Posts tagged "investing"

JC 008: How to maximize cash flow with Tyler Sheff

April 26th, 2017 | no comments

Want More Mailbox Money?

Real Estate is a Team SportMeet Tyler Sheff who is the founder of CashFlowGuys.com, a licensed real estate agent, problem solver, educator, inventor and syndicator.

Want more mailbox money? Stop paying retail for your investment properties and boost your cash flow. Tyler shares his strategies for deal structure and offers advice on how to adjust your mindset in order to scale your business.

The mission of The Cash Flow Guys is to create successful real estate investors. Tyler teaches investor how to do the math associated with vetting a deal and how to interoperate the results.

Tyler’s the host of the Cash Flow Guys Podcast and a Master Facilitator of Robert Kiyosaki’s Cash Flow 101 Game.

5 Key Points:

  1. Put people on your team who own rental property
  2. You need an education to invest in real estate
  3. Lean how to receive mail box money
  4. Learn how to do the math
  5. There are different ways to structure a deal

 

Favorite book, Equity Happens by Robert Helms and Russell Gray

Favorite quote, “you can be fired from your job but you can’t be fired from you investments”

The Power Hour – Tyler’s parting advice for ongoing success is to tune out and think for an hour every day.

Reach out to Tyler by visiting his website, http://www.Cashflowguys.com

Facebook – https://www.facebook.com/tylersheff

Twitter – https://twitter.com/tyler_sheff

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

PODCAST:                        008 – How to Maximize Cash Flow with Tyler Sheff

Introduction:            Welcome to the Real Estate Locker Room Show with John Carney. Did you know that investing in real estate is a team sport? Join John and his guests as they explore the intersection of 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 ongoing 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 today from Cleveland, Ohio. We’ve got another great guest on the line from the Tampa area down in Florida, and that’s Mr. Tyler Sheff, and we are going to talk about the importance of cash flow. Tyler is the founder the www.CashFlowGuys.com and a licensed real estate problem solver, educator, investor, and syndicator. Tyler has been involved in the real estate game for over sixteen years and now maintains a 100% laser focus on investing for cash flow and helping others do the same. As a master facilitator of Robert Kiyosaki’s Cashflow 101 game, Tyler hosts workshops to teach the busy people how to use what they have to obtain what they need in order to build passive income and escape the rat race. Welcome to the show, Tyler.

 

Tyler Sheff:            Thanks, John.

 

John Carney:            The Real Estate Locker Room is all about having the casual locker room conversation about real estate. I’m really interested in the intersection of sports and the business of real estate. To get kicked off, I like to stretch out a little bit with just a warm-up question about sports. Do you have a favorite athlete that you can share with our audience?

 

Tyler Sheff:            Oh let me think. A favorite athlete? Maybe Wayne Gretzky. There was a time that I watched hockey when I was a kid, and I was a big fan of Wayne Gretzky back at the time.

 

John Carney:            Fantastic. I had number 99 on my bedroom door in the Oilers jersey.

 

Tyler Sheff:            There you go.

 

John Carney:            Coming from up here in Cleveland, he was a guy we loved. So you’re all about cash flow (cash flow is king), but before we talk about some of those strategies that you love and implement, can you let me know how or why real estate ended up as your career path?

 

Tyler Sheff:            It’s interesting. I like to tell people this is my second act in real estate. My first act went good, don’t get me wrong. I got involved, I started flipping houses and of course I got my real estate license, it’s going back to the year 2000. And that was all fine and dandy. I learned how to make money, but I never learned necessarily how to. That’s why I went into real estate initially, to answer your question, for money. I wanted to make lots of money, but what I didn’t take the time to learn is how to keep the money. So it took unfortunately a second act for me to figure out how to actually keep the money and have the money working for me instead of me working for it. That was a big revelation.

 

John Carney:            So if you’re in sales, we’re talking about real estate sales, you’re finding a buyer or a seller and then you’re getting a commission check, and then you’re onto the next one.

 

Tyler Sheff:            Hopefully.

 

John Carney:            Hopefully. If you’re a good agent you’re on to the next one. You have multiple deals cooking. But what you’re saying is we’ve got to get that income producing more income through assets, correct?

 

Tyler Sheff:            I call it mailbox money. I love it when I open the mailbox the last couple days of the month and the first few days of the following month, and I’ve got all these checks rolling in. It’s just beautiful every time that happens. And here’s what’s cool, John. I also get this mailbox money from properties that I’ve never owned, and just serving as an agent. Because what I’ve figured out I learned from one of my mentors, is I can take my real estate commissions as a promissory note instead of taking it as a lump sum at closing. Now by doing that I found myself putting together a lot more deals because the realtor commission no longer became an issue. ,You would think that the buyer would be paying the real estate commission if it’s after closing, right? But what we found is that with rental property it wasn’t really the buyer that was paying the commission, it was the tenants because they’re paying to live there. So once you adjust your mindset a little bit, I was able to carry my commission back as a note, make a decent little bit of interest, and then receive monthly payments of my real estate commission over time so I could take that payday and I could stretch that payday out over three years, five years, ten years, whatever the buyer decides they want.

 

John Carney:            I’m unfamiliar with this strategy, but believe me I will become familiar with this strategy quickly. So you’re getting a principle plus interest type arrangement with the new buyer on the promissory note, right?

 

Tyler Sheff:            Correct. So let’s say for example I sell a house for you and my commission on that house would be $10,000. Now normally in most markets the seller pays the real estate commission. I run across a lot of buyers that are not skilled at negotiating, so what happens is they wind up buying what I call off-the-shelf or they wind up paying retail. Well that’s really not going to help them if they can’t structure deals that make sense based on their investor identity. So instead the service that I offer to buyers in my market and actually across the country because we have buyers from all over the place that buy in my market, is I go in and negotiate for them on their behalf. Yes believe it or not, there’s a real estate agent out there that can negotiate, there are a few of us. And in exchange for me negotiating, the buyer pays my fee. That way in negotiations the seller is not concerned with having to pay a ‘realtor commission’ because it’s not coming out of their proceeds. That allows us to focus on the true negotiation that which the seller, or the buyer, is really going to pay, and what the seller is really going to receive. And now when I do that, I can talk to the seller about what their walk-away money is. I don’t have to talk in hypotheticals, ‘Well if I give you $100,000 for this house, that really means you’re going to net $80,000.’ No if I say we’re going to give you $100,000 for the house, you’re going to net $100,000 and here’s how we’re going to do it.

 

John Carney:            So that is really removing the elephant from the room on both sides in getting down into the negotiations, deal structure, and all the other fun stuff, huh?

 

Tyler Sheff:            Absolutely. Absolutely, I find that most investors are just like realtors. They’re not skilled at negotiating and they don’t enjoy negotiating. So if you’re not skilled at something and you don’t like doing it, well do you really- what’s the chances of being successful while you’re doing it?

 

John Carney:            So for all the listeners out there, when we’re talking about sourcing a real estate agent and how important they are in most markets, and looking for that extra value, now you have another tool, another question you can ask, another way of thinking about generating a better cash flow right from day one. Not only that, by removing the commission you’re also lowering the tax basis of the property.

 

Tyler Sheff:            Yup.

 

John Carney:            I’m not an accountant but I believe that that’s how that works because I’ve asked- in the past I’ve asked for the commission to be separated and paid separately out of escrow so that- this was for a property I bought as a primary residence, and that was basically to lower my tax basis on the public record, which is legal in the state where I did that. So that is a strategy that I’ve not heard of, and I’m going to be looking into. Alright, well cool. When you’re out there working for yourself on your own cash flow investments, you have- you’re representing your partnerships, and your family interest. Talk to me about the team you have and how you went about finding those people.

 

Tyler Sheff:            My team is very diverse, and as is my business. I’ve got several different classes or different legs of the business and I was probably the last person to get on board with the team concept. I thought one of two things depending on what time in my life it was. It was either nobody could do it as good as I do, or I can’t afford to hire somebody because I thought to myself, ‘If I hire an employee, that’s going to cost me $40,000 a year.’ I didn’t sit there and think- my mindset was off, that’s a big problem. If your mindset’s not right then it’s going to keep you from doing things. When you hire somebody for $40,000 a year, you’re not writing them a check for $40,000 a year on the first day they show up to work. What you owe them is $769 for this week, and then if they’re good, next week there will be another $769. So I was stuck in this mindset and one of my mentors, Jay Massey, helped me get unstuck in that regard. It’s like you’re not paying them in advance. I mean they do a job, they do a good job, you keep paying them and they’re valuable. If they don’t do a good job, then you don’t have to pay them anymore. That’s kind of how it works. So that was a game changer for me.

