Posts tagged "investor"

JC 099: How to Raise More Capital with Jake Marmulstein

September 23rd, 2020 | no comments

Groundbreaker Will Simplify Your Syndication

Before founding Groundbreaker, Jake Marmulstein held a number of roles involving real estate and technology, supporting the growth of early stage digital technology ventures while working with the government on foreign direct investment by Fortune 500s. In 2011, he started his career in real estate, underwriting hotel investments for Watermark Capital Partners.

At Groundbreaker, Jake owns the Company’s strategic vision and execution. He is responsible for sales, management of the departments and the people leading them. Jake also manages Company finances and capitalization, as well as the Board.

Jake Marmulstein joins John Carney today in The Real Estate Locker Room to share how using technology platforms will increase investor confidence.

Key Points:

  1. Look at markets that are underserved and listen to what people are saying.
  2. Real estate syndication technology allows you to automate the process and raise more capital.
  3. The more investors you have, the greater your need for a platform to manage them.
  4. Simplify! Presentation and easy user experience is important.
  5. Streamline your syndication process.

Favorite Sports:

  • Soccer and Rugby

Favorite Books:

Pro tip:

  • Don’t be too greedy with your first deal. Just do what you need to do to get the job done.

Reach Out to Jake Marmulstein

Thank you, Jake Marmulsteinfor taking the time to share how to provide real estate investors with access to more capital.

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

Connect with John Carney
Facebook: @JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2020

 

 

 

JC 077: Working Smarter, Not Harder with Gary Boomershine

October 21st, 2019 | no comments

How to Think Like a Banker

With a family legacy in the real estate market and a long successful career in enterprise and emerging technology markets, Gary Boomershine had the vision for a business, RealEstateInvestor.com.

Gary capitalized on the opportunity to leverage people, processes and technology to gain a leg up in a cyclical, changing and competitive real estate marketplace. He experienced his real estate business flourish with technology that allowed him to work smarter – not harder and stay focused on the one thing that makes money, talking to sellers and making offers.

Tune into Gary and John’s conversation in “The Real Estate Locker Room” as they discuss the strategy for using your time and money wisely.

Five Key Points:

  1. Everything is cyclical, and the markets circle every 8-10 years. You can get “squished” at the turn of the market so you must change with it.
  2. High-risk investments are with rehabs right now. Wholesaling is a sound strategy right now until a change in the real estate market.
  3. Mindset: Think like a banker. The business model that banks use works. The banker is the person with power because they have the money and is the 1st to get paid.
  4. Gary’s current strategy: 1st position loans, backed by property he can see. Currently doing super low risk loans, takes a spread and invests in 401k.
  5. Cash Now: Single transition (whole seller, rehabber, flippers). Cash Flow: Building wealth (apartments, lending). Cash Later: When you achieve financial freedom. 

Favorite Sports:

  • Soccer

Favorite Books:

Pro tip:

  • 5/10/3 concept: Wake up at 5 am. Push the whole day out until 10 am (work out, read scripture, journal, clean & acts of service). 3 hours or work as a CEO in your business.

Resources Mentioned:

  • Hard Money Brokers

Reach Out to Gary Boomershine

Thank you Gary Boomershinefor taking the time to get us in the mindset to level up our real estate game.

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

Connect with John Carney
Facebook: @JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2019

 

 

JC 041: Lead Generation 101 with Tom Cafarella

March 7th, 2018 | no comments

How to find sellers in any real estate market

Tom Cafarella is a real estate investor, coach and the owner of Ocean City Development, a real estate firm that puts the needs of their clients first. Before becoming a real estate investor, Tom was on track to becoming a doctor, a profession he chose because it was the most lucrative at the time.

Tom was focused on completing his medical degree when he picked up Robert Kiyosaki’s “Rich Dad, Poor Dad” audio book. He realized that his career path in medicine wasn’t the right fit for him. Tom quickly pivoted, changed degrees and turned his attention to business and accounting. His post college accounting career path was short lived when he was fired for daydreaming (researching real estate). Tom jumped into the real estate game and began taking massive action to make ends meet.

In this episode, Tom shares the story about his entrepreneur’s journey into the real estate industry and the many obstacles that he had to overcome along the way. He drills into why it’s important to do what you love and why you shouldn’t lie to yourself when it comes to choosing a career. Tom reveals his tricks to finding qualified sellers as well as provides examples of how to always stay one step ahead of the competition.

