Making Money in Multifamily Real Estate Show

162 | Engineering Yourself To Be Successful In A Given Market with Chris Larsen

October 06, 2021 Dave Morgia Season 1
Making Money in Multifamily Real Estate Show
162 | Engineering Yourself To Be Successful In A Given Market with Chris Larsen
Show Notes Transcript Chapter Markers

Chris' Background:

  • Chris Larsen is the founder and Managing Partner of Next-Level Income
  • Chris has been investing in and managing real estate for over 20 years. 
  • He bought his first single-family rental at age 21, while completing his M.B.A. in Finance at Virginia Tech
  • He began syndicating deals in 2016 and has been actively involved in over $400 million of real estate acquisitions.
  • In addition to real estate, Chris has invested in equities, oil & gas, and angel investing groups

In this episode we cover:

  •  11:56 - Population growth and industries to target
  •  15:08 - Digging deeper into zip codes
  •  18:57 - Chris' change in thesis
  •  25:45 - Chicken or egg - picking your market
  •  30:36 - 5KQ1 - If you could only pick one trait that explains your success, what is that trait and why?
  •  31:30 - 5KQ2 - What is the most uncharacteristic thing you've done in your business and why did you do it?
  •  32:20 - 5KQ3 - Can you name any time where you felt like you were not going to end up successful? How did you overcome that fear?
  •  34:03 - 5KQ4 - Can you name a time where something in your business went perfectly and what did you do to make that a reality?
  •  35:24 - 5KQ5 - What have you been focusing on lately to improve yourself or your business?

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Intro:

Welcome to the Making Money in Multifamily Show, where we discuss everything to do with multifamily real estate investing. We believe it's the best way to gain financial freedom and build lasting wealth. This is where you'll find it the best information and practices to help you succeed in your real estate business, whether you're already experienced or just starting out. Here's your host, Dave Morgia.

Dave Morgia:

Hello, listener. Welcome to the show. I'm your host, Dave Morgia. With me today is Chris Larson. Chris, welcome to the show.

Chris Larsen:

Thanks Dave. I'm excited to be here.

Dave Morgia:

Yeah, I'm really looking forward to the talk, Chris. Just before we dive in, just wanted to give the listener a little bit more about you. Chris is the founder and managing partner of Next Level Income. He has been investing in real estate for over 20 years. He started back in the, oh, I guess in MBA program, right at 21 years old. First a single-family rental. Impressive to start there. Chris has taken his engineering disciplinary background, applied it to real estate and really just scaled over the years. He now has been syndicating for getting closer to almost half a decade, or I guess over half a decade here and over 400 million across all those deals. Really looking forward to the talk today, Chris. Do you just want to kind of fill in any gaps I had and just tell the listeners what you focus on?

Chris Larsen:

Oh, that was a great intro, Dave, actually. Last week was the fifth-year anniversary of our first syndication we closed on. It's kind of nice to think about that. I think I crossed the date and didn't even remember. If you're listening today, I'll tell you how you can get a free copy of my book and learn all the details about what we talk about today Dave.

Dave Morgia:

Yeah, that's awesome. We'll definitely get that book out to the listeners. Just so they can kind of learn a little bit more about you and your whole kind of, I guess, strategy on the real estate. But like I said, Chris, there's kind of the engineering background and it's funny. I had a conversation today about a similar thing where I think my background and kind of the applied sciences, the hard sciences have affected the way I have a lens on real estate. Can you just maybe start there, what your background is? I think it's biomedical. Just kind of how that's kind of gotten you into the game and what kind of perspective you brought to it from that.

