Creative Deals to Buy with Garrett Terrell

INTRODUCTION:

In Episode 40 of the MHP Show podcast, host Derek Vickers sits down with real estate investor Garrett Terrell to explore the world of mobile home park investing. Terrell, boasting 60 properties in his portfolio, shares his insights and experiences, shedding light on his transition from real estate agent to successful investor.

KEY TAKEAWAYS:

• Transitioning from Agent to Investor: Terrell discusses his journey from working as a real estate agent to diving into the world of investing, driven by a desire for greater control over his ventures.

• Underwriting Strategies: Listeners gain valuable insights into Terrell's meticulous underwriting process, which involves thorough analysis and quick decision-making to identify lucrative investment opportunities.

• The Power of Relationships: Terrell emphasizes the importance of building strong relationships with sellers to access off-market deals and negotiate favorable terms, ultimately leading to successful acquisitions.

CONCLUSION:

Episode 40 offers listeners an insightful glimpse into the mindset and strategies of a successful real estate investor, highlighting the importance of control, thorough analysis, and relationship-building in the mobile home park investing space. Whether you're a seasoned investor or just starting out, Terrell's wisdom and experiences provide valuable lessons for navigating the world of real estate investment.

WATCH IT IN YOUTUBE:

TRANSCRIPTION:

[Music]

00:06

hey everyone welcome back to the MHP Show podcast I'm your host Derek Vickers on the MHP show we all know we talk about anything and everything that has to do with mobile home parks crazy freaking mobile home park stories and the operations and all the interesting things that happen in this asset class I've got another guest with us today but before that I want you guys to go to my website and go to Eric vicks.

00:32

com Evergreen weinar you can literally log into that and get an hour and a half of content of the basics of Mobile Home Park investing all the way up to how to close your first deal and how to get the money for your first deal if you listen to that that's literally all you would need if you just took the advice on the free webinar and you could go get your first deal like this is not a complicated process guys it's not that complicated I know people like to make it complicated but it's really not so if

00:59

you go check that out derck vicks.com Evergreen webinar you can get access to that now so today I have Mr Garrett ter ter Terrell did I say that Terrell Terell Terell got it man well hey dude it's great to have you on the show um you've got 60 properties now is that correct yes that's correct 60 properties now we we had touched base on on Instagram and you were like oh my God I love mobile home parks I bought my first one it was a unicorn deal and I was like dude I want to hear about this deal so

01:34

so welcome man yes thank you dude I appreciate you having me on and I'm excited to talk about this deal andh see if I can provide any value to your audience yeah and so when when I get on the show here I like to ask people because you're an entrepreneur like what was your first entrepreneurial Journey that you went on before real estate unless real estate was first well to be honest with you real estate was first I mean I got my license uh when I got out of college and I played division one baseball in college and I knew I wanted

02:04

to get into real estate and so I I kind of just got my license just to kind of understand the business and how it all worked and offers and inspections and closings and appraisals and Loans I just wanted to get like kind of a baseline of how it all worked but I quickly found out that investing is is where I want to spend my time um and it's just been history ever since so yeah pretty much real estate was the start so you were you were an agent at first yes yes I was right and and you know I talked to I know some agents I think most real

02:39

estate agents like want to do what we do at at some point but then some of them don't and like so what was the thing that that made you like all right this agent thing is not gonna work I got to get to investing what was that thing dude it's just control it it's totally controlled you know when you're when you're an agent I mean it's basically a job you know and you're kind of at the Merc of other people and so although you can make good money doing it and I did and was very successful at it um I I

03:09

really wanted to be in control of the whole entire process whether I bought a property to Fix and Flip which was my main bread and butter for the last five years um or whether I was buying a rental property I have full control of that um so that's that's really why I didn't want to be an agent forever but I just wanted to learn learn the business yeah that's awesome man it's really like you know so when I was selling insurance it's the same thing I I was literally trading time for money at that point I

