Journey to Multifamily Millions

From Successful Broker to Successful Real Estate Investor with Jason Lee, Ep 62

September 21, 2023 Tim Season 1 Episode 62
Journey to Multifamily Millions
From Successful Broker to Successful Real Estate Investor with Jason Lee, Ep 62
Show Notes Transcript

Today's guest is Jason Lee, He is a highly recognized real estate broker in the multifamily real estate industry. He has worked with several eight to ten-figure real estate investors in San Diego County, helping them acquire, sell, and 1031 exchange in order to improve their portfolio.

He is also a very active multifamily investor and has acquired just over 120 units in San Diego County valued at over $50,000,000!

In this episode, Jason shares his inspiring journey from college confusion to thriving real estate broker. He shares valuable insights into the world of 1031 exchanges, emphasizing wealth-building strategies and timely property identification. 

He also discusses how to excel in multifamily real estate while avoiding transaction surprises and cultivating a stellar reputation for successful investments. Stay tuned!

Episode Topics

[01:26]  Meet our guest, Jason Lee
[01:56 ] From Sports Enthusiast to Real Estate Pro
[05:13]  Surviving Rejection: The Broker's Path to Success
[11:11]   The Power of 1031 Exchanges: Building Wealth in Real Estate
[17:41]   1031 Exchanges: Strategies, Timelines, and Pitfalls
[23:00]  Mastering Multifamily: Building Reputation and Wealth in Real Estate
[27:38]   San Diego Real Estate Insights: Local Advantage and Smart Investing
[32:58]  What is one red flag every investor should look out for?
[34:13]   What is a myth about the real estate business?
[35:16]   Connecting to Jason

Notable Quotes

  • "Success leaves clues, right? And so you were able to emulate that and hope that it pointed you in a direction." - Tim Little
  • "The game is to save your commissions or save your money and buy real estate." - Jason Lee
  • "I'm happy that I never started in a salary position because I've always had that, I got to find, I got to hunt, I got to kill something to make my next commission." - Jason Lee
  • "People who don't know about 1031 exchanges really need to learn about it because it's how the wealthiest real estate investors have built their wealth." - Jason Lee
  • "The timing is the biggest rebuttal we get when we work with first-time clients. Everyone's scared of the time." - Tim Little
  • "The biggest risk in a 1031 exchange is running out of time and ending up buying a bad deal because you couldn't find a suitable property." - Jason Lee
  • "Don't ask sellers or brokers to do things for you at the last minute. Don't have any surprises in the transaction." - Jason Lee
  • "Multifamily operators talk, brokers talk, and word of mouth spreads fast. Treat people with respect and build a positive reputation." - Tim Little

Connect with Jason Lee

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Ep 62 - Jason Lee (audio)

[00:00:00] Jason Lee: I think the biggest thing that new buyers or sellers should look out for in the market, especially buyers, though, usually transactions go wrong because of buyers and the thing that buyers that are amateurs, they need to look out for is if you want to be a one and done buyer, despite one property, the market can be done. Sure. Do it, do whatever you want in that transaction, try to get the best deal possible. But if you want to have a career in real estate and buy multiple properties in your market, have a good reputation, don't ask sellers or brokers to do things for you at the last minute. So the simplest way I can say is don't have any surprises in the transaction.

[00:01:15] Tim Little: Hello, everyone, and welcome to The Journey to Multifamily Millions. I'm your host, founder and CEO of ZANA Investments, Tim Little. And on today's show, we have with us Jason Lee. Jason is a highly recognized real estate broker in the multifamily real estate industry. He has worked with several eight to 10 figure real estate investors in San Diego County, helping them acquire, sell and 1031 exchange in order to improve their portfolio. He is also a very active multifamily investor and has acquired just over 120 units in San Diego County valued at over 50 million. Jason, welcome to the show. 

