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JC 017: Apartments, Banking and Politics with Michael Gibbons

June 28th, 2017 | no comments

All people want to live in a nice property

Michael Gibbons is a highly respected investment banker with decades of experience successfully owning and operating multi family real estate. Mike is the senior managing director, principal and co-founder of Brown Gibbons Lang and Company (BGL) with offices across the USA and Global M&A Partner offices in more than 40 countries across 5 continents, which allows BGL to deliver their clients unparalleled access to corporations, investors, and opportunities globally.

Michael always had an interest in real estate and started out with a few doubles and a 4-plex. He learned how to install toilets and more importantly what it will take to run a real estate ownership organization effectively. The key is to build up the number of units that you are managing so that you don’t have to personally do all of the work.

Michael and his team are dedicated to providing well-managed, quality multifamily homes. Michael owns an interest in over 10,000 units and lives by the philosophy that each unit must be “good enough for mom to live in.” He believes that everyone deserves to be proud of where they live, and the apartment communities that he owns provide a safe, clean, well-maintained and friendly environment that residents are proud to call home.

Michael’s winning formula is to look out for undermanaged and/or poorly maintained properties and apply a high standard to maintenance and management. You must apply social responsibility to your real estate investments and success will follow.

Michael Gibbons is on a mission to save America. He is entering the political arena and running for a seat in the US Senate representing Ohio. He believes that “the government doesn’t create jobs, business creates jobs.” Michael doesn’t want to be a career politician. He wants to apply his business knowledge in Washington to serve the American people and accelerate the growth of the US economy.

Five key points:

  • Everybody has to start somewhere – Michael entered the business of real estate investing where many entrepreneurs start, buying single-family properties and working from the ground up to restore and resell them. The small details that Michael learned during his early days set him up for success in the future.
  • “If the unit isn’t ready for your mother to move into, it’s not ready to rent to someone else.” – people want to be proud of where they live. This applies to all income levels. BGL looks for undermanaged or poorly maintained properties and applies defined management strategies to improve the situation, providing people with a safe, clean, well-maintained place to live, somewhere they can be proud to bring their friends and parents to visit.
  • Find tenants that fulfill their side of their contractual obligations – always pay their rent in full and on time. It is dangerous territory for landlords to get into situations where they allow tenants to stay without paying rent for any period of time. This practice can quickly lead an investor to defaulting on mortgages. Retain high credit standards, source tenants that have pride in themselves and their property and they will in turn take pride and care for your property.
  • Utilize modern technology – install video cameras in your multi family investments. “We have found that with the technology that’s available now, if we put up camera systems, generally people behave properly if they’re always on camera in common areas.”
  • Every person involved in real estate is important – from the person fixing the electrical faults to the person vacuuming the hallways, insure that you have a team with the correct cultural fit and chemistry. Success comes when the work is fun and you’re surrounded by other people that “find it fun” and are also willing to put in the hard

Mike is a three-sport college athlete. These are his top three favorite athletes;

  1. Jean Gibbons – Michael father, world class athlete, wrestler & coach
  2.  Aaron Shea – former NFL player and Mike’s son-in-law
  3.  Tom Brady – NFL quarterback for the New England Patriots and godfather to Mike’s grandson.

Favorite books:

  1. God’s Gold: The Story of Rockefeller and His Times by John T Flynn
  2. The Constitution of Liberty by Friedrich A Hayek

You can reach out to Michael at BLG, http://www.bglco.com

For more information about Michael Gibbons US Senate campaign visit –http://www.gibbonsforohio.com

Thank you Michael for taking some time out to share your story with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at http://www.johncarneyonlie.com

POST GAME REPORT: Episode Transcript

JC 017: Apartments, Banking & Politics with Mike Gibbons

Michael Gibbons is on a mission to save America

Announcer: Welcome to the, “Real Estate Locker Room Show” with John Carney. Did you know investing in real estate is a team sport? Join John and his guests as they explore the business of real estate and athletic competition. The goal for this show is to grant you direct access to the real estate pros that are closing profitable deals and growing their businesses. On the “Real Estate Locker Room Show” we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve on-going success. Now it’s time to kick-off and level up with new ways to grow your real estate business.

 

John Carney: Welcome back to the Real Estate Locker Room Show. I’m your host John Carney, coming at you again today from Cleveland, Ohio. The goal for this show is to help the listeners raise the bar in their real estate investment game. Joining me today is a great guest, he is a mover and a shaker in the multi family world of real estate, specifically here in Northeast Ohio and I will let him talk to you about his formula for success in just a moment.

 

But I’d like to welcome Michael Gibbons. He is the senior managing director, principal and founder of Brown Gibbons Lang and Company. Michael provides an active senior role to client engagements and business development opportunities. Now Brown Gibbons Lang and Company, or BGL, is a leading independent investment bank serving the middle market. BGL specializes in merger and acquisitions, advisory services, debt and equity placement, financial restructuring advice and valuations and financial opinions. With global industry teams in business services, consumer, health care, industrial and real estate, BGL has offices in Chicago, here in Cleveland, Ohio, Salt Lake City and global MNA partner offices in more than 40 countries across five continents, which allows them to deliver unparalleled access to corporations, investors and opportunities globally.

So, we’re going to learn a little bit from Mike about when you scale up a business like BGL, and you get into real estate, you can certainly apply those business skills in that competitive environment of high finance to apartments.

Now, immediately prior to BGL, Michael was president and CEO of Underwood Newhouse and Company, a leading regional securities and investment banking firm in Houston, Texas. And prior to that he was senior vice president for McDonald and Company here in Cleveland. And recently, Mr. Gibbons has announced that he will be running for a spot in the US Senate right here, for a seat in northeast Ohio as well.

Welcome to the show Mike, thank you for taking the time out of your very busy schedule to share your experience with our listeners.

 

Mike Gibbons: Well I’m glad to talk to you John. I want to make one correction though, we’re no longer in Salt Lake City; we’re in Irvine, California, San Antonio and Philadelphia. And that was a brief stint in Utah where we were unable to really make it work there. And it’s kind of an organic process that you go through and as you staff various locations with various skills you take advantage of that, and we’re doing that.

 

John Carney: Your resume is extensive. We want to drill into the real estate, and we talk a little bit about sports, we call it The Real Estate Locker Room Show basically because there’s just as fierce a competition out there in the real estate market day in and day out, probably the same in the MNA market day in and day out as you would see in the super bowl, correct?

 

Mike Gibbons: Well, it’s a very competitive business. I was warned many times before I started it that the likelihood of success, particularly out of Cleveland — and that’s where I wanted a family, and really commuted to Houston for four years, in a very tough environment in Houston, and came to Cleveland and said, “You know, I can’t go back to where I was,” just wasn’t the right thing for me to do, and started BGL.

