Mastering Multifamily: The Art of Raising Money and Building Relationships with Abbas Mohammed

Jack Hoss [: 00:00:01

in assets, about: 1500

Abbas Mohammed [: 00:00:31

I appreciate you having me on it. And just clarify part of that is also massive, but actively, we're at 338.

Jack Hoss [: 00:00:38

Okay. It's still a very quick ramp up here. I'd like to see where you started. Did you when you got into real estate investing, did it start in, like, single family homes and A lot of us do, or did you jump right into multifamily investing like this?

Abbas Mohammed [: 00:00:53

Yeah. So I actually jumped right into multifamily. So my background on real estate prior to getting in is I got into real estate at eighteen years old as a residential real estate agent. And the first year, I just I failed miserably at it. I didn't know what I was doing. But then I started getting transactions. And then within about four and a half years in the business, I became top 15 in the country with REMAX. I had about 25 virtual assistants. And so we really ramped up our operations, and my business was doing it very well. And I got to a point where it's okay. What do I do with all the cash that's coming in from the sales business? And so I was actually gonna go out and start to build basically single family portfolio. And I just, after looking at it deeper, I've decided that I wanted to skip that completely for multiple reasons, but mainly, because I realized I don't have control of the value. Meaning, the value of these homes is really based on interest rates and based on affordability. And as interest rates would go up in the future, this was a few years ago. My thinking was on this, as interest rates would go up, these housing prices are gonna start to go down. And so I really have no control over that. The other thing is that it was very hard to scale. And I lived in California, and I didn't wanna buy in California either because then I would have to deal with all these front laws and everything. I decided not to do single family. I looked at other investment options like Brito and Stogs and all these other things that I did not like that either. And so then eventually, I found out about multifamily, and there were many reasons why I got into multifamily, but I jumped straight from not investing in a single family to just doing my first deal at 64 units. And to me, I think that was one of the best positions I made.

Jack Hoss [: 00:02:33

Can I ask you, like, what kind of process you went through to decide on making that first investment?

Abbas Mohammed [: 00:02:38

cted increase of rent is say $: 2000

Jack Hoss [: 00:05:55

You beat me to the punch. I'm gonna ask you regarding your market criteria. But now that you brought it up, you talk about building your network on the with those brokers. They're certain strategies or tactics that you've implemented in order to establish those relationships?

Abbas Mohammed [: 00:06:11

Yeah. It's I think the most important part of building those relationships is a few things. But number one is you really have to treat brokers like their friends because people wanna do business with other people that they know and trust And so if you can get them to know you, like, you, and trust you by being omnipresent, being all over the market, being on social media, reaching out to them on deals that you're interested in, and just showing them that you're very diligent about the whole process. If they send you a deal, you're fast to respond with it. It's, hey. I'm interested to give me more info or, hey. I'm not interested. This is my actual criteria. Just being fast to respond, being communicative, being honest. And then if you get under contract, this is another thing that I've realized is very important. If you get under contract on a property, do what you say you're gonna do. I I see sometimes buyers get under contract. In the minute they get under contract, they go back and they try to change the terms and renegotiate for no reason. If there's a legit reason, I get it. But if there's no reason, you just sometimes I see people put a property under contract with terms that they actually don't expect to close on just to get the deal. And so the minute you do things like that, you earn their relationship. So I just I'm just very diligent with them. I treat them well. And if I say I'm gonna do something, I do it, and I don't bring up any excuses. Like, oh, the market is hard. Things are changing too fast. Nope. This is what I said I'm gonna do, and I'm gonna keep working out of them till we close. And if I can't close for whatever reason, I've never had that, but if I can't close, at least they'll see amount of effort that I put in to to make it happen. And so that has helped me really establish deep relationships because they know if they'd give me a deal, but I'm gonna everything possible to close on the deal.

Jack Hoss [: 00:07:50

When you make that initial reaching out to the to that broker, is there anything in particular that you do to get their attention because I know that I'm sure some of the great the best brokers are being reached out to all at the time and trying to weed out who's actually a legitimate investor and who's not in a bit daunting on their end.

