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TABLE OF CONTENTS
1. Introduction 4

2. An Overview of Raising Money 7

3. Understanding Real Estate Syndication 10

A. Roles in a Syndication 11

4. Building Your Personal Brand 13

A. Build an Online Presence 14

B. Clean Yourself Up 17

C. Overcoming Fear 19

5. Creating a Plan 22

A. The Sample Multifamily Business Plan 22

6. Raising Funds for Your Deals 29

A. Find & Pitch Investors 30

B. What to Say 31

C. How to Say It 36

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7. Legal Compliance 37

A. Understand SEC Compliance 38

B. Hiring a Securities Attorney 39

8. Bonus Material 42

A. Why Multifamily Real Estate 42

B. How to Sell to Your Investors 47

C. The Top 5 Investor Questions 49

D. Places to Find Investors 51

E. The Importance of Investor Relations 53

9. Thoughts on Getting a Coach 55

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 INTRODUCTION

Opportunities don’t happen.You create them.

- Chris Grosser

Is the fear of not having access to capital holding you back from taking down a multifamily
apartment deal?

If so, you are not alone. Many multifamily investors just getting started often wonder where
they will get the funding needed to buy their first deal and get their career up and running.

Based on my experience, it all comes down to one thing: Your Approach.

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In our live coaching, some people indicated that would kick off their investing career when
they have enough money to do so. Others fear they will not be taken seriously if all the
cash they need is not all in the bank and ready to go. In my opinion, there is no time to
sit by the sidelines and try to time the market. Regardless, all these people feel stuck and
without options.

The good news is that you don’t need a lot of money or excellent credit to get started in
multifamily real estate. Rather, it’s about getting in the right mindset, honing your sales
skills, sounding credible and gaining the trust of investors to partner with you. All of this
will not be easy. It will take work. But with the right dedication, you will be set on a path to
financial freedom.

It’s also worth noting that there are MANY legal implications of taking investor money and
running an SEC-approved (Securities and Exchange Commission) real estate syndication.
You do not want to violate securities law. This guide is meant to provide you with an
overview of the process and how you should go about raising capital. Before you begin
the formal process of raising money for a specific deal, talk to a securities attorney and go
through the entire process from beginning to end.

Bear in mind that this guide is meant to provide you with enough knowledge to get started
on your journey to raising capital for your first multifamily deal. By reading it and applying
the lessons, you will gain the confidence needed to build your network, speak with potential
investors and make a positive difference in the financial future of many people - including
your own!

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ABOUT ME
My name is Agostino Pintus. I am a real estate
investor and entrepreneur. I run a multifamily
syndication company, Realty Dynamics and a
real estate education company, Bulletproof
Cashflow.

I had my start in single-family and small

multifamily in 2004 and had a good baseline
of real estate. Regardless, after I committed
to multifamily, my first deal took about a year
to get done - and our business grew quickly!

When I was first starting out, I made some

rookie mistakes and bumbled phone calls
with brokers. But as I practiced my pitch to
brokers and vendors, I improved. The turning
point was when I committed and learned how
to talk to investors I met while networking, it
opened many new doors. I was able to take
down deals and deliver the returns the team
was looking for.

And if I can do it, you can do it too!

So, let’s dive in...

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 AN OVERVIEW OF
RAISING MONEY

Marketing is really just about sharing your passion.

- Michael Hyatt

The two most important things to realize when raising money from investors is that real
estate is a relationship-based business. There will be a great emphasis in this guide around
networking and selling to your investors. If you are going to win in this business, you must
put the investor first and yourself second. Treat everyone’s money better than you would
treat your own. Be very careful with the money and never put it into any marginal deals.

When we are talking about raising money for your first deal, we are saying that we will be
“syndicating” the deal. Real estate syndication is centered around compliance with strict laws,
rules, and regulations set up to protect an investor. It’s important you follow the process to
keep the investor – and yourself – out of trouble. The basic outline looks like this:

A Develop a network of investors and create relationships with them.

B Find a property that underwrites to your numbers and commit to buy.

C Have your attorney create a Limited Liability Company (LLC) to hold the property.

D Sell shares of the newly formed LLC to your investors by raising money.

For this guide, we will dive into #A and #D so you understand the underlying concepts of
HOW and WHO you can raise capital from. This is a high-level overview on how to approach
people and manage the capital raising aspect of a deal. It is not meant to be legal advice.

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Before you can sell shares of your LLC - or syndicate the LLC - to the investor, they must be
an “accredited investor” and you must have a prior “substantive relationship” under SEC
Regulation D Rule 506(b). This means that you must have enough of a relationship that
you feel confident the investor is telling you the truth about their status as an accredited
investor.

For an investor to participate in syndication, they must be an “accredited investor”. This

means either:

a they make $200,000/year;

b they and their spouse have a combined income of $300,000/year, or

c the investor has $1,000,000 in net worth, NOT including their primary residence.

Once you have a substantive relationship with the investor - sometimes at least 30 days -
you can offer them your syndication deal. Generally, you should know your investors for a
substantial amount of time before you can offer them your deal. This will require a lot of
work as you will need to do a lot of raising. If you need $250,000 for a down payment, then
your goal is to get a soft commitment ofat least $500,000 – or double of what you will need.
Some people may back out, some may not be ready, and some just don’t want to invest.

Note: Because of these constraints, networking is key. You must get out, tell your story,
and network with investors BEFORE you commit to a deal.

As you work to get investors on board to invest with you, you will have to show them your
background and convince them you are someone they will want to do business with for
the next 7 to 10 years or for the length you plan on being in a deal. Of course, they will
also want to know financial returns they will get back when they invest with you. You don’t
have a deal yet; you will need to prepare the material - which we will outline in this guide
- so you can sell yourself. This is key as you, the deal sponsor, is more important than the
actual deal itself.

The great thing about this approach is that once you find a great deal, you will not only be
under a lot of pressure to raise the capital. This method also greatly reduces the risk of
breaking SEC rules around having an existing relationship.

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With your network out of the way and the attorney in place to draft the necessary
documents, you are then able to sell shares of the LLC to your investors. However, there
are conditions for their participation.

Keep in mind that to raise capital - or syndicate the deal - you should be familiar with the
basic structure of syndication and why it’s important. We will cover this in the next section.

ACTION STEPS
a Build a Strong Network. Use Meetup and EventBrite and sign up for 10 real estate
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networking groups in your area. You may even consider checking out finance or
accounting related events as there may be interested people there (or have access
to people interested in investing in syndication deals).

b Be a Network Conductor. Over the next 5 days, connect 5 people that can help each
other in their business. Remember that you don’t always have to gain when building
a network. If you introduce people that can benefit from one another, it’s just as
effective. Connecting others builds rapport with multiple people and strengthens
your personal network. For example, if you offer some support personally to
someone that has influence in the community - such as marketing help or other
core competency related to the real estate business - the person you helped will be
grateful and want to return the favor.

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 UNDERSTANDING REAL ESTATE
SYNDICATION

Real estate is the safest investment in the world.

- Franklin D. Roosevelt

As I mentioned before, Real Estate Syndication is the pooling of capital to invest in a real
estate opportunity. When it comes to syndication, the key thing to realize is that you are
using OPM (Other People’s Money) to get the deal closed. The benefit of putting this capital
together is that it might make it possible to purchase and pursue opportunities that one
person may not be able to on their own.

