EP337: Buying Apartments With NO MONEY

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In this episode, we’re going to share with you one mindset shift that allowed me to acquire $400 million in multifamily real estate—without ever having millions sitting in the bank. 

And we promise you this: if you adapt and adopt this mindset, it will change your life for the better.

Years ago, we learned a principle that unlocked everything. If you want to model excellence in any area—whether it’s business, wealth, or relationships—you don’t reinvent the wheel. You find someone who already has the results you want, and you model three things.

1. Their Perspective on Money.
2. Their Partnership Philosophy.
3. Their Playbook for Risk.

Today, we’re going to zero in on belief systems. Because if you change what you believe, you change what you achieve.

And we’ll warn you right now: if you haven’t yet acquired multi-millions in multifamily real estate, what we’re about to share might rub you the wrong way. Why? If you’re already doing what we’re about to tell you, then you’d already have the results.

You see, too many people only listen to the things they already agree with.

But here’s the truth—agreement doesn’t change you.

Challenge does. And if what we share today shakes your current thinking, that’s not a problem… that’s the beginning of your transformation.

So, what if we told you that right now, there are broke people with no money acquiring 100-unit, 200-unit, even 300-unit apartment complexes? While you’re sitting there thinking you need millions to play in this space, they’re using strategies that require little to ZERO of their own cash.

In fact, there’s an investor of ours, a school teacher making $55,000 a year, who purchased a $23 million, 180-unit apartment complex. Her cash out of pocket? Less than $75,000. But she’s an incredible person, like us, she’s not special nor is she lucky in the financial sense.

See, here’s what separates people who stay broke from people who build generational wealth: broke people think you need money to make money. Wealthy people know you need knowledge to make money. And in 2025, the knowledge gap has never been wider.

While everyone’s complaining about “high interest rates” and “expensive real estate,” there’s actually more capital chasing large multifamily deals than ever before. The problem isn’t lack of money – it’s lack of knowledge about how to access that money.

So if you’re tired of watching other people build wealth while you make excuses about not having enough money, pay attention. Because in episode, I’m going to show you six advanced financing strategies that will let you control millions in real estate assets – even if you’re starting with nothing.

But first, let me destroy the biggest lie that’s keeping you broke…

They told you that real estate investing requires money. That’s the biggest lie in the wealth-building world. Money is not the seed of wealth — problem-solving is.

If money were the only requirement, then everyone with money would never lose wealth. But you and I know that’s not true. Some people have money and still lose it. Others start with nothing but an idea and end up building empires.

Why?

Because the real game is not about money — the real game is about solving problems.

Real estate investing does require money, in fact, millions of dollars, but it doesn’t necessarily require your millions of dollars — it requires your mind.

It requires your ability to create value, structure opportunities, and solve problems for people who already have money but don’t have the time, knowledge, or strategy.

Let me break it down: wealthy people are not sitting around asking, “How do I get more money?” They’re asking, “How do I get more yield on the money I already have?” They’ve got the resource, but you have the resourcefulness.

Because by solving this problem you are literally and figuratively creating massive values.

➡️ What do we mean by this?

Here’s where the principle of value creation comes in.

Value isn’t about the thing itself — it’s about the problem it solves. 

Imagine you’re caught in the middle of a monsoon — rain pounding from every direction into your house from the roof, from the flooded streets, water everywhere. And then someone runs up to you, out of breath, and proudly hands you… a bucket.

A bucket of water as my house is flooded. 

Are they nuts?

It’s totally worthless. 

But what if you were stranded in the middle of the Sahara Desert — the sun blazing overhead, heat pressing down on you like an oven, every breath feeling like fire in your lungs?

That same bucket of water in the desert? Priceless. The water didn’t change — the context did.

It’s the same in real estate.

• A seller has a problem: “I can’t hold onto this property.”
• An investor has a problem: “My money is sitting in a bank losing value, I want to invest, but I don’t know who to trust.”
• A city has a problem: “We need more housing.”