I had an early setback, far greater setback for my partner, as is noted in the name of the company Brown Gibbons Lang — well Kevin Brown was a wealthy entrepreneur and had a bit of wealth from an inheritance. We had become friends and we were going to set out, with his capital support and my deal skills I developed, and form a company. Unfortunately, Kevin was killed a month and a half after we started the firm in an offshore powerboat race. Actually, the Trump race in Atlantic City. I and a number of my friends were there to watch him and he came into the restaurant where we were sitting — and actually we were playing Blackjack. First time I was ever in a casino in my life. — And he said, “Go home guys it’s too choppy.” By the time we got home, sat around for an hour or two with my family, and we got a call from one of my friends and said Kevin had been killed in the race that he wasn’t supposed to run.

And it was an unfortunate occurrence, but it created the true entrepreneurial situation where I was left with basically my capital, which was relatively insignificant at the time, and a telephone. And that’s where we started. So it’s all worked out, and it shows you what you can do in America if you just set your mind to it. I’ve been very fortunate to have the opportunities I had, and we tried to make the best of it.

 

John Carney: So just can you just tell a brief — talk about how you went from investment banking and how you stumbled into real estate and what that looked like?

 

Mike Gibbons: Well it really wasn’t a stumble, John. I was very interested in real estate, literally from the day I got out of graduate school. I remember I read a book called No Money Down. Since I didn’t have any money, that was an important part of where it started from. And I began acquiring with very little down payment money, had a real estate license and used my real estate license. And the commissions I’d receive on the acquisition side helped acquire various things and would buy some double houses and eventually a four-suiter.

None of those were very successful but I learned a lot. Not only did I learn how to install toilets efficiently, but I understood what it would take to really run a real estate ownership organization effectively. And the key is to building the number of units that you’re managing to where you don’t have to do all the work. Because if you try to do all the work, you’re very limited in the scope of what you can know. And I started out that way, sold those off as I was advancing in my career. But again, I always had that interest and attraction to real estate.

I was in capital markets in the financing business, advising businesses, and I was always attracted by the relative certainty of the cash flows versus the various business I was working in. And I never really had any engineering training or I really didn’t understand how manufacturing worked early on. And obviously, I’ve been in probably one of every kind of manufacturer in the nation and got to learn about their processes and how they operated over the many years I’ve been in the business. But during that period I always had an attraction to real estate. And indeed I was part of a partnership in a regional investment bank where they permitted you to make investments outside the normal scope of everyday business. And I got a couple of partners and one of them ran the real estate. And at one point we got up to a relatively significant number of multi family units that we’d owned jointly. I owned a relatively small percentage of them, of the whole enterprise. But again, expanded my knowledge just from being around and looking at properties, buying properties, financing properties.

And then as my career progressed I found myself working with real estate enterprises. And I was always — my early days were public finance, I was using tax exempt debt to do financing for various enterprises. And at that point in time, under the tax laws in the United States where you created an increase to employment you could use tax exempt financing. And the firm I was with, McDonald and Company, was a very significant underwriter of that kind of capital back in that period.

So I just learned more about the financing markets, the mathematics of financing. And ultimately kind of left public finance and moved into more financial institutes in bank, corporate finance type activities; took converted mutuals to stock, in smaller institutions and worked with REITs – a few of them that worked back in those days. And then when I went to Houston, which was supposed to be a two-year stint that turned into a four-year stint, I did it largely because McDonald and Company had gone public. They didn’t have the same cultural fit that I had felt so comfortable in while it was a partnership, and really sought that kind of partnership structure where I could own a piece and help build a company, help build something that I own.

So in doing the thing in Houston I was already — I still had my real estate partners up in northeast Ohio; we were still acquiring and improving and selling multi family during that period of time. And when I came back to Cleveland and formed BGL I was all about MNA for 20 plus years.

And right around when the crash came, actually maybe a little bit previous to that, I had consented to doing a development deal while still at BGL. It was a multi family with an older gentleman that I had established a great friendship with. I did that, saw the deficiencies in the way that they were then managing the properties, and ultimately wanted to create an organization that I could use BGL and investment bank as a platform and create an organization where we had very fine management, and kind of fit my philosophy of investing in multi family. And we’ve done that now for seven or eight years, and we’ve achieved some pretty good milestones in that period.

 

John Carney: So yea, hardly a stumble in. That’s a correction without understanding the whole story, for sure. But so, I suppose the important take away I got from hearing the whole timeline was you started out with single family homes, a few duplexes, probably spent some evenings there applying paint and fixing plumbing without a license–

 

Mike Gibbons: Many, many.

 

John Carney: — so that your tenants could move in the next day. And that is a familiar story with just about every single real estate investor I’ve interviewed to date.

 

Mike Gibbons: You’ve got to start somewhere, you know?

 

John Carney: You have to start somewhere. And then what does that look like today? And where —

 

Mike Gibbons: Well, in a week — I don’t own 100% of very many things, I have a few I own 100% of, as far as real estate dwellings. But generally we’re operating in LLCs, oftentimes it’s the partners in the investment banking business, at times we’ll take in outside investors.

And I didn’t mention this, but early in the days of Brown Gibbons Lang, having been in Cleveland, I knew a lot of the developers in the region, largely stemming from my public finance days as a matter of fact. And I was in a very good position to — down a number of REITs formations, and we took them public while I was in Houston. And the real estate investment trust business changed considerably in the early ‘90s. Prior to that, you needed a separate enterprise to manage those businesses, or to manage the real estate homes that were owned by the trust. It was a very unwieldy, difficult structure to operate in and all that changed in the early ‘90s. And because of my relationship with some of those developers, because I had as much familiarity with REIT structures as anybody probably in the Midwest at the time — I wasn’t an attorney and didn’t work in those areas, I was really an investment banker that had worked with the formation of REITs –I was called on to use some of the expertise I’d developed to advise a number of REITs and their formation, and actually model those enterprises for largely a collection of partnerships; model those pre-excel. I was using Lotus123 back in those days. And created those models and took them to Wall Street, found an underwriting team and we took a number of REITs public where I acted as the advisor, BGL acted as advisor.

Around northeastern Ohio it was Associated States and Developers Diversified, both of those were enterprises that I advised on their formation. I ended up on the board of Associated States after about ten years, became an active board member, shared financial planning and really kind of studied where real estate performance was. Being in the Midwest, it’s very much different than if you’re in the coast or in you’re in the hot growth areas. We have a housing stock here that’s a bit older than most other locations, and I was always tied to Ohio and tied to Cleveland, this is where I love to live. I had spent four years commuting, coming back here every weekend almost. Coached my daughter’s soccer team, I was an assistant coach while I was working in Houston, so I was always connected to northeastern Ohio. So the natural place to invest was northeast Ohio. But the housing stock in a city like Cleveland or around Cleveland is very much different than you’ll see on the coast or in Florida or in Atlanta or in Dallas.

Having been on the border of public multi family REIT, I kind of studied what the differences were and where I thought I could make a difference and also do well for my investors if I had them. And kind of developed a plan. And generally we’ve stuck with working class housing, is what it’s called now. I think we were lucky enough to identify that earlier in the trend, and it’s now become a topic of conferences to talk about work force housing.

