Archive Daily Archives: November 18, 2020

Due Diligence When Buying Small Apartments.

Due Diligence When Buying Small Apartments.

 
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Due Diligence Process When Buying Small Apartments.  Featuring Francis Fernando.

Cordell

It’s recording all right, hello everyone Cordell Davenport here with small apartment investors and this is my second go-around where I’m bringing across someone who can be very beneficial to you and I and I said before is that my vision of coming up with these shows is not just to let me find somebody let me find somebody new and we find somebody new.

I want to have a core focus of people who really know what they’re doing that can be able to teach and have a message to say and so, Once again those people are going to be a real estate agent University a real estate attorney and a mortgage broker. I’m a property manager and a real estate attorney does say that I think I’ve screwed him up yeah he did yeah yeah, so anyhow so what I try to do.

My ultimate goal is to own and manage a small apartment portfolio and it’s funny that I met Fernando. I am kind of following his steps not knowing I’m following his steps. I listened to an interview with him and learned some stuff about him.

On smallapartmentinvestors.com  I have this free ebook have your family living expenses covered by small apartments you own and guess what that’s my goal and I know that if anything it’s all about mindset so mindset but skill set plus performance equals results and when it comes to property management that’s a huge portion of skillset..

Is going to read his little brief bio and we’re going to learn some more about this his message his tactics and how we can all benefit so Francis bought his first income property 2003 with no formal training or experience in real estate by 2006, he started a property management business that grew to operate 40 million and residential multifamily and represented prestigious clients such as Wells, Fargo, California National Bank in US Bank.

He is the author of a trademark book titled job plus real estate equals wealth. I have that book FYI that serves as a guide on how to invest in multi-family properties while working full-time today after selling his property management business. Francis, they saw after a real estate coaching speaker that helps new and seasoned real estate investors start and grow their portfolios.

He also helps real estate agents become authority figures in their community by creating sales funnels that nurture and convert into sales. Francis also works at auction.com the largest marketplace of distressed real estate he coordinates and helps the auctioning of foreclosed properties. Francis the graduate University of Buffalo, we earned his bachelor’s science and master science and electrical and computer engineering.

Francis is a dad of two incredible sons, ahusband, a yogi and fitness enthusiast and lives in Buffalo New York where its cold, and I’m in California. It is about 80,

 

Francis

Oh man, hey now getting colder every day. The night it’s getting colder, although this week we do have a nice warm week.

Cordell I will start talking about my mantra right and mantras don’t come in as part of who you are as a being. I mean, there are I guess there are certain mantras about your personality that you hang tight to like your down.

But I’m gonna step away from values for a second and talk a little bit about them. The journey and then I’ll tie it back into what my actual journey is but my mantra as it pertains to real estate is I call it hashtag how much will I make right and the reason for that is it sounds like it’s driven purely on how much money I will make and yes that is a component but it’s more a higher level look into it saying if I’m going to get involved in real estate.

Or if I’m going to get involved in a business or if I’m going to get involved in any kind of entrepreneurial endeavor, I might looking back and breaking that transaction and that deal apart from the infrastructure right so from an infrastructure perspective do I have what it takes to take care of or and I get into that end every.

Right now can I facilitate that with the current status and current involvements that I’m doing right now with my family involvement with my current job can I actually take that off or am I getting into a headache where I’m going to get involved and then like below? Just can’t logistically take care and the reason that’s important to me is because as I look back at my journey, I went through those kinds of situations.

I had a job. I got involved in real estate and I logistically blew up a little bit in my real estate portfolio because I didn’t have the, Structure to take care of those. So as I look back, you know, they say, you know hindsight 2020, right? I look back and I go wow.

I wish I knew what I know today. I wish I knew that when I got into real estate. So that’s really what the mantra is, so it’s not as much as it sounds like it’s all about making money really that hashtag how much will I make is really how much of how much do I know is my brain going to learn by getting involved?

So that’s oh yeah and then I’m gonna tie it into a little bit of my journey so really really at a high level. I’m an engineer by profession. I became an engineer because my come from a family of engineers my dad was an engineer we traveled around the globe my dad worked in various minds copper mines in central Africa Southeast Asia, and then eventually in Canada and then you know, I moved to the US.

So that was sort of in my blood engineer but I always say I was an engineer up here not down here. I think I had the want and desire to become a business person or an entrepreneur but I didn’t really know how to do it so my first kind of leap into it was my first formal.