Three Marketing Strategies for Real Estate Lead Generation

  1. Mailers – Be consistent. 3000 to 10,000 letters to get that one big deal.
  2. Cold Callings – Build a list and continue to call your database.
  3. Internet – Google pay-per-click and Facebook adds. Hire a professional.

Five Key Points:

  1. The harder the task, the less competition you will have.
  2. The first step in a new venture is always the hardest.
  3. Our number one job as investors is to find opportunities and take advantage of them.
  4. There’s no direct career path to real estate investing and that is why guidance from a mentor is necessary.
  5. Most new investors make the mistake of having a preconceived notion of what it should take to get a good deal

Favorite Sports:

  • Basketball and Football

Favorite Athlete:

Favorite books:

Pro tip:

  • Prioritize your time and complete the hardest task for the day first.

Reach Out to Tom Cafarella:

Thank you Tom for taking the time to share your expertise on finding properties ahead of the competition.

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

Connect with John Carney
Facebook: @JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2018

JC 030: Raising Money and Crowdfunding with Amy Wan

November 1st, 2017 | no comments
How to raise funds to pursue large real estate investments 

Amy Wan is the Founder & CEO of Bootstrap Legal, a business that automates the drafting of legal paperwork for real estate private equity, syndication, and crowdfunding deals. Prior to founding Bootstrap Legal, Amy was a partner at Crowdfunding Lawyers and General Counsel at Patch of Land a real estate marketplace lending and crowdfunding platform. Amy was also named one of the Top 10 Women to watch in Legal Tech by the American Bar Association Journal and was nominated for Corporate Counsel of the Year Award by LA Business Journal.

Amy founded Bootstrap Legal as a means to fill the gap in accessibility to legal services. Her company aims to make it more affordable for aspiring entrepreneurs who don’t have a trust fund or roll with the rich crowd to prepare the necessary paperwork. Their services apply artificial intelligence to the drafting of legal documents for those looking to raise capital – especially those looking to get into real estate.

Five Key Points:

  1. Money is universally translatable and universally respected.
  2. An accredited investor is basically a “wealthy person” who has money to lose.
  3. Whenever you are selling a security, you always want to disclose everything.
  4. Disclosure is important because the SEC doesn’t care what you sell. What they do care about is giving investors all the information they need.
  5. Lawyers are good investments for real estate investors. They draft documents to protect clients like you.

 

Favorite Athlete:

Favorite book:

Pro tip:

  • Lean on your network of family and friends, and people who support you and believe in you.

Reach Out to Amy Wan:

Thank you Amy for taking the time to share your expertise on real estate syndication with us.

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

Connect with John Carney
Facebook:@JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

 

© John Carney 2017

 

JC 028: How to Make Private Money Work for You with Jay Conner

October 18th, 2017 | no comments

All You Need to Know About Private Money

How to Make Private Money Work for You with Jay ConnerJay Conner has been in the real estate industry for over 14 years and is known as an expert in private money lending. He has over $52 million worth of real estate transactions under his belt and runs a fully automated business, allowing him to manage his company working not more than ten hours a week, earning no less than a seven figure income.

Jay’s road to becoming a private lending expert started when the bank cut him off during the crash of 2008. Desperate to salvage deals, he was forced to learn how to raise private funds less than two weeks after being cut off. He did his research and was able to create a system that combined the best aspects of all that he learned. His ordeal became a blessing in disguise in the end, as his system was able to raise over $2 million in less than 90 days in private funds, stating the first person he approached handed over $250,000 in private money. It blew him away to realize that his system worked the way it did and raising private money wasn’t entirely complicated as he imagined.

Needless to say, his private funding accomplishment has only helped his career reach new heights and to this day, Jay credits the banker who cut him off.

Hard Money versus Private Money

Hard money

  • Hard money lenders are mostly brokers.
  • They go out and raise money from individuals.
  • Average interest rate on hard money is 14%
  • Origination fee is 4 points.
  • They won’t advance more than 80% of the purchase price.
  • They will check your credit.

Private money

  • A private money lender is an individual that loans money out from their investment capital or retirement account.
  • Interest rate is 8%, no points, no renewal fees.
  • 100% of the purchase is advanced when you buy,
  • you can get 125% of the after repair value when you buy.
  • They won’t check your credit.

