This is The first episode of Real Estate talk with Randy Stedwell, We are having Stewart Beal from Beal properties and Beal Capital. We are talking about Multifamily and Property management as well as syndication.
This is for everyone out there who want to know about Metro Detroit Off Market real estate. We will be interviewing people every week and taking questions from everyone in the comments or they can come on video with us. we will post the link in the chat when the LIVE starts for those who want to come on video with us.
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E-Mail: RandyBuysHousesMi@gmail.com
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How's it going everybody so I'm very happy to announce on this is a episode one of real estate talk with
Randy stedwell I am Randy stedwell and we are having a very special guest
here named Stuart Bill part of BL Capital Bill Property Management
I mean he has his hands in pretty much anything real estate related so we're
going to get you know be able to see his perspective on where we are on the
market where we are everywhere so we're just gonna kind of get to it see how we
are um if you have any questions if you have any you know comments or anything
like that put them in the comment down below let's keep everything positive
and kind of going forward all right and Stuart how are you doing welcome aboard
yeah thanks for having me thanks for having me awesome so yeah I'm very happy to have
you I'm I on our show we are you know we're glad to have you here while we're
here um so every time every so often you're gonna see me kind of look off to the side it's because in the group I can
see where the the comments come I can see who's saying it but for some reason because it's a group they don't show it
just shows Facebook user so um but with that being said I you know
kind of wanted to get your story on uh like where where how did you got started
in this uh in real estate in general and then you know and then how did you get to where you are right now so but kind of let's start with your background
and how you got started in real estate yeah okay great so I grew up in a bit
of an entrepreneurial family and my father was a contractor and he would bring Business magazines home uh from
work and I started reading those Business magazines and this was before the internet and it was before Bitcoin and so these Business magazines
the way people got wealthy is they invested in uh real estate I've I of course didn't have any money
uh at the time and so I uh what I did was I started a lawn care and
Landscaping Company when I was 13 14. and just started mowing neighbors Lawns
and uh you know doing you know stuff that you would do within walking distance of your house but when I was
right 16 I formed a official company and uh got really serious about it started
signing contracts hiring employees made it a real business and when I was 19 I sold the lawn care and landscaping
company for 250 000 dollars and wow yeah the way I did it is I
structured it kind of like a land contract in real estate where the buyer paid me 50 000 down and then 1 uh 483
dollars uh a month for for 10 years and so that was the the first big business
deal I did when I was uh 19. and then wow so and yeah go ahead so you
know I just kind of so you started a business when you were 15 years old the lawn care company okay yes now most 15
year olds are out there trying to get dates to the dances and and trying to
you know get girls out there and I'm not saying you weren't but but you're out
there just trying to make a hustle now I understand that because I was the same way so the difference between what I was
doing and what you did is you actually made a legit business out of it I was just trying to earn extra money and I
was just always hustling so yeah so actually formulate did your
parents help you with that and how did you know how to do all that at age 15.
yeah so uh I came up in uh a bit of a unique background where my mom uh was a
lawyer so uh she wasn't focused on like business law she worked for the uh
United Auto Workers in Union type law uh
but definitely uh I am blessed to come from a privileged background not from a
monetary point of view I mean I I'm you know I earned the money that I've made
uh in terms of you know trading my hours uh for dollars in the beginning but I
came from a background where I had uh a good wealth of knowledge that I could
bounce ideas off of and for sure you know when it was time for me to write my
first business contract uh she definitely helped me with it um and I know everyone on the call
doesn't have a lawyer as a mom but they are uh certainly certainly ways uh to
reach out to your extended Network and try to find uh inexpensive or mentorships making expensive resources
or mentorships to to um to to get on the same playing field
as I was but no I I definitely uh fully acknowledge that my parents set me up uh
pretty well success and that's actually something I'm focusing on now to set my three daughters up for Success
um and you know paying for uh the Michigan college fund so that they're not going to have to go
into debt to pay for college and doing doing a lot of things uh you know with
real estate that can set them up for Success so um you know basically it was my like
intensive hourly work with uh some uh
certainly family help that got me got me started a little earlier than most people most people would but the key to
a small business and one of the reasons I like real estate and the key to a small business is two
things uh contracts and recurring revenue and that's why I really like
lawn care and that's why I really like real estate is because both of those are contractually based recurring Revenue
businesses where you know that that money's coming in every month and that you can make it because you know it's
coming in you can make uh you can make uh plans you can hire employees you can
buy equipment and and that's why I really like lawn care and that's why it transitioned me well to real estate is
you sign a contract with someone you can trust that most of the time they're going to pay that they're going to hire you to mow Lawns every year and that's
why my business was much more valuable than the average lawn care business I mean you you talk to young people that
have Lawn Care businesses I said show me your contracts and they say what I I got 100 customers I don't have a single
contract and I say well your business is worth nothing more than the value of your equipment uh right if you don't
have contracts and so I I learned that very very early
um and uh had every one of my customers on a contract so that when I went to sell this business I said not only are
you getting 400 names and email addresses my clients buying contracts where they're committed to paying you
money in the future and that's why now did you do a four-year contracts did
you do a seasonally contract a yearly contract yep and then I started doing
two-year contracts too eventually okay awesome so with that being said like how did you
know so you're obviously your parents were a big help with your knowledge on uh being an
entrepreneur getting these contracts up with your mom being a lawyer uh you know
but no one can just hand you drive you
know you have to have the drive to be able to go out there and do it okay action speaks louder than words right
so you know were you at times out there I mean you're 15 16 years old you're out
there doing this business at how many of your friends were out there you know doing mundane stuff you know kid
teenager stuff things like that that we're trying to coax you to away from that you know you get a lot of peer
pressure yeah so I think one of the keys to success in business is
uh the the stomach the guts to make ambitious requests of people oh yeah
okay so there's a very high likelihood that uh my neighbor is not going to hire
a 12 year old or 13 year old to mow their lawn they can hire a 20 year old a