I had a few informal leaps into business but my first formal leap into business as it pertains to real estate was in 2003. From Buffalo, New York to New York. My nine to five job. I was I was an engineer at Verizon my nine to five job moved me out to New Hampshire and I loved the area there was something a unique about that area it was a little bit north of Boston real estate prices were a tad bit cheaper than the big metropolis of Boston, so all your investors were coming from Boston unable to buy in Boston and buying up north in Manchester New Hampshire and, The time I found it attractive to buy real estate, so I was buying I was using my corporate.

Saving it up and I was always one to buy assets, you know, I had red rich dad poor dad and I had learned the difference between a massive versus a liability and that was kind of a you know, wake up moment for me so I was using that money buying acids which my choice was larger apartment buildings, but.

Here it’s actually sorry for the definition of your show it’s smaller. Families and it’s not the two families but I was more attracted to the five to six to eight unit, that was my sweet spot so actually I will redefine that smaller apartment complexes. And so yeah and that’s what I was doing.

I was buying up smaller apartment complexes. I got to a point where I had 22 unit 20 22 units my portfolio sizes changed here and there 22 units and I got logistically stuck and I’ll expand on that later as we get into the show, but logistically stuck in the sense couldn’t manage my job and I couldn’t manage the assets so I decided to take a leap of faith and go, you know, my first entrepreneurial venture outside of buying the real estate was to start it.

He manages the company to manage those assets. You can be a real estate agent in that area to be a property manager. Yeah, yeah so that it’s pre, you know, depending on the state and the local ordinance for the most part most instant this is if you’re managing third-party money.

So if you’re managing your own assets or if you’re working for one individual, you don’t need a license, but if you’re if you’re co-locating what you should be collocated co-mingling funds, but if you’re managing multiple funds for various different owners, then yes you do need.

 

Cordell

Yeah, you know when you were saying something in before about your mantra and everything and how much you want to make and I was thinking is like to me success is to know what you want and to get it. So what is it you want? Whatever it is you want. a person can say well I want to buy this. I want to buy that or personally say, you know, I have a kid and I don’t. Iwant money for college or my IRA right now sucks. I need some money or I’m just tired of working or whatever may be so we.

We do certain things we strive for certain things because of what it gives us we all know that money is just to a vehicle money is important but what is going to give you what’s the end result and I think a lot of it was down the time free time to to pick and choose what you want to do.

 

Francis

I like that you said that because for me it was time until and it still is right because I do value my time very verymuch but I heard something that was really.

Recently that was interesting It was speaking to a young lady and she said you know I asked her why she was getting into real estate So I do some coaching for people that are trying to get into real estate and I do some coaching on people that are trying to build they’ve already got real estate but they’re trying to build up there property management companies.

So this particular young lady was getting into real estate. She had a really good job, so she was really clear on what she wanted to do. She had trimmed her liabilities over the last, you know, 12 months. So that she could free up capital and didn’t have too much expenses.

 

And, She was ready to take that leap of faith. So after the basic question I said, so why is it that you want to get in? Really. And why was she sayingFrancis? I’m always so shocked that every generation has to start from scratch. She’s just recently married and I think she’s about to have kids or probably close in the in the near future she will be having kids and so it could be a thought and in her mind of hey why does every generation meet to start from scratch and she doesn’t she wants to break that cycle in her family and be able to create generational wealth that she can pass down to her children who?

 

It hopefully passes it down to their children and that’s the beauty with real estate; it’s one of those transferable assets.

Cordell

Yeah and unfortunate you know sometimes for people like myself who grew up in the inner city parents and have anything and there is this could they call it a long money, you know, where it’s generational and but if you grew up in the area where your parents and own a home or they were always renters, there’s nothing transferring there’s no life inheritance and it’s great if we can have a whole different discussion about generational wealth, you know, sometimes we could look at back in the civil rights days where they called a red line where you couldn’t get a property because You know, you were you where you were black you’re Latino you were whatever maybe and then you just get black ball so I don’t want to deviate because I have a habit of deviating sometimes no no let’s get them from good but I think that no it’s true so it all points down to okay, what is it that you guys want what do I want what you guys want so great?

