EP 604 – Next Level Income In Multifamily Real Estate With Chris Larsen

NCS 604 | Multifamily Real Estate

NCS 604 | Multifamily Real Estate

 

When you look closely at the demographics, it is a safe bet that multifamily real estate will continue to be a lucrative property class for years to come. Exactly where and how do you find the best deals in this space? What should you look for in an investment deal? Chris Larsen, the Founder and Managing Partner of Next-Level Income, gives us some of his ideas on these questions. With over twenty years of experience in investing in and managing real estate, Chris knows his way around the industry. As you listen to him talk with Scott Carson on the show, don’t miss out on the very important nuggets he imparts and learn how you can take a slice on the lucrative multifamily space in the next decade.

Listen to the podcast here:

Next Level Income In Multifamily Real Estate With Chris Larsen

We are honored to have my friend, Chris Larsen from Next-Level Income joining us. He is an amazing investor who does and approaches things from an engineering mindset. He has done a great job of systematizing and building amazing processes in place to help his business grow. He’s got a passion for helping other real estate investors out there take their income to the next level. I think you’ll enjoy this episode. Make sure you stick around because Chris will make it available for you to be able to grab his book at no cost. I’m sure you’ll enjoy it like I have.

I’m even more jacked up to have a friend of mine join me all the way from Asheville, North Carolina. This guy is a rock star, a long-time real estate investor. Spent some time in the note space delivering some goods out to people out there. He’s also a fellow podcaster, but this guy is doing some amazing things, taking people to the whole next level when it comes to income. I’m excited to have our good friend, Christopher Larsen, kicking butt and taking names. He is joining us from Asheville. Chris, how is it going?

Scott, I’m psyched to be here.

I’m glad to have you. You’ve done some amazing things so far. For the readers who aren’t familiar with you, take a couple of minutes or take a couple of seconds, however long, and tell us a little about your background and what you’re focused on.

Scott, thanks for the opportunity. I’ve been an investor for many years. I bought my first property at age 21. I was investing in the stock market before that. I bought pools of distressed debt like we were talking about before. I’ve always wanted to be an investor. It came down to freedom. I was in college, I went to Virginia Tech. I was studying engineering, but what I love was racing bicycles and I wanted to be a professional cyclist. I trained with Lance Armstrong. I trained at the Olympic Training Center. My best friend was my roommate. He was my training partner and between my freshman and sophomore years, he died of a massive brain hemorrhage. I put my head down and I poured my heart and soul into racing for the next year.

I had a breakthrough. I was a Category 1, which is the level you need to be to take out a professional license. I was winning a ton of regional races. I was traveling nationally. Labor Day weekend came around and it was my friend’s Memorial race. I won in a dominant fashion and by all accounts, I should have been thrilled. I came across the line and not only was I not happy, I felt no emotion. A week later, I decided to quit racing. I couldn’t figure out why this sport and this life that I loved and was so passionate about, didn’t make me happy. I got back to school and I was probably a little depressed. I took a step back and try to figure out what I wanted to do.

I talk about this in my book, which if your audience wants, they can go to our website NextLevelIncome.com and then click on the book link and get a copy. It goes a little bit deeper into it. I had a family friend that introduced me to cycling and also introduced me to investing Roth IRA, compounded interest, and I was day trading in the stock market. I was making like $5,000 a month in college, but I was also losing money time from time to time. There was one morning, it was about 3:00 AM. I hadn’t slept. I was thinking about a trade. I thought, “Is this how I want to live my life?” What I was chasing was freedom. What I realized was that wasn’t being an investor, that wasn’t freedom. I started looking at other options.