25 year old a professional but like let's just start out by making that ambitious request okay hey Mrs
Smith can I mow your lawn I'm 13. I want to uh save up my money to buy a better lawn mower boom right she hires you so
that teaches you okay people like being asked ambitious requests and they
respond very favorably to them so then next time you say uh hey can I do this
for you can I do that for you and it just kind of snowballs into you know one
of the major keys to business success and real estate success is to make ambitious requests uh you know I uh I
had a lease renewing this week I asked the tenant It was a commercial tenant I asked the tenant to pay twice as much
rent as they've been paying that's an ambitious request ambitious they thought it was ambitious
as well but I you know I've been doing this now for 25 years 20 in real estate in five years in the lawn care business
and I just I'm comfortable making ambitious requests so I'm made that request and that started a negotiation
where of course I'm not going to get them to pay for twice as much but it's a starting point we're going to negotiate
that so that that was a lot of um uh of issues and and and read read
books read magazines and it'll get you comfortable with doing some of that stuff and I've talked to tons of friends
and business associates and they say they're just not comfortable making those requests well if you don't believe
in yourself and you don't believe in asking for those things they're not gonna they're not gonna come you know
oh 100 I agree with you on that and that's that's where
taking action comes in in play and you know if you don't take action you're
never going to get comfortable enough to make those ambitious requests you know right uh you know when I'm talking to
newly Sellers and or you know I I figure out why they're selling I
figure out all this information well you know they're asking for we'll say a
hundred thousand dollars and and I have to give them uh hey I gotta be down here
at 50. you know and without them just hanging up on me I gotta
deliver the blow is is intellectual and you know as possible they may not go
with me but at the same point I'm still building a relationship with them and they may go with me if I keep following
up with them you know so and it opens up the negotiations like you said you know
so uh now with that you know you started
you know very young being ambitious I I did the very same thing I was actually
any chance that uh I had growing up I was mowing lawns raking leaves shoveling
sidewalks I did everything anything that I could do my parents
we grew up lower middle class and I say that you know
um but we had my my parents specifically said
hey if we are required to put a roof over your head Three Square meals a day
okay and put clothes on the back they don't have to be the best clothes and they don't have to be the best meals and
it doesn't have to be the best roof so that's all we're required of you you want anything extra
there's a model there's a mower there's a rake I'll provide those for you there's a shovel I'll provide that
for you go make money yeah yeah I would say I I would say I
grew up uh upper middle class I grew up in uh one of the best neighborhoods in
Ann Arbor called Burns Park and Burns Park is filled with University of
Michigan professors who right don't don't want to mow their own lawn but thought it was super cool the fire the
neighborhood kid to mow the lawn um and I I would agree with you my
parents didn't give me uh spending money but they did provide a lot of the basics and what I tell young people is you're
never going to have more cash than when you live with your parents you know because uh they pay for they pay for the
mortgage the insurance utilities the the food and so it's actually really good
time when you're a teenager to get started in business to start earning money and saving money because you're
not going to be able to save more money ever than when you're a teenager or a
young early 20s if you're living with your parent you're going to save like 75
80 percent of your income whereas when you move out it's going to flip on you completely or you're going to be lucky
to save 20 of your income so that's what I say to young people when they ask me you know what should I should be doing I
say working harder as a teenager than than uh than ever to try to to get a
head start and that that's what I did is I I worked just really really hard when
I was a teenager and young young person to uh right to save money because what
do you need to invest in real estate this is a real estate show people say how do I get started in real estate well
I say the first way to do it is to save up money to invest in real estate because what are you investing if you
don't have the money to do it and a lot of people read the I can get started with no money down or I can borrow money
from uh High interest private lenders and there's like all these tricks I said
skip all that just work your butt off for a year 18 months save up 25
000 and invest the right way you know into real estate with some with starting
point and that's the that's really the best way to get started in real estate yeah I completely agree with you on that
because there are so many times where you see all these okay I can get in with
zero down well guess what if you get in zero down and it it just so happens to
be the exact long time wrong time and things tank well now you're upside down
in those High interest loans you know yeah I've never I've never seen a zero
down deal that's actually zero down yeah you might be able to buy zero but you're definitely gonna have to invest 50 Grand
into it in the first six months to make it work you know exactly so yeah I I've seen some things where
people can manipulate it and you know with a combination of a private money lender and a hard money lender so with
both of them come together the problem I have that is if you're a beginner doing that if you're if you're an expert and
you have your numbers down that is no problem 100 agree with that 100 but if
you are a very a beginner and you haven't done not one deal you haven't
done not one rehab more likely you're wrong on your numbers more likely you're going to go over
budget and you know kind of go you know that is going to uh get you
just in hot water you're going to be upside down in that deal you know yeah
yeah so um you know with that being said so you're at 19 years old you sold your
business on a kind of like a land contract you know
where you're like okay well I may not get the entire entirety up front but at
least I can set myself up for the next 10 years where I'm getting a reoccurring payment and I'll work on something else
yeah so one of the keys to uh business and real estate is uh multiple streams
of income so you hear people talking about that you want to invest in you want to invest in some over here you
want to invest in some over here you want to invest right and and that was what uh
uh starting this small business and selling it allowed me to do is I've now got multiple streams of income I've got
the income coming in from the lawn care and landscaping business even though I'm no longer doing one minute of work and
that way I can dedicate every minute of work into another stream of income and I did uh construction uh that I I worked
in construction industry I was a superintendent I uh started a
construction business and started earning that money again uh to then save it and invest in more real estate and
then of course I had a third stream of income so I went I went from no income to now I've got three streams of income
I've got the lawn care and landscaping business which I'm doing nothing for I've got the construction business where
I'm trading my hours for money again and then I've got the real estate uh investment which in the beginning just
one property isn't going to be a very strong uh income but again that allows you to start snowballing things and