And I just have a philosophy about people and about where they want to live and how they feel about living in a certain situation. And I took that philosophy and applied it to my real estate investment. I believe that every single person in the United States wants to be proud of where they live, and they want their friends and family to come over and visit them and not be embarrassed of the maintenance levels of the property that they’re living in. They want to walk through a lobby that looks like they’re prosperous and they’re living in a well maintained, well managed facility. And I think that’s true across all income levels. I don’t think it’s any different, no matter if you’re struggling in a lower wage job to you’re a wealthy person that just doesn’t want to have any duties of home ownership. And I think every level of those you can do more and more, commensurate with the level of rents and the level of profitably.

So what we look for are properties that are undermanaged or poorly maintained, and our effort is to find those, buy those cost effectively and manage them in the way I just talked about. We have a rule with our management operation: if that unit isn’t ready for your mother to move into it’s not ready to rent to somebody else. And I think a lot of businesses say they have a social responsibility too, and I think anybody that’s operating in America in business should have a feeling of social responsibility. And one of those things is I want to make our tenants lives a little better, because we do the things that need to be done when they need to be done and provide with them with a safe, clean, well maintained place to live. And some place they can be proud to bring their parents or their friends and feel comfortable going in and bringing them there into their apartment. And I think that’s a solution that’s worked for us very well.

 

John Carney: So would you say your approach and your philosophy has to be in some respect a point of difference; do you see a dramatic change when you buy a property that’s under managed and in need of repair. And can you just talk about the turnaround that you see with existing tenants. And then how that would compare to someone across the street or next door that just doesn’t have that same attitude about providing an environment that you’d want your own mum to live in.

 

Mike Gibbons: Well, you know, it doesn’t happen immediately. I think you have to convince the tenants that live there that you’re different, and it takes a while to do that, you can’t just come in — we typically don’t come in with a total rehabilitation of the project, because in many cases we just can’t afford to do that.

One of the advantages of investing in workforce housing — and I might add, not everything we have is workforce, we have some higher end properties but we don’t really have the low-income properties. We don’t have any units that would be considered low income. It’s people that work; they may not make professional level salaries, but they certainly are hardworking and they have pride in themselves. And generally you want tenants to have pride in themselves because they are going to have pride in the property that they’re living in, and they’re not going to do damage or dump litter, or they’re going to keep the place clean and not fight the management company.

Oftentimes when you see these undermanaged properties, they’re just not well managed in a number of ways. If you don’t pay your rent, and you have tenants that don’t pay their rent on time — unfortunately we’re not the government where we’re responsible for making sure that everybody has their rent payment every month. So we have very high credit standards and the reality is, is I wish I was in a position to give everybody free rent. If I was in that position it would be a wonderful thing. I try to contribute a significant portion of my income to help those kinds of people, but you can’t do that and have a business. So unfortunately, you’ve got to have people who pay their rent on time. The minute you start allowing people to live there while they aren’t paying rent — I’ve seen a lot of property owners make that mistake; so they’ll try to negotiate with the tenants and they end up defaulting on their mortgage. And you wouldn’t be interviewing me right now if I’d defaulted on a number of mortgages over a period of time. And when a relatively small percentage of your tenants aren’t paying rent you can find yourself in that position.

I’ve never defaulted on a mortgage and I don’t intend to, and the only way to be certain that that isn’t going to happen is to make sure you get cash flow under the contractual arrangement that you have with those tenants. And it’s a win/win situation: we’re going to keep the property up in good condition if they just meet the terms of their contract, which is paying their rent on time.

And oftentimes we’ll move into a turnaround situation, under managed situation, sometimes even over managed situation, where they have a few other different characteristics we can get into. But that undermanaged situation, generally they’re letting people slide by, and you’ll end up with the tenants owing multiple months’ rent, that’s a recipe for disaster. That’s when you talk about the decline of areas and properties, that’s what usually leads to it.

Everybody talks about the terrible slum landlords, well in many cases they are terrible, but oftentimes it starts where they just don’t get their rent payments. And most if not all of these projects are leveraged and they need to make mortgage payments, and if they aren’t collecting their rent they can’t make those mortgage payments. You’ve got to have a discipline about making sure people pay rent on time.

We’ve also had very good luck, where we’ll find a property that’s in disrepair and has been neglected as far as the management, or maybe the right management techniques haven’t been used and they’ll have problem tenants. You’ll have tenants that are selling drugs, or they’ll be having gatherings in front of the building and will harass other tenants as they come out. We have found that with the technology that’s available now, if we put up camera systems, generally people behave properly if they’re always on camera in the common areas. When somebody breaks a window we know who broke it. When somebody steals furniture from the lobby, we know who stole it. When somebody comes in and commits a crime on the property we can generally trace when they come in and when they leave. So we had very good luck of just getting better behaved people living in our properties. Because all people want to live in a nice property that is well maintained, and if you allow people that don’t care about that to move in you’re not going to be able to do that.

So that’s one of our initial steps, is to spend the money on camera systems, spend the money on common areas; just the general condition of the property, the street appeal of the property is very important. People want to see landscaping and green grass and nicely maintained shrubbery and lighting and everything should be well lit. You cannot have a full-time security force, it doesn’t work at the level of rents that we run at. But we’ll have — particularly when we’re turning a building around, we’ll intensify security to a certain level and if somebody is on site that’s causing a problem, generally we can have security there in pretty short order.

 

John Carney: Well, that’s basically a long — for the listeners that are out there that want to be in the multi family game, or anyone who’s struggling managing their own multi family, take note of what advice Mike has given us. Because that’s generally, I would imagine, almost a weekend course in property management and multi family all wrapped into a ten-minute segment, so thank you for that.

 

Mike Gibbons: I’m happy to do it.

 

John Carney: That’s great advice, well we wrap this up with a few questions that we end up posting up on the show notes. But when you were growing up as a kid, you were also a college athlete, what sports were you into? And how did you see that team sport aspect of your childhood translate into success in business?

 

Mike Gibbons: Well, you know, I guess I didn’t appreciate how much participating in team sports — and some individual sports too — how much they helped. But I think it’s just a general attitude of being able to get along and work with people, where you have a particular function, they have a particular function, and when everybody’s doing what they’re supposed to do at the same time, things work a lot better. It’s that simple.

I played high school football and I wrestled. My father was actually a wrestling coach, I never quite achieved the level of capability that he would have wished. And I think he would have been a lot happier with me if I’d found wrestling to be my sport. But he was a great athlete, an all American national champion, and I just was never going to be that. And I also participated in track. And when I went to college, I really decided I wasn’t headed to the NFL, and although I had some looks by division one teams, I thought I was better suited — and again I wanted to stay around Ohio. The only D3 school I looked at transferring into, I waited so long to make my decision they’d already agreed to go to a school out of state. And ended up at a D3 school and was able to compete in three different sports while I was there and still go to class and maintain good grades. It was a great experience for me.