Chris Larsen:

Yeah, Dave, I appreciate, you mentioning that and talking about your background as well. I was actually having lunch today with an investor and we were talking about assumptions, and she was just saying how a lot of people don't really make good choices with diversification in their portfolios. We were talking about some of the reasons. I was talking about history, which I think is one. I think we have a hard time learning from history. Then as humans, we think linearly, we don't think curvilinear. Real estate especially goes in cycles. A lot of things go in cycles. It's not just like straight up, an average of 3% a year, 10% a year for the stock market. As an engineer, you were taught to make assumptions before you solve a problem. People are like, well, Chris, you didn't actually become an engineer. You went to school to become an engineer. I think that's an important distinction. I didn't, I always thought I wasn't smart enough to become an engineer. I joked that my counselor pulled me aside and said, Chris, you have too much personality. You can't be an engineer. You got to figure out something different. Because I was kind of like the class clown in college. My younger son is kind of a class clown now. I gotta make people like me and I like to have fun. It's such a dry subject. Going back to that, you make your assumptions, then you solve the problem. I'm always asking, questions like, what are the assumptions? Like why are we investing in multifamily? It's because of the demographics. Why are we anticipating these outcomes? Because of these assumptions. I look at the Corona virus and what happened. There was a lot of incorrect assumptions that public policies were based upon. I've been studying that and reading about that since December 2019 when things started to happen. Whatever applies in life, I think you should always step back and ask assumptions, question the assumptions. That's really the big thing I learned, Dave, and then the analytical side, I've always loved, kind of looking at the analytics. I raced bicycles for more than two decades. I actually started racing bicycles nearly 30 years ago when I was 14 years old, I'll be 43 next year. I'm a data guy. I'd look at the numbers and I was like 1% improvement. If you look at my engineering background combined with this passion for constant, incremental improvement with cycling, because I always thought like, if I could add a percent here, a percent there, next thing that's a 10% performance difference. Well, it's the same thing in multi-family. What appealed to me was I could analyze the numbers. I could have some control, and then I could turn these levers just a little bit, 1% here, 1% here, 1% here and create these massive increases in value in these properties. I think that kind of gives the listeners a little bit of a rationale behind why I moved into the space and also, how my background shapes the way I look at things and do things.

Dave Morgia:

No, that's a great start to the show. I want to kind of throw in maybe, I guess, a little bit like ever nerdy reference, but the model is only as good as the assumption. It's like back in engineering school when they said like, assume the [inaudible 05:10] Back in those days, it worked to get the practice of the equation done or whatever you're working on, but in the real world, it's not going to get you close to the right answer. Especially when you're predicting real estate trends and how a project is going to execute. It's not good enough. You have to really pinpoint, like you're saying Chris. So, bringing that, I guess engineering lens, that background. You mentioned those little levers that maybe add up the one, two, 3%. How do you apply logically what you see in the world to the underwriting what's on paper, to make sure that you're being crafty enough, but also not being too aggressive and just thinking logically through these assumptions that you're making?

Chris Larsen:

