspect, at my CrossFit gym. We worked out together and never even thought they would be my mentor. And then just one day I overheard a conversation that he was looking to help do construction and to build that up at the gym because they were looking to expand.

And I said, "Hey, Will, would enjoy taking you out to Subway." Had no clue how I was actually going to pay for it. Hopefully he was going to pay for it, which he did. And I said, "How can I be of value to you in your business?" And I could see that he's like, "I don't know." And I said, "Here's the kicker, you don't have to pay me anything."

How Sterling’s Multifamily Investing Journey Started

Sterling: And that's how I was really able to get my foot in the door and started helping him within his property management company. Then shortly after that, he came to me and said, because he owned some multifamily that, "Hey, I'm looking to buy single family." Normally it's single family, then multifamily, but he wanted to go the other way.

And I said, "Well, that's good." He had the cash, but he didn't have the time. I had the time but didn't have the cash. And then that's how that first deal ended up coming to fruition.

Darin: That's great. You said this two or three times, you said the first step is making a decision. I completely, wholeheartedly agree with that. Look, if you want to get into this world, you have to just firmly decide and then commit to making it happen.

Then once you do that, your mind shifts to being solution-oriented like, okay, well, now I've decided I'm going to do it, I know I'm going to do it. How? Who am I going to partner with? How am I going to accomplish it? What's the next step? And you just go after the next step and then the next step and then the next step. Don't get bogged down in the fact that there's all these unknowns.

Sterling: And I want to rewind back to that because you made a very critical point on top of my critical point is that once you make the decision, it's this thing that's out there, Tony Robbins calls it the reticular activation system. But basically your brain will start to pick up all the things that will help you closer to your goal.

Decide and Commit

Photographer: Brett Jordan | Source: Unsplash

Sterling: And that's exactly what happened to me is that okay, I made the decision, I want to start buying single family. I knew all these weaknesses, and then just somehow through the universe, I'm not getting all woo-hoo, wa-ha, but I guess it does work.

Darin: Right. It kind of does happen that way though.

Sterling: Yes. And then I just started pulling certain things that enabled me to bridge the gap from where I was to where I wanted to go.

Darin: I was driving with another real estate guy yesterday, we were going and looking at RV parks and stuff and he's like, "I never really noticed all the RV parks before, but now that we're looking, I see them all." It's just like you go buy a new car and all of a sudden you see all the same car all over the road, you never used to see them before.

This same idea happens, once you decide and commit to doing that, you're like, "Okay, well what meetup groups can I go to? What conferences can I go to? Who could I meet? How does this work? Who else do I have to meet? Is it brokers? Is it lenders?" And you just go after it, and one question leads to another solution and then you're off and running.

But I love that you said you have to make that decision. Because until that point, there's a lot of people that say, "Yes, I'd like to get into real estate," well, that's not a decision. You could say that today and you'll have the same saying a month from now, a year from now. You actually have to decide and commit.

Take Action and Start Investing in Multifamily

Sterling: And for you, Darin, what percentage of people, if you were to try and put a percent on it, that actually, let's say they're considering getting into real estate, what do you believe actually convert to getting to that first deal? Less than a percent? Less than 5%?

Darin: I've never thought about the percentage, but I would say it's a very low percentage. So my background, I started as a CPA and then fast forward, I was trading large loan portfolios between banks. I remember seeing this guy's tax return and his net worth was like 20 million and he only paid $17,000 in taxes. And I was like, "How is that possible?" But he had all this depreciation allocated.

But I didn't take action off of that. What I should have done looking back is said like, "Well, how did he do that? Let me learn more because I want to do that." And instead I kept working as a W-2 employee and then I later started my own company, but that was something that could have been a clue.

I've been to conferences where somebody said, "Hey, the lighting guys and the audio visual guys …" So you mentioned Tony Robbins a few times. Well, people that do stage work and the audio, they listen to Tony Robbins over and over and over again and I applaud the ones that say, "You know what? He's saying some good stuff here, I'm going to go and do that," versus the ones that they don't take action on what he's saying.