Good so I have Francis on a talk today about physical due diligence everyone but before we start talking about that did I interrupt you on your line of thought Francis no no not at all. I’m ready to jump into the content and yeah, all right so everyone when it comes to buying apartments there is a lot of due diligence that needs to happen there’s financial due diligence they look at leases look at the rent rolls look at the t-12 to trailing teeth trailing.

12 months, you have to look at the market with due diligence and understand what’s the norm but when it comes to physical due diligence, that’s a whole different ball game, you know, there’s it involved with. HVAC roofers and the thing about Francis because he’s been doing it. He hopefully can share some insights of the top five things that we should always be aware of when buying a property.

I’ve heard of times where if I want to buy an apartment I can hire property management and say, okay when I pick up this property, I’m going to manage it once you come to the due diligence with us. I’ve heard where someone just says I’ll come and find a general contractor and then have them walk.

I’ve heard. People outsource to third parties but the problem that I see that I’ve encountered is because my niche is 50 units unless a lot of people go for the big bucks, they don’t really go over 50 or they go a hundred. I I was listening to a seminar and it was a niceguy who gave a good presentation on due diligence and he’s his company that takes pictures and does all kinds of things but.

But because my niche is 50 units he’s not gonna even touch it.  That means that how do people who have 50 units unless they get around or what should they do when it comes to doing the physical due diligence?

 

Francis

On a property they want to buy right ready so critical question and and before I even jump into that, you know, you said that there’s that sort of middle of the market, you know, the 50 units and below and that’s sort of the untapped market and this is a call out to all entrepreneurs that see those kind of opportunities right so typically when you look at real estate the the largest size properties, whether it’s due diligence property management or or any aspect of servicing those.

50 units and greater there are I call it the big boys and the big girls that are gonna service those right and then they’re really small ones are either self-managed or the portfolio sizes small enough where it may not make financial sense for you to even get involved in that.

But there’s that sweet spot where most people don’t get involved in right and if you can figure out how to create business within that sort of untapped market right that is you know, it’s a call out to all entrepreneurs that look in that sweet spot because there’s not a heck of a lot of competition it’s exactly what I did in Manchester New Hampshire is there was a speed sweet spot of third party real estate of third-party property managers, most people didn’t want to manage other people’s real estate, especially for residential.

Right then andthere was that sweet spot of that underrepresented market and I said wow this an opportunity there, it’s tough it’s really tough but how can I get into it and make an ad profit from it? That’s just kind of my entry into that. I’m going to touch a little bit on all due diligence but I’ll focus a little bit heavier on the short right and the the reason is I I kind of flows for me the entire due diligence because I think a lot of times when people see properties they get they get hung up on you know, how do I how do I?

And they’ll spend so much time on the spreadsheets analyzing it and by the time they go to buy or put an offer on the property either it’s sold or they make an offer which doesn’t make sense right so I’m gonna go all the way right to the start.

First step of due diligence for me is financial pro forma, right so I’m going to run a financial pro forma on the asset now that the whole section is a whole separate discussion, right? I’ll give you the basic elements of a financial performa how much is that asset going to make right so you’re simply going to have and there’s performance that you can get.

I have a performer reach out to me. I’m sure Cordell you have a version of a pro forma bigger pocket that says versions of profarmac. Essentially in a nutshell a pro forma as your income and your expenses are right and then certain key ratios like cap rates cash on cash return debt service coverage ratio.

So there’s some really important ratios that’s going to tell you what the property is going to perform like. So performa is a sound that is complicated. Word all it says is all it stands for is projected performance. Not real performance projected performance. So it’s your first step into saying hey, it’s even worth doing physical due diligence on this, right?

We want to be disciplined investors so we want to do our first step being in financial performance. I want to just evaluate this idea of a funnel. This is the top of the funnel. I’m filtering out anything that doesn’t make financial sense too. Me. So super important to do that it’s going to tell you based on what kind of returns you want.

This is a good asset. One more thing on the financial performance that I’ll kind of end on that is. A lot of times the philosophical question a lot of times people, you know will look at a property and there’s a sale price on it. Let’s just say it’s an open property on the market.

Let’s say it’s on MLS. It’s an active listing on MLS and I’m gonna make fictitious numbers here. Cordell the sale price is $250,000. Most of the time as buyers, we’re looking at that we’re running our pro forma on $250,000 and then we’re basing our offer on $250,000 or a function there on.