I read as many books as I can get my hands on. I read over 250 books on investing, real estate, and all different things. I decided that real estate was a good fit for what I wanted to do. At age 21, I bought my first investment property. I did like a house hack. I rented out the rooms. I bought the place next door and I bought another one. I had a portfolio of properties. I didn’t have a lot of money. My family didn’t have a ton of money. I then went out and found a career that I can make a lot of money. I spent fifteen years in the medical device space and I put as much money as I could into these real estate investments. Ultimately over the past several years, I transitioned exclusively into commercial real estate, specifically multifamily. We’ve been syndicating those deals for years now. Now, my goal is to help others through education and opportunities to achieve financial independence as well.

All of us go through a transition in our lives trying to figure out who we want to be when we grow up. I think a lot of people out there feeling the same thing, “Am I doing something that’s going to make sense to the long-term? Am I accomplishing all the goals that I want to do?” A lot of us are like what you were talking about. You’re going through things and you get to be at the pinnacle. You’re like, “Is this what I want to do at the point when you get reached that peak when you’re winning the race? You talk about buying debt and then also being in the multifamily commercial space. Let’s dive into that for our audience out there because much of our readers are looking at that space. We’ll talk about some of your debt purchases here in a little bit but where do you think the market is going? Let’s start first with the multifamily market. I know we don’t have a glass ball to look at. We can’t see the future. We can look a little bit back in our history, but where do you think the multifamily space is going to go with everything happening in the market, Chris?

At the core, I’m a demographics guy, Scott. Probably everything I talk about I go through in detail in my books. I’m an engineer, I’m a data guy. I was reading stuff and one of the books I read was by Harry S. Dent. Some people think he’s crazy. He comes up with these predictions, but if you read about Harry S. Dent, he’s a demographics guy. He talks about these big demographic trends. I look at it like tidal shifts. If you know the tide’s coming in and going out, you might not know where the waves are going to hit if you’re a surfer, but you know when to go out and go surfing. That’s how I look at it.

I was looking at demographics and that’s what led me into the medical device space. I knew the Baby Boomers were going to need surgery. I started looking, “Where are these people going to move?” I was in DC after I graduated from Virginia Tech. I ended up getting my MBA in Finance Portfolio Management. My wife and I moved up to the DC area to start our careers. I said, “People are moving to the Southeast.” My wife and I moved to Ashville, North Carolina, not only for the quality of life but for the demographics.

Next-Level Income: How to Make, Keep, and Grow Your Money Using the ‘Holy Grail of Real Estate’ to Achieve Financial Independence

When I was doing an analysis of my portfolio back in my early mid-30s, I came across the multifamily space and I saw the same things with the Millennials that I see in with the Baby Boomers. What I look at is where are we going this next decade? I can’t predict what the rest of 2020 is going to look like, Scott. I could tell you what the collection rates are per property and go through that. What the next 3, 6, 9 months hold, I don’t know. Here’s what I know. I know the trends and the fundamentals of the multifamily space aren’t changing over the next ten years.

We still need 350,000 new units per year just to keep up with demand. We need about four million new units this decade to meet demand. That’s not changing. What’s happening now is going to put a strain on supply. We’re seeing units being pulled off or new projects being pulled off the market. We’re seeing homeowners who are delinquent on their rents and record numbers going back. That means that more people are going to rent. I’m not happy about that, but that’s a fundamental that’s not going to change going forward. I think short-term, there’s certainly going to be some unique opportunities for people that got a little overextended. If you’re looking to acquire a property and you have the cash to deploy, I think that’s going to be a good time. Because if you believe in the long-term fundamentals, that’s not changing.

I agree with everything you’re saying there. It will be needed, especially when you’re looking at what 10% of all homeowners are in the forbearance agreement. Before this all happened, 1 in 10 Americans are already a month behind with their mortgage. It’s a scary thing. We’re going to need affordable housing. I don’t think it’s just going to be the multifamily things. I think it’s going to be the mobile home park aspect of things. People are going to have to downsize or figure out where to go and you’re right. It’s not just where you’re at and where I’m at, nationwide there’s a huge need for housing, affordability, and multifamily and things like that.