03:39

was literally you know eating off of every commission that I got and I would have to go out and hunt down the next deal and essentially like you are on your own but still it's like you you live and die by that commission so you're like you know you're a slave to it almost so I I I get it yeah so it's good man but um and so you got in you started fixing and flipping houses and then what like what on Earth made you buy a mobile home park like why so it I never heard of mobile home parks before like the actual asset

04:17

class in investing into it I've obviously heard of them before but one of my really good friends Ethan in Washington Ethan Lee shout out to him he is a few years younger than me uh and is absolutely a genius when it comes to Mobile Home Park investing and you know we just we he was doing my PPC and we kind of you know talked about his strategies versus me doing fix and flips and rentals and uh and he just kind of started telling me about the mobile home park process and operating them and tenant owned Park owned home and we just

04:51

kind of organically just kept the conversation going and really over the last you know eight nine months I had just been specifically underwriting mobile parks and you know probably underwrote 200 plus deals maybe 250 deals I mean I was really really trying to understand this asset class and then this unicorn deal popped up um in uh you know late summer and it just everything made sense and I I took advantage of it and took it down and it I I will tell you right now this deal was the best financial decision I have ever made in

05:33

my life it was I'm not going to say easiest but it was the PA it was the path of least resistance uh compared to buying a single family Fix and Flip um or buying a single family rental it was the it was so much fun and I just I'm just gung-ho about this asset class I am utterly convinced that this is this is the asset class that I want to stay in for a very long time yeah that that's awesome man and I want to go back to something that you said because something you said is extremely extremely important so you

06:12

underwrote 200 to 250 deals and anybody that's in my inner circle program or anybody that's even just watches the free webinar like I tell people you have to start underwriting deals even the shitty ones on loopnet you you have to start underwriting deals and so I'm curious because it's so interesting that you did that and then you found this unicorn deal so I'd love to know like what all you learned from doing that underwriting um religiously and how that actually helped you find this unicorn deal so great

06:45

question my background is Fix and Flip right that was my bread and butter you know I am very comfortable in that uh asset class that uh risk so I kind of just took the same uh basic you know underwriting guidelines and applied that towards mobile home parks and I know it's completely different and there's a lot to kind of unpack there but for me an easy kind of rule of thumb and I use this all the time in Fix and Flip if it's not a hell no it's a hell yes and so I kind of looked at that I kind of

07:21

looked at mobile home parks the exact same way you know uh if it was kind of a questionable deal you know I could probably pull a few strings and try to make it work this way it just nothing really excited me until I found this one deal where I underwrote it very conservatively and was like man I can't lose on this like I'm buying this you know and so it you know if it's not a hell no it's a hell yes you know or if it's not a hell yes it's a hell no you know so I I kind of just I I really

07:54

wanted to buy the right deal um I did not want to buy an okay deal I I really wanted to buy the right one and the right location just with the whole entire story I never really fell in love with any of the other properties and their stories you know because part of this and you know this as well part of the underwriting process is the story of the property and it's the story with the seller and so I just never really connected the dots with any of the other ones they just they were all okay you know but I found this one and it was the

08:28

right one and I took advantage of it I knew it in my gut the second I looked at it I I knew in my gut that I was going to buy it and that's how it ended up happening yeah man and dude that's awesome because in and I tell people all the time like when I go into a deal I know the purchase price I've already underwritten it you know on my on my phone like briefly back of the napkin I go through the deal and I get this little vibration thing like oh yeah I want that one I'm buying this one and that's it we'll go and buy the deal but

09:01

you don't get that I think you develop that feeling after you underwrite 200 or 250 bad deals then when the good deal comes along you're like oh my God because people tell me all the time why am I gonna go write these shitty deal underwrite these shitty deals on corxy and loopet and mobile home park store I'm like because exactly what you just said because now you're learning like what a bad deal looks like and what a decent deal looks like and what a good deal looks like I mean I imagine there

09:31

were a lot of things that you learned in there your first one probably took how long did it take to underwrite your first deal you're probably uh like I don't know well yeah I mean I I really underwrote it for I mean I I as soon as I saw I I knew because they got five offers within the first couple days and it was actually an MLs deal that's the crazy thing about this is it was an MLs deal that my broker sent me um and I I knew I had to act quick on it and I underwrote it every which way possible

