Putting Up 100k Hard - Ryan Narus

Ryan Narus:   0:00
Yes. So, essentially, what we just did was we said we went to the cellars and we said, Hey, look, we want we're we're gonna sell. Well, it wasn't us, but it was R J B partner. We're selling off another one of our properties. We would like to 10 31 this into here. We need an extra 30 days to close just to quell any fears and make this school nice and smooth. Here's an extra $100,000 towards the deposit. Nonrefundable son. Others you can use the funds immediately. So thin,

Jerome Myers:   0:28
operator. I know other investors are romanticizing multi family invested and I'm looking to learn from other investors. Mistakes. I know you are, too. You found the right place. Welcome to Myers Methods Presents multi family missteps. Hey, everybody. Welcome to Myers Methods presents multi family missteps. I'm your host, Jerome, and I've got Ryan Harris with me today. Ryan, how are you,

Ryan Narus:   1:07
man? I'm just trying to stay healthy and sane. You want a It's a lot of fear mongering out there right now, and I am totally gullible with that stuff.

Jerome Myers:   1:19
Yeah, and me too. I think the big thing here part of reason why we created a spy gas and so people could get educated on real fear. Real things actually fear, right? And so, you know, do me a favor, tell the listeners a little bit about your background, and then we can dive into whatever deals you want to talk about. Where you got

Ryan Narus:   1:38
some, Mr Sure. So as of this recording on 32 years old and I subscribed to the lie that everyone kind of peddled growing up Oh, study really hard in school. You'll get a good job And, you know, you got a good university and you work really hard and you'll be able to retire on a beach. And it turns out, first foremost, you don't necessarily need good grades to go a good school. Going to a good school doesn't mean you're gonna go to get a great job. And getting the great job doesn't mean you're going to be able to retire the way you want to. And also it is outrageously unfulfilling. So what I did or the course of, say, 10 years from when I graduated undergrad till now is I just picked up every book I could pick up. I talked to everyone with a pulse who was willing to talk to me. And I just learned networked sacrifice, self assessed, learned who I was, what I was really truly passionate about. And I started a mobile home park acquisition company. So we've bought 13 mobile home, Park says of this recording. I have three more under contract. So by summer, assuming this whole virus thing doesn't completely kill the economy, we could have 16 mobile home parks that we've acquired in the last five years. A lot of lot of hustle, lot of sacrifice and a lot of mistakes. So we're definitely gonna talk about some today. But that's about who. That's why I am. We've acquired a little over 1300 pads, and who knows, Maybe by the end of the year we'll have almost 2000. So we're rocking and Roland virus or no virus?

Jerome Myers:   3:15
Nice, Nice. That's a big portfolio. Be so young. So tell me like we're we're been the challenges. I mean, you guys dived into it. Did you have mentor ship like, how did it work?

Ryan Narus:   3:28
Oh, my gosh. You know, the beautiful thing about entrepreneurship is there is no right or wrong way of doing it is there's really there's no book of entrepreneurship. There's no instruction manual. You just have to go out and have the courage and the action taking proclivity to just keep going and not stop and not quit and that, yeah, I mean every day. I was joking with you before we started. I had to be on the phone for 2.5 hours trying to get something that amounted. Thio Click in one spot like Who's gonna ever tell you like hey, justify? You can't deposit money into your account unless you collect one thing and no one tells you about that. And you're like, Well, I can't just like, not do this because it's rent week. I don't know. It's got like so, yeah, I mean, there's just so many random hurls that life throws you as an entrepreneur and I love it. I love that. It was a lot of sacrifice, a lot of mistakes, a lot of luck to get where I'm at today. But I'm I am just an absolute junkie for this stuff. I I'm in heaven.

Jerome Myers:   4:36
So tell me what's been the toughest deal so far, like what's been the biggest challenge of this marriage.

Ryan Narus:   4:43
Man, it's hard to pick one deal. That was of the 13 we've closed. That's been the problem the hardest. I mean, my 1st 1 was was really hard because we went to 40 banks and got 40 rejections. So that was really tough. We had one. Our biggest acquisition ever was really tough because we were a J v ng with another company who was 10 30 wanting money and then not 10 30 wanting money. But it was our relationship. So we had to, like, be the go between and it was a lot of moving parts and yeah, I mean, almost every single day from tree that I bought, I have bought with full recourse leverage and so find it. So any time that you go into a situation where you know that if you're wrong, they're coming for about everything you have is really, really scary and nerve racking. Um, but yeah, I mean, we could talk about all sorts of stuff. I mean, from

Jerome Myers:   5:42
10. 31. D'oh! Let's talk her is You know, a lot of people may not fully understand what the ramifications are for somebody the 10 31. So let's let's do that.