Syndicating multifamily real estate is an evolution in income-generating real estate for

passive investors. Basically, you are partnering up with investors to buy an apartment
building and cash flowing them afterward via the tenant rents. At the same time, the
tenants are paying down the debt. While multifamily syndication has been around for a
while, it has become more popular recently as a way for business professionals, doctors,
and other W2 income earners to produce passive income while protecting their income
from taxes.

Let’s define what a basic ‘Multifamily Syndication’ looks like, but keep in mind that there
are many ways of structuring a deal. This guide will discuss a high-level overview of a “plain
vanilla” syndication deal. You should do the research and discuss with your partners and
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SEC attorney to best structure the deal for you and your investors.

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 A ROLES IN A SYNDICATION
A typical syndication has two “roles”: it may have one or more Deal Sponsors, acting as
the syndicator, that performs the day to day operations and management of the property.
Then, there are the Limited Partners – or your investors. Here is what each do:

The Deal Sponsor is the one that keeps it all together. They need to identify the market, work
with the lender to get the financing locked in, execute the business plan, make sure the
renovations are getting done, staying in constant contact with the property management
company, and keeping the investors up to date. There is a person or company that organizes
this investment and that is responsible for managing the whole operation on behalf of the
investors. They are interchangeably known as the Sponsor, Operator, or Syndicator. (I’ll
use those terms interchangeably in this guide as well).

Depending on the legal structure of the organization created for the investment, the
Sponsor is technically known as the General Partner (GP) or Manager. Typically, the GP will
take 20% to 30% of the equity in the deal.

The Limited Partners, or the investors, provide the equity in the deal. They are bringing the
cash to get the deal done. These people are typically accredited investors and do not
have day-to-day operational responsibility. Rather, they rely on the Deal Sponsor to make
sure they are doing what they said they would do for the return they targeted at the time
they funded the deal. With that said, they usually have very limited decision making in
the operation of the property, which reduces their personal liability if a lawsuit crops up.
Additionally, they are not on the banknote so if things go very bad for the property, their
exposure is what they originally invested and not the entire amount of the property itself.
The LP will take 70% to 80% of the equity in the deal.

Aside from the equity the is also a return split. Depending on the deal, it could be a 10%
cash-on-cash with a 50/50 split over and above the 10%. Your CPA can assist in calculating
the numbers to make sure the returns are accurate.

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The General Partnership should maintain transparency throughout the venture of any
deal. Risks should be clear to all the investors; every deal has its own risks, no matter how
good the offer looks. All this should be covered in the syndicators’ subscription agreement
that is prepared by a securities attorney.

It’s also worth noting that the splits defined are dependent on the asset class, the risk level
of the deal and the risk tolerance of the investor. For your first deals, the numbers defined
above should suffice in getting the capital you need to get started.

If you don’t have a deal yet, you must start marketing your real estate business now, or
you will find a deal and be unable to fund it. It all starts with building your personal brand.

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 BUILDING YOUR
PERSONAL BRAND

Truth is a point of view, but authenticity can’t be faked.

- Peter Gruber

A personal brand is like a corporate brand, like Apple or Coca-Cola. It is who you are
and what you stand for, your values, and the way you express those values. A personal
brand helps you communicate your unique identity and clear value to potential investors.
Personal branding is your personal story.

That story plays an important role in establishing your “why” and directly influences
whether an investor will invest with you or not. Your personal brand should highlight your
strengths, establish a reputation, build trust, and communicate your unique attributes you
bring to the investor relationship. If you put a compelling story together, your personal
brand will signal to investors that you are a safe bet and you will deliver on the promise of
a healthy business relationship.

Developing a personal brand may sound challenging, but there are steps you can take to
build credibility. This section outlines tips to help you create an authentic personal brand
and amplify your success when speaking with potential investors.

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 A BUILD AN ONLINE PRESENCE

Develop your character so that you are a person of integrity.

- Peter Cain

When you are reaching out to investors, understand that if they do not know you, they will
do their homework on you. Finding information about a potential business relationship
using social media and websites is the way business is done. Today, just about any piece of
information about a person or business is available with a few mouse clicks and a Google
search. For someone starting out, it offers a great opportunity to differentiate between
people that are ill-prepared versus someone (like you) that means business!

Marketing creates a great opportunity for you to build a first good impression. When done
right, creating good marketing with the right informational brochure, social media and
website can build trust and extend your reach to investors.

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ACTION STEPS
Before you open talks with an investor, you need to:

a Create a Facebook, Instagram, LinkedIn, and Twitter profile. When building your
profile on these various social media platforms, make certain to update your bio,
the name of your real estate venture, focus, and aspirations. You want to use your
phone camera (or have a professional photographer) take a headshot for your
profile photo. Make sure to dress in a suit or other conservative apparel for your
photo. Use the same photo, name, and bio across all platforms to remain consistent.

Note: Even if you are not going to use your personal Facebook account for your real
estate business, clean your page of PUBLIC negative photos, posts, or information
that may cause people to raise eyebrows if they were to see it. If you have a post
and you are not sure of what it would do, go ahead and delete it. This includes
removing anything to do with religion or politics.

b Create a nice, clean and informative website. Having an online presence as a real
estate investor speaks volumes about your legitimacy and how serious you are
about the business. At the minimum, it should have information about yourself
(including a bio), how to contact you, and social media links. Use Fiverr or Upwork
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to find a website developer and someone that can design a logo for you to use on
the website and other marketing materials.

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GoDaddy.com to purchase a domain name. Try to find something that
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is easy to pronounce and doesn’t have any crazy spellings. Make sure you also
have at least one email address on that same domain. Avoid using free email sites
(like Yahoo or Gmail) as your business as it appears somewhat unprofessional.
Additionally, consider making a blog part of your website. This information can also
be shared on your social media profiles.

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 c Create a business card. Business cards are a non-negotiable for real estate investors.
Between local events, meetups, and simply talking to investors, you will need
business cards that have your phone number, website, social media information
and email address. Business cards provide an opportunity to show your personality
and stay top-of-mind with your audience. Use Fiverr or Upwork to find an artist that
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can design the card for you. From there, go to PsPrint to order them.
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d Create a “Deal Launch Guide”. This is basically a brochure that details your strategy,
expected returns, and your plan to purchase multifamily assets. It also describes
how you will purchase your properties and the strategies you will use to create
value for your investor. Think of it as your business plan of how you will use the
investors’ money and what they can expect in return.

By using these marketing tips (both offline and on), you can kick off your career as an investor
to the next level with an optimal marketing strategy. From here, you can now work on how
you take on the “look of a real estate professional”.

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 B CLEAN YOURSELF UP

Elegance is not standing out, but being remembered.

- Giorgio Armani

According to Image Dynamics, 55% of

another person’s perception of you is
based on how you look. So, you need to
dress as you want to be seen: serious,
professional, and ready to talk. People in
real estate are usually very conservative.

Investors will judge your competence

and abilities based on your appearance.
Dressing professionally and appropriately
will elevate your image and give you the
confidence necessary to succeed in your
in-person meetings.

Note: If you do not have the clothes,

either borrow the money or use your
credit card to invest in two or three nice
outfits. Your appearance to the outside
world is of paramount importance.

