Table of Contents - Profiting from Small Apartments with Lance Edwards
Dave Debeau [00:00:09] Everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast coming at you from a very, very chilly Kamloops, British Columbia, minus twenty two degrees right now, my guest and a much warmer, friendlier climate place, Mr. Lance Edwards, all the way from beautiful Houston, Texas. How are you doing today, Lance?
Lance Edwards [00:00:31] Well, a lot warmer than you are, Dave, I thank you for having me. It's 72 degrees down here in Houston, so I'd much rather be myself than you. But anyway, I'm very privileged and very honored to be able to speak to you and your your listeners today.
Dave Debeau [00:00:44] Well, it's my privilege as well, because I've been following you for several years now, Lance. And for those folks that are familiar with you, Lance is a very, very experienced real estate entrepreneur who focuses on investing in apartment buildings, specifically small apartment buildings like think two to thirty, thirty six type units. That's the kind of the range that Lance focuses on. And he's been doing this for quite some time. So, Lance, why don't you tell us a little bit, first of all, how you got started in real estate investing in the first place?
Lance Edwards [00:01:17] Well, thank you. You know, it's interesting. Interestingly, it all started for me back in about two thousand two, actually about one block from here from actually my Houston office home right now, about one block working for a corporate job and a young employee, a young family working many hours, working hard like many, many people start off. And my thought process was, I need an extra stream of income, added extra income, worry about getting laid off, all kind of stuff going on in the economy. And I discovered real estate investing, but my started real estate. I it definitely because through fortunately, through a recommendation from a mentor, I was guided to get started in small apartments to bypass the more the conventional single family route. And so my very first property ever bought with a fourplex, I bought it nothing down one hundred percent seller financing. And that launched my real estate career. And within three years of that start, they will retire from a 20 year career and been doing full apartments full time ever since then.
Dave Debeau [00:02:19] Wow, that is impressive. That's a very quick turn from a full time employee to full time self-employed through real estate investing. So that is that is fantastic. So it sounds like you got off on the right foot. And it sounds like the first kind of deal is similar to the kind of deals that you're doing today, which is a far cry from most of us. And start with one thing and do a hodgepodge of different things before we kind of, you know, land on the one that we really stick with. But taking that into account, knowing what you know now, is there anything that you would do different if you were going to get.
Lance Edwards [00:02:53] Gosh, you know, yeah, I wish I had knew what I do now with the hindsight and yes, I would get started sooner. No. One, I would have left my corporate job sooner, even those three years, a pretty short time frame, but I could have left sooner. The only thing I didn't leave is because my wife, you know, that's a pretty big leap psychologically. Leave, quote, the security of corporate America. And I would have left sooner to get going into apartments. One piece of advice I would only share with everyone, no matter what sector of the state you're in, if you're straddling between the job that pays bills today and in getting started in your real estate business. Here's my best advice. Do not I repeat, do not leave the job that pays the bills to go into something else until that something else is already producing enough income to pay your bills because it is otherwise going to be a very, very stressful and likely unpleasant journey.
Dave Debeau [00:03:45] Yeah, very, very well said. I wish I had taken that advice earlier on, but on the other side of the coin, it too. Sometimes I see people waiting until their real estate income creates as much income as their job income before they leave the job. And that can be a bit of a handicap as well, because some of them start dipping into that real estate income and increasing their lifestyle. So it makes it more and more difficult to quit the job, too, right?
Lance Edwards [00:04:11] That's a big no no. Yeah, because if you're if you're if you're intent now, you might choose to do both. You can certainly do both and you can have double income. However, if you are for me, I couldn't imagine straddling both worlds anymore. Being over here on the other side, entrepreneurial space, I couldn't imagine going back. But certainly if your intent is to go from employed entrepreneur, you make that income what you're doing. But don't increase your lifestyle. Increase your lifestyle after you've made the leap would be my advice, because if you put your energy full time and the entrepreneurial side, you'll do 10 times what you can do on the employee side income wise.
Dave Debeau [00:04:49] Very well set. So, Lance, I know you start off investing for yourself and and for the last number of years, you've also started teaching and training and coaching and doing seminars all over the place. I'm on your email list. It seems like you're doing different events. You clone yourself. I just found out before we started recording it your brother doing some of those smart. But what are some of the big mistakes you see newbie apartment building investors making when they first get into this space, whether they're starting there or they're transitioning from a different strategy into apartment buildings? What are some of the big mistakes people are making?