Abbas Mohammed [: 00:08:09

Yeah. So it's interesting. I actually have a whole strategy around that I learned from someone else. This was now my idea originally. And that is instead of going after the so in multifamily, you've got teams usually it's not one person selling a whole property by themselves. They've got teams. And so in those teams, you've got multiple different workers. And so most people, what they do is they find a team that they wanna establish a relationship with, and they go after the top or recurring the team. The problem with bat top brokers getting calls and emails from literally everybody. And if you're a brand new person to the market or to multifamily or real estate, they're just They just don't have the time to pay attention to you because they've got other relationships that they already established that they need to stay in touch with. So what I personally do is I actually go to the teams in the markets that I'm interested in, and then I start building relationships with the newer brokers. So maybe the brokers have just joined in the past 6 months or the past 2 or the past 3 years that are still establishing their database, establishing their relationships, because as you grow your business, they're gonna grow their brand and their ability to get deals in that market. And so then you just grow together. And so that's the strategy I implement. I actually go after the kinda more junior brokers and the teams because it's so much easier to build relationships with those guys. And and they're trying to do deals. And so they will communicate with you. They will show you deals. They will vouch for you if needed. And so I really I really like to implement that strategy rather than go after the most wanted person on the team.

Jack Hoss [: 00:09:41

If you're watching this video, you'll notice there's a banner behind Abbas's shoulder, and it looks like you wrote a a book or a guide on how to buy multifamily real estate at this point, if they go to model equity.com/invest, would they find a download to that?

Abbas Mohammed [: 00:09:58

Yeah. So if they actually make an account on our website, they will also get that ebook for free. And so what this ebook is, it's basically like a step by step process on how to buy family real estate. You could do it actively by yourself, or you could invest constantly with us. That book will be exactly kinda walk you through the whole process And I made this actually last year, and it's been one of the best things I've ever made that has helped my business tremendously because Our database has grown so much as a result of that book because people get it, then they send it off to other people that then also download it, and it's free. It doesn't cost anything download at any time. And so that's really been a major game changer for us, actually.

Jack Hoss [: 00:10:39

So there had to have been a driving reason for you to write that book. What was the what spurred that on?

Abbas Mohammed [: 00:10:45

Yeah. So I always wanted to add value to the people that are in my database. And so I would I did things like doing videos and maybe I'll write blogs and all these other things. And then I realized one time, I'm like, if I had a way to, like, just give a super high value item up for for free. And this thing would be the first item that people go through. And so it has to be, like, super high value and really teach people a lot of different things. What would it be? And I realized most people really don't wanna sit through, like, a multi hour type of video course or whatever. And so after thinking that through, I decided to come up with the ebook, because I saw other people that had done ebooks in other industries, and those are very common and very successful. So I did the same in multifamily. And that's been working out really well. I get a lot of investors that read it, and then they text me about it. So it's been working out. Right?

Jack Hoss [: 00:11:36

I'm not gonna make you a giveaway all of the secret sauce in your book, but what is one of the biggest takeaway somebody would get from your book, or it seems to be the most popular insight that people have responded to.

Abbas Mohammed [: 00:11:49

Yeah. I would say easily choosing markets. I I go really in-depth on how to choose markets correctly in that book and I give out our criterion or exact process. That's kinda I would say that's one of my biggest or best skills, I would say, choosing Marcus, analyzing the elbow. So I go really in-depth on that in the book. I also go into other things like building broker relationships and analyzing deals. And I talk about financing. I talk about some of the top mistakes I see people make. I talk about some ways to add value to deals, but really the biggest thing I get the most feedback on is the strategic markets.

Jack Hoss [: 00:12:23

Yeah. And one of the questions I told you that I'm gonna have a list of rapid fire questions as we wrap up this episode, but I'm gonna Kick one off here right off the bat. And one of them is what is a real estate investing myth that you would like to bust here today? You're proving one out in a certain aspect. A lot of people will go into single family homes thinking it is a lower bar of entry. Would you say that isn't actually the case?

