This podcast guesting Neal Bawa is hosted by Michele Swinick of Everything Home

Multi-Family Investing & Housing Trends / Online Training

by Neal Bawa | EverythingHome Michele Swinick

Neal:  Exactly. I think that we are in a state of denial. We have a perfect storm and that perfect storm is on the one side, it’s impossible for real estate and stock prices to decrease because of the liquidity in the market. On the other side, construction costs are up, labor costs are up, and the amount of construction that we’re doing is really nowhere near what we need to be doing, simply because people are a little skittish, right? This has now lasted seven years, so I don’t see any single family or multifamily home makers going, “All right, we think it’s going to continue for another five or ten years, let’s build, build, build.” We’re not seeing enough of that basis.

Even places like Phoenix, that they are and people are like, “There’s too much construction going on,” and my feedback to those people is, I want you to go look at a website: When you get there, I want you to pick up two cities. One is Pittsburgh, the other one is Phoenix. Now, look at the huge supply/demand gap for Phoenix. Pittsburgh has nothing, right? That’s why there’s no cranes in the sky over Pittsburgh, but if you look at Phoenix, there are very few cities in the United States that are going to have a supply/demand gap as massive as Phoenix. That is why there’s cranes up in the air, because there’s a huge gap there.

The other piece of this puzzle is, that the multifamily guys know this and they’re all happy with where they are, but they’re not stepping forward to offer solutions to the government. They’re just happy with the fact that if interest rates go up, another 4 million people in the U.S. will basically be forced to become renters. That’s good for them. They’ll build more multifamily, but nobody is actually saying, “I need to be part of the solution and try and figure a way out so that there is affordable housing being provided.”

Here is my forecast for what you’re going to see in the next five years:  Today in 2018, everybody is talking about the opioid crises and the drug crises. We weren’t saying anything five years ago. Five years from today, everyone is going to be talking about the mass homelessness epidemic in the United States. It is starting from San Francisco, it’s starting from Los Angeles. Tent cities going up. It’s not just two guys under a freeway anymore, it’s cities of people that are employed, that are working people, that can only afford to live in these makeshift tents.

The problem is going to spread across the United States over the next five years regardless of whether we have a recession or not. Because there’s only one direction for real estate prices right now. It’s upward because supply and demand are not in balance. You’re going to see this problem get much worse, more multifamily will get built but almost everything that we’re building in multifamily, everywhere in the U.S., is Class A. 93% of new multifamily construction in the last 18 months is Class A.

But the problem is not the Class A people. The problem is the people at the bottom end. All of those homeowners or all those people that were looking to buy homes, they are now priced out by the interest rate increases, they still have enough money to go into apartments, so they’re going to go into apartments. But what they’ll end up doing is they’ll end up jacking up the prices of multifamily. When that happens, everybody is going to try and adjust.

So, the first thing, first effective that will be, that America will have a new generation of people that are going to be high income poor people. These are people that have two incomes, but 50% of their income is just going towards rental. More and more people are going to basically shrink their disposable income to zero.

Then the second phenomenon is the people that have already done that over the last five or six years because of the huge rent increases will become homeless. So, you’re going to see an increase in the number of homeless people that is going to be an exponential rate.

Think about exponential rates and how quickly they become big. If you have one person and every hour you have a new person, that becomes 2, then 4, then 8, then 16, and then 32 and then 64. This is an exponential explosion. What that means is, 10 years from now, America could have hundreds of times as many homeless people as we have today. No one is talking about this right now because the problem—the awareness of the problem hasn’t reached critical mass. But that’s where we are going to go.

Now, I know that this is going to happen, I know that it’s bad for America, but there’s opportunity here. That’s why I’m in multifamily, because no one in the U.S. has even suggested a solution to this problem, which means that regardless of the recessions, which are good and should happen, hopefully there’s a standard recession in the next two or three years that adjust things, but regardless of recession, for multifamily, which is at the lower end of the scale, there’s only growth. Some years are going to be crazy growth. We might see 6, 7, 8% rent increases. We saw those numbers in 2015 and ’16. They cooled down a little bit in 2017 because of new supply but cool down still means we’re still above long-term trends. Again, because the construction peaked in 2017. It’s slowing down again and because of that slow-down, we’ll see another spurt in rent increases. As that happens, my investors are benefiting.