Be Part of the 1%

Darin: They're in the room for free, they're getting paid to do the lighting or the audio, visual or whatever, learn from the guy. He's one of the best public speakers out there, motivational speakers. So some people, I don't know, they just let it go in one ear and out the other, I guess.

Sterling: And this is the question, when it comes to the philosophy side is, is there always going to be the have and have nots just due to exactly what you mentioned? That the people that have, let's say 90% of the wealth is by 1% or 5% of the people. Is it always going to be that way just due to exactly what we talked about? There's only a finite of people that actually take action.

Darin: I think there will always be a disparity with regards to that. So I skipped the single family side. I went right into multifamily. Then I joined a mentorship group and surrounded myself with people that were doing it and learned from them and all that.

But I've seen from these conferences, let's just say 50 people joined on a weekend conference, and a year later, I say it's the 80-20 rule. Maybe there's 10 that are still banging away trying to get that deal. And the other 40 paid their money just like the 10, but they didn't put the time and effort in. You've got to commit.

It's not easy. It's not like when you get in, they just come knock on your door, here's a deal. But there's people out there that will help you and will teach you and will support you. And there's partners that will want to work with you. They don't know that you exist.

Multifamily Investing Is a Team Sport

Sterling: And that's the thing is you don't have to do it all on your own. That was one of the biggest things that I also learned too. And reading the book 4-Hour Workweek, and there was other books that I read too, but that really just helped with understanding my strengths and then also weaknesses.

Then shortly after I find my mentor is I ended up finding someone. This is the partnership where I ended up scaling to just close to about over 500 units is that, that person was the complete opposite of me. I'm more of an extrovert, not afraid of rejection, going out there networking, putting myself out there in the content marketing side.

He's more of an analytical, Sterling, I'll go to the meet up with you. But I just want to stand in the corner type of person, great guy on the underwriting. So that was one of the things that helped then, really starting to build people around me, because it's a team sport.

Darin: People say that in multifamily over and over and over again, it's a team sport, and it really is. I mean, there's partners, there's vendors, there's finance people, attorneys, there's all kinds, there's property management companies. But you can ask other people, who do you use?

Darin: That was one of those huge benefits of surrounding myself with other people that have done it. I'm like, "Who do you use for property management? Who do you use for your attorneys?" So you don't have to recreate the wheel.

Sterling’s Multifamily Teaching Program

Sterling: And you just saved yourself thousands of hours or let's say hundreds of hours, and then also the risk too. That person may have gone through, let's say three or four contractors in order to get that one contractor that they just provided to you.

Darin: Right, absolutely. So, hey, do you have a mastermind or any kind of teaching program that you do?

Sterling: I do have an accelerator that I also help people with. That's more of individuals that do want to take the direct to owner approach and just scale from and transition from single family to multifamily.

Darin: So what is that all about? Tell me and the listeners what that's all about.

Sterling: So what it goes into is taking the more hybrid approach when it comes to the acquisitions primarily, hey, these are the ways and the whole infrastructure setup to acquire mid-size apartments. So there's that aspect. And then also creating an omnipresence through the content marketing and really creating a personal brand for yourself. Just to have a steady flow of investors that want to invest with you and your deals.

Darin: That's huge. Look, and you're giving back. And look, I'm sure there's a financial gain, you charge for it. But look, I paid money to join a mentorship group and I'm like, "It was money well spent." I went from a duplex to 76 units and I don't think I would've done that, had I not surrounded myself with other people. And if I did, you can do it, but it probably would've taken me two or three, four times the amount of time.

Wealthy People Buy Time

Wealthy People Buy Time
Photographer: Morgan Housel | Source: Unsplash

Sterling: And this is the thing is either you have the money or you have the time.

This is the biggest thing that I learned, Darin, in my life is that rich and wealthy people buy time. I never understood that concept. I remember this was Grant Cardone who said it numerous times.

I'll just give an example. I'm a part of Big Brothers Big Sisters where I give back to. And I have a little brother that comes from the environment that I came from and I help spend time with him, all that. He's since graduated because he's over 18. But I remember going to Kings Island and I also went with my friend and his little brother and I said, "Hey, let's go ahead and get the fast passes. Trust me, it'll be worth it."