Yeah. There's a lot we can go into there. By the way, if my voice sounds a little scratchy today, I live in Asheville, North Carolina, our sits backed up to 60 acres of woods. About 7:30 last night, we heard my dog barking and we had a mama bear and her three Cubs. One got under our garage door, pulled the trash out into our driveway. I ran out and I was banging pans and I was yelling at the bear. I think I went into father protector mode. I woke up this morning and was like, what happened to my voice? I realized I was yelling pretty loud last night, making myself big and scary. We chased her off. But anyway, that's some of the adventures of living out in the woods among nature. Love seeing them, but don't love having them come into our house. Let's start at the top and then kind of dig deeper as we go into this. Oh, by the way, I go into this in my book, we can talk about it at the end, but it's on my website nextlevelincome.com. I walked through all of these things I'm going to talk about. Starting at the top level, I mentioned the demographics at the beginning of the show, Dave. You have to ask, why are you getting into a market? Why are you getting into a profession? Where are you going to sell this? I think I always say a rising tide raises all ships when it comes to an industry or a market. I looked at the demographics before I got into the medical device space. I was in the industry for about 18 years selling medical devices. I worked for J and J. I worked for Medtronic and I'm like, hey, baby boomers are gonna need surgery. This is over 20 years ago. I'm like, baby boomers need surgery. If I can live in an area of the country where there are a lot of people and people are moving, that has a large population, that's going to need surgery, that's going to help me out in a sales career that I'm paid upon commission, right? Multifamily is the same way. Now you have baby boomers that are actually renting in great numbers. As far as increases are concerned, even greater than millennials. But millennials when I got into multi-family were renting at massive numbers. Migrants, immigrants are renting in massive numbers. The highest percentage of any portion of the population. Then you say, okay, it's a great market. We have a lot of people that are renting. Where do you want to buy? You want to buy in areas that are growing faster than the population of the United States. Okay, what areas? This doesn't take a genius. You can go on United Van Lines website and figure it out. But you also know, hey, people are moving out of California, New York, no offense there, Dave, moving into places like the Southeast. They're more business friendly, they're cheaper. They have nicer climates. Why would I not want to live in Florida with no tax? It's nicer weather than, Chicago where it's, high tax and windy. Again, no offense to Chicago. I'm just talking about the way people think, what people tell us and they vote with their feet, right? They vote with their feet when it comes to things like this. You circle those areas of investment. You circle those bigger as a country, then you start diving into the markets. That's what we do. We dive into those markets in the Southeast that are then growing faster than the Southeast, that also exhibit characteristics of areas and properties that we can go into and use our strategy. We use a value-add strategy, and it really doesn't matter what strategy you're in. You can apply the same strategy in all of these markets when it comes to apartments, when it comes to multifamily. Then we'd go in, and this is where your assumptions and your data starts to meet reality. This is where the rubber meets the road. You make these assumptions; you go in, and you identify a property. You do the underwriting and say, okay, this property is for sale. This property currently we're about to acquire is in Charleston, South Carolina. You look and you say, well, hey, look, this property is 10th in the market. That specific market for rents. If rents are $1,500 in this property and they're $1,300, you start to scratch your head and say, why is that? Then you look into the property say, hey, can we move those rents $200? What does it take to move those rents $200? That's where we start to bring our team in. That's on the ground. That's operating in Charleston, the property management team, and start to question our assumptions and say, hey, are these correct? They say, well, yes and no. Yeah, maybe you can't move rents $200. You could move them 150. Maybe it's not going to take three years. Maybe it's going to take you five years and you start to dial those back and you start to bake in some fudge factor as a fudge factor here and there, but kind of some fluff, some time, and some additional resources in terms of capital that are going to do that. Whatever assumptions we make, Dave, one, we question them and then two, we always add some additional layers on top of that. If you look at our occupancy, for instance, so the property we just closed the underwriting, what are assumptions that we made for that property to hit our metrics? We had to have about 93% occupancy. Well, today that property is at 99% occupancy. It's outperforming those assumptions. That's what we want, because let's say something happens again like 2020, [inaudible 11:13] drops. There's something that goes on in the local market. Maybe it drops down to 90%. If we can average 93% over the five years that we hold that property, we're going to be able to meet our metrics. If we maintain 95%, we're probably not doing our job because rents probably aren't high enough. But let's say we maintain 95%, we're going to achieve better than assumed performance, and that's going to be better for our investors. I'm happy to dive into any additional detail in any of those areas as well.

Dave Morgia:

I think maybe first I guess we'll dive into population growth. Not only region specific, but some market specific. You're looking to outpace the region. Obviously as a whole, that makes a ton of sense. On a, I guess, more linear level is there certain sectors that you'd like to see moving into these markets to provide that job growth? Is it, the hospitals, the industrial, what type of service industries do you prefer to see? I'm sure there's preferences. I'd just like to hear your take on it.

Chris Larsen:

