EP338: You’ll Never Be Poor Again If You Start Doing THIS

APPLE PODCASTS | SPOTIFY

You’re about to discover why 97% of people will die broke, while the other 3% build generational wealth through one simple decision they make that most people are too scared to even consider.

You see, the difference between rich people and poor people isn’t how much money they make. It’s what they do with their money when they get it. And today, we’re going to show you the exact system that transformed two immigrant sisters into multifamily moguls.

But first, let us ask you something that’s going to make you uncomfortable…

When was the last time your money worked harder than you did?

See, most people have been programmed by what we call the “poverty operating system.” They think wealth comes from trading time for money. They think real estate is only for rich people. They think apartment buildings are only for Wall Street billionaires.

That’s exactly what we used to think. Until we discovered that multifamily real estate isn’t just an investment — it’s a wealth-generating machine that works 24/7, even while you sleep.

As the Kitti Sisters, we’ve helped thousands of investors break free from the single-family trap and scale into large multifamily properties. And in the next few minutes, we’re going to give you the exact blueprint we use.

Here’s what’s really happening in America right now…

While everyone’s fighting over single-family homes, competing with primary homeowners and fix-and-flippers, there’s a massive opportunity hiding in plain sight. Large multifamily properties — 65 to 325 units — are sitting in what we call the “sweet spot of wealth creation.”

They’re too big for the mom-and-pop investors, too small for the massive institutional players like Blackstone. Which means less competition and more opportunity for sophisticated investors like you and us.

But here’s where most people mess this up…

They think they need tens of millions of dollars to get started. That’s the lie the system wants you to believe. The truth? You can control a $15 million apartment complex with as little as $3–4 million — and most of that doesn’t even have to be your money.

Let us break this down for you. When you buy a single-family rental, you’re buying one income stream. When you buy a 150-unit apartment building, you’re buying 150 income streams under one roof. One loan, one insurance policy, one management team.

➡️ But here’s the real magic…

Single-family homes are valued by what similar homes sold for. You have no control — you just hope the market goes up.

But apartment buildings are valued like businesses — based on the income they generate. And we control that income.

The formula is:

Property Value = Net Operating Income ÷ Cap Rate

Here’s the math with real numbers. Let’s say we have a 150-unit building and increase rent by $50 per unit:

Monthly income increase
$50 × 150 units = $7,500 more per month

Annual income increase
$7,500 × 12 months = $90,000 more per year

Apply the cap rate formula
Most markets trade at 5–6% cap rates
At 6% cap rate: $90,000 ÷ 0.06 = $1.5 million
At 5% cap rate: $90,000 ÷ 0.05 = $1.8 million

So by increasing rent by just $50 per unit per month, we’ve increased the building’s value by $1.5 to $1.8 million.

Think about that. $50 more per month, per unit, across 150 units creates over ONE MILLION DOLLARS in equity. That’s the power of forced appreciation at scale.

Properties under 65 units?

You’re still dealing with mom-and-pop sellers who make emotional decisions.

Properties over 325 units? You’re competing with billion-dollar funds that can pay all cash.

But in that 65–325 unit sweet spot?

You’re dealing with sophisticated sellers who understand business, but you’re not competing with the mega-funds. It’s the perfect storm for wealth creation.

The System: Step-by-Step Process

Now, let us give you the exact system we use to find and acquire these properties…

Step No. 1 — Market Selection

You want to focus on what we call “Goldilocks markets” — not too hot, not too cold, but just right.

Secondary markets in the Southeast and Southwest. Places like Charlotte, Nashville, Dallas–Fort Worth, Phoenix suburbs, etc.

Now, let us break down exactly what we mean by “Goldilocks markets” because this is where most investors get it wrong…

“Too hot” markets are places like San Francisco, Manhattan, or Beverly Hills. Sure, the properties are expensive, but the cap rates are terrible — we’re talking 2–3%. Your cash flow is non-existent, and you’re betting everything on appreciation. That’s speculation, not investing.

“Too cold” markets are declining Rust Belt cities — places like Detroit, Cleveland, or Buffalo. Yes, you can buy properties cheap, but there’s no population growth, no job creation, and no demand for your apartments. Cheap doesn’t mean profitable.