 

John Carney:            Finding the mentors to help you get a business structure that would allow you to help more people and to scale up, right?

 

Tyler Sheff:            Absolutely.

 

John Carney:            So with the Cash Flow Guys, I love the name because cash flow is what real estate investment should be all about, and if it’s ticking along and well-structured in advance, and everything works out, that’s what you should be receiving, mailbox money. Talk to me a little bit about how your business helps people get in that right mindset and get that first deal, or that third deal, or that obstacle deal in the portfolio.

 

Tyler Sheff:            Robert Helms from the Real Estate Guys Podcast, Real Estate Guys Radio, he said do the math and the math will tell you what to do. And I heard that a few years back at one of his seminars, and it really rung true. Like Cash Flow Guys is about educating people on the right way to do the math on the real estate investments, to do the due diligence, to do their homework, to understand what they’re investing in because our mission is to create successful real estate investors. People say, “What do you do?” I say, “I make billionaires,” and essentially that’s what we do. I teach people the steps that they need with no gimmicks, no hype, no extra up-sell to be successful as a real estate investor. And that’s the real crux of the service that we bring to the community. We’re not in it to sell courses, we’re in it to sell real estate. So there’s a big difference there and if I sell somebody one property and they get nuked, do you really think they’re going to buy another property from my team?

 

John Carney:            Succession follows success, and you would want your clients to be successful, that is just Business 101, right?

 

Tyler Sheff:            Absolutely right.

 

John Carney:            But not everybody subscribes to that, but that sounds great and I mean right out of the bat whether you’re a client of the Cash Flow Guys or not, if Tyler or one of his agents is working on a deal with you, it sounds like he’s got a system right out of the gate that helps you maximize your cash on cash return.

 

Tyler Sheff:            Absolutely right. For us, John, it’s not a rush, we’re not in a race. And a lot of investors, they go to some weekend seminar, and that’s great because everybody needs education. I’m not anti-education, I’m actually very pro-education. But they come out and they’re ill-prepared to make buying decisions. What we do, what separates us- and then they get with some regular real estate agent who’s just dying to make a commission. And it really to some degree, you really can’t blame them because they’ve got to eat, right?

 

John Carney:            Absolutely.

 

Tyler Sheff:            And so you’ve got a person that’s overly anxious to get into a property, and then you’ve got somebody who’s overly anxious to sell one because they don’t have a passive income themselves; that creates a potentially volatile and riddled with failure type situation, where I don’t need to sell real estate to make a living because I can do nothing. I can spend my days on my kayak, I am retired at 46, I don’t have to work. So I’m able to take the time to get my clients on board with the right mindset, the right skills and tools to allow them to be successful, because I’m not in this for the money. Money’s nice, yes, but it’s a byproduct of the service that we provide.

 

John Carney:            Correct, you are an entrepreneur at heart solving problems, and the income is just the natural byproduct of having happy clients is what it sounds like to me, Tyler. But along with being an entrepreneur, like real estate investing to me is bare bones entrepreneurship, whether people want to call it investing or being an entrepreneur, I look at them to be somewhat interchangeable because if you want to have multiple properties and scale up so that you can be fishing when you want to be fishing, when the fish are in town so to speak, and running at the right spot, you have to get started and then you have to have sound strategies, cash flow strategies, and it takes the average entrepreneur or small business ten years to be successful. What have you seen? What timelines have you seen, kind of an average from the people you’ve been able to help who said, “I understand real estate, I just don’t have the confidence to do it all by myself. Give me a hand.” How many years are you seeing before people are really able to sit back and say, “You know what? I can double this now.”

 

Tyler Sheff:            You know it depends on the person. We meet lots of different people, and the big part of what we do with coaching is we take the time to interview people and really get to know them and try to get to the bottom line of what they’re trying to accomplish. You’ve got the engineer types that have to know every single bit of information because that’s how they process thought, that’s how they think. Engineers are going to have a more difficult time, in other words their success gap is going to be much larger, it’s going to take them longer to accomplish the same thing as somebody who is a little less conservative so to speak, who is not as analytical to get to where they need to be. The engineer is a very risk averse type person, so it’s just going to take them a heck of a lot longer than it would the average person per say. Now I am very concerned about risk, and I’m cautious when I do things, I’m far more conservative than my wife is. And she’s not careless by any means, I’m just more conservative than she is, and we were able to get our first couple dozen doors within our first year of getting out there and doing it. Now with that process, as far as a timeline, I was in a big rush. I thought there was a badge of honor by the number of units that I had under my belt. I took a financial bath to some degree, or at least a dip in the pond that gave me an invaluable education, so we’ll call that tuition.

 

John Carney:            Okay, I mean that is a great analogy because that’s maybe skipping a valuable step.

 

Tyler Sheff:            Yeah.

 

John Carney:            But you didn’t make the same mistake twice, right?

 

Tyler Sheff:            Well actually I’ve got to say, I actually have made the same mistake more than once. I’m not going to lie, I couldn’t say otherwise. But the best thing I try to tell people whether they listen to my podcast or at any one of our events is that take the time to understand what we’re doing. In America we go out and buy stocks and mutual funds, we don’t understand what we’re investing in, we trust somebody else, a complete stranger on Wall Street to bargain with our retirement fund. It’s kind of illogical if you think about it. I used to play the stock market and now I look at the two, it’s like real estate is not rocket science. You don’t have to have a PhD to invest in real estate. Although I do have a PhD technically, I’ve got a Public Highschool Diploma, PhD, but it’s not hard, it’s not difficult to invest in real estate, but it does take some education and whatnot. And the faster you’re willing to take action, I think the faster you’ll see it.

 

John Carney:            I agree. A big proponent of taking action because results only follow action as opposed to planning I suppose. You’ve got to have that action step in there. Well great, so I mean we are talking about cash flow, and you’ve brought up some great points and some great tips for helping investors get started with cash flow. So before we get into our two minute drill and conclude this, what is your number one piece of advice for a rookie real estate investor who is after the cash flow? I might be repeating myself but know the numbers, is there something other than the math that you find to be a critical piece of the puzzle?

 

Tyler Sheff:            Put people on your team that own rental properties. Whether that be an attorney, especially a tax professional, a real estate agent. Insist that your team members in those roles own rental property because if they own rental property, they should be able to teach you how to maximize your efficiency in that regard.

 

John Carney:            There you go. We could end on that note because that is great advice, but we won’t. We’re going to now tie the sports aspect into this show. So are you ready for the two minute drill?

 

Tyler Sheff:            I’m ready, bring it.

 

John Carney:            Perfect. When you were growing up did you love playing sports or did you participate in any sports that made you realize ‘Wow I learned a few lessons there and I’m applying that to my business’?

 

Tyler Sheff:            I played a lot of sports, and I’ve got to be honest with you, I was terrible in most of them. But I did enjoy baseball and I learned quickly that I enjoy being part of a team. I absolutely enjoy being part of a team.

 

John Carney:            Okay, that’s great. I think that I learned the same thing. And are you still playing softball, or playing any team sports today, or is it fishing and-?

 

Tyler Sheff:            Well I got a little older John, and then I got a little fatter, and things don’t work the way they used to, and I’ve fallen down and gone boom a few times, and now I unfortunately don’t play sports anymore. I am an avid kayaker and fisherman and whatnot. I do some diving and that type of thing, and spear fishing. I’m an outdoorsman, a sportsman.

 

John Carney:            Don’t discount that though, like I think the outdoor solo athlete is just as much of a sportsman as the team guy playing the branded sports.

 

Tyler Sheff:            I agree.

 

John Carney:            And I’ve been fortunate enough to reel in a big game fish, and it wasn’t easy.

 

Tyler Sheff:            That’s for sure.

 

John Carney:            The fish made it easy for me being a rookie, he just swam right up and we pulled him in, but it’s supposed to be harder than that and the people on the boat were blown away. But it’s a tough sport.

 

Tyler Sheff:            Well hey, get a swordfish on the line and then tell me if that’s easy.

 

John Carney:            I doubt it, it was by no means a swordfish and that doesn’t look easy, not at all. Have you caught a few of those?

 

Tyler Sheff:            I have actually, I caught a few out in the Gulf of Mexico, and let me tell you that was an experience.

 

John Carney:            That is, that’s pretty cool. I’d love to see the photo.

 

Tyler Sheff:            Yeah I’ve got them somewhere around here, I’ve got to dig them out.