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ACTION STEPS
a Think professional and conservative. Wearing the right outfit for the right occasion
is an indication of good judgment. Always err on the side of dressing in a more
conservative manner. With that said, clothing that minimizes flaws and emphasizes
strengths shows self-respect. Also, wear conservative shoes that are clean and
polished. Never wear dirty and wrinkled clothes that do not fit properly.

b Beyond the clothing. Trimmed nails, a conservative haircut/hairdo, a clean shave,

and tasteful jewelry determine how professional you look.

c It’s all in the details. Make sure your hair is clean and conservative in color and
style. If you have any tattoos, be sure to cover them up before you meet the broker.
Remove facial and visible body piercings. Choose accessories that complement
your clothing.

d Don’t let them smell you from a mile away. Cologne should never be strong. A
fragrance can cause an allergic reaction or offend others. When in doubt, do not
wear cologne. Your personal hygiene will have a huge impact on whether the broker
will want to work with you. Brush your teeth and your tongue beforehand and put
on deodorant.

Dress professionally! Although dressing and grooming appropriately may not guarantee you
will hit it off with the broker, it will give you a competitive edge and help to make a positive
first impression.

Now, you can now focus on overcoming the fear in your mind.

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 C OVERCOMING FEAR

Fears are nothing more than a state of mind.

- Napoleon Hill

I’m sure that many of you out there are afraid of asking friends and family to help fund your
deal for fear that it may go sideways and lose all their money. So that begs the question:
Should you let friends and family in on your deal?

I totally understand where that question would come from and fear is a powerful thing. We
are afraid that if our brother or sister puts down $50,000 or $100,000 and the deal fails,
they would not only not speak to us again, but they would talk to the rest of the family
and tell them what happened. Losing that same money from a lifelong friend could ruin a
relationship too.

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We all know that sometimes deals don’t work out. So, what do you do in that case? Let’s
go through a scenario where you’ve made some money flipping a few small houses and
now want to go a little bigger. You get your hands on a run down 4-plex for $40,000, you
plan on putting another $50,000 and selling it for $175,000. You borrow the entire $90,000
from your family and you get to work. But there are some mishaps; You underestimated
the construction costs by $25,000 and you can only sell the property for $125,000. Instead
of an $85,000 profit, you only made $10,000. This is a terrible disaster. But what do you do?

You have a couple of choices. You can either:

a You can honor your commitment to your family by making them whole on what
they gave you. You pay them back the principal plus interest. They will feel for you
because you took the money from your savings, but that trust will go a long way.
They will still talk to you and not ostracize you from the family. In fact, they would
probably tell their friends about how you made good on your word.

You let the 9 family members that kicked up the $90,000 - plus your parents that
b
kicked up the other $25,000, know that you will be returning their principle, but no
interest and roughly $1,000 of the profit from the sale. Since you at least returned
their principal, they will probably still talk to you, but you did not fulfill your promise.
They will keep that in mind for the future - especially on the next deal you want to
do. It will take a lot more convincing, but since you have a good track record, they
may lend to you again.

We’ve looked at the best-case and worst-case scenario, but there is the consideration of
not using friends and family in the first place.

When you are first starting out, friends and family is usually the first place you turn to get
financial support for your deal. This will extend beyond just the immediate people you
know, but also their friends, neighbors, and people they work with. If you think about it,
your friends and family network is huge. If you don’t leverage these people for your deals, it
will be difficult if not impossible to raise the money needed to get the deal done - especially
when you are starting out. You need to take the money if you are going to do a deal.

This means overcoming the fear and ask everyone you know - friends, family, people at
work, everyone - to invest with you. It’s that fear that will hold you back if you don’t act and
raising capital is important to get the deal locked up.

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ACTION STEPS
a Write down all your goals. From there, take responsibility for taking massive action
to work towards those goals. Remind yourself everyday of your “why” and commit
to making at least one investor call daily. I personally have a vision board at multiple
places in my home that I look at daily.

b Practice...and practice some more. The way you overcome the fear is to get so good
at underwriting, get broker opinions before you commit to buy, and plan for the
worst. By preparing, you will eliminate your fear.

With this out of the way, you can now focus on creating your plan.

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 CREATING A PLAN

When you invest, you are buying a day

that you don’t have to work.
- Aya Laray

Like any great business, you need to develop a plan. The plan for this business - called
the “Multifamily Business Plan” - provides an investor with an outline of a potential deal.
The plan includes photos, information about the building, demographics and employment
info, a business plan, projected financial information, and returns.

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Preparing a Multifamily Business Plan allows you to think not only about how to purchase
the property but also consider what the exit strategy will look like. It is vitally important to
have a clear understanding of how you will get your investors their money back.

When you put in the work to draft a Multifamily Business Plan, it will make you feel more
confident and comfortable. The ability to see the photos, visit the property, know the area
and the act of writing about the deal will force you to perceive it as an inevitable reality.
The more real and achievable it seems to you, the more confident you will be to talk about
the deal.

Your Multifamily Business Plan will give you the opportunity to provide an outline of what
a deal can look like with your potential investors. Even though you don’t have a deal locked
up at, it will look similar to what you have in your Multifamily Business Plan.

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A THE SAMPLE MULTIFAMILY BUSINESS PLAN

Take the time to invest in yourself. Your future depends on it.

- Robin Sharma

One purpose of the business plan is to get investors excited about the vision of the business.
What would an ideal, but feasible, deal look like over the next ten years? In the plan, you
can show photos of a potential building, spreadsheets with cash flow and financials,
improvement plan with planned rent increases, expected cash on cash return and more
effective demonstration of the future of the deal. This important document allows your
investors to visualize the many possible ways of making a deal happen. Moreover, this
would change with time since, we know, ideals do not constitute the real-life scenarios.
However, it is always good to see what might be possible.

With this in mind, use the Multifamily Business Plan outline in the Bonus Material section
to assist you in forming your own Multifamily Business Plan.

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Here’s the outline of each of the sections:

DISCLOSURE

This short section just outlines that this is a sample deal and is for demonstration purposes
only. It lets the reader know what to expect as it may influence their investment decision.

EXECUTIVE SUMMARY

This short section contains a summary of the investor’s terms, which includes the preferred
rate of return, information regarding equity, projected returns, minimum investment, the
term of the investment and a description of the property. It also includes an overview of
the business plan, which comprises information regarding renovations, rental prices, and
exit strategies.

PROPERTY INFORMATION

This section contains a description of the property itself, some information about the
surrounding area and the unit mix. For example, if you are planning to renovate the units
and make improvements to raise the rent, that information belongs in this section.

MARKET INFORMATION

This section defines your market. It will contain information on the sort of property would
you be interested in. As a beginner, choose the area that you feel the most comfortable
with. Most new investors should plan on investing within a short driving distance to your
home, rather than investing somewhere that is very far away unless your location makes
that impossible. Doing this will help you to become an expert in that area, which will help
you more easily analyze deals and opportunities. Further, it will help you to learn who the
players of the area are, which will ultimately help you to find investors and opportunities.

FINANCIALS

This section contains both the rent rolls and actual financials. Here, you will include a
description of where your financials are today. You will document the current situation
and updates you wish to perform in terms of cost. As you move with your investments, it
becomes imperative for you to have your complete financials handy.

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PROJECTED FINANCIALS AND RETURNS

This section contains the five- and ten-year financial projections, and the estimated returns
for your potential investors.