Abbas Mohammed [: 00:12:48

of depreciation in: 2021

Jack Hoss [: 00:14:49

Sure. Just to remind everybody, it is model equity.com/invest. In fact, I'm gonna ask you to do me a quick favor. If you found any of value here so far with the boss, Send a link to this episode to one of your friends who's getting into real estate. I I'm sure they would really appreciate it. Abbas, one of the things that I always find really interesting is that when you're starting, you obviously are managing a syndication here now. Yep. Did you find getting into syndication a hurdle that needed some study, or was that easier than you expected?

Abbas Mohammed [: 00:15:25

Yeah. It was definitely it was harder, to be honest with you than I thought. The biggest hurdle with that is that really as you get into indications. You're raising money and using other people's money on these deals. And to me, mentally, that was that was not easy because I'm like, okay. I'm okay with losing my money. Could go and I could go make more money and not a big deal. But then as I was raising money on my first deal, I had some of my friends, some of my past clients, some people at my network. I remember one lady actually explicitly, because she had a $100,000 in savings, and she wanted to put $50,000 in there. I don't like I'm like, no. You don't understand. This has a risk to it because it's an actual investment. There's no guarantee you might lose your money. The chance of that happening is slip, but I didn't want her to go through with it, but I believed in the deal fully. I was signing on the law, and I was putting my own money into the deal. And so then she just kept insisting, and she wanted to put her money in the deal. And that deal is due in super well. Just last year, we've increased NOI by 29%. So she's gonna do really well on it. But the point of that is it just made me realize that a much deeper level like this is serious. This is other people's money. This could be someone's retirement money. This could be the last 100,000 they have in their banking account, which, by the way, I do not recommend you invest your last 50 or a 100,000 into deals. I reckon when you always have reserved, But the point of that is it's real people's money and so you'd better be very careful about choosing Marcus choosing the deal, operating the deal at the maximum potential that could operate at because it's not your money at the end of the day. Someone else's money, and I wanna be a good steward of your money.

Jack Hoss [: 00:16:59

I hate to take a sidestep here, but one of the things that you just pointed out is that isn't it interesting how as soon as you pushed her away regarding That that investment, the more she pursued.

Abbas Mohammed [: 00:17:12

Oh my god. It's crazy. Unless she came back, you wanted to invest again in the next deal.

Jack Hoss [: 00:17:16

I'm like, no. Don't do it.

Abbas Mohammed [: 00:17:18

But she had more money at that time and she, again, she wanted to know. But, yeah, I realized that actually when you push people away, they wanna really do it. And It's unfortunate because sometimes I really don't want people to do it because I I know they don't have as much money and they shouldn't be necessarily investing. I always recommend people invest in multifamily, but at the same time, I always think it's a good idea to have reserves. Like, you need money set aside for your own needs and anything extra, sure, invest it, but don't invest your last dollar into deal.

Jack Hoss [: 00:17:46

Yeah. I just always find that is that's one of the most interesting things. Whether it's a syndication or you're trying to create a partnership or whatever. The lack of I'm gonna say desperation. Yep. Actually, Adds to that known trust that you mentioned earlier.

Abbas Mohammed [: 00:18:03

100%. 100%. But, yeah, I think it's, I think it's very important that as people do deals that they think of investors like that being in their deals. Like, anytime I'm looking at the deal, here's how I think through it. I'm like, Would I want Brent? And I'd personalize it by mentioning the name and think of lippers. Would I want Brent to be putting money in deal. Do I want Rebecca to be putting money into the sale? Because these are real people that I have a real relationships with, and I would not wanna ruin those relationships over a transaction.

Jack Hoss [: 00:18:32

Right. People are listening to this episode here right now. And whether they're they invest in your syndication or somebody else's, they decide that they wanna go passively What are some of the questions or considerations they should be thinking about before handing over their money?