Ryan Narus:   5:54
So, actually, so that one. It ended up getting resolved because R. J. V. Partner ditched the 10 31 idea. But, um, I had two other was basically the solution there was. We're gonna put up an extra $100,000 nonrefundable Tobias an extra 30 days, so we could 10 31 it and then the 10 31 didn't end up happening. But the reason why I say that for the listeners is that's a tool you can use in your toolbox that you can put up more non refundable money to get the cellar more comfortable with. I have a last minute, 10 31 and then ultimately not having it. But they have $100,000 in the bank that they can use today, which is what we kind of essentially gave them. So that quelled a lot of there, kind of, um, anxieties about that. But we had two other ones that we just acquired that were 10 30 ones. First was a friend of mine who ended up becoming my friend through the process. But he was probably one of the most annoying people to buy from there a lot of reasons, and he's self aware, which does hysterical zeal. Tell him to listen to this and he'll he'll joke with me for, Ah, for it. But he he was an interesting one because he's about retirement age and long story short. He was gonna 10 31 about a 1,000,000 bucks into an LP structure that was gonna pay him about 10% cash on cash. So he was absolutely jazzed about. It's not number one to be able to defer taxes, but number two to hit retirement age with a passive 100 grand coming in a year. That's pretty awesome. So it was definitely a win win for him and us and and everyone involved, Um, but that was a pain in the butt because I had never done a 10 31 from dealing with, uh, with trying to help someone who's never done this before to get the Q I and get the attorney and do all this stuff that I have never 10 31 before. And then this one we just closed two weeks ago was a sophisticated seller who done 10 30 ones before it was an attorney. So we did. That was just not a big deal at all. Um, yeah. I mean, it's just it all comes with the par for the course for being an entrepreneur. A lot of times you have to go and figure stuff out, even though you're not the one doing it. So I wasn't 10 30 wanting money. I was just buying a property. But because the seller was difficult, I went and I learned a bunch of things and actually did a bunch of things for him. Even though I'm not getting compensated for that, just because when you're ever whenever you're closing a property, your goal is to make this as easy as possible for the sellers because you just don't and and it really everyone involved because otherwise mistakes. We're gonna happen. Too many hands in the cookie jar and delays are inevitable. So the more you can be on it during due diligence and closing Oh, man, the better. So, yeah, a lot of things we could talk about drum.

Jerome Myers:   8:51
So I want to make sure I got this right, because the first thing we were talking about you were having a 10 31 exchange money, and that's for the flippers who don't know what 10 31 is. It's a tax vehicle that people used to push to defer their taxes after they create a capital gain. And so you have to buy similar real estate. But are, you know, similar asset. And you know, if you're buying real estate, you buy more real estate, etcetera, right? So when you added the extra $100,000 hard for the 10 31 that did not happen, that was on your side. You guys were buying in one year was a 10 30

Ryan Narus:   9:29
one, right? Yes. So essentially, what we just did was we said we went to the cellars and we said, Hey, look, we want we're we're gonna sell. Well, it wasn't us, but it was R J B partner. We're selling off another one of our properties. We would like to 10 31 this into here. We need an extra 30 days to close just to quell any fears and make this school nice and smooth. Here's an extra $100,000 towards the deposit. Nonrefundable son, Others you can use the funds immediately. So in other words, That was just a negotiation tactic because truth was the due diligence was done. We knew we were buying the property, and we were We were just in the traditionally There's 60 days to close multi family, 30 days to do your inspection period, your your due diligence and then 30 to close. So appraisals surveys the works. And so we had already past the barely passed 30 day inspection period. And when we were in the financing period and basically we just went, Hey, look, we want another 30 days. Not because we think anything else is wrong here and to sweeten the pot for them. We're just like here's an extra 30 100 grand up front. So again, that was literally just a way to quell any anxiety. But again, it's It's a It's a good tool that you can have in your toolbox and only recommend doing this after the inspection period is over and you're fully ready to close.

Jerome Myers:   10:53
What? Where did that 100 grand come from? With it from the 10 31

Ryan Narus:   10:58
exchange? No, that was just from the bank from our reserves

Jerome Myers:   11:02
from your reserves. So you dug in your pocket. You are How big was the transaction?

Ryan Narus:   11:09
A massive. It was 10.5 mill. Um, so yeah,

Jerome Myers:   11:14
person. You give him another one?

Ryan Narus:   11:16
That was huge. Me. Effectively, Yes. Yep.

Jerome Myers:   11:19
Okay. And then you guys were Why would you do that? With your money? Could you have harmed without your partner? Your 10. 31 partner?