One thing I am a little concerned about in that space and we’ve seen this, multifamily has been the most aggressive asset class. I hesitate to say, but the most overpriced aspect of things because you get a lot of people moving into it. I think overpaying for assets, with the idea that they’re going to cash out of it in 2 to 3 years. You’re shaking your head, you’re agreeing with me on that. You’ve got to be in that long-term knowing when the tide’s coming in and going out, I love that analogy. There are going to be some opportunities. People that over-leveraged the property, overpaid for it that you can pick up on the debt side in 12 to 24 months. I think you’d agree to that.

I do. With my partners, we’ve looked at similar trends. We started looking at A-class properties because we said, “There’s a pullback.” You can watch these trends. I talk about in my book, going back to the savings and loan crisis in the early ‘90s, watching both my parents lose their jobs. I lost my internship coming out of 2000. I was there in the great recession. You can see these trends in real estate. My partners and I, we looked at that and said, “What if we looked at some higher quality properties?” What I mean by that is properties with residents that have more stable occupations. They have a higher income. They’re not going to suffer as much in a downturn.

You have to be selective within the space. You say multifamily, what are you talking about? Are you talking about class C properties? Are you talking about affordable housing? Are you talking about subsidized properties? Are you talking about luxury properties? I’ve always been a fan of B, A-minus in that space. Although we have properties going back into the ‘70s that had been built. You have to be selective. We’ve seen cap rate compression on the lower end of that scale, and you certainly see people that are overpaying. They just want to get a deal done. They think they can raise the rent by 7% annually and hit their numbers. You’re not going to be able to do that.

The whole raising the rent aspect of things, I think you’re right. I think you’re going to be looking to maintain it, if not, you’ll give in a little bit to help out your tenants if possible for you. What are you seeing across your properties just looking at where it’s at? Are you seeing people in the high 90% still for say collections, are you seeing a little bit more of leniency on that stuff? How’s that working out for you in your properties?

If we look nationally, we’re seeing, mid-80s collections. Typically, if you go back a year, you’re seeing like the high ‘80s as your typical collection. They’re off a little bit. If you look at our portfolio, the properties that I owned, we have about 1,200 units total in the properties that we own going back to 1974, all the way up to 2014. The properties built in the ‘70s or early ‘80s. We’re seeing collections in the high ‘80s. That segment is 88%, 89% collections, April and May. It’s solid but not fantastic. The properties that are more on the B-plus, A-minus side, those collections are essentially unchanged. We’re talking about 97%, 98%, 99%.

What’s the geographic makeup of your units? Are they all there roughly around where you’re located or spread out a little bit?

I moved to the Southeast on purpose to follow these demographic trends. I like the Southeast from a multifamily space. I’ve owned properties in Texas, South Carolina, North Carolina, and Georgia. My partner is in Kentucky and Tennessee. Our portfolio is mainly based in the Greater Atlanta market, as well as North Carolina. We’re talking about Raleigh, Charlotte, and Atlanta. There are 30-some different submarkets in that MSA. The Raleigh and Charlotte properties are doing quite well. They’ve been very stable and the Carolinas haven’t been hit that hard by the COVID-19 situation. Georgia and South Carolina are open. North Carolina just moved into phase two. I’m hopeful that we’re going to keep moving through this in a positive fashion, but certainly, there’s going to be some short-term effects.

Multifamily Real Estate: The trends and the fundamentals of the multifamily space aren’t changing over the next ten years. We still need to keep up with the demand.

 

Let’s talk about some of your notes. Pass being a note investor on stuff like that. What kind of those deals made up of, the multifamily, single-family? What kind of breakdown were there?