Right? I’m going to offer this much less than 250 right but we’re not offering it based on the performance of the pro forma. So super important to understand is that whenever I do a financial performance. Care what they’re asked. Me I don’t even base it on the asking price

Cordell

Yeah you’re right because when you buy commercial property or buying a business unlike a residential no it is listed for a hundred thousand.

I’m going to offer 33% less and just whatever it is and then buy but knowing you’re buying numbers or you’re buying a business that’s why you have to go in detail go ahead.

Francis

This is not perfect and this is where it takes the emotion out if there’s a real estate agent involved in this transaction right it can get kind of sticky because the agent’s going to push to get the highest price on that, whether it’s whether it’s a buyer’s agent or A seller’s agent, right?

Their primary motive is to make sure that they own the propertycells and rightfully so that their job right is to get the maximum price. So when it takes the emotion of when you give an offer immaterial of the asking price because you’re saying, hey, my offer is based on the performance of this asset and the financial viability to me as a purchase, right?

And you know, take no offense to the offer that’s gonna make So that’s step one for me. The second step was the physical so it’s more about what we’re talking about here is the physical if it passes that litmus test of the financial viability then I’m going to do a physical inspection so I do a couple of different physical inspections the first one is obviously just a drive through but once I’ve gone through and it’s kind of checked off the location the access to schools depending on the type of building so if it’s a if I’m in the B slash lacy range, that’s the market that I want to be in from a renter perspective then I’m going to.

Make sure it’s you know, within all the facilities of what is needed for a B, slash sleek see property, if my intent is to take it from a like doing a reposition so I’m saying I’m taking a seat property and I want to make it a B. A Mayana be location right like am I taking a C property and bringing it into a B physical asset but I also want to be make sure I’m going to be location from the perspective of schools, you know access to amenities and all of that, so I’ll do my quick sanity check on that.

Do a physical drive through but now when I’m going into my actual physical inspection, I’m wearing a couple of different hats right so the first hat is my I call it my my basically my contract a hat, right? I’m looking for deferred maintenance, right so is there anything in this property that in the next five to ten years one year what I didn’t care your time frames are that are going to be exhausted in other words, they’re at the life expectancy or they’re at their maximum life expectancy, so of course the main mechanicals right the roof the windows the the HVAC systems and and then I will do a physical walk through of the units too because if the units are you know in, Decent shape.

You know from a visual perspective but if I get into the internal, you know internal guts of the apartment and I’m looking at you know, really old plumbing really old toilets really old tub surrounds then I know when those tenants move out right my rehab cost is going to be that much more my unit turn costs are gonna be that much more so I’m looking for.

Diffeeral maintenance, that’s my first first thing major mechanicals, that’s my second thing then after I’ve worn that my contractor had I’m then going to wear my elect my my insurance auditor. Right I’m gonna sell yourself doing this process if you have a team with you usually I’m by myself yeah usually I’m by myself I will take a I will take a maintenance contractor with me, you know, usually my own when I ran my own team I had my maintenance contractor with me on occasion if it’s a property that I’m a little questionable about I may take my insurance agent to depending on my relationship with my insurance agent, so I might actually take my insurance agent but I’ve been schooled enough to know what to look for so I’ll wear my insurance hat and now I’m going to walk the property from the perspective of an insurance.

Agent right because typically what happens is when you close on a property you’re going to get a binder for it. Be 30 to 60 days at. 30 to 60 days after the closing the insurance is completely the insurance company’s going to send an inspector to do a physical inspection of the property to make sure that it’s in compliance with what they’re underwriting okay and if they start seeing things I’ll give you a quick example, they see knob and tube wiring right or they see fuse panels right they’re going to write recommendations on your not not even recommendations, they’re actually going to write non-compliance items as a checklist of correction.

So that need to be made if not they’re going to drop your insurance or they’re going to decorate your insurance rates up significantly. Right so you want to go through from an insurance perspective and look like how an insurance inspector is going to look at that property so I’m looking for Northern tube wiring.

I’m looking for electrical fuse boxes. I’m looking for old plumbing, you know old cast iron plumbing and anything that antiquated were insurance agents going to be you know slip and then the slips and falls and all that so of course, I have it so with the insurance company give you like a form you fill it out once you go to the property give it back to them and then They’ll give you a quote on on what will cost to ensure it possibly how does that there yeah, so on the initial they usually just get an address on the initial on the initial for for closing purposes, they’re going to give you an initial they may have a questionnaire for you like what kind of electrical right and you’re just simply answering those right so you might get coverage and you’ll get bound coverage but it’s it’s a you know, it’s it’sit’s contingent upon a 60-day walk through of an insurance inspector, all right, so once the inspector goes through it says a bit.