 

John Carney:            Look I know that a lot of our guests and a lot of our audience are avid readers, or their avid podcast listeners. Is there a favorite book that you have whether it’s related to sports or to business or to just something that supports being better at business that you can recommend?

 

Tyler Sheff:            I’ve got to say, the best book- and I’ll say this before I even give the title, and it’s about- they’re hopefully supposed to be releasing an updated edition. Not that the old edition is necessarily outdated, but these two guys put out so much value when they put out a piece of product that they’re just going to add more value to it. It’s called ‘Equity Happens,’ and it’s been written by The Real Estate Guys which are Robert Helms and Russell Gray. You cannot- it’s no longer in print but it’s still available from time to time on Amazon and I see the price fluctuating between $20 and $150. I love that book, I learned so much from that thing. It’s a big thick read, but I absolutely love it.

 

John Carney:            ‘Equity Happens,’ that’s good. We’ll get that up on the show notes for sure. Alright, is there a quote that keeps you motivated when things aren’t going your way? When the chips aren’t falling your way?

 

Tyler Sheff:            That keeps me motivated? Yeah what keeps me motivated, and sometimes I tend to be a little over-conservative, and it’s actually a quote that I use quite often and people have- I feel people now using it, so I guess I originated this. You can be fired from your job but you cannot be fired from your investments. So I’m having a down day, and I’m thinking, ‘Ah jeez.’ At the end of the day I think to myself- listen I have a stream of income that will remain uninterrupted for a lifetime the way I’ve structured it. So whatever’s bothering me, whatever’s bumming me out, I don’t really have anything to complain about because there’s always someone else that’s worse off than me, and at the end of the day my stream of income is never going to stop. So really I just need to put on my big boy pants, and buck up, and get back to work because I’ll be okay.

 

John Carney:            The gratefulness practice. It could always be worse.

 

Tyler Sheff:            That’s right.

 

John Carney:            Cool. Do you mind sharing one come from behind victory in real estate that you’ve had in the last ten years?

 

Tyler Sheff:            I had some properties under contract when I was first starting out in real estate. I had 22 houses under contract as a lister, or one investor. And apparently there was a riot in the neighborhood where all these houses were located, it was not in a friendly neighborhood. So long story short is on that Friday night, every one of those houses was burned to the ground. There was nothing but literally charred remains. But it turns out that after it was all said and done, the seller kind of thought about trying to figure everything out, and we wound up selling the lots for much more than we wound up getting for- that we had the houses listed for because the houses were in pretty bad condition. So it turned out that the riot actually helped the situation, it made it better because it just cleared all that rubble out of the way and he didn’t have to pay $10,000 a house to have them torn down.

 

John Carney:            That’s a good story. You have to be in it to win it, don’t you?

 

Tyler Sheff:            Amen.

 

John Carney:            Cool. Before I let you go, is there anything you do on a daily basis to train for success or to get into a flow state?

 

Tyler Sheff:            I have my power hour in the morning. I tune out. No Facebook, no email, no cell phone, no nothing. I sit back, I do absolutely nothing. I don’t read, I just sit back and think, and I do that for an hour every morning before anything else happens in the morning, even before my coffee happens in the morning, I just sit back for an hour and I guess some would call it meditating but I just call it thinking. I just sit back and think.

 

John Carney:            That is a great success tip, and it gets you into the flow state, and then you’re ready to tackle the day, right?

 

Tyler Sheff:            Amen.

 

John Carney:            Perfect. Well thank you for joining me in the Locker Room today, Tyler. Where can the audience find you to carry on the conversation if they have any questions or want to get ahold of you through the Cash Flow Guys?

 

Tyler Sheff:            I’m kind of everywhere but I guess the best way to reach out to me is through my website, go to www.CashFlowGuys.com. Of course you’ve got my podcast and all of our content information, my contact information is right on there. So feel free to reach out if you have questions or if there’s anything I can do to help you.

 

John Carney:            Perfect and we’ll have all of that on iTunes and on my website in the show notes. Alright, there you have it folks. Cash flow, cash flow is king. I truly hope that you picked up some actionable advice today from Mr. Tyler Sheff, and we thank him for taking the time to share those gems with us. Make sure to check out the Post Game Report on iTunes. Again we’ll have links to all the great places you can connect and interact with Tyler there. And while you’re there please subscribe to the Real Estate Locker Room Show to ensure that you don’t miss another episode, but also to help other likeminded real estate investors find us when they’re looking for real estate related content. If you like what we’re about, I’d be grateful if you’d tell a couple of your friends so that they can also share in the learning. If you visit www.JohnCarneyOnline.com you will see the additional content and links, and while you’re there you can sign up for our newsletter and keep in touch with me for other real estate investing insights, and tricks, and hacks, and other great stuff. So 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. Thank you Mr. Tyler Sheff.

[End of Audio [00:28:12]

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© John Carney 2017

JC 003: How to drive by your retirement fund with Richard Desich

March 30th, 2017 | no comments

Take control of your retirement by investing your IRA and 401K in real estate 

The Real Estate Locker Room Show EP 003Richard Desich joins John in the Locker Room this week and shares his pro tips for success in real estate, business and life.

Richard is the co founder of the Equity Trust Company. The Equity Trust Company provides the platform for people to self direct their IRA and 401K retirement savings into main street investment s such as real estate, small business and start-ups.

“The more you learn, the more you earn.” is the Warren Buffet quote that kept coming up throughout our conversation.

Are you an avid reader? There are days when Rich is buying multiple books on his Amazon App. A few books that Rich suggests are;

A Few Lessons for Investors & Managers  by Warren Buffet
A Fire to Win: The Life and Times of Woody Hayes by John Lombardo
The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone
Made in America by Sam Walton

Rich attributes his success to a thirst for learning, having great mentors, reading every day and understanding that he doesn’t know all of the answers.

He advises us to learn how to add value to all of our professional relationships and be willing to give at all time.

Richards’ second favorite quote is from investor superstar Charlie Munger who says,

“Go to bed a little bit smarter and a little bit wiser than when you woke up.”

Thanks again Richard for taking the time to share your story with us.

To connect with Rich Desich visit www.trustetc.com

POST GAME REPORT: Episode Transcript

The Locker Room Real Estate Show Podcast

JC 003: How to drive by your retirement fund with Rich Desich

 

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 to the Real Estate Locker Room Show. I’m your host, John Carney and we’ve got another great episode coming your way today. We are going to discuss, using your 401K or IRA Retirement Savings to invest in real estate, and potentially other assets. So, if you’re a real estate person, which I hope you are, and not so much of a stock market person, you are going to love this podcast. Our guest today is, Richard Desich. He is a real estate investor and Co-Founder of The Equity Trust Company. Mr. Desich helped form The Equity Trust Company, which allows Americans to self-direct their IRA and 401K Funds into main stream investments, such as real estate small business and start-ups. Equity Trust now provides custodial services to approximately 300,000 clients. And has $28 billion in retirement assets.  Richard is a noted lecturer and trainer, and has traveled all across the U.S.A. educating Americans on the advantages of self-directed retirement plans which he is going to get into with us today. You may even come across Richard quoted in the popular publication such as – The “Wall Street Journal”, “Investor’s Business Daily”, and “Fortune Magazine.” Mr. Desich is a graduate of Culvert Military Academy, and the Ohio State University. He currently serves on the Board of the Girls and Boys Club, and Baldwin Wallace University. Welcome to “The Locker Room”. Richard, my friend, how are you doing today?

 

Richard Desich:  I’m doing great John, thanks for having me.

 

John Carney:  Cool, thanks for taking the time out to talk with me and share some insight with our audience. I like to kick things off here by warming up with a little bit of a stretching exercise. It’s just one question to get the conversation going. We are going to be exploring the intersection of sports and real estate and talking about the similarities. So,  who is your favorite athlete of all time?

 

Richard Desich:  Well, I think that kind of changes over the year, but as of right now, I’d have to go with LeBron James, and it’s a hometown answer because I am just a hometown guy. There are just so many great components of his story and arcs of coming back home and winning a championship—being down 3-1 and being the first team to ever do that and comeback in the NBA Finals. That’s so compelling. So, right now it’s LeBron James.

 

John Carney:  Perfect. I’m just going to add that if you’re looking for athlete quotes. “Nothing is given, everything is earned.” Something along those lines, which is an absolutely fantastic quote by LeBron James. So, let’s get into it. Rich, tell me why real estate and how did you get started in real estate and let us know a little bit about how that rolled into Equity Trust Company.