YOUR MANAGEMENT TEAM

In this section, you should write a short biography for yourself as well as some of your
other important team members. For example, a brief biography should be written for
your property manager, broker, attorney, and accountant. If you have any other important
partners such as a mentor and title company liaison, they should also be listed here. This
section will work to give you and your team credibility- with a professional edge, you will be
perceived as somebody who is more than capable to both out together and close a deal.
Clearly define your team and the systems that you will both use to delegate and automate
the many tasks at hand.

At a minimum, your team will need these members:

Experienced property management. The lenders may require you to have a third-party
manager engaged to handle the property. If you will be doing a long-distance deal (which
I do not recommend for your first one), then a property manager will be a must. It’s
important to note that the property manager must have experience with the asset class
you are targeting. A well-known property manager also knows the most active real estate
brokers and can make introductions for you.

Mortgage broker. An experienced mortgage broker line up the financing you need for your
deal. They will negotiate with the lenders on your behalf and coordinate their due diligence
on you. Typically, dealing with a mortgage broker is more expensive than going directly to
a local bank, but a good broker knows where to find the exact lender for your exact deal.

Commercial real estate attorney. Your attorney must have experience negotiating and
closing multifamily deals as well as reviewing loan documents provided by the lender. Do
not rely on an attorney that has only handled residential closings. This is a place you want
to have an experienced attorney on your side.

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A great securities attorney. State securities law and local real estate law are two completely
different areas of law. You need a securities attorney that has dealt with multifamily
offerings - and syndications. They must know the SEC codes as they apply to your deal to
ultimately keep you compliant with Federal law.

An excellent CPA. Real estate accounting and tax matters are specialized. They will handle
distributions for you and your investors. The better ones will even answer tax questions for
your investors, which further strengthens the relationship.

A great insurance broker. A good insurance broker will find the best insurance for your deal.
They will also recommend insurance products to protect you personally as you scale and
grow your real estate business.

Inspector/Contractor. Have experienced professionals on hand to evaluate the condition

of the property you are committing to buying before you go into contract. Make sure to
perform a thorough inspection and walk-through before you close.

Title insurance agent. A good title company will perform due diligence on the title to verify
there are no liens.

Start with the property manager and work your way down the list. In many cases, they can
provide referrals to help build your team. When you get an introduction from a friendly
property manager, you will get a better reception than a cold call. Just make certain that
when you begin tapping those referrals, you are well versed in the language of real estate
and your follow-through. Always remember that when you get a referral, you are putting
the referrer’s reputation on the line. Do not make the person referring you look stupid
by being unprepared. Word travels fast in the real estate business and you may not get
another shot!

Finally, you can work on getting soft commitments from investors to get your deal under
contract much more quickly.

With the Multifamily Business Plan out of the way, it makes the step of engaging with
investors that much easier.

ACTION STEPS
a Download an Offering Memorandum. Loopnet
www.Loopnet.com is the largest marketplace for
www.Loopnet.com

commercial properties. From small multifamily properties to apartment complexes,

shopping malls, and fast-food restaurants, www.Loopnet.com
Loopnet serves as the perfect place to
www.Loopnet.com

search for publicly listed commercial properties that are currently for sale.

27
 Go to Loopnet and create a free account. Login and search for properties that match
your criteria, preferably in your local area. Ideally, you will be able to download
the marketing and financial package, but you might be required to contact the
broker and complete a non-disclosure agreement to gain access to the financial
information.

Find a property that in the market you wish to buy. It should be the same size,
purchase price and area you are interested in. If you are downloading a CBRE,
Marcus & Millichap or Colliers Offering Memorandum, it will probably have an in-
depth marketing package. It will include what you need to create your Multifamily
Business Plan, such as photos, financial information, rent roll, unit mix and
information about the area and its demographics.

Note: Loopnet is your best bet to find brokers, not necessarily to find deals. After
creating your free account, you will be able to message brokers with what you are
looking for in terms of property. Broker relationships will be one of the best ways to
locate deals. Have your script ready before reaching out to the brokers.

b Create Financial Projections. The Offering Memorandum should contain both the
actual and Pro-Forma financials for the property. Using this data, you can create
your own five and ten-year projection to calculate the potential returns for your
investors using a spreadsheet software. Business plans typically have five and ten-
year timeframes as it ensures signals to your investors that they will need to be
committed to the deal for that time frame. If the Offering Memorandum already has
financial projections, you can simply use those by copying them into a spreadsheet.
In any case, make certain to structure the deal so it will achieve the desired returns
for your investors while still providing you with income for putting the deal together
and its ongoing management.

Note: The financial information outlined in Offering Memorandum are typically

gross exaggerations of the truth. It is paramount that you create your version of the
truth in any Multifamily Business Plan or documents that you create. Any numbers
you discuss should be based on reality.

When it comes to our sample Multifamily Business Plan, the accuracy of the financial
information is less important for this exercise. It will become more important when you
prepare your real deal. Focus on having something substantial to say to your potential
investors. There is no need to have projections that are entirely correct. The goal of this step
is to provide the investor with an idea of what a deal could look like. It should outline the type
of deal and financial commitment.

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RAISING FUNDS FOR YOUR DEALS

An active investor is someone who actually lives off their

investments as opposed to wages from a job.
- Robert Kiyosaki.

With your Multifamily Business Plan and personal branding items completed, you can begin
setting up meetings with potential investors. It is important that you go into this with a positive
attitude, visualizing your success. You are looking to garner some level of commitment from
your target investor. If they feel that you are not certain about what you are saying, they will
sense it.

Because we as humans are wired to be fear-based, you want to be prepared to address

what happens if they experience their greatest fear - they lose all or part of their investment.
Handling objections is something you need to become good at coming up with answers
and how you will mitigate the risk is important.

29
 A FIND & PITCH INVESTORS
As you meet target investors, that contact info and business cards you gathered and get
them into your online CRM, like HubSpot or MailChimp.
https://mailchi.mp/ From there, you can follow-up.
https://mailchi.mp/
https://www.hubspot.com/
https://www.hubspot.com/
https://www.hubspot.com/

This is one of the most critical parts of operating in the capital raise space!

This means you MUST:

• Send emails consistently

• Send text messages consistently
• Build relationships and partnerships to grow your network

A best practice I follow is to follow up by email about 4 days after I met the person for
coffee or even at a conference. It provides them ample time to get home and get back to
regular life. From there, follow-up again on Week 3 with an email and a text. Then follow-
up again on Week 6. If you are using a modern CRM, you can schedule reminders so you
don’t miss anything. Potentially, you can also automate the messages as well.

See the Bonus Material Section for ideas on where to find investors.

30
 B WHAT TO SAY
With your Deal Launch Guide out of the way, you will now be prepared to speak with
potential investors. Thinking about and planning how you will open with the investor
contact will prepare you with what you will say. Ultimately, your goal is to have as many
“in-person meetings” with as many potential investors as possible.

As I mentioned before, I start by telling a story in my investor pitch that outlines my “WHY”.
Simply put: people remember stories, not data. So, when you talk to your investor, go
beyond presenting the data, numbers, and statistics. Instead, present a clear narrative.
Pitch and convince your investors of your vision by taking them through a story.

Any good story has the following three parts:

• Setting
• Struggle
• Solution

Use your story to explain why you are investing in real estate, what it will do for all involved
and use the data in a way that resonates with people emotionally.

Let’s say you are reaching out to your first contact, Henry. From here should go into your
personal story. In today’s world, people have a short attention span. You need to work for
attention. If you lose your investor in the first five minutes of your pitch you may have to
start all over. Having an interesting “WHY” and align it to their “WHY” is a good way to open
that rapport.