My partner and I, we were buying pools of distressed debt from banks. His group was working them out and I was funding. In 2014, 2015, coming out of the great recession, as we were starting to see property prices start to climb. We were able to buy debt for sometimes $0.09, $0.15 on the dollar. Towards the end of that, we were looking at prices of $0.25 on the dollar. Those were entirely single-family seconds and most of those were non-performing seconds that we were buying and working out. If you’re buying for $0.10 on the dollar Scott, and I know you’re very familiar with this space, you don’t have to have a lot of them work out well to do very well. It was a profitable space, but around that same time, I was starting to invest in the multifamily side and I made a decision to focus my active endeavors on the multifamily space at that time. I moved into a passive role with the distressed debt that we were buying.

With seconds, we’re going for pennies on the dollar. That market is rebounded strongly as the values have come up in the last couple of years, to the point where that’s almost an overpriced segment in the debt space too. There’s still opportunity out there in so many different ways on the real estate side. With the investors that you’re dealing with, what do you see are probably the three biggest things that they’re looking for? For those that are looking to raise capital, looking to do syndication, especially with the different deals that you’ve done, what some of the things, maybe the biggest obstacle, the biggest questions that people are asking or look into answering? This is a way for our readers out there who are looking to raise capital for their first or a bigger project. What are some of the things that you’d recommend people talk about?

There’s couple of different directions we can take this, Scott. When I talk to an investor, I tell them what our goals are. Our goals are capital preservation, income, and then appreciation in that order. We’re looking for stable cash-producing assets. We want to make sure that they have low occupancy rates where they can break even. Like this property we acquired, 55% break-even occupancy. Very stable cash-producing assets, low breakeven occupancy. When it comes to what investors are concerned about or what they’re looking for, maybe why investors invest with us. They’re looking for diversification. They’re looking for stability in their portfolio. I dive into this in my book. I talk about if you can bring 20% or 30% of your portfolio into income-producing real estate, this is why I call it the Holy Grail. A little sneak peek in the book is because you can increase the returns of your portfolio and decrease the risk.

My MBA is in portfolio management. I almost got a PhD in finance. I love it. I talk about the sharp ratio I don’t think a lot of investors know that the ultra-rich have about 30% of their assets in income-producing real estate. The reason is it’s so stable. It’s producing cash. When the stock market’s dropping 20%, 30% like we saw, your properties are probably not dropping by 20% or 30%. Do properties go down in value? Sure, they do, but they’re more stable. Part of that is the illiquidity. That’s the downside. Investors say, “When do I get my money back? How do I get my money back?” That’s a big concern for investors. If you’re an investor, I think you need to ask a few questions. You need to say, “Am I comfortable with the strategy overall? Am I comfortable with the market? Am I comfortable with the operator?”

That’s before you even look into the deal, because you might see the best deal in the world in a market that is a one factory town that’s been dying for years and you might be like, “It’s 12% cash-on-cash.” If you can’t sell that asset or people are moving and stop paying rent, that’s not a good deal. You always want to ask, when do you get your money back? Illiquidity is a benefit in terms of stability. It’s also a detriment. If you say, “I’ve got to have my money back in 12, 24 months.” The multifamily space may not be right for you. If you’re putting together deals and you’re looking for investors, you need to make sure you educate them on that, or you have some sort of provision to make sure that investors know when that’s going to happen.

Those are great nuggets. You said something there that’s good. Somebody looking in the multifamily, I think only the real estate investors in the short-term, we’re talking fixing flips. You still should be twelve months or less. If people are looking to get in and get their money out in less than twelve months, I think it needs to be completely outside of the real estate side. We all know that deals, especially in today’s market, you get hit with a right hook like we have. My phone and email have been filling up with hard money lenders asking, “Will you buy my note? We buy my debt right now?” I love your model. Let’s look at the long-term. Appreciations are the last thing that we want to be looking at. Unfortunately, a lot of people on the West coast were like, “We can guarantee appreciation. Let’s invest in appreciation and go the low cap rate.” That’s a death sentence at some point.

NCS 604 | Multifamily Real Estate

Multifamily Real Estate: The trends and the fundamentals of the multifamily space aren’t changing over the next ten years. We still need to keep up with the demand.