 

Richard Desich:  Absolutely. You know, everything for me revolves around my family and in particular my dad. You know my family came to the country and I am very proud because my family are steel workers. They came into the Cleveland area first. The only thing outside of the Cleveland area, West of Cleveland, about 30-40 miles, is Steeltown. So, he came in and grew-up in that area. He came from a humble background and wanted to make a better life for himself. After being in the service and graduating from college (he was the first in the family to do that) he got into investments, finance and wanted to diversify portfolios for folks who he was helping as a financial planner. Real estate was a real class that he just knew and he understood that it was one of the greatest wealth creators in the country. So, he learned his journey through apartment complexes and some of the family homes and went on to some commercial properties. He had that breath of experience and all the challenges for each one of those classes of real estate. He learned from that. My dad is an entrepreneur. He was always willing to try and not afraid to fail and learned from his mistakes. So, I had known real estate for my entire life, and that’s kind of how everything that I look through right now is through the lens of what I learned from my dad. And then I’ve had some great mentors along the way, folks I’ve learned even more from. So it’s all starts with him and my family.

 

John Carney:  Perfect. So, when you were growing-up what sports did you play? Were you involved in team sports and did you see any carry-over from the sports you played growing-up into your professional life, specifically, real estate?

 

Richard Desich:  Yes, I think it did. John your book has a great title, it’s a real team effort. I think that idea does carry over from sports and athletics into any type of investment. If you are an entrepreneur, you need to have a team. I mean you can be a leader, just like LeBron on the Cavs. He is a leader on the team. But, you know, you don’t win a championship just by yourself. It’s in some ways, sort of cliché, it really is the absolute truth. So, when you are looking at small business or real estate. Which is what real estate is if you are starting out. And you do it, as a form of small business. And as you grow, you have to have a good team around you. I think that’s part of the number one correlation between your sports and the business world.

 

John Carney:  Yes, I agree. So now, I want to learn a little bit more to share with our audience. It’s a little more about your business. Let’s say that I have a hundred grand in my retirement fund. Now’s a good time to be talking about this. We’ve got an election year, right. The market’s up and down. You know, chaos in other parts of the world. Brexit, all these things are happening. So, you know I’m not a stock market guy. I’m a real estate person, but I have an IRA. I’ve worked for public companies in the past and I still have a small amount sitting in a 401K plan. It shouldn’t be there. It should probably be with Equity Trust. Tell me how you walk clients through the type of service that you can provide for them, especially if you’re a busy professional who understands real estate but doesn’t really have all the time at the moment to really get into it. What kind of services do you provide for these folks?

 

Richard Desich:  Absolutely. So, you know, naturally our company Equity Trust actually started out as an accident. It was really based around real estate. You know my father put together commercial real estate investment deals and he wanted to let his clients diversify outside of the stock market. Just to the kind of point you were talking about, the markets being up and down and kind of being out of their control. You know, something that couldn’t affect whether the markets were going up or down. He wanted to diversify a portion of their portfolio and he had his clients invest a portion of their IRA fund into an investment with Drug Mart. He got a license for that, just for his clients and they had a great investment. They made 10% of their money for 20 some plus years and then they ended up selling it and they carried the profit of a sale into another great property, so they won. What happened from that deal was that someone had heard about it and said, “can my clients do that?” So, it’s almost by accident the company began. And so, to a person who has $100,000.00, for example. Those who know, or understands or think that real things is a good active class to be in, that’s who we deal with, a good portion of our clients are real life, real estate investors. They may look down the street, or see a market they think is good for an investment. If they like it, they can drive by a good portion of their investments and become involved directly. Depending on their comfort level of what they are looking for. But, they can see their retirement portfolio as they drive by and they are not looking at something and going up and down. So, the mechanics of it is someone has a $100,000 and says, I can go buy a piece of property here for $50,000.00 and they transfer their account to us. And what we do is the paperwork and the reporting and all of the compliance items, all the registration things you need to do to keep that account with a tax advantage in it. So, that’s what we do as a custodian. We facilitate transactions every day. I’m really proud of what we do. Over the last 9 months our company, our clients, through our company, placed a billion dollars in capital, into the economy here, and into investments, and a lot of real estate. A good portion of that is real estate. Which improves community. So, that’s kind of it in a nutshell as to what we do as an organization.

 

John Carney:  Let me ask you a few more questions that just drill into that a little bit. For instance, single family homes—okay we buy one of those. I’ve got a little bit of money left over. I like office buildings for some reason. I work in an office building. But, the average person on the street just can’t go out and purchase an office building, right? So, if that’s my burning desire, do you help people put funds together to invest in apartments, or office buildings? I’m just using that as an example. Is that a service that’s available? Or by self-directed does that mean you are 100% in charge of sourcing and securing your own deals?

 

Richard Desich:  Yes. The self-directed component means that we are a passive custodian. The folks that come to us have a deal in mind and are working with someone or come to us with putting theirs into syndication. You know, they can buy into a limited partnership or tenants in common, a portion of. There’s a portion of commercial building I want to buy 10% of it. You know, 5 or 6 of their friends come together. Or their person who’s syndicating an investment can buy a portion of that too. Or they can do the single-family homes, they can do raw land, apartments, duplexes, mobile homes. It really is the whole range of the real estate market. That’s what we do. It depends on the person coming in and what the flavors are that they want to do.

 

John Carney: I think that’s pretty-clear. Let’s talk a little bit about what you’re working on that’s real estate related? One of your first projects in real estate was building a commercial center, is that correct?

 

Richard Desich:  Yes. I worked and helped manage that early on in my career. In a commercial center and then single-family homes. Now we have our building here which is a large project. In the real estate world our headquarters is here in Westlake, Ohio. I’ve just been surrounded by good people and I can attribute to what Buffett says, “The more you learn the more you earn.” I always liked that quote. So, in addition to real estate reading, and listening to podcasts, I have been going to real estate investing seminars, since I was 10, 11, 12 years old. And have just been around real estate investors. So, I was always learning. I don’t think I know, I know what I don’t know. Just with anything, just constantly being around really sharp people who have different ways of accomplishing their goals and being successful. I’m as far as real estate, always, always learning.

 

John Carney:  That is fantastic advice. And you know, maybe that’s something that comes with a little bit of age, and the aging process. I mean, I sometimes wish I could turn the clock back. Some of the first real estate deals I did when I thought I knew more than I actually knew. There are plenty of lessons that I learned the hard way. But you know, checking your ego at the door as you get into real estate and listening to what those who have been playing the game for a while have to say is definitely good advice. In surrounding yourself with people who have the experience. Is that sort of where you’re going?

 

Richard Desich: Absolutely. I love Charlie Munger. I read a lot of his stuff and Warren Buffett of course. You know, what Warren Buffet said, “Learning from mistakes is probably one of the greatest lessons in life. But you don’t have to learn from your mistakes. You know, it’s much better to learn from someone else.” I think that’s such a powerful way to look at things. Anything you are trying to do in life. So many very successful people who know the pitfalls. The things you look back to and say, oh wow, I wish I had gone 10, 15, years ago I had done that. Those are great questions to ask mentors that you can seek out. Say, “Hey, where do you wish you could have done things differently?” And that’s what will get you such a wealth of information and help you out. Like you said, checking your ego at the door and understanding operating considerably, a sense of humility. I think that’s really key to being successful.

 

John Carney: Yes, the Warren Buffett, Charlie Munger relationship, I’ve read a little bit about that.  I read Warren’s rather large lengthy books, and I think I wrote an article about him a few years ago. I was talking about exercising your investor muscle—one of the lessons I learned from Warren Buffett. He went out and actively pursued Charlie Munger, right? You might know this story a little bit better than me. So, jump in and correct me if I’m wrong, but, when he was young, he wanted to have a mentor?

 

Richard Desich : Yes, go ahead.

 

John Carney: When he graduated and decided, this is what I want to do, I want to trade shares and be a stock market person. He just determined he was going to go and work for the guy who was doing it the best. And didn’t get the job right away. He moved from Nebraska to New York. And then he had to kind of keep beating on the door to get in. And then he was kind of given all the not so glamorous work, right? But I mean, that’s how he started. And if you don’t want to read an 800-page book, there’s the lesson in finding a mentor.