[00:01:53] Jason Lee: Hey, Tim. Thanks for having me. Good to 

[00:01:56] Tim Little: be here. Yeah. And it is great to have you. So I gave everyone a very high level overview of your background, but on this show, we really like to get into the details of how you got started on your journey. So please take us back to the beginning and tell us how you got to where you are today. Yeah, 

[00:02:14] Jason Lee: like most people, real estate wasn't their dream growing up as a kid. When I was younger, I was confused. I wanted what I wanted to do, but I knew I always wanted to do something that was active or in sports. I was always playing sports growing up. And after I went to, graduated high school, went to college. I went to San Diego State University. I really had no idea what I wanted to do. My parents were pushing me to go down that route I didn't want to go down. They wanted me to go to grad school, wanted me to do med school, and that would have been a really bad path for me. So I basically changed my major through the middle of college, and when I found That all of my best friends in school, their families that were the most successful, they were all in real estate. So they all had rental properties or had some sort of successful business in real estate. So I thought there was something there and I ended up trying it out, interning at a company here in San Diego, joining some clubs on campus. And I really ended up liking the competitive side of real estate. I've always been a competitor. I've always been someone who likes Mindset. I started being a broker when I was 20 years old and I've been doing it for about six years now. And, yeah, through then it's been a great journey. And I found out early on that the. Investors were the ones that were making all the money brokers making commissions. Sure. But, you pay California tax and federal tax on that and you don't end up with much after you pay taxes. The game is to save your commissions or save your money and buy real estate.  And I started doing that about four years ago with a partner. 

[00:03:52] Tim Little: Awesome. So there's a couple of things that I want to ask you about there. So I think your journey, at least in college, is not unusual from a lot of people right now, not knowing exactly what they want to do. But you looked around and you saw that some of your friends and their families found success in real estate. And I think it's just really important to point out that, you were able to see folks who were being successful and, what do they say? Success leaves clues, right? And so you were able to emulate that and hope that it pointed you in a direction. I think a lot of people, depending on how or where they grow up, maybe they don't see that, right? Their parents are teachers or something like that. And so they don't get that insight. I think the only clue that I had to that regard was, when my dad sold his Condo and made a good amount of money on appreciation. It was able to put that down on a house. I was like, Oh, these things will rise in value. Interesting. But that's where I left it. I wish I had dug into that a little bit more. But that was good. And then You started your journey as a broker. And one thing I'm curious about is you talked about that desire for competition. But what are some of the other characteristics that you think you have or skills that you think you have that made you successful as a broker?

[00:05:13] Jason Lee: Yeah. Being a broker is tough. It's a lot of hard work, especially in the first couple of years. you definitely need to have tenacity. You have to be consistent at what you do. you have to do the boring work and the boring work that no one wants to do is being on the phones, talking to people, calling owners. They want to buy, sell, exchange, whatever we can do to help them. And I probably got rejected, over, I probably got rejected a couple of thousand times before I even got my first lead and probably a couple of thousand more before I got my first listing. So you have to be very. You can't take anything personal. You have to understand it's just business. It's the path that everyone has to go down in order to be a successful Asian or a broker. but the path is very lucrative. If you can get through that first couple of years where a lot of people, they call it a revolving door where a lot of people come and exit the business because they don't have the kind of resiliency to make it. I think once you get past that stage you can be successful in brokerage and it's a great way to learn the business. I think the way I was able to learn so fast about investing in multifamily was because all my clients were successful investors and I saw how their mind worked, how they underwrited properties, how they saw things in a different way. I did between a bad deal and a good deal, how they differentiated it. So I think. The skill of having, to answer your question, you have to be resilient. You have to have skills to talk to people over the phone, talking to strangers, you have to learn how to sell yourself because inherently you're the product and the service they decide to choose you to work with them. So yeah, it's definitely a competitive game, but a lot of fun. 

[00:06:57] Tim Little: Yeah. And it's, it sounds straightforward, right? Oh, you have to be able to talk on the phone, call strangers and do all these things. But these are things that most people find. terrifying or they just hate it. And so I think that's why, like you said, that revolving door is there because they don't stay in long enough to get the thick skin, that rhino skin that they need in order to survive the rejection. I tell anyone that I think that is such a useful skill ormindset to acquire, especially that early on, right? If you're that young and you're able to accept rejection, that easily and move beyond it and be successful, then there's not a whole lot that could stop you, on your journey and the rest of life. And so that's true for brokerages. Sales are a lot like that. there's a few industries where if you're willing and able to tough it out, it gives you so much confidence and resilience for so many other things, I think that it could be applicable for a hundred percent. Yeah. And so on, help the audience understand, when you're a broker, are you working off pure commission or is there some annual salary and commission, or does it just vary? Yeah, for 