 

I’ve made that mistake.

We all have at some point if you’ve been around longer than five years, for the most part with the trends. We’ll be talking about portfolio management with the market being in such an increased upward trend over the last twelve years. I know that your spider senses have been saying, “This can’t stay as it is.” What are some of the things that you and your partners have done? We know that the is going to stop, the merry-go-round is going to stop at some point. What do we need to do to start preparing for that? Anything that you guys have planned or discussed and put in place to take advantage of opportunities?

There are a couple of different things. We are moving away from bridge debt. There are a few rules if you will. I think it’s important to have debt that lines up with your expected hold of the property. The last property we acquired here has a tenured debt with a projected seven-year hold. We are looking at making sure that we have some flexibility. There is a stage process. We could even say, plan A, is at a 4 to 5-year period. Plan B is at a seven-year period. Plan C would be, “The market’s not great during either of those periods. We’ve got to go out towards the end of this debt.”

We’re putting in longer-term debt. That’s on top of what I already discussed, Scott, of looking at properties that are more stable. Because I think, if you’re buying a value-add property and you got to turn that resident base and increase rents, $200, $300 to get where you need to be in a short period of time, you’re going to see some drag on that. That’s going to prevent that appreciation. It’s also going to hurt your cashflow because if you have to operate at say 93%, 95% occupancy to hit your say, 7% pro forma cash return, and now you’re at 90%. You’re probably not losing money. That deal that you’re not having to make any improvements on is probably outperforming the deal that you’re making all these improvements on.

You have a deal that’s higher risk and lower returns. That’s the opposite of what you want. I’d say, if I’m going to take more risks, I want higher returns. We’re looking at more stable deals. We’re looking at longer-term debt. Also, we’re educating investors and saying, “Scott, if you’re interested in this deal and it’s going to project 12%, are you comfortable if we only did 6%?” That’s a good question to ask yourself. If you say, “I can’t deal with that. That’s not going to work for me,” then you have to understand that we’re operating in a slightly different environment. Cap rates may expand going forward. Appreciation may drop a little bit. Cash may be a little bit lower than expected. It’s always important. If an investor says, I’m not comfortable with that, it’s okay. This might not be a good fit for them at this time.

The thing is many people, they get into it with the new puppy investor, “I’m so excited. We got a dealer to get it done.” You said something like, “I got to get a deal done.” That is the worst type. Take your time. Make sure it’s a good deal, not a dud. Are there any mistakes along the way? I’m sure there has been, but any deals that when you think of duds or stuff, you’re like, “I should have done that.” Anything that stands out in your past, Chris? Because we’ve all got them.

In the medical device space, I train reps and manage a team. One of the things I enjoy is you teach people. One of the best ways to teach people is to tell them your mistakes o they don’t make the same mistakes. I was buying properties in the late ‘90s, early 2000s. I timed the market perfectly. What I mean is I put my first property on the market to sell and I watched the property values drop 30% while it was on the market. I was like, “If I could have pulled a trigger or a lever at that time and liquidated everything, I literally would have time the market perfectly.” It was the end of 2007, I waited too long.

That’s one thing. Don’t get greedy. There’s a great saying, “My secret was, I always sold a little bit before the top and I bought a little bit before the bottom.” That’s why I talk about the title shifts. You don’t have to time it perfectly and don’t try to time it perfectly. You’re probably going to get run over by the steam roller if you try to pick up that last penny. That’s the first lesson. Go with the flow, but have a plan. Always be selling and buying on your own timeline. Let’s talk about the multifamily space. The worst deal I was in, I was a limited partner, a passive investor in a deal.

We bought it in Houston around 2013. Oil was hot, things were getting were off the charts. It’s like about the same as we are now. Oil prices dropped, the economy in Houston tanked, the hurricane came through. That property, we had a management issue. We had pulled some money out then we had a capital call. We got an investment that’s not performing well, and then the operators call me and say, “You need to send us a check so we can keep operating this deal.” What are the lessons? You need to prepare for these things.