Ryan Narus:   11:32
Yeah. Yeah, we would just have to grab someone else. Um, but yeah. I mean, basically, you split it up based on equity percentages, So I own 30%. I put up 30 grand of that 100 but I mean, it all comes out in the end. It's on an extra 100 grand. It's not like we bought it for 10 6 We still bought it for 10 5 We're just giving them some more of their their money off front to quell the fears.

Jerome Myers:   11:58
Yeah. So the thing that I've been wrestling with, right when I get into the deals that are massive and you're like Okay, well, if I put all my money up hard and everything that I have is at risk and I'm working with somebody who's bringing cash but doesn't have anything at risk, how do I make sure that they perform and you guys have taken it. You know what I consider is pretty extreme, right? Here's 100,000 hard. We're not getting it back. Blah, blah, blah, blah. How do you know? Where did the certainty come from that you know, your partner was gonna perform

Ryan Narus:   12:36
lots of trust and lots of documents that are signed and notarized and attorney up. It's worth every penny. A. Some attorneys can be outrageously expensive, as long as you know they are good. It was not our first acquisition, by the way. You make sure things are airtight. You make sure the money goes to an escrow, not to just, you know, the sort of directly. So in other words, you have your bases covered and no, you know, that's another is the seller didn't get their money until, you know, all documents were additional documents were signed and money was sitting in escrow. It's that way. Was it? Yeah. Is that gonna make sense? Wow. Wow. You When? When it comes. When it comes to your money, you need to take the extra precaution like I'll give you good. For example, today we had a guy do a roof job for us, and he was expecting to get paid like the same day. And a lot of contractors do that, though they'll be done with work, and they'll be like, Where's my money? And they won't realize you really traditionally should allow for a Net 30. But the truth of matter is, if I was a contractor, um, if you had a look at it from their perspective, one thing that you could push for if you're uncomfortable getting a deposit up front is basically using an escrow agents. So that way you have 1/3 party person saying, OK, this person performed. Now this person's going to perform absolutely worth your time and your money to really make sure you have the documents in place and the money in escrow.

Jerome Myers:   14:09
Wow. Okay, so you said that that 10 31 didn't happen. So how did you guys end up closing the deal?

Ryan Narus:   14:22
Oh, I mean, we had we had the bank already set up and everything was just a question of where the all that money there, the J V partners money was gonna come from, so they just took it from a different account.

Jerome Myers:   14:32
Okay. And so they just pay taxes wanted and moved on or they went somewhere else or something,

Ryan Narus:   14:38
you know, Actually, that's a good question. I don't I don't know if they tend dirty one that somewhere else or if they just pay the tax on it, but yeah, I mean, they ended up just going right. We're just gonna take money from another account. Just forget the whole 10 31 thing because there's a complication there and

Jerome Myers:   14:56
what's the guy's? Is your host your own? I just want to let you know we lost my methods in the follow 2019 with ambition so inspiring a new breed of multi family if you are interested in getting in a multi family, are scaling your current business up over to our Web site at my methods dot com grabbing free forceps guy. How they get now, let's get back to the O wow

Ryan Narus:   15:24
happens. It's real estate is not like going to the store and buying something. It is so so many moving parts. I mean, we've got one of the contract right now, where with this whole cove in 19 thing. The permit office is basically trying to say that we're only zone for, like, 70% of the loss there, even though they have over 100% of addresses. So in other words, their records don't make sense. They won't let us talk to their boss. And so we're like, Okay, fine. We'll just come and meet you and then they're like, Well, our office is closed because covered 19. So it's like, you know, everything could be great. You know, you have the bank statements, tax returns, rent rolls, everything matches. And you're like, Great, I'll go to zoning and make sure everything's cool was owning Ow! Just kidding. There is this whole pandemic and we can talk to each other, so yeah, I mean, there's always some bizarre thing in every deal that kind of derails stuff, and you just you've got to be ready for the unexpected. And, um, like, you know, my business partner, Ian Tutor, is on on this right now, But one big thing that he does, which is outstanding, is Oh, boy, he will poke you until he gets the right answer out of you. I mean, he's got boomerang on his ah, email now, and so he'll just literally program like Hey, did you get my last email? Hey, did you get my last email? Hey, hey, You haven't heard from you and that's our North Carolina attorneys. Paralegal told me two days ago She's like, I absolutely love working with the end because every close I know if I missed something, he's already on it. It's like, Yeah, I mean, that's that's kind of how you have to be if you want things to go quickly and efficiently is you've got to be on it and not afraid to kind of make people angry during the due diligence and closing process. Because this is your money. I mean, you're talking about hundreds of thousands of dollars, if not millions of dollars. If not tens of millions of dollars, like you better be sure everything is. You know, every T is crossed, every I is dotted.

