Originally posted by @Aaron R. :

@Ben Leybovich @Sam Grooms You mentioned the seller was not very sophisticated. He bought the property for 1.645M in 07/2013 and sold it to you guys for 8.15M 5 years later. 500% increase for an unsophisticated seller is pretty good. 

 He bought the property for $2.9M in 2013. But, yes, I disagreed with Sam's assessment of "not sophisticated. You can't argue with success.

I will say that he may not have been the most sophisticated seller, but on the other hand - he did not need to be. He did well enough on the front end. And while we can term someone as not sophisticated to do what we do, the reality is that he was plenty sophisticated to call the cap rate compression game, and had the balls to deploy when many did not.

Bottom line, I agree with you - @Sam Grooms should not have characterized the seller this way.

I'd argue that its 10x harder to build value now, than in 2013. How could you not build value by buying in 2013?

If the seller was given the property today for free, and you told him he could have any increase in value on the property over the next three years, I don't think he'd change a thing. 

When I said he was not sophisticated, I meant in the sense that I don't think he could do what it takes to build value in today's market. That's not an insult. I'd happily switch places with him. Hats off to him for the tremendous gain he just realized. 

Congrats!

@Ben Leybovich Amazing! Congratulations. That is one of my goals 150-200 unit. I have a lot to learn. Currently active military, so try to get debt paid for and put together $25k or so to get my first multi family or 2 singles here in AZ BEFORE I have to move again. Again, great work and a great example for the rest of us. Thank you for sharing your experience.

Originally posted by @Sam Grooms :

I'd argue that its 10x harder to build value now, than in 2013. How could you not build value by buying in 2013?

If the seller was given the property today for free, and you told him he could have any increase in value on the property over the next three years, I don't think he'd change a thing. 

When I said he was not sophisticated, I meant in the sense that I don't think he could do what it takes to build value in today's market. That's not an insult. I'd happily switch places with him. Hats off to him for the tremendous gain he just realized. 

Haha you can argue, but you would lose. It is harder to build value, of course, it is. And yet - he was the smart one to get in when he did - we are the schmucks having to do the heavy lifting. Wouldn't you rather be him? And isn't part of the reason we are doing what we are doing so that in the next cycle we can indeed be him?! 

Originally posted by @Ramon Grullon :
@Ben Leybovich Amazing! Congratulations. That is one of my goals 150-200 unit. I have a lot to learn. Currently active military, so try to get debt paid for and put together $25k or so to get my first multi family or 2 singles here in AZ BEFORE I have to move again. Again, great work and a great example for the rest of us. Thank you for sharing your experience.

 Thank you for your service, Ramon! And - baby steps...

@Ben Leybovich and @Sam Grooms . Thanks for sharing your experience in taking down this 98 unit deal. Very helpful to those of us with similar aspirations for the future. Thanks for taking high road and focusing on the big picture in the process.  

Originally posted by @Obinna I.:

@Ben Leybovich and @Sam Grooms . Thanks for sharing your experience in taking down this 98 unit deal. Very helpful to those of us with similar aspirations for the future. Thanks for taking high road and focusing on the big picture in the process.  

It is our pleasure to help, Obinna!

And, @Sam Grooms - note how people enjoy the high road, big picture, broad strokes...Ben Leybovich's liberal arts approach to teaching :)

Originally posted by @Ben Leybovich :

Originally posted by @Sam Grooms:

I'd argue that its 10x harder to build value now, than in 2013. How could you not build value by buying in 2013?

If the seller was given the property today for free, and you told him he could have any increase in value on the property over the next three years, I don't think he'd change a thing. 

When I said he was not sophisticated, I meant in the sense that I don't think he could do what it takes to build value in today's market. That's not an insult. I'd happily switch places with him. Hats off to him for the tremendous gain he just realized. 

Haha you can argue, but you would lose. It is harder to build value, of course, it is. And yet - he was the smart one to get in when he did - we are the schmucks having to do the heavy lifting. Wouldn't you rather be him? And isn't part of the reason we are doing what we are doing so that in the next cycle we can indeed be him?! 

 I get the sense you didn't read my entire post :)

That is so awesome!! Ccongratulations!

Originally posted by @Obinna I.:

@Ben Leybovich and @Sam Grooms . Thanks for sharing your experience in taking down this 98 unit deal. Very helpful to those of us with similar aspirations for the future. Thanks for taking high road and focusing on the big picture in the process.  

It is our pleasure to help, Obinna!

And, @Sam Grooms - note how people enjoy the high road, big picture, broad strokes...Ben Leybovich's liberal arts approach to teaching :)

But, guys - Sam just yelled at me to fully read his comments before arguing... Sam is still having trouble coming around to the reality that I am always right lol

@Ben Leybovich Congratulations man! Big close! Big deal! Hopefully big profits for you & your team! Phoenix is a great market.

Aw man that's great congrats!!!!