One, don’t get over-leveraged. We had a little bit too much leverage on that property. Two, keep a close eye on management. Three, it goes back to one of the things I said, which is to be comfortable in the market you’re in. If you’re in a market like Houston was at the time, it wasn’t as diverse as it is right now. If that one sector of the economy, or let’s say you buy a multifamily or a student housing deal in a property, and now there are no students in the property because of COVID-19, that’s a big risk. You have to be comfortable with those things. That’s something I tell investors. I say, “I’m always going to invest in these deals alongside you.” If this is what I look for, I always walk through that with people. The converse of the things we look for is, you can make mistakes by not doing that. Don’t overleverage. Make sure you’re buying in diverse economies and make sure you keep a close eye on operations and management.

Operations and management can eat you alive if you’re not watching things. While the cat’s away, the mice will definitely play.

That’s where the rubber meets the road. If you’re not hands-on operations yourself, you got to be confident in your operating partners.

What’s one of the biggest learning curves or one of the best ways to learn to go from a passive to an active investor in a multifamily side, Chris?

Going into it, I’m always a learner, so I’m always trying to figure out like, “What are the pieces that make a success?” I was looking for those pieces and saying, “If I was doing this myself, what would I do? How would I improve upon this?” As an engineer, I’m always thinking, how do you iterate? How do you get to the next level, no pun intended, of performance? Pay attention. That means looking at monthly financials and digging in. I’m a numbers guy. I would highly recommend if you’re going to be a passive investor in the space, if you’re not comfortable, they can look through those numbers for you.

You can keep an eye and say, “Is there something amiss?” If you’re one of our investors, my investors call me and say, “Can you walk through this with me?” You can call your operator and your syndicator and say, “Can you walk me through what I’m seeing?” As an owner in the deal, you deserve to see that. That’s number one. Understand what is going on and keeping an eye on those things. Going into, even if you’re passive, think like an active investor and that’s the biggest thing. The second thing is, going back as an engineer. When we solve a problem, the first thing we do is we list our assumptions.

Multifamily Real Estate: The ultra-rich have about 30% of their assets and income-producing real estate; the reason is that it’s so stable.

 

I’m always questioning assumptions. You asked about this earlier, Scott. How is the market changing? What do we see going forward? I love multifamily. It says on the cover of my book, that it’s the Holy Grail. I think it’s going to be in the near future. If we’re talking again on this show, Scott, I may say, “Things have changed. The fundamentals have changed and I’m willing to change with it.” What I mean by questioning the assumptions, I also mean stay humble. Do you ever look in the mirror and say, “Am I right? Did I make a mistake? Am I wrong?” It’s okay to be wrong. It’s not okay to be wrong and stick your head in the sand and continue to make bad choices based on the wrong assumption.

What I always like to ask too, is coming from the debt space into everything. We’re going to see a lot of debt here. I’m doing this for my own and picking my brain here for you. What’s your asset class? You talked about C, B, As parts of the country. You like to select the Southeast conference part of the United States and the major cities for the most part. That’s a strong area. We talking 100, 200-plus units. What’s your property size that you’re looking for as far as the number of doors?

You get efficiencies as you move up the scale. A lot of investors that are getting started, don’t make an assumption that you need to go 10, 20, 50, 100, 150 units. You don’t have to be sequential. If you know how to run a good deal, and you look at where the efficiencies are. You can’t cut a person in half. I guess you could literally.

It goes back to Solomon in the Bible.

The Bible, there’s a lot of good financial advice on there. There are efficiencies that you start to achieve when you’re around 150 units. We are typically looking at deals like 150 plus units. We’re also looking at segments of the market where we have a competitive advantage. We like to buy deals that are too big for not even moms and pops, but like small, mid-market players. We did a raise. We raised almost $20 million. We know that we have firepower when it comes to some of these larger deals. Here’s the challenge. It’s like Babe Ruth.

