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Show Summary
In this conversation, Chad Apap shares his inspiring journey from being a residential realtor to becoming a successful real estate investor. He discusses the shift from selling properties to buying them for long-term income generation, emphasizing the power of cash flow and strategic investing. Chad also explains techniques like cash-out refinancing to recover capital and reinvest, the importance of understanding local markets, and the value of building relationships through networking. He highlights the lessons learned from both wins and challenges, and how collaboration and persistence have helped him achieve financial growth and stability.”
Resources and Links from this show:
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- Investor Fuel Real Estate Mastermind
- Investor Machine Real Estate Lead Generation
- Mike on Facebook
- Mike on Instagram
- Mike on LinkedIn
- Chad Apap on Instagram
- Chad Apap on Facebook
- Chad Apap’s Phone Number: (248) 755-2762
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Chad Apap (00:00)
The first one we bought at 35,000, we needed a lot of renovation in that. We needed right around 60,000.worth of renovations in that. We put that in, we cash out refi, and with close in cost of everything, we’re in this property for maybe 10,000 out of pocket, so very minimal down payment. We have about 38,000 worth of equity in that property from the appraisal. ⁓ So we’ve already increased our…
profits on the books which is great but the best part about it is with this property our mortgage payments 900 a month and we just put a tenant in section 8 for 1700 a month so we’re profiting 800 a month off of that property
Michelle Kesil (02:23)
Hey everybody, welcome to the Investor Fuel Podcast. I’m your host, Michelle Kesil. And today I’m joined by someone that I’m looking forward to chatting with, Chad Apap, who’s been making serious moves as a realtor as well as investor who has done four properties in the past year. So excited to have you here on the show today, Chad.Chad Apap (02:46)
Thank you, I appreciate that.Michelle Kesil (02:48)
Yeah, of course. I think our listeners are really going to take something away from your knowledge of investing and just knowing what deals are the right ones for people to buy into. So let’s dive in.Chad Apap (03:04)
Awesome.Michelle Kesil (03:05)
Yeah. So first off, for those not familiar with you and your world yet, can you give the short version of what your main focus is?Chad Apap (03:15)
Certainly, about five years ago, I got my real estate license and have been a residential realtor for the last five years. Probably about three or four years ago, I started working with some investors, some flippers, helping them sell their properties after they flipped them. And I really got to learn firsthand what to look for in properties, what is important.where you make your money, where you lose your money. And so at this point, I’ve been a very successful realtor.
top 100 in the state of Michigan. So I have a pretty good resume as a realtor, but now I’m really getting into the investor world and helping myself as well as others identify those properties and really start making money buying real estate and not just selling real estate.
Michelle Kesil (04:16)
Yeah, absolutely, I love that you’re using your real estate knowledge to get into the investing world. What markets are you operating in?Chad Apap (04:25)
Yep.So really anything in Michigan we’re doing now, we haven’t ventured outside of Michigan, our focus is in Detroit, because I really feel that Detroit is just a hidden gem. ⁓
You know, it’s the places there’s, you know, like from 10 years ago in 2015, so many people, you know, today said, oh, I wish I would have bought then, because the prices were so low that like 10 years later, how much money would you make? It’s just unbelievable.
And Detroit still has those opportunities. The market of Detroit since 2021 is up about 400%.
has been clipping, know, the 2021, 2022 was up around 60 % both of those years. The last year, it’s right now still trending in a plus 30 % trend. So it’s just doing amazing things and there’s a lot of potential to not only make money holding properties and renting them out, but also with long-term appreciation.
Michelle Kesil (06:31)
Yeah, absolutely. That’s great that you are seeing the value in that market that you’re in. So yeah, what are some of the main things that you’re doing in your business that are allowing it to run smoothly?Chad Apap (06:39)
For sure.Okay, so in our investor business, ⁓ the biggest thing is right now we’re just focusing on not overextending ourselves too much. ⁓ Any flip possibilities or… ⁓
Wholesale possibilities. We definitely you know look to take advantage of those Especially if we can wholesale them We’ve probably let a couple properties go with a wholesale that we could have maybe made five or ten thousand more on but it allowed us to get an influx of cash quickly to buy some hold properties and One thing I think too many people focus on one or the other either flipping or Just buying and holding and I think you need a healthy
balance of both you need that influx of cash for sure to buy more properties but ⁓ but if you’re not holding and generating income then you know a year later if you flipped all your properties you may have more money than you started with but but you don’t have
You have no long-term appreciation. You have no monthly income coming in where In the blink of an eye you probably Could make the same amount of money that you would have flipping just holding on to these properties
Michelle Kesil (08:11)
Yeah, absolutely. That makes a lot of sense. So, what are you most focused on solving or scaling to next in your business?Chad Apap (08:24)
Yeah, so, you know, really the goal right now is really our scale is as many buy-in holds as possible. We’re using the flip techniques again just for influxes of cash. But, you know, we bought two hold properties already this year.The first one we bought at 35,000, we needed a lot of renovation in that. We needed right around 60,000.