The one who steps in and solves those problems is the one who creates value. And the one who creates value is the one who controls the deal.

So if you’re sitting there saying, “I can’t get into real estate because I don’t have money,” you’ve already disqualified yourself from the opportunity. But when you shift your belief — when you realize that your role is not to bring money, but to bring solutions — you step into the investor’s seat.

Money follows value. Money follows solutions. Money follows wisdom.

Stop saying, “I don’t have money.” Start saying, “Whose problem can I solve with the knowledge and strategy I bring to the table?” Because the minute you stop chasing money and start solving problems, money starts chasing you.

Money starts chasing you. Now you might be wondering, ‘Okay, but where exactly is this money, and why isn’t it chasing me yet?’ Great question — let’s pull back the curtain.

Think about it: every single day, there are pension funds, insurance companies, wealthy individuals who we call high net worth individuals or ultra high net worth individuals, and government agencies sitting on HUNDREDS of BILLIONS of dollars that they NEED to deploy into real estate. They have the money, but they don’t have the time, knowledge, or desire to find and manage deals.

That’s where YOU come in.

Here’s the revelation: money never disappears. It only transforms.

What do we mean by this?

Think about water on Earth. All the water that has ever existed is still here, the same water your friendly T-Rex drank 66 million years ago that’s in your fancy Stanely cup right now. 

The fascinating thing about water is that if it gets hot, it turns into vapor. If it gets cold, it freezes into ice. If the conditions are right, it melts back into liquid. But no matter the form, the water is still here. It didn’t vanish — it just changed state.

That’s exactly how money works.

It doesn’t vanish from the earth. It doesn’t get destroyed in the burn down Asgard sense. It just changes form. Sometimes it sits in the stock market. Sometimes it flows into bonds. Sometimes it moves into real estate or private equity. But the money is always here — just like the water.

And right now, that money is transforming again. It’s chasing yield.

It’s moving away from places that are overbuilt, overhyped, or underperforming — and it’s flowing into alternatives like multifamily real estate, where it can find a safer home and a stronger return.

Anytime we walk into a room full of serious investors, we’re surrounded by people who collectively control billions of dollars — money that’s just waiting to be placed into the right opportunities.

These people are called allocators. Why? Because whether they’re running a pension fund, a family office, an insurance company, or a private equity firm, their job is simple: to find good investments where they can put their capital to work.50

In 2025, mid-year reports show that global private real estate funds are sitting on more than $350 billion in dry powder.

And that’s the key — the money didn’t vanish, it just went looking for a better yield.

Which means if you can position yourself as the connector, the bridge between this capital and the right opportunities, you win.

So let’s talk about exactly how that works in practice.

When a large multifamily 🏢 deal gets financed, it doesn’t happen with just one source of money. It’s not like swiping a credit card or writing a single big check. Instead, the financing is built in layers — what’s called a capital stack.

At the foundation, you’ve got the largest piece of the financing aka debt, that covers the majority of the purchase and gets the deal off the ground.

But here’s the key: that big check doesn’t cover everything.

There’s still a gap — money needed for the down payment, money set aside as reserves for operations, and money earmarked for c like renovations or upgrades.

And that’s where investors come in. That remaining portion of the capital stack is funded by other people’s money — individuals, family offices, private businesses, or even institutional partners — who are looking for a solid return on their capital.

So in every multifamily deal, you’ve really got two major forces at work making the deal possible.

And once you understand that every deal is powered by these two forces — the big check aka debt that is providing leverage and the investors supplying equity — the real question becomes: how do you, without starting with millions, step into that equation and become indispensable?

That’s where strategy comes in.

NO. 1 Agency Debt Stacking – Become the Deal Finder
Here’s how broke people become multimillionaires: they become the bridge between money and opportunity.

In 2025, Fannie Mae and Freddie Mac — the two government-sponsored enterprises that provide what’s called agency debt — are offering the most competitive rates for large multifamily deals, often 100–200 basis points below commercial banks.