Five Key Points:

  1. The number one thing that keeps real estate investors from moving forward is not having the funding for the deals.
  2. Private money puts you in control.
  3. The most dangerous number in any business is one: having eggs only in one basket.
  4. Only 13% of for sale by owners will sell in some creative way, the other 87% just want all the money.
  5. The great thing about private money is you can use it for commercial investments too.

Favorite books:

Pro tip:

  • Do not run a to-do list. Successes are scheduled, so schedule what you want to get done.

Reach Out to Jay Conner:

Free Gifts:

Thank you Jay for taking the time to share your expertise on private money with us.

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

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

 

JC 026: How to Become a Cashflow Ninja with M.C Laubscher

September 20th, 2017 | no comments

Eliminate the Control That Banks Have Over You

JC 026: How to Become a Cashflow Ninja with M.C LaubscherM.C. Laubscher’s a wealth architect and strategist, educator, and financial freedom fighter. He’s the President and CEO of Valhalla Wealth Financial and creator and the host of the popular business and investing podcast, Cashflow Ninja.

M.C.’s mission is to help as many people as possible eliminate the control that banks and financial institutions have over their lives by building their wealth in a variety of ways outside of Wall Street.

He believes the best way to achieve this in the Information Age is by reclaiming the banking function in your own financial life through the structuring of an efficient cash flow management system and creating and building assets that provide multiple streams of income. This is how to eliminate the control that banks have over you.

M.C. teaches actionable education to his listeners and helps his client’s collapse time in their wealth plan and achieve 40 years of financial results in 10 years or less.

M.C. challenges existing societal belief systems and misinformation around concepts such as money, saving, investing, wealth and retirement.

The 3-Question approach towards achieving financial freedom:

  • What do you want? What do you want in life with your health? What do you want with your money and your investing? What do you want from the relationships in your family?
  • Why do you want it/why does it matter? For clarity, you have to know the reason why do you want it and what do you want.
  • Who do you need to become in order to get what you want? Customize and design processes and systems get you to where you want to go.

Five key points:

  1. Before investing you need to recruit an A Team / Power Team in every area that you require help. Then you must customize and design processes and systems that will keep you on track to go exactly where you want to and what achieve what you want.
  2. Whether you’re looking to become a real estate investor or looking to take your portfolio to the next level, there’s art and science in creating financial freedom and in creating the laws that ensure financial freedom. Science is the way to figure out exactly how to get there and the art part is deciding where your interest lies.
  3. A real business is about solving problems for other people and creating outcomes for clients or customers. Products and services are just vehicles for solving problems and creating valuable outcomes.
  4. Every investor must have the skillset of analyzing data, analyzing investments and understand how to analyze a property deal.
  5. In real estate investment it is important to understand who are you trying to serve so that you can determine the approach, strategy and tactics.

 

Favorite athlete: Joel Theodore Stransky – Famous South African rugby player.

Learn about the game of rugby union here: https://en.wikipedia.org/wiki/Rugby_union

Favorite books: The Creature From Jekyll Island by G. Edward Griffin

Pro Tip: Set a target and be crystal clear about what you want in the next quarter, the next six months, or the next year.

Check out the Cashflow Ninja podcasts – http://www.cashflowninja.com/podcast and reach out to M.C. direct – info@cashflowninja.com

Thank you M.C. for taking the time of your schedule to share your story and cash flow expertise with us.

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

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

 

JC 019: $400 million dollars of development in 18 months with Tom Charek

August 2nd, 2017 | 2 comments
Accelerate your success with a team who complements your strengths

The Real Estate Locker Room Show with John Carney EP 019Tom Charek offers his clients the knockout combination of his experience as a large-scale commercial builder and his training as an engineer. Tom is no stranger to large-scale projects and completed $400 million dollars of development in 18 months with the Geis Companies in Cleveland, Ohio.

Tom combines his experience on the construction and project management side of a deal with his knowledge of business structure and finance to deliver a total package to his clients who invest in a range of development from apartment buildings to hotels to office buildings. Tom will tell you if a deal is bad early on so that you don’t waste time and money and you can keep moving forward.

The three questions that you must ask when evaluating a development opportunity are:

1) is the land good?

2) is the city good?

3) is it easy to build?

Tom entered the real estate investing game when he was looking to own his first home. He fixed and flipped his way to success by purchasing and renovating a tri-plex, collecting the rent, managing the property and exiting for a profit. A few years of hard work and hustle will pay off if you are willing to make sacrifices and self-manage your investment properties.