But “just right” markets? These are growing secondary cities where you can still get 5–7% cap rates, strong population growth, and reasonable property prices.

Think about it — Charlotte has become a major banking hub. Nashville is the healthcare and music capital of the South. Austin suburbs are overflowing with tech workers who can’t afford downtown anymore.

Why These Markets Specifically?

Three critical reasons — and we want you to write these down ⏬

Reason #1: Population Growth

You want markets where people are moving to, not from. Look for 2–3% annual population growth. Why? Because more people means more demand for apartments — which means you can raise rents and maintain high occupancy.

For example, Tampa Bay has been growing by 50,000+ people per year. Charlotte has added over 100,000 people in the last five years.
These aren’t just numbers — these are future tenants for your properties.

Reason #2: Job Diversity

You never want to invest in a one-industry town. What happens if that industry collapses? Look for markets with at least 4–5 major employment sectors.

Nashville has healthcare, music, tourism, logistics, and technology.
Phoenix has aerospace, healthcare, technology, manufacturing, and tourism.

If one sector struggles, the others keep the economy stable.

Reason #3: Landlord-Friendly Laws

This is huge — and most investors ignore it completely. You want states where you can actually collect rent, evict problem tenants, and operate your business efficiently.

Avoid states like California, New York, or New Jersey where rent control and tenant-friendly laws can destroy your returns.
Stick to business-friendly states like Texas, Florida, Tennessee, North Carolina, and Arizona.

Step No. 2 — Deal Size Strategy Breakdown

Here’s what nobody tells you — we want properties between $8 million and $25 million. Why that specific range?

Let us paint a picture for you. Properties under $8 million — let’s say a $3 million, 30-unit property — you’re still dealing with mom-and-pop owners who make emotional decisions. They inherited the property from grandpa, they’re attached to it, and they don’t understand business valuations. These deals take forever to close and often fall apart.

Properties over $25 million — let’s say a $50 million, 400-unit complex — now you’re competing with Blackstone, Starwood, and billion-dollar pension funds that can pay all cash and close in 30 days. We can’t compete with that.

But that $8–25 million sweet spot? That’s where the magic happens. We’re big enough to attract institutional-quality financing — we’re talking 65–70% loan-to-value with non-recourse debt. But we’re small enough that we’re not competing with the mega-funds.

Let us show you what this looks like in real numbers. A $15 million property — that’s typically 120–150 units depending on the market. We’d need $3–4 million down. That sounds like a lot, but here’s the beautiful part…

We can raise that $3–4 million from other investors through a syndication. So our actual cash in the deal might be $300,000 to $500,000, but we’re controlling a $15 million asset. That’s 30-to-1 leverage on our personal capital.

Let’s say that again — non-recourse financing at 65–70% LTV. The government-sponsored enterprises like Fannie Mae and Freddie Mac are literally backing our loan. And if something goes catastrophically wrong, they can’t come after our personal assets.

Think about that. We get a $12 million loan, and if the property fails completely — which almost never happens with proper underwriting — the worst case is we lose our down payment. They can’t touch our house, our other investments, or our personal assets. That’s the power of non-recourse debt.

Step No. 3 — Broker Network Mastery

This isn’t about what we know — it’s about who we know. But here’s the secret — we don’t need to know hundreds of brokers. We need to know the right 10–15 brokers.

Let us explain how the commercial real estate world really works, because this is insider knowledge most people never learn…

Every major market has 3–5 brokers who control 70% of the quality deals. These aren’t always the biggest firms — these are the specialists who focus exclusively on multifamily properties in your size range.

Here’s how we find them: Go to LoopNet right now.

Search for multifamily properties that sold in the last 12 months in your target markets between $8–25 million. Look at who the listing agents were. You’ll see the same 5–10 names over and over again.

Those are your target brokers. Now, here’s how we approach them — and this is critical — we don’t call them asking for deals. We call them positioning ourselves as serious buyers.

Here’s the script:

“Hi, we’re the Kitti Sisters. We’re actively acquiring multifamily properties in the $8–25 million range in [Market]. We have capital committed and can close quickly. We’d love to introduce ourselves and learn about your current pipeline.”