10:03

like beste scenario worst case scenario underwrote it with terrible debt with really good debt in just any way that I diced it up it was going to be a win and and so that's so I had to act on it quick it it was not weeks and weeks and weeks it was hours um yeah time was of the essence for sure and I mean you're you feel good about when you find deals like that you feel good about your speed Das action too there's no really hesitation because if there's hesitation then there may be there something there

10:34

that you're not very certain about but when you get that deal that you know it's like boom I'm gonna go I'm gonna go yeah so so tell us about this deal like I want to hear about the Unicorn that I missed out on okay so uh well what do you want to know how many pads What were what was the utility setup was it Park owned or tened owned and where was it yep so it's a 33 units um deal in Alabama um it was 31 Park owned homes and it was two tenant owned homes and um city water city sewer paved roads uh just a just an overall

11:17

beautiful Park um you know and I really kind of I love the story of the property that was really kind of what drew me to it it was a and it was listed by a Marcus and milap broker um it was a single seller she had owned it for 25 years uh bought the park in the late 90s and kind of built it up over the course of time and um you know she had ran into some U medical uh problems over the last couple years and kind of you know was getting to the age where she wanted to start to sell off the park and she also owns a large

11:53

portfolio and we'll get into that later um but she was at a point where you know she had made her money with the park and she was ready to exit you know and she was selling it at a substantial discount a substantial discount and so go how much so she was selling at 1.1 million for 33 units um it was about 326 acre lot um really good land uh also really good location in town um and it was in Montgomery Alabama and uh so and also the Asis noi was $192,000 well that was on your calculations or her calculations that was on actuals of two

12:51

years um that was on a T12 and also a t24 okay so obviously I underwrote that even less um but it it really is and it's an interesting way of how she ran the park uh Market rent for some of these units were $700 $750 long-term rent um she was actually running them as weekly rentals and she was collect she was collecting about $1,100 a month on all of these units so um yeah there's there's some substantial cash flow in this deal also the park owner was paying for the utilities um so that was part of the

13:34

underwriting process but it was it was a cash count absolutely for sure and then so what was the the value at are you keeping it weekly are you keeping people paying weekly keeping it weekly yeah and and it's weird how that even came about uh that actually came from the majority of the tenants they want to pay weekly surprisingly because the thing is these people get paid weekly checks and so they don't want to hoard their checks into once a month and then pay a one-time payment they're actually

14:06

willing to pay more just by the ability to pay weekly for some of these because they get their check they pay their rent and then they're on to the next week and so it actually came out of the tenants asking hey can we pay weekly and and so and then she started to run this little business model and it's it's been incredible and the best part about this deal is I bought it with private money and I cross collateralized some of my other rentals and basically bought it cash at 133% for 10 months and when we

14:42

got it appraised it appraised at 2.04 million pretty good pretty good dude yeah that's awesome man and I mean look me personally I don't how are you collecting the weekly rent like you have somebody there doing it or they paying online or cash pay or something so she has she has built a a team of people that act so we have uh two on-site managers uh one is collecting the rents one's kind of like a office admin um and then she H so basically she has about seven employees that actually work at the park that's small park that just

15:23

seems a little crazy yes so she she's got a great team she's got an office in the front where all the tenants come in every Friday and pay their rent either through credit card or debit card or they come in with cashier checks and she has made it very easy on these tenants and they love they love this park I mean she's got a 15 person waiting list of people trying to get in there because it's managed very well and these are attractive looking mobiles it's uh paved streets and so it's just a good little

15:56

operation and so basically um we we have on-site management yeah w wow and what if you have seven employ like I wouldn't run this spk like that personally but like how many how what's your payroll there like how because if I'm looking at them I'm like you have seven freaking employees if unless you're paying them all just a little bit every week like they're not working that many hours like that seems to me is going to just blow up the noi but uh there's another portion of this so she owns or did own an