[00:08:16] Jason Lee: I started at a smaller boutique shop here in San Diego, and they didn't offer any hourly wage or salary. So if you're a producer, someone who's just there to find leads and close them, you're not going to be getting any sort of salary compensation. There is. At bigger corporate brokerages, what they call a runnership where you're like an intern, they pay two, three grand a month to basically do all of the work that the senior brokers don't want to do. They don't have you on the phones. They just have you analyzing Excel spreadsheets. They have you running to properties for them, picking up keys, just the dirty work. if you are someone who wants to have a salary in brokerage. If you stay being a salary employee in brokerage, you're never going to save up enough money to be financially free. So I think getting out of that W two salary mindset as soon as possible, is honestly a good thing. I'm happy that I never started in a salary position because I've always had that, I got to find, I got to hunt, I got to kill something to make my next. Commission. So I think having that mindset early on really helped me in business later on in my career 

[00:09:28] Tim Little: as well. Yeah, and I agree. And I think, the problem that you're alluding to is that people get into it because they get so used to having that regular predictable income. The idea of going without is, it can be terrifying, especially if you've racked up regular bills, your mortgage, your car payment, all that stuff. If you switch over to something where it could be feast or famine, that's a really scary proposition for most people, I think. 

[00:09:54] Jason Lee: Yeah. And most people, it gets tougher the older you get because the older you get, the more expenses you're going to have. When you're older, you have, you start having a family, you want to buy that house, you want to, you end up having that big mortgage, you end up having kids, like more expenses.  So I think it's really it's significantly easier to get started in brokerage early on before you you're at that age where you can't take as many risks anymore 

[00:10:19] Tim Little: in your life. No, and I think that's a huge point in general for taking those risks is to do it early. you may fall on your face or, you just get back up. And again, you're not tied down by some of the responsibilities and expenses that come later in life that might prevent you from going to that side of the house. I think that makes a lot of sense. let's talk about. as you were watching these investors come in, there's probably some aspect to the, Oh, they're making all the money, made sure you're getting your commission, especially if you're pretty successful at it. But it's very different from a tax perspective and everything else. What were you learning from these investors? And was there any kind of aha moment where you're like, I need to be doing this. As well, if not, just doing it solely if that's what you want to do. 

[00:11:11] Jason Lee: Yeah, I think my first aha moment, just because it'll hit home for a lot of people and, it's a good example was I found a client who was looking to buy a fourplex in San Diego and I found them a pretty good deal for about 800, 000. It was in a rougher part of San Diego. But he fixed up the property and he sold it a year later with me for about 1. 3 million. And he took all of his gains tax, tax deferred or tax free, they call it. It's actually deferred, but he deferred all of his capital gains. Didn't pay the 30 to 40% to uncle Sam and he rolled it into an eight unit property. And, he bought that eight unit property for about 2 million. Right around there in a very nice location, San Diego, and then he did it again. I think a year ago and bought a 16 unit property. So I think seeing people over and over roll smaller properties into larger properties and just multiply their wealth so quickly, it was just, pretty incredible. That guy probably made about, Two to 3 million worth of equity gains just in those two trades, next to him. and it wasn't that much work on his end. He just had to, of course, get the construction done by the deal. But if you look at it from a time standpoint, he didn't spend that much time at all on investing in 

[00:12:31] Tim Little: those assets. Yeah. And so there's a couple of different things, when we dive into 1031 exchanges. There's the equity gains that you talked about, right? but, there's the tax deferral, which is always nice. but there's also another two pieces that I think people don't hit on enough, which is one, the economies of scale that come with getting. More units, which, say going from a four unit to an eight unit like you were talking about right now, you have economies of scale in terms of maybe the cash flow is even better because of the price point that you got it at the rents that you're able to command in that nicer area of town. and so he might be cash flowing twice as well as he was on that fourplex. And then there's all the other advantages of having more units. Maybe you're getting a lower percentage on your property management, stuff like that. I think the other piece of it, besides the economies of scale, when it comes to getting better cashflow is the fact that you're able to roll directly into that second property without having money out of pocket potentially. Cause you're using the entire. Profit from the original property and putting it into the second property and getting an eight unit without any money out of pocket potentially is that something that you've seen in your experience? 