Then we follow through. When they send us deals, we analyze them quickly and give feedback within 24–48 hours. Even if we don’t buy, we stay engaged. We become known as the investors who respond fast, ask smart questions, and can actually close.

Within 6 months, we’ll be on their preferred buyer list. That means we see deals before they hit the market — and that’s where the real opportunities are.

Step No. 4 — Pipeline Strategy Explained

Here’s where most people fail — they look for one deal at a time. Wrong approach.

We need to be analyzing 50–100 deals to find one worth buying. But here’s the secret…

Let us break down the math for you, because understanding this ratio is crucial to your success:

Out of 100 deals we look at:

• 80 will be overpriced or in bad locations — immediate pass

• 15 will be interesting but have fatal flaws — deeper analysis but ultimately pass

• 4 will be worth making offers on

• 1 will actually close

That means we need to be constantly feeding the pipeline. We should be looking at 10–20 new deals every week. Sounds overwhelming? It’s not — once you know what to look for.

We’re not just looking for deals that work today.

We’re looking for deals with upside potential. Let us give you the three types of value-add opportunities that create wealth:

👉 Opportunity Type One: Occupancy Plays

Properties that are 90–95% occupied that we can stabilize. Maybe the previous owner was a poor manager, maybe they had deferred maintenance issues, or maybe they just didn’t know how to market effectively.

👉 Opportunity Type Two: Rent Growth Plays

Properties with rents $100–200 below market that we can push over time. This happens when owners get comfortable and stop raising rents, or when they don’t understand their local market.

👉 Opportunity Type Three: Physical Improvement Plays

Properties with deferred maintenance that we can fix and force appreciation. New roofs, HVAC systems, unit renovations, exterior improvements.

The key is finding properties where the improvements will generate more income than they cost. Spend $5,000 per unit on renovations, increase rent by $150 per month, and we’ve created massive value.

Step No. 5 — Underwriting Like a Pro

While everyone else is using basic cap rate calculations, we think like institutional investors.

Here’s where most investors fail — they look at a property, see it has a 6% cap rate, and think, “That’s good enough.” That’s amateur-hour thinking.

Professional investors — the ones making serious money — underwrite every deal with three scenarios: Base Case, Upside Case, and Stress Case.

Base Case:
This is the most likely scenario. Conservative rent growth, normal occupancy, standard expenses. This scenario should still generate acceptable returns — we target a 12–15% IRR minimum.

Upside Case:
This is if everything goes right. We execute our business plan perfectly, market conditions are favorable, and we achieve maximum rent growth. This scenario might generate 18–25% IRR.

Stress Case:
This is the worst-case scenario. A recession hits, occupancy drops, major capital expenditures are needed. Even in this scenario, we shouldn’t lose money — maybe we make 6–8% IRR, but we don’t go negative.

We model out 5-year cash flows, multiple exit strategies, and sensitivity analyses on key variables like occupancy, rent growth, and exit cap rates.

For example, we’ll test:

• What happens if economic occupancy drops to 55%?

• What if rent growth is 0% instead of 3%?

• What if we have to sell at a 6% cap rate instead of 5%?

This level of sophistication is what separates the professionals from the amateurs. And it’s what gives us confidence to move quickly when the right deal comes along.

When we find a deal that works in all three scenarios — base, upside, and stress — we move fast. We’ll have an offer submitted within 48 hours, because we know we’ve found something special.

This systematic approach is how we’ve been able to acquire over $400 million in assets. It’s not luck, it’s not timing — it’s having a proven system and executing it consistently.

Now, let us blow your mind with how financing works at this level…

At the 65–325 unit level, we’re not just getting a loan — we’re accessing the most sophisticated financing in real estate. But before we show you the opportunities, you need to understand something that most investors get completely wrong…

Recourse vs. Non-Recourse Debt Explained

There are two types of debt in commercial real estate: recourse and non-recourse. And understanding the difference could save us — and you — from financial ruin.

Recourse debt means we are personally liable for the loan.

If the property fails and can’t cover the debt, the lender can come after our personal assets — our home, savings, and other investments. Everything we own is at risk.

Non-recourse debt means the lender can only go after the property itself.