Lance Edwards [00:05:29] Yeah, I would say a couple of things. Not for anybody, any type of real estate. I would say your main emphasis needs to be on your marketing. You've got to get your phone ringing. There's a saying your phone's not ringing, no business. You have a hobby. So you've got to constantly focus on marketing to get leads coming in. That's true of any sector real estate. With regards to apartments day, the biggest mistake I see being made today, even with experienced people, if the people think about apartments, is based on math. We just got to run some calculate the math the way we make offers based on math, the way we increase the value based on math. We make decisions to buy based on a math test. The very simple math hit. And the best advice is stick to the math test. Too often it's too tempting for people to get caught up in the emotion of it and they overpay for a property and they'll come up with some kind of rationalization of why that's OK to do. But ultimately down the road that's going to cost them. So stick to the math. There should be no emotion involved in this business. There's a thing was a movie. There's no emotion. There's no crying in baseball. There's no emotion in apartments. This is strictly the math.
Dave Debeau [00:06:35] So just and if you don't pay attention to that role, there is a lot of emotion and a lot of crying in real estate.
Lance Edwards [00:06:41] That's very good. Yes.
Dave Debeau [00:06:45] Now, let's I know we're both big fans and proponents of marketing, and we've both been students of Dan Kennedy and we're on the ground and probably all sorts of folks like that. So when it comes to marketing for your real estate investing business, what are you talking about there? Who who are you directing that marketing towards?
Lance Edwards [00:07:05] Well, there's three components to marketing. And I like I say, none of us are in the real estate business. We're all in the marketing business. And we have an incredibly simple business model. First of all, there's two things we're always marketing for. And those two things are deals and dollars buy deals. What I mean, Dave, is I need to find motivated sellers, people going to sell me their apartment, low price, good terms or both. On the other hand, I'm marketing to find dollars. Dollars means if I want to buy the building, I need to raise a private investor. On the other hand, if I want to sell the building dollars means I've got to find a buyer. But I find deals, I find dollars and I matchmake always doing that. The third thing I talk about marketing is when I own the building I market to find residents or convince people to keep the building for the biggest single variable on cash. In an apartment building with occupancy and so we to do active, aggressive marketing to keep you occupancy always, always up and that's it. I mean, that's in the nutshell. That's the business is those three things. And that's what we focus on, doing that over and over.
Dave Debeau [00:08:06] While we could we could spend a lot of time on each one of those three things. But would you mind maybe just sharing what works best for you these days when it comes to finding those motivated apartment building sellers? And does that kind of look different than perhaps what what other people are doing to find motivated sellers of single family homes? Or what do you do that works best for that?
Lance Edwards [00:08:31] You know, this is where it all started with deal flow. This will be the start of the deal flow and there's a number of techniques that I can use. I'll tell you, my favorite, absolute populist favorite is direct mail, a letter or a postcard, old fashioned old school direct mail. We send that piece to an apartment owner. Now keep an eye on small apartments that owners a mom and pop. This is Mom and Pop, and it's a direct mail piece that says, I'm interested in buying your building. If you're selling, give me a call. And that's my favorite for a number of reasons. But first of all, it puts me in direct contact with the seller. Ninety nine percent of the time the property is not listed for sale, so there's no competition. I'm the only one having the conversation directly with the seller. And another main advantage of direct mail is because I do a lot of seller financing if I want to sell or financing. The best way to get seller financing is to be talking straight to the seller and the most creative deals get done because this is Mom and Pop I'm talking to. And so top of the list is old school direct mail. We do a lot of it is actually right here at my door out here in the Houston office.
Dave Debeau [00:09:39] Lovely. I'm an old school guy myself, and it definitely warms my heart when I hear that it's still working well in different, different things because, you know, now everybody's so enamored with Facebook ads and Google stuff and websites and all this kind of weather. There's a place for all of that for sure. But it makes so much sense. Nothing really beats getting something physical delivered to your door. And there's so little of it nowadays. I mean, there's so little competition. You're definitely going to stand out. I'm sure you've got some creative and interesting ways to make sure that happens. So glad to hear it. Excellent laughs. I also want to find out a little bit about you're good at a lot of different things. What would you say is probably your, as Kiyosaki calls it, your unfair advantage when it comes to real estate investing?
Lance Edwards [00:10:27] My unfair advantage is a system of systematizing everything, systematizing everything you talked about how it seemed like all over the place, all these activities. Well, I learned very early on that until you have systems, you don't have a business, you have a job. It all depends upon me. That's a job. And guess what? I work for a lunatic myself. And so my wife
Dave Debeau [00:10:53] learned about me, that's for sure.