Many investors hold onto properties for too long. Tom recommends selling an investment property after you renovate so that you maximize the improvement value and you do not have to spend time, effort and money a second time. Trends change so plan your exit and renovations accordingly.

Tom encourages investors to study their local market and determine where for the same rental rate you can purchase or build for the lowest cost.

5 Key Points

  • Say “yes” to opportunity
  • Know the rental rates for your product type. You want to invest / build where rental rates are high and costs are lower
  • When starting out, self managing your investment properties will keep you accountable
  • Maximize the improvement value of your investment buy not holding it for any longer than three years after you renovate
  • Surround yourself with a team of people who complement your strengths

Favorite athlete: Kevin Love – NBA player

Favorite book(s):

Bringing Out the Best in People by Aubrey Daniels

The 7 Habits of Highly Effective People by Stephen Covey

Tom trains for success by reading for 2 hours daily. Reading and gaining more knowledge is the key to gaining the advantage in business / life.

Thank you Tom for taking some time out to share your business insights with us.

You may connect with Tom Charek direct on LinkedIn or you can reach Tom at Pride One Construction http://www.prideoneconstruction.com and “like” Pride One of Facebook, https://www.facebook.com/prideoneconstruction

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

 

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

JC 016: Lessons from selling 42,000 units with Daniel Burkons

June 21st, 2017 | no comments

Multifamily success begins with a strong team

How do you eat an elephant? One bite at a time. Dan Burkons joins us in the locker room today to share his story of success as multifamily sales agent. Dan’s kicked off his career by listing and selling 14 units in East Cleveland 15 years ago. Today he’s closing $58 Million dollar deals. Everyone starts small and grows bigger by working hard over time.

Dan has worked with clients who started with one small deal, quit their day jobs and scaled to 10,000 doors. He believes that having sold management in place is a critical component of success. Pairing a profitable operating and management system with private equity is required to successfully scale.

Something will always go wrong closing a commercial deal. Find out who is creating the roadblock and what their motivation is. You will overcome the obstacle by drilling down into the problem, identifying the root person raising the objection and getting to the decision maker to find a way to solve the issue.

Ice hockey taught Dan that hard work is fun if you like the people who you are doing it with. He attributes his success in business to working hard with people he enjoys working with.

5 Key Points:

  • Have a management plan first.
  • Bad management will sink a great deal.
  • When entering a new market you have to find the right multifamily agent who is active in the product type you want to purchase.
  • You want a local real estate attorney on your team who’s an expert in your niche in the market.
  • Hard work is fun when you like the people on your team.

Favorite athlete: Matthew Dellavedova – Australian born NBA player

Favorite book: How Wall Street Created a Nation: J.P. Morgan, Teddy Roosevelt, and the Panama Canal by Ovidio Diaz Espino

Favorite quote: “If it were easy, everyone would do it”

Thank you Dan for taking time out of your busy day to share your story with us.

Dan’s office phone is 216 264 2018 or email – Daniel.Burkons@marcusmillichap.com

Website – http://www.marcusmillichap.com 

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

POST GAME REPORT: Episode Transcript

JC 016: Lessons from selling 42,000 units with Daniel Burkons

Multifamily success begins with a strong team 

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

 

John Carney: Welcome back to the Real Estate Locker Room Show. I’m your host John Carney, coming at you again today from Cleveland Ohio. I’m here on the sunny west side and joining me today is mister Dan Burkons, and he is on the south side, correct?

 

Dan Burkons: I am, Independence.

 

John Carney: Alright, perfect. This is going to be a great episode today. We are talking to one of the regions’ premiere experts on multi-family investing. Dan is a broker and he is a senior director of Institutional Property Advisors, or IPA, which is a division of Marcus and Millichap. And he’s one of the three original founders of the Marcus and Millichap Cleveland Office.

His leadership and specialization within the Midwest department market enables him to create substantial value for major private and institutional investors. Dan joined the firm in 2003 and he and his team are approaching 42,000 units sold across 14 states, totaling over 1.8 billion. Impressive stats there. Dan’s expertise is in assessing value and leading national marketing campaigns, selling apartment portfolios ranging from to as many as 25 properties in multiple states, owned by multiple partnerships.

In 2013 Dan received Crane’s Cleveland Business Forty under Forty award and in 2012 he was induced into the Midwest Commercial Real Estate Hall of Fame. No stranger to the media, he’s regularly featured in publications such as: Apartment Finance today; Globe Street; Heartland Real Estate Business; Midwest Real Estate News; Multi Family Executive; Multi Housing News; The Cleveland Plain Dealer; and of course, Crane’s Cleveland calls him for any information they need from an expert regarding the multi family. Alright Dan, welcome to the show. Thank you for taking the time to share your expertise with the audience.