You get up and you’re swinging for the fences. You’re going to strike out more typically. If you’re going after some of these bigger deals, there are not as many players necessarily. We had six LOIs out. Two came to fruition and then one pulled out when the interest rates tumbled in the market unraveled. Out of the first quarter, we ended up with one deal, even though we had six LOIs out there. Efficiencies are what we target, some of these bigger properties and then also a competitive advantage. We’re trying to focus on what we can have a competitive advantage in.

One out of six in the first quarter is not a bad play at all. It’s a 15% or 18% closing ratio. That’s pretty good. I always tell new investors, expect to have roughly about a 10% closing ratio for the offers you’re putting out. You’re going to either kill them for due diligence, financing or a variety of things. I’m glad that you said that there because I think they should drive everything at home. Everybody makes offers a lot of times, especially starting off with. They only make offers for the amount of capital they have in their bank account. A lot of times they’re afraid to make multiple offers thinking they’re all going to get accepted. We know that’s just not the case.

When we started Scott, it took us almost a year. We started the process, my partner and I in October, November, and we closed our first deal in August. We were thrilled to get one deal done in the first year. If you’re starting out, set your expectations. You’re going to have to take a lot of cuts at the plate to get your first hit and that’s okay.

You’re talking about raising $20 million. Is that only accredited investors or you’re doing a mixture? What kind of fund set up is that?

We operate under Reg D 506(b). If you asked me, if you go to our website, it says accredited investors is who we work with. There is a provision. You can put about three dozen non-accredited or sophisticated investors in these deals. We do have a handful per deal. I would say, maybe 3 or 4 sophisticated investors. I do say allowing per deal because if you call me and you say, “I’m close to meeting the minimums.” Even if you’re accredited, you might not be allowed into our club to be a good deal like that. You got to be a good fit. It’s a club, it’s a team. We want to make sure that everybody’s on the same. We can raise the money. We’re not trying to squeeze people into something that’s not a good fit for them.

What are some of the best ways that you guys have raised capital or put yourself in front of the right people to fund these deals to be a part of it? Any tips you want to give our audience out there?

I wish if I had some magic tip that I’d say, “Here’s how you can go from $0 to 20 million in your first deal.” If anybody out there has that call me. I’m all ears. The best tip I have is to build your network. I read a book in college, I think it was called Build Your Parachute Before You Jump. It was about building your network and it resonated with me. Dale Carnegie had a How To Win Friends and Influence People. I’ve had a lot of people help me along the way. I love to help people. I got a couple of young individuals here in Asheville that I mentor, I help give them some insight into different things.

Always be trying to build your network. After you do that, let people know what you do. If you’re confident and you’re good at what you do, don’t be afraid to let them know that. I wrote this eBook years ago and I sent it to people. I came across a company that said, “We can publish your book in eight weeks.” Even if you don’t have one written, I was like, “I wrote it.” I sent it to them and it’s been great. What I found, Scott, is that it shares a bit of my personal story. I have friends that have known me for 5, 6, 7 years or even longer. They read it and they’re like, “I didn’t know that about you.”

It’s because I don’t go around talking about my childhood or my personal struggles. Especially if you’re successful, you don’t talk about your failures, but it’s important. I would say, build your network, let people know what you do. Don’t try to fit people in. Meet people where they are and they’ll come to you. One of our first podcast guests talks about just give away as much value as you can. That’s what I’ve focused on is trying to help as many people as I can. If 1 out of 10 of those people I help comes back, that’s a pretty good rate of return. That’s not why I do it, but it seems that that’s the way the universe works.

Multifamily Real Estate: It’s important to have debt that lines up with your expected hold of the property.