start doing some interesting things where you you can buy properties more rapidly so in the beginning of my career
I bought a property uh every 18 months quickly I was buying a property year
then I was buying a property every six months then a property every three months and then now we buy two to three
properties every month of various sizes and so it kind of like uh snowballs and
Warren Buffett's autography uh I think it's called snowball because you know
his his theory was he started 50 years ago and it just grows and grows and grows until it's an Unstoppable
Avalanche of success rolling down a hill and no one can stop it and that's uh you
know what I've been working on oh wow so are these mostly single families do you do multi-family things
like that I know you do now you deal a lot with multi-family but in the beginning did you start off with single
family yeah so I I didn't really spend much time on single family uh the first
property I ever bought was a five unit that I bought my other unit and then the third property I bought was a 30 unit
now it was a very distressed 30 unit it wasn't like what you'd pay for 30 units today but
um I didn't spend much time on single family I have I have bought single family and single family is fine I'm
definitely not going to knock that as an investment strategy but I've always focused on what I call uh small to
mid-size uh apartment buildings so that's five units and up uh and you know
mid-size would go anywhere up to like 100 units okay so and how would you find those just
through wholesalers through other agents or anything like that or would you be
out there cold calling and trying to find those deals yourself yeah so the first whole the first
wholesale deal I ever did was about 15 years in in business uh wow yeah I
didn't even know what wholesalers were until about 2016 when I did probably my first wholesale deal uh what I did what I did
is I uh used a combination of off-market and on Market strategies so on Market is
you know uh work with Realtors to make offers on the MLS and then off Market is
writing letters uh meeting people um and and and then another strategy
that doesn't work in 2023 uh but maybe we'll again in the future but
it worked really well from 2008 to 2015 so like a seven year stretch there is
you'd watch listed deals get old and stale and then you would approach them
with a much lower offer or a land contract offer or a very little downland contract offer and pick deals off that
are technically listed but they're just so old that uh yeah no one's looking at
them anymore and you can come in at a much more attractive deal um so yeah lots of different strategies
uh now a big one is social media you'll see me on Facebook you'll see me on LinkedIn I'll go viral from time to time
with different stuff and uh more than one deal a day comes into my book
Facebook Messenger or LinkedIn messenger now of course when you're looking at a
deal a day you've got to weed out a lot of things to try to find the deals that work for you but it's worth it because
if you're trying to buy two to three properties a month you need to have a really big deal flow coming in
um just to be evaluating all those deals now now the ones that don't work for you what do you do with those deals you just
pitch them back do you well Summer with the network yeah some are really horrible so I just say I just say no
um yeah some some are in the city of Detroit uh a lot of them are in the city of Detroit and I I can't right now in
good conscience recommend anyone invest within the city of Detroit right now uh just because of what's going on with the
evictions and and things like that um so I just tell the people hey I'm not a Detroit investor right now I'm a metro
Detroit investor I'm not a city of Detroit investor right now um and
um uh and then a lot of deals I take an hour or two to evaluate and then give
the person feedback and then a lot of them we do make offers on and then a lot
of them I uh I'm not a broker and I'm not trying to earn brokerage fees I'm not trying to earn realtor fees but what
I do is say hey my friend this guy would be interested in that or hear me you
know hear me Zach metler or one of my clients who might be interested in buying it yeah so I do a lot of
introductions and you know keep the deals uh flowing flowing that way
gotcha now as a wholesaler myself if you ever have any deals that don't
work for you yeah and you know send them over my way I'll see if I can help them out okay happy to work with you I always
get finders feed I always work things out you know no problem yeah so whether whether it be direct to seller or not
through another wholesaler so okay yeah do you work you work with other wholesalers yep I I JV a lot so oh okay
great um yeah so and sometimes I'm the one that has to tell them the honest to
God truth so yeah okay yeah what I tell people is it's like it's
really like people are like people contact me all the time hey hey Stuart if you ever have an apartment building
that doesn't work for you kick it to me and I'm like well over 500 people have asked me that uh so you're gonna have to
do better than that bring me some value and get in communication with me more
often and then you'll be top of mind like I'm not gonna remember you pinging me on January 9th 2023 a year from now
oh you know what I mean but like if you if you bring me value uh you know refer
clients to me or for investors to me bring deals with me then then you'll get into like a tight Circle that we work
with um and then you'll be top of uh top of mind you know most definitely I try to I
try to follow up with everybody as much as possible uh you know and any it's all
about relationships no matter what you know yeah for sure and I don't expect anybody to just hand
me over a deal without anything in return you know I always pay finders fees no matter what so yeah that makes
sense yeah the whole wholesaling is a um it's kind of a world that I've dipped my
toes in but I haven't really lived in and breathed it so you know and people like me people ask me hey Stuart how do
you buy mid-sized apartment buildings okay I could talk to you for 10 hours about that and then another personal
support teach me how to wholesale real estate and I would say ho hold up I'm
actually not gonna even tell you anything I'll go talk to this guy go talk to this guy yeah go talk to Randy
because I I'm not going to spend my time trying to tell you how to wholesale real estate because I'm not an expert in it
but I I'm an expert in a few a few things and so if you want to know how to do this or that I could speak to you
know what I mean oh most definitely and that's another reason why we have this channel is is I
don't want this being a okay this is only wholesaling and that's it I brought
lenders on here I brought other property management companies on here I brought other people on here I want to see just
just because like for instance we had to lender a hard money lender on here and I'm like I want to know what your
history I want to see how you got started where you know where you're at now what are your goals and you know
you're not just a hard money lender you know so uh you're an investor as well
and so on and so forth so like for instance you you have multiple streams
of income and you have multiple different businesses so you know the
fact that you own your own construction company the fact that you have a landscaping company the fact that you
have uh you know even though they're mid-level multi-families you know
they're you probably have higher multi-families by now um you know things like that it's it's
crazy so you want to bring that value to everybody else and hopefully if they you
know get Great Value they keep watching us and the good thing is is all of on
our YouTube channel and if you haven't subscribed yet hit subscribe hit that subscribe button uh we're on YouTube
