Alright, folks.
So far, my goal has really been to give you a 10,000-foot view of what it means to develop and what you should be looking for from the limited partner side of things.
If you’ve been following us for a while, you’ll remember that one of the very first newsletters I wrote was about a buddy of mine, Dominic, a public school teacher who woke up one day and realized that his salary wasn’t going to get him where he wanted to be. So he started investing in real estate, buying one condo at a time in what I called his “Dreamland.”
I sat down with him—how long ago was it? Maybe two years ago—and talked through the strategy he used to identify those investment properties.
One of the things that really stuck with me was how clearly he laid out his goals for investing and retirement. I thought he had a really sound approach because he knew his Dreamland. You and I talk about “Dreamland” in the context of development, but for him it was where he was building his retirement portfolio.
He studied the finances of each rental property, understood the HOA bylaws, and could quickly determine whether something would cash flow and make a solid investment.
We were hanging out at Bryant Lake Bowl talking through all of this. At the end of it, leaning over his Bloody Mary—with, honestly, way too many olives and pickles (shout-out to Bryant Lake Bowl)—he asked me:
“So... what do you think?”
I remember telling him:
“Dude, this is good. You’ve figured out how to balance being an investor and a landlord with everything else I know you have to do every day.”
But...
I remember wondering whether I should even say the next part. Should there be another sentence after the word but? Or was I just going to discourage him?
Then I looked at that Bloody Mary and thought, Well, shit. He can always order another one.
So I gave him the candid advice.
I told him:
“It’s good. But you’re never going to scale fast enough to get where you want to go. You can’t grow one unit at a time. You have to think in terms of multiple units.”
At the time, that left him with three options.
He could build.
He wasn’t ready to build yet. This was before I had the Masterclass, before I had a coherent curriculum that taught people how to become developers.
The second option was buying apartment buildings outright.
He definitely didn’t have enough capital for that. I mean, if he did, he wouldn’t be worried about his retirement, right?
Which left the third option:
Investing in other people’s deals.
I told him,
“I think you should ABSOLUTELY keep buying condos. Keep being a landlord. At the end of the day, people always need a place to sleep.
But you’re also going to need to invest in other people’s deals, because that’s how you add more doors to your portfolio, and you do it much faster.”
At the time, he didn’t know anything about multifamily development.
I’m pretty sure terms like limited partner, general partner, capital stack, and NOI sounded like Portuguese.
But we kept talking.
I broke some of it down for him.
We finished breakfast.
And I planted a little seed:
Be a landlord.
Be an investor.
Diversify your efforts.
Grow your portfolio at scale.
To his credit, he listened.
And I unintentionally set myself up for an enormous task ahead.
Because when you position yourself as both a developer and an educator...
Surprise, surprise...
People want the education.
So I told Dominic to start watching for local investor proposals because he had a good sense of the Minneapolis market.
Study them.
Bring them to me.
Come up with questions.
Every so often we’d meet back up at Bryant Lake Bowl, investor deck in hand, and we’d walk through the numbers together.
Some of what I taught him, you’ve already read about.
The dangerous illusion of success.
Why a great developer is not always a great investment.
And now...
We’re ready to start digging into the specifics.
The real math.
The real analysis.
And that’s exactly what we’re going to do together.
One fictional multifamily development.
Ninety-six units.
Located in Northeast Minneapolis, in the Logan Park neighborhood.
No question is too small.
And questions are NEVER stupid.
Page by page.
Concept by concept.
I’m going to walk you through this development.
I’ll show you what works.
What doesn’t.
And, most importantly...
Why.
Are we hanging out at Bryant Lake Bowl scrutinizing a spreadsheet over a Bloody Mary?
No.
But we’re going to roll up our sleeves and learn some shit anyway.
Over the next few weeks, when we’re finished, you’re going to be smarter, savvier, and more informed than 99% of current and future limited partners.
You’ll know where to look in a deal offering.
You’re going to know how to think about the numbers.
So next week...
We jump into Alden Row.
And hey, before I forget, mark it on your calendar: August 12th, 7:00 PM Central Standard Time. This is our first virtual meet-up where I’ll go live on Substack with folks in the Multifamily Master Class.
You are in the multifamily master class, aren’t you?
I mean, this Limited Partner series and the Multifamily Master Class are the peanut butter and chocolate of development. If you’re not a paid subscriber, you should be. If you ARE a paid subscriber, upgrade to the Multifamily Master Class. You basically get everything I write, AND the Master Class, AND this Limited Partner series. For $99 bucks. Is it $99 because it’s cheap?
No, it’s $99 because I’m trying to find and grow talent.
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