I’m not a politician, I can’t affect policy, so the best thing that I can do is look at the trends, benefit myself, benefit my investors, and that’s what we are seeing. We have a portfolio of over 100 million people, over 200 investors that are directly invested, and we’re looking for more properties in areas that we see don’t have glass ceilings. Seattle has a glass ceiling because the rents went up 45% already in five or six years. That’s too much. But we don’t see that glass ceiling in Phoenix or in Salt Lake City or in Boise, Idaho or in Tacoma, Washington. There’s a lot of places where rents can go up way, way beyond where they are.

Coming down is the problem. They should come down, but boy, that’s very, very hard. It’s very hard for anything to come down in this market.

Michele:  Well, you gave everybody 10 valid reasons as to why they’re not coming down. One of them you just mentioned is in 2017, you said that was pretty much the high point of the construction. Is it because all of them are—the cost of doing the A-level properties for multifamily has gotten so high that they pulled back or are they just waiting to see what the trends are going to be, so they’re kind of playing with occupancy and inventory so that way they can drive their prices up in another year or two, because of that 18-month lag time that you talked about?

Neal:  Well, because building construction is a much riskier thing to do towards the end of a cycle. As I said, for somebody like me, that’s buying a property, that’s cash-flowing, holding through a recession is no big deal, right? Maybe I’m giving my investors 10% cash year, now it turns out to be 5% cash a year. If the investor comes to me and says, “Hey, I’m making less cash,” I’m going to say, “Yes, but I want you to wait for the year after the recession. You’re going to notice a bounce-back and I’m going to give you more then.” It’s not a big deal for me.

But if you’re a developer and a recession is coming, the problem is their timelines are much less flexible. They can’t just hold on. They have a $30 million construction loan, that can’t basically say—when the building is finished, they have to sell it and during the recession, you don’t want to sell anything, you want to hold onto it.

So, developers are saying, “Okay, I think 2020 is a recession year. I don’t want to start something in 2018 that finishes in 2020 because I can’t hold on for a year. It’s not a cash-flowing property, it’s empty, it’s brand new and I need to sell it as soon as I finish it.” I think that’s going to happen in a recession timeframe, and that’s why a lot of people are easing off on the new development side. And I think to some extent that’s happening on the single family side as well, though not as much as it’s happening on the multifamily side.

And that means that supply shortages in the 2019, 2020 timeframe will actually be worse than they are today. We talk about supply shortages nationwide. We’re at the beginning of that process. They’re not going to get better. Anybody who follows the total housing construction starts in the U.S., when the total multifamily starts can say that the shortage will get worse because we’re predicting a lot of growth, but we’re not making as many homes. We’re not doing single family, we’re not doing multifamily, we’re short on both sides. That’s the problem.

People keep thinking this is crazy. It’s different from 2008. 2008 was a bunch of people that should’ve never gotten loans that bought millions and millions and millions of homes and then abandoned them.

Guess what happened to those homes? They are not held by those people anymore. Investors like me bought them. I own 20 homes, all for rent. At this point in time, I have the wherewithal, I have the money, to hold my way through a recession. And why should I drop them? I’m not upside-down. And even if I’m upside-down during a recession, I’ve made so much gains over the last six or seven years on those homes that I bought in 2008, ’09, and ’10, that even if my rent drops 20%, I’m still making a lot of money. I will simply hold my way through a recession. That is why 2008 was a one-time event. What they’re going to see next is not a realistic crash. We’re going to see garden variety recession and those are good for business, not bad.

Michele:  And that’s going to be something unique and it might actually how it’s going to be moving forward in the future?

Neal:  Yes. I think that we’re in uncharted waters here, Michele. We have never—we are in the middle of the largest banking and financial experiment in history. In the last 2000 years, there have been lots and lots of times where unlimited printing of money led to catastrophe. In 2000 years, there hasn’t been one example where it didn’t end that way, where it didn’t end with a catastrophe.

Having said that, we have a much more structured world than the Romans basically printing money. They did that, and it led to the end of their civilization, so did the Greeks.