As soon as we got to the park, we got the fast pass. At first, it really wasn't that much effective because the park just opened up. But then later, the rides were about two hours long. However, for us, they were 10 to 15 minutes because we had the fast passes and that's when it absolutely clicked right there of rich people and wealthy people buying time. So it's the same concept when it comes to this. Yes, you can do it all on your own, but in essence you're just buying the time is what I've learned.

Darin: I love that example because it's so relatable. People can relate. You go to a park and the lines are shorter, you could go on more rides.

Fast Passes

Sterling: It was 25, 30 bucks more from general admission to the fast passes. And I'm just looking at all the people. I was like, "You could've just paid more and you save yourself time." But many people just don't understand that concept. that was me, I always looked at, oh, I'll just save some. But I didn't realize the value of the time, which is actually even more important, you don't get back.

Darin: That's awesome. My wife and I went to one of the parks in Florida and it was Halloween. They had all the different haunted houses.

Sterling: That's my birthday.

Darin: Is it? Halloween's your birthday?

Sterling: Yes, both my brother and I. He beat me out the womb by two minutes though.

Darin: Nice. So we went and we paid, I want to say it was more than just a few bucks. But we paid a higher price so that we get access to. And the next thing you know, they're leading us into, and we went into every one of the haunted houses. We saw the lines and some people I think waited like three hours to get into one of these things. We were, in five minutes, in front.

Sterling: And you went through multiple. So one person was waiting three hours to go through one?

Darin: One. Right. So they may only have went to one or two haunted houses and maybe we went to six or seven and we were done. But that, I can relate to that and it's so true.

Multifamily Investing Requires Relationship Building

Darin: I had one guy on Instagram say, "Hey, I would join one of these mentorship groups, if they would guarantee me a deal." I'm like, "Don't pay the money." If you're a guy that is going to expect that they're just going to hand it to you, don't do it. It's just giving you access to people that have already been successful. And it's your job still to do the work of making it happen and building the relationships with the team members that you need. But it gets you in the room, where if you're not in the room, it's just much more difficult and time-consuming.

Sterling: And even to this day, I'm looking to get into different rooms. There's an, organization, Entrepreneurs Organization, where you have to have minimally a million dollars revenue in order to get into that. So me networking with those people and many of those people are even further along than me that I have to figure out ways to build relationships with them.

One individual, he had mentioned that he hasn't been in the gym for a couple of months or so, and I said, "Hey, let's go to the gym together. I'm more than happy to kickstart things off for you." And that's a prime example of someone being value-based and just being creative with how I'm a fitness person, okay, that's the thing that they lack in, that's the value creation there.

I'm just being around this person. Because one, the type of quality of individual to get into that organization, and he's even light-years away in his business than I am as well. So I always figure out ways to build upon those relationships and make it value based as well.

The Value of Building Relationships

Darin: Yes, that's cool because say he says yes, you go to the gym, now he gets to know Sterling. He's like, "You know what? Sterling is a pretty good guy. I want to hang out with him more."

Sterling: We had already hung out several times after that. And even in that gym that we went to, which is the country club of Houston, it's called the Houstonian, I don't have a membership there, he has a membership. It's quite the check that you have to cut. He's introducing me to other people. So that is the value and I'm just a prime example of that.

Darin: Look, there's real estate deals that I was riding with a guy recently and he bought some land with two other guys and he said, "I just got the call from a good friend of mine and he said, hey, you should come in on this deal." And you don't get that phone call if you don't build the relationship.

I think some people are a little short-minded in terms of spending a little bit of money. It's interesting because you said it there, you're always still trying to get into other rooms. I've had so many successful people that they already have the wealth now. They've built up 3,000, 5,000, 10,000 units, but they're like, "I'm in these three masterminds." They still see value in trying to learn from other people that are further along than they are.

Learn from Others and Succeed in Multifamily

Sterling: There's different perspectives. Yes, the growing of the unit count is cool and all that, but also what I've learned from people further along than me is just life lessons. One thing I've got from EO as a prime example is that I thought it was just strictly going to be…

Darin: From what?