[00:13:57] Jason Lee: Yeah, you just named, most of the most powerful benefits for sure.   I think real estate is a very capital intensive business. And if you can roll all your profits and not have to put any more money in to buy a larger property that cash flows more, where you have more tax benefits, even a better location like this person, it's. One of the most powerful strategies in real estate. So I think, people who don't know about 1031 exchanges really need to learn about it because it's how the wealthiest real estate investors have built their wealth. Every single one of my clients who own over a hundred units, 500, 000 units, they've all utilized the 1031 exchange to their advantage.

[00:14:36] Tim Little: Yeah. And let's talk about some of the, I wouldn't say downsides to a 1031, some of the restrictions associated with it, the biggest thing I see people complain about are the timelines. Because there are real timelines. talk to me about. the timelines associated with a 10 31, and if you've seen anyone kind of struggle to find that second 

[00:14:57] Jason Lee: property. Yeah, the timing is the biggest rebuttal we get, when we work with first time clients. So everyone's scared of the time, right? So the time period is after you close the property you sell, which is also called the down leg property. So once you close your down leg, You have 45 days to identify the property that you're going to buy. And the way you do that is your 1031 accommodator who holds your funds because after you sell, you don't hold the funds in your account. An accommodator holds it because the money it's your bank account. That's now taxable. So a qualified intermediary holds your funds. They send you a letter to identify up to three properties on a standard exchange. You identified three properties and you have to close on at least one of them. And you have 45 days to send that letter to the accommodator. And they report it to the IRS. And once that 45 day period expires, you now have to buy one of those three properties you put in that little, one page sheet or letter. And then from there. You have to close on a property on one of the properties, at least in six months after closing. So you have 45 days to identify and then 180 days to close after you have sold your property or properties. And the way we mitigate that time risk, because it is fast, that 45 day period, it feels, it makes people really nervous. And the way that we mitigate. That, anxiousness is to give the seller at least two or three 30 day extensions so that they now have, after contingencies are removed, if they're closing is 20 days or 30 days out, they have an extra, one month or two months to know that their deal is going to close, but they have now one to three months extra to go shopping for their property. So that's how we've. A lot of our deals to where it makes sense for our clients to, work with a buyer on an exchange and then go, improve their position 

[00:16:48] Tim Little: on something else. Yeah. And that makes sense. I guess also, I imagine that as soon as a potential seller knows that they're going to sell, that's when they start thinking about it. And talking to you and saying, Hey, I want to sell this. And at that point is probably when they should start looking, because, the faster you can find those replacements or like kind properties, the better off you'll be. Certainly you don't want to rush into a deal. I think some people have been guilty of that in 1031 exchanges, right? The clock's about to run out and they're like, oh crap, here, I'll put an offer in on this. And they get something that probably wasn't the best deal because they found themselves at the end of their, at the end of their time. But do you guys start looking as soon as a potential seller knows that he wants to sell in 1031?

[00:17:41] Jason Lee: Yeah, we start showing them options right away. Like we bring it to the first meeting, like here's what we have available. Here's what's available in the market. and here's how we think you can improve your equity position. Usually when sellers want to exchange, they have a lot of dead equity sitting in their property. That's when they have a very small loan, a lot of equity, but their cash flow isn't where it should be. So the return on equity is very low on cash flow. that's. A big motivation, also them wanting to move to a better location. If they're in a class C location, a lot of times older sellers looking to retire and have easier tenants to manage, they'll want to move into a class a area near the beach or something like that, but yeah. The importance of working with a broker that has inventory that knows how to run a 1031 exchange properly is so important. I've seen some people get burned working with single family home agents, residential agents that just don't understand how it works. they close their property, they sell in 21 days, they just started their ID period, 45 days, they haven't seen one property they like, and now they're, in a time crunch, and they're running around looking for anything and everything, That's where we see a lot of bad deals happen, because that is one risk. The biggest risk, in my opinion, of a 10-31 is you run outta time, you can't pay taxes and you end up just buying a crappy deal on the market because you couldn't find anything that suited your needs. So that's probably the biggest,like red flag we give to clients before they end up working with us.