But at this point, the modern world is more balanced, so we have the ability to keep on printing money for possibly the next decade or two before we have to deal with the consequences of what we’re doing. On one side, we print money for liquidity, on the other side, we raise debt by trillions of dollars in a year, obviously this is not sustainable. Everybody knows that it’s unsustainable to raise your public debt by a trillion dollars a year, but you can keep doing it for a number of years.

My bet is that we will have the ability to extend and pretend for at least another five to seven years. That’s why I’m bullish on investing, because the only way to pretend and extend is to keep doing what you’re doing. If they keep doing what they’re doing, real estate will go up. Stocks will go up. There’s a crash coming at the end of it all, but who knows when it is? I don’t know.

In general, once crashes happen, people chase real assets. What are the real assets out there? Real estate, gold, timber. Those are real assets, not paper assets. Physical things which go up in value because construction costs do. In general, I’m bullish on real estate. We just have to be very careful not to get over-leveraged in the coming years. So, for those of you that are looking for advice on real estate, don’t be buying homes that are 10% down. Find a way to do 25% down. Don’t over-leverage yourself. Don’t do short-term loans. This is a great time to lock in 30-year fixed. On multifamily you can’t do that, so lock in 10-year fixed loans, because whatever comes beyond that, you don’t want to have a—you don’t want to be shopping for a new loan in the middle of any kind of future economic problems that we face.

That’s my advice. Buy real estate because construction costs are going up. It’s a real asset and we keep pumping fake money into the market.

And you said there’s quite a few years left to take advantage of using the model that you’re using right now and then when things change, there’s just going to be more opportunity, then hopefully you’ve accumulated enough of a profit or a sustaining power like you said. Just based on the 20 homes alone, because of the amount of profit that was made over the past six or seven years or so, you can sustain a recession for the period of time that it is and even if rents go down, you can handle that.

Neal:  Exactly. In my case, when I bought these properties, rents were about $1,000 each and I was already making a little bit of money, 6, 7, or 8%. Today my rents are $1,400. So, I can sustain a drop of 40% in rents—which is huge. Keep in mind, when recessions, home prices drop. 2008 home prices dropped 30%. Did rents drop 30%? No. Did they drop 15%? No. Nationwide, rents only dropped 9% because the people that are renting, a lot of them can’t buy homes simply because they got cheap all of a sudden. They don’t have the credit, they don’t have the down payment.

So, rents don’t decline even in a deep crises like 2008. They don’t decline as much. So, Google that and you realize that holding real estate, especially if it’s rental real estate, is the best way to get through deep recessions because the decline that will happen is probably going to take the edge off of your profits, but you’re probably not going to go upside-down, as long as your property is cash flowing and in a good place.

Remember, I go back to talking about good cities and bad cities. If you’re buying property today, buy it in a city where there’s a lot of job growth, there’s a lot of income growth. Because you’ll be able to get through that recession because your occupancy in your rentals will stay up. Occupancy is really the key factor that drives your profitability in a downturn. 

Michele:  I mean, the information is just beyond powerful and also, it’s alarming listening to it from—you know, I put my consumer hat on and just listening to all that, and then you put your investor hat on and you’re encouraged, but you’re also, like you said, nobody is willing to try to fix these problems, so as we get through—when the recession shows up and then we get through it, it’s almost like, at least anyone that decides to get into a little bit more serious investing now, they’re going to be well into the changes and they already have somewhat of a track record and the relationships and hopefully they’ve been working with you through your MultifamilyU and all of the training classes so that their positioned at that point to take advantage and utilize that opportunity that they can really make some progress and acquisitions during that period.

Neal:  Absolutely. MultifamilyU’s programs, our apartment programs are fast track. They are go to school for two weeks, it’s two weeks in the evenings, you can take the programs from anywhere in the U.S. We have students from every state in the U.S. attending, and then you’re ready to go out there and start buying multifamilies using other people’s money. We teach you everything from finding the best properties, analyzing properties. We teach you how to manage property, manage yours remotely. We teach you how to raise money. Our goal is to basically get you to the point where you can start buying and collecting multifamily, be an active investor. You can be a passive investor. Folks like me, you know, we have 2018 passive investors, so we can certainly talk about that.

