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Home » Resources » Articles And Reports » The Gold Club Weekly Report » “The Value of Investing In Small Apartments” – Lance Edwards

“The Value of Investing In Small Apartments” – Lance Edwards

In the first chapter of How To Make Big Money In Small Apartments, Lance Edwards’ #1 Best Selling book about achieving (as he did) financial independence through investing in small, multifamily dwellings, the Houston based real estate entrepreneur details the humble beginnings of an empowering personal story he has shared with thousands of budding investors at training seminars throughout the country. As a systems engineer, he had spent 20 years rising through the ranks in corporate America, and in the early 2000s he worked 60 hours a week for a public software company “in a position where if I missed my quarterly numbers, I was summarily fired.” Edwards’ journey towards personal investing success – and resulting influence owning and operating a training business (First Cornerstone Group, LLC) that the Houston Business Journal selected as the “13th Fastest Growing Company” in the city—began with a need any loving father can relate to.

In 2002, when his daughter was 12, he decided that when the time came for her to go to college, no matter which school she chose and how high the tuition, he was going to give that to her. Motivated to find another income stream, that same year, he invested for the first time in a real estate seminar, taught by a nationally known author and instructor, on how to buy houses with no money down. Edwards says that mentor shared “a special bit of knowledge with me that changed the trajectory of my life.” He had made a lot of money doing houses, but to realize his financial goals, he shifted to multifamily properties, i.e. small apartments from 2-30 units.

Lance’s mentor explained that “Multifamily provides bigger numbers in a shorter time period.” Edwards emerged from that training session determined to find small apartments to buy and sell. His first deal in March 2003 was a four-plex, which he was able to purchase with no money down. “Your first deal is critical,” he says, “because it not only proves that the system works, but more importantly, it proves that the system works for you.”

Over the next two years, Edwards went on to purchase 50 properties with nothing down, on a part-time basis, while prioritizing intensely and maintaining his demanding full-time corporate job. By July 2005, his small apartments business allowed him to retire from the rat race and launch a full-time real estate business that acquires and flips multi-family properties. Fellow members of a local real estate club he belonged to were so impressed with his success and his overall message about small apartment investing that they asked him to teach them how to do it.

The impact of Edwards’ first informal seminar in 2007 ultimately led him to create a full-fledged training operation dedicated to teaching people how to create faster financial freedom by investing in apartments using none of their own money. He now has students nationwide using his proven system to profit from flipping and buying apartments via outside private investors or seller carryback financing—defined as “when a seller acts as the bank or lender and carries a mortgage on the property, which the buyer pays down each month.”

While his operations are based in Houston, he has spoken to real estate investment groups throughout Texas, California, North Carolina, Florida and other states. He has conducted his wildly popular three-day seminars in Houston, Dallas, Los Angeles, San Francisco, Orlando, Charlotte, Chicago and Philadelphia. He also offers coaching programs where his coaches—always those who have graduated from his program and done deals—go one-on-one once a week with students to help them get started in their own business.

Edwards’ book, published in 2014 and subtitled “How To Finally Earn The Money You Deserve in Real Estate Investing” is an extension of these principles, a comprehensive primer on small apartment investing for those who are unable to work with the author in person or via webinar. The book reveals how anyone can skip the competition and get started with small apartments—whether new or experienced. Running through the details of over 40 case studies, Edwards teaches how to make money by wholesaling, buying and/or rehabbing small buildings. Included are step by step approaches for finding and qualifying deals, finding buyers and investors and monetizing small apartment deals—and how to scale up to larger apartments. For Edwards, writing a bestselling book brings him full circle in this second career which has taken him, financially and otherwise, beyond his wildest dreams. One summer while vacationing in Honolulu, he was at a bookstore looking for something to read at the beach. Laying on the floor, as if guided by fate, was a copy of his mentor’s book on real estate investing. He consumed the book in a single afternoon and signed up for the author’s seminar shortly thereafter.

Now he’s the one receiving gratification from helping enlighten others about a surefire path to financial freedom. “I have discovered two passions along the way,” Edwards says. “First, I love deal making, the challenge and creative aspects of it. Second, I enjoy teaching others and empowering them on how they can take control of their destiny and have financial independence that, they, like me at one time, didn’t know was available to them. None of this is taught in school. It’s very gratifying when I can see someone’s eyes light up when they realize the financial possibilities in their life that they didn’t know existed.

“Even more gratifying is the opportunity to interview them after they’ve closed their first deal and made $10,000 to $20,000 by flipping their first small apartment building or earning $20,000-$40,000 per year of passive income, using none of their own financial resources. Those ‘a-ha’ moments of breakthrough inspire me to keep growing as a teacher and trainer. Like me, a lot of my students are parents looking for financial security for their families. At one of my recent seminars in Dallas, I met a man who, using my system, had recently made $20,000 and then $12,500 flipping buildings. He pulled me aside and told me he has a son with autism and had a tough time financially meeting the special needs that requires, until I taught him how to. Now, he’s able to do something for his son that he otherwise could not do. That moment in a nutshell is why I love and am dedicated to this training business.”