You know, this is not what we thought it was right there’s a buried oil tank there is not a two wiring there is you know antiquated facilities we’ve got a we’ve got a re-up on these or you’ve got to correct these okay make sense. Yeah, so yeah, so that’s yeah, that’s that’s you know, my next step on the physical inventory is going through wearing my insurance at my third is to make sure that I do an inspection of the inventory.

Right so I a lot of times when you buy let’s just say you’re buying a four fan the listing agreement is going to say four family four bathrooms your four apartments, four bathrooms, four refrigerators four dishwashers, and it’s going to have a listing of all the equipment that you’re going to ultimately own at the transaction number sale.

I am going to walk through because I am ultimately buying those four refrigerators for dishwashers. I want to make sure that you know, I’m looking at cereal numbers. I’m looking at ages of those products. And the relative condition of those right are they near the end of life and if you’re in there looking at those and it’s an occupied unit then likely you’re going to be able to hit up a lot of other things which I’m going to get into next which is speaking to the tenants, hey if you had it have you had any issues with this refrigerator oh yeah this is a fourth time I’ve called the landlord, you know, this thing keeps going out on my it keeps leaking and that’s why you if you go downstairs you’re going to see leaks on the unit below right it starts opening up the quote-unquote can of worms but this is a good can of worms because you want to know this.

Desire mm-hmm, yeah, yeah so from a physical standpoint that’s what I’m looking at if I get really into depth or I’m questionable about certain things then I will get like an engineer in there if there’s certain things about the basement that I’m not liking foundation issues or I see lolly columns, you know sort of recently put up there.

I may have some concerns with you know, settling basements or settling subspurs, so I may get people in there for that but for the most part if everything looks fairly good. That’s that’s it on a on a physical inspection and then let’s say that you do your physical expectation and you say man all these damages you go back to the seller and say, hey you’re gonna give me credit on this or you’re gonna let’s work something out yeah absolutely so I’m gonna I’m gonna write all of those down, you know, I’m taking copious notes as I’m going through this inspection right and my copious notes are going to then translate into you know, how does this affect the overall deal is this something that hey, this is part of my offer this was.

Part of my original Proforma when I ran the pro forma, I knew this was gonna be part of it and then of course I’m looking at you know, sort of from a market perspective, you know, is this something that I can absorb or is this property going to sell with these conditions at that price right if it’s going to sell with the so for example property is listed at 250 and that’s a pretty good going.

Market or properties are selling at 270 right now so 250 is right within the market but I know the reason it’s 20,000 below market is because also it means a new roof which is 15 grand so the owner was smart enough to know to accommodate for that and it’s reflective in his asking.

So I’m gonna do a quick sort of sanity check on that but I’m taking copious notes and I’m gonna translate those copious notes into a dollar per line item, yeah. Of course. I’m going to separate. My capital work is right So these are immediate capital expenses that need to be taken care of and I’ll break those up into what Icall life safety versus long-term improvements and then I’m going to look more into beautification common hallways that need to be painted that kind of stuff through routine maintenance.

That’s all part of performing anyway typically yeah yeah and when I when I make my offer a lot of times I will include that I’ll include a pro forma in my offer so that I’m not offending anyone and I’ll include my breakout of you. Don’t do the breakout of repairs right up front, but I’ll do step one I’ll do my offer.

If I get kicked back then I’ll say the reason for my offer is boom and I’ll include my pro forma and oh by the way, if you want to know further detail, it’s because of and I’ll take my copious notes and say just so you know, I mean, I did observe that your roof is leaking and I’m not here to buy a leaking roof.

I’m here to buy it. Asset that’s producing income hashtag how much will I make right and you know that roof needs to be replaced. Yeah my next one and these kind of like all mesh in together is after the physical inspection.

I’m going to do an occupancy inspection. All right, so my occupancy inspection is who is my tenant base, right? I want to meet all my tenants, right? I want to meet all of my tenants. I want to see all the tenants at least. This is a big part of what people miss the expiration date of leases, right?