Abbas Mohammed [: 00:18:49

Yeah. That's a good question. I would say a few things. Number 1 is you wanna ask you wanna really vet the sponsor more than anything else. Because the sponsor could make or break a deal. So you wanna ask them how they chose the market, why they chose the specific area, why they chose the specific property. What's the sold business plan. What are the downsides risk of this deal? How could you lose your money? How could you make money on a deal? If they said that there's no downside risk or that or there's norriscofilos doing money at all, but I would be very careful. That's a red flag to me. So I wanna see all these things, and then I wanna see Ideally, if something was to go south or if something was to happen to this person and let's hope none of that happens, is there someone else as a backup? Right? Did they have contingencies on there. So you wanna make sure you go through all this stuff because some and so these are harder questions, but asking the hard questions is important. And if the sponsor doesn't have the answers to those type of questions or they they don't wanna respond for whatever reason. I've seen some that don't respond at all in these type of questions and just move on and save you money for another deal. There are plenty of deals out there, but they're but there are some deals and then there's some bad deals. And so you just wanna vet out the right deals. Overall, people have done very well, especially over the past decade or so and and and real estate in general, but specifically also in multifamily, I think there's always a roughcaster. You should always vet out the sponsor as much as possible.

Jack Hoss [: 00:20:13

So during this past 2 years of you doing this, what are some of the biggest mistakes you've made that you would advise everybody to avoid?

Abbas Mohammed [: 00:20:21

nning of August, late July of: 2021

Jack Hoss [: 00:22:24

You you've mentioned this a couple times. You mentioned you earlier, you had multiple virtual assistants helping you on a couple things. And then you're you just mentioned now getting help scaling your business. Is that always been something that you've pursued? The concept of working in and or working on instead of in your business. Now or is that a mindset shift you had to go through, and how did you find your way in letting -- So

Abbas Mohammed [: 00:22:50

it's funny. I remember when I first started in real estate, I was eighteen years old. I was at a basic at the time, I was an idiot. I didn't know what I was doing, but I got in.

Jack Hoss [: 00:22:58

It wasn't an idiot at 18. Let's face it.

Abbas Mohammed [: 00:23:01

$: 2000

Jack Hoss [: 00:25:53

That that's interesting. So what was the first thing you let go when you hired that first VA?

Abbas Mohammed [: 00:25:59

This was back when I was in my sales business. What I was doing is I had 2 headsets on, and I was cult calling all day long. We're looking for our clients. And so my first virtual assistant was in there to basically cold calling me. So I hired 1 and then I noticed we were doubling our lead size per week. And then I had a second, so we tripled our leads per week. Then I had a third of basically quadrupled our leads And so then afterwards I realized I was spending so much time looking to hire the right people and vetting them out. So then my next hire was a hiring manager. She started hiring a lot of people, and I was just training people to cold call. Then I'm like, okay. I'm spending all day long now. Not cold calling, but I'm training people. And so then I hired a training manager, and so she started training people. Then it's okay. Now I'm just doing phone calls for sales to set appointments and then go on unemployment then I'm like, okay. I need to hire salespeople to do these follow-up calls. So I had two people that did that. And then I was doing just listing appointments. So then eventually, I got an agent to do those appointments. And so now the business is literally a 100% passive because I've got all the people doing it for me. And so then, and I shifted my focus in April of last year to just model equity and multifamily. And so now my entire focus is building that up. I hired someone to underwrite for us, and so now I only look at a deal if it pencils out. And then the next thing I realized is that I was spending a lot of time the marketing and setting up the email with all these different things. I hired someone to do that for us. And, recently, I hired someone to help us with equity raising because I so much time doing that. So it's just it's one step at a time. I look at what I'm doing right now at the most up, and then I put somebody else up

Jack Hoss [: 00:27:37

there too. Sure. That's interesting. It's one of those things that as entrepreneurs. I think we have a hard time seeing it as an that as an investment as much instead of an as an expense. If that makes sense.