[00:19:40] Tim Little: Yeah, no, and that absolutely makes sense. So I definitely advocate for anyone who's even thinking about it. Doing a 10 31 exchange to get in contact with the right people, the brokers like you who already know what is on the market or is likely going on the market. Can you talk to me about it? Are there any unique considerations when we get into the commercial multifamily side of things versus that single family and small multifamily space? Because, once you go over four units. then it's officially commercial multifamily five units and up. Can you talk about that? Yeah. So I'd say 

[00:20:18] Jason Lee: The biggest difference between the two asset classes, the one to four unit residential and the five unit commercial, five unit and above is definitely the loan. So the loan is structured much differently. on a one to four unit loan, they care. It's mostly Fannie Mae Freddie Mac government back loans, and they care mostly about the person's credentials, not the property. So they care a lot about your debt to income ratio. How much money do you make? How much debt do you have? And, are you qualified to buy this property with a mortgage? That's how they look at it. But, most of those loans are 30 year fixed. And, when you go to commercials, there's a lot more nuances and variables. number one is they care about the property's cashflow much more than your personal cash flow. So they underwrite the property much more than they underwrite you. So they want to make sure that they hit a certain cash flow threshold. It's also called a debt to income, sorry, debt coverage ratio. when you have a one debt coverage ratio, that means the property breaks even. Anything above that at cash flows. So people look for, or banks look for a 1. 2 to 1. 25, DCR debt coverage ratio for a multifamily for office buildings, industrial buildings goes up because there's a little more risk in those assets, but for multifamily, it's usually 1. 2. That's what we see. and then another big one is that. There's no 30 year fixed loans or very few, they're all, they're mostly five year fixed, seven year fixed, 10 year fixed, and they go to an arm, they go to an adjustable rate mortgage, balloon in 30, sorry, amortized over 30 years. but there's also, I could talk a lot longer about commercial loans. There's a lot of different things about it. bridge loans, the prepayment penalties,different ways to, get the best rate. But, yeah, there's a lot more variables than 

[00:22:08] Tim Little: commercial loans. Yeah, no, that makes sense. And it's just a good thing for people to know, because, as the example that you showed, right? Someone went from a quad, which would be considered, just residential to an eight plex. Now that's a whole different beast from the lending perspective. So these are really good considerations for people to just keep in mind as they scale up, if they are using a 1031 exchange. So going back to the broker side of things. I want to understand better. So tell us some of the biggest mistakes that you see buyers and sellers make that could ruin a deal because you have that unique perspective where you've been on, both sides of the fence as it were. So I want to know what you're seeing, the dumb things that buyers or sellers are doing that are tanking deals.

[00:23:00] Jason Lee: Yeah, I think the biggest thing that new buyers or sellers should look out for in the market, especially buyers, though, usually transactions go wrong because of buyers and the thing that buyers that are amateurs, they need to look out for is if you want to be a one and done buyer, despite one property, the market can be done. Sure. Do it, do whatever you want in that transaction, try to get the best deal possible. But if you want to have a career in real estate and buy multiple properties in your market, have a good reputation, don't ask, don't ask sellers or brokers to do things for you at the last minute. So the simplest way I can say is don't have any surprises in the transaction. Like I'll give you a perfect example. I closed the eight unit property here in San Diego last week. And on the day of closing, the buyer sent the setter seller, a letter saying, and me a letter saying that, Hey, I found out that there was something else wrong with this property, complete BS. And he wanted another 200 K off the asking price, just for no reason at all, basically. And. That is a prime example of someone that will never see a deal for me ever again, because I was representing him and it makes me look bad. So that investor is now blacklisted for my inventory list. And if you get blacklisted on enough brokers list, all commercial brokers talk. Most people are friends in the industry and they will talk about you because word of mouth spreads very fast in this industry. And when you do someone wrong, you will definitely never see a good off market deal ever again. Another way to really sabotage yourself is to reach into the broker's pockets. We talked about in the beginning of the show, brokers don't make any hourly wage. They have no benefits, no salary. The only way they make money is to see a deal close. And when you ask them for 10, 20, 000, just to make your deal a little bit sweeter, you're shooting yourself in the foot so bad. And most people don't even know it because that broker will remember that forever. And they'll never want to work with you ever again. You'll be their last call. If they can't sell a property on the market. So I think I just understand. other people's positions being empathetic and having no surprises happening transaction from your end, whether you're a seller or a buyer is the best way to keep a good reputation in multifamily or commercial 

[00:25:22] Tim Little: real estate. Yeah, and that's a really important point. I don't think enough people understand how much this is a reputation driven business.