 

Richard Desich:  Finding mentors is so important. I was actually, Benjamin Graham in New York. And, but that’s absolutely right. He read the book and it was great, because Graham wrote two kind of seminal books on investing and he learned from going through “The Crash.” You know, “The Depression.” So, he took those lessons and Warren Buffett and a value investor. Hey, you know what? I want to learn from that. So, you can, I always like to try to find the more successful person that you. In whatever field you’re trying to get into. And look at real estate, there’s plenty of amazing real estate investors out there. But always look at ideas, and saying, “How can I spend a little bit of my time every day. Charlie Munger says, “I want to go to bed a little bit smarter each day.” And this idea of constantly learning proving yourself. I always think, you know, when I talk to the kids. I work The Boys & Girls Club, I talk to them. I say, the greatest investment you can make is $7.99 in a book. Then you can interact with some like Warren Buffet, or Charlie Munger, you can learn from them. Or Sam Walton, these are on Amazon. These are all amazing people, just take lessons from them. And for a very small cost, you can. You can learn from reading a book, or listening to a Podcast, or seeking out a mentor too. You can, the books allow you to access people like that. See what you normally have access to. But, people in your community, who have done real things, those lessons. I would think, you would want to, or are you where you want to be? Reaching out to them. So many people do like to give back. I think just having mentors is a really powerful thing.

 

John Carney:  Right. And so, when, you know, I have, when I went and reached out for help. I never asked someone, “Hey, will you be my mentor?” But when I was living in Australia, on a real estate development I had to ask somebody for help. I was because I wanted to get financing. I needed someone who could guarantee finance. I didn’t have any assets at the time in Australia. And you know, when I later asked him, hey, why did you help me out? He said, “Oh, you know, because you were already proven to be motivated. And I’m just paying it forward, this is how I got my start.” I find that a lot with people who are playing at the elite level of real estate. You know, that they have been in this game for their entire life and are more than happy to sit down and share their knowledge with young people. Would you say that’s accurate?

 

Richard Desich:  Absolutely, just by asking, just by picking up the phone, and asking. I think that’s a huge thing. But also you have to be respectful. I think a universal law, and you want to give before you receive, and so. You know, to the extent that you can try to provide value to that person. And maybe, it’s not, you’re going to tell them things about real estate that they might not know? But, maybe there’s something else you bring to the table. Maybe you know about marketing, and you could help them out that way. Always be looking to give. That’s another kind of universal success trait. Is just give and not necessarily give till you get something back. It’s just the way the universe works. It’s the more you put out, it does come back. So, I think that’s a you know, a combination of mentorship. But also trying to be respectful amongst where they’re at. And in their career, and if you can help them out. Or start off a relationship by a connection. Or however you can provide value to that person. I think that’s important too.

 

John Carney:  Yes, that is great advice, you know, givers gain and I suppose we’re talking about there’s going to be listeners to this show who were, who are doing it, doing their due diligence that want to get into the real estate game, you know. Meet people, who hopefully want to have a chat with them and with a trust company about putting their 401K Retirement Savings into tangible assets that they can drive by. But, they don’t know how to get started? So, a lot of getting started is taking the right action. What advice do you have based on all of your experience? And especially, working with hundreds of thousands of investors in real estate. You know, what is your number one tip that you can give to someone who is just starting out?

 

Richard Desich:  Well, that’s a great question? I feel blessed because I’ve been around so many amazing, creative, real estate investors my entire life. And they really run the gambit from every type of thing you can think of, from commercial, to mobile homes, to single family homes, to developers. I think the kind of commonality is, it’s two things. One, is to learn as much as you can. And that kind of comes back to what Warren Buffett says, “The more you learn, the more you earn.” Get as much information as you can: Podcasts, books, mentors, learn. The on the other side of the coin is? You know, take in all that education and knowledge. But, if you don’t put it into action, then it’s just a thought in your head. So, you have to execute on a plan. But if you have a good balance between those two then that’s where you get success. If you get all the knowledge and learn, make mistakes, and stand on the shoulders of people who have come before you, but also, be able to say, I’m ready to go, and pull up your sleeves and do the work and execute. So, I think those are two key points there.

 

John Carney:  I agree. You see, I think we already talked about that, we’re going to cover that. I mean, again, back to the guy, back to the kids that are out there that want to become professional athletes. Or the young adults that want to take it to the next level. It’s sort of the same thing isn’t it? I mean, you’ve got to decide that you’re dedicated to this activity and then surround yourself with the people that can teach you the skills to get started the right way.

 

Richard Desich:  Excellent. I love the title of your book, “Real Estate is a Team Sport” it really is. It is, you do need to have a team of, a great team around you. It’s very rare for something to be built that’s really great right now, really great that it was just one person. It’s almost impossible. You have to realize you job. You have to be able to fill-in the blanks with all of these great organizations. People will have to test the business and other endeavors. You have to have a great team on it. So, putting that team together and building, and then being able to execute on a plan that’s truly what it’s all about. So, it’s your knowledge and work too. Everything comes back to what LeBron said. He has a post and videos about what he does, as far as his work ethic. And he’s saying, here I am 5:00 a.m. I’m in the gym. Even though he’s the biggest star in the world, he’s out there working. If you Google, you can find him. His work out, just like an hour and a half, doing it every day. And so, there’s part of it. You know, to be successful, you have to roll-up your sleeves. And do the repetition. And do what is necessary, to win, and to succeed. You have to put the work in. And you have to enjoy it, too. If you enjoy what you’re doing, you enjoy the process, and you enjoy the people around you that you are surrounding yourself with. Then, there’s that quote that says, “That if you love what you’re doing, you’ll never work a day in your life.” And I think really what people can aspire to be that. If they are going to really inspire to that, then they’re going to be really, really, successful.

 

John Carney:  Yes, that’s fantastic advice, thanks for that. Richard, are you ready for it? For “The 2 Minute Drill?”

 

Richard Desich:  I am, absolutely.

 

John Carney:  Alright, perfect. Just so you know, perfectly goes a little bit longer than 2 minutes. But, here we go. What sport do you love playing as a kid? And what lessons did you learn?

 

Richard Desich:  I always liked soccer. I played soccer. And it’s something about the sport; it seems certain components of it. You put the training in, the commitment. And then, you go out and you win as a team, and you lose as a team. So, I always liked team sports, all of them.

 

John Carney:  Cool. What do you participate in today? What activities, or sports do you still compete in, as an adult.

 

Richard Desich:  Actually, you know, I got into running. Which I love. I’ve done The Cleveland Marathon. And I think that’s also a good, great aspirational goal. I never ran growing-up. I would encourage folks to, I never thought about, one of the great life goals. I ran a marathon before that, just to kind of do it. And I really got into running. I think it’s a great discipline, and it allows you time to think as well. When you’re putting in those miles, train up for, not necessarily for a marathon, half-marathon, or 10K, 5K, or whatever it is. I think running is just a great, you can do it anywhere. And do so much while doing it. So, I love running a race, I’m a big runner.

 

John Carney:  What’s your favorite sports or business book. You’re a big reader, so we’ll let you pull out one from each category, sports and business.

 

Richard Desich:  There’s a book about Woody Hayes, two fold, a real famous coach at Ohio State University. And you know, Woody was, he was a guy who had challenges. He wasn’t always the best temperament sometimes. But, he had a great commencement speech. Where he talked about how he might not be the smartest guy in the entire world, but no one could out work him. And he’d just worked, and it was a great work ethic. I always loved that quote, I loved that speech. And being an Ohio State guy. One of the things about Woody Hayes. Just growing-up I was just a big fan. So, such a good sports book right now.

 

John Carney:  Cool. And then you have a business book to read?

 

Richard Desich:  Yes.

 

John Carney:  If everybody listening has to go out and buy one business book to put on their shelf so when they bump into you, you guys can discuss it—what is that?

 

Richard Desich:  You know what? And this I’d tell you to do. I showed this to my nephew to keep in mind. So, my Amazon account, my Kindle Amazon app. And showed him, literally, me buying books. I’m reading all the time, and buying a couple of books a day sometimes. And I’m always learning and reading. For business, that would be a habit, read, always read. A book that I am reading right now. my favorite business book is always changing, because I’m always reading so much. But, there’s a great one coming back to, “Warren Buffett.” It’s called, “A Few Lessons For Investors and Managers.” That’s a great book that can kind of teach you some general lessons that can apply to anything that you’re doing. As far as there is directly upon real estate. Although, it’s not tactical in real estate. I think they’re good core principals. So, anything that you can read, that would be a great book. I’d say, “Made in America” which is the book I’m reading by Sam Walton, is one of my favorites. Same Walton on his deathbed wrote that book. And there’s just amazing references that you can pull out of there, great stories. I also love Jeff Bezos book on Amazon. And it talks about, it’s called, I’m drawing a blank on it? I’ll get it to you for the show notes. But, there’s a great book that Jeff Bezos was the author of. It’s one of my top 3 right now.

