Podcast Summary: Real Estate Investing School Podcast

Episode 172: REAL DEAL: 60 Acres, 6 Units, $0 Down

Host: Brody Fawcett
Guest: McCrae Hepler
Date: July 4, 2024

Brief Overview

This episode of the "Real Estate Investing School Podcast" dives deep into a creative, multifaceted real estate deal pulled off by guest McCrae Hepler. The focus is on how McCrae acquired a six-unit multifamily property (sixplex), 60 acres of land, and an additional half-acre downtown lot in St. George, Utah—using a mix of creative financing, strategic networking, and collaborative partnerships. Brody and McCrae break down each stage of the deal, offering actionable insights for listeners who want to replicate similar successes in real estate investing, even if they have limited capital to start with.

Key Discussion Points & Insights

1. Deal Overview [02:49]

• Asset Package:
  • Sixplex (six 2-bed, 1-bath townhome units)
  • 60 acres of land with water shares in Cedar Canyon
  • Additional half-acre lot two parcels down from the sixplex
• Location: Downtown St. George, Utah, just off Main Street and Trailblazer Blvd.
• Acquisition Date: 2019 (before the post-2020 real estate spike)
• Initial Deal Source: Off-market, referral via a hustling local agent, Peyton Fisher.

2. Deal Genesis & Networking [05:00-06:13, 15:25-16:30]

• McCrae was regularly telling realtors he is an investor, leading to deal opportunities.
• The seller was planning to leave for a mission in Hawaii, motivating him to bundle properties and solve title issues, seeking an easy close.

Quote:
"If you network and you let people know and you're always constantly talking to people... things like that will ultimately fall into your lap."
— McCrae, [15:25]

3. Asset & Structure Details [07:02-08:04]

• Sixplex:
  • Purchase price: $750,000
  • Unit size: ~750 sq ft each, 2 bed/1 bath, all with carports
• Half-Acre Lot:
  • Purchase price: $115,000
  • Zoning: Not immediately eligible for multifamily; potential foreseen with future city planning.
• 60 Acres in Cedar Canyon:
  • Effectively acquired for $0 by helping the seller resolve title issues; nominal contract for $1,000.
  • Value mainly in water shares; not all land is developable.

4. Financing & Partnership Structure [08:17, 23:00-29:11]

• Initial Financing:
  • Commercial loan from State Bank of Southern Utah for sixplex and half-acre lot.
  • 25% Down Payment: Majority provided by a third partner needing to park capital.
  • 3-person partnership via LLC: Equity split after refinancing at 36% (money partner) / 32% (McCrae) / 32% (other partner).

Creative Additions:

• 60 acres and water shares essentially acquired for free as a bonus for solving the seller’s title issues.

• Refinancing & Exit:

  • After 1 year: Renovated several units ($8-10k per unit), then refinanced into six individual residential loans (each unit/tax ID).
  • Allowed flexibility for future sales/refis and better rates; increased property value (~$925,000 a year later).
  • Sold half-acre lot for $260,000 (bought for $115,000), netting ~$150,000 profit.

Quote:
"We brought in a partner with most of the money, then in a year, we refinanced out and paid him back...so we didn't really have to come in with much money either."
— McCrae, [11:33]

5. Operational Details & Cash Flow [11:33, 31:24]

• Current Financials:
  • Sixplex rents: $1,200-$1,250 per unit ($4,800-5,000 monthly gross)
  • Property value nearly doubled since purchase.
  • One partner manages and maintains the property, making it hands-off for others.
  • Still holds the 60 acres; half-acre lot was sold to a friend who built a house.

6. Networking & Relationship Strategies [16:09-22:57]

• Active networking, even beyond title company connections—reach out to agents, mortgage lenders, builders, other investors.
• Using community outreach (e.g., McCrae's local video series "What's Happening in Southern Utah") to build reputation and opportunities.
• Brody emphasizes the importance of small, intentional relationship-building tasks over time.

Quote:
"Friendships, relationships, that’s what it's all about... if you're just always thinking about ways you can do that, there's always opportunities."
— McCrae, [22:17]

7. Lessons, Creativity, and Cautions [32:56]

• Get creative—but always do it correctly, legally, and ethically.
• Use experienced advisors (title experts, lenders, etc.) and structure deals so every partner's interests and logistics are handled.

Quote:
"Get creative, but just make sure you're doing it the right way... Surrounding yourself with people that know what they're doing."
— McCrae, [32:56]

Notable Quotes & Memorable Moments

• On Deal Simplicity:
  "At face value, it sounds really complicated... but honestly, that's how most real estate deals... come across." — Brody, [10:34]
• On Networking Importance:
  "It's all about the relationships." — McCrae, [16:09]
• On Partnering Smart:
  "He had money that he wanted to park... we told him, let's just you come in with the majority of the money, we'll come in with a little bit, and in a year, we're going to refinance." — McCrae, [11:33]
• On Creative Acquisition:
  "The 60 acres we actually got for free, because I helped him fix the title issue." — McCrae, [09:22]

Timestamps for Important Segments

• [02:49] – McCrae introduces the deal: sixplex, half-acre, 60 acres
• [07:02] – Asset details, zoning, and water shares
• [08:17] – Purchase price breakdown, loan structure
• [11:33] – Rent roll, partnership structure, and creative financing explained
• [13:21] – Status of 60 acres and half-acre (sale and profits)
• [15:25] – Networking and relationship strategies
• [22:17] – Community engagement and networking via social content
• [23:00] – Detailed financing tactics with loans and refis
• [27:01] – Down payment, ownership splits, and LLC structure
• [30:03] – Brody relates to project planning and importance of tax IDs for future flexibility
• [31:24] – Current property management and cash flow outcomes
• [32:56] – Final advice: Creativity must be accompanied by sound structuring and expertise

Final Takeaways

• Strong networking and creative problem-solving are essential to finding and structuring deals.
• Bringing in capital partners can enable larger acquisitions with minimal personal investment, if you know how to structure win-win partnerships.
• Smart financing (switching to individual loans, holding/selling assets as market changes) adds flexibility and value.
• Community involvement and "value-first" networking keep deal flow strong.
• Always do your creative deals the right way—using competent legal and title advice.

Actionable Advice:

If you want to find unique deals and expand your portfolio, start by telling everyone in your community—especially realtors and lenders—that you’re an investor, and consistently offer value in return. Layer in creative structuring and partnerships, and always anchor your deals with rock-solid paperwork and professional advice.

Episode Summary by [AI Podcast Summarizer].