Serial entrepreneur on a mission is how we’d describe this episode’s guest, David Toupin. He started his first business (humble origins of mowing lawns) at 13 years old. In his junior year of college he took a semester off to do some internships. Had he stuck to this route, he would’ve done well financially coming out of college. But six months later, he jumped ship, turned to real estate, and never looked back. David began with a couple of wholesale deals, and he learned two real important things: 1) You don’t need to buy single families in order to purchase multi-families and 2) You don’t need to use your own money to buy real estate. David knew he wanted to have an apartment business so he set out to hunt for deals, made a ton of offers, and fished for funding to get the ball rolling. He purchased his first 24 units at 21 years old and has rapidly scaled up since. Up to date, David is the CFO (and co-founder) of Obsidian Capital Co. and owner of Real Estate Lab. He’s currently working on a ground-up apartment development in Austin, Texas and plans to acquire another 1,000-3,000 units in the next couple of years. Takeaways from our conversation with David: 1) Leverage. Or as Robert Kiyosaki defines it, ”Being able to do more with less.” Don’t confuse leverage with racking yourself up with debt to acquire negative cash flowing deals or lending money to partnerships that won’t return a profit. In the same token, leverage also isn’t over-improving a property only to find that your value hasn’t increased or purchasing all the latest and greatest technologies for your business only to realize that your current processes were adequate for your operation. Leverage comes down to having the creativity, nuance, and understanding to combine ideas together and create something greater. If you do more with more, according to Robert Kioysaki’s definition, then that isn’t really leverage. That’s just doing more. And as we gather from David’s story, he knows a thing or two about leverage. So work smart, not only hard. 2) Make offers. You can make a good deal great, but you can’t turn no deal into anything. Sometimes, you do need to rely on a bit of quantity over quality. Making offers is one such time where it is appropriate. Now, this is not an excuse to make offers on bad deals, but don’t let your search for the perfect deal make you blind to decent/good deals. Sometimes, it takes those initial decent/good deals to act as your training wheels and be a catalyst for your next great deal. Take it from David, he was making offers before he even had capital! 3) Courage to connect. The beautiful thing about a network is you never know when it’ll come in handy or what will become of it. When David was looking for his next deal after his first 24 units, he sent a letter to an investor from out of state and from some sick twist of fate, this 71 year old gentleman accepted David’s invitation to connect. They formed a relationship with one another and ultimately struck a sale together that David bought from the gentleman at almost a million dollar discount, willingly! The rationale? The other investor liked David. That’s it. And as David explains, it was this deal that really got others to notice who he was. So just imagine where he would have been had he simply forked over sending the letter believing that this old-time investor wouldn’t even see it. Take a breath, puff up your chest, come from contribution, aim to add value, and just reach out to people you want to surround yourself with. 4) Trust the data. Love it or hate it, emotion will always be a factor because of the human condition. Afterall, without emotion, real estate investing wouldn’t really be fun, would it? Emotion is inevitable. Just don’t let your emotions be your downfall. All too often, as with David, new investors trust new-to-them tenants/managers/employees/etc. all too easily, before any real trust is earned. But as a responsible business owner, when excuses come up from others you hire to perform, look at tangible evidence and data to form a conclusion whether or not that excuse is a basis for incomplete or partially completed work. Determine if poor performance is actually being influenced by an external factor or simply an unwillingness to step up to the plate. If David could go back and talk to his 16 year old self, he’d tell him, “Start buying apartments today and buy everything in sight no matter what the price is… don’t even think about it.” An unexpected benefit of real estate investing, David said, was the freedom. He’s able to travel, work from anywhere, do whatever he wants whenever he wants… and the cash flow is a cherry on top. A piece of advice David would tell his friends looking to get started in real estate would be to “Set your expectations up front… know what you want to get out of real estate and map your actions.” David recommends using ...