I played lacrosse and football in college. And the four years of football, and trying to compete in Ohio in football in a heavily academic school, where it was tough to get a lot of players to help this into the school. We were able to field a pretty good team. And a lot of those guys are still my friends and in each case they’ve all been successful — or I think all of them, I can’t think of any that haven’t been — but they’ve all been successful in whatever profession they decided to go in, and we often get together. We had an undefeated team in the college I went to, that was an unusual thing to have, it was the only one in the history of the school. And every one of those guys — we talk about how the coaches put us together and got us working together. We were always not as deep as the teams we were playing, as long as we didn’t have a lot of injuries we were going to do pretty well. We had people knew their roles and fulfilled them.

And it’s the same thing in real estate. It’s the same thing in investment banking. You have a job to do and you’ve got to do it as well as everybody else does their job, and it’s particularly important in real estate. You’re relying on the guys that vacuum the hallways as much as you’re relying on the people that are fixing the electrical problems or the plumbing, it’s all got to work together. And that kind of team atmosphere is the best situation you can create. And we have that right now and it’s not always that easy to achieve, you’ve got to have the right chemistry among people. But we’ve done it and it’s worked out very well.

So we’ve grown, and we’re one of the larger property owners in northeastern Ohio, and we intend to continue to grow in that area. I’ve got a couple of sons that seem interested in real estate, all of them are still in school, heading to law school and business school, but I think they’ve seen the fun I’ve had with it and the interest I’ve had in it, and I’m hoping one of those guys decides they want to follow and keep this effort going in the family. Like you’re doing John. Your family’s been in real estate for generations. I’m the first generation in mine.

 

John Carney: Right, and that’s just it though. It is fun. And I think it’s fun because it’s challenging, and it’s hard work and you get to surround yourself by other people that find it fun, challenging and are willing to put in the hard work. Three rapid fire questions before I let you go. We’re compiling a bit of a list. Who’s your favorite athlete – all-time?

 

Mike Gibbons: Well, it’s funny, because I actually know him, and this probably isn’t going to be a popular choice in Ohio. But my son-in-law, married to my daughter, played for Cleveland Browns, and so obviously, he’s probably my favorite athlete along with my father. My father was a world class athlete, just happened to be in wrestling. But my grandson’s godfather is a guy named Tom Brady. I’ve gotten to know Tom a little bit, and I’d consider him one of the — a guy with one of the finest characters — if you’re a Cleveland Browns fan, you only see this guy that comes in and destroys our team when he’s in here. I’ve gotten to know him personally and he’s kind of just a really great person. As is my son in law, as is my father.

So I guess I’ve got three of them. I would say: my dad, Jean Gibbons, and my son-in-law, Aaron Shay, and his big buddy Tom Brady. And I know each of those people pretty well, and it’s great seeing somebody in competition. Aaron’s not playing anymore, my father’s passed away, but I’ve heard the stories many times about how he competed and how good he was at what he did. And we can still watch Tom, usually in the super bowl every year. And for how much the fans of the opposing team seem to hate him, he’s really a great person and he’s a regular guy that just works harder than most everybody else.

 

John Carney: Yea, he works hard and he’s a leader. So I mean, two key ingredients to become a multi super bowl champion. Is there a favorite book that you have? We’re putting together a booklist out of this show.

 

Mike Gibbons: It probably is — I often say that there’s been a lot of books that have kind of shaped my — where I’ve ended up in life. When I was in 8th grade I read a book called God’s Gold about John D Rockefeller. I lived in a family that didn’t have a lot of extra dollars floating around the house, and I kind of set off to try to change my family’s trajectory, and I think I’ve done that to some degree.

But I can tell you what changed my whole attitude about politics. In college I majored in political science and economics, and just as most other college students, I didn’t read everything as carefully as I should have the first time I was asked to read it, but it’s become kind of a hobby for me over the last 20 odd years.

But a book called The Constitution of Liberty by Friedrich von Hayek, changed my world view. My grandfather was a labor union president, my dad, who was not really about in politics, pretended to be a democrat early on. I had a grandfather that was probably even to the left of that, my mother’s father. And I didn’t really form a political view really until after I was in college and got out of college. And I have to tell you, Friedrich von Hayek influenced me. It was a rational argument that really kind of convinced me that free markets and capitalism could change the world. It has, it’s taken more people out of poverty than any other system of economics in world history and that book changed my view.

I don’t read a lot of fiction, I read a lot of non-fiction and as my best friend says, “You read the weirdest stuff I’ve ever seen Mike.” But I think I’m curious, and I read a lot of things that aren’t best sellers. And it’s given me a great base of completely irrelevant and unimportant facts that I can talk about at length, and if you aren’t interested in that sort of thing I’ve got to be pretty boring. But it’s probably the book that changed my life.

 

John Carney: That’s good. And we’ll link that in the show notes on our website. Well we’ve run a little bit over. If you have a couple of minutes would you like to share your thoughts on your decision to enter into a big political campaign?

 

Mike Gibbons: Yea, and it took a long time and it was a decision that was very difficult to make. And I’ve said this many times, but I wish I could have found somebody with similar world experiences than me that would have been willing to run. My last son graduated from college a month ago, not even a month ago. My commitment to my children has changed as they grow up. I’ve got more time. I’ve got a son that graduated from Georgia Tech with honors in aerospace engineering, which if you know anything about Georgia Tech and having a degree in that field, he had great job prospects, and he went down and joined the navy and is in Pensacola now in flight training. And I think the combination of that and kind of having my last child graduate from college — I don’t need to focus on my kids as much as I used to. It got me thinking. And he’s adamant about wanting to help his country and defend his country, and I came to the realization that I’ve never really tried to do anything for my country directly. I’ve created hundreds of jobs over the years, and I’ve taken the risks necessary to create those, but I’ve never really given back to this country the way it’s given to me. And I’ve had — there’s been some opportunities, taken advantage of it that I hope everybody can have that same opportunity.

And I don’t like the direction our country is headed. I don’t like the politicians that we’re electing to office. I think we have too many career politicians who really have no experience and they’re very good at winning elections and raising funds to win elections but they really don’t have any day to day knowledge of what it takes to make this country thrive.

 

The government doesn’t create jobs, business creates jobs. And being a business man who recognizes his own capabilities and is not just out for some kind of an ego trip, that really wants to ensure that our governments can use the principles that made our country as great as it is, and not forego those and pick up on the latest ism that’s out there, the latest cause that somebody comes up with. And really kind of keeps the country directed where it’s — in a direction that’s gotten us where we are right now. And I’m going to try and do that. I promised my wife and my kids I wouldn’t change one iota. I tend to be blunt, and I don’t — I’m not a political soundbite guy. And I want to take that kind of an attitude. I’m going to try to get to Washington and actually tell the truth.

Because this country is in a very serious predicament right now: we’ve got national debt 105% of our GNP. The only time it’s ever been greater than that was after we fought a world war. And the difference is the end of that world war we hit 50% of the industrial capacity of the world. We don’t have that anymore. We have got to grow this country. If we don’t grow 3 or 4 percent over the next many years we’re in serious trouble. We’ve got to address that and there’s ways to address that that our politicians just don’t want to talk about. And they may have the soundbites, they really haven’t developed an argument and understand why we have to do that. Because right now we have enough debt that we’re either going to have to default on it, or we’re going to have to grow the country so that becomes a less significant portion of the GNP, that debt. Or we’re going to have to inflate our way out of it. And the very people that won’t allow this country to grow are the ones — the people that they’re claiming they’re protecting and representing. And they’re going to be the ones that are most hurt in that inflationary environment, if that’s what we end up doing.