16:29

additional uh 53 units uh about a mile away from the mobile home park so she not only owned this 33 units uh she owned a large uh single family portfolio about a mile away so the bulk of that uh expense is associated with that other uh portfolio as well so they're helping her with everything got it got it got it and then so you're she's still letting you use the same employees yes okay well dude I mean more power to you man that like that that's a that's a good situation you know not necessarily A scalable situation but

17:12

it's a heavy cash flow situation so how what's your cash on cash return there now uh well I I actually bought the park with less than 20,000 bucks out of pocket um and then what are you bringing in on it every month so it Nets about 17 to 18 it gross grosses about 33 a month depending on on capex and maintenance it Nets about 17 uh 175 is and I have hard money on it right now for 13,000 a month yeah there you go with basically 10,000 bucks into the deal yeah I mean that's pretty good I mean that's a good return man and you

17:52

you know you'll own that asset um here at some point so yeah dude that's interesting and I you know it's interesting you brought that up because we you know if I see a deal like that I'm going to do it a little bit differently than that I'm 100% not going to keep it weekly that just sounds like brain damage um but uh you know I guess with that particular management system that you have in place there with the old owner um I'd be curious to see how that goes uh long term but it seems like it's

18:24

working out well well for you well here's here's here's what I would say about is I'm totally I agree with you 100% uh the the whole situation to me I'm like weekly rentals really like these people you know but we've bought we've seen I've seen a bunch of stuff we've bought stuff that's weekly before we've always transitioned it but go ahead sorry I cut you off there no no you're good it so but the the missing piece to this puzzle really the the icing on on the top with

18:53

this whole entire thing is me and the seller have really built an amazing Rapport and and an amazing trust and friendship that is the big uh kicker in this because if I didn't if I didn't have any relationship with her I mean trust me I would have questions about this whole entire operation right um she is you know I have a really good discernment about people and she is salt of the earth type of person um and so she you know she gave me a substantial discount on the property and the fun thing was once we actually closed on the

19:30

mobile home park because I you know gave her a million bucks and she was ecstatic she was thrilled over the moon that she got a million dollars paid off all of her debt happy as can be and she then uh approaches me about a week after the sale and goes hey I also got another little 20 unit single family portfolio a mile down the street do you want to buy this and I said absolutely and so there's there's three phases to this because she's retiring right she's a 70-some year old woman in Alabama she

20:02

wants to get out of the business and just cash out right and in order for me to give her that peace and comfort of the deal of essentially buying her whole portfolio from her um she's willing to give me a discount on this because we have that trust and we have that friendship so phase one was the mobile home park phase two uh we just actually closed on last week was the 20 unit single family port folio and then phase three will be probably Q2 Q3 of next year um and I'm going to buy the the rest of her

20:36

portfolio so that's the the piece to this that I wanted to mention and and that's awesome and and look that that is super super important because you said she's owned these these this park for 25 years right so and and we we talk about this you know everybody I have on this show we talk about this how important relationship build buing is and that's how you find these killer off Market deals yeah because you are building the relationship you're not just going to close someone on selling their park

21:08

immediate like immediately on the phone it's just dumb like it's not gonna happen right think about something that you've had for a majority of your life and how easy that is for you to get rid of most people would say yeah dude I'm not getting rid of whatever I'm thinking of right now yeah um and so you have to build that relationship I think that's um that's awesome so what advice would you give to people that are on the phones they're they're calling Sellers and they're frustrated like getting that

21:35

first deal because it's slow like what advice would you give those people I've thought about this tons of times in it it is really I I really think it boils down into instead of going wide with your contacts instead of going you know calling a thousand people in a day I think you really have to go deep with the right people I think that's very big into this because as you know this is a relationship business this is not we are not even though we're buying and selling multif Family Properties we are we are

22:09

dealing with people this is a people business this is not a real estate business and if you can go deep with the right people and have the right relationships with these people they will do things for you that they will not do to the open market you know um she I truly believe if I did not close on the mobile home park and have that type of ease and comfort with the whole transaction um and still keep them on as management I do not think she would have given me the 20 unit deal especially at the discount that she's given me at