But I think that this is a time for people to be active in real estate. I strongly believe that, that this is a time to go out and do that. We’re in a Goldilocks-zone. It’s going to last for a few  years and when it comes to 2020, if you’re in the right place and you have loans locked in, you’re going to be able to get through whatever happens next and move on to better times beyond that 2020 downturn.

That’s my message for everyone. I can also tell you—and this is a slightly depressing message, but it’s an important one. Every trend that I see, whether it’s in real estate or not, shows that America and the rest of the world are becoming a land of haves and have-nots. The average consumer gets hit in every possible way. Interest rates are going up, home prices are going up, construction costs are going up. You keep getting hit in so many different ways and the only way to really recover from this is get yourself on the other side of the fence because for everybody that is getting hit, there is somebody that’s benefiting.

What I’ve seen is that it’s the investor class that benefits. We just had a huge tax reform bill. This was not a tax reform bill. If you wanted to tell the truth, it was a bill that was a gift for investors. If you own Apple stock, you’re happy, because Apple now is bringing $200 billion back into the country because they only have to pay 15% tax, and they’re giving it back to their investors. They just increased, yesterday, their offerings. I’m sorry, their dividends. They’ve also announced that they’re going to be buying back stock, which is like another dividend, right?

Folks that are invested in stock markets and real estate are the haves and the folks that are not invested will continue to get hit. What is happening is, that we’re hollowing out the middle class and now we have a whole bunch of people that have two salaries that used to do well in the past and used to have disposable income, that disposable income is just going to keep shrinking until it gets to zero. You need to find a way to create passive income. Whether that’s in real estate, whether that’s in any other realm, because that’s the world that you live in and it gets tougher from here.

Michele:  Most of the people who lived through any of the real estate issues or just not having a job that has nothing with real estate because everything was so tight, once there is that lack of disposable income or there is that hardship, I mean, obviously not having enough money to pay your bills is an issue. But all the other stuff that comes with that, I mean, I’m sure you saw this, too, I saw people’s lives completely destroyed where some of those people, even if they recover financially, the family was broken up or was almost destroyed and the relationships dissolved.

Some of the people are actually no longer here so there’s so much damage that comes with having that lack of able to make means when you are out in the world doing exactly what you have maybe done for 10, 20, 30 years and now you’re saying, “How is this possible that I can’t make ends meet when I have a good job and there’s two of us?”

Neal:  Yeah.

Michele:  We’re not living in an area where you would expect to think that that’s where those problems should be and that’s what you’re saying. Is as we go further down the road here, and it’s going to be that long away, we’re going to see a whole new layer of problems that there’s not a solution.

Neal:  Yep. Yep, yep.

Michele:  That’s bad for what’s going to happen, but also, like you said, there’s an opportunity there for people now while they still—I think they’re still going in the direction that we need it to be at least and you do have that disposable income. Consider looking at getting involved in a passive way or even like you said, in an active way, but because you are offering all this information, I mean, if somebody just listens to this show, they honestly could have a really good idea on—let’s just say they picked a couple areas in Phoenix. They now, like you said, most of the people, they have more information than a lot of the people that go invest or try to invest these get-rich-quick schemes and things like that. Now they actually have the potential and the power that they might be able to, by the time things change in the next year-and-a-half to two years, they have enough of that subsidized income that they could make it through and then bring themselves to the next level.

You’re providing an opportunity for people really to change their lives and you’re giving enough advanced notice that their lives are going to change in the wrong direction shortly, so why not try to do something to make it, so you can at least make it not as painful or maybe, hopefully, avoid it all together?

Neal:  Absolutely. Because I think that there is a very substantial of our population where the destruction of their life of the destruction of their lifestyle is imminent in the next 10 years, unless they take steps. The two-job system in the U.S. does not work anymore. Keep in mind that the one-job system in the U.S. worked until the ‘70s. People always said, “One job is going to be enough.” And then one day, it just wasn’t. Women went into work and then the two-job system worked, and it worked for about 45 years. It’s falling apart at this point in time until what you need at this point in time is everyone needs to have another source of income that they’re developing and if you have the funds, invest passively. If you don’t have the funds, invest actively. You’ve got to become more self-reliant because the societal structures that we are in, are insufficient for the problems that we are facing.