 

Dan Burkons: Well thanks John, thank you for that nice introduction. It’s all flattering but I still think of myself as doing the same thing I’ve been doing for 15 years of selling apartment buildings.

 

John Carney: Right, and you’re good at it. So that’s okay to be good at stuff. 42,000 units sold, everyone starts with one. We’ll get to that in a minute. So, I like to kick off this show with a little bit of a stretching question to get everyone warmed up here, and I generally ask our guests: what sports did you play growing up and who was your favorite athlete?

 

Dan Burkons: Well I would say — so hockey is the sport that I played the most growing up, and I still play. In fact, I skated last night, had some beers and that’s actually — to me, I’m not the world’s greatest hockey player but I like it and got great friends through it, and that’s what I do for exercise more fun than the treadmill.

If you asked my favorite athlete, I actually was just thinking about that as you said — I know you have a lot of Australians followers and I tell you one of my favorite athletes, nothing to do with hockey, is Matthew Dellavedova, Australian guy that came to the Cavs and was a real part of a couple of those runs to the finals. And he’s my favorite athlete because, like me, he doesn’t have the greatest natural talent but I envy his work ethic. The guy shut down Steph Curry, weekend VP in a couple games 2015 and went straight from the basketball court at Quicken Loans arena to Cleveland Clinic because he was almost dead of exhaustion, to get IV fluids to come back the next day. That’s a guy I admire.

 

John Carney: Yea, maybe we should have kept him around to shut them down again this year.

 

Dan Burkons: Right.

 

John Carney: So, I believe that for those of us that like the competitive nature of sports, whether it’s a team sport like ice hockey or an individual sport like golf with your buddies, that business has the same type of competitive nature to it. And so, we draw the comparison between business and sports on this show.

But look, I’ve had clients in the past come to me who want to — when I was living in Australia and working with America Property Source — clients who wanted to get into US multi-family investing. And just like anything, I believe you need to start small and you have to find an expert for your team before you even start small; before you get started you have got to recruit your team. And so finding the right agent with the right experience in the market is critical. Tell us a little bit about your experience over the years, from kind of when you got started to where you are now. You’ve probably seen it all and — share some insight on how do you get started in the multi-family game if you don’t own any apartment buildings or duplexes yet.

 

Dan Burkons: Sure, I’d be happy to, and for myself getting started as a broker it was the same thing; starting really small. My first listing was 14 units in East Cleveland, which for those of you who aren’t familiar with the area is a war zone, it’s the worst of the worst of the worst. That was a $230,000 transaction barely qualifying as commercial real estate. Went from there to — we closed a 58 million dollar deal a couple of weeks ago. So everybody, whether it’s as an owner of a brokerage, starting small — no one is just going to plug you in and you’re not going to be doing 58 million dollar deals. You’ve got to start somewhere, you’ve got to build, you’ve got to build off success.

One of the most rewarding things, and really just the coolest things in my career as a broker is, as I’ve grown from a young adult to — I don’t know what I am now at age 37 — as I’ve grown as a person and I’ve grown in business, I’ve had a sort of symbiotic relationship with several key clients where we’ve grown together. One of them — in fact I mentioned the 58 million dollar deal we just closed — one of them, my second listing at east Cleveland, one was 13 units in another, not much better suburb. And I sold it to this group that was four young guys with full time jobs, and they’ve bought 10 or 20 units. They wanted to buy this thing and they actually ended up — we ended up arranging it with seller financing and I learned a couple of tricks because I didn’t understand what it was at the time. They actually got in with cashback at closing, which isn’t always the best thing but worked for them. And the bank thought they were growing too fast so one of their parents had to cosign for them.

They ended up making a ton of money off that deal, buying another one, buying another one, buying another one, I sold them a lot of it. Then four of the guys that bought that $300,000, no money down transaction in 2013, I’ve actually sold them a 53 million dollar and just recently 58-million-dollar deal. As they grew organically, left their jobs, went into real estate full time, then they hooked up with a private equity shop who gave them the capacity to take down really big deals and portfolios. So it’s an example of somebody who started in commercial real estate part time, built up their management expertise, learnt from some mistakes, took in a little money from local investors and once they’d perfected their craft a little bit, took on little bigger time money and was able to really get into the big deals.