I took over a 12 unit building in Manchester New Hampshire, the owner bought it as a 12 or 18 unit building. The owner bought it within six months of owning the building and there was a lot of capital work that he had accounted for but within 12. Months six months of closing the building the building went 50 percent vacant and had he gone through and just done due diligence on the leases and even just one within the leases just one aspect of the lease and that one aspect is what is the expiration date of the least had he focused on that he would have seen holy crow, you know, 50% of my leases come do within six months of me buying this building, right?

This is an expense that I didn’t anticipate because now not only do you have lost income for them moving out you have. Rehab fees for each of those units and then you have releasing fees to your property management company to release those. Problems. Yes. Yes. So, I’m gonna do tenant leases.

I’m gonna meet my tenant base and speak to them. It’s unbelievable what you learn from people when you speak to them. You know a simple question like hey Cordell, yeah everything good at the apartment. No, that’s that’s all I need to say and it’s just gonna blow up into a conversation, although you know, not real.

Or well, you know, I’ve been telling the landlord about this and. You know, it explodes into a great conversation and I’m also gonna look at pending lawsuits are there any lawsuits are there any, you know, potential lead issues, you know lead laws are pretty hefty are there kids in the building is there an ongoing lead inspection or lead violation is there and,

I’m gonna ask a tenant one how tenant two behaves. I’m gonna ask ten at two how tenant one is and I’m gonna do my trust functional look do they when they’re selling do they have to say if they have section eight tenets as you’re doing review yeah it’s going to it’s typically gonna state it on your retro it’s gonna say the source of income so a lot of times they will say section eight and the source of the income okay, and and the lease will typically say to okay?

Yeah so I’m gonna ask for a tenant file for each of the each of the tenants I do review the file to look at any vouchers that are coming in from because also if you go historically, even if they’re not on section eight, there could have been periods of time where the tenant fell into trouble and they needed some form of government assistance to build them out, so I’m gonna look and see if those and that’s not necessarily a bad thing people good people get into trouble but I just want to know historically has this tenant been employed or had they’ve had periods where they’ve lost their job as a seasonal work.

Would vary you know, typically in the wintertime they don’t have they’re out of work and they’re you know, they’re on some form of government assistance, so I want to just know all that well. It’s like a person really needs to have a good checklist, oh absolutely to make sure nothing is good skip go ahead yeah and then my final one is verification, so I’m gonna run through these again first is financialperforma second is physical inspection third is the occupancy and my final one is I call it verification and this is where I go, it’s a phrase that I love it’s trust but verify mm-hmm right when someone says, hey for us is you don’t trust me, oh no, I trust you.

I trust you but I verify, Right so when you verify you’re just keeping an honest person honest, yeah and I’m not that’s that’s my my you know, I I like to be verified upon because I want to make sure that I’m doing my work and anyone checking upon me.

I love the fact that they will verify what I’m doing because it keeps me on it keeps me as an honest person, it keeps me honest and honorable to my role so on the verification. I’m just gonna give you a few ideas on verification back deposits.

Okay so typically if a person is organized with their real estate assets, they’re going to have a separate bank account for that asset or they might have multiple assets, but they’re going to have. One bank account for those multiple assets. Right. I would hope that people are like that and they’re not commending rents with their own personal accounts and all that if that is the case it’s a great way to verify the stated income so if they’re saying, hey, my monthly rents are that I’m getting on this building is 3,000 a month, right or 36,000 if we’re annualizing at 36,000 a year, it’s not hard to ask for copies of bank receipts deposit slips bank receipts or access to the bank statements and they can black out the, Their own numbers and you just want to say hey if it’s 3,000 a month how come I’m not seeing 3,000 a month.

And a lot of times Cordell you’re going to get people that say well it’s really complicated no not really it’s a rent check that comes from a tenant and you go to the bank and you deposit it and you’re going to get a deposit slip that’s that’s it’s complicated as it gets so verified the,

Same bank account you can verify these you go back like 90 days like how far do you go back I’ll go back 12 12 months from outside, yeah, I’ll go back I’ll ask I’ll ask for 12 months because it’s fairly easy to do a quick sanity check because then I can get a trend a lot of times I do get pushed back from that from bank statements a lot of people are uncomfortable with getting vaccinated so I will put it as a contingency in my my PS right contingent upon bank statements or if I can’t absolutely get bank statements because they’re commingling there’s a lot of the owners that kind of ran at all.