 

But we’ve got to grow the country. I think I know how to do that. I think I know how businesses are formed. I think I know what stands in the way of their prospering. And I think our government has to ease off on those businesses. I think we have to lower tax rates for businesses and get people to create jobs and make sure that those lower tax rates are tied to people that are really taking risks of job formation. And if we do that, we can super charge this economy and we won’t head down the path that so many countries have that have tried this kind of foray into socialism. It doesn’t work. It hasn’t worked, ever. And they keep saying, “Oh well if we do it right..” There is no right way to do socialism. And even if you want equality in a country, you’re not going to have freedom. And I think that freedom and the fact that everybody gets a shot at opportunity here is what we need to make sure it continues in the future. I’m going to try and do that. And that’s really why I’m doing it.

I’m not a career politician, never thought about it before. If I could have found somebody better to run, I would have certainly supported them and would rather help them in their quest for office. But I can’t find anybody because they aren’t willing to take the considerable risk that comes along with running for office. And I just said –you know, they can make up stories, or they can come up with something they somehow will twist in my background that will make — try to make me look unacceptable to the voters, but I’m willing to take that shot. I think I’ve never done anything unethical in my business career and I’m proud of that, and I’m willing to take anything they can come up with because it won’t be true. So, long story short, I’m doing it because I can’t find anybody else that has my experiences to run and to support. So I’m going to do it myself. I’m the one that complains, I might as well take a shot. That’s what it comes down to John.

 

John Carney: There you go. That’s the American story. I wish you nothing but luck in your race for the US senate Mike. Alright, well that wraps it up. Thank you for joining me in the locker room today Mike. Where can the audience find more about you if they want to reach out or contact you online?

 

Mike Gibbons: Sure. Well I’ll give you our firm website is: bglco.com and we’ve got a good bit of information on there. We’ve been around for 28 years, just found out that we are among the top five most recognizable names in middle market investment banking in the United States. I’m very proud of that. They said it couldn’t be done in Cleveland; we managed to put it together and do it. And then my website for my campaign is: gibbonsforohio.com

And we’ve only been at this a couple of weeks, so positions aren’t filled out, but there’s a video on there that will pretty much summarize what I’m about. And I hope the listeners watch that because it’s — I want to be that new politician that our founders envisioned and not the career politician that unfortunately we’re forced to vote for now. We really have no choice because those are the only people that are running.

 

John Carney: Get in, get the change going, and then hand it over to the next generation. There you have it folks, I am sure that you picked up some actionable advice today from Mr. Michael Gibbons. Make sure to check out the Real Estate Locker Room Show on iTunes, Stitcher, or Google Play and hit that subscribe button to ensure that you never miss out on the pro tips from our great guests. The post-game report show notes, links and additional content for this episode will be available on my website: johncarneyonline.com/podcast when this episode is live next week. And while you’re visiting the website, feel free to drop your email address into the newsletter sign up form to receive even more real estate investing insights, tips, tricks, hacks and other good stuff. Remember to stay focused on your goals, have fun and stay in the game. I’m your host John Carney and until next week: work hard, play hard, and profit hard.

One more time, thank you very much Mr. Gibbons, for taking the time out of your busy schedule and your campaign to join us. Have a great day.

(Music Out)

End Audio

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JC 001: Confessions of a Deal Junkie with John Williams

March 22nd, 2017 | 1 comment

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Learn how to become a real estate deal junkie with Phoenix, Arizona based real estate investor John Williams.

 

The Real Estate Locker Room Show with John CarneyJohn Williams doesn’t believe that you have to be the most talented guy to be successful as a real estate investor. You have to leverage the talent that you do have and work hard.

Investing in real estate is commutative and John’s advice is to learn from doing. Don’t be afraid to get you hands dirty and learn the business of fixing property from doing it.

Finding deals is hard work and requires the fine art of hustling. First, carve out a niche in your market and learn how to source off market deals.

J&J Real Estate Holdings is always looking to achieve a win, win for both buyers and sellers.

Real estate investing is not a “get rich quick” enterprise. You have to be willing to learn something new everyday and stay hungry. Cash flow is the name of the game

John started with one single family home in 2001 and has scaled to managing over 1200 tenants and multiple mobile home parks.

Grow into the investor that you want to become in a manageable level.

Having a team and a good partner is invaluable in the real estate game. John advice is to look for a partner who has the same core values, set some outrageous goals and go for it!

You must have two teams: Team 1 – The Outer Team or the licensed professionals and 2) Team 2 – The Inner Circle – all of the people who support your real estate investing business.

You have to be an early riser to get the deals and be successful. Work hard, be fair and have integrity.

John Williams / J&J Real Estate Holdings
www.jjrealestateholdings.com

The Real Estate Locker Room Show EP 001 John Williams

 

 


POST GAME REPORT: Episode Transcript

The Real Estate Locker Room Show Podcast

JC 001: Confessions of a deal junkie with John Williams

 

Announcer:  Welcome to the, “Real Estate Locker Room Show” with John Carney. Did you know investing in real estate is a team sport? Join John and his team as they explore the business of real estate and athletic competition. The goal for this show is to grant you direct access to the real estate pros that are closing profitable deals and growing their businesses. On the “Real Estate Locker Room Show” we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve on-going success. Now it’s time to kick-off and level off with new place to grow your real estate business.

 

John Carney: Welcome back to the Real Estate Locker Room Show.  I’m your host John Carney coming at you from Cleveland, Ohio and today on the line from Phoenix, Arizona we have joining us in the Locker Room John Williams. John Williams is one of the founders of J & J Real Estate Holdings. J & J is a Phoenix based owner operated real estate company specializing in long-term cash flow properties. They acquire and manage single-family homes, mobile home parks and apartment buildings.  Through a proven acquisition strategy and sound management, J & J locates and transforms undervalued and distressed properties into rehabilitated assets generating recurring income for its partners. J & J’s strategy is designed to succeed despite an ever-changing real estate landscape generating maximum revenues in both up and down market cycles. Managing everything in-house from acquisition to operation, J & J builds equity and generates revenues for their company and their partners.  With a proven track record of improving the communities where they invest, J & J continually increases the value of their portfolio. John Williams was born and raised in La Canada California, and he graduated from Loyola High School in Los Angeles where he played football and then at the college level he played for Cal Poly in San Luis Obispo. After graduating from Cal Poly, Johnny moved to Phoenix to work with his partner’s father, who had a pre-existing property management in real estate investment business. John learned how to manage and acquire houses, apartments, office buildings, industrial buildings and mobile home parks in the 2-1/2 years he was working there. He also witnessed just about every scenario that you could possible imagine in the property management business and, with this new found knowledge, Johnny set off on his own to get wholesaling houses and opened up one of the largest wholesaling operations in Phoenix. John has been involved in more than 1,500 sales/purchases of houses (he bought his first investment property in 2001) and has been a licensed real estate agent in Arizona for 7 years and in 2008 Johnny and Joe partnered up and they opened the door to J & J Real Estate LLC. So, John, welcome to the Real Estate Locker Room. How are you doing today?