Agency debt simply means loans backed by these agencies, designed specifically to support housing by giving investors long-term, fixed-rate financing with favorable terms.

But here’s what they don’t tell you: these agencies are DESPERATE for good deals to fund.

Fannie Mae and Freddie Mac loans aren’t just cheap debt — they also come with mandates. In 2025, each has a $73B cap, and at least 50% must go to “mission-driven” deals like affordable housing, workforce housing, or properties with green/efficiency upgrades.

Green loans count if you cut energy/water use by 30% (with 15% from energy), and workforce housing loans are even exempt from the cap, meaning they can finance as many as the market brings.

For agency multifamily loans in 2025, Fannie Mae and Freddie Mac typically require a minimum DSCR of 1.25× (sometimes as low as 1.15× for affordable housing or floating-rate loans) and allow up to 80% LTV on conventional deals. In certain affordable housing programs, leverage can stretch higher — even up to 90% LTV — while standard stabilized assets generally stay in the 75–80% range. Actual terms vary depending on property type, stabilization, affordability, and sponsor strength.

While we all love the idea of locking in long-term fixed debt, it only works if it matches your business plan. I was just talking with an investor about this yesterday. In multifamily, agency loans come with prepayment penalties—and unlike single-family homes, you can’t just pay them off early without consequence. If you exit before the loan term ends, you could owe millions in penalties, because the lender wants to recover the interest they expected to collect.

So yes, fixed debt sounds great on paper. But if your hold period is shorter, you may need the flexibility of a loan with lighter or shorter prepay terms. And make no mistake—these penalties aren’t small. On our very first multifamily deal, a $6.9 million, 76-unit property in Phoenix, we delivered a 3.11x multiple—  returns to investors. But even then, we had to pay over $1 million in prepayment penalties. The deal still worked because of the forced appreciation we created, but that’s not always the case.

That’s why prepayment costs can’t be an afterthought. They need to be factored into your assumptions from the very beginning—because the right loan structure isn’t just about rate, it’s about alignment with your strategy.

But what if you can’t even get a property under contract because you don’t have proof of funds?

NO. 2 Mezzanine + Preferred Equity – The Partnership Play

This is where smart broke people become wealthy: they create partnerships that benefit everyone. When you find a great value-add deal, you don’t need to fund it yourself – you need to structure it so everyone wins.

There’s a guy with $10,000 to his name who structured a $35 million, 240-unit acquisition. Here’s how: Senior debt covered $24 million, mezzanine debt filled $6 million, preferred equity covered $4 million, and a private investor put up the remaining $1 million.

His role?

Deal finder, project manager, and general partner. His ownership? 20% of a $35 million asset. His cash investment? Zero. His sweat equity and deal-finding skills earned him a $2.8 million net worth increase.

But listen carefully – mezzanine debt and preferred equity are EXPENSIVE money.

We’re talking 12-18% interest rates, sometimes higher. This only works if you can execute the value-add plan perfectly and on time. If you can’t deliver the projected returns, you could lose everything. Preferred equity holders get paid before you do, so if the deal goes sideways, you and your investors will get wiped out first.

On top of that, these structures often require you to pay part of the return current (during the hold) and let the rest accrue to the back end. In other words, it’s a high-octane, explosive part of the capital stack. This is not something a beginner should touch.

Yes, it can deliver very high rewards if executed flawlessly, but it can just as easily blow up a deal if things go wrong. We’ve seen both outcomes. So while it’s important to know that mezzanine debt and preferred equity exist, I would not recommend this as a go-to strategy for anyone just starting out in multifamily.

In fact, on one of our own purchases — a $68 million property — we almost went down this road. At the time, many of our colleagues were having success with a structure that stacked senior debt, preferred equity covering a large slice of the capital, and then a smaller layer of traditional investor funding.

Once we had the property under contract, we began exploring that option. But midstream, as we dug deeper, we realized the terms and conditions were egregious. And we were already 2–3 weeks into the process on a 60-day closing timeline.

So we had to make a bold decision: pivot back to the traditional capital raise.

