I just got back from attending Brad Sumrok’s AIMNATCON (Apartment Investing Mastery National Conference) last weekend. In case you weren’t able to attend, I thought I’d share a few highlights from my notes that I thought you might be interested in.
There will be no fluff, and minimal details on many of the points, just a few highlights I made note of. If you’re not sure who some of the speakers are, I suggest looking them up as their advice will carry more weight when you see the level of success they have.
“Success is 80% Mindset and 20% Mechanics”
– Tony Robbins
A few random points that I thought were worth noting:
- The National Apartment Association is suing the CDC. If you lost rent income during the COVID pandemic, contact NAA to be included in the suit. The cost to be included is $1K.
- Brandon Turner of the Bigger Pockets podcast raised $75M for deals using mostly Instagram.
- The new Biden tax bill will not affect bonus depreciation. It was a temporary arrangement from the beginning and will be phased out as originally scheduled over a period of years.
Taxes (Tom Wheelwright)
As you probably know, multifamily investing makes it possible to pay zero taxes. Some may feel like it’s unethical or un-American. But in reality, you’re just working with the government to accomplish the government’s goals. The tax law is a series of incentives. The government gives tax incentives to anyone who will help them accomplish their goals. The government wants housing to be provided. By working along with the government on their goals, you are rewarded with tax incentives. If you want to pay less tax, do what the government wants done. Other incentives to pay attention to are things related to clean energy, such as solar.
- Financial education. If you want to change your tax, you have to change your facts. No one can do it for you. As you increase your financial education, your ROI goes up, your control goes up, and your risk and taxes both go down.
- You don’t have to be big to get the tax benefits of big people, you just have to behave like them. New taxes are a war on specialists and favor business. Behave as a business for tax incentives.
- Tax law today is a consumption tax. If you earn money, then spend it, you’re taxed. If income is put into your business as an expense or put into assets, it’s not taxed.
- Tom gave away a free book to everyone, which you can get at wealthability.com/tfwbook/
Working with Brokers, Finding Deals (Charlie Young)
If you’re getting started, Charlie suggests finding a junior member on a broker’s team rather than going after the top broker.
Everyone has access to secondary data on a market, but gather primary data to be an expert on that market. Secondary data is the kind of data you can buy or find online. Primary data is info you can only get by talking to people in the market and learning about it firsthand. Charlie talked about driving every street in an area where he wanted to invest and made a map with dots of properties he was and wasn’t interested in. The broker who came to his office saw this and was impressed and he got a deal as a result.
You need enough data to be thoroughly convinced you can stretch yourself for the deal.
If you get invited to a best and final offer for a deal, here are tips to get the deal:
You’ll be asked to introduce yourself and talk about your background and experience. Most people will do that and stop there. But there are additional questions the broker and seller want to know and may ask. By beating them to the punch and answering these questions thoroughly without them having to ask, you will stand out and have a better chance of getting the deal.
Here are 5 additional pieces of information to include:
- Why are you excited about this property? Use primary data, tell why you’re going to buy the property and why you’re willing to stretch to get it.
- Tell us about your equity – have structure and answers about what you’re going to do with equity.
- What’s your underwriting criteria – how will you underwrite taxes, etc.?
- What capital do you have? Do your due diligence.
- What are you going to do about debt? While you may not know all the details, know your sources and process.
- If you thoroughly answer these items, you’ll convey confidence that you know what you’re doing.
Don’t be a pain in the butt. Charlie said, ‘I got a deal where someone else offered significantly more and the broker knows the guy could have closed, but the broker worked with him before and he was a pain to deal with, so the broker gave the deal to me.’
Put your investors first. Sometimes that might even mean not taking a fee you’re entitled to so your investors get their money.
Brokers are very busy right now. Be careful what you’re asking from them.
If you don’t know which buyer the broker is vouching for on a deal, it’s not you.
The seller trusts the broker. Your job as GP is to make sure your group is chosen. Find out from the broker – is there anybody I don’t have on my team that the broker wants on my team? They may have a relationship with certain professionals that they like working with. By getting that person on your team, you give yourself an edge.
Take good care of your brokers. Take them to a nice dinner. Don’t talk business, just make them feel special. If you’re trying to get a deal and it’s between you (who they know and have good feelings toward) and someone they don’t have a relationship with, who do you think will get the deal?
Identify these things about your target market: What do they need? Where do they congregate? (Events, podcasts, social media, etc.). Who influences them? (Get those people to promote you). Who influences the influencers? (Give them what they need or want). What do the influencers need?
Your reputation is built on:
- Presentation – you have to look the part
- Associations – who represents your business
- Endorsements – people saying nice things about you
Pete’s talk was on marketing, but it was very powerful and I’m giving a section just to his presentation. I hadn’t heard of Pete before, and that’s probably because his specialty isn’t multifamily investing, it’s marketing. He’s the guy big players like Grant Cardone hire to help with their marketing.
Pete talked about 3 critical steps that 99.9% of people don’t have dialed in that will make you an authority. He spent most of the time on step #1 because he said it’s the most important.