Oh, that is an excellent question. Excellent question. Yes, we want diversity of employers. We want a diverse economic base. Let me give you a not good example. One of my first investments was in Houston. Houston submarket. Now as an investor, I was not a partner in that deal. I was a limited partner, but I wasn't a general partner. I wasn't organizing partner in that deal. I wasn't making the decisions, but I made the decision to invest in this property. I thought, hey, Houston is a great market. Houston was kind of over-weighted in the energy sector. When there was a downturn in that market in 2016, 20 17. Oil prices started to crash. They were like at $120 a barrel. Before that the market was just ripping. Market drops, we lost a lot of jobs. Performance started to suffer, and then you start to see other cracks. Because property management teams that aren't working so well. They start to falter. You have all these issues that start to come out and that's healthy. It identifies weaknesses in structure and that sort of thing. What do we prefer? Houston for the record is now more diverse, but we prefer diverse economic basis. We like medical. We like Fortune 500 companies, tech companies. Like the research triangle near Raleigh Durham is a big market we like. Let's talk about Charleston. Greenville, South Carolina, revise a tremendous automotive industry tech industry that are moving in there. Orlando people might hear Orlando and say, that's a high tourism industry. Yeah. There's tourism. But guess who else is moving there? Hedge funds. You have financial companies that are moving down there. You have military Lockheed Martin is there. That's a great market. I can go on and on. But let's just stop there. You have three big industries that are down in that Orlando market. They're going to provide lots of jobs. What do jobs do? They provide income. What we want to see is we want to see income, where about a quarter to a third of the average income is going to create the amount of rent that we are going to basically top out at. Let's say the average income in an area is $60,000. A third of that would be $20,000. $20,000, you divide that by 12, you're talking about maybe around $1,600 a month. That's about the top end of the income. For us, if we're trying to get rents to $1,500 and we see that, hey, the average income in our area is $80,000 for instance, we're certainly comfortable pushing rents up to $1,500 in that. You want to also see, like you mentioned, Dave growing industry, growing income. You want to see a trend that's outstripping the country, the region, the state, for instance.

Dave Morgia:

Yeah. I just got to go deeper. We'll talk about, I guess, more of the, I guess, local zip code level. I'm sure you use resources like city dash data and all these other sites, to kind of gather some info holistically on the markets. When you're looking at a specific property and you maybe see that the zip code is maybe even slightly below average, or at least at average, compared to, I guess the MSA, what is your opinion on that? Do you have to dig deeper into what's going on in that zip code, the neighboring kind of areas, maybe there's something being built. How do you kind of make that decision? Because it's not just numbers at that point, you have to decide, is there stuff getting injected into this area? I just wanted to kind of hear your take on how early you'll maybe get into a certain specific area.

Chris Larsen:

Yeah. That's a great question. The data doesn't tell the full picture and that again, is why you have to bring in property management teams, your operating team that knows the area really well. That can say, oh, hey Chris, this area it's kind of up and coming. I'll talk about kind of how I identify up and coming areas and how you can as well if you're listening, in your city. Even if you're talking about, you're just buying a little single-family rental, for instance. It all works the same. You have to look at the history, right? You have to drive. I go in drive there, drive one mile, three-mile, five mile radius. I look around and, for instance the submarket that we're buying in Charleston five years ago, it wasn't as good as it is today. You can't make a decision today based upon what the data was five years ago. It's really important to know that. If you see something like that, it doesn't mean necessarily that the deal is not going to work out, but you have to know like, where is it going to go? You could have a market that's on the downtrend. You might say, hey, the income looks good in this area, but it's been going down for a period of time. That's not a trend you want to see either. You want it on the uptrend. It could be on the lower end of that scale, as long as it's on the uptrend, but you have to bake that in depending on where you think you're going to get to go. It might take a little bit longer when it comes to that. We've certainly seen that in areas like Atlanta where they're building out like film industries. A great example is we bought a property in Conyers, Georgia. Industries were moving from LA and North Carolina into Georgia. Georgia instituted some new incentives for companies to move there. You had this big influx of companies that were moving there. You had to see like, hey, what studios are being built nearby? We knew that would drive our investment thesis and allow us to hit the metrics that we were looking for, even though at the time we bought the property, it wasn't necessarily on track to do that.

Dave Morgia:

I mean, I guess now that you're bringing up a specific example, I have to dig into tenant base and the type of tenant you are actually leasing onto these properties. You can't just buy an A-class and expect a workforce housing person that might be more in line with that income that you were talking about there. What do you consider when you're kind of looking at that, and maybe there is a growth of, I guess, surplus of jobs coming in. Do you try to align specifically to that income level, but below, above? How do you kind of strategize as you see jobs coming into the market?

Chris Larsen:

Yeah, it depends. It's actually done earlier in the process, Dave. We will target a market based upon our strategy. Our strategy now is really B plus A assets. Assets that are 20 years old or newer. We're targeting markets that are in that trend, whereas workforce housing, if you look at the portfolio that we built, five or so years ago, that's going to have a slightly different model, different management, different capital investment. It's also going to typically have a different return profile as well with all that.