After you open with the story, you can move into the pitch. In a confident and sure tone,
you could say to him:

“I’m working on a new deal. Maybe you can help. I’m looking to buy an apartment
building in the Columbus area with a group of investors. We expect the annual returns
to be around 14%. The minimum investment is $60,000. You wouldn’t happen to know
anyone who might be interested in investing, would you?”

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This may go one of three ways:

1 Henry may say, “That sounds interesting. I could get into that deal like that,” or

2 Henry may refer you to someone that invests in real estate, or

3 Henry may say he doesn’t know anyone and can’t help.

If Henry is interested, schedule a time to talk. If he knows someone, have him make an
introduction and then follow up with that person. Make sure you keep Henry (and anyone
that introduces you) informed on your progress. This is important you demonstrate to
Henry that you appreciate the referral and hopefully will send others your way.

If you tell a potential investor that real estate is an “unbelievably safe investment without
any risk” they will become suspicious. Many people know that any investment has an
element of risk. When selling an idea or concept, address the risks head-on. If you divert,
your audience will not trust you - and trust is key when raising money.

Your experience as a real estate investor: If you are speaking to a cold lead, you will need
to convince them that you have the capability to execute. You should spend most of the
meeting attempting to make the investor comfortable with you on a personal level, only
then can you address the deal itself. Your goal is to build a rapport with the investor to
demonstrate to him that you will be capable, even though you do not have a portfolio or
any successful deals to your name.

It is easier to develop a personal relationship with an investor if they get to know you. The
goal here is to build rapport. Sharing your “why” will make you relatable and trustworthy.
Through conversations like this, you may even discover that you and your investors have
a lot in common.

From there, you can share what you have been doing professionally. Perhaps you worked
in a sales capacity and set a record. Or, perhaps as an office administrator you saved
the company a great sum of money. Even if it is unrelated to real estate, you want to
demonstrate that you are capable of success. If you have endured failure, spin it by talking
about it as a learning experience and how you overcame the odds.

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Then, you can talk about why multifamily real estate is the place where investors should
be putting their money. You can share what brought you to real estate and some of the
deals you have walked with brokers. You can even discuss some of the good deals that sold
recently and the not so good ones where the numbers just don’t make sense.

If you can lay out your personal story and the investor gets comfortable with you, you can
then start sharing some of the aspects of a potential deal. The conversation may go like
this:

You: “I have a sample deal for us to review. I am currently working with brokers to land
one similar to this one. I’d like to get your feedback on what we project in the way of
returns. Fair enough?”

From there, turn to the Executive Summary page with the investor to discuss the returns
you are targeting.

You: “We will be targeting deals that produce double-digit, cash-on-cash returns on the
high end. Typical would be an annual return of 9% to 13% over the life of the investment.
That sound good?”

Henry the Investor: “Not bad. How long would my money be tied up?”

You: “I’m telling investors that they should be prepared to keep their money into the deal
for up to 5 years. We will look at doing a refinance between Years 2 and 5 as we build
value by increasing rents and driving values up. When we do the refi, we are looking to
pull and return at least 60% of the investors’ principal capital out of the deal. Investors
still have equity in the deal after the refi. The LLC operating agreement would spell out
exactly how that would be done. How would you feel about that?”

Henry the Investor: “That would be fine. Would there be any cash distributions?”

You: “Yes. We will pay out distributions quarterly.”

Henry the Investor: “That sounds reasonable. Where would you say are the risks?”

33
 You: “It depends on the deal. The greatest risk is our ability to execute the plan. We could
fall short of our projected returns or it may take more time to achieve the target. For
example, let’s say we want to renovate 50% of the units so that we can raise rents by 25%.
We need to make sure we have cash in the bank or get the lines of credit we need to fund
the renovations. However, maybe the tenants won’t leave as quickly as we would like and it
may take longer to raise rents. With that said, with the first few deals we will be working on,
the plan is to keep these risks to a minimum. We have no plans to vacate a building or buy
a big renovation project. We are looking for a solid, value-add deal with stable rents and
room to add revenue. My experienced partners feel the same way as well. Once we have a
deal locked up, we can go through the plan to identify and address the risks.”

From there, you say, “Before we dive into the Deal Launch Guide, do you have any
questions so far?”

At this point, the investor should be comfortable with you as a person as well as with the
risks, returns, and terms of the investment. You know what you are talking about and you
are speaking confidently about your numbers and how the project will come together.

Afterward, spend some time going over the remainder of the Deal Launch Guide. You want
to be respectful of time so don’t go too deep into the document.

You: “Let’s spend a few minutes going over the Deal Launch Guide. As I mentioned before,
this isn’t a real deal, but when we do land one, it will look like something like this.”

Go through each section of the Deal Launch Guide. You want to get the investor familiar
with the document and address any questions they have. Don’t focus too much on the
numbers as they will not the actual numbers to a real deal.

After you walk through the guide, wrap up the meeting taking the investor through a deal
closing scenario from the investors’ perspective:

You: “I truly appreciate you making time to meet with me. I will keep you posted on deal
activity. When my team and I have a property under contract, I’ll send you a Deal Launch
Guide that will look similar to this one. If you are interested in investing, let me know
how much you are in for. I will send a confirmation. Once I get commitments from all the
investors and our due diligence looks good, we will begin the closing process.”

34
 My attorney will send you an operating agreement along with a private placement
memorandum via DocuSign. Simply review and sign the operating agreement and a
subscription agreement that describes the investment and dollar amounts. You can wire
the finds a week before closing to the account provided by the attorney.

After we close, we will send a monthly report to the investors for the first six months until
we get things stabilized. Afterwards, we will send out quarterly reports with distributions.”

Once you wrap up the meeting, be sure to keep in touch with the deals you are working
on. Keep in mind that they might not be able to invest, but they could give you feedback to
improve your pitch. In any case, maintain an open line of communication with that investor
- whether it be by email, text or phone call - whatever they are comfortable with. As you
continue your search for a deal, you will have your investors ready to fund it!

ACTION STEPS
a Create your Sample Deal Launch Guide. The Deal Launch Guide outlines your
investment strategy, describes the market you will invest in and your team. The
investor will see what type of returns they can expect, the market and niche of real
estate you invest in and how you will create value with the investment.

b Talk to everybody that you know. This is one of the most daunting tasks of fundraising:
talking to everyone. The most surprising part of this exercise is that we live in a
connected world and everyone knows everyone. You need to reach out to friends,
family, neighbors, and co-workers. Never discount anyone. You need to tell everyone
you know what you want to do, and you will be surprised at what will happen. If a
friend refers you to someone they know, always follow up. Even if that person will not
invest, they may invest later or can possibly refer you to someone else.

c Set up a meeting with your first potential investor. Try to make this person a trusted
friend or family member. In doing this, the worst-case scenario is that they won’t
invest, but it will still be both great practice and will boost your confidence. In the
best-case scenario, they will want to invest or they will know somebody that might!

Continue to learn! Find the next book that you’d like to read or a seminar that you could
http://bit.ly/33sWRhq
attend. Download The Bulletproof Book List for suggestions.

35
 C HOW TO SAY IT
As you study and train with this material, you want to be a “Subject Matter Expert” who
has spent the time knowing all they could about multifamily. Remember, they are not only
investing in a property. They are also investing IN YOU.