Critical Step #1: Be a World Class Communicator
Your signature talk is the single greatest marketing tool you have in your business. You’ll have one for winning deals, another for talking to investors, and possibly others for other parts of your business. Grant Cardone has a signature talk for raising money. Use your signature talk every day. It doesn’t require being extroverted, you just need the structure.
Here is the structure to use. It’s called the “Storybraid Framework”. No matter what the situation, use this framework.
Here’s an overview:
Now let’s break it down.
This is where you connect with the other person. Talk about something you have in common. It could be your story, something about family, something universal… Then show them the problem you can solve for them. When they see you can solve their problem better and faster, they will choose you. Help them get from where they are to where they want to be. Empathize. Take them on a journey to where they want to be.
‘Do you know what bank accounts are paying? I had a million dollars sitting in a bank account doing nothing, then I invested it and later had 1.2 million and I didn’t have to do any work. I went to my friends and said, stop leaving your money sitting around in a bank account, invest it like this…’
That’s a short version with the general idea of telling a story to take the person on a journey.
Ideally when you start this section, you’ll tell a story and create an open loop, meaning you don’t tell the end of the story (because you’ll come back to it at the end).
Here’s the brain science behind what you’re doing in this step. When you start talking to someone, they have a wall up and their mind is closed. By connecting with the person as a human, you have taken down the wall they had up. Now their mind is open to listen, so it’s time to speak to it…
Teach them 3-5 things that will help them get from point A to point B. This is your proprietary process that you follow. When they buy into your process, they buy into you. This is the nuts and bolts to show you can do it
This is the call to action. Ask for the money (or whatever it is you want).
Close with something that reinforces everything else you talked about. If you left an open loop on the front end, now is the time to close it. Go back to your story and highlight how it reinforces all the other things you said.
This is the framework that the best in the world use.
By applying this framework, Raymond John (from Shark Tank and creator of FUBU) went from converting 5-10% of his audience to 60%.
Critical Step #2: OPS = OPM
You probably already know what OPM means, right? Yes, “other people’s money”. So what’s OPS?
Other people’s stages. What does that mean?
Here’s an example. Grant Cardone invited Pete to speak at several of his events. He was basically the only speaker at these events besides Grant. Grant spent $20M to host one of the events, $9M for another, and $6M for the other. So that’s $35M spent on these stages.
Pete benefited hugely from speaking on Grant’s stage. Now everyone in the audience wanted to work with him (and it costs 7 figures to work with Pete). And what did it cost Pete to speak on these multi-million dollar stages? Zero. Grant spent all the money to create these stages. Pete generated thousands of customers and generated 8 figures for his business from this.
So how can you leverage other people’s stages?
Here are a few examples:
Social media, webinars, podcasts, physical events.
It doesn’t have to be a physical, in-person event. Pete leveraged many digital stages (virtual events) during 2020 and was massively successful.
Think about it. If you’re at an event, you could go around introducing yourself and giving out business cards. But what if you’re the person on the stage teaching something valuable? Now everyone in the room knows who you are and would like to work with you.
It puts you in a completely different position. This is one-to-many marketing.
Again, it doesn’t have to be just on a physical stage, but could be a digital stage as well
Critical Step #3: Own Your Own Stage
Now you’re not only leveraging other people’s stages, but you’re creating your own stage / platform.
Here were 3 lessons:
- It can be a digital stage. For example, social media like Instagram or a Facebook group. Grant Cardone raises millions from social media. He goes live on Instagram when he has a deal. Another powerful form of a digital stage is building an email list. However, don’t try to build these all at once. Start with one and really build it up before trying another. I talked to Brandon Turner from the Bigger Pockets podcast and he said he’s also using Instagram to raise money.
- It can be a physical stage. You could host an event, either a big national one or a smaller local one. You might remember that Joe Fairless started off with a local meetup group.
- The value is astronomical. When the pandemic started, Pete had scheduled a big live event that had to be cancelled, which cost him $5M. But he pivoted and switched to digital stages. In 2019 Pete had an 8 figure business. In one month in 2020, he made more than all of 2019. So, in other words, he made 8 figures in one month during the pandemic.
Brad listed these 10 keys to mastery:
- Accountability. Recognize that what you have now is the result of the decisions you’ve made up until now.
- Proximity. Get connected to the right people. They can save you a decade of time by just one insight.
- Constant, never ending improvement
- Community of peers. We can’t choose the family we came from, but our peer group is our choice.
- Time vs. Money. The poor spend time to save money. The rich spend money to save time. Or, as Warren Buffett said, “The rich invest in time, the poor invest in money.”
- Get outside your comfort zone. Great things never come from comfort zones. Get comfortable being uncomfortable.
“Everyone in the front of the line was at one time at the back of the line.”
Michael said focus on finding deals and finding money. Everything else is noise. Get things off your plate onto someone else’s.
I love that because that’s what I try to convey to people thinking of building their own website – it’s not a good use of your time.
But obviously it applies to many areas of your business. Your time needs to be focused on the things only you can do.