Now, I do have, I have to tell you this—and I want to end on a bullish note. I live in Silicon Valley and I invest in startups and I work as an executive in residence. On Fridays I work as an executive in residence at Plug and Play, which is the largest startup accelerator in the U.S., so we have 400 companies in our portfolio and part of my job is to find the nugget so that Plug and Play can invest in them. This is not a paid job, I do it because it’s very fun.

I can tell you that within 10 years, it’s going to take us 10 years, we will resolve some of these real estate problems and the reason for that is self-driving. When we get to the point where the self-driving revolution is completely in bloom and maybe, Michele, I can do another show for you where we talk about this, because I know a lot about this area, it will allow us to expand our housing without an increase in home prices.

Keep in mind that if you go 40 miles from Phoenix, 30 miles from Phoenix in the desert, homes are cheap there, right? If you can build them. What is the problem? The problem is traffic. The problem is traffic prevents us from growing the boundaries.

I can’t do that in the San Francisco Bay Area, but in Dallas and Phoenix and Orlando, I can just keep growing in all directions. But the problem is, infrastructure, freeways, traffic. The self-driving revolution reduces the total number of cars on the road from 250 million to 44 million within 10 years. It reduces the infrastructure work that we have to put in on roads because a self-driving vehicle takes 1/10th of the space on the road.

If you look at roads, you look at a freeway, you think that the freeway is packed, right? Look at it from the top view. 90% of the freeway is empty. The space, because humans need space between cars, because our reaction times are very slow, well, machines don’t. 10, 12 years from now, when you get to the point where the self-driving revolution hits, I think a ton of our real estate problems will be solved, but we still have to live between now and the next 12 years, but I think real estate is a great opportunity for that time.

Michele:  I guess basically, that makes a lot of sense now why most of these companies are getting involved in that space when a lot of other people didn’t express the strategy from the side you did. Their strategies were other reasons, but your actually make a lot more sense.

Neal:  Huge. It’s a massive expansion of real estate. You will be able to, 15 years now, live 50 miles from your work and get there in 40 minutes with almost 0 traffic. I know what I said is a utopian statement, but I think it is absolutely possible.

You look at the internet, we’ve increased bandwidth of the internet by 1,000 times since the 1980s and has anybody complained about the internet crashing? No, because digital, you can do a lot of things. Well, actually, cars and traffic function just like individual data packets on the internet. Once we get this process digitized, we will have the ability to sustain much higher levels of traffic. Could be as high as five or ten times higher on the same set of freeways, which allows us to expand beyond where we are.

There’s a solution coming, but it’s definitely 12 or 13 years up.

Michele:  Right. That’s going to be a lot of other interesting and somewhat predictable problems in between that period, where the goal is to minimize that damage because that damage is extensive.

Neal:  Very extensive, unfortunately. As I said, you will start hearing—the people that are hearing the show, you will start hearing, you know, about America’s homeless problem more each month, more each year. Even in cities like Phoenix, which is quite reasonable, compared to let’s say San Francisco or Seattle or Denver. You’re still going to start seeing these tent cities because pressure from all those homeowners that are now priced out of homes, pressures the multifamilies and the people at the bottom of the multifamilies just can’t afford the rent and they fall out. You’re going to see huge numbers of those people fall out and that’s going to happen every year.

Keep an eye out for that because that is a signal for you to say, “I need to be a real estate owner.” Because when that problem gets that bad, the government is going to start throwing billions or tens of billions of dollars into it, especially populist governments like Trump’s government. They don’t want any kind of criticism, so when you start seeing these tent cities mushroom, money will be thrown into it. It will be a great time to be owning real estate when crazy amounts of federal dollars are being thrown into a housing problem.

Michele:  Especially your C and B properties.

Neal:  Yes.  And you said something that’s really important here, Michele. Pretty much everything in my philosophy is about B and C properties. A properties, the expensive properties were renters rent because it’s a lifestyle for them—even Donald Trump, he has homes, but he still rents because he has some of these places where he just goes every once in a while, so he rents. Class A is a very dangerous situation right now because we’ve had a lot of new construction. If you’re looking to buy upscale condos and downtown Phoenix for rent, I strongly urge you to reconsider. This is not a good time to be getting into Class A. 93% of all construction the last four years was Class A. Rents are declining. Do your research. There is a positive rent growth in Class A anywhere in the United States today, but there’s positive rent growth in Class B and C in almost every market in the U.S. In almost every market.