If something goes catastrophically wrong, the worst-case scenario is we lose the property and our down payment. They cannot touch our personal assets.

Let us give you a real-world example of why this matters. During the 2008 financial crisis, we knew investors who lost everything — their homes, retirement accounts, even their children’s college funds — because they had recourse debt on commercial properties that went underwater.

But investors with non-recourse debt?

They lost their down payments, but they kept their personal wealth intact. They lived to invest another day.

This is why non-recourse debt is the holy grail of commercial real estate financing. And at the 65–325 unit level, we can access it.

The 5 Types of Non-Recourse Lenders

Now, not all non-recourse debt is created equal. There are five main types of lenders, and each serves a different purpose in our wealth-building strategy…

TYPE #1 — Agency Debt: The Gold Standard

Fannie Mae and Freddie Mac loans — this is the gold standard of multifamily financing.

These are government-sponsored enterprises created specifically to provide liquidity to the multifamily market. They offer some of the best terms in the business: 75–80% loan-to-value, fixed rates for 10–12 years, 30-year amortization, and true non-recourse debt.

When does this fit?

This is perfect for stabilized properties — 85%+ occupancy, market-rate rents, and good condition. Our business plan here is buy-and-hold for cash flow and long-term appreciation.

Here’s what this means in real numbers: On a $15 million property, we might put down $3.75 million and get an $11.25 million non-recourse loan at a fixed rate for 10–12 years.

Red flags to watch for: Agency lenders are conservative. They don’t like major value-add plays, significant deferred maintenance, or markets they consider risky. If a property needs heavy work or sits in a declining area, we won’t qualify.

TYPE #2 — Bank Debt: Relationship Lending

These come from regional and community banks that specialize in commercial real estate.

They’re typically smaller, relationship-based lenders who know their local markets intimately. They can move faster than agency lenders and are more flexible on property condition and business plans.

When does this fit?

This works well for value-add deals where we need more flexibility — maybe the property is 75% occupied and needs some work. Banks understand local markets and can underwrite deals that agency lenders won’t touch.

Typical terms: 70–75% LTV, floating rates tied to SOFR or Prime, 3–5 year terms with extension options, often non-recourse after a seasoning period.

Red flags: Watch out for personal guarantees that don’t burn off. Some banks require full recourse for the entire loan term. Also, floating rates can hurt if interest rates rise significantly.

TYPE #3 — Life Insurance Companies: Patient Capital

Life insurance companies have long-term liabilities — they need to match those with long-term assets. They’re willing to provide 15–20 year fixed-rate loans on high-quality properties.

When does this fit?

This is perfect for core properties in prime locations that we plan to hold long-term. Think Class A assets in major markets with strong, stable cash flows.

Typical terms: 65–75% LTV, fixed rates for 15–20 years, strict underwriting standards, and true non-recourse debt.

Red flags: They’re extremely conservative. They want pristine properties in top locations with strong sponsors. If we’re newer to the business or the property has any hair on it, we won’t qualify.

TYPE #4 — Bridge Lenders: The Speed Demons

These are private-equity firms, REITs, and specialty finance companies.

They specialize in speed and flexibility — they can close in 30–45 days and will finance deals other lenders won’t touch.

When does this fit?

Perfect for heavy value-add deals, distressed properties, or when we need to close quickly to beat competition. Our business plan is to renovate, stabilize, and either refinance or sell within 2–3 years.

Typical terms: 70–80% LTV, floating rates (SOFR + 4–7%), 2–3 year terms with extensions, often non-recourse.

Red flags: Higher interest rates and fees. Extension options often come with rate bumps. We must ensure the business plan can handle the higher cost of capital and that we have a clear exit strategy.

TYPE #5 — CMBS Lenders: Wall Street Money

Commercial Mortgage-Backed Securities (CMBS)

These lenders originate loans with the intention of selling them to Wall Street, where they’re packaged into securities and sold to investors.

When does this fit?

This works for larger deals — typically $5 million+ — on stabilized properties. We get competitive rates and true non-recourse debt, but with less flexibility than other options.

Typical terms: 75–80% LTV, fixed rates for 10 years, 25–30 year amortization, strict prepayment penalties.