we're also if you're watching on our face Facebook Channel Metro Detroit off-market Real Estate Group head over
to my YouTube channel at Randy stedwell and subscribe uh we will you know this
will be on there for the archives you know so yeah it looks like you know
there we go look got your video back so you know we're trying to add as much
value as possible to everybody and uh so at this point you have three streams of
income you have your construction business you have your landscape business that you sold uh that's giving
you reoccurring income and then you had what was the other business as well uh yes we had the landscaping and we had
the construction and then we had the first real estate Investments the first real estate investment and you know the
the key the key is to save up some money before you start settling into your life
you know you get married you've got kids you've got cars you've got health insurance you've got vacations I just
went to Disney last week oh my God I couldn't believe what that costs you know and so the key is in your young 20s
to to hustle definitely go get that job that W-2 job let's start a side hustle
so that your W-2 job is paying your expenses and you can save 100 of your side hustle uh income and invest it in
real estate you've got a short window to to really get started on this uh
investment career before you start settling in and you're you're not able
to save as much money uh as you could because you've got two cars health insurance you got to pay babysitter
child care you know all those things that start adding up and so that's that's what I did is I really focused on
getting my earnings higher saving as much money in my income as possible and
investing as much uh into real estate as soon as you can because
um you know don't try to time the market don't wait don't don't get hesitant about investing in real estate get
invested in real estate as quickly as possible it's too powerful of a tool for
wealth creation uh to wait because remember when you invest in real estate you've got four or five different
amazing that happen the first thing is you have cash flow the second thing is
you have appreciation your property's going up in value the third thing is you have depreciation so that that's
shielding your income again uh shielding taxes against your other income the
third the the fourth thing is your residence your tenants are paying down your loan own so that's increasing the
spread between the value of the property and the loan just kind of stretches over time and and that and that improves that
gets better every single day so it's a huge difference between investing now or six months from now uh in in these
benefits and then of course you've got your cash out refinances your potential sales of investing
um but I talk to people all the time who said it's now a good time I say there is never a better time than now
um as long as you buy a property that you can manage well yeah
so on that you know where they're asking you know what do you think of the state of the market is right now and again
back to what you just said you kind of just answered it uh but you know should
we buy should we not you know things like that and you know I think you're
going into answering that but I just wanted to kind of reiterate that that question yeah you should buy a deal that you can
manage well or your property management company could manage well you should buy a deal that you get a couple different
benefits on are you a Sweat Equity guy are you a guy that likes doing the
financing and the insurance and and the construction management do a deal that
is is good for you I don't I would not do a deal where you think you're going to increase your rent
a whole bunch this year uh rent is increased very rapidly over the last two
years and if you're looking at a deal where the seller says that you can increase it way more I would be hesitant
about that so make sure you're just doing some tight underwriting on the seller's numbers don't say okay this
guy's charging way too little I'm gonna charge way more that's dangerous in 23. that might have been fine in 2021 but
that's dangerous in 2023 because that guy's already raised around a whole bunch yeah and you know I was looking at
my Toledo my Toledo deals that I own I own uh about 500 Apartments in Toledo
right now and I looked in in 2021 we were charging about 500 a month and now
in 2023 we're charging about 700 a month that's a huge increase over two years
and um if you're looking to buy a building in Toledo and you see that the form the
form an owner is raised rent 200 a month you've got to be you got to be worried
trying to convince you you can raise it another 200 you know um so you got to be careful you got to be careful looking at deals in 2023
about rent increases but um I think expenses are going to stabilize obviously those skyrocketed twos
expenses are going to stabilize I think interest rates are going to stabilize uh I think there's going to be a lot of
opportunities in in 2023 uh for a real estate investment and that actually
brings it another question was Gary Corbin asked um he said no better time than now a
question mark with the even with the seven percent interest rates so yeah
yeah so so you're going to be offering Less in 2023 than you offered in 2022
and I've got a couple of deals where I made an offer about a year ago in my underwriting I had 3.5 interest
rate because I had just gotten a loan from Old National Bank in Ann Arbor for 3.5 interest rate well now uh now uh Old
Nationals at six and a quarter so okay it was only at seven percent for about
two weeks it's down all the way it's down all the way down to uh six and a
quarter and actually Old Nationals said that if the building is Class A they can get down to all the way
to 5.85 right now so wow so don't get me wrong it was up to seven percent there
for a minute but it's it's way it's way back down again already so okay so but again there again though
even with 6.25 there's a huge difference in the cost of debt between 3.5 and 6.25
and so that means you have to offer less than you did a year ago and the seller says sure what are you talking about
real estate has gone up in value in the past year and what I what I say to my sellers is look at my math you know I'll
show it to you um what is it's not true because the buyer a buyer with 3.5 interest rate can
pay a million but with 6.25 you can only pay 850 000 or you know whatever the
math works out so you got to be careful about that but yeah I I uh I'm not
concerned about 6 6.25 or 5.95 I was I was concerned
about seven that was getting pretty difficult there for a minute yeah and I I think between five and six percent
um even a little bit more than six percent I think that's where we need to stabilize and keep because a lot of
people don't realize that until for the you know for the past ex
with the exception of the past couple years you know for the past like say two or three years
interest rates have been at like six percent or above you know so yeah so my
first deal I ever did uh in 2002 was at 5.25 fixed for five years and then when
when it got to the fifth year I didn't really know what I was doing I kind of messed it up a little bit I never had a
loan expired before so it went floating it went from 5.25 to floating so I get a
letter in the mail saying hey your interest rate is 5.25 the next month I get a letter in the mail saying it's 5.5
then I gotta let in the mail saying 5.75 and I didn't know what to do you know
yeah so and so then I contacted my banker this was back in 2007 you know
when I was like 24 years old I said hey what do I do he said oh you just got to refinance again on a five year and we
got it back down to like 5.25 again I think um right so yeah I think that's I think
that's where we're going to stabilize to be honest so you know do I think that will come down eventually Maybe
in a few years but you know I I honestly think we're