Abbas Mohammed [: 00:27:53

You know what it is? I think the there's 2 problems with most business owners, including myself, and I still struggle with this, by the way, but especially when I first started, And that is number 1 is we think we're the best. Right? We're the best at what we do. Nobody could do it as well as we could do, and that might be true. Right? But if you hire 2 people, 3 bill people that do one thing that you're doing at a 100% and they could do it at 80% and you hire 2 people to do that, now you're at a 160% of production. And so you have to think of it in this case, even if they're not gonna be as good as you, which, by the way, is a mistake. I don't think that's actually true. I think the people that we're hiring are better at the things that they're doing than I would be because I was so shattered doing so many things I did. I wasn't really focused on one thing. So that's one thing. The other thing is we get worried about the cost which is a real concern, especially if you, obviously, most of us were not raising money for to fund our business group. We're growing our business out of the proceeds we're making. And so what you have to get really good at is just monitor it. If you know how to monetize the people that are working with you and now and in which areas could you bring in extra revenue by hiring people, then hiring people isn't an expense anymore. It becomes a profit generator because I know if I hire someone and this specific seat. I might pay them x amount per hour, but they'll make me x amount per hour. So then it's like, why wouldn't we hire a 100 of them to make us as much money as possible? So just have to know how do I monetize every role? And if you know how to do that, then hiring becomes free.

Jack Hoss [: 00:29:23

Have you tried to stay domestically in or there's a I understand there's a lot of VA companies out there that have overseas resources. What have you found the best

Abbas Mohammed [: 00:29:34

Yeah. So when I first started, I just I started with a VA company that was hiring for us. I was not really happy with the overall, how to say it, performance, because what I realized is that a lot of times the people that they were hiring were people that couldn't get jobs on their own because if they could get jobs on their own, they so then what I ended up doing As I just figured out what these companies are doing to hire people, and we started bringing that process in house. So we learned how to post job ads on these different websites, local to the countries that I'm hiring from, how to vet people out and set up a system. So I it took me a lot of time to come up with those but then once you come up with them one time, that's it. You don't have to redo it every time. And so we started just hire people directly. We started hiring the Philippines and then Pakistan in India, then we started hard from Mexico and Argentina and Dominican Republic and all these other countries. And it was just it was phenomenal. Now I've shifted my focus where I used to be just a 100% VA. Now I've focused a lot more on hiring some VA's to help with the lower level admin task. But, really, I wanna hire people that are local in the US that have skills that I don't have because I noticed that will help you transport a business with significantly. 1 One amazing person can be equivalent to many decent people.

Jack Hoss [: 00:30:51

Yeah. That that makes a lot of sense. The one thing that I've always struggled with is that I've had we've tried VA's in the past, and to get them to go off script has been It's almost impossible sometimes because you want to we buy houses at discounts. And and and just to go through the formulaic form, isn't what you really wanna do. You wanna have them have a conversation, and it doesn't typically work out that way.

Abbas Mohammed [: 00:31:21

Yeah. It's very hard because Here's what I realized. It's hard to train someone to do that. So what you wanna do is you just wanna keep filtering through people until you find that person that could do it. And so, like, our hiring process, we might get 100 of applications. We interview very few. And then out of the people we interview, we actually hire four people at the same time for any given job role because I know this is and I've hired now hundreds of people so I can tell you the process 2 of them will quit. 1 of them I'll fire because they just don't do well or they don't show up on time whether they're not serious enough, and then I'll keep one. That's always been the process. Hire 4, 2 will quit. One wall will be fired in a normal state. And so now I just, you know, look, if I wanna hire, I know I have to go through hundreds of people, But so I came up with a formula, so that way we go through that officially. So I came up with tests, like mental quizzes, and, like, they have voice recordings, all of that stuff. So by the time that we actually ever interview them, like, they're pretty qualified people.

Jack Hoss [: 00:32:20

Yeah. No. That's a good idea. Just one last time, mod modelequity.com/invest, learn more about what Abbas and his team are doing, But, like I said, I warned you, we'd queue up a half hour pretty quickly here at boss, but I do have a few rapid fire questions I kinda wanna wrap up with.

Abbas Mohammed [: 00:32:38

That's the

Jack Hoss [: 00:32:39

starting with, is there a book you would recommend everybody checking out, or what are you reading right now?