22:44

which uh on that portfolio bought it for 762 th000 nois is 156 and if it appraises at the same cap rate that this mobile home park appraised for it'll be worth around $ 1.5 $1.6 million so she is giving me deals and I understand that and it's not pretty it's not you know these are not the Taj Mahal you know but she has the she has great people and she has the right people in the right places and I am focused on building the relationship and she and I will tell you this even after two you know two and a half months of operating

23:25

it she is going above and beyond cuz she almost is like you know hey I'm I'm passing off my baby to you I wanted to be a good baby for you you know and she's almost taking that pride and that ownership with her even though she doesn't even own the park anymore and she wants to see me do well and so it's this whole entire story you know it's not just it's not just the numbers even though the numbers are incredible I really think you got you have to find the right relationship with the right

23:57

seller yeah yeah totally and that that's so true and you know last week I had my call with the our Inner Circle program there's a guy on there he's working this deal he's building relationship with the seller and I was like let's look at this deal and I'm like dude this is a freaking screaming deal I said get your ass in the car take a contract over to his house and sit in there and talk to him and um he did it and after he did it he's like so he didn't sign the contract yet he's gonna talk to his attorney but

24:28

he's like Derek I guarantee you this guy is not selling to anybody else but me and I'm like boom that's what you want yes absolutely trust TR it's amazing what happens with trust I will just tell you that especially in real estate people will people want to do business with people they know like and Trust yep that is plain and simple and so yeah I I really think you know it's not about calling a thousand sellers a day it's not about underwriting thousands of deals it's finding the right deals and finding the

25:05

right sellers in building a relationship with them I I really think that's what it boils down to yeah for sure and and it goes back to to things that I talk about too you have to figure out like you know what kind of deals that you want to buy find those kind of deals and then work on those sellers like you want to you know expand like whatever area you're looking in but if you're going to call 10 Parks you know you wouldn't buy anyways like that that's not a good use of time so you're right and you know

25:34

spending more time and building the relationship I mean that's that's just huge that's just huge and now the and really now for me the next phase of this is you know stabilizing the deal with good long-term debt and so a lot of the you know what I've been learning in the mo because again dude I'm only I'm really only six to eight months into the whole entire mobile home park world I'm very fresh and still still very new into this asset class uh I have six years of investing in real estate experience but

26:05

about eight months of Mobile Home Park investing and they are completely opposite especially the lending side of this business but what I've learned so far and you can probably give me a lot more advice on this um that a lot of these deals can be financed through uh long-term debt through local banks and Credit Unions so I've gotten a couple term sheets so far um and a lot of these guys are at 75 70% LTB on the arv uh we're going to be looking at anywhere from 20 to 25 year am 7 and a half to eight and a half% interest right

26:41

now so with all that being said um with this purchase I'm going to be looking at a potential three to $400,000 Cash out refinance and that will drop The Debt Service about2 to3 th000 a month which will really put me in a good spot in this uh deal as the rents continue to increase over time yeah yeah and and that's awesome because like yes the lending environment is different for these things you kind of have to you kind of have to hold the bank's hand through and like hey this is this because they don't it doesn't register

27:16

for them I know um you know in the beginning when we were first buying deals we really had to walk people through but now the banks are definitely they understand the asset more but it can create problems for sure absolutely yep yeah what did you what did you see about the lending environment you mentioned something about the lending environment like how was it different on this versus your prior business that you've gotten um Bank lending on well it's just a different asset class you know uh a lot of the conversations so far have been

27:48

about you know Park owned versus tenant owned um there's a whole there's obviously a debatable thing about that in the first place obviously Banks love the the tenant owned aspect I I kind of you know because I'm in the I was in The Fix and Flip industry I kind of think about it a little bit different but I understand why a bank may think that I look at control I look at control as being very valuable in this business and so when I see you know as a tenant owned uh even though you sell her Finance you

