EP197: We Made $8.65 Million in 27 Months To Show It’s Not Luck

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Hey there!

We could tell you again and again that making millions through real estate investing is possible. 

Buttt we’d really rather SHOW you how it’s done, instead of telling you. 😏

It’s much more effective that way, don’t you think? 

So, today we’re sharing the actual strategies we used to make $8.65 million in 27 months, and how YOU can do the same!!

Now, we knowwww what you’re thinking, but listen. 

The truth about what we’re sharing is that this isn’t magic, luck, or too good to be true. 

Honestly. 

We’re sharing our proven method for multiplying millions through multifamily apartment investing – from strategy, to setbacks, to what NOT to do on the way. 🙌

By following our framework, you’ll learn how to replicate our success and make it yours. 

Here’s to putting money where our mouths are and showing you the way to millions. 🥂

We operate a multifamily real estate portfolio valued at 300 million dollars, beginning with this gem in 🌵 Phoenix, Arizona.

We bought this 76-unit apartment complex for $6.9 million.  After a short 27 months, we sold it for a $8.65 million profit.

👉 In this episode, we’ll share how we did it, what differentiates our approach to others, and if you can replicate this for yourself.  

But first, let us explain to you what mistake we made along the way that threatened to derail our real estate empire from the start and the changes we made.

Many people might make this mistake too, but hopefully, our explanation can assist you in avoiding it.  Now, recently, we met Ben Hardy, the bestselling author of ’10x is Easier than 2x.’ His book explains how aiming for 10X growth in ventures, such as real estate, can be simpler than merely 2X-ing it. 

Why?

A 10X mindset encourages innovative, scalable approaches instead of just working harder. 

Many new investors start small, perhaps with a single-family rental, then progress to a duplex or triplex. 

But targeting larger multi-family properties from the start reveals that many processes remain consistent, whether for a duplex or a 🏢 200-unit complex.

The twist?

Larger properties can yield significantly higher returns with similar or even less effort. Going for bigger opportunities often requires a broader vision and strategy, not necessarily more work.

And that’s the mistake that we made when we first started in real estate investing, we also were thinking too small because we never realized that tackling much larger real estate deals would apply to people like us, just getting started. 

But when we understood that the rewards for larger deals were significantly greater, our mindset changed.

➡️ This shift allowed us to generate $8.65 million in profit within just 27 months. ⬅️

If we hadn’t changed our mindset, this success wouldn’t have been possible.

Source:  The Kitti Sisters TV

How We Did It

How did it all begin?

Let’s go back to our first purchase—the Phoenix apartment complex.

While people recognize us as investors, we fundamentally view ourselves as problem solvers. This perspective was crucial when we were contemplating the 76-unit apartment deal.

These were the challenges we faced 👇

1️⃣  The seller wanted to move on to bigger projects after 14 years but needed the sales revenue without incurring capital gains tax.

2️⃣ We didn’t have $6.9 million available, creating a financing challenge.

3️⃣ Our investors were keen to shift from small-scale investments to larger ones, aiming to reduce risks in the process.

We solved the first challenge by including a provision in our purchase agreement.

This allowed the seller to use a 1031 exchange, which deferred taxes on their gains.

They could reinvest the profits in another property after selling the 76-unit apartment.

So, what to do when you don’t have $6.9 million in cash parked in your bank account? 

Well, you do what we did and you raise the capital via apartment syndication.

While the word may sound super fancy, syndication is nothing more than pooling together funds from multiple individuals who all want to collectively go into an investment together, in this case, to buy this complex.

Of course, there’s some paperwork and rules we have to abide by, but those aren’t complicated and any competent SEC attorney can help you with the paperwork.

The third challenge to be solved is raising the capital – AKA using OPM – Others’ People Money. 💵

For newer investors, this is probably the most intimidating aspect of getting into larger multifamily apartments.

Let’s share a quick tip:

Think of it like fishing – to catch fish, you go where the fish are.

When raising capital, go where the investors are.

It might seem obvious, but many overlook this.

The easiest way to secure funds is by connecting with people already interested in real estate and looking for investment opportunities.

Using this approach, we raised about $3.9 million and acquired a loan to cover the rest of the purchase price.

What Differentiates Our Approach to Others

Ever assembled Ikea furniture without reading the manual?

Well, we’ve done that, regretting it later.  This is like a common mistake for real estate investors. They focus too much on a low price but miss important details like property quality, location, and income potential. 

If most properties are selling for a certain price and you find a much cheaper deal, be cautious. 

Many stories circulate about investors thinking they’ve found a great deal, only to uncover hidden issues like incorrect financials, unauthorized occupants, or unapproved renovations.

Remember: if a deal seems too good to be true, it usually is. 

In today’s data-driven world, people know market values. Rarely will someone offer a property at a big discount without a catch. While such deals aren’t always bad, ensure you know all the details. It’s not just your money at stake but also the trust of your investors, which is very important.

Can You Replicate This

You might wonder, “Can I replicate this and get the same results?”

Think about Ratatouille.

It’s a popular dish known for its rich flavors and beautiful appearance. But at its core, it’s a simple stewed vegetable dish. Sauté onions and garlic, add vegetables, season, and let it simmer—a straightforward process for a tasty outcome.

Likewise, our investment method follows a clear plan that we call the C.A.R.E. strategy:

C for Compass: Define investment criteria instead of impulsively chasing deals.

A for Awareness: Understand specific local market conditions, as national data may not reflect local realities.

R for Review: Evaluate purchase prices, income, and expenses using a simplified model for deal analysis.

E for Execution: Action is key—visit properties, and make offers for real financial growth.

By adhering to this framework, we’ve successfully exited three large apartment complexes.

Beginning with our inaugural 76-unit complex, this system moved us from small investments to making an $8.65 million profit in 27 months.

Now that you see how we made $8.65 million profit in 27 months, it would be worth a darn thing if you had to pay a lot of taxes on it. 🤓🤓

So tune in 🎧 to this episode so you can learn the Tax Game and How to Win It.