Which would have been a disaster for most general partnership teams, but because of our track record and deep investor base, we were able to pull together $34 million of equity and close without touching mezzanine or preferred equity.

Looking back, that decision was a godsend. Given today’s interest rate environment, had we gone forward with the mezz/pref structure, I’m convinced we would have already lost that property to foreclosure.

That’s why I tell new investors: know that these structures exist, but don’t make them your go-to strategy. They are high-risk, high-reward tools — and if you don’t fully understand the fine print, they can cost you everything.

I know some of you are probably thinking, “Wait a second… you just told me about mezz and pref equity, and then told me not to use it!” And you’re right — because that strategy is a minefield for most new investors. So let’s move to something far more favorable, something you actually can use to your advantage.

NO. 3 Tax Credit Equity – The Government Money Hack

Here’s what most people don’t realize: when you hear about the government “giving away money” for multifamily, it’s not like Uncle Sam is cutting you a check. Instead, the government issues Low-Income Housing Tax Credits (LIHTCs) through each state’s housing finance agency. If your project qualifies — usually by setting aside at least 20% of units as affordable — you’re awarded a bundle of credits.

Now here’s where the magic happens: you don’t use those credits yourself. You sell them to investors — typically banks, insurance companies, or Fortune 500 corporations — who buy them at a discount because they can use them to reduce their federal tax bill dollar-for-dollar. When they buy those credits, they give you real cash at closing. That’s called tax credit equity.

This money comes in as equity for your deal, and it usually covers 30–40% of your total development cost. But it doesn’t replace the senior loan. You still need debt to cover the bulk of the project, and you may still need some private equity to fill in the remainder.

Here’s what that looks like in practice on a $40 million, 200-unit project ⏬

Source of Capital	Amount	% of Total
Senior Loan (agency/bank)	$20M	50%
Tax Credit Equity	$14M	35%
Private Equity / Developer Equity	$6M	15%
Total	$40M	100%

In this setup, the tax credit equity reduces how much private equity you need to raise. Instead of scrambling for $20M+ in investor cash, you only need $6M. And if you’re the deal finder/developer, you can often negotiate a meaningful ownership stake for structuring and managing the project without writing a personal check.

That’s why this is such a powerful “government money hack.”

The capital is already out there, mandated by law, and sophisticated developers use it every day to scale projects far larger than their personal bank account could ever fund.

Now, tax credit deals are incredibly complex. You’re dealing with federal regulations, compliance requirements that last for decades, and if you mess up the compliance, you have to pay back ALL the tax credits with penalties. This isn’t for beginners – you need experienced legal and accounting teams, and the deals take 2-3 years to close.

Now, if you think those strategies are good, wait until you see what’s next…

NO. 4: Seller Financing + Equity Participation – The Distressed Seller Goldmine

In 2025, distressed sellers are everywhere, and they’re your ticket to wealth. Properties bought in 2021-2022 are facing refinancing nightmares at 8% rates. These sellers are desperate for solutions.

Here’s how broke people are becoming millionaires: they’re solving problems for distressed sellers.

There’s an investor who found a seller with a $25 million property facing foreclosure.

The seller owed $20 million and couldn’t refinance.

The investor offered a solution: he’d take over the property, assume responsibility for the debt, and give the seller 15% ongoing ownership to avoid foreclosure.

The seller said yes immediately. The investor now controls a $25 million asset with zero money down and the seller avoided bankruptcy.

But here’s the truth about seller financing that nobody wants to tell you: if a deal is truly good, the seller usually doesn’t NEED to offer seller financing.

They can get traditional financing or sell to someone with cash.

Seller financing often means there’s something wrong with the deal, the property, or the seller’s situation.

You’re essentially becoming the lender of last resort. The seller might be desperate because the property has hidden problems, the market is declining, or they’ve already been rejected by traditional lenders. Do your due diligence twice as hard on these deals.

This isn’t theory – this is happening right now. But broke people with the right knowledge are solving problems for wealthy people and getting paid handsomely for it – IF they know how to evaluate the real risks.