worth of renovations in that. We put that in, we cash out refi, and with close in cost of everything, we’re in this property for maybe 10,000 out of pocket, so very minimal down payment. We have about 38,000 worth of equity in that property from the appraisal. ⁓ So we’ve already increased our…
profits on the books which is great but the best part about it is with this property our mortgage payments 900 a month and we just put a tenant in section 8 for 1700 a month so we’re profiting 800 a month off of that property
we have our second hold that we just did as well and likewise same sort of technique ⁓ we bought it for 70 we’re gonna put about 10 in we’ll cash out refinance well this one we probably will be
able
to pull out 5,000 extra than we started with. So it’s going to help our bank account go up and get the next property. But more importantly, again, we’re going to make about $500 a month
on that one Section 8. So we’ve in essence turned two properties into about $50,000 to $60,000 worth of equity. And it’s currently generating us $1,200 a month in profit.
Which again is just going to help us build and build our portfolio. What our ultimate goal is is we want to get between 40 and 60 homes over the next five years and when we do that the expectation is that each one we’re going to make it you know probably about 500 average on. So if we had 60 homes we’d be generating 30,000 a month in income or 360,000 a year. But the best part is within a five
year time period, these houses all should have at least a hundred thousand worth of equity in them. So we also will create a six million dollar equity position and really set ourselves up nicely and all by just buying right and at good price points in the city of Detroit.
Michelle Kesil (11:43)
Awesome, sounds like a exciting goal and profitable strategy to get there.Chad Apap (11:49)
it is.For sure.
Michelle Kesil (11:53)
So, I know that you mentioned you like to support people with getting started on investing. How are you doing that?Chad Apap (12:06)
Yeah, so, so ironically enough, the last house we bought, ⁓ the client who sold it to us, it was their old family home and it was her and her brothers. had inherited the home and they just had to sell it because they weren’t all in agreement what to do. But that client reached back out to me and she told me, she’s like, listen, I’m going to be retiring in the next four to five years and I need to get some properties and generating some income. So that way,can ⁓ retire and have some extra income and and be alright so I’m literally able to help ⁓ the lady this was a unique one I was able to buy this house on land contract so again very minimal out of my pocket but I’m basically turning around and teaching her how to take the money she just made from selling me this house and ⁓ and buy other properties and do things for her and do the exact same thing that I’m doing my
off.
Michelle Kesil (13:09)
Amazing. What are some tips or strategies that you have for people that are considering getting started with investing?Chad Apap (13:20)
Yep, no, that’s a great question. So no matter where you’re investing I think there’s simple rules that I look for that You know people will ask me all the time. Is this a good investment? Is this a good investment? One of the quick tests that I do is just the one and a half percent rule and what that is is My rents I always want to be minimum one and a half percent of what my purchase price is so for instanceif I’m buying at $100,000 a year, I need my rents to minimum be $1,500 a year. Now, it’s really a home run when you can find those areas and spots that you can get 2%. So for instance, that property I was making…
I’m making the 800 a month off of, we’re 2 % of what we are all in is on that property. And with that, it’s how we’re able to get such great cash flow. So, you know, those are just simple things as a new investor that you can do that really, really can help you identify what’s a good property or not is just look at what the rents in the area are. And whatever those are, you’re looking for properties ⁓ that are just, you
know
fit that one and a half to two percent rule so to make sure that you’re going to be making money in the
Michelle Kesil (14:44)
Yeah, absolutely that’s important to make sure your investments are making money and not losing money.Chad Apap (14:52)
100 percent.Michelle Kesil (14:53)
Yeah, absolutely. So I know that every business owner goes through those experiences wherethings are maybe more challenging, a deal could go sideways, or you have to pivot fast. Have you had one of these experiences so far in your investing journey that you could share about?
Chad Apap (15:56)
100 % not I’m not with my current partner, but uh, but but some previous partners Just had had one situation where we bought a great property and It was just from there. It was a comedy of airs afterwards. We got a great price. We had to put about 50,000 into it our expectation was that From rents in the area that we would I was a duplex that we would get about 1600 per unita month in rent. So we were expecting about $3,200 a month in rent. just whether it was time of year, whatever, we couldn’t rent this property out to save our lives. We were down to advertising at $1,200 a month and still struggling to find tenants for it. On top of that, the city was a huge pain for us. It took us five months to get a certificate of occupancy, which should only take you two or three weeks.