 

John Carney: So when I look at real estate, and you can just pick the asset type, or the class, I mean it really does always boil down to good management: what I believe is the success multiplier. So, could you elaborate on that component, about how these guys were able to grow about over 10 to 15 years, right? They were an overnight success in 15 years, right?

 

Dan Burkons: Right, from zero to ten thousand units. Yea, whether it’s them or anyone else, management really is the key. And I know you have a lot of listeners on here who are earlier on, or some who are just looking to start, or some at obviously more advanced levels, but as far as building that portfolio, management is key. The place where I’ve seen, particularly international or out of state investors come to our markets, and where I’ve seen some fail over the years is not having thought out about a management plan, just looking at the numbers on paper and saying, “Yea, this is a good cap rate, this will work, this meets what I’m looking for.” And a day before closing saying, “Oh, can you recommend a good management company for me?” It sort of should be in the reverse.

You should be — if you’re looking in an area, you should be trying to get comfortable with a management company first, before you really make any serious offers and about to invest your hard-earned money into deals. Because the best deal in the world can get screwed up very, very fast by somebody — whether it’s a dishonest manager or somebody who just doesn’t have the expertise. That is crucial; very small differences in occupancy and rents and expense management can have huge impacts on operating incomes and failures.

 

John Carney: Yea, across the board I suppose, because some management companies make it easy on themselves by keeping the rents low, but there’s all this money being left on the table, right? I’m sure you’ve come across that. That also leaves a big chunk of value for an incoming buyer I suppose.

But, so if you’re coming in from an out of town market — I’m contacted by people often that want to pick my brain about the Cleveland market. The first thing I tell them is that it’s competitive like any market. Can you give us a little bit of the 2017 overview of what Northeast Ohio looks like in multi-family?

 

Dan Burkons: Sure, like any sort of market there’s stratification based on asset class and asset size. And on the larger assets; on the, call it ten million and up, a lot of competition is experienced, national syndication groups. Not so much in northeast Ohio, recent and public companies — it’s for various — are less desired market for that, which actually makes it more profitable for others because those types of public entities often compress cap rates and starve the yield.

So actually it’s more of an opportunistic market, in all sizes from small to big. And in the 500,000 to 5 million range, where we do a lot of business as well, there’s just a mix of local and out of town guys who are coming here — if they’re local, they’re here because they’re already here and they’re looking for the next deal that’s good for them to add to their portfolio. If its someone out of town, they’re usually finding their way to north east Ohio because the cap rates have compressed so much in other parts of the country. Even other parts of the Midwest make Cleveland look like a relative bargain, just because there is — historically there has been a little bit less interest, and quite frankly with the development of Cleveland there should be more, but not everyone has Cleveland on their map, which is good because it leaves the yields a little bit better. You usually get people who are not from the area saying, “Hey, I’m coming to look at properties in Cleveland, Columbus, Cincinnati, Pittsburgh, Indianapolis.” They’re not in love with any one market, they like the idea of getting into the Midwest. A lot of times they’ll come back and say, “Wow, Cleveland, there’s really nice areas and you can buy really stable product, not susceptible to these big swings of up and downs, and look, that’s what I’m coming here for. That’s why I’m not buying in California, I’m buying in the Midwest go get something really stable and those opportunities are here.

 

John Carney: It’s an interesting market. Cleveland has everything that any major city I’ve ever been to globally has, right? We’ve got three brand name sports teams, two stadiums right downtown, you can walk from one to the other and then you’re walking through multiple neighborhoods that have all the foodie and nightlife culture you’d want. Big banks and it’s a pretty homely town.

 

Dan Burkons: And to be honest, I think especially as Cleveland’s downtown has developed — like you and your partners have been an instrumental part of developing Cleveland’s downtown as more of a 24-hour center. as that’s happened more and more young people are saying wow I can really do all the fun 25-year-old stuff in Cleveland that I can do in Chicago or somewhere else and literally pay a third as much and live in a much better place. And as you get older with a family, a lot of my friends have been moving back because jeez I’ve tried to make it in San Francisco and we’re both working and I’ve got no money to pay daycare and this and that. And I go to the pool and there’s 10 billion people. In Cleveland I go anywhere I want, there’s no lines and they have everything. So the quality of life is really good and that’s actually been attracting more and more companies to come back here.