[00:25:32] And like you said, people talk like multifamily operators talk. We talk to each other. We know that brokers talk to each other. So if you leave that bad taste in their mouth, all you're doing is hurting yourself. because that's one less opportunity that you're going to get, and it might be a lot more than one less opportunity because he might talk to another broker. She might talk to another broker. And before you know it, like you said, you might find yourself on an island. With no deals coming to you, and then you can't even partner with other GPs because if brokers find out like it just creates this bad scenario for yourself and you're stifling your own aspirations in that business. yeah, again, I can't emphasize enough how much this is a reputation driven business. So just treat people with respect, and if you treat them the way that you would expect to be treated, then you should be. Okay. if I'm the seller and someone came to me with some bullshit requirement last minute, I'd be upset too. So does it make sense for me to save that money to go ahead and do that to them? So I, and I tried to think about that as well, right? I went on a tour of an apartment here in Tampa. There's like a, I don't know, 49 unit, Tampa apartment building. And it was a really nice show. The broker walked me around. It was super hot. Gave me water, all this stuff, a really great impression. He knew his stuff and, but at the end of the day, the price that they were asking just was well above what we had underwritten it for. I could have just said nothing, and just not gotten back to him. But then what kind of message am I sending in terms of how I do business? If I do that, I feel like I'm not respecting his time. If I don't say anything at all. So I wrote him back and said, Hey, definitely appreciate you taking me around, but here were the issues. We really just couldn't get there on the numbers. We tried, this is our, the best we can come up with. And we really don't want to, offend the seller with that 

[00:27:38] Jason Lee: type of off. Yeah. That's a perfect way to play it as an investor. You can negotiate the price all you want upfront. And, brokers understand that because. Brokers like me would much rather have an investor that's upfront communicative, tells us why the price doesn't work. And a lot of times they'll go to bat for you if they can't find any other buyer. especially in a slower market like this. And, it's just when you're shooting yourself in the foot, when you go into contracts, say everything looks good. And then you just come with a crazy surprise saying, Hey, I need half a million off the price for some asinine reason. So I think that's just the correct way to play it is what you said, 

[00:28:14] Tim Little: Tim. Yeah. And to your point, like he actually came back, a week later and was like, Hey, the seller is ready to meet the market. cause they just read where they were at and maybe they were a little above where reality was. And so they were asking for offers at that point. And we did wind up putting an LOI. On that property, a letter of intent. Now, did someone beat us out? Yes, but it wound up being like, a non profit or something that came in like a couple million dollars over everyone else. And I was like, okay. we're not going to compete with that. Didn't really make sense to me. It sounded less like a non profit and more like an anti profit. But,if I certainly wouldn't blame them for taking the deal, but to your point, they did come back to us later and said, Hey, the situation has changed. Just wanted to let you know, please bring in any offer that you might have. No, that's great. Yeah. So it seems like you've carved out quite a niche for yourself in San Diego County. Talk a little bit about that. And then tell me, do you see yourself investing anywhere else or is that your competitive advantage? the network. Connections, the knowledge that you have of that area. Yeah. So 

[00:29:32] Jason Lee: I really do believe I have a competitive advantage in San Diego, just because I have a lot of great relationships here. I have a good management team. I have good contractors. I have a lot of friendships with brokers who have brought me deals and my team deals. So I do think I have a really good advantage here to find good properties and to grow here. Eventually, it gets to a point where It makes sense to scale into other locations, especially like San Diego, because San Diego is a mom and pop town. There's not a lot of properties here over 50 units. A lot of them are smaller apartment buildings. So I think when it gets to a point where we want to scale into bigger buildings and out of state, if the politics get worse, if like tenant laws get worse, right now, they're not bad, but we could see it going in that direction. So when that happens, Then it'll probably make sense to diversify, but the economics here are really great. we have no supply. We're not building here. The rents just keep going up. rents are up 5% this year, even in this crazy market. And, San Diego overall is a really good place too. Start your journey in real estate. Cause there's a lot of two to four unit properties, a lot of eight to 10 unit properties. But, yeah, I do think it's smart to venture into other locations like Phoenix or, possibly, Idaho I like, and then, Texas has good properties too, but I don't think it makes sense to go into those markets until I've built up enough base here in San Diego.