Dave Morgia:

Yeah. You mentioned that shift. What was the change in thesis for you guys? Obviously, the market has changed entirely, so I'm sure you have a valid one, but what does that change for you guys?

Chris Larsen:

Yeah. Going back two years, there's a great book. It's called the secret life of real estate and banking. Well, I'm actually pointing directly to it. It talks about real estate cycle. At the beginning of the show, I was talking about how history is not linear. It goes in cycles. We typically see an 18-to-19-year cycle for real estate. This goes back all the way to the 1850s, since we were recording things in this country and even goes back further than that. But let's just talk about real estate in the US. Halfway through these cycles, typically around year 7, 8, 9, you start to get a downturn. That downturn is typically followed by an aggressive five-year uptrend, which I feel like we're then beginning now. But if you go back and listen to me on podcasts at the end of 2019, I was saying, hey, beware, going into 2020, I can't predict the future, but history tells us that this is a time to beware. Going into these economic downtrends, there was a couple of things that made me shift my thought process. One, I think you have to say, hey, cap rates are compressing in some of these workforce housing properties. That means returns are going to be lower because you're paying more going in and then you're going to get coming out the other side. For me, it was more, I mean, you could argue, hey, if cap rates are compressed, you can maintain the return structure. But I felt the risk is greater in those properties. Since the cap rates compress to get closer to these higher quality properties, I was more comfortable moving into those properties like B plus A assets that we were talking about. The other thing is, and this is the really important thing, if you rent to somebody that's making $40,000 a year and you think to yourself, hey, are they going to be more risk or less risk of losing their job and someone that's making $80,000 a year? You have to ask yourself that question. To me, the answer was yes. They're probably going to be at more risk of not paying rent. The number one reason people move out of our properties and those B plus A properties is that they buy a house. Last year in our portfolio, we had a 98% collection. It was almost unchanged. Now we had some, we had some evictions, we had some notices that we had to send to people, but for the most part, they just handed the keys over and left. They said, hey, I don't want a negative report on my credit. I'm going to get out of here. I'm going to make it easy for you. You're just dealing with a different caliber of resident. That's something to consider. I think, that's going to give you a higher quality, potentially lower risk investment going forward. Those are the big things really. History, the cap rate compression, and then the higher quality resident. Those are the things that led me into this segment.

Dave Morgia:

Yeah. It's all about risk profile, right? Like you say, if the cap rates are compressing on the more C to B class stuff, it doesn't make sense. Sometimes I mean, if there's a lot of value there still, but looking at the market as a whole, the profile for return, isn't there as much as maybe you lose a little bit on the more A-class stuff. But like you said, the tenant basis is way more likely to pay and way less likely to lose their job. It makes sense to maybe lose a couple points on the IRR, ARR, whichever metric you use, to be able to know that the downside is almost locked up compared to the other properties.

Chris Larsen:

You may be listening and you may disagree or agree. That's why it's important to have your strategy mapped out and work with a group that has a similar strategy as you, or you can have, like, I do. I have properties that are affordable workforce housing. I have properties that are, solid B class properties. I have A-class properties. I have some luxury properties that we've added to the portfolio this year. I like having a breadth of properties in my portfolio. I've added them at times that I feel are advantageous, based upon where we are in the cycle.

Dave Morgia:

I think that's something to take away too. A lot of people like to go all in on real estate and that's amazing, but also, if you do it right, you can be so diverse that you're going to be protected and not be susceptible to hear those horror stories that people that have had seminars and kind of lost their shirt because they went all in on one little aspect or one little avenue. But if you spread yourself out, even within the real estate space, you could still kind of, weed your way through during these kinds of ups and downs. So yeah, interesting to hear that.

