The Curious “Law of the First Deal”

I’ve interviewed dozens of successful real estate investors on my podcast who were either financially free or almost there. And I noticed their path followed a very specific and consistent pattern, which went like this:

Their first deal was the smallest; it was the hardest to do, and it took the longest.

The second and third deal followed in rapid, almost automatic succession.

By the third deal, they had replaced their income.

It didn’t matter how big the first deal was 토토.

They achieved financial freedom within two to three years of deciding they were going to pursue a multifamily strategy.

This pattern is so consistent that I call this phenomenon “The Law of the First Deal,” which can be stated as follows:

The first multifamily deal (of ANY size) results in financial freedom within three to five years.

That’s how powerful that first multifamily deal is.

Don’t believe me?

Take a look at these entrepreneurs who have replaced their income with apartment buildings in under three years:

“It Took Me Two Years to Replace My Income”

I’ll let Brad Tacia tell his story about how he replaced his income with passive apartment building income less than two years after deciding to pursue a multifamily investing strategy. You remember the beginning of Brad’s story: He planned to buy ten single-family house rentals and replace his income in ten years, but actually ended up buying five rentals over five years. Brad picks up the story from where we left off.

I had heard about multifamily and started to look into it in early 2015. I got some training, read some books, and started analyzing deals and making offers. I didn’t have any previous apartment experience, and I didn’t feel like I was ready, but I just did it anyway.

About eight months later, I had my first deal under contract, a 12-unit in Monroe, Michigan, about an hour from where I lived. For the down payment, I made an early withdrawal from my IRA and used a bank loan for the rest. Almost six months after closing on that deal, I purchased the 12-unit next door with a partner. Four months after that second deal, I closed on a 63-unit with a different partner.

After that, I had covered my living expenses with passive income from the apartment buildings?just under two years after I decided to pursue multifamily.

In early 2017, I quit my job.

My life has been so much better since I left my full-time job. I am able to get more sleep, exercise more, and do all sorts of things that I have been putting on the back burner because I didn’t have enough time. Most importantly, I have been able to spend a lot more time with my family. My relationship with my wife and kids has improved dramatically. I find that I’m able to think more strategically about my life.

Since replacing my income, I have not stopped investing in apartment buildings because I enjoy the activity, and it’s a great way to build generational wealth. I bought a 23-unit with yet another partner, and then I syndicated a 50-unit deal. Today I control a total of 160 units, and I don’t plan on stopping.

That first deal was like a giant domino for me. It was the hardest to do, and of all the deals it took the longest. I didn’t really know what I was doing; I didn’t have a track record. I had to overcome a lot of obstacles.

But that first deal enabled the financial freedom I have now.

Once I did that first deal, the second and third came almost automatically, and they kept getting bigger. In less than two years from when I started investing in multifamily apartments, I had covered my living expenses through passive income.

I’m excited about helping other people become financially free like me. That’s why I joined Michael’s program as a coach, so I could help students do their first deal. I know that once they do that first deal, the second and third deals will follow quickly, and they will have replaced their income. That’s what I’m excited about.