Abbas Mohammed [: 00:32:45

Yeah. So I don't read a lot of books, to be honest with you, because I like to read one book multiple times before I implement it. One of the books I had to recommend to everybody is whatever takes Spice, Steven Schwartzman. He's the guy that built Black still, and and this guy is just amazing. If he reaches buck, you really have to talk to understand How much work you have to put in order to make a large company successful, but then he also talks about something very interesting. And he says, building A large company takes as much work as building a small company because with a large company, you could bring in eight people that can actually help you grow the company with a small company. You can't do that. And so that was a major mindset shift to me when I read that book. And so I always highly recommend it because that I think that was one of the, like, life changing books for me.

Jack Hoss [: 00:33:29

No. That's a good I haven't had anybody recommend that one, so I got it on my list now while you're

Abbas Mohammed [: 00:33:33

looking at it.

Jack Hoss [: 00:33:35

So what is the biggest business you've made so far, and what did you learn from it?

Abbas Mohammed [: 00:33:39

Biggest business mistake. I would say the that 6 months of time I wasted 0. I mean, that that's a lot of time. We literally had 0 production during those 6 months because I was trying to make sense of the market when nothing was making sense. We didn't buy anything, which is good. But I could have spent my time better. So now I've just I've realized, look, if things are not making sense, I should just refocus on other areas that where I could actually help the business before. That was me and a few other people of the business, and it's like we're all spending all our time trying to make sense of these deals, and nothing was making sense. And so we wasted a lot of time. We got done other things.

Jack Hoss [: 00:34:15

That reminds me of a lot of the people, quite a few people that reach out to me or whatever. The this they're stuck in analysis paralysis, and they never take that initial step. Yep. It's taking that imperfect action. Sometimes it is the biggest thing a person can do.

Abbas Mohammed [: 00:34:32

100%, 100%. I also wish I would have hired, by the way. This is another thing I've recently realized over the past year, and that is I wish I would have hired higher level talent, that new skills that I didn't have earlier. It took me a long time to get to that because I always couldn't justify the price. How could I hire someone that charges x amount per year, and I could just hire someone so much cheaper. And I just have to go along the skill and teach them. That'd be so much cheaper, but then you realize over time, you don't have the time to learn kills last. And even if you do, you're never gonna be good at it as of the same level as someone who's been doing it for 20, 30 years. So it's actually cheaper to pay someone way more and have them break those skills into the business. And that will help you grow much faster. I just wish I had to realize that sooner.

Jack Hoss [: 00:35:15

Yeah. I was just about to ask you if you could go back in time and give your younger self one piece of advice. What would that be?

Abbas Mohammed [: 00:35:21

But -- Yeah. It would be that.

Jack Hoss [: 00:35:23

--

Abbas Mohammed [: 00:35:23

you just answered that. Too many skills Man, it's interesting. So I go to a lot of masterminds. And in these masterminds, sometimes they bring in these people that are worth just billing as the dollars And as these guys talk, what I've realized consistently, not one time consistently, is that a lot of times, they actually have less kills than a lot of us do. But they're just very skilled at very few things, and they're in the nowhere to stick to. And so because of that, they could grow the business because they realize what they're not good at and what they are really good at, and they stick to things. They're really good at versus a lot of us try to oh, there's this thing that the business needs. Let me go try to learn it. And implemented. And so now that's not what a billionaire would do. What a billionaire would do is say, okay. We're not good at this. Who do I need to bring in that could actually help us with this process? And that person will help change the business completely. So it's just the realization that these higher level people, higher income people, are not out there trying to learn new skills.

Jack Hoss [: 00:36:19

Right. So you have 60 seconds to give everybody one piece of advice. What is it? They can implement today.

Abbas Mohammed [: 00:36:28

of: 1000

Jack Hoss [: 00:38:07

Well, no. That was awesome. So, Abbas, is there a question or concept you wish we would have covered here today?

Abbas Mohammed [: 00:38:13

Well, I think you're honestly an amazing host. You really know how to dig deep and keep the conversation phone really well, and so now I but I appreciate you asking.

Jack Hoss [: 00:38:21

Again, it is modelequity.com/invest and Abbas gave us a ton of great content and tips and tricks here today. Please take a moment. Share this with another one of your real estate investing friends. And we'll see you next time.

Abbas Mohammed [: 00:38:37

Appreciate it.