[00:30:59] Tim Little: Yeah, no, and all that makes sense. Like you said, the. Just the local knowledge that you have those connections. I think it does give you a competitive advantage for sure. And I think the other important point that you hit on was the lack of supply, especially at the larger scale, 100 unit plus, it's just not something that you see a lot of over there compared to, Georgia, Florida, Texas, where it's, completely normal to have 150, 250 unit apartment buildings. And then at the same time. What people need to understand is, they're probably, if they're into this stuff, they're looking at a lot of articles and seeing, oh, commercials in trouble and multifamily rents are going down, which I try to emphasize to people like anything. Is that all real estate is local and I know that sounds super cliched, but it just comes down to macro versus micro, right? People see these very macro statements of what is happening in real estate or in commercial and. It's so broad as to almost be irrelevant because when you zoom in on a market, say San Diego, right? It's not experiencing drops in rents. you just said that they're still up 5%. And I think that's what. operators are doing, they're finding those markets where the numbers still work. They're not going to the markets where rents are dropping dramatically. Like, why would we do that? So I think it's just dangerous if people pay too much attention to headlines without really diving into the details, especially of specific markets. All right. With that, we do have to transition to the turbo round. So I'm going to ask you three questions that I ask every guest that I have on the show. And I just ask you for a quick, honest answer. So the first question is, what is one red flag every investor should look out for? One red 

[00:33:03] Jason Lee: flag every investor should look out for, it's funny that I say this because I'm a broker, it is the brokers offering memorandum and their underwriting. A lot of the time brokers will. make the cap rates better than they really are. They will make the expenses lower and the pro forma rents higher than the market can really obtain in that region, especially for an unrenovated unit, which they usually are. So really do your own underwriting. Every single time you see a package from a broker, never trust other people's underwriting.

[00:33:37] Tim Little: Yeah, I, of course, I've seen this too, right? and we just, we consider those OMS a starting point. but they, you definitely should not be taking those as gospel and using them, for your underwriting. That's where, The T12 and all the real numbers come into play in terms of proforma, we tend to be a little more conservative because you guys are looking at the best case scenario. Maybe we need to look at, I won't say worst case, but less best case scenario because we're taking into account investor returns and all that stuff. But no, that's a good one. All right. What is a myth about this business that you would like to set straight? 

[00:34:17] Jason Lee: Oh, a myth about the business that I want to set straight is that you have to have You know, a ton of money to get started. You don't need to have a lot of money to get started in real estate. A lot of people think that you need to save up years and years for your first down payment, but you can leverage connections. You can leverage your hustle to get into your first deal very quickly within your first year. partner with the right people. If you have time and the hustle and where it's all to get deals. Partner with people who don't have time, but have a lot of capital and those will create some great relationships. So you don't have to be old to be a real estate investor. You can be young, hungry, and intelligent to buy your first couple of deals.

[00:34:56] Tim Little: Yeah, I couldn't agree more. I'll admit that, when I was young, I did have some of those same limiting beliefs. Oh, I don't have any money, so I can't do that. it's all a matter of, like you said, being hungry and being creative. If you can find creative ways to get deals done, then you could get your foot in the door. And that's where you really start your growth. All right. Hey, Jason, this has been awesome. I really appreciate all your insights, especially on the broker side, because we don't get guests on here too often to give us that perspective. Please. Tell our listeners how they can get a hold of you. And if there's anything else that you'd like to share with them.

[00:35:32] Jason Lee: Yeah. Best way to get a hold of me is I'm pretty active on Instagram and YouTube. It's just Jason Joseph Lee. You can message me on either of those platforms, but, yeah, thanks so much for having me, Tim. It was a great interview and I'm looking forward to talking more. It'd be great to have you on my show as well.

[00:35:49] Tim Little: All right. I will take you up on that. I appreciate it. All right. we have, we'll have all your information in the show notes. I appreciate you coming on. And look forward to continuing to see you do big things on your journey to multifamily millions.