Michael suggested rather than doing one deal in this market and the next deal in another market, etc. to do multiple deals in one market before moving on. Build goodwill with people in that market. For example, brokers and others. If you’re constantly moving around, you’re constantly starting over.
Michael said this is an unfair business. It’s all about who you know and trading chips.
Michael spends time with brokers. He goes golfing with them even though he doesn’t really like golf (as well as a number of other events and activities). When he entertains them, he doesn’t talk business. He’s just planting seeds that he can hopefully reap later when he needs their help getting a deal.
Daymond John (from Shark Tank and creator of FUBU)
His mother told him when he was young to look around, at planes, apartment buildings, whatever. Everything you see started with one person having one idea. The point was that ideas are powerful and when we look around us, we see evidence of that when those ideas are acted upon.
“Interest – If you don’t know about it, you’ll pay it. If you know about it, you’ll earn it.”
Money highlights your weaknesses. If you’re doing something inefficiently, throwing more money at it will just magnify the problem.
Jay Abraham is Daymond’s mentor. On a side note, Jay has a great book I’m currently reading called “Getting Everything You Can Out of Everything You’ve Got”.
Daymond mentioned running into a lady at an elevator who pitched him on a business idea. Daymond liked the idea and decided to do a little research to see who this lady was. He kept seeing pictures of her on social media next to this guy with a confederate flag shirt. Turns out, it was her husband. She never heard from Daymond and probably doesn’t know why. Sometimes young people want him to invest and he checks them out and sees they’re posting things on Tiktok at times they’re supposed to be working.
I think there are different lessons that could be taken away from those points. For example, it’s worth paying attention to who you associate with. It’s also worth going through your social media from the perspective of potential investors or brokers. Also, it’s not just about putting on a show, but being a person of integrity.
Daymond said you should be able to describe yourself and what you do in 2-5 words. Here’s what Brad came up with for himself: “Financial freedom investing in apartments”
“Don’t tell people your problems. 20% don’t care, and 80% are really happy you have them.”
They did something cool after this. They had a pitch-off. Five of Brad’s students were chosen to give a 3 minute pitch to a 3 person panel consisting of Daymond, Brad and Pete Vargas.
There was prize money involved for the top 3. But probably even more valuable was the feedback on the pitches. This feedback will help not only those 3 people but everyone watching.
Everyone was trying to follow the Storybraid Framework. Here were some common mistakes:
- Too many details in their personal story
- Not spending enough time talking about what’s in it for the investor.
Here were some things several did well:
- Connected with each person they were speaking to
- Having clear and specific benefits for the investor
- Having a story that will resonate with most people
Dragan “Dragon Slayer” Trajkovski
Dragan is a speaker with Tony Robbins. Here were a few highlights:
“Success without fulfillment is the ultimate failure.”
We don’t always get what we want, but we get what we’re committed to.
You will never out earn, out sell, or out perform your current identity.
Raise your standards in every area of life.
Keep leveling up your life. Like video games, each level is progressively harder. Don’t try to avoid problems, they are a sign of life.
Jesse is also a Tony Robbins speaker. Jesse founded Marquis Jet, the world’s largest prepaid private jet card company, which he sold to NetJets. He helped pioneer the coconut water craze with a company he later sold to Coca-Cola.
Jesse shared a number of personal stories where he took action that most people would be afraid to take. He shared some lessons he learned along the way.
Here were a few:
Differentiation – What makes you stand out from the crowd as different from everyone else?
Success in business is the intersection of 3 things:
- What you love
- What you’re good at
- A product or service that helps people
People buy into people more than products.
You are one idea or one referral away from changing the trajectory of your life.
He mentioned 2 things that are important to success in business:
- Helping people get from point A (where they currently are) to point B (where they want to be) quickly
- Having credibility. He and a friend came up with the idea of selling jet cards, where you pre-pay for hours to use a private jet. He was successful because he got endorsements from celebrities. You can apply this principle by associating with people who are more established and successful than you in this industry. Take your photo with them, have them on your podcast, go on their podcast, etc.
“If you don’t have a seat at the table, make one.”
There was a story behind this quote and I didn’t get notes on all of it, but the basic gist of the story was that he was trying to get a celebrity to endorse his business (I believe it was Ben Affleck). Ben said Jesse should come to this big Hollywood party that he’d be at to talk to him more, but Jesse wasn’t on the invitation list so he tricked the bouncer into letting him in and found a table next to Ben’s with the actor Pauly Shore’s name on it and replaced it with his own name. As a result, he was able to talk to Ben and get him to endorse his company. So he said, “If you don’t have a seat at the table, make one.”
Pressure weeds everyone else out, so be glad you feel pressure. If you don’t quit like most people, you’ll be successful because of that pressure.
“Pressure is a privilege.”
Jesse talked about the importance of really connecting with people and caring about them. He said he sincerely congratulated them on things they did well (not just in their career, but even things like how he admired someone as being a good father), and also consoled them when they had problems. It contributed a lot toward the success he has had. I think this is something that could be applied well with your relationship with investors, brokers, etc.