This means that the investors, with their limited availability and lack of background, will
have a hard time evaluating what you are saying in your investor pitch. Because of this,
they will evaluate your ability in how confidently you are delivering the information.
With that said, you must not look nervous and constantly apologize. Remember that you
are building something great and you are doing investors a favor by telling them about it
so they can share in the journey and its rewards.

On the other hand, do not be arrogant or talk over the investor asking questions. Rather,
come across as coachable - especially when you are practicing on friends and family. You
don’t always see the potential problems in your delivery. You must be open to advice
when you don’t have all the answers. When you take this approach, it shows investors that
you are open to change where needed and that they can help you further sharpen your
delivery.

ACTION STEP

Practice improving your voice to speak with confidence. A great way to do this is to record
a pitch with a friend. Listening to a recording of your voice will make you aware of any
mistakes so you can improve. Practice at least three times a week and it will be much
easier to improve your speaking habits.

36
 LEGAL COMPLIANCE

I would uphold the law if for no other reason than to protect myself.
- Thomas Moore

Understanding private placements as outlined by the Securities and Exchange Commission

(SEC) is important and essential for every capital raiser looking to secure private money from
investors. A “Private Placement” is a fancy way of saying you are issuing a security or a stock.
Issuing a stock is selling a part of the building to investors. They hand you money and you
give them partial ownership. From there, they expect to get something - dividends, profit
when sold, or other benefits.

If the investors are going to be completely passive, then you are doing a private placement
and must do a syndication. The good news is that you don’t need to be an expert in this area.
You just need to know there are rules around how to raise capital - and bring on a good
securities attorney.

37
 A UNDERSTAND SEC COMPLIANCE
Raising funds from investors fall under very strict SEC and state guidelines. There are
additional rules, regulations and licensing to lend a property back out as residential (owner-
occupied) loans or commercial (non-owner occupied) loans. As with any government
agency, you should never mess with the SEC.

With that said, engage a securities attorney early on and thoroughly understand the rules as
defined on the SEC website. It can be very intimidating and complicated to stay compliant, but
if you have a good attorney lined up, you should be in good hands. For someone starting out,
you may want to start by looking at SEC Regulation D Rule 506C. This rule allows syndicators
https://www.sec.gov/fast-answers/answers-rule506htm.html
https://www.sec.gov/fast-answers/answers-rule506htm.html

to raise money under two different offering types, “B” or “C.” Not everyone is eligible to invest
in your deal. To me, a “506C” is the least complicated way to start raising investor funds, but
speak to your securities attorney before making any final decisions.

38
 B HIRING A SECURITIES ATTORNEY
Your securities attorney is one place where you should never cut corners. There are many
items where you can save money, but the syndication legal piece is NOT one of them. If
you try to handle this on your own or with an offshore attorney found on some website, it
could give you legal exposure that you just do not want.

There are two things to keep in mind. First, you want to use someone who specializes
in real estate syndications. This part is important; There are many real estate attorneys
that do not handle the syndication part. You need a dedicated professional for this one.
Second, there is a great deal that goes into the legal piece than simply drafting a PPM
(Private Placement Memorandum).

Here are just some of the things a good syndication attorney will do:

• Assist in structuring the offering

• Assist and recommend proper entity structuring

• Verify you are not violating securities laws by paying referral fees

• Provide guidance so you do not act as an investment advisor

• Review your business plan and proforma to ensure they are accurate and not misleading

• Take the time to understand your specific deal and pull all relevant information together

• Review your website and social media pages are SEC compliant

• Draft the operating agreements for all the LLC entities

• Perform an Asset Protection analysis

• Draft the PPM (Private Placement Memorandum)

• Draft the operating agreement, subscription agreement, questionnaire, talk to your

investors if they have questions, handle and file all the state filings, perform a post

offering review of all documents.

39
Even for a syndication attorney putting their own deals together, this is a lot of work. You
are better off finding a good securities attorney to handle the fine points so you can focus
on raising capital and finding your deal.

Keep in mind that this legal expense gets paid out of the funds you are raising, as this is an
expense. You have a fiduciary responsibility to your investors and protecting their money.
If investors sue you, they have a near-automatic case for breach of fiduciary duty. This is
because most juries would find that not having an attorney confirms that the syndication
was not done properly and thus is negligent - even if you do most of it correctly. There is
also the potential for unauthorized practice of law because you are technically drafting
legal documents for the entity without a license to practice law. So, in addition to all the
actual work and advising, you are also getting the attorney’s stamp of approval which sets
you up well if things don’t go well with your investors.

40
ACTION STEP

a Ask your attorney for references. As I mentioned, your real estate attorney typically
does not do syndication. However, they may know others that do. Create a list of 10
securities attorneys by asking for referrals and checking out the various Facebook
Groups that focus on multifamily syndication. Research them on social media and
on the Internet to see if you can glean any feedback from other syndicators.

b Narrow the list. From here, select and interview 5 securities attorneys. Ask them
the same 3 questions below and see how they answer. If they are readily accessible
and responsive to your requests, then you know you are working with a true pro.

Ask about their previous clients. Review the experiences of clients they have worked
with in the past and if they can vouch for them.

How many cases they have handled? The laws around syndication are very different
than other areas. You don’t want someone “practicing” their first case on your deal!

How long they have been practicing securities law? Determine if the firm or attorney
is new or if they are trying to pass themselves off as a seasoned veteran.

In the end, you need to be comfortable working with your securities attorney. For instance,
if they do not have the same positive energy as you, it will lead to strains in the relationship.
They are part of your team.

41
 BONUS MATERIAL
A WHY MULTIFAMILY REAL ESTATE

90% of all millionaires become so through owning real estate.

- Andrew Carnegie

Aside from understanding the benefits of multifamily real estate, you must be able to convey
the benefits to your potential investors. This will be imperative to your ability to raise capital.

The great thing about real estate is that it has served as the primary way for people to gain
financial freedom. When it comes to cash flow, multifamily apartments are by far, the most
lucrative way to get that stream of income that is within the reach of private investors. Once
you add in the powerful tax advantages, it takes this mode of investing to a whole new level.

42
Here are the top 9 reasons why YOUR investors will want to invest in a multifamily
syndication deal:

1 STEADY CASH-ON-CASH RETURNS

Higher cash-on-cash returns compared to single-family homes make multifamily a solid

winner. Getting $300 of monthly cash flow on a single-family home is a good starting point
for many investors, but multifamily investors can realize multiplied cash flows. This is
multiplying the number of units. If one deal works, why not multiply it by 50 or even 100?
Even owning a single multifamily deal with 12 units will put one or two thousand dollars in
your pocket. It may not be enough for some of you to change your life, but it would certainly
help cover some of your bills.

2 PLENTY OF DEMAND

In case you hadn’t noticed, there is a lot of tenant demand for multifamily. Aside from Baby
Boomers and Millennials moving to renting rather than owning, it’s less expensive to live in
an apartment than maintaining a single-family home. For investors running their properties
correctly, it means high occupancy. On the investor side, the cost of multifamily deals
compared to single-family homes are enough to keep some investors away.

3 LOW RISK

If you are familiar with how banks lend on multifamily, you know that their rates are usually
low and have a high degree of flexibility and leverage. This is because they see multifamily
as a low-risk investment. If your single-family home goes vacant, you need to worry about
having cash reserves to sustain it. If you have a mortgage on it, you are pulling that cash out
of your personal reserves. The benefit of having many units in one building is that if one goes
vacant, there is still cash coming in from the others to keep it running. If banks like low risk
and you can leverage their money, you should take advantage of it.