Chris Larsen:

I mean, we even have short term rentals. We have short term rentals. We have commercial office, we have multi-family, we have mobile homes. I'm not agnostic when it comes to real estate, but I certainly am open to looking at different areas of the market when it comes to stuff like that. You know, Dave, we can move on to something else, but I did mention I was going to give kind of like my secret and how I find local deals out. I did mention that. Here's something you can do if you're listening to like, hey, where's the next hot area in my city, my town, my state that I'm living in. Government's great because typically they're going to tell you where they're going to focus their resources. If you go on your local government website, your local city website, they're going to have typically like a development or like housing development, revitalization. Sometimes they call them like revitalization zones, investment zones, or corridors. They're going to have a plan. These are typically like anywhere from a five to a 20-year plan. What this is signaling is an investment in infrastructure and investment of resources by the city. You guys all know it. You're like, oh, the west side is going to be hot because the city is like building out things. That's where like the cool new brewery pops up or the cool new restaurant pops up. In those kinds of weird looking hipsters are hanging out. Then five years later you look around and you're like, oh, there's like BMW's and Mercedes popping up. The home prices increase and go from there. But that's how I found those areas in and around Asheville. I just went on the city website and I focused and looked at that and we bought in those areas. That's where we kind of focused. That's why I mentioned the house where we live kind of backing up to the woods here, but we're actually right on the edge of one of those areas. I know that I can literally walk down the hill and take advantage of the new commercial construction that is literally ongoing right now over the next five years. That's probably going to be good for my property value. All the stuff we're talking about, this is something that you can apply to commercial real estate apartments. But if you're listening and you're like, this doesn't apply to me. I do single family, or I build homes or, hey, I buy Airbnb’s, in my town, you can use all the same strategies at a smaller scale and make money in your hometown.

Dave Morgia:

However, big or small you are, you absolutely have to keep your ear to the pavement and keep it local. Even if you're huge, you've got to keep it local or have people on your team that are keeping boots on the ground. I gotta to ask chicken or egg, was it that you pick the Asheville market and then moved there? Or were you already there and looked kind of close to where you were marketwise?

Chris Larsen:

Ooh, I love it. I tell people, I put my money where my mouth is. I invest in what I talk about. I'm very transparent about my investments, about what my portfolio is built upon. Same thing with my coaching clients. I won't maybe give them specific numbers, but I will tell them, percentages of my portfolio. My wife and I, and I'm an engineer. I'm a nerd. I was in band. I went to band camp. I was on the math team. I'll admit to being a nerd. I had a spreadsheet and I stacked rank cities. We were living in Arlington, Virginia, outside of DC. Asheville was on my list. I'd never been to Asheville, but it looked good on paper. Kind of like if you're shopping for cars, you might not have ever test driven those cars, but you look, and you're like, oh, this has good reviews and you narrow it down. I was looking at cities that I wanted to test drive our future. Asheville is one of those areas. It was in a region that was going to grow. It was gonna have a rising demographic. I'm like, Asheville has a lot of these traits that my wife and I were looking for. We wanted, lower cost of living than where we were in a big city. We wanted a higher quality of life. We wanted a lot of the things that we like. We like wanted good food, good drink, outdoors, proximity to an airport and be in a region that was going to continue to grow. That had a lot of natural resources, like good water source, quality food supplies, those sorts of things. Asheville hit the mark on all those things. We moved to Asheville to take advantage of the demographic trends, but also, a lot of it was for the quality of life for this area. But I would say if I didn't move to Asheville, I still would be comfortable moving to an area like Charlotte or Greenville or even another big city, like Atlanta would have been a good move. Again, if you're a real estate investor, think about that. If you have the ability, I call it geographic arbitrage. I wrote a blog article about it here not too long ago, but I call it geographic arbitrage. If you're young and mobile or just mobile period, you don't have to be young. Maybe you just think you're younger or feel young, take advantage of these geographic trends, move to an area that has lower cost of living that has greater investment advantages. Over the course of 20 years, it can make a massive difference in your net worth and your quality of life.

Dave Morgia:

I think it's a leap that not a lot of people make. I personally can't make it quite yet, but I see the appeal. You can be so local, so in touch with the market. It's good to have those people on your team. But also, if you can personally be there yourself, you really will not miss a beat. Like you say, going back to kind of like the new brewery in town. You hear that before anyone else. The outside investor is not going to know it before you, and you can kind of react quicker and be able to adjust your thesis on whatever market you do end up in real quicker than anyone else. There's a lot of power there.