 

John Carney:  Alright, tell us about one come from behind victory you’ve had, in either business, or hopefully real estate? Where, you know, had a deal and everything was going right. Then a big ole’ obstacle appeared in your way. Then you got side tracked. How did you get back on track, get that victory. Anything pop into your head?

 

Richard Desich:  Yes, absolutely. Our corporate headquarters here in Westlake. John you have to come out here. You know, this is a massive project. It took several years. And was kind of my night-night job. And there’s so many moving parts. You know what it really taught me and I took this from the marathon training is that you have to understand, that certain things are their processes. You have to take your time. You’re going to have set-backs and I think if you are going to understand that there are always going to be set-backs. It’s not really a matter of if there will be, it’s how you react to them, the set-backs. So, I think if you understand patience and you get creative and you innovate, out of almost any challenge, you really have to keep things in perspective. But, yeah, it taught me so much. I learned so much from that transaction.

 

John Carney:  Cool, let me ask you this? How do you get into your flow state, or “The Zone?” Is there a practice or a ritual habit that you have that allows you to get that laser like focus on it, on a task?

 

Richard Desich:  I suggest to you and everyone out there to read on productivity as much as they can. I’ve read so many of them, learned so much. So, what I do is I chunk my day out. So, I have you know, certain parts of my day are for strategic planning. Certain parts are meetings. Certain parts are for phone calls. And so, I don’t get distracted, and I, everyone has, depending on their own psychology, and who they are 3-4 hours a day where I call them, “Magic Time.” If you can focus in on and find your magic and for me my magic time is from [10:00] to [12:00], that’s, where you allow, a lot of great thinking. And so, I schedule my day around those 2-3 hours, and focus on strategy. Then in the afternoons, I do phone calls, eating, but it’s set up that way for me to be successful. And I plan my morning, you know, I have a ritual, you know, as a wake-up. I drink down 24 ounces of water with sour vinegar, lemons, a squeeze of lemon. And that’s a ritual every morning. Then I feel hydrated, I have a clear mind, and I exercise most days. And then I get in my morning by doing certain things prior to even starting work. So, I think having a morning ritual and having what works for you. Maybe you’re a night owl and “The Magic Hours” are you know, later at night, that’s okay too. Just figure out, what your rhythms are? And work to those rhythms and work to your strength too.

 

John Carney:  Alright, one last question? What is your number one tip for winning more in the real estate game.

 

Richard Desich:  I think it comes back to that quote, “The more you learn, the more you earn.” So, the number one tip for winning more is? Just always have a sense of humility, understand that there are people who know way more than you, no matter how good you are. You can always learn something from someone. You can always give back and help them out too, if that’s from a mentorship perspective. But, always try every day, try like Charlie Munger says, “Go to bed a little bit smarter, a little bit wiser.” How ever you do that, A Podcast, a book, a mentor, helping someone else out. And you’re learning from helping them out. Anyone of those things. “Go to bed a little bit smarter, a little bit wiser.” That’s the winning tip.

 

John Carney:  That is a great tip. Go to bed, a little bit better than when you woke-up in the morning, I like it. Well, Rich, thank you for joining me today in the Locker Room. I definitely, learned a lot from this conversation, some books I’ve written down here in my notes, to jump on Amazon – www.amazon.com, and put in my “Shopping Cart” Hey, where can members of our audience who might want to contact you be able to find you online? Do you have social media accounts? Or an email address you want to share? How do people get in touch with you?

 

Richard Desich:  The best way to get in touch with me is through our company website. Which is – www.trustetc.com, and the company is – Equity Trust. And so – www.trustetc.com, it has all the information there and lots of great content—free content. Kind of our core value of our company provide lots of education and help you become successful.

 

John Carney:  So, is there a specific place on your website, if people just visit your website? We’ll have that up on the show notes, and the extras both on ITunes and the website. Is that a lot of free information to get people, you know, to have a better understanding of the opportunities, and self directed IRA.

 

Richard Desich:  Absolutely, our goal is to write tons of information so that people can become better educated on the opportunities. Then they can make a decision that’s good for them. And what we want to do is have a long term relationship with all our clients and have them do well and everyone wins.
John Carney:  Everyone’s happy, happy clients, we love them. Alright, there ya have it, folks. I truly hope you picked up some actionable advice from Mr. Desich today relating to a number of things. We talked about investing your retirement savings into real estate. You can drive by and have a look at. We talked about great books that everyone should be reading. And you know, the power of learning to earn more. So, make sure you check-out “The Post-Game Report.” on iTunes and while you’re there please subscribe to the Real Estate Locker Room Show to ensure that you never miss out on the pro tips that our guests have shared with audience. The mission here is to help you elevate your real estate game. Now, if you like what this show is all about. I’d be grateful if you would leave a nice 5-star review in iTunes so that other like-minded people in the real estate world can find us easily when they’re looking for free content to listen to when they are training for their next marathon. Please visit – www.johncarnionline.com, because there will be links, and additional content associated with today’s show posted there. And while you’re on the website feel free to drop your Email in the newsletter sign up form to receive more real estate investing insight, tips, tricks, hacks, and other great insight, great stuff, all related to plan the real estate game. Remember to stay focused, work on your goals, have fun, stay in the game. I’m your host – John Carney, and until next week. Work hard, play hard, and profit hard.

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JC 002: Multifamily Syndication, Teams and Giving More with Joe Fairless

March 29th, 2017 | no comments
Meet Joe Fairless; real estate investor, multifamily syndicator, philanthropist, author and host of the world’s longest running daily real estate podcast, The Best Real Estate Investing Advice Ever Show.

 

Joe started his career in advertising on Madison Avenue in New York City. He began researching real estate as a way to achieve financial independence.

In 2009 Joe began investing in single-family homes. Joe wanted to scale his real estate investment business and focused his attention on multifamily buildings and syndications as a strategy to grow bigger, faster. Now Joe controls over $85 Million in multifamily real estate.

Joe competed in baseball and football growing up and played football in college. The lesson that he learned sports that he applies to real estate every day is that when something bad happens, learn form it quickly and move on quickly.

Favorite quote, “the secret to living is giving”

Check out Joe’s book, The Best Real Estate Investing Advice Ever. Volume I

Tune in and subscribe to Joe’s podcast, Best Real Estate Investing Advice Ever Show

You can reach out to Joe directly by email to info@joefairless.com Don’t forget to mention that you heard him on John Carney’s podcast and receive your FREE APARTMENT RESOURCES GUIDE.

Thanks again Joe for taking the time to share your story with us.

POST GAME REPORT: Episode Transcript

The Real Estate Locker Room Podcast

JC 002 Multifamily Syndication, Teams and Giving More with Joe Fairless

 

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:  Hello and welcome back to the Real Estate Locker Room Show. I’m your host, John Carney, coming at you from Cleveland Ohio. Joining me today in the locker room, from Cincinnati Ohio, is Joe Fairless. Joe is a real estate investor, a podcast host, a philanthropist, and author. If you’re not familiar with Joe’s show on iTunes, it is the world’s longest running daily podcast for real estate. It’s the Best Real Estate Investing Advice Show. Joe has interviewed Barbara Corcoran, the author we all know so well in the real estate world, Robert Kiyosaki, as well as hundreds of other high profile and influential real estate investors. His podcast has over 4000 daily downloads, and 140,000 each month. And we’re up to episode #771, so check that out. Along with being a Podcast Host, Joe is also the author of, “Best Real Estate Investing Advice – Volume 1.” which we can talk about. I remember seeing that release, it blew-up Amazon. So, check out his book as well. Klout considers Joe the top 5% online influencer. Joe is an active, full-time real estate investor, who controls over $54 million in real estate at the moment. His focus is on multiple family. How are you doing Joe? Thanks for taking the time to share your experience with our audience.  

 

Joe Fairless:  My pleasure. Nice to be on the show. I know that you are a little under the weather. So, I will try to talk as much as I can. That way you don’t have to talk. I am really looking forward to our conversation.

 

John Carney:  An all-around good guy, thanks for that Joe. All right, we’re here to explore the intersection between elite sports and elite real estate investing. I like to stretch out, as with a sports related question? Who is your favorite athlete of all time? And why?

 

Joe Fairless:  Well, I’d say, the first person that comes to mind and it’s a little ridiculous, but Mickey Tettleton. He was baseball player who played for the Detroit Tigers, the Texas Rangers and probably others. He just had a funky batting stance and I just really enjoy how he approached the game a little bit differently. Because he had a batting stance where you know, you typically hold the bat upright, right before the pitcher throws. But, instead he had it just parallel to the ground. And then he would bring it upright, right before the pitch came. And what I liked about that is, it’s different. But, yet he was effective non-the-less. I think applying that in our real estate business is certainly noteworthy. Where we can approach things differently but then be just as effective, or more effective as before anyone else.