NO. 5: Public-Private Partnership Stacking – The Government Subsidy Play

This strategy is so powerful that it should be illegal, but it’s not. Smart people are layering multiple government incentives to reduce their cash requirements to almost zero.

There’s a developer who structured a 300-unit development that used:

• Tax Increment Financing from the city: $5 million
• Density bonus incentives: $3 million value
• State housing finance agency loans: $15 million
• Federal tax credits: $12 million
• Private mezzanine debt: $8 million

Total project cost: $45 million.

Government subsidies: $20 million. Private capital needed: $25 million. The developer’s cash requirement? Zero. His ownership for putting the deal together? 30%.

But understand – this level of deal structuring requires a team of attorneys, accountants, and government relations experts.

You’re dealing with multiple government agencies, each with their own requirements and timelines. One mistake in compliance can kill the entire deal and potentially expose you to legal liability. This is PhD-level real estate, not something you do as a beginner.

But here’s the strategy that’s creating the most wealth for broke people in 2025…

NO. 6 Syndication 2.0 – Become the Fund Manager

This is the ultimate broke-to-wealthy strategy.

Instead of trying to buy one property, you raise a fund to buy multiple properties.

Investors give you money to manage, and you get paid whether the deals work or not.

There’s an investor who started with $5,000 in his bank account.

He raised a $50 million fund by promising investors access to deals they couldn’t find themselves. He gets a 2% management fee ($1 million per year) plus 20% of all profits.

In 18 months, his fund has acquired 6 properties totaling 800 units. His annual income from management fees alone? $1 million. His share of profits? Another $2.3 million. He went from broke to multimillionaire by becoming a fund manager.

But here’s what they don’t tell you about being a fund manager: you now have fiduciary responsibility to your investors. If you lose their money through negligence or poor decisions, you can be sued personally. You need securities licenses, compliance systems, and legal structures that cost hundreds of thousands to set up properly.

Plus, if you’re collecting management fees but not delivering returns, your investors will come after you legally and financially. This isn’t just about making money – it’s about being responsible for other people’s life savings.

But here’s what I really need you to understand if you’re broke and want to build wealth…

This isn’t just about real estate financing. This is about understanding that money flows to people who solve problems. Every single one of these strategies works because you’re solving a problem for someone who has money but lacks time, knowledge, or opportunity.

But with great opportunity comes great responsibility and great risk.

But understand this: every single strategy we just shared requires you to become an expert, not just an opportunist. The bigger the deal, the bigger the consequences of mistakes. You’re playing with millions of dollars and other people’s money.

Get educated, get experienced, and get the right team before you try any of these strategies.

Here’s the truth: today’s opportunity window won’t last forever. The doubled tax credit cap is temporary. Distressed sellers will eventually get bailed out. Interest rates will normalize and competition will return.

But right now, today, there are billions of dollars sitting in accounts waiting for someone smart enough to show the owners how to deploy that capital profitably.

The question isn’t whether you have money to invest in a large-scale multifamily.

The question is: do you have the knowledge and the team to solve problems for people who do have money?

If there’s one mindset shift you take from this week’s video—and you actually adapt and adopt it—it can position you to acquire multi-million-dollar multifamily real estate. And yes, it has the power to make you millions.

Now, will it?

Maybe. Maybe not. But here’s the truth: at least you’ve given yourself a chance.

It’s like stepping up to the free-throw line in basketball. If you never take the shot, there’s a 0% chance it goes in. But the moment you square your shoulders, focus your aim, and release that ball—you’ve given yourself a chance to score.

And it’s the same with wealth; we’re not saying this mindset guarantees you millions.

What we’re saying is this: just like the shot that actually leaves your hand has a chance to go in, adopting this mindset gives you the chance to win big.

And if you’ve ever wondered, “How’d I build a real estate business from scratch… if I had to start over?” 

Then buckle up—because that’s exactly what I’m breaking down in the next video. we’ll see you there.