Chris Larsen:

Absolutely. Let me reverse that Dave, I think if you're going to make the move, when you come out of school, I would say, go live in an area that has a ton of jobs and a ton of opportunity. That's probably going to be a big city. If you're living in New York or Chicago or LA or DC or San Francisco or Seattle, and you're thinking, man Chris is just like beating up my city. No, you should know start your career in one of those cities, because that's going to allow you to access a lot of jobs and leverage up your earnings. If you go from making 50 grand to $200,000 in a big city, and then you have an opportunity in a smaller city or an area with a higher quality of life, you're gonna have more leverage when you move there. Just because you're living in one of these big cities, doesn't mean you're doing it wrong. I think you're better off starting in a big city, then then moving down. I think a lot of people choose quality of life too early, leave a lot of earnings potentials on the table. That's not always a way to get your goals either. I think there's a sequence that you can kind of arrange these choices as well.

Dave Morgia:

Not only just the income earning too, but I think if you're looking to invest in real estate and you're raising capital, these bigger markets are great for that. You get your kind of name out there and market that's kind of what we leverage while we're here in New York. We're not investing here. Maybe we do eventually, but I don't see it anytime soon. We don't even look, but you can find money that wants to invest elsewhere along with us. That's like the big lever you can do if you want to have that [inaudible 29:58] driven track and still invest in real estate, maybe that's the channel you kind of negotiate there. Just be aggressive wherever you kind of end up. I guess maybe take a thought or two before you take that first job or second job offer, whatever it may be. Then Chris, I know we do have to get you out here. Before we go, I want to just get through these five key questions. As long as you're ready, I want to shoot these off at you.

Chris Larsen:

I've been waiting the whole show.

Dave Morgia:

First one here, if you could only pick one trait that explains your success. What is that trait and why?

Chris Larsen:

I would say grit, it's like grit mindset, if you're familiar with any of these books, I think Michelle Duckworth is the one that coined the term grit. I think about like, when I was younger, I always had this like really long-term vision about what I wanted to do. I was the kid who took my candy bars and I stuck them, like in the freezer to eat for another day. I actually would come home in the winter. I put a snowball in the freezer. When it heated up, I could pull my snowballs out and throw them at people. Now they are ice. I couldn't do that because I would hurt somebody. But I've always had like a long-term view of things in life. I think that's really important if you're trying to achieve something and you're listening today, know what you want in life, keep your eye on that target and keep your head down.

Dave Morgia:

Then what is the most uncharacteristic thing you have done in your business and why did you do it?

Chris Larsen:

Yeah, like I said, I spent 18 years in the medical device industry. You know, some of those years I was making north of half a million dollars and I left. I walked away from that, this past year. The business I'm in now, I'm a hundred percent in syndicating real estate. I have coaching clients. I'm all about educating and helping people achieve financial independence. But one of my friends, when he heard I was leaving the industry, he said, what do you hate money? What's wrong with you? I think for somebody that's been so frugal and so intense on increasing my earnings and my net worth, that was pretty uncharacteristic of me, but I'd do it all over again.

Dave Morgia:

This next question may be flirting into that territory, but can you name a time where you felt like you weren't going to be successful? How did you overcome that fear?

Chris Larsen:

Yeah, I mean, there's been a lot of times. I can go back in my racing career, my career in med device. I think the big thing is during all of those times, when you feel like the rugs been swept out from underneath you, whether you lose a big client, or your girlfriend breaks up with you. All these things, these are really painful things that make you, kind of look in the mirror and just be like, how the hell am I going to figure this out? But I remember when my mom said during one of these times, and she reminded me of it. She said, well, Chris, it's really tough right now, but I know I'm going to be fine and I'm going to be better off five years from now. That long-term view, just knowing that things will work out okay. When you get in the car and you put in your destination in Google Maps or Apple Maps or Wave or whatever you use, you don't know what the traffic is going to be like. You think, you know the direction you're going to go. But sometimes it says, hey, we have a detour for you and life is going to bring you detours. Just remember what your destination is. When you get hit with a speed bump, a detour, traffic, whatever it may be in your life, even an accident, remember where you're going. Remember the people that you want on board with you to get you there.