 

John Williams: Great John. Thank you for having me. I tell you this is actually going to be an exciting show. For one, just how far you and I have come since we first met and I started. It is really exciting for me to see you come full circle and achieve the success you have and for us to both be here today swapping stories about our times.

 

John Carney: So, we can dive right into that. You know, just like before you get into any type of exercises scenario, I like to ask a stretching question just to warm up here. It is sports related of course, because we are going to explore that intersection of sports and real estate today. Who is your favorite athlete of all times?

 

John Williams: I’m going to have to say, Dick Butkus. Like myself, he was just a hard-nosed linebacker. He didn’t have the best talent, but he made the best of what he had. He wasn’t from a winning Super Bowl regime, but he took what he had. And he certainly was an unstoppable force the years that he played. I’m the kind of guy who likes people that make the most of their talents, and not those who don’t always have the most God given talent.

John Carney : Right. I mean you can’t always be the fastest strongest guy in any competition, but you can definitely work as hard as you possible can with what you have. Right?

 

John Williams: Absolutely. It is all about making the best of what you have.

 

John Carney: Sound advice. Can you tell our listeners how did you get started and why real estate? What turned you onto that?

 

John Williams: I always like to build things as a kid. Building was tangible and I could see the process from start to finish—whether it was building blocks or model kits. I knew I wanted to do something that would be hands-on but still retain that competitive nature with a team environment. Most of my friends and a lot of family members were in the brokerage business. Getting out of college I asked myself what I wanted to do and who I wanted to be? I didn’t want to trade time for dollars selling stuff for other people even though that’s a great business to be in. I just knew that I wanted to go where I thought the masses weren’t. I was fortunate enough to get an opportunity and was hired right out of college by one of my greatest mentors, “Big John.” Who moved to Phoenix to run his operation. Eventually he had a real estate company with approximately 2000 units. And just threw me into the fire, and it was trial and error, and then doing. So, it’s been a, really how I got started.

 

John Carney: You learned by doing. From some of our past conversations, I think it is great. I love the story that he had you working with the workers so that you learn the business from the ground up. Can you elaborate on that just a little bit?

 

John Williams: Yeah. You know, I tell a lot of people today that I contribute my success to those 2-1/2 to 3 years working with Big John and Ben and really learning everything from the ground up, as you say. I spent at least a day a week coming in in work clothes and working side by side with the maintenance crews, you know, turning apartments, turning mobiles. You name it, it has happened to me. From walking into an apartment that has been vacant for a month and having, I don’t know, 5,000 cockroaches fall on top of me in my hair and down my shirt. The not so pretty side to the business—I have seen it and done it. But really I needed to know all those things for me to be a better manager, owner, etc. I needed to know how many gallons of paint it took to turn an apartment. I needed to know how much time it would take these laborers and managers to do something. So, you know, I jumped right in and luckily was there the way that they kind of taught me was—you are going to learn everything about this business. And, really that is what I owe a lot of my credit to today.

 

John Carney: So when you were a young guns coming out of school, you were a linebacker playing at the college level and there is a certain amount of discipline that comes with maintaining your spot on the team. Did you tap into that—that discipline that you had growing up, playing sports, and, especially the college athlete once they put you to task in their business in Phoenix? Did you see a correlation between that sort of training—that physical and mental training and how you were able to thrive and grow a business that you have today?

 

John Williams: Yes, absolutely John. I think being in competitive sports, especially in college, but even more especially being a linebacker, it is one of those things where get a task and I turn it into a game to see how quickly, how good, I can finish the task and really just kind of be veracious out there. I would be on the field back in my glory days, which was a long, long time ago. But I find a lot of the real estate investors that I rub shoulders with are also former athletes themselves, because just have that competitive nature that really helps us thrive in this business.

 

John Carney: I think that you almost need to have that competitive edge right now, I would say, in this market. I just moved back to Cleveland as you know and everybody wants the same thing. Right? What is the brief when you talk to an investor? Does it go something like this. “I want the lowest priced property in the best area with the highest return for cash flow and capital growth.” Right?

 

John Williams: Oh yeah.

 

John Carney And so everybody wants that. And I mean it is a battlefield out there trying to get deals, at least here in Ohio.

 

John Williams: Oh I will tell you that is a dog-eat-dog world. But I will say that Maricopa County is probably one of the most cutthroat counties in the country as far as real estate. We have got some of the savviest investors. We also have probably the most sophisticated tax and data recording systems available, which also makes it the cutthroat market that it is. So, absolutely, everybody wants the best of the best of the best. In this business if you are not hustling, you are not getting the deals.

 

John Carney: So, what are a couple of good hustling tips We have some listeners out there that might be listening to the podcast, driving in their car or going for a jog and saying I want to get into this game. I am educating myself. Or they are already looking for that next deal and they have noticed that their market is now way more competitive than when they started out. What are some recent tips that you have? What are any strategies that you have come up with that are helping find those deals that your business and your investors love?

 

John Williams: I was fortunate early on to get a few good mentors that taught me the foreclosure, pre-foreclosure, distress seller and various others, including trusting salesmen. The typical investor is going to find a real estate agent, say go find me a good deal. They are going to go search online and figure out what they think is a good deal even though they may not be an investor themselves. And, really, it depends on the market you know. For example, right now, if you want to find a good deal on the MLS in Phoenix, you are really not going to find one. If you do, they are few and far between and they are being swept up by guys like me or even guys better than me who that is what they do all day long. So my advice is to really carve out a niche and that is going to be in the way you market yourself and to find these sellers off market. So, everything we do is off market direct to seller. Meaning I am not waiting for a seller to call an agent to list it to go on the MLS so I am free to serve everybody else. Most of our deals that we do are direct marketing to sellers direct. So we don’t have any competition or very little and we are able to negotiate much better that way and find the deals that make sense for us.

 

John Carney: To elaborate on that, talk about how that is sort of a win, win for everybody.

 

John Williams: It is a win, win for everybody. Going through the traditional selling of using agents, there is definitely ups and downs. But in those cases, there is a reason why the property is going to be below market value. And that is because it is either in need of repairs, the seller is in distress and needs money or there is a timeline involved. Because we are able to offer cash and that may seem pretty shaky because everybody says they are a cash buyer these days. But we offer them some other options besides just a low-ball cash offer. But in the end they are not paying real estate commissions, building cost repairs. We are not paying that either and we have a nice happy medium where we meet and able to get deals going much quicker because there are less people involved.

 

John Carney: Yes, and that is a good system that you have at J & J. Now, it didn’t evolve overnight. You touched on the fact that you had great mentors. But, let’s talk about the timeline. You went from working to your own wholesaling operations, owning your own investment shop with partners. For people starting out or just new to the business, you have to give them a timeline. When I talk to investors, people want immediate gratification. I say you can have a little bit at a time, but you have got to map out a ten-year plan and be consistent and be dedicated. So, could you shed a little bit of light on that?