Mobile school they have your mom and pops yeah yeah and they just kind of put it into their own checking account then I’ll ask for tax returns schedule yeah, yeah. So you cantrack not only your income but also your expenses so you can look at all the checks that are being written out and just cross-color correlate that with yourprofana okay and then one more check that I do is on any utility expenses that they state.

I’m gonna do a quick phone call to the utility companies to get the account number and just say, hey what’s been the average? Water. Here’s the account number. And if I don’t have permission to do it. I’ll have them, you know, have me on the call and make that phone call so I’m not easy.

I’m not an easy buyer. I’m not an easy purchase. I’m not I’m not very much like to buy this sellers but where where I don’t mess around Cordell is that once I’ve gone through those I make a financial transaction really easy, all right, you know makes sense, um, All right well I have a question like I know there has to be people out there.

Cordell

I know you mentioned you earlier. Provide coaching and things like that but what if someone wants to buy a small apartment but they need some hand holding on a due diligence process does your services include?

Francis

Cordell the three tiers of what I do is the first tier that I offer is if you’ll get it if you’re new and you’re getting into real estate. I’ve created resources right, the first resource being the job plus real estate equals wealth book, right? I also have that as abundle with an online video course right and it is a soup to nuts course that the course sort of encompasses.

I took the 15 years of managing over 40 million dollars worth of real estate, so I get into depth with you know, due to Legends how to analyze properties what type of properties to buy where to buy you know, how to negotiate with people how to surround yourself with the success teams and I give copies of the performer it’s my own version of the Proforma so it’s everything is in that and so that’s sort of my entry level, you know, you get the book and that program.

The next level is if you. ‘d be a solutionfor me like I have a client now that he flips high-end, you know, one to two million dollar homes in Massachusetts. The agreement or the work that I’m doing with them. Properties so I’ve created a funnel for him and I’ve created sort of a marketplace for him that people know if they’re selling a high-end property in the Seacoast or the South Shore of Massachusetts, he is the guy because he’s well he’s well not leverage he’s well financed right he’s liquid right he’s wealthy he’s he’s got cash in hand.

And he’s able to move rapidly on an acquisition so I’ll work with someone like that on a onon a strategy so the point being that anyone who’s got a very specific strategy right and that’s what super important if they’re very specific on what they want to do, so if someone comes to me and says, hey Francis I am thinking I want to get this as soon as I hear that I know they’re not sure exactly what they want to do, but them in your funnel yeah yeah, you know what you you’re probably likely better off reading the book getting some clarity on what you want to do and then when you come to me with a clear strategy.

Hey I am looking at properties on the South Shore of Boston, or the east side of Buffalo, this is the criteria. I’m looking for right? I know you’ve been through. Lack of a better word level one of my programs I know you’ve fundamentals you’ve been through the fundamentals. I like that yeah, so I’m able to work with you so I love projects where it’s like so you know, I don’t like corner people into hey this is I only work with people like this know that second level working with me is you have an interesting project as it pertains to real estate due diligence analyzing a property creating a marketplace for yourself a real estate agent that wants to stand out absolutely.

I’ll work with you. And then my last offering which is really where my sweet spot is is I will work with clients who are seasoned real estate investors that own portfolios small, you know, probably 10 to two 300 units in smaller portfolios but and they have a property manager or their self-managing it but they’re dissatisfied with that that portion of it.

And it’s vertical integration they don’t want any leakage of income in their business they want to create their own property management solution that’s where I come in and I go soup to nuts turn key operations for them to bill their own problems.

Cordell

I’m going to be there in a couple years and we are going to be working together. We will build that together on this show. Yeah, that’s why I do I believe to achieve all right well, um, I thank you for your time, how can people get in contact with you?

Francis

Okay a couple of different ways Instagram, which is how you got all of me. Cordell right my my handle on Instagram is at how much will I make hashtag how much will I make so if you search that you get my Instagram I’m on Facebook Francis Fernando on Facebook, if you email me Francis at Francis Fernando com my website Franciscoanda.com multiple different ways.

I’m on LinkedIn, so I’m everywhere just Google my name.

Cordell

Well, thank you, thank you thank you thank you and we’ll look forward to next time we hook up so we can chat and learn from each other. We’ll learn from you. I don’t know what you learned from me, but I’m learning a lot from you but once again thank you and we’ll see you next time Francis.  everybody like I said go to the website small apartment investors.com .

I am constantly trying to feel that website with a lot of content will see you later bye.