Red flags: Prepayment penalties can be brutal — sometimes 10% of the loan balance if we want to sell or refinance early. Also, if the loan gets into trouble, we’re dealing with a servicer, not the original lender.

Matching Your Business Plan to Your Loan

Here’s the critical part that most investors mess up — we have to match our business plan to our loan structure.

If we’re buying a stabilized property for long-term hold, agency debt is perfect: low rates, long terms, predictable payments.

If we’re doing a heavy value-add play — buying at 60% occupancy, renovating units, stabilizing over 18–24 months — we need bridge financing. The higher cost is worth it for the flexibility.

If we’re buying a trophy property in Manhattan that we plan to hold for 20 years, life insurance money makes sense. We get the longest terms and most predictable payments.

But here’s where people get in trouble — they choose the loan based on the lowest rate instead of what fits their business plan.

Don’t take a CMBS loan with harsh prepayment penalties if we might want to sell in 3 years.

Don’t take bridge financing if we’re planning a long-term hold — the rate resets will kill returns.

The Wealth Multiplication Effect

Let us show you how wealth compounds at this level…

Year 1: We syndicate our first 100-unit property. We raise $2.5 million, control a $12 million asset, and earn $150,000 in fees plus ongoing cash flow.

Years 2–3: We stabilize the property, increase NOI by 15%, and now the property is worth $14 million. We’ve created $2 million in value.

Years 4–5: We refinance or sell. Our investors get their preferred returns plus profit sharing. We receive our carried interest — potentially $500,000 to $1 million from this one deal.

But here’s where it gets exponential…

While we’re managing that first property, we’re also raising capital for deals 2, 3, and 4. By year 5, we might have $50–100 million in assets under management.

At that scale, we’re not just investors — we’re fund managers.
We’re earning acquisition fees, asset management fees, disposition fees, and carried interest across multiple properties.

We’re talking about the potential for $1–5 million in annual income, plus the long-term wealth created from ownership stakes in appreciating real estate.

Let us paint a picture for you…

➡️ Imagine waking up tomorrow and checking your phone. While we were sleeping, 200 families across three different properties paid rent. Our professional management teams handled every issue. Our bank account grew by $15,000 overnight.

➡️ Imagine having a portfolio that generates $2–3 million in annual cash flow.

➡️ Imagine never having to worry about your job, retirement, or your children’s college tuition again.

➡️ Imagine building something so substantial it provides financial security for generations.

We didn’t have connections. We didn’t have family money.

But we had something more powerful — the right information, the right strategy, and the courage to think bigger than everyone around us.

We didn’t start with 200-unit properties. We started small — a 76-unit, learned the business, built credibility, and systematically scaled up.

But we always kept our eyes on the prize: building a portfolio that creates generational wealth.

Today, we control over $400 million in multifamily assets.

We’ve created wealth not just for ourselves, but for hundreds of investors who trusted us with their capital.

And we’re just getting started.

But here’s what you need to understand…

This window of opportunity won’t last forever. Interest rates are changing. Institutional capital is flooding into multifamily. Competition grows every month.

For the past few years, cap rates expanded to 6–7%. But now we’re at the bottom of the market, and soon we’ll see those same properties trade at 4–5% cap rates by 2027–2028.

The easy money has already been made by early movers.

But here’s the opportunity that still exists…

While everyone’s chasing stabilized, institutional-quality assets, there are still value-add opportunities for investors who know how to find them — and have the expertise to execute.

Properties with occupancy issues, management problems, deferred maintenance, or below-market rents — these are the deals that create wealth.

But we have to move fast, because every month more sophisticated investors enter this space.

The best time to plant a tree was 20 years ago. The second best time is today. 💓

We all have two choices right now.

We can keep doing what we’ve always done — trading time for money, hoping a 401(k) will somehow be enough, staying stuck in the small-time real estate game…

Or we can make the decision that separates the wealthy from the broke.

We can choose to think like institutional investors, not retail investors.

So here’s what we want you to do right now:

1. Start connecting with commercial brokers and get on their deal lists.

2. Set your filters for multifamily properties between $8 million and $25 million in growing markets.
   Don’t just look at the pretty pictures — study the rent rolls, analyze the financials, and understand what truly drives value at this level.

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

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