going to be in the fives fives and sixes for for it's going to stabilize right around there so yeah and I think I think
you'll be fine investing in mid-size apartment buildings uh and five five and a half as long as the seller uh is
looking at the same numbers you are you know if he's looking at 20 20 numbers 3.6 interest rate
it's going to be a little bit of a challenge but remember no one's going to be able to pay more than you can for the building
in these mid-sized apartment buildings now if you go out and try if you go out
and try to buy a 250 unit apartment building that's where that's where it's very challenging you might be you might
have a five interest rate but the other might have a three because he's got different type of money he's got Chinese
money or insurance company or uh New York and so that and when you get to that
level it's it's harder to compete against the big guys but on midsize apartment buildings 20 units 30 units
everyone's gonna have the same interest rate they're going to all be calling the same Banks and so you just gotta offer
what makes sense for you don't get too aggressive yeah so
um does it uh Jim Wellington asks I what
are your thoughts on multi-family uh valuations uh many sellers have very
high expectations on value particularly if they're locked in a three to four
interest rate three four percent interest rates uh a buyer Now isn't getting that rate and most likely can't
pay the price that reflects debt Debt Service at as much lower interest rates
or current owners so do you anticipate a some type of price correction in
multi-family yeah so the the person I'm going to be buying from in 2023 is a
mom-and-pop seller they've owned the property for a long time they want to retire and their kids want
nothing to do with it also they realize that they have not
been reinvesting in this property and so they've got some major items that they
need to invest in maybe the city's cracking down on them maybe they're Banks cranking down on them they get
they have to replace the roof or the windows or the parking lot something that's going to cost a hundred grand you
know and and these folks haven't been aggressive on their rent increases so these buildings aren't cash flowing like
they should even though the debt is very low and when they're faced with an improvement that's going to cost 100
Grand or maybe even two so there's going to be 200 Grand you have roof and a parking lot that's going to be a a
seller and then the third thing it's someone whose debts expiring in 2023. uh
so I that just happened to me should have refinanced a loan six months ago but I was like yeah it doesn't
expire for another six months I got I'm busy I'm buying these other properties now I have to refine I have to refinance
it next month and I'm going I'm going from a 4.4 to a six and luckily you know
luckily I've been managing the property pretty well it's going to cash flow and a 4.4 or a six so I'm going to be fine
but there's going to be some people that they're not going to be fine they haven't been managing the property aggressively enough it doesn't work at a
six and they're going to sell so the the we just bought a 20 unit in Ypsilanti we're also all three of those things
were true at the same time Mom and Pop seller that's getting older the city's
cracking down saying hey you know two years ago we told you you had to replace this parking lot you didn't know you're
definitely gonna have to and then three the debt was expiring and so we we bought the 20 unit for a good price so
you're you're going to be looking for that type of seller um you're definitely not going to buy a
nice property Class B or Class A from a guy who's got three percent interest rate in 2023. it's not gonna work
um so so have you dealt with uh any properties that
are going to be I especially in the multi-family where you want to do like a seller finance
where I you know they have a great interest rate and they just want nothing
to do with the property it's a mom and pop like you said and they're looking to retire and they haven't put much money into it and they're like well you have
this great interest rate let me either take over your loan and give you a partial seller finance or do a full
seller finance have you done anything like that yeah definitely so uh we just
bought an office building in Lansing 16 000 square feet uh where the heating and
cooling system died and so now this guy's got no heat in this building and he's got tenants and I said look the
building's not financiable right now uh but I'll buy it on a land contract and
so I bought a I bought a 16 000 square foot office building for twenty thousand dollars down
um uh on a land contract we've now put in a new a hundred and sixty thousand
dollar heating and cooling system we're gonna we're gonna do some uh lease up uh
improvements and get this building lease back up and then we're going to do a cash out uh refinance on the building
and so that as an example that's an example of uh seller financing and then
on loan assumptions yeah some loans are very attractive to assume right now because of the low interest
okay awesome so I had another one uh another question on here from Earl
Harrison I can't post it on here because it didn't come through here for some reason but he said uh what would be your
recommendations or advice to someone starting out and trying to Source uh
potential deals and I think we kind of talked a little bit about it but he
probably came in late I so I just let me reiterate a little bit of that is that
you mainly have deals just straight come to you is that right well the answer to that question is you
want to meet sellers of real estate right you're a buyer of real estate you want to meet sellers of real estate so
how do you meet sellers of Real Estate first of all always be networking secondly reach out to the people that
deal with sellers of real estate so that's wholesalers real estate agents Banks insurance companies title
companies contractors oh my gosh contractors let me tell you about that
so I hired a guy to trash out a apartment for me
and and he said he's and I said hey if you if you're ever trashing out uh an
apartment on someone else's property and you think they might sell call me and
one week later he said Stuart I don't know exactly what to do right now but I
got this guy named Milo he owns a 24 unit in Romulus and he let it slip that this is the last job he's going to hire
me to do because he's going to sell the building so he was like hey thanks for trashing out my apartment this is the
last one you're gonna do for me I'm gonna sell the building I was like give me Milo's phone number and within 24
hours within 24 hours I'm meeting with Milo in his garage uh he's smoking cigarettes
like three at a time and I'm they're you know just talking to this guy he's like seven years old and and we struck a deal
for a 24 unit in Romulus right right then and there and that was from a contractor so if you're if you're a buyer of real estate you want to network
with sellers of real estate and and just always be networking so that's your that's your Banks your insurance
companies your wholesalers your real estate agents your contractors and just make it known shout from the rooftops
that you're a buyer of uh real estate and the deals will trickle in in the
beginning and then once you start buying you will be like oh this guy's serious and then they'll bring you more deals just like you're a wholesaler right you
don't spend a lot of time with people that you know that are not serious you spend the most time people that you know
are serious repeat buyers cash buyers and so you want to develop a relationship of seriousness you know
exactly and you know I it's funny because when I have a cash buyer that I
don't deal with very often I've never dealt with before I have a earnest money deposit for him
versus a earnest money deposit for uh somebody who's closed multiple deals with me right