Edwards has developed a reputation in his industry as a “myth buster.” Most people, he says, feel they need to start with and/or stick with rental houses because they feel they aren’t qualified to buy and sell small apartments. The truth is that everyone is qualified to start the way he did, and he quickly shares the three myths, expressed in question and answer form, about small apartment investing.

MYTH #1 Don’t I need to graduate from single family to multi-family?

No, you just need to decide to start.

MYTH #2 Don’t I need lots of cash and credit?

No, you can do these deals using other people’s money, and no qualifying. The Top 2 methods to achieve this are: ask for seller financing (common in small apartments) and raise any cash down payment from a private investor, like a self-directed IRA investor.

MYTH #3 Don’t I need to deal with tenants and toilets?

No, you should never self-manage your properties. With small apartments, you hire management companies. You manage the managers.

Knowing the human tendency towards educating ourselves to the hilt, only to let the training and materials fall by the wayside, Edwards’ training offers a lot more than inspiration and powerful, targeted strategies. He includes a unique value proposition that helps students get started. Those who work with him and his team engage in a three-step process:

  1. First, “we need to train you on how to do this business on your own”
  2. Then, “you need to decide if you want to do it yourself or if you want us to do it for you”
  3. “You decide whether you want to create cash flow, wealth or both.”

His organization offers products and services spanning the full spectrum of Do It Yourself (DIY) and Done For You (DFY) services. For those who want DIY, Edwards provides the training and the same tools he uses in his own real estate investing business. Those who choose the DFY route enjoy the benefit of having his team do their marketing (including calls and direct mail), identify the best deals and even negotiate the contracts and close with them. In essence, drawing on his engineering background, he has created automated “assembly line” type systems that allow graduates to plug into his existing team to help them reach their goals.

Edwards firmly believes everyone is qualified to start today, and from personal experience, knows that the most critical deal is the first one—which he says is the scariest because “we haven’t been taught this in school.” He well remembers his own initial trepidation about getting on the phone with prospective sellers. What if he couldn’t answer their questions or he made a crucial mistake?

His first foray into the business found him securing a list of people who lived in Honolulu but owned property in Houston. Before he visited Hawaii on vacation, he sent out 50 letters to these property owners, asking them if they might be open to selling. He said he would meet them on his trip. He expected a very small response rate, if any, but 15 ultimately responded, eager to do business. He met them back to back in the lobby of his hotel and told them he preferred if they carried back the financing. He quickly learned that many owners are seeking debt and stress relief and are thus eager to sell and make a profit. From those initial 15 people, Edwards bought a total of 23 properties and was on his way.

Remembering those fears, and the way he overcame them, Edwards quickly incorporated a psychological component into his training. Believing that “Your greatest asset is your mind,” he began instructing on crucial Mindset Training. As he writes in his book, “Want to be an apartment millionaire? Well, you need to first have the mindset of an apartment millionaire. Freedom and wealth originate from within. It’s about reconditioning yourself into new daily and empowering habits.”

First he shares the “bad news” that “We are not typically taught the mindset of an entrepreneur. School was designed to make us good employees.” On the flipside, the “good news,” he writes, is that “the mindset of action, abundance and entrepreneurism can be learned—and quickly. It is really a matter of replacing your limiting beliefs with more empowering and supportive beliefs that support your vision, belief systems that silence the fears that are subconsciously prohibiting you from taking the action that leads to different and more powerful results.” He then discusses the need for a mentor who has been through the journey and can help guide the individual from passion to success.

Mindset is the fourth component of success in real estate that he discusses in one of the book’s key chapters. The first three are Specialized Knowledge, i.e. knowing how to find, find and farm deals; Marketing, i.e. marketing for deals, dollars and residents, which should comprise two thirds of all of one’s activities; and Systems, i.e. acting like a CEO of your business, and designing the systems that free you up for marketing and a better lifestyle, including the fulcrums of processes, technology and leveraging other people’s time and talents in the service of your entrepreneurial vision.

“Mindset,” Edwards says, “is learning how to act through the fear. I had a mentor along the way who worked with me once a week to help me with my head game, because in the beginning, there was fear in every step. Every time I did something new for the first time, a new fear arose. I learned that we’re all programmed with belief systems that are filed away in our subconscious mind. Because we have all learned to be good employees, and one mistake can get us fired, it’s messy and non-linear when we step out in entrepreneurship. And we must address that little voice that chirps away telling us we’ve made a mistake, and what if this or that. Those fears hold us back when the truth is, you do deserve bigger things in life. We can do more than think small in our identity and sense of self-worth.

“One of the things that’s unique about teaching people to do real estate is that there is a distinct formula for success,” he adds. “The formula is Success = Skillset plus Mindset. A skillset is something you can learn, and it can even be purchased. So, the biggest part is mindset, or learning to act through the fear. In my training courses, coaching and seminars, we teach skillset and mindset, ensuring that people get past what’s holding them back so they can enjoy the kind of success in real estate investing that I have. I love watching people blossom into something they never thought they could possibly be.”

That includes his daughter, who graduated with honors at Wake Forest University and now works for Edwards’ organization! To Learn more about Lance, visit his website http://greenlightreinvesting.com.

Free Book Link: http://www.FreeApartmentsBook.com

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