Lance Edwards [00:10:55] I'm telling you. And so, you know, I'm also known precisely the small apartment. I'm known for systematizing the industry because I get outside these doors with systematize virtually everything there is when it comes to the marketing system, to the top systems. You've got to get out going first. We systematize it. So we've got campaigns running literally all over the country on behalf of our clients where seller leads are coming in automatically. They're being screened automatically. Buyer leads are coming in automatically. So that is really my unfair advantage. If, like Systematize and I systematize around a niche, I've stuck to my niche because I really need to understand the ins and outs that mom and pop owner so I can really have the best conversations and come up with the best offerings and win win scenario. So I would say the systematizing we've done for ourselves if our client.
Dave Debeau [00:11:45] Yeah. That makes so much sense. So obviously there's no quick fix to how to systematize your life in your business, that sort of thing. But if people are hearing that and say, hey, you know what, yeah, I've got a few doors or a few properties or whatever, and I'm kind of all over the place and still punching the clock at my job and doing this and that, where would you direct them as a good first starting spot for learning about how to create some systems around what they're doing? Any any suggestions around that? Any any pointing people in the right direction for that?
Lance Edwards [00:12:19] Yeah, here's what I teach. Well, first of all, I'll answer a couple of ways, Dave, and a different list. There's going to be a different realms of experience spectrum here. But the most important thing you've got to do, getting started. And even if your experience is you've got to maintain a consistent deal flow, the leaves have got to be coming in consistently. And so you've got to have activities going on every single day. And I would work on systematizing that, whether it's hiring an assistant or finding someone to do something for you. But I find way to systematize that. And again, it depends on where you're on the on the curb. That's answer No. One answer no to David is somewhere along the way and may not necessarily be when you're just getting started. And if you're starting off, you may be the solo partner of doing everything. But once you get kind of going, you really have the opportunity to identify what is it you're really good at personally, because each of us has a unique ability that is effortless for us. And then there are certain activities that is just like pulling our eyes out. It just really. Is it painful? We don't like to do it, identify what you're really good at and focus on that. Those things that you don't like doing is what you want to as soon as you can delegate that to someone who loves doing that and get that off your desk, because the energy release, the energy boost you will have will be so great. You can focus what's your best that you'll see your productivity going up. So I would answer from those two angles.
Dave Debeau [00:13:45] Excellent. Yeah, it makes sense of focusing on deal flow because we all need that for whatever kind of business we're doing. We don't have that. We don't have a business. And then getting out of your own way and delegating or outsourcing, whatever you suck at.
Lance Edwards [00:13:59] Yeah, that's even more concise way to say thank you.
Dave Debeau [00:14:05] Excellent. That's well, time flies when we're having fun, that's for sure. And we're wrapping up our time for today's interview, but perhaps you can tell us a little bit about what it is that you do and when it comes to teaching and training people about getting involved in a small apartment buildings.
Lance Edwards [00:14:24] Well, we have a full here in my Houston operations. We have a full education and marketing business. We do everything from teaching people how to get started to running these systems for them. Systematizing people have businesses. We have know sending out the direct mail pieces. We even have a phone Florida pre screen to leave. So, you know, wherever anyone happens to be on what they're looking for, that you want to learn how to get started or you you want us to coach you or systems up for you, we have a full gamut of systems for anybody in that spectrum.
Dave Debeau [00:14:53] Be excellent. If people want to find out more about Lance Edwards and what you're up to and how they can kind of get fatto into this whole world, what would they what should they do?
Lance Edwards [00:15:03] You know what I would do and I've got a gift for your listeners to have. I really I really appreciate this opportunity. This this has been fabulous. I have a book out, best selling book called How to Make Big Money and Small Apartments, number one on Amazon, and very proud of this. It defines everything on how to get started in small apartment. If you're interested in space, you all learn more. We sell this book for fifteen dollars on Amazon. I'll give you book. The book, the physical book and some other materials go along with it, you'll simply send me six dollars shipping and handling. Now, if you'd like to take me up on that offer, there's a Web site called Free Apartments, Book Dotcom, Free Apartments, both dotcom. We'll get the book, some other educational materials with affinity for six hours and change the shipping and handling. And you can check it out for yourself.
Dave Debeau [00:15:49] Sounds like a heck of a deal. In fact, I took you up on that offer a couple of years ago. Got a copy of your book. Good stuff. Very, very good book. Thank you. Thank you so much for sharing some of your time with us today on the call. Really appreciate it.
Lance Edwards [00:16:02] That a lot of fun day. Again, my pleasure. And again, I'm glad I'm down here in Houston, Texas, and not up there was minus twenty three degrees. But other than that. Great, great. Thank you so much.
Dave Debeau [00:16:13] All right. My pleasure, my friend. Thank you everybody for tuning in. And we'll see you on the next episode. Take care of. Bye. Well, thanks very much for checking out the property profits podcast and you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us the review. He very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom. Take care.