you know so it's it's a safety mechanism it's relationships yeah yeah 100 so
uh yeah that is I mean get out there I that's basically the same answer I have
is get out there get to know people and Shout from the rooftops from everybody
family members uh you know for you you're out there getting your oil change
and and you're just shooting the with somebody tell them you buy real estate
you never know what happens you know it was you know it was so funny is uh I I
was at I went to the Michigan Michigan State basketball game this Saturday and my friend said let's go to the student
bar called the riv you know and and I should open my Michigan gear and some guy up to me and started ripping on me
because I was wearing Michigan gear in the in the enemy territory yeah and then he was like where are you from anyway
and I was like I'm from Ypsilanti he said oh my God I I just got a job in Ypsilanti and my boss uh owns this and
owns that and I'm like oh let me get a lunch with this guy and so like just you know just talk and just communicate
networking meet people and it just it comes together you know most definitely
yeah so yeah so on that it's you know relationship that's kind of how
like I've done some of my easiest deals that way and you know I've gotten some
really hard deals you know by cold calling you know so and you know you
never know what happens um you know and kind of going from that but
now going to what you have now um you know
going to what you have now you have obviously a lot of
multi-families and a lot of different businesses so what other businesses do
you have right now that's going on and uh how did you for instance we know that
you have a property management company uh so tell me a little bit about that
and how you got started in in Property Management yeah so in Property Management uh people
would call all the time saying hey Stuart I see that you're doing real estate and doing pretty well will you
manage my property and I always said no I've got to focus on uh my things but
then I started hiring some staff to manage my properties and I realized it
would be great if I could get some additional Revenue to pay these people more to work for me more full-time if I
managed more and that's how we started building the business uh right now we manage uh
remaining about 500 properties uh in 65 cities around Metro Detroit and you know
about 400 of them are owned by other people but that allows me to have a staff of 65 uh employees that benefit my
properties and our clients properties and it's just a really lost really robust staff that's the that's the
reason we started the property management company and then we also help people with real estate Investments so
I'm not here to help you buy and sell real estate but if you want to invest in real estate with me you can go to
beelcapital.com and you can invest in some of our smaller deals as a
non-accredited investor or if you are an accredited investor you can invest in our real estate syndications
um which which uh are the the deal mechanism we use to go after the bigger
properties the 100 unit you know properties so you just dropped a big
bomb right there so um because not a lot of people maybe a lot
of people here may know what a syndication and I kind of have an idea but for
the people who don't what is a syndication and how do you go about like with your
company Bill Capital get part of the smaller deals like what is
how is somebody you know it's just a website so how does somebody know for sure that you know if they give you say
ten thousand dollars twenty thousand dollars that they're gonna get a uh either a return or C statement saying
where their money's getting put and things of that nature so how does how does all of that work yeah okay great so
uh our minimum investment is twenty five thousand dollars and if you're not you're not an accredited investor uh and
you're having trouble uh buying a property or you don't know exactly what to do you can invest with us in one of
the deals that we're already doing and the documents uh the the documents
government so you're going to be signing an operating agreement that says you're a
partner in this business you're going to be issued a share and you're going to get a quarterly update on the success of
the the real estate in addition to that uh if you're local uh you can visit the
property uh you can review the deed review the closing statement review the appraisal it's just like you're buying
the property yourself except you're doing much less of the work or none of the work it's more of a passive
investment those are the okay those are the small deals now on real estate syndications
bigger is better right in business you want to do the big biggest thing ever well even me I've been doing this for 20
years it's hard for me to have five million dollars available to buy a 216 unit apartment building in Lansing so
someone before me invested something called invented something called a real estate syndication as a vehicle to pool
investors money together to buy that uh together so that's what we do right now
we're raising 10 million dollars uh twenty five thousand dollars a share
from investors will probably have about 100 investors and that will allow us to
go buy a 216 unit apartment building in Lansing or a 150 unit apartment building
in Monroe going after them yeah awesome so with that what's the
difference between a syndication and a Reit yeah so Reit uh a Reit is often a
publicly traded vehicle that's publicly traded on the stock exchange and it's
operated by a very large uh corporation uh real estate indications are usually
operated by two three four five guys in a small staff and they're doing
something much smaller than uh a Reit a Reit has costs associated with it where
you've got to be buying you know 500 million dollars worth of real estate make that worth it whereas the smallest
syndication I ever did was we raised two and a half million dollars we bought about eight million dollars worth of
real estate and that was 184 apartments and uh the costs are lower so you can do
smaller things with uh syndications um so it's a similar structure but it's
smaller so with the Syndicate yeah so with a syndication do you get like dividends and air or or do you just get
um uh just get your shares bought out when you sell the property like how does that normally work is it a passive
income monthly yeah so uh different sponsors do it different ways but I'll tell you the way
I've done it and I'm currently doing my uh eighth one and everyone will set up the exact same uh an investor gets a
seven percent preferred return on their investment and then above seven percent it splits 70 30. so 70 percent goes to
the sponsor which in this case excuse me 70 goes to the investor and thirty
percent goes to the sponsor which in this case is myself so if you invest a hundred thousand dollars you're gonna
get seven thousand dollars back before the sponsor earns any money and if the
investment does better than uh seven percent then it's split 70 30. and my
syndication uh the last three years have returned uh 10 to the investor so if you
invest a hundred thousand uh you'll get uh ten thousand back a year and that's
only cash on cash that doesn't include all the other benefits of investment real estate that's the appreciation the
depreciation yeah paying on the loan Cash Out refinances sales
um and that's a big question can you when us you're in a syndication can you depreciate
yeah so it's exactly like you own the real estate it's all flows through the K1 so if you're if you invest a hundred
thousand real estate syndication you're gonna um own a one percent interest in the
syndication and you're going to get one percent of the appreciation one percent of the cash flow one percent of the
depreciation um just like you were doing it yourself and investing all the money so that you
have a hundred percent of it the the the syndication is not for someone who wants