28:22

still have the note and everything I understand all that but there's something to having the control of the actual mobile and having that control to either raise the rents uh decrease the expenses by billing back some of the utilities I I think there's an argument for that but on the lending side they want the tenant owned yeah they absolutely want the tenant owned and so it's a learning process for me but I I think it's very interesting how these Banks uh look at it and some banks don't care if it's Park owned they could

28:54

care less yeah but a lot of them the majority want the tenant on for sure for sure and you know it's interesting and like you and I tell people too like they're like Derek you know all of our stuff is tended on we got a few Park owned but like would you do a all Park owned home deal and I'm like yes if the circumstances were correct if the market lot rents 200 bucks but I can get $1,100 in park own rent I mean that makes more sense right or you know it's if there's a massive Delta there between the lot rent and the park

29:29

own home rent one that probably means that the market lot rent is too low one and then two you can get more from um the park on home run so I would consider it I I I would totally um consider are the homes newer at at your Park they're mixture 70s and 80s uh mobiles yep uh all metal roof which is nice and she has done very very quality remodels on these really has ripped them all down to the studs and turned them over over the last 25 years but they're all metal roof which is which is very cool she takes pride in her

30:05

remodels yeah which which I like because I take pride in my own remodels for single family deals so um yeah for sure for sure yeah and it's funny because you know I'll talk to sellers oh yeah we remodeled all the units and then you go in and it's a box like what the hell did like no you you painted the walls dude like that's so funny yeah but there are you know we have like so we bought a park um outside of Tampa that the seller told me that and I'm like oh yeah okay let's do the walk through and see but this guy

30:41

same thing you have 70s 80s models even some 60s models in this park and they were Immaculate like he did a fantastic job like the same thing ripped them out down to the studs and rebuilt the inside of it completely and so I I do it's it's possible and if you have people that are doing that it's definitely it's definitely worth it yeah and that's why she did it was it's GNA it's going to yield a higher rent you know I mean what you were talking about the lot rent versus the park owned home

31:10

rent that's exactly that portion of Alabama is that lot rent is really like $250 maybe $300 a month but these these mobiles I mean they they are a thousand plus you know I mean they are on the week remind let me remind you on the weekly they are a th000 plus yeah long long-term rental rates they're about 700 to 750 bucks a month um so that extra little you know 25 30% of Market rent you know it it's it's interesting I've never seen it before in even in all the deals that I was underwriting I had

31:52

never really seen a weekly rental situation like that before but again I think it's the right deal and the right location with the right seller with the right story and so I I you know bet on the deal I I knew for a fact that it was grossly discounted grossly discounted and it turns out I was right you know bought it at 57% of arv as is arv and now it's just about stabilizing the deal you know so I just got a question for you what are your what are your uh methodologies of stabilizing a deal after you buy it with uh hard money

32:31

or private money uh well it depends on what kind of deal it is like if it's an all tened owned home park I mean that's different I mean it depends on if there's delinquency it depends on if they're Park owned homes if they're Park own homes I I'm gonna buy in markets where rents typically high and so I will convert all those to T and owned because I know the bank likes that and then for our sake on the operation side it's like it's way I don't want to say it's it's easy but

33:01

you know as your Park seasons over the years it does get easier because you have the same people in there you may have a couple you know a couple turn over or not but it's generally you know I it's better Tenon especially if you're in a high rent Market it makes more sense because there's not that the Delta is not quite as big but in some cases it's still big even where the lot rent's higher and it's like so what does that mean this should the lot rent be higher like would they pay higher lot rent you

33:30

know I don't know so um yeah so I I can answer that question for for an hour you know depending on the park I mean if it's a super if it's a fstar park you know which I don't have any of those we have a park that was probably a three and a half Star Park it was just go in get the bad people out um fix the infrastructure and you know gradually raise the rents over China yeah I love it so I love it yeah so there's you know depending on what kind of Park can totally vary how you're you're going to do that and your

34:01

strategy can be different on on different Parks like I can't we've had some parks that the strategy been the same but there's always some different little nuances because these things just operate uh differently so but what's what's next for you manam are you still are you are you on the hunt for deals I I always am always am on the hunt for deals I I think you know obviously in the near future you know my goal is to continue to stabilize this portfolio that I bought from this singular seller