Sterling: It's called EO, Entrepreneurs Organization. But the biggest thing I've learned from that through our, they call it forums, but they're in essence mini masterminds. That what we work on is not even so much the business side. We work on our actual selves and that will enable us to be better in the business.

I'm one of the youngest people that's in that organization. I'm learning from all these other people that are minimal age, I would say 45 to 50. No, maybe about 40, 45.

Darin: So you just aged me out of it, man.

Sterling: Well, there are guys that are older.

Darin: All right, there are guys that are over 50.

Sterling: I'm saying the average age. But yes, that's what I was simply saying is that. Because I'm a firm believer that yes, it's good to learn from your own mistakes, but it's even better to learn from others. And I'm always about just information and expanding my mind because there's limiting beliefs I know I still have to this day.

When a New Idea Comes to Your Mind

When a New Idea Comes to Your Mind
Photographer: AbsolutVision | Source: Unsplash

Sterling: And when I put myself around others that are even further along in their journey, or let's say life's journey or even business journey that they think a certain way and when they say certain things I'm like, "That's interesting. I have this certain thought or belief, they have this certain belief. Why do they have that belief?" And then that opens up the conversation. I think it's Ralph Waldo Emerson that says that once the mind, an idea comes to it, it can never go back to being the same.

Darin: Say that again.

Sterling: Once the mind is expanded with an idea, it can never go back to being the same.

Darin: Because that idea has been presented to it, and so that's part of what is going around in your head.

Sterling: Yes, let's say the rich people buy time concept. Once that idea hit my mind, it could never go back to where it was. I remember when I was really young, my mother would drive around to all these different gas stations to save 5 to 10 cents per gallon. That was just one of the beliefs that I had. Then once I got a new belief, it could never go back to doing something such as that.

Darin: That's cool. This is completely different. So I was renting a house in a neighborhood that had a, I don't know if you've ever heard of these things, a crystal lagoon.

Stoicism

Darin: So it's a huge, huge pool that looks crystal clear, you don't put chlorine in it. But instead of having a golf course in the community, it's got beaches and docks that you can jump off of. It's really cool. I mean, you feel like on vacation.

But one guy said, and he was a pilot and he was living there, and he was like, "When we moved in from out of town, the realtor showed us to all these different neighborhoods. And once I saw this, I just can't unsee it. So I would go to all the other neighborhoods, but does it have a crystal lagoon? No."

So you have that thought in your head and how does that match up? You're bouncing everything off of that. That's awesome. I'm learning from you, my man. I love it. Hey, what's the next big stretch goal for you? Where do you go from here?

Sterling: I'd say one of the things I'm really working on is philosophy and then just calming a lot of my mind down. So I've taken on learning philosophy, such as Daoism, also Stoicism. And one of the key principles I got from that is that understanding the things that I can control and then also the things that I can't control. So that's one. And then also that people are going to be people at the end of the day. That's the second. And then also seeing the world for what it is and not what I believe it actually should be.

Darin: That's pretty deep, my friend.

Sterling: Yes, we can go down some rabbit holes. Are we ready for it, to add onto the podcast?

Focus on the Positive

Darin: That's pretty deep. Look, I don't know where you stand on this, but we are going down philosophy a little bit. But people say that the world is so bad today and it's so hard and this and that. I'm like, "I get that there's things today that are different than before. But if you look at the Bible or talk to people from other generations, people are still concerned about the same things, man."

Sterling: Exactly.

Darin: Do I have enough money? Do I have good relationships? Am I physically fit, all these same worries are in our life. Yes, there's social media and it has impacts and all these different things and there's pros and cons. But it comes down to a lot of the same stuff that people were grappling with years and years and years and years ago. We have a choice. We have a choice to focus on the positive or focus on the negative. That's our choice.

Sterling: Exactly. And also with that is, it's very interesting to hear from certain philosophers on exactly what you had mentioned, that a lot of the same issues in the past, and what they're talking about is like, that applies to today. And as a prime example is that how people are going to act in their best interests and their best interests, many of the times may actually not be in your best interest. So it's just understanding that.