 

John Carney: I’m not familiar with this player and his batting stance, but I will look that up here shortly. You transitioned from the advertising world in New York City, to full time real estate investing. I’m interested in that journey, how people make that transition. Do you mind sharing your story about, “why real estate?”

 

Joe Fairless:  Yes. I am from Texas, where I graduated from college in 2005 from Texas Tech. as an advertising major and then went to New York City. I went from, cows and cotton, to concrete and I guess, no sun and lived in New York City for ten years. I worked on Madison Avenue after college, which is very prestigious, but it is also code for, I didn’t make any money at all because I was in a very competitive environment. I climbed the corporate ladder, became the youngest Vice President of a New York City advertisement agency and then, at the tail end of my advertising career, I started investing in real estate. The reason why is because I knew that I had to invest, I had to learn about investing, but I didn’t know quite what to do? So, I ended up reading a bunch of books, went to online forums, talked to people I knew and found real estate investment the choice that I wanted to pursue. Once I did that I started looking at what I wanted to invest in. Initially I bought single family homes and in 2009 I bought my first house. Not because I had a crystal ball, and I knew it was what the right time to buy. But, because I didn’t have any money. So, in 2009, I was very fortunate, I didn’t have any money until 2009. And once I bought in 2009, I bought my first house, $76,000.00 that rented for about $1100.00 or so. Rent is around $1200.00 now. Went for $1100.00 to $1200.00 now. I bought three more houses, and then realized that it just wasn’t happening fast enough. I would make $250.00 a month, on a house. And then a tenant would move out and I would have to pay, meaning me, would have to pay $5000.00 for move-in ready costs, the carpet, painting, and misc. fixes. There would be my profit that was going to be wiped out for a year and a half. I thought, wait a second; this isn’t going to make me financially independent. I’ve got to think of a different approach. I started studying multi-family investing, learned the process, bought a lot of books, started talking to a bunch of people. I ended up leaving my full-time job while I was still studying, multi-family investing. Well, after I left, I left because I just wasn’t digging it anymore and life is too short not to do stuff you enjoy and let it go by. Therefore, I started looking at syndication where I raise money from investors in my apartments and share in the profits. Because I couldn’t get approved for a mortgage for a house. And I couldn’t get approved for a mortgage for an apartment building. Because I didn’t have a W2 income. I was kind of forced to find creative ways to buy apartments, and that’s what I did, I wrote and learned how to raise money from investors. By getting something together, and share in the profits and now, you mentioned $54 million, it has actually increased, to $85 million, since the last buy out. So, now I control $85 million-dollars-worth of real estate. That is, apartment communities, that’s like 99% of it, apartment communities. I still have three homes but most of it is apartment communities and they are in Dallas, Fort Worth, and Houston, Texas.

 

John Carney:  Congratulations. So, you got into the single-family home game. Which is where, I don’t know? I’ve never really made this comparison before. But right now, up in Cleveland we’re in the ALS, so I’m thinking baseball right?

Yes, in order to get to the ALCS, all these guys started in Little League right? So you have to start somewhere. Would you say, the single-family home experience taught you what you needed to know to raise the bar to the next step because that’s part of the progression of being a real estate investor?

 

Joe Fairless:  Yes, I’d say it taught me what I needed to know and to learn more about it. It taught me that real estate is the way to go, for my own purposes. And it taught me that what I was doing at the time wasn’t going to be scalable and wasn’t going to help me become financially independent. I created a spreadsheet for my homes that included a home, I think it was like a home a year, 3 homes a year that I was going to buy. And over ten years it was like, oh, my god, stop the madness. Because I bought four homes, I was having a hard time keeping track of all the paperwork that’s involved with the property management, the insurance, the taxes. I was like, I do not want to scale this at all. And, I want to pause, by saying you can make money doing that approach by the way. People have and they do. I just didn’t want to set myself up with single-family homes. So, it inspired me. And gave me some perspective for what I did want to do.

 

John Carney:  Right. We both know people who have enormous single-family home portfolios. And a big key to that is, a big key to everything is management. You decided that your niche was going to move and we come across that all of the time too. You know, we are talking about sports, what athletic competition were you involved in, when you were growing-up?

 

Joe Fairless:  Well, I primarily played baseball and football. I played a little bit of football in college at a small Division III school. I primarily played baseball and football.

 

John Carney:  To be a collegian athlete, in any division, requires a certain amount of discipline. When you left the competitive sports arena of college did you see that it helped you apply what you learned through the discipline of sports and in your first job, and translate that right into real estate.

 

Joe Fairless:  I think what it taught me the most is that when something bad happens, learn from it quickly and move on quickly. That’s what so many people get caught up in. I’m on a softball team right now and I see people on my softball team and they make an error, or they strike out and when they strike out, they should kick themselves off the team… it’s soft pitch, when they pop-up, or hit a grounder…and they’re pissed off for four innings. It’s like, dude, get over it! Immediately, learn from it and get over it, immediately. Otherwise, you’re going to let that influence the rest of the game and they’re going to be compounding negative consequences. And that’s what I apply in business too. When stuff goes down, which happens weekly. Something goes wrong weekly. Sometimes daily depending on what’s happening but at least once a week. We got to learn from it quickly, and then move on.

 

John Carney:  I agree, it’s a team effort, real estate or business. And whether you’re buying apartments or selling doughnuts you need a whole team of people to help you be successful. .

 

Joe Fairless:  Yes, I read that in a book somewhere too, but I forget which book?

 

John Carney: It’s really the same.

 

Joe Fairless:  I’m kidding, it’s your book.

 

John Carney:  I know. Doughnuts—that’s what got me, I just can’t come up with the doughnuts. I just moved back to the states. Now we have a Dunkin’ Doughnuts around the corner. So, of course I had to try that. But, along the lines of what you just said is something that I learned recently. And maybe it’s something we’ll, it was the way it was phrased? “A bad decision made quickly is better than a good decision that takes a long time to plan.” And this can be applied to when you have to make a decision quickly. If you don’t have all the time in the world, make a decision and if it isn’t the best decision at that time, you still have time to adjust.

 

Joe Fairless:  Yup. I agree with that for the most part. It depends on how high the stakes are? Sometimes it takes a little bit more. But, one of my favorite books, is, “Blink” by Malcom Gladwell. He talks about how he can a split decision, an informed decision in the blink of an eye. That is just as informed as if we’d spent months, years, pondering what we would or should do? Our eyes very much embrace that philosophy for the most part.

 

John Carney:  Malcom Gladwell’s fantastic. I like all his stuff. What are you working on right now? I think you might want to share with us, I guess?

 

Joe Fairless:  I’m working on a couple of things. I mean, the three ways I make money. Because let’s start there, and then we’ll talk about a couple of projects. Three ways I make money –

 

  1. By doing multi-families syndications. Where I raise money from investors and invest and put up a little bit of my own money on the deals. And then we share in the profits. We are under-writing multiple deals. Well, more than multiple. Lots of deals right now. My business partner is in Dallas, as we speak, literally as we speak. He’s in Dallas touring properties that we’re in the final found on. And so, I’m focused on that and getting my investors prepared for the next deal.

 

  1. The second way I make money is through my Podcasts. And really, when I say make money it’s pretty much break even, depending on my staff salaries. But, it is, a way for me to provide thought leadership, to learn by interviewing people like yourself and others who are very experienced, or doing something very interesting. And just keeping my mind sharp. So, working on continuing to optimize the Podcast, and getting the word out there.

 

  1. And then the third way, I make money is through my client consulting program. I have private group of clients that I walk, hand by hand through the multi-family syndication process. It’s a major amount of my time. So, I also am working on new content to continue to keep that program refreshed. My team and I upload a new piece of content each week to the resources site that my clients have access to.

 

Those three revenue streams are what I use to guide my months, my weeks, my days. In terms of what I focus on. Those are some of the projects.

 

John Carney:  Okay. And in each project, or each income stream I would imagine has a unique team allocated to that right? So, I mean, what they’re investing in, in real estate. Where you’re providing a service, like consulting service. Or you have to surround yourself with a group of people, correct? And would you look at those teams, as one big team, or individual teams, or how do you manage that?