to get in their truck drive to the job set the guys up drive the lows get the
stuff help carry it in you know put a sign out front that says for rent get
the calls show that show the place rent the unit manage it wake up in the middle of the night change the toilet that's
not what a real that's not who a real estate syndication is for a real estate syndication is for someone who wants Pat
you know passive income gotcha and there's two ways to do it and a lot of people do it both ways that's how I do
it I run my property management company I'm on the ground dealing with the the pros and cons of real estate but I've
also invested passively in other people's syndications and you get that mailbox money which is the the best
money there is that's yeah 100 I wish I had that
mailbox money so well you're you're young you're just you're you're getting started you make it happen
most definitely and you know I actually still have a day job I have a nine to five okay yeah and I so I do wholesaling
on the side I treat it like a full-time job and I even told people that everyone's like well why don't you just
go full time you know you're you're doing pretty well and I'm like yes I I
am um but I want to the only time the only way I
will quit my job is if I replace my income with
with um either rental income or passive money income right something that's
consistently coming in right yeah I know and people people call me and say hey
Stuart I want to quit my job and be you and I say that that's actually not me I've never quit my job I work as hard as
now as I ever did uh running in the pension business because I don't ever want to lose that uh trading uh my hours
for money uh but yeah in in the in the short term uh I want to be trading my
apps for money I want to be investing in real estate and investing in this business so now I've got multiple
streams of income all of which I save up and buy more real estate so that I've I'm not the guy on the beach there might
be guys on the beach but that's not that's not me so tell me a little bit about you know
with you getting a lot of a you know Property Management uh
you know other people wanting to you know for you to
to take their deals or not their deals sorry uh to take their properties and manage their properties and things like
that how is it you went from doing Property Management from your just all your property where you're the only one
you have to answer to to now a lot of other people that even though they're paying you now you still have to
kind of answer to them as as owners of the property yeah you've got to have a temperament uh
Property Management property management is really tough when you're the owner and then it's doubly tough when you're
in the middle of the tenant and the owner so I had a client had a client recently on the property side who said
uh no we're we're not fixing that and I had to go to the tenants saying sorry we're not fixing that and then the Ted
said okay well if you're not fixing it I'm not paying rent so then you got to go back to the client and say we really need to fix it if they're going to stop
paying rent and then the client said no a victim so then I go back and I say hey
look if you're you know we technically don't need to fix that and if you don't pay your rent then we're going to have
to evict you and she said Okay a victim me so then I go back to him and he says evict me and I go back to her you know
so that that's the tough part uh property management and if you don't have the temperament for it where you're
just uh doing it more in like a robotic fashion instead of getting like all excited and all you know angry and the
passions Run High you're not gonna last very long and so really it's just
focusing on the facts and focusing on the documents and trying to keep the emotions out of it
so 100 percent ideal I wholesale a lot of
properties and um probably I started wholesaling and I still do a little bit inside Detroit
what areas would you see are you seeing because I know you do Property
Management inside Detroit um what areas are you seeing that are
good areas I there's a lot of bad bad areas and things like that but what are
good areas to invest in um and what what do you look for in
screening your tenants in order to make sure that you don't have to go to the eviction process as least as possible
yeah so the city of Detroit is tougher now because default rates are skyrocketing I was just hired to manage
136 apartments in 30 different buildings in the city of Detroit as a property management client and in the 136 units
uh over 60 or 70 tenants are delinquent in their rent and that's really just an
impossible situation uh where more than 50 percent of the tenants are delinquent their rent you want to have like five
six seven percent at the very most of your tenants being delinquent in the run this this client has uh 50 plus uh
delinquish um and so I am not a uh
Detroit neighborhood expert and I can't speak to that question as well I would
like I'm a Detroit property manager expert you give me a building in Detroit I'll manage it uh as good as anybody but
I can't tell you what neighborhood invested and what not to uh but if you send me an email I can introduce you to
a few folks who can that's what I said oh that's awesome what I don't know the answer to question I say send me an
email and I'll introduce you to the guy who knows most definitely and that's the key thing
is is that uh you know there's a lot of people back in my this is just my
opinion because I've I've been wholesaling a lot in Detroit um you know since I started and a lot of
people think okay this is back in you know 2020 2021 oh we're still there
where you you can be evicted it takes nine months to a year to to evict you
and even though they made it harder the the state has
made it harder still for us to uh uh evict in inside Detroit uh it's still a
lot faster than it was when we did have covet we can actually get court dates you know yeah
um and so on and so forth but um you know
hopefully how do you screen your tenants to try to avoid as much of that
yeah our requirements in the state of Michigan are a 600 minimum credit score three times income no evictions no
bankruptcy no collections other than maybe some minor medical Collections and
a good rental reference and if you don't have that we require a uh cosigner obviously that works much better in
downtown Ann Arbor than it does in a neighborhood in Detroit or Flint or Pontiac but you've just got to be uh
careful and and select your residence uh you know you've got to select your best applicants in those areas
right and you could you can Flex on those requirements if necessary if you're not getting that to keep the
occupancy you want you can lower those requirements a bit and and tweak them yeah and I meant was actually saying
that Sierra funds are are a big problem and actually I think Sierra funds have
actually grown out have you heard that yeah we're done we're done I haven't
filled out a Sarah application in probably six months and we just got our
last payment maybe two weeks ago I don't really expect any other Sarah payments
they stopped taking applications yeah maybe a few and maybe a few in Detroit
are still coming but that's kind of uh Gone by the wayside um yes now do the judges know that and
respect that that's another uh thing we'll see how they play it out but
um yeah uh Sarah created a major cultural problem uh where we've got
people that were paying the rent just fine until covet happened nothing happened to them to affect their income
they just gotten have it and not paying and now they're not paying still it's a they created some cultural and with that
said it did help out people legitimately too I've got but I've got dozens of examples I could rattle off about how it
really helped both the landlord and the tenant but there's no question in that some people are taking advantage of it