But every time the city came out, they said, you fixed what we had before but here we want you to fix these things now. So it was it was like the money grab from the city. And I think the final straw for us was our taxes should have been reassessed at a taxable value of around 40 to 50 thousand and they came in and assessed us at a hundred and twenty thousand. So they were gonna have the taxes.
You know close to three times what they should have been We tried to dispute them. They denied it. I could have fought it more and I’m sure I could have ended up winning that ⁓ But it was just at this point. It was just like we don’t have any one place. We don’t have anything So with this particular property, it was just time to get out and ⁓ and lick your wounds and call it a day Unfortunately, we were able to sell it ⁓ And not take a loss, you know like
Like we took a little bit of a loss on paper, but once we got ⁓ the benefits of the tax write-offs on it, ⁓ I think we ended up making, you know, two or three thousand off of it with the tax write-offs. you know, it wasn’t a total loss, but it was definitely sometimes one of those deals you have to just know when to walk away that it’s not going to be a long-term good hold for you.
Michelle Kesil (18:20)
Yeah, I think that’s important to know when to walk away and get the lesson for the other opportunities that are ready for you.Chad Apap (18:28)
you100%.
Michelle Kesil (18:34)
What are some of the lessons so far that you’ve learned through investing?Chad Apap (18:43)
you know, I think one of it this is going to be a really unique interesting one But make friends with the neighbors where you buy. You know when you don’t do thatdepending on what areas and things like that, people know when houses are vacant and you just open your door up for vandalism, for theft, for things like that, for potential squatters. Whereas when you go in and you identify a neighborhood you want to be in, meet the neighbors, go knock on the door, give them their, your information, get their information, ⁓ because they’ll keep an eye on things for you. You know, they’ll let you know, do this, don’t do this. Hey, somebody was around your house and
you know, just let you know to go check them out. So I think that’s one of the best lessons I think I’ve learned that no one really talks about is just like you would in your own neighborhood, get to know your neighbors. Be a neighbor, be a friend, ⁓ you know, get that help watching out for your property because it’s a huge investment for you.
Michelle Kesil (19:46)
Yeah, absolutely. I’ve also never heard that so I think that’s some great advice for people to do and it’s quite simple.Chad Apap (19:54)
Yep.Michelle Kesil (19:56)
Awesome. When it comes to growing your business, whether that’s through building relationships and networking, what are some of the things that have made the biggest difference for you?Chad Apap (20:12)
⁓ you know, networking hands down. ⁓is the biggest thing. You should be joining as many real estate investment groups as you can, going to as many functions as you can for investors, because I can’t tell you how many people are now calling me with deals. So I’m no longer out there hunting and trying to find that perfect deal. I’m just deciding on which ones I want to take advantage of. So through networking, it has been very
vital to me. I found contractors, I found people helping me build, I found property managers, ⁓ even some hard money and some things like that. ⁓ You know, it’s been really instrumental for us to even get to where we are because we literally started with zero dollars in the bank account and me and my partner each had ten thousand dollars that we could chip in for a project. you know, we’re not that story of, we started with five hundred thousand
and
look at what we’re doing. We literally started, you know, from base one a year ago, zero dollars in the bank account. Each of us had $10,000 seed money that we could, you know, just sort of start the company and the business with. you know, again, not quite a year later, we’re generating $1,200 a month in income. We have $60,000 in equity, and we have about $6,000 or $7,000 in our bank account.
We’re in really, really great position and just by networking and meeting people, the opportunities are coming to us. So it’s really helping us take advantage of those opportunities when they come.
Michelle Kesil (21:59)
Amazing. that’s so important. Relationships can take you far in this space.Chad Apap (22:04)
100%.Michelle Kesil (22:06)
great. So before we wrap up here, if someone wants to reach out, connect, collaborate, learn more from you, where can people reach you and find you?Chad Apap (22:17)
Yeah, hey. So you can find me on Instagram, ChadAPAPRealtor. You can always just reach out direct or direct message me. If you want, you’re more than welcome to call my cell phone, 248-755-2762. But those are probably the two best places to catch me at. And…Whatever questions you have, whatever help you need, please reach out. I would love to help you do exactly what I’m doing and grow you and your business as well.
Michelle Kesil (22:51)
Well, listen, I appreciate your time, your story, and your perspective. Thank you for being here.Chad Apap (22:57)
Thank you.Michelle Kesil (22:58)
Yes. And for those listeners tuning in, you got value, make sure you’ve subscribed. We’ve got more conversations with operators just like Chad, who are building real businesses. We’ll see you on our next episode. -