Originally posted by @Noah Ryan :
@Ben Leybovich Congratulations man! Big close! Big deal! Hopefully big profits for you & your team! Phoenix is a great market.

Noah - I love Phoenix too. And when I say this, I mean I love living here.

I've always been a gut buyer. Yes, the numbers have to make sense, but I don't ever want the very difficult job of selling to people something they don't want. So, the question I ask is always - will they like it? 

The thing is - I am not so different from most people I'd want to work with. All of us more or less want the same things in life. This means, we like the same things in life. So - if I like it, other people will likely like it too!

I like Phoenix. I like this asset. The location, grounds, mechanical set-up - I like it. So - they'll probably like it too... That's why I bought it!

This is very exciting. I'm just starting out in RE and am interested in the whole aspect of syndications, finding deals, and getting a group together.

I am just about to finish college and am wondering... what is the best way to start towards this kind of process?

I am not saying in reference to lock up deal like this (although a dream!) but, how can one start the foundation to get to where you guys are?

I am currently starting to familiarize myself with vocab and their importance in RE. What would you say are some steps someone beginner can take.

Thank you both and awesome property!

@Ben Leybovich this was the moment when I was alerted by the forum that I couldn’t upvote the same person more than five times a day. Lol. Congratulations on the deal, I don’t understand all the concepts...yet.

Congratulations ! 

Originally posted by @David Grinly :

This is very exciting. I'm just starting out in RE and am interested in the whole aspect of syndications, finding deals, and getting a group together.

I am just about to finish college and am wondering... what is the best way to start towards this kind of process?

I am not saying in reference to lock up deal like this (although a dream!) but, how can one start the foundation to get to where you guys are?

I am currently starting to familiarize myself with vocab and their importance in RE. What would you say are some steps someone beginner can take.

Thank you both and awesome property!

What are you studying in college? Do you already have a job lined up? 

If you want to eventually do commercial real estate, I'd go into commercial real estate right out of college. Whether that's underwriting for a bank, an analyst for a services company like Cushman & Wakefield, or even a broker. All of those will help build knowledge, confidence, and credibility. 

Originally posted by @David Grinly :

This is very exciting. I'm just starting out in RE and am interested in the whole aspect of syndications, finding deals, and getting a group together.

I am just about to finish college and am wondering... what is the best way to start towards this kind of process?

I am not saying in reference to lock up deal like this (although a dream!) but, how can one start the foundation to get to where you guys are?

I am currently starting to familiarize myself with vocab and their importance in RE. What would you say are some steps someone beginner can take.

Thank you both and awesome property!

This is an interesting question you pose. In one way, Sam is right - your current college studies can either help in your REI quest or not. However, as Sam has alluded to earlier in this thread, he and I come from utterly different backgrounds, being that he is a CPA and I am a violinist. And yet, both of us were able to find and succeed in REI.

So - whichever side of this equation your education satisfies, you can succeed. Not only that, but you can find a partner to compliment you perfectly in all of your areas of weakness.

One way or the other, success is more a function of persistence than anything else.

Good Luck!

Originally posted by @Stephen Jeffers :
@Ben Leybovich this was the moment when I was alerted by the forum that I couldn’t upvote the same person more than five times a day. Lol. Congratulations on the deal, I don’t understand all the concepts...yet.

 Hahah That's funny! Thank you so much, Stephen :)

Congratulations!  I would love to hear more about your lessons learned.

@Ben Leybovich Nice! 😎🍹

@Ben Leybovich Congratulations Ben.

Originally posted by @Richellon Belk :

Congratulations!  I would love to hear more about your lessons learned.

Thanks! 

Budget to hire professionals, they can be worth every penny. 

For the offering, get an attorney that specializes in securities, not just one who has or can do it. We used Jillian Sidoti, and she was great. 

You'll also need a real estate attorney. We had a few last minute items come up from the lender, and we never could have closed on time without a great real estate attorney. I've seen deals fall apart because they weren't able to close on time. Which brings me to my next piece of advice. 

Hire a due diligence team. This can usually be done by your property manager. If they don't offer that service, you might want a larger property management company. You'll still walk each unit with them, but their experience is invaluable. 

Put extensions in your contracts. We didn't need it (we closed early), but we had a 15 day extension built in to the contract. It would have cost us $50K in nonrefundable earnest money, but if it saves the deal, it's definitely worth it. 

Use a mortgage broker. They might seem expensive (probably the most expensive professional you'll hire, depending on the size of your loan), but its their job to make sure that loan closes. In today's environment when you usually don't have a specific finance contingency, just think of this cost as extra insurance. 

Get your financing figured out between the LOI being accepted and the PSA being signed, if possible. We spent the first week after the PSA being signed still figuring out which lender we wanted to go with. By the time the application was in and they got started, we were two weeks from contingencies going away and our money going hard.

You can see that 4 of my 6 lessons deal with hiring professionals. Just factor their cost in to your numbers. 

I'm sure @Ben Leybovich also has some good lessons. 

@Ben Leybovich BOOM💥!! Very nice!