If you’re on social media, then you already know Tim Bratz. Since beginning his career 15 years ago as an intern in real estate, he has done a little of everything. However, it didn’t take long for him to realize that multi-family properties, at the end of the day, accounted for 90% of his net worth and required only 10% of his time.

What Tim came to discover was “what you focus on expands,” and boy, has it! Tim is in the top 5% of the nation’s multi-family investors. He began in residential, but has now grown his portfolio to 3,700 multi-family units.

Tim’s motto has been to learn from mistakes. “Fail forward,” as he puts it. Tim splits his personal time between Cleveland and Charleston, South Carolina, but sources his deals from the Midwest and Southeast. He and his team look at 400 deals per week that they source from similar modes as residential R.E. investors: mailers, networking, and even drivebys.

Tim tells people all the time that he is in the business of buying apartment buildings so that when one comes across their desk, rather than just passing on it, they call Tim. He creates loyalty by offering a referral fee or equity in the project. Building relationships with brokers over time is where he has seen the most incremental growth.

Best deal ever

Tim and his team came across a 60-unit new construction development outside of Charleston through a broker. The area was booming and the numbers were good. He was all-in for $6.5 million: $100,000 per unit, with the ability to rent them at $1,200-$1,300 per month. As the land was being cleared and permits were applied for, the local hospital called and asked if they could rent 40 of the units to traveling doctors and nurses for $2,500 per month with a three-year contract.

Tim financed 80% of the cost and found private fundraising for the other 20%. Unexpectedly the hospital came back to say, actually we need all 60 units. To top it all off, the city just recently asked them to add 12 more units, making it 72, because the need for housing is so great.

After a few months of occupancy, Tim can return to the bank showing a 22% CAP rate. Unheard of! With a stabilized value at $22.5 million, that comes to $15,770,000 in equity. The cash flow, between Tim and his investing partners, is right at $778,000 per year.

Takeaway: Preparation = Opportunity = Success

Keep making deals and eventually, unicorns like this will fall in your lap. Don’t quit, it takes time. Quantity leads to quality!

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Takeaway lessons

It all comes down to knowing how to choose your deals and putting in the work.

“I was really bad at real estate for about seven years ago with real learning curves,” he says. “And then finally something clicked. All those times you mess up, you learn from all those things and you don’t make that mistake again. And you keep on failing forward until all of a sudden you’ve made every mistake and now nobody can pull the wool over your eyes.

“We do all the due diligence on all these things. And so we know exactly what we’re getting into from the get-go. We know what it’s going to be worth. We know what we’re going to have to go into it. And it’s very predictable for us. We look at a lot of deals in order to sort through to find and cherry-pick the best ones. It’s a sorting game. And if you can work quickly through deals, you can get to those deals faster than a lot of other people can’t before all the competition comes in.”

There were roughly 2.5 million multifamily properties in the U.S. in 2017. Of those, about 700,000 were five units or more, including roughly 94,000 were larger than 50 units.

“You’ve got to sort through a lot of deals in order to find that good one, because as much as one deal or an armful of deals can build your net worth and build your legacy, one big deal can take you down, too. You’ve got to really know what you’re looking at or be working with somebody who really knows what they’re doing.”

Think of it as a garden.

“Jim Brown has this analogy of sowing and reaping and planting and harvesting. And he says something along the lines of, listen, you have to go out and you have to plant seeds. If you don’t plant seeds, you will not have a harvest. Right now, some people go out and plant seeds and some of those seeds dry up. They get burned out by the sun. They don’t get the water that they needed. They blow away into somebody else’s pasture.

“You’ve got to work an entire season before these things actually grow and produce fruit. And there’s a lot of people who get discouraged when the seeds burn out, when the seeds blow away, when the seeds don’t get enough water, don’t get enough soil.

“You can’t see the actual fruit growing because sometimes it has to grow down before it grows up. You might not actually be able to get a harvest from some of them. Other ones might harvest. You might see them sprout in five days. You might see them sprout in five weeks, five months, five years, maybe 50 years. Just because you’re not seeing the results right now doesn’t mean it’s not working underneath the surface.

“You’ve got to put in the effort. And over time, if you’re doing deals and if you keep on planting seeds, eventually there will be a harvest for sure. I’ve been waiting 15 years for this deal to occur. It happened because I was bad at real estate, because I stuck with it, because I didn’t quit and go somewhere else, start over, and go through the learning curves over and over again at different industries.

“You just keep on planting seeds. Keep on doing it, live with it, and know that it’s going to grow eventually.”

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.