43
 4 LEVERAGE PROFESSIONAL PROPERTY MANAGEMENT

The cash flow of a properly run multifamily deal enables you as an investor to hire professional
property managers to handle maintenance, tenant concerns, and problems if they arise.
The incoming cash flow generated by a multifamily property allows you to use your time to
source more deals or spend it on what you enjoy doing. What’s more, having a professional
property manager will allow you to scale your business if you like as you can lean on their
expertise.

5 IT’S A BUSINESS

Many investors favor multifamily properties because of the consistently strong market and
the significant return on investment. So, like any business, there are many tax benefits and
ways to increase cash flow. Aside from depreciation and interest deductions, other expenses
like insurance and ongoing maintenance are spread over the number of units in the deal.
You can force appreciation and Net Operating Income in more ways by offering benefits to
your tenants. This drives valuation up and creates value in your multifamily deal.

6 DEPRECIATION

When you own or are invested in a multifamily deal, you are technically invested in a business.
So, everything related to that business, from paperclips to taxes, can be written off. One of
the most powerful deductions you can write off is depreciation.

This is how a straight-line depreciation schedule works: The IRS ruled that resident-occupied
real estate has a lifespan of 27.5 years. The land the property sits on cannot be depreciated
as it has an infinite lifespan. Let’s say you want to buy a property for $6MM and the land is
worth $400k. Applying the IRS rule, you are able to deduct 1/27.5 of the $5.6MM, or $203,636
from income for each year. This allows you to show a loss on paper as the deduction may
eliminate most or all of the income from that property. Even though you show a loss on your
tax return, that money is cash in your pocket and that of your investors.

44
If you have a portfolio of other investments, you are then able to apply these paper losses
to other areas of your portfolio. This means that your multifamily investment can lower your
tax exposure on other investments you hold. Even as a passive investor on one of our deals,
the depreciation in our multifamily deals flows through to our investors in proportion to
their ownership percentage.

Keep in mind that this is not an entire elimination of all taxes, but there are other tools you
can use to defer taxes indefinitely.

7 COST SEGREGATION

Cost Segregation is a great way of accelerating the depreciation of just about any commercial
property - including multifamily. As I mentioned earlier, the IRS tax code says that real estate
has a lifespan of 27.5 years. However, there are certain items that make up the building such
as the plumbing fixtures to the cabinets to the appliances that have a shorter lifespan.

When a professional cost segregation study is performed, an engineer will come on-site and
walk each individual unit. From there, they will separate all the items from the overall value
of the building and present you with a schedule for those individual items. Many of those
items, the IRS deems them to have up to 7 years of useful life. The cost segregation study
identifies these items.

In the previous example, I indicated that you would save $203,000 in taxes through
depreciation. Let’s say that the cost segregation study of that $6MM property shows there is
$5MM in building depreciation and $1MM from personal property appreciation. Your taxes
look a lot different. We would take the ($5MM x 1/27.5 years) for $181,818 and ($1MM x 1/7
years) for $142,857, totaling $324,000 in annual depreciation expense - significant savings
over the $203,000 that we had calculated before! This will give you a great tax offset in
income against other investment income.

The only caveat with taking this approach is that you could get hit with a higher tax bill when
you go to sell the property down the road. As I mentioned earlier, there are ways of rolling
your gains without getting nailed on taxes.

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 8 QUALIFY AS A REAL ESTATE PROFESSIONAL

For many people, real estate is a means to supplement their full-time job with some
additional income. What many don’t know is that if you spend 750 hours or more annually
in your real property business, such as managing rentals or turning units, you qualify as a
Real Estate Professional. This means you are able to deduct 100% of your rental depreciation
and ‘losses’ against any other income. This designation only helps you if you have ownership
in a significant amount of rental property (i.e. more than just 1 unit) and you earn less than
$150,000/year in Adjusted Gross Income. If you are an investor in one of our deals, you then
have ownership and that may get you qualified.

9 1031 LIKE-KIND EXCHANGES

Earlier, I mentioned depreciation as a way to increase your deductions and reduce your
gains. A great way to defer taxes on your gains is by using a “1031 like-kind exchange” to
roll your gains and avoid getting nailed in taxes for an indefinite amount of time. As long as
that cash stays in the 1031, you can keep multiplying it without any tax implications.

This is a high-level view of the most powerful benefits that any passive investor should
understand. If you are able to discuss the benefits at length, it will make raising capital that
much easier. Understand and commit to memory the nine benefits of multifamily. You will
need to become an expert at reciting the reasons. Practice on friends and family to make
sure you have them all down.

46
 B HOW TO SELL TO YOUR INVESTORS

I have never worked a day in my life without selling.

If I believe in something, I sell it, and I sell it hard.
- Estée Lauder

For more than 50 years, Neil Borden’s concept of the “Marketing Mix” has been the recipe
for marketing success for companies large and small. You may know it as the 4-P’s: price,
product, placement, and promotion.

The goal of this process is for you to build an army of interested investors. When you have
this database established and you find a deal, you have investors lined up and ready to
fund, making it much easier to get your deal funded and closed.

I took this concept and applied it to the sales process, shown below in “The Four P’s of
Selling Your Multifamily Deal”.

1 PERSONALIZATION

This means that you must customize your message to the investors’ needs and style. The
goal is to reduce the psychological distance between you and the investor. Personalizing
the communication is one way to do this. Your message must reflect the investors’ needs
and the way they prefer to make investing decisions. Customizing in this way makes it
easier for them to say “Yes”.

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 2 PICTURE

We buy with our emotions. We rationalize with logic. Pictures excite buyers. It builds their
anticipation and raises their expectations. When you demonstrate that you know your stuff,
it builds the investors’ confidence that they are dealing with an expert. How your materials
look when it arrives is perceived value. If your documents and presentation materials
arrive in a clean and professional-looking package, it makes the investor feel good about
spending time with you. When your literature is crisp and fresh versus a dogged-ear copy
of something that has sat in your trunk for three years, it creates greater anticipation in the
investor. When you show up for an investor meeting, you are dressed professionally, and
you have scripts of what you will say, you will put them at ease.

3 PROOF

Most investors are conservative when it comes to investing. They have a high degree of
skepticism and are always looking for proof. They rarely take anything at face value. They
need to see and understand the perceived value and are impressed by personalizing (First
P) and picturing (Second P). Typically, the investors you are speaking with are already
investing in real estate. If not, you can refer to Bonus Material Section to strengthen the
“Why”. Afterwards, you talk about your team, the experience they bring to the table, the
number of deals they have done. You have a much better chance of getting the investor on
board if you personalize your presentation, maximize your perceived value, demonstrate
your performance value, and offer proof sources.

4 PITCH

This is the part when we have our Call to Action (CTA). While we will not have a deal in the
pipeline just yet, you want to at least get a commitment to carry on the dialog for when
you do. In the end, you are just trying to see if people on your list are interested in your
strategy. If they are, GREAT! You can add them to your pool of interested investors.

As you continue to meet people, your confidence will improve. This will require a lot of work
as you will need to do a lot of raising. If you need $250,000 for a down payment, then your
goal is to get a soft commitment of at least $500,000 – or double of what you will need. Some
people may back out, some may not be ready, and some just don’t want to invest.