34:35

um that's kind of my goal in the near future but really I my buy box right now my buy box is mobile home parks in Alabama mobile home park in Alabama and I you know I will and especially just with her with the the type of influence that she has and and her track record and everything she's got contact all over the place and so I I you know me I'm in Scottdale Arizona um but uh with her having a lot of kind of boots on the ground with me flying there multiple times you know I I really kind of want

35:12

to you know focus on stabilizing portfolios in Alabama you know some people some people are just drawn to certain things in life you know like some people are RV guys some people are Self Storage guys some people are single family guys I don't know why but I think me and you are just drawn to mobile home parks I don't know what it is uh but that is that's just what I want to focus on specifically just in Alabama too okay yeah and that's look that's good that you have that narrowed down because it's

35:46

gonna be so much easier for you to actually say hey this deal is good or hey this deal doesn't fit my box and I think that's that's important to identify absolutely for sure so um any anything anything else you want to leave for our for our listeners here before we check out man I would just say I would just say conservatively underwrite you know I mean because that because there I I will tell you this there's a few deals where I was really close to pulling the trigger but it just didn't really it

36:18

didn't feel right you know I didn't have a the numbers made sense but just something in my stomach it was you know it wasn't a hell yet yes so it was a hell no in my opinion you know and so I would just say conservatively underwrite you know the reality is is that um these expenses are going to happen you know you're not going to get the best debt you're not going to get four and a quarter debt at a 50-year note you know you're not going to get a 90% LTV cash out you know so I would just say

36:51

conservatively underwrite on all aspects you know if you're at 100% occupancy underwrite at 90 you know or underwrite at 85 if you think you can get debt at 8 and a half% underwrite it at 10 because if if it still works at that aspect and you know 10% maintenance and and expenses you know under over underwrite because it's only going to help you in the future and you know I got burned by this in single family by thinking oh you know the arv is 500 oh it's going to bump to 515 525 because I'm such a good

37:31

flipper because these people are going to love these countertops and all this stuff in reality is people don't like the house as much and that 500 turns into 485 you know and so I've learned that over time to be very very very conservative with underwriting and look at a ton of deals I would say you have to in just my opinion I would say you you got to look at a hundred deals before you say yes to one I really I really believe that and it's not fun underwriting all these deals and you know figuring out the debt

38:10

on the exit it's not fun doing that but it's gonna make it all the worthwhile once you find that right one and that right seller yeah yeah it's just it's just like practice like you have to I think that's great advice being conservative and actually underwriting deals I mean I think that's you have to do that and it's going to make you understand the assets more it's going to make you understand the deals more you're going to get smarter blah blah blah all that right it comes from actually doing the

38:39

work surprisingly right you got to do the work got to do the work that's the other part of this you got to take Massive Action just like Grant Cardone says all the time you can you can't do anything with knowledge you have to apply that knowledge and take Massive Action and also once you find the right deal you got to rip the Band-Aid rip the Band-Aid and pull the trigger that's the other thing is some of these people are so scared to pull the trigger finally on that right deal when it comes up you and

39:11

other people do not have that same fear and so I would say your ability to make very calculated decisions quickly is going to be a huge Advantage for you if you can establish that muscle in this business to do that you're GNA be that much farther ahead from everybody else who just has all the knowledge but doesn't want to apply it yeah that's true that's true man that's that's great advice please heed that advice people listening well Cole uh Garrett man I appreciate you coming on um by the way

39:45

man I was looking at your Instagram and I'm a watch guy see you got some nice watches on there man couple yeah there's a couple in there yeah I like it man I love it I love it yeah um I'm a watch guy too so uh I get it well cool well thanks for being on um the MHP show guys we're live um we're on air every Monday the show is aired check out on iTunes Spotify YouTube and uh yeah check out the Derek vicks.

40:18

com Evergreen weinar and please like And subscribe to the podcast we will see you all next week peace [Music]

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