 

John Carney: Yea right so I was gone — I’ve just been back in town for my first year, completed my first year back living on the west side of Cleveland after being away for 19 and last night we took a drive with the kids downtown just for something to do and they had a free concert at Edgewater Park. And traffic on the shore way, which they have converted now into a boulevard and they’ve really spruced up the area and the Metroparks are running the lakefront beach. You know, it was wedged. It was a line of traffic from 25th street to the new Edgewater entrance and then from Lake road and Clifton to the west all the way down. And it was packed. It didn’t look like there was a place to park a car on that whole piece of property. And that’s now kicking off summer with concerts and the beach seems to always be full when I drive by. So they’re really doing a good job there in that Gordon Square and West 25th street neighborhood of utilizing the lake front.

 

Dan Burkons: It’s interesting that some of your audience — I’ll tell you what, we’ve had — that Westside area and Edgewater park west, the higher city area — there are places that even 5 years ago I would have thought of as man that’s kind of rough, sort of being a rundown part of the city. That area on the Westside is just — we’ve had a lot of out of town investors actually buying 10 unit 20 unit, 30 unit type deals there and seeing it as a big opportunity. And because those are some areas that were historically not nice in Cleveland, a lot of local people overlook them and the amount of millennials and highly educated young folks who want to live in those — it’s a little bit more like living in a neighborhood of Chicago or something, a little more edgy area. A lot of the out of towners are getting that faster than the local folks, and buying up stuff that ten years ago would have been worth $15,000 a unit, and they’re buying it for $20,000 a unit, putting $5000 into it and making it worth $40,000 a unit. And there’s opportunities there, and seeing the opportunity and the growth pattern in some of those Westside neighborhoods.

 

John Carney: Yea, I mean it’s fascinating to watch. They grow and continue to flourish. So if you’re coming to Cleveland and you’re looking in multi family, or any market really, obviously the role that you play as a broker agent — talk a little bit about how you work on the buyer’s side for people, and what level of expertise having the right person — there might be someone listening that wants to go to Florida and they don’t know anyone in that market, or they want to go to Texas. What questions should they be asking a guy like you to make sure that they get the right person helping them out?

 

Dan Burkons: I think it’s important that you find somebody who really is active in that specific product type in that area. So there’s a bunch of guys, for instance in Cleveland, who run around saying, “Yea, hey, you want to buy apartment buildings?” They’ve never really done an apartment building, they’ve done one. Our team have sold several hundred in Cleveland. It doesn’t have to be that, but wherever you’re going, Texas, figure out and find out and maybe call around, find out who are the guys who are actually active. If you’re trying to buy 10-30 in a deals in say, San Antonio, before you just grab on to the first guy and spend two years being dragged around by somebody, spend an extra couple of weeks figuring out and maybe interviewing or meeting a couple of people. Say, “I want to see your track record. Not the market, I want you to show me how many deals you’ve done.” It doesn’t have to be a guy who’s sold 400 deals, but a guy who, “Hey look, I’ve closed three deals, I have three on the market, here’s what I know about — I can tell you about.” Somebody who is actually active in that.

Don’t hook up with a guy who sells houses who’s trying to get in — make you his first client to do an apartment deal or a shopping center deal with or whatever it is. You don’t need to be the guinea pig. It’s okay to be with a younger guy, as long as the guy’s focus is actually to be doing some transactions in that niche. Because they’ll understand really quickly the fit. they’ll say, “Hey, you don’t want to waste your time with that deal, the expenses are not underwritten well.” Or “Hey, that’s a really poor rental market you’re not going to get upside.” Somebody who can make a very quick judgement on something.

Look, there’s so much information out there, all of us have limited amount of time to rule out the stuff — there’s a lot of stuff people throw on the market that doesn’t make sense. To someone who can very quickly cut through 50% of them and say, “Throw that in the garbage pile, let’s focus on looking through these other 50% of deals.” You’ll go a long way by hooking up with somebody who is actually plugged into that product type.

 

John Carney: Sound advice. And then, if you’re coming into a new market or just getting started, from your experience –management — let’s circle back to management, how would you go about finding the right group to manage and what advice would you have on how to source someone like that?

 

Dan Burkons: You know, I think if you find that right agent to work with that’s a good place to start. So if someone’s actually doing a lot of transactions in that specific niche, you can ask them, “Hey look, can you recommend three good management companies? What do you think their strengths and weaknesses are? Who might be good for me?” And they may say, “You know what, there’s really only one that’s good for what you’re trying to do.” Or they may say, “Well there’s a few.” That’s a good place to start is to hear from the agent.