Jerome Myers:   17:26
So tell me, how did you went toe 40 banks and got refused 40 times and you told me about a $10 million deal. How did you bridge the gap? What happened that allowed you to make that transition?

Ryan Narus:   17:38
Lot of networking, lot of learning and a lot of sacrificing. You know, we we if you were to ask me 10 years ago how many millionaires I could call text or email and within 24 hours I get a warm response from I would confidently tell you zero You know, I don't know. Maybe someone in my family I don't unaware of is a millionaire, but no one. I mean, I didn't know anyone. I never read any books. And about it was about 10 years ago where I was like, You know what I need to do? I just need to read books. So I picked up the seven Habits by Stephen, Stephen, Kobe And then I was off to the races after that. Red rich Dad, poor dad. And for our work week and Napoleon Hill's thinking we're a rich, and I just I couldn't stop until and then I did the same. Took the same outlook with, um, meeting people. And so you know what ended up having s o. We went toe. So we are. First deal ever was a J V and R J. Where are the idea was Hey, we'll use use training wheels like we'll do the operations. You guys will learn from you. They're like great. Since it's a learning opportunity for you, why don't you go and procure the bank? And we couldn't. So we basically had to go back to R J be partners and be like, Can you do this part? We can't. They're like, Yeah, I got it. So they so they it wasn't It ended up being a big deal, but because they had, like, a default option in the back. But I think that's really, really relevant, because if we hadn't no worked really hard and met folks we trusted I mean, I don't know if we that have been friends and family money and we got 40 banks to say No, I don't know how we would have closed that, And that's just an important thing down now. You know, 13 deals in cause I fire my lengthen, and it's almost like every day I get a new lender reaching out to me being like, Hey, I really want your debt business. It's like Dude, where were you five years ago? You know, it's a lot of work, a lot of work. That and here's a really important thing, a lot of work that never netted me anything of the you know, nine out of 10 people I've never worked with have never or probably will never do anything for a rate. So you have to be comfortable with putting yourself out there and spending a lot of time and often cases money on folks who will never do anything for you.

Jerome Myers:   19:58
So what are the tactics? People talk about networking all the time. But how do you actually do

Ryan Narus:   20:03
that? You have to find out something that's really meaningful to the person that you want to speak with. A lot of folks are easy. I'm really easy, like I don't care who you are if you're unemployed or if you're the CEO of a Fortune 500 company. I want to talk to you and I don't expect anything in return. I am easy in that regard. Most folks are not. So is a good book called Give and Take, and basically the The author argues that there are three types of people. They're givers, takers and matters. About 80% of people are matters, and then the so, in other words, the overwhelming majority of folks that you reach out to, they're going to expect something in return. Now there's some folks who are basically just gonna take, take, take, take, take. And basically you're gonna twist her arm to get them to give you anything in return. And then there's a handful of folks like me who are just I don't care. I'm gonna give you whatever I got just because I thoroughly enjoy helping people. So in other words, the way you've got a look at this, as you know, even with someone like me, I really like helping. So it makes me happy to help people. So really, that's what I'm getting right If I'm gonna help you and I'm gonna network with you So what about everyone else? What everyone else is most likely gonna be a match. Er so in other words, what value can you provide them? A lot of folks were like, Well, let me go buy you lunch. Let me go buy you a drink. Let me go buy you a cup of coffee, and that's great. The only thing is, you also have to remember like it's gonna be 1/2 hour to, you know, drive all the way out there. Then you hang out for a now, er that's 1/2 hour back then. I'm realistically not gonna get anything done afterwards, you know? So, like, it's a big time commitment, you know? Go grab a cup of coffee. Jump on the phone. Um, you know, so you gotta look for ways to, you know, provide value beyond Just like, hey, let me give you a cup of coffee. A one great thing that I like to do is I like to connect folks. Hey, you're such and such. I know five people who are lenders, contractors, this that the other thing other multi family owners like here, let me connect you with some folks. Do you mind if we're in each other's networks? So in other words, what I look to do is I look to almost make people a little bit uncomfortable and how much I'm giving them. So that way, since I know most folks are gonna be match hers that way, they feel compelled to help me. I mean, I did. I've gotten some hilarious messages where folks are like, Dude, can I just give you something like you give me so much? I'm, like, uncomfortable, but like, that's how that's my mentality for networking, and obviously there's a 1,000,000 ways you can do it. But you know my best advice for everyone listening in, like find a way to pump someone else full of value For me, it's connecting, folks. If you don't have a lot of people you connect, can connect folks with it. Maybe giving someone a couple coffee. Ah, it maybe. Hey, you really like giving advice? Will you give me advice? It may be, Hey, let me have, like, a part time internship for you, and I'll basically run and get your coffee. But I'll, you know, be ableto learn, you know, from from your operation from the front lines. So there's a bunch of different ways, but the way you've got to be looking at it is most people are probably matters. How can I make this an equal exchange?