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 C THE TOP 5 INVESTOR QUESTIONS
As with any interview or business negotiation, you need to go into the conversation with
the end in mind. In your case, your goal is to build rapport, demonstrate you know what to
ask and assess their ability to present deals to you based on your investment criteria. This
means getting to know the broker as well as the property they are selling, if any. Below are
the 5 top questions that you need to be prepared to answer. An investor may ask:

1 IS MY INVESTMENT SAFE?

You could say something like: “Multifamily real estate, unlike the stock market, is a tangible
asset. Apartment buildings - unlike a single-family home - is a business that spreads the
risk because many people are paying rent. It’s highly unlikely that all the tenants will leave
at the same time. Additionally, we can force the appreciation by making improvements to
increase value while the tenants pay the principal down. All this contributes to the increase
in value while we optimize the operation. So, while all investments have some level of risk,
multifamily apartments have many more safeguards than other investments.”

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 2 TELL ME ABOUT THE TEAM’S EXPERIENCE.

As you continue down the road of deal syndication, you will realize that this is a team sport.
The team is more important than the deal itself. After all, the team is responsible to create
and execute the business plan. If your target investor doesn’t believe in the team, it won’t
matter how good the deal looks.

3 HOW MUCH ARE THE SPONSORS INVESTING IN THE DEAL? DO THEY HAVE SKIN
IN THE GAME?

For some investors, they will want to see you have “skin in the game”. Meaning, they want
you to know that you believe in the deal enough to put your own funds in the deal along with
theirs. Not every investor will care - especially if you are only dealing with friends and family.
Another way around this problem is to have a partner that can put money into the deal. An
investor will be pleased to see that someone on the General Partner side is putting their own
money in. Finally, you can also sign on the debt. This will give the investor comfort that you
cannot just walk away from the deal.

4 WHY DO YOU LIKE THIS DEAL?

When you have a target property in mind, describe some of the features you are looking
for. Perhaps it’s in the heart of a fast-growing medical corridor and it will appeal to young,
entrepreneurial, and collaborative grad students as well as medical professionals. In any
case, indicate you are looking for properties that have good upside.

5 WHEN DO WE START GETTING DISTRIBUTIONS?

This will depend on your overall deal structure. In my deals, we do our distributions quarterly,
then windfall at sale. So, once all investors are paid back their principal at a refinance event
- typically 2 to 5 years - the investor will also receive a profit at sale.

These one-on-one conversations with potential investors is a great way to get timely, valuable
information. Remember that all the information you receive from these talks provide you
with guidance for the next conversation. Also, practicing your tone and speed will say more
than any financial sheet could. And don’t forget to ask plenty of questions! Document them
after the meeting for the next one. You will be happy you did!

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 D PLACES TO FIND INVESTORS
Any real estate entrepreneur and investor will tell you that relationships are key to building
your business. I can tell you that it was through my relationships with property managers,
brokers, but most of all passive investors, that I was able to not only forge new friendships
but also close many deals. If you don’t have a network yet, you may be wondering how can
you meet high net-worth investors?

One of the places to meet them is at non-profit groups and charity groups. Many of these
people tend to be generous. They enjoy giving back to their community. When they are in
a group with others celebrating the spirit of giving, they are in a mindset of relationship
building. They will be open to meet people - people like you.

Consider looking at Meetup.com or Eventbrite and search for “charity”, “non-profit” put a
list together of events in your area. Pick events that line up with your interests as closely as
possible. Go a few times and get to know the people and make yourself visible. Talk to others
and get to know them and let them get to know you. If you run into someone that doesn’t
want to talk to you, pay no matter. Just talk to as many people as you can. And all you are
doing is talking. You are not pitching or selling them. You are building your network.

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I found that volunteering at non-profits and charities is one great way to build relationships
with those that fund these endowments. Many of the high-net individuals that support
these causes support them with their time and money. Through these relationships, I
personally have benefitted, not only with my deals but also with great friendships I’ve built
over the years.

Additional strategies I have found to be helpful is to go to real estate conferences, wealth

building conferences, and even Real Estate Investment Association (REIA) meetings. You
are able to find like-minded people there that have large networks of their own.

When you are talking and meeting people, you don’t want to go in cold. Make sure that
as you prepare to go to these events, you sharpen your skills. Spend the time to learn the
verbiage, deal structures, and lingo. Nail down your story and define your why. Remember
that your network is investing in you, so listen to podcasts, educate yourself and make real
estate a big part of your life.

Network building is a big part of your success!

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 E THE IMPORTANCE OF
INVESTOR RELATIONS
Investor relations is a relationship-based role that in my mind is another crucial pillar in
the syndication world. There is no get-investors-quick trick that you can use to raise capital
as a beginner. These are long term organic relationships where you set up a win-win
business structure where all parties have something to gain. This is something me and my
team are constantly working on putting ourselves in situations, networks, and occasions
where we can connect with people looking to invest their capital while building long term
relationships. These are our business partners!

Investors play a major and vital role in the success and growth of your real estate business.
It’s important to effectively control the flow of information between the asset and the
investors putting up the money. To maintain clear communication channels, follow the
following:

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• Put the investors’ interests first. You are leveraging someone else’s money. It’s your job
to protect this capital before your own at all costs.

• People invest in the person, not the deal. If you present yourself as a genuine professional
in this industry people will have trust in you and your work to execute the plan.

• Not all Investors are the same. Make sure in your investor interviews you get to their
goals as passive real estate investors so you can align the deals that meet that criteria.

• Be sure you can work with them. Make sure you both are a good fit for each other. The
last thing either of you want is to have issues for the life of the investment.

• Finally, learn about your investors. Since this is relationship-based business, you should
know why they are doing this. Develop a deep relationship with these people and make
it personal.

Your role as GP is key. It is important to remain transparent and honest with investors and
making efforts with your investor relations is an absolute necessity. Remember that you
are targeting to grow their wealth for their son’s college tuition, their daughter’s wedding,
for their generational wealth. Knowing their “WHY” is just as important as knowing your
“WHY”.

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 THOUGHTS ON
GETTING A COACH
Like professional athletes, investors sometimes need coaches to venture through the
complicated world of multifamily investing. With that said, you may want to consider
coaching to get into your first deal.

Productivity is always a challenge for many investors. The difficulty lies in the fact that
there is so much information that it’s easy to get overwhelmed. With a coach, you are
guided towards accomplishing your goal - one day at a time. As the days turn into weeks
and months you will achieve the results you are looking for!

After all, you will need all the veteran advice you can get in terms of analyzing deals,
understanding your market, speaking to brokers and other important strategies. Perhaps
you need help putting together some of the strategies described in this guide. A coach can
help you with that.

While there is no correct way to investing, you can always learn and master skills from
someone that has been in the trenches. If you would like to learn more about our online
and offline programs, check out the Bulletproof Cashflow Multifamily Coaching Program.

Starting anything new is often a triumph of heart over logic. But brick by brick, you will
build an enviable new business - if you put in the work. As with anything worthwhile, what
you are taking on is a bold step towards your dream. The journey you are on has many
opportunities and many risks. However, if you believe in yourself, stay sharp, and build a
solid team around you, nothing can stop you from reaching your goal. Push your limitations
aside and always give your all.

I’m rooting for you!

Be Bulletproof,

Agostino

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