You can also — another good thing would be to hook up with a local real estate attorney who is local to that market. Because we have a lot of folks who are from out of state, they are using their out of state attorneys. Every market has its niches and loopholes and laws and the way to do things. You want to find someone who’s experienced, who’s a local real estate attorney to that market, and that guy can, one: help you navigate the intricacies of the purchase agreement and so forth, but also that guy’s also great for a referral service. Both attorneys and brokers are constantly dealing with people who touch every other part of the real estate spectrum, and they say, “Oh no, you know what, I’ve got a few clients that use this guy. He’s a really good manager, he’s local he’s this that. Or stay away from this guy he’s got a great sales pitch on the internet but he actually has no substance.”

 

John Carney: I like what you just said there, because when you look at attorneys, attorneys who fill that niche and are laser focused and have the track record are good people to have on your team. I add an extra layer that you should gel and trust your attorneys on your team, and that’s just a matter of meeting a couple of people. But you know, they have so much insight behind the scenes and they really do connect the dots, don’t they?

 

Dan Burkons: Yea and so again just with like the — it’s important, don’t just find the first guy you find with a picture on a billboard. Try and find out who actually is representing clients, doing real estate deals like yours in that market. Not the guy who is doing $500 divorces and, “No, yea, I do apartments and real estate stuff too.”

 

John Carney: Right, family law and commercial real estate, two things that probably one person can’t do well.

 

Dan Burkons: Right.

 

John Carney: But, I mean, again, when you make a transition, when you’re doing single family homes, you don’t really need a lawyer that much, unless he’s finding you deals through probate or other forms. But so you get this mentality that you don’t want to pay the fees. Absolutely, 100% critical to pay those fees as part of your costs of doing business when you’re on the commercial level, especially in higher dollar value transactions for sure.

Well cool. We’re kind of going to wind down into our two-minute drill here Dan, and so you’re talking about ice hockey, and you grew up playing ice hockey I imagine. What kind of lessons did you learn playing team sports that you bring to the table running your team at your business to help your clients succeed?

 

Dan Burkons: Well, hockey really taught me that hard work can be really fun and can be really motivating if you love the people that you’re with and if you love what you’re doing. So I love to play hockey, even more I love the guys that I met through hockey, lifelong friends at all these different junctures. So hitting the gym or skating or practice or whatever it was, never seemed like work when I was with people I wanted to be with, that I was doing something that I thought was fun. If I wasn’t with people that I wanted to be with, I don’t think I could have ever worked there.

Now the truth is, I’m not the best or have the most god given talent for hockey, probably at the other end of the spectrum. In real estate, it turned out that I do have some of those gifts to build and sell and understand and think quick on the feet and size up buildings. So it turned out I learned from hockey what it’s like to work hard at something you love, and then I found something else that I loved and I actually was good at it too. So that ended up being a good fit for me. And I just learned: hey, hard work is fun if you like who you’re doing it with.

 

John Carney: That’s a good story, thanks for sharing that. And look, do you read? Do you have a favorite book that you keep handy either at your desk or at home? I’m just curious, because we get a lot of — I’m compiling an awesome book list through this show and everyone’s got a different favorite so far.

 

Dan Burkons: I’ll tell you what, I’d love to see the book list when you compile it. Because to be quite honest, it’s been a while since I’ve read a lot of motivating business stuff. I tend to see reading as my escape from business, family, and chill my mind out. And by the way, I don’t read fun stuff like mysteries, I usually read history stuff. So that just takes me to totally different places and I like to decompress, not to think about business. However, I’d like to see some of those business books, because there’s always something new to learn.

 

John Carney: Well look, a lot to learn through history, what’s one of your recent favorites? I’m not going to let you off the hook.

 

Dan Burkons: That’s ok. You know what, I’m almost finished with this book that I found in my father-in-law’s bookshelf the other day. I’ll think of the name in a second. It’s called “How Wall street Created a Nation.” It’s about — it’s kind of a cross of history and business, and it’s about the Panama Canal and Jackie Morgan and a bunch of Wall Street people bought up big shares of the failed Panama Canal. This company from France, and then pushed the US government to more or less instigate a revolution of Panama. And then they got these great concessions from in the Panama Canal, and then all of a sudden, their shares that they bought for like two cents in the dollar were worth $2 a share