 

When I worked for State Farm, the agent I worked for was Frank Beamer’s nephew. He was a team captain, Brandon Semones, a great guy. A great family. The Beamers. that whole family. They’re fantastic people. Great work ethic. That was a good fit for me. I looked at UVA and Duke. I looked at some other schools in that area. I’m from Maryland. I got on that Virginia Tech campus and I saw the beauty of the mountains. It’s that good, humble work ethic resonates with me. I love it. You go to the UVA games, they got their little blue blazers on and they’re making fun of you. Every year I was there, but one year, we beat those guys. I got a lot of friends from UVA. That humbleness and that lunch pail defense is something special.

More so than anything else. There’s a lot of analogies and similarities between that aspect of defense and successful real estate investors. You show up, you do your job, you do it the best of your abilities. You’re constantly learning. There as a good team. You’re networking. I think about how Beamer handled the situation where the mass shooting that took place there on the campus years ago. I sent Beamer a letter. I’ve been to Blacksburg a couple of times in my travels. I was very surprised that he sent back while quick note to me.

You show up you’re going to have some great day, some days you’re going to have your lunch handed to you. If you’re an investor at the market and getting your lunch handed to you, takes some time. You had given some great pointers without talking about it. Educate yourself, read, learn what’s going on in the market. Don’t count on the highs or worry about the lows. Play somewhere in the middle and make sure you’ve got plan A, plan B, and plan C in case things don’t always work out for you. That’s a beautiful philosophy, a beautiful business plan there, Chris.

For anybody that’s struggling, or that’s taken some hits. What we’ve done is focused on the fundamentals. Focused on putting out content, talking to investors and over-communicating. Educate yourself, focus on what you can control. There’s going to be some sleepless nights, but I try to focus on the positive.

Chris, what’s the best way for people to go get a copy and download your book or anything like that?

Check us out at NextLevelIncome.com. You can check out our podcasts there, The Next-Level Income Show, where we help you make more money, keep more money and grow your money. We do that through opportunities to educate yourself and also opportunities to achieve financial independence through cashflow real estate. You can check out our book, Next-Level Income, and it’s at the book link. Your audience, Scott, can get a free copy, download it. If you put your address in, I’ll send you a copy as well.

We appreciate that. Thank you so much, Chris. Learn from what Chris talked about here and share some amazing nuggets out there. I know many people want to up their game going from the single-family to the multifamily. Going from a D-class, A-class and helping you put some things together. Do what Chris did. Learn, surround yourself with great people and then plan. Make sure that deal works on up and down aspect of things and that you’re not trying to squeeze a dud into a deal or square peg into a round hole when it comes to buying real estate. Chris, thanks for coming on. We appreciate having you.

Scott, thank you. I love what you’re doing here. You provide so much value for your audience. I appreciate the opportunity.

That’s going to wrap it up for this episode. Go out, take some action. Download Chris’ book at his website. Click on the link and put your address in and you’ll get something in the mail. That’s a beautiful thing. I thought I was the only one doing that with my book. Who knows? That’s a good thing to see you out there. We’ll see you all at the top.

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About Chris Larsen

NCS 604 | Multifamily Real EstateChristopher Larsen is the founder and Managing Partner of Next-Level Income, through which he helps investors become financially independent through education and investment opportunities. Chris has been investing in and managing real estate for over 20 years. While completing his degree in Biomechanical Engineering and M.B.A. in Finance at Virginia Tech, he bought his first single-family rental at age 21. During his subsequent career in the medical device industry, Chris expanded into development, private-lending, buying distressed debt as well as commercial office, and ultimately syndicating multifamily properties. He began syndicating deals in 2016, has raised more than $15M and been actively involved in over $150M of real estate acquisitions. In addition to real estate, Chris has invested in equities, oil & gas, and small business lending, as well as being active in Venture South, one of the nation’s Top 10 Angel Investing groups. Chris lives with his wife and two boys in Asheville, NC where he loves spending time with them in the outdoors and enjoying the food and culture that the region has to offer.


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