 

John Williams: Yes. First of all, this is not a get rich quick business to be in. I moved here in November of 2001. So that took me almost 16 years of being in the Valley. I think I bought my very first house, which was a HUD repo, probably 60 days from moving here. So I was kind of just eager to get into it and, hopefully, had the partners that would provide the capital and I provide the knowledge, know-how (or so-called know-how as I was learning as I was going) and provide the blood, sweat and tears to get some deals done. And along the way I have learned a lot of things. You know there has been highs and lows. I have lost everything almost twice. Which really I figure was somewhat necessary. Failing to learn what you are not good at to fix it. So, yes, 16 years later I am here. We are still hungry and learning every day. And yes, it takes bumps along the way before you can really find out your niche and what you are good at and, yes, that is kind of the story there.

 

John Carney: So, what is J & J working on right now? What is the jump out of bed in the morning project that you guys have in your sights?

 

John Williams: You know, the funny thing is, my partner and I are both deal junkies and that is kind of what we live, eat and sleep is deals. So we look at everything. We are very fortunate that now we are to a point where we have a healthy base of over 1,200 tenants that we own and manage, so it gives us a little bit of flexibility to not—like in the early years, we were begging and borrowing just to pay mortgages, etc., to buy new stuff. So we have the flexibility there, but really we are looking for taxable properties. Our favorite asset class right now is mobile home parks. And that is probably just because what I started out in. My partner Joe, his father is huge in that and owns over 65 parks in Maricopa County and Pima County and Canal. And that is kind of what he was raised on and myself and we love it. We are good at it. Our team is good at it. We really just look for those and then everything else makes sense. A 150 house package came my way and, oh my God, that actually looks like it might work. So, you know, we get excited about deals when it makes sense.

 

John Carney: I understand on a basic level the mobile home park model. I am more through our family business understand multifamily apartment buildings. So that is what I am on the hunt for. But mobile home parks—it can’t be something where you wake up in the morning and say: “You know what? I think I am going to be a real estate investor. I want to buy a mobile home park”. You had mentors, but I am now hearing from more and more people about the mobile home park business. How would you get started in something like that—safely I suppose?

 

John Williams: Yes John. It is definitely not a business you want to wake up and just dive right into. There are certainly ways for people to get involved in mobile home parks right off the bat. And that is going to be your cleaner, nicer, probably age restricted parks, where really you are just buying a cap rate, not equipment. I am kind of putting a quarter in a gumball machine you are going to get out of return. Once again, we go with the masses that and we buy distressed parks, typically family parks. And these parks need work. A lot of time we become developers because we have to go in and rearrange the entire layout of the park—bathroom utilities, mixed tenants, which a lot of times half the park could be that. In our eyes, one rotten apple could spoil the whole bunch. It is really fun and no park is the same, but I can tell you that ours were just huge projects. My partner and I now still have two parks that we have never been paid a dime on because they are still in the rehab phase and some of these we have owned for 3-4 years and that is just the name of the game. We are willing to sacrifice now and not make a penny for years to know that someday that is going to be stabilized and that is going to be paying a monthly check to our mailbox no matter what.

 

John Carney: Just throwing off to cash flow.

 

John Williams: Absolutely. You know, just to go back to your question about how would somebody get started? I would suggest breaking it down to a micro level and just buying a single manufactured home. There are deals out there. One of the first videos I ever watched back in 2002 was a guy, Monty Scruggs, Deals on Wheels. You can buy homes that are in existing parks and you can basically sell those to new owners, create some paper, get a few of those, collect down payments on each, get a few of those and then get yourself an income stream. You can even go on further to buying your own lots and putting a manufactured home on it and either keep it is a rental or sell it on terms. But I would say those are two good ways to get started at the micro level and then kind of build from there. Looking back at our experience, everyone we started from was one house or one condo and then turning it for one 4-plex and selling that and moving up to an 8-plex and then a 32-plex. I just recently sold a 32-plex for a $900,000 mobile home park. So, really it is just a natural progression and once you feel like you have mastered a certain area of expertise or at least got really good at it, they you move onto the next. And you keep growing and just building your game.

 

John Carney: Sound advice. Growing into the investor that you want to be at a manageable level. Something I talk about and that comes up in just about every episode. We talk about the team and critical players, but would you say, you talk about your mentor and you have a business partner, Joe, and you guys both work well together. Would you guys say that it is the two of you working together? Can you talk a little bit about the value of partnership and shouldering the responsibility with someone who has a little bit different skill set but the same passion for the same mission.

 

John Williams: Absolutely. Having a team and a good partner is invaluable. I would not suggest anybody going out there and trying to do this on your own. While you may feel that you are making the entire pie, I can tell you that you will be left out on opportunities, as well as, who wants to be on top of the mountain by themselves. So, yes, I have had numerous partners over the years. Without really giving much thought about why we are getting into partnership with that person, just to find out whether it was eight months or a year later that it didn’t work. My advice is that you really have to look hard at the person who is going to be your partner and make sure that you both have your core values and both of your expectations are on the same page. And if you can find a partner that does work well with you, then stick with it and set some really assume crazy goals and just go for it.

 

John Carney: Absolutely. And I think that part of the experience, part of the real estate game, so to speak, is about fine-tuning your team over time and finding good partners. You have got to have them. I can’t say that anything you do in life, especially in real estate is going to work out the first time. But once you do find those people that you can build long-term relationships, my experience is that it has been golden. I always like to sit back and review any type of business relationship that didn’t go to plans. Those are lessons that you take with you and, obviously, apply as you move forward. I don’t expect it to happen, but I have got a better system personally for evaluating who you are going to be spending a lot of time with. Right?

 

John Williams: Yes. And there are two teams. The first team is going to be all your license professional vendors that you need to have in your corner to make you successful, which is your title agency, your contractors, your realtors, etc.  And then there is your inner team which is even more important and finding out what everybody’s core competency is. I can tell you right now that we have been able to develop this great relationship with people who we have done business with for years and, for example, the new partnership we have for our wholesaling business is a guy I have known for many years. You have met him John. He works and he sells properties. So, good. Partner, you take over that side of the business and we will fill this in on acquisitions. We get deals giving you sell and we are back out there looking for more deals. Strategic relationships like that really allows us to leverage our time and knowledge and really exponentially grow.

 

John Carney: That is sound advice John and thank you for pointing that out. It is combining skill sets. I have never thought of that in my notes here. You kind of have your first team, the licensed professionals, and the outer team, the second team, the inner circle. That is a great way of looking at it. I have never thought of that before. Gold! All right, let’s get into what we are calling the fourth quarter questions. What sport did you love playing as a kid and what lesson did you learn from playing that sport?

