From 0 To 75 (83) Deals In 1 Year With The Kwak Brothers
My guests today are Sam and Daniel Kwak. Sam and Daniel have an inspiring story of building a real estate empire from 0 to 83 deals beginning with no money and no credit. They currently run an online financial education company, along with a YouTube channel that currently has around 260k subscribers. Sam and Daniel are passionate about sharing and helping others in their journey to success and are frequent and popular podcast guests and keynote speakers. They are also the co-authors of the book 0 To 75 Units In 1 Year: Introducing the FORCE Strategy to Acquiring Rental Properties.
We begin the episode with Sam and Daniel sharing their background story and how they ended up in real estate. Daniel shares that they were immigrants to the US when they were very young and had very little money. They have always been entrepreneurial as Sam started a DJ company when he was 18, and Daniel was selling pokemon cards when he was a kid. They got into real estate in 2015 and Sam shares that they had no option but to figure out how to acquire rental properties in non-traditional ways since they had no money or credit. They tried everything that real estate offers, from fix and flip properties to wholesale deals before settling in with multifamily homes to create a continuous income stream no matter what happens in their lives.
We then talk about why Sam and Daniel decided to venture into multifamily and not single-family rental homes. Daniel shares that they got into multifamily because of the economies of scale. According to him, if you can buy one property with eight streams of income, it’s equivalent to buying eight properties simultaneously. Additionally, when you analyze multifamily deals, you do it from a much more numerical and analytical perspective. However, when analyzing single-family homes, you have to collect comps and consider the person living there, including their emotional attachment to the house. When learning how to invest and analyze multifamily deals you have to learn how to analyze an income stream, assess the risk, the market, and understand the present and future value. You can learn this in single-family but not at the level you can learn it in commercial real estate.
Next, we talk about why Sam and Daniel started their YouTube channel and how far they were into real estate when they got into it. Sam shares that it was a product of an accident. They love sharing, and when they learn something, it’s their nature to share it, teach it, and assume authority. When their real estate interest started to develop in 2014, they started sharing content on YouTube, and one video on how to pay off your mortgage took off. It qualified them for the partnership program so that they could be paid to put videos on YouTube. According to Sam, this wasn’t a strategic business move - they were just documenting what they were learning. However, people noticed, and they started building their authority. Having a YouTube channel has helped them raise capital, find more deals, and build more legitimacy behind what they do. They are now producing content with a very intentional approach and at a higher level.
We then talk about how Sam and Daniel raise capital and strategies that you can use to raise money for deals. He believes that once you find that universal law of success that works for you in business, you apply it to every single little thing, even with finding deals. When finding deals, you don’t look for property, you look for people, and the same thing applies to capital. When you are raising capital, you are looking to build relationships with people who have the capital. For Sam and Daniel, they have raised tens of millions of dollars since they started despite their age using this strategy. To implement it successfully, you have to know your product, who your ideal client is, and how the two jive with what is happening in the market. You can have a great product and strategy, but if they don’t align with what is happening in the market, then it will not be effective.
Lastly, we talk about what Sam and Daniel are doing in their business to prepare for the current market and some eventualities down the road. Daniel shares that 2022 is the greatest year and the best opportunity to raise capital because so many people are selling their stock and cryptocurrency and are moving towards real estate to buy assets that hedge inflation. However, according to Daniel, people underestimate the opportunities by betting based on optimism about increments in rents and a decrease in the cap rate. They believe that the rise in interest rates will make home affordability more severe, and people are going to be forced to rent because of it. On the other hand, the ratio of rent to income has significantly skyrocketed compared to the average mortgage and income. So, once the inventory resets in the housing market, it will push a lot of class A tenants back into home ownership. There are so many things that investors who are putting a lot of dollars into optimism are not considering.
Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Sam and Daniel Kwak and get valuable information on how to move from zero to multiple deals in multifamily properties without money and credit!
“If you stop flipping, you lose your income, but money will always be flowing in with rentals.”
- Sam Kwak
“If you want to end up in multifamily investing, stop pursuing other avenues first and go straight towards what you want.”
- Sam Kwak
“Sibling partnership is like a double-edged sword and you need a great deal of self-awareness and humility to have to make it work.”
- Daniel Kwak
“Whether you are a young or old entrepreneur, the only power an obstacle has is what you give it.”
- Daniel Kwak