Jerome Myers:   23:13
So I've got two more questions for you. Is there an example of when you tried to network and it just went bad?

Ryan Narus:   23:21
Oh, God. Plenty. What do you want most? Goes to you? Some hang up on you. Some people really mean and nasty. I mean, there's this one. Really, uh I I I was thinking about earlier today. I'm not gonna mention his name, but he was not nice to us. And we still kept reaching out to him. And, um, he's a really public guy, so I'm not gonna say his name. Most folks probably have heard of them here, and I mean, we accidentally had him on our distribution lifts once, and he kind of responded to us like I'm sorry things aren't going as well as you had hoped. And I have that email saved one day. So if one day he's like, he reaches out to me, I'm gonna hit forward. Yeah, I mean that. But I'm a competitive guy. So, like, it's it's funny, like I don't like my wife tries to compliment me every now and again. I'm like, honestly, I almost would rather you just be mean to me because that fuels my fire more than Big Nice. But yeah. No, you a lot of time. I mean, we've had a lot of folks, um, kind of be ugly or you know, it. Most folks will just not respond to you. Um, but some folks will be really arrogant. They'll hang up on you, They'll you know, It's funny. One of my one of my better friends right now. I called him out for ignoring us. He ignored us for probably the 1st 2 years were in the business. And now he is so apologetic about it. I'm like and his name is Chris, and I'm like, Crest did. To be fair, we were a bunch of knuckleheads when we were starting out, so I don't blame you. And he's like, Well, yeah, but I should have seen that you guys were a little different. It's like, didn't know we weren't We're not any different. We just didn't stop. That's it. We just didn't quit. Most people quit. So you were right to screen this out back then? Um so, yeah, I'd be prepared for a lot of ghosting and then your occasional like rudeness.

Jerome Myers:   25:11
Wow. Wow. So what some words of wisdom you could give to the listeners?

Ryan Narus:   25:17
Don't quit, man. I'm not that smart. I want to wait for us this good school. It's not ivy. You know, I I didn't start out rich. I was middle class. I started with something. $30,000 was what I started my real estate company with and our grocery. Our gross revenues are, I think, about $2 million a year now. Um, things were going really, really well, and it's not because I work harder than you. And it's not because I'm smarter than you. It's because I had more money to start out then you because I had more education than you. It's just I didn't quit. I mean, that's really it. I I love reading books. I'm almost done with Ray Dalio. His principles and I also have a book. I think you're friends with them. To Kenny Coruna out of Boston. He gave me a book on Ah, positive positive, um, parenting. Forget the name of it, but I'm just about to start that once I'm done with Reyes. Um, you constantly learning constant listening to other people's podcasts and reading stuff. I'm like then rating blog's reading the news constantly looking for knowledge, but just really just not stopping, man, cause God, there's so many days where you're like like I told you on the phone 2.5 hours with Brent manager today for something stupid that I had done to like almost a month ago. He's gotta be There's gotta not be willing to stop, Man, it's really that simple.

Jerome Myers:   26:43
I love it. Ryan, If they want to get in touch with you, how can they do that?

Ryan Narus:   26:48
Tupac is probably my favorite rapper. And he is, Ah, Song called I he's quoted saying, I ain't hard to find. At least it wasn't but like to park. I'd like to think I'm cool like him. Not even close. Um, I ain't hard to find. I'm the only Ryan nearest that I know of in the world. If you Google n a r us, my Lincoln comes up. My website comes up our communities therapy dot com. Like I mentioned earlier, I am a I am a giver. If you need anything, I will do what I can to help you out, and I don't expect a thing in return. So if I can help you get out there and make the world a better place, reach out to me. I I am excited to help you in any way again.

Jerome Myers:   27:31
That's awesome, Ryan. Hey, guys, I appreciate you making it to this party of podcast. What? You go out and make a difference in the world. It's not just about making money and real estate. Ryan. Thanks for sharing your experiences with us. Talk to you soon.

Ryan Narus:   27:43
Tox is in.

Jerome Myers:   27:48
You made it to this juncture. So you really love what we shared on this episode of Meyer's methods. Presents Multi family Mr Do Us a Favor. Give us a five star rating. Give us a review on share this with somebody who's interested in the way.