There’s a massive difference between these areas. Focus on taking care of the housing needs of the common people. That’s where the money is because there’s a lot more common people than rich people.

Michele:  There’s room there for the rich.

Neal:  There’s headroom there, right? You know, you can just keep increasing those rents because there isn’t any inventory coming in, so he’s competing with you?

There’s a lot of supply problems.  Nobody is making Class C properties in the U.S. Nobody has made Class C properties since 1999 when Bill Clinton shut down the Affordable Housing Program. Since that time, we haven’t made hundreds of thousands of units a year of affordable housing. We used to make hundreds of thousands of units a year. Last year we made 17,000 of them, so there’s no supply for these people.

The only thing that can happen is with no supply and increasing demands, rents go up. That’s where you should be focused on, rental market. Whether you’re single family or multifamily, focus on the mid-segment, the middle-lower segment, and you’re going to do really well regardless of what happens in this cycle, regardless of what happens in a recession.

Michele:  What’s the first step that someone should take? Just go to the website and determine which class to take or is there a beginner one that they should start with?

Neal:  What I suggest to people is, before you spend money, there’s a webinar on my website, it’s called Real Estate Trends 2018. Some of those were discussed today, maybe 20%, but 80% of them were not discussed. It’s an hour-long event, it’s recorded. I teach it live. I’m teaching it live, I believe, on the 10th of May, so you’re welcome to attend live and ask  your questions.

But it’s also recorded as a webinar. That’s the best place to start. Watch that, it will give you some idea of where your city is in the cycle, what you can be doing, and then the other page for you to look at is the Bootcamp page on My goal was to teach a completely, absolutely 100% pitch-free bootcamp. You’re not going to be running out to max out your credit card because I want to charge you $25-30,000 for mentoring or coaching or tapes. There is no such thing.

You’re going to go in, pay a flat fee under 1,000 bucks, and get completely immersive information on multifamily and nothing else. No pitch in the future at all. It’s just education. You’re going to pay a very low cost for a quality product. Go and read the reviews from the students about this and then if you’re ready, if you think that multifamily being active is right for you, jump in.

If you’re a passive investor and have money to invest, all  you have to do is just call me. My phone number is in the website, I can talk about our upcoming projects. I can show you how our previous projects have done, how our current investors are doing. You’re welcome to have that conversation with me one on one.

If you want to be active though and generate revenue or passive income for yourself, I wouldn’t call it passive income because you’re being active. Generate income for yourself using other people’s money, I think the Bootcamp is a tremendous place to go to.

Michele:  That was one of the things that impressed me the most about your approach and your set up, was that you’re giving real scenarios. You’re not just providing a webinar and then having people go out and about. You’re giving them options to be involved in a different way, but you’re also showing them, “Here’s the projects we did. Here are the financials. Here are the statistics.” It’s real.

Look, a lot of these other companies or informational setups, educational forums, they’re not providing any of that information to show what they have done and what they hold and how they are acquiring properties in the future. Even if nobody wanted—wasn’t impressed with everything else, which is tremendous, the fact that you are living, breathing the information that you’re providing, and you’re disclosing that, should be something—an average human being just goes, “I’m so impressed with that.”

Neal:  Thank you. But I have to say, this is really the way everyone should be. I think transparency is the way that you should do business. I have investors that call me and say, “Tell me your horror stories,” and I tell them a big long list of them, because I’m no guru. I’ve learned by doing. The difference in my bootcamp is I show you what I’ve done and used real examples. You’re going to see my properties, my staff, things that we did that we thought were great and they didn’t work out. 

I think that that is the right way to teach and that transparency of what’s gone right for us and what’s gone wrong for us is an essential part of doing business and establishing trust and if you are doing that, you should do it with your investors.

I have students that say, “You send reports to investors and tell them all this bad stuff? You’re telling them about this fire that burned down six units, and this and that?” And I say, “Yes. I never keep any bad information from my investors,” because in the end, what they want to see is bad stuff happened, Neal’s team handled it, my money is still safe.