Or some people talk about, let's say in politics or whatever, I'm not going down that rabbit hole. But they say there's corruption in that. But let's give a example for people that say that, and this goes back to one of the principles I was mentioning.

The Four Agreements

Sterling: Let's say, Darin, you're in a room with the president and they say they're going to put sanctions on, let's say you have a $1 million investment in a medical company. The sanctions that they're going to put is it's likely that, that $1 million investment is going to go down to $500,000. What would you do? And let's say that's a stock in the company, what would you do in that case?

Darin: I would probably lobby against that, try to find out why you're doing it. And look, my best interest is to not have that happen. So I'd probably try to figure out a way if there was one to not have that happen.

Sterling: Gotcha. Or the common way what people would do is they would just make the trade. So they would just take their investment and then just move it somewhere else, but that is what you would call insider trading as an example.

But then I look at that, yes, it is bad in a way, but that person's looking out in their best interest. So they have the information, are they going to just ride along or they're just going to act in their best interest from that? So there's just understanding the core of that.

Then that goes back to another principle, which is from the book, The Four Agreements is not to take anything personal. If you understand the principle, people are going to act in their best interest, which is not a lot of times in your best interest is to not take anything personal and then accepting that, that's just out of your control.

Marcus Aurelius

Darin: That's a great philosophy. It's hard for a lot of people. It's hard for a lot of people to not take things personally, but I could tell you're a guy that has thick skin. I tell my kids, I'm like, "You got to have thick skin, man. The world's going to come at you with a lot of different stuff and you got to let it bounce off." Hey, what do you like to do outside of work for fun?

Sterling: I like to travel. I just got back from Guadalajara, which is in Mexico. I speak Spanish.That's one thing. Learning more of that language, because right now I would say I'm about intermediate. I can have the conversation, but when it comes back to me, it still sounds gibberish. So that's what I'm working on now. I can get some parts. So there's that.

Also studying philosophy, I've really enjoyed that. And listening to Marcus Aurelius, the Epictetus, all these individuals that are way back when. And understanding Marcus Aurelius was at that point in time, the most powerful person on the planet and he wrote this, it's called Meditations, but it was essentially just his thoughts.

Just hearing that from that individual, talking about the things, understanding the things he can control and not control. Also, not having desires with the flesh and women and all that and getting conquered by it. So all these different things that he talks about, I'm just like, "This person talked about that and how that relates to today." Just mind blown. That just opens other questions. I know I'm getting all super excited about this, so I'll just leave it at that.

Focus on the Whole Self

Darin: Well, one thing that I think is awesome, most people when I ask that question say travel and whatever sports that they enjoy. But you come across as a guy who, look, this is a real estate show and people typically listen to it for wealth building opportunities. But I think it's so key that you focus on the whole self. You're not just focused on the wealth-building, but you're also focused on how can Sterling be a better guy? How can, tomorrow, I be better than I was yesterday? So that's huge. So I applaud you for that.

Hey man, it's been a pleasure getting to know you. Look forward to meeting up face to face at some point, hopefully. You're in Houston, I'm in Dallas. If you're ever in Dallas, definitely look me up and I'll do the same in Houston.

Sterling: How are the toilet sizes there? If the toilet sizes are bigger, I'm definitely making a travel out there to Dallas.

Darin: Toilet sizes here are the same. Hey, how do people reach out? How do people get to know you better?

Sterling: So one is you could visit sterlingwhiteofficial.com. I'm on YouTube as well. You just type in Sterling White and I've got tons of content that I push out there, especially on the side of finding deals off-market and going direct to the owner.

Darin: I can vouch man. This guy, he's out there on YouTube, man. You put in his name, you're going to see him pop up for sure. Really appreciate you coming on. Listeners, I hope you enjoyed that one. Until next week, signing off.

How to Reach Sterling White

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Darin Batchelder


Wealth creation through real estate provided me with a new passion to get the word out and let others know that they have an alternative to investing in the stock market.

If I can inspire and educate just one person to take action that results in life changing wealth creation then the work to launch and grow this podcast is well worth the effort.

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