yeah so I might ask another questions what is your stance on rent control policy from Lansing uh some legislators
are are trying to introduce the bills uh yeah have you heard anything about that
yeah I don't get really too concerned about what happens in the economy and I don't really get too concerned about
what happens uh from a political standpoint because I've just always
outsmarted and outworked the competition and so if they pass rent control obviously
that'll put a cap on the value of real estate it'll probably yep break buying opportunities unexpected buying
opportunities and we'll figure out a way to to get around it rent control is also illegal at the federal level so I don't
see anything that anyone at the State of Michigan would do would affect that but um yeah I've been I don't spend too much
time on that what I spend time on is evaluating off-market mid-sized apartment buildings and just buy them
and manage them yeah so that brings us to an another question is is what you
know what are you um like how you acquire these properties
are you going out and buying a loan or are you doing this straight through your syndication and through your calculate
through BL Capital um I mean how does
how would say you don't have that say you're mean okay and I don't have
nothing like that How would how would you say I go out and buy a 20 unit apartment building
you know um would you buy Saving just saving up 20 down or
uh if you've got limited cash and you've got a deal uh what you should do is put
together a small partnership an LLC where you are an investor and then you
invite several other investors into the deal and um set it up not as a syndication but as
like a joint venture um gotcha and you just have like let's say it's a four unit apartment building
four hundred thousand dollar price hundred thousand dollars cash three hundred thousand dollar loan but you
only have twenty five thousand and you need seventy five thousand for investors you just create a uh you just create an
LLC and have uh three guys come in for twenty five thousand each and then the
four of you on the the deal and then you charge them some fees to put it together because
you're the one doing the work so right so um so I'm always looking for deals that
I can bring Partners in and I say um you know they bring in the money I'll
I'll run the project you know so therefore I get whatever we agree upon
whether it be they don't have to do anything so therefore you know they get 50 of the deal I get 50 or or 70 30 or
however we work it out yeah and you know so is that something realistic that a
investor uh would do uh I I would say that you need to invest
some of your own Capital uh because me as an investor I'm not investing in something unless someone's vesting in
some of their own Capital but if you're young and starting out it doesn't need to be a lot uh right you know I'd put in
I'd put in three quarters of it you know if the guy in a quarter and doing it you
know okay oh yeah that's good to know that's you know that that's what I'm I'm
trying to you know for me because the thing is is that I all my whole family
money actually has gone to my and I've been open with this with my channel that
we've been uh all our wholesaling money has gone to um updating our personal house so you
know I gotta make the wife happy first that's first and foremost so so after
that is done then I'll be able to start saving up and actually doing deals on my
own yeah and I say one one thing at a time for
sure uh just keep hustling and and getting that first goal accomplished and then start saving money for
for multi-family and uh uh Randy we've been going for an hour and seven minutes got any final
questions yeah so sorry about that uh oh no problem I love it yeah so no just just
one last question is is where are you going in the future so what it what is your future goals and what do you uh
what do you have that maybe anybody here could even help you out with uh or
anything like that yeah okay great so my my career goal is to buy bigger nicer easier to manage
stuff uh the easiest part spot to get started is Class C Class D value add a
ton of work type projects and that's naturally where a lot of guys start out and that's where I started out and I've
been dealing with for a long time I'd like to sell some of that harder to manage stuff and trade it into some
nicer easier stuff um you know buildings where you can
attract the highest of quality people the highest credit scores the highest incomes people that treat your property
better than some others might so that's one of my uh career goals and then
people that are listening to this the way you can help me is invest with me you know contact me at bocapital.com or
on Facebook or on LinkedIn I'm Stuart Beal or also hire us to manage your property
we'll Manage Property anywhere in the state of Michigan whether it's a single family home up to the largest property
we ever managed was a 468 unit apartment building and then also if you're a
contractor listening we always need good contractors and then also if you need help with something that you are working
on you have questions you want me to look at a deal with you I'll give anyone an hour of my time
and gladly look at a project with you meet up for lunch I do lunches a lot too
where we meet together three four guys at a time so yeah let's let's stay in touch let's keep announcing
yeah so Emma does did ask uh do you deal do deals out of Michigan and obviously
we know you do in Ohio um because you said Toledo uh yeah and he said if so where so is there any
other places yeah so I just invest an hour with a driving distance in my house basically and that's an I live in
Ypsilanti so that covers Toledo anywhere in metro Detroit and uh Lansing although
I did make an investment in Grand Rapids just because I think that it's a really fast growing area and so you know I
thought that might be a good idea but mostly just uh close by I want to be able to see a touch and feel it
yep awesome and then are you doing any development where you may be buying a
big chunk of land and building apartment buildings I've never bought a building I've never
built a building excuse me because construction costs in the state of Michigan has always been 300 percent
higher than you could buy at a building for uh as an example I bought a 60 unit in Monroe that came with some vacant
land and I asked the contractor to quote building the 60 unit and I bought the 60
units that were there for 2 million and he said it would cost 12 million to build the next 60 units so obviously
that's all doesn't work you know so I know I'd like to but I've never done it okay awesome
conversation yeah most definitely and we appreciate it we appreciate you coming
on this channel and seeing anything and if you have any questions for Stuart
Beal get a hold of them at Beale Capital uh uh you know any of his link his
LinkedIn his Facebook channels or anything like that and you can also invest with them as well so I really do
appreciate you coming on on with us and at least showing us that you know hey
anybody can do it as well um and I really really honestly like I
actually helps me a lot that you know talking about when you started when you were a
kid I think that more parents should should have started out like your parents did
um and I I'm trying to get that's another goal of mine eventually once I
get successful with this channel is I you know hit as much younger people as possible so they can uh get that in
their head as early as possible awesome let me leave you with my email address it's uh s yield
s-b-e-a-l at gobiel g-o-b-e-a-l.com and email me as well
awesome so awesome definitely do that and if again if you have any questions
if you have any deals or anything like that get a hold of get a hold of Stewart bill you can also JV with me my number
is here and my emails in the uh description below I appreciate it start
I hope you have a great day thank you bye