 

Joe Fairless:  There’s overlap, for the most part. I have my administrative assistant, Samantha and I have my content creator, who helps me with the content and thought leadership, that’s Theo. He’s a Co-Author of the book with me. And we’re writing another one right now together. He and I and she and I, all three of us, overlap on all three of those revenue streams. As far as other team members go. I have team member who finds interview guests for my podcasts, as well as does the show notes and does the promotional efforts. And I have a team member who does all the editing of the podcasts. So, those are the four team members that are on my payroll every month. And then misc. contractors. Like, someone in India, who does SEO for me through UpWork.com. And some social media company that handles social media and things like that.

 

John Carney:  Got it. And I mean today, in today’s world, stay on track with real estate. You look at it like a business, the business of real estate, and being an investor. And you want to grow and attract money, right. Because everyone runs out of money. As someone put it recently, you have your internal/external team. The external team being your professionals, like, your accountants, and your local lawyers, your internal team being like, partners, mentors, and assistants. So where do you go when you have profile. How do you fit a profile into the mix if you’re starting out as a real estate investor and you want to raise the bar, build your portfolio, in whatever niche you’re in and take it to the next level? Would you recommend that raising your profile in your community is something you ought to look into doing?

 

Joe Fairless:  Yes. Help me understand what you’re asking?

 

John Carney:  You’ve got your team, and you’ve got your businesses up and running, but you’ve also built a great profile in the industry. When it comes to people who are investing in real estate, investors who are new or wanting to scale up. I just wanted you to touch on adding to your profile. You spoke about social media management and some content creation.

 

Joe Firless:  I think the most important thing when you talk about building your profile. Or building your brand, or creating awareness for yourself and your company is to find one platform that comes natural to you, that you enjoy posting on and own that one platform. One of the mistakes people make, is try to be everything to everyone all of the time. That’s huge mistake, because any one of these platforms, Instagram, Twitter, Facebook, a blog community, YouTube, iTunes, Amazon, has millions, upon millions of people to speak to and to connect with. The mistake people make is that they want to be everywhere at once. They water down their message and don’t focus on one thing. Just focus on one thing, on one platform that you enjoy posting on. Provide thought and leadership to your audience once you define them, and you’re going to over time, build a following. That’s going to translate into the direct business results.

 

John Fairless:  That is great business advice. So, I guess that’s what carries us onto the next question that I have. If you’re a rookie real estate investor, or a newbie that might have one deal or two deals under their belt and are just thinking of doing exactly what you did in your career—and that is, they may burn out on the corporate ladder side or just need a change of pace or might be wanting a move from a warm climate to a cold climate, or visa-versa—what advice would you have for them to kick-off and get started?

 

Joe:  For someone starting out? I’d say, make sure that you know the basics of what you’re looking to do. Whether it’s a single family, or multi-family, or storage units, or office retail, industrial parking, or whatever? Learn the basics through books, and online forums. Then, once you know the basics. Identify people in your area who are doing what you want to do, reach out to him or her, or them, attend meetings. Speak to them, and get to know them. Buy them lunch, buy them dinner, buy them whatever, a book, or whatever. Add value, be very grateful and appreciative for their time in meeting them, the time they are spending with you. Be respectful of their time and go with an agenda. Have a focused conversation, make sure, if the meeting is for 30 minutes, you meet for 30 minutes. If they can stay longer, then by all means do it. But, be respectful of their time and say, “I know we scheduled for 30 minutes, are we good? Do we need to wrap this up?” Stay in touch with them. That’s probably the best way to get things going. I think 98% of the people who hear this, won’t do that. Instead they’ll read some books, do some online forums, listen to Podcasts. Then maybe reach out to one or two people at most. And not be respectful of their time, not buy them lunch. Not go in with an agenda. And that’s what happens and how the herd gets thinned. That’s how some people go to the top, some stay in the middle, some kind of float in between, and some sink to the bottom. So, I’d say fortunately you have an audience who is taking the time out of their day, to listen to this Podcast. So, I’m going to take that into consideration. In what I said earlier, I think a majority of the people listening will do that advice. But, in general the real estate investors who hear this advice, or where told this through some other channel, they won’t act on it. And it’s a shame, but it makes everyone who does that stand out, and be more successful.

 

John Carney:  Right and joining a community that’s actually not as large as people think it is. Or would you agree with that? I mean, that is also sound advice for the people that do listen to Podcasts, your Podcast, this show and the other good real estate Podcasts out there. What a great way to be in a conversation with people and learning something during that commute to work, or when you’re jogging. I quit radio probably two years ago when I was first told about Podcasts and started looking them up. The day I listened to my first Podcast I thought this is awesome! There’s more in it, and it just became a habit. So, when I moved back to the states, they were trying to sell me every subscription possible for radio. I told them I don’t listen to the radio and the guy couldn’t believe it. I listen to Podcasts, man and that’s how I continued to educate myself. Well, cool. That’s great advice Joe. Can we get into our two-minute drill here?

 

Joe Fairless:  Let’s do it!  And we’ll get to the rhythm and point of this interview.

 

John Carney:  What is your favorite sport? Or business book? That you’ve read recently?

 

Joe Fairless:  My favorite sport is, well recently, my favorite sport right now is softball.

 

John Carney:  Softball, okay, perfect, that’s a lot of fun. What about like books? Like, that might not have come up? Correct.

 

Joe Fairless:  Okay.

 

John Carney:  What is your favorite book related to either business, or for instance, sports.

 

Joe Fairless:  Okay, favorite book about business, sports, would be, “Crucial Conversations” and the whole point of the book is that they help you create a mutual purpose when the stakes are high, and opinions vary. And that’s the key, create mutual person and build up from there.  

 

John Carney:  Cool, I’m going to check that out. Is there one quote that keeps you motivated when things get tough? Like that one quote?

 

Joe Fairless:  Yeah, “The secret to living, is giving.” Another cousin of that quote is, “Help enough people get everything they want, you’ll get everything you want.”

 

John Carney:  Perfect. So, when the chips are down. Think about what you can do to give a little bit more.

 

Joe Fairless:  Yep.

 

John Carney:  Got it. Awesome. Do you have your #1 come from behind victory in real estate, and what did you learn from that?  

 

Joe Fairless:  The come from behind victory would be when my first syndication deal, it was about 2 and half weeks before we were supposed to close. We had over $200,000 worth of investor dollars go away for various reasons. And it was last minute. But, I got my one of my existing investors to go and bid what he had originally asked. And it ended up closing.

 

John Carney:  Did that translate into a happy investor at the end of the day.

 

Joe Fairless:  Yes, absolutely, certainly.

 

John Carney:  Going big. Is there any training for success? Like, your number one, maybe habit that you do on a daily basis. That would put you in a flow-state, or is it training for success habit?

 

Joe Fairless:  I have a liter of water with a scoop of wheat grass every single morning. I’ve been doing that every single morning for the last 3 years and it helps me stay healthy.

 

John Carney:  Fantastic. And then the #1 tip for winning more?

 

Joe Fairless: Would be, don’t focus on winning the score. Focus on winning the battle within how good you can be. Because the competition is in others. The competition is how good you can be within yourself.

 

John Carney:  Perfect, alright, that’s great! Well, thanks again for joining me today Joe. We want to be able to let our audience know exactly what, where they might be able to find you if they want to hook up on some social media, or carry on a conversation with you, where are you these days online?

 

Joe Fairless:  You can go to the App Store and just put my name – Joe Fairless, and you’ll find my Podcast, “The Best Real Estate Investing Advice Ever.”

 

John Carney:  And I highly recommend that all of you out there put that on your show list. So, when you’re in the car you can listen to great advice and the great guests that Joe has on his Podcast as well.

 

Joe Fairless:  I also say that if you Email me at info@joefairless.com I have a department resource guide that has all the websites and research places I go to when I’m researching markets, as well as books I wrote and recommend. So, email me at info@joefairless.com and mention that you heard me on John’s Podcast, and I’ll be happy to get that to you.

 

John Carney:  All right, perfect. So, there you have it folks. I truly hope that you picked up some actionable advice today, from Mr. Joe Fairless. Make sure to check-out this program – Post Game Report on iTunes. And while you’re there, please subscribe to the – Real Estate Locker Room Show to ensure 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’d be grateful if you would leave us a five star review on iTunes so that other like-minded real estate investors can find us easily. You can also visit John Carney online at www.johncarneyonline.com, for links and additional content associated with today’s show. And while you’re there please drop your Email into the newsletter sign-up form, to receive more real estate investing insight, tips and tricks, and other great 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. That’s a wrap Joe. Thanks again for taking some time out to share your story with us.
Joe Fairless:  Hey, I enjoyed it, thank you.

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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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