Dave Morgia:

Yeah. That's a big one that goes back to your first question there. It's just head down, keep moving. Sometimes a lot of times you need to kind of the partner there with you, whether it's spouse or other business partner, that'll help you kind of get through the toughest times. But yeah, head down, keep moving. You'll get there eventually. Then opposite to that one. Can you name a time where something in your business went perfectly and what did you do to make that a reality? When I left the medical device arena, I launched the coaching business. Very small. I said, I'm going to keep this small to about 10 coaching clients. In two emails, I got 10 coaching clients. I was like, oh, shoot. That was way faster than I thought. I felt like I had this actually this weight on my shoulders, because I want to perform, and I need to grow this because I had to start turning coaching clients down. I think, the reason is the audience that I've built over the years, we have a few thousand listeners subscribers to the next level income show our podcast. I think, giving away, all that content for years and years helped build that and do that. It went well because I followed one of my first podcast, guests, Richard Wilson's advice, he said, Chris giveaway 80% and then charge for the other 20%. I just focused on that, just give away as much value as I could and, wherever you're doing, I think if you can help people I tell my boys that's how you're going to make money. Yeah, people like to stick around people who can add value both ways. It's just a lot of synergy there. People can see those true intentions, so there's a lot to that. I like that quote too. I'm going to keep that one. Then the last one here, Chris, what have you been focusing on lately to improve yourself or your business?

Chris Larsen:

Yes. I just read a great book and it's called Idea to Execution. It's really about using virtual assistants to scale your business, but kind of push that idea aside. What I'm really focused on is a concept like called who not how by Dan Sullivan. The idea to execution is really learning how to outsource things so you can focus on what is your unique ability. For me, it's like, okay, what can I hand off to somebody else that can do it either cheaper and or better than me, so I can focus on these high value things. Things like being on your show, Dave, hopefully providing you if you're listening today with information, with value to help your life, and you want to get those calls and people say, man, you changed my life. I was listening to your show. I've been listening for years or, you get a call from an investor that says I've been following you for three years. I'd like to invest in this deal. It still blows my mind. It brings a smile to my face because you're sitting here looking at a camera and not really knowing what's going on after you put it in there. The more that I can do that and the more value I can provide, I can also provide opportunities and jobs for other people. I love that. I'm really learning how to go from being a specialist, a one man shows to building a team, being a leader and helping as many people as possible.

Dave Morgia:

Yeah, it's touching to have those moments with people who you haven't interacted with before, then they reach out and realize you do have kind of that company that likes to keep in touch with you. It's nice to see that. I guess just going back to the adding value, Chris, we're wrapping up the show. You mentioned the book, maybe drop it one more time, but how else can the listener get in touch with you today?

Chris Larsen:

Yeah, absolutely. If you're listening today, you can get my book for free. It's called Next Level Income. If you go to the nextlevelincome.com there's a book link. If you click there, you can put your information in, you can download it for free. I'll even send you a copy if you put your address and you can also check out our blog or podcast. if there's something specific that I touched on today that you want to dive deeper into, feel free to reach out to me, chris@nextlevelincome.com.

Dave Morgia:

Chris, thanks so much for the time today.

Chris Larsen:

It's been great, Dave, thank you so much for the opportunity.

Dave:

Thank you for listening. This has been the Making Money in Multifamily Podcast. If you have any questions, comments, or would just like to connect, please feel free to check out the show notes for how you can connect or visit longviewacquisitions.com

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5KQ1 - If you could only pick one trait that explains your success, what is that trait and why?
5KQ2 - What is the most uncharacteristic thing you've done in your business and why did you do it?
5KQ3 - Can you name any time where you felt like you were not going to end up successful? How did you overcome that fear?
5KQ4 - Can you name a time where something in your business went perfectly and what did you do to make that a reality?
5KQ5 - What have you been focusing on lately to improve yourself or your business?