38 - Multi Family Real Estate Investing With Sam Kwak

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By The Hobby Hustler Show and Matthew Alexander. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.
The Kwak Brothers first immigrated to the United States in 1999 to Chicago, IL. They applied to get their VISA 11 times, got denied each time, finally, on the 12th attempt, there VISA got accepted. Their parents are both Church Pastors and still are. They came from a background where they financially struggled and they had to break through boundaries of language and culture. They began their real estate investing career in 2014 following the sale of their first business which was a mobile DJ business that they started in 2012. They reached a financial breakthrough in 2017 where they went from 0 to 75 rental units in 1 year. First Deal: - ¬A landlord was looking to retire in late 2016 - Four, single family portfolio in south suburbs of Chicago - Landlord priced it at $150,000, but since Sam didn’t have enough, he thought about owner financing - Owner Financing: The seller essentially becomes the bank and you make a payment plan with them. You do not need a traditional mortgage What do you (and your brother) currently own? - 75 units in total! Mostly apartment complex’s of 20+ units - At the time of the recording, they are working on 20 house deal How do you find the deals? - Now, mostly word-of-mouth because people know about them - At the beginning, they were reaching out to people by sending out direct mail and just calling agents with units for sale Is there a way to screen the deals? - Underwriting process - Location - Rent to purchase price ratio? - What is the demographic? - Is there a growing market? - How much money can we generate? - Is it underperforming? - What is the cap rate? What is Real Estate Wholesaling? - Let’s say you went out and found a house, and the owner wants to sell it, and you may know someone who wants to buy it. You go back to the private network, let the buyer know you can introduce them to the seller of this house, and then you get X%. If you are not a licensed realtor, you can get fined for this! You need to be licensed! What happens if you cant find someone to get the contract? - If you’re looking to get into wholesaling, Sam encourages you to take a course because of the complexities - In short, you can put an escape clause so that you can get out of the contract if the buyer bails on you Would you recommend wholesaling to a Hobby Hustler? - Sam finds wholesaling a big waste of time for his situation - Sam doesn’t have *money issues* in the sense that he can find money - If the deal is that good, why would you send it off to other people? - Ask the wholesaler, “If you think the deal is really that great, why don’t you do the deal?” How do you build a real estate network? In order to build these networks, you need to GET OUT OF THE HOUSE! Go to networking conferences, go to Chamber of Commerce events, go to real estate meet ups… and just start making relationships with people! Do you see a market crash coming? - Yes, Sam see does see it happening in the near future - The market crash is ultimately going to be the reset button that this market needed. Right now, the consumption power is with the baby boomers - There is a clear difference on what millennials and baby boomers spend their money on, and this next crash will switch the power from baby boomers to millennials. - This is why Sam thinks companies like: AirBnB, Turo, Uber, Skip The Dishes, etc. are going to thrive - Sam predicts that car manufacturing companies are really going to hurt and he thinks GM will file bankruptcy How should we prepare for a market crash? - Pay off all your debt - Stop going for 5-star dinners - Save your money - Selling assets that you don’t need - Stop paying for subscriptions that you don’t need - GET LEAN! Adjust before the adjustment happens to you!

41 episodes