Those are the three messages you send:  Bad stuff happens, our team handled it, your money is still safe. That’s what they want to see. If you just keep showing them all the good news, then they’re going to stop trusting you. They’re going to be like, “Why isn’t he telling me anything bad? I have properties. All kinds of bad stuff happens. There must be bad stuff happening with him as well, he’s just not sharing it.”

That’s when you lose your investor’s trust. Always, always be very clear and transparent with your investors. When you do that, you will get more investors, you will get more people investing with you, and their ecosystem of partners and brokers will expand.

Michele:  At the end of day, that’s exactly what you want. You’re building a partnership for people, you’re building lots of trust because, as you said, if you’ve nowhere to look and you’re propositioned properly, there’s always going to be opportunities. So, by having that layer of transparency, when the opportunities really start to come, now you can call all the people in your database and say, “You guys, look what I just got.” They’ll be flocking to you, not to mention they’re saying, “Hey, I got three other friends that need to get involved.” Is there room? And you’re like—there’s no more room, I’m sorry. We got to go find something else. Then all of a sudden now, you’ve got an incredible amount of capital ready to support you and now you can’t find the inventory, you know what I mean? That’s a great problem to have as an investor or someone who is working at that level.

The strategy is brilliant.

Neal:  Absolutely.

Michele:  It’s almost kind of like that’s the way people should do business. A lot of people don’t. It only makes you stand out more exceptionally. Maybe everything should just stay where it is and the people that are working with you and learning this way, they’re going to be more successful because this strategy is—it’s honest. It’s the way it should be and at the end of the day, the nice guys are supposed to finish first, right?

Neal:  Well, I think my nice guys are finishing first. I’m very pleased to see what my students are doing. They’re making offers, they’re moving forward in their careers, they’re creating groups. I tell my students, the first project, the first multifamily is an elephant. It’s easier to hunt an elephant in groups. So, I encourage them in a way to group up because they’re more likely to take down their first project.

The moment you take down your first project, everyone’s confidence goes through the roof. Now you’re at 300, 400% of your confidence level, when you’re talking with investors, you have little swagger, you have this certainty to your conversations and all of a sudden, the capital gets attracted to you. And then maybe in the future you don’t need to partner anymore.

But I believe very strongly that partnership is the right way to go about the first project, so you can leverage the other people and leverage their experience and their time and their money and that just makes the whole process very smooth.

So, if you’re a student at my event, you’ll notice that there are labs in the Bootcamp that are specifically designed to connect you with other people in your geographic area or people looking in a particular geographic area and I’m doing that deliberately because I know that you’re going to be more successful. Partnership is really the key to success in real estate. In any realm, but especially in real estate.

Michele:  Sometimes that extra support of just the phone call to let you know that your decision was okay or maybe let’s just take a second look at it, could mean all the difference in the world when you get to some of these critical points.

Neal, can you give your website again, so people can tune in and get started in and at least listen to that webinar that talks about their city or the cities they wanted to start taking a look at.

Neal:  Absolutely. The Real Estate Trends Webinar is at Go to and search for the word, Real Estate Trends on the home page. Watch that webinar, it’s an hour long.

And then the Bootcamp is at Even if you’re not interested in the Bootcamp, even if you’re a passive investor, I urge you to go read the content of those pages. I think you’ll enjoy that process, you’ll learn a lot from it. Check it out and also, my phone number is in the website. Feel free to call me regardless of whether you’re a passive investor or you’re thinking of entering the  market actively.

Michele:  Well, Neal, I really appreciate your time today. I know it’s very valuable. You’ve got  your hand in many different parts of the real estate world and especially you’re talking about this whole other project that you’re working on, the Plug and Play. I really, really appreciate it. The content was amazing. I definitely would love to have you back on to talk about all of these other issues any time that you have availability in your schedule.

Neal:  Sounds good. Would love to be back on the show and Michele, once again, thank you for having me on your podcast.

Michele:  You’re welcome. I’m going to list all this information on our website, which is We’re going to expose the way that investing should be done, good people doing good business and good things, and Neal, you’re one of those. I really appreciate you having that ideology and strategy because it’s important and it’s nice to see that there’s some of those good guys still out there.

Neal:  Thank you.

Michele:  You’re welcome.

Neal:  Thanks for your time and thank you to all those that are listening.