 

John Williams: My siblings and I were very fortunate that we played all the sports growing and nail it down to football, basketball and volleyball in high school and track. And then to football in college. I would say football was my favorite and the lesson I learned is I wasn’t very good when I first started and I was timid and shy and I got the crap kicked out of me a few times. The lesson there was to get the heck up and get after it. You know what, it doesn’t matter if your opponent is bigger, stronger, and faster, you can always find a way to overcome and that was part of the biggest lesson for me.

 

John Carney: Love it. What sports do you participate in today? What are you doing right now? You are not padding up and going and playing tackle football on the weekends are you?

 

John Williams: No, far from that. I am lucky if I can do much these days. I have a pretty beat up body from my years of sports. So really, I like work with a personal trainer, which has really gotten me in better shape so that I can lead a normal life. Definitely coed sports and weekend sports is out for me and I spend my time playing a little bit of golf, swimming, and I am really enjoying the outdoors more so than sports these days just because of all my former injuries.

 

John Carney: Gotcha. What is your favorite book—what book do you keep coming back to. Or have you read something recently that you are telling everybody about. What is on your shelf?

 

John Williams: I am not a huge reader. What can I say, I love pictures. I have read all the classic real estate books, Think and Grow Rich, The Richest Man in Babylon. I will tell you a few that I just recently bought and I just got into. I am pretty excited about them just because they were referred to me by some other real estate entrepreneur real estate friends of mine. One is “Secrets of the Millionaire Mind” by T.R. Becker, and that is really just kind of mastering the inner Zen as well. I like it so far. I just got into it. The second book I am reading is called “Flection” and this is basically a book for improving your systems in business and really getting a grip on your business. That is kind of what I feel, where we are today. Now it is time to look at all of our systems and strategies and team and figure out how to get us to the next level.

 

John Carney: We are all about the next level. Leveling up. So, real estate is a business where they have one or ten thousand doors. That is how I look at it and I know you look at it. Whether you are looking at entrepreneurs for motivation or athletes for motivation or anyone for motivation is there one quote that resonates with you that you look to for motivation. Especially when you get that call that the new house you just renovated is flooded. What are you thinking?

 

John Williams: I just read a quote yesterday that said something like that. Some people wait for quotes to get them motivated. The rest of us just go out and do it. I love quotes. I get a thought of the day every morning and those just get me going. One of the quotes that I would say epitomizes what we do in real estate is “Good things come to those who wait, but only things that are left by those who hustle.” [Abraham Lincoln]  Right there, you can sit back and wait to get some stuff, but only after the stuff that I left behind because I was hustling.  That motivates me because the sky’s the limit in real estate and it is just a matter of how hard you want to push yourself, how hard you want to work, how many deals you want to do, how many houses, how many properties do you want to own? You just get to go out and hustle. As much as we want or as little as we want, depending on what we are up to.

 

John Carney: So, just like playing a team sport or individual sport, I personally love the come from behind victory story. Could you share a quick one of those?

 

John Williams: Yes, this wasn’t so much as a come from behind as thinking it was going to be a disaster to turning into a huge success. In 2009 when the bottom dropped out of the market and Phoenix, the apartment market truly failed the day after. And the first 4-plex I ever bought, John, was a boarded up 4-plex in downtown Phoenix. Not a very good area, was boarded up and I bought it for $24,000, which was $6,000 per door, which was ridiculous. I am sure it was probably one of the cheapest 4-plexes I bought that year. I bought it thinking the building was great, it was so cheap, and then coming to realize you get what you pay for. We unscrewed the plywood, broke into the thing, there were no keys, it was uninhabitable and realized the cost that it would take us to get where it needed to be to rent it out. The funny part is once we got this place rented out, the type of tenants we were attracting were the worse of the worse. We were actually threatened to be killed by our tenants, which is kind of a funny story. We didn’t get hurt, and we ended up buying the next three contiguous 4-plexes, packaged them all up, put a wall around them, kicked out everybody bad and what we thought would be a quick flip we just sold this last year and we made a huge profit and exchanged that into a new mobile home park which is going to net us thousands of dollars a month. It was a great story where we thought we picked a lemon, stuck with it and it turned out to be one of our huge successes.

 

John Carney: There you go. That is a great story. Thanks for sharing that. We have to stick with it to get across the finish line. Lots of obstacles in the race. Do you have any habits or anything you do to train for success? We have talked about reading books or listening to books on tape, but is there anything that you think is important when you are running a business and you are investing in real estate to kind of check out for yourself and/or get into that flow state where you are really focused.

 

John Williams: That is one of those questions John that we could talk for hours on and what is going to help in your success. But, as far as habits go, it is the little things that you do day in and day out that is going to bring you success. And that is getting up before the competition because I don’t care who you are and where you are, there is always somebody that is getting up earlier, sending out more letters, and going house to house knocking on doors. Someone is going to be doing something bigger, better more of them than you and trying to steal your success and your deals. So, it is really the little things you do. Really, we try to be fair and try to be very interested in our team, in our co-workers and even our tenants. We want to make sure that everyone is happy, and this goes back to the more you give, the more you get back. So, really always be willing to have a vested interest in others and their success and that will come right back to you tenfold.

 

John Carney: Perfect. More great advice from John Williams—waking up early. You have to be an early riser to get the deals and get your hustle on. We have said it before, it givers gain. Be willing to give something to others and not expect immediate gratification from that. Be an all-around good guy, right Johnny.

 

John Williams: Absolutely. You have got to be a good guy. I would say integrity is the number one thing you need in this business starting out. As you know, relationships are what all this is about. If I didn’t have all of my contacts through all the years I wouldn’t be where I am. All you have in this business, especially starting out when you have nothing, is your word and integrity and that is what helps you build those relationships.

 

John Carney: Alright. Well, thanks so much John for taking the time to join me in the Locker Room today and share those gold nuggets of advice with our audience. Where can people in the audience find you to carry on the conversation online, social media, website. Where can we connect with you if there is someone interested in learning more from John Williams.

 

John Williams: We do have a website, jjrealestateholdings.com. Don’t judge us by our website. It is really not finished. But, now that you mention it, we probably should get on that and seek out some other relationships to help us with that business that we are week in. So, I would say jjrealstateholdings.com. We have a bunch of other exciting new things we are working on in building a new company with some new partners, with real sale houses and Chris Simon which we will eventually have on the website.

 

John Carney: There you have it, to connect with Johnny and J & J Real Estate, look up there website which will be listed on the show notes, iTunes and my website. There you have it folks. I truly hope you picked some actionable advice from Mr. John Williams today. Make sure to check out the post-game report on I-Tunes and while you are there, please subscribe to the Real Estate Locker Room show to insure that you never miss out on the pro tips from our guests. The mission here is to help you elevate your real estate game. If you like what this show is about, I would be grateful if you would leave a 5-star review on iTunes so that other like-minded real estate investors can find us easier. Visit johncarneyonline.com for links and additional content associated with today’s show. While you are there drop your name into our e-newsletter sign up form so you can keep in touch with us and receive more real estate investing insight, tips, tricks, hacks and other good stuff. Remember to stay focused on your goals, have fun, stay in the game. I am your host John Carney. Until next week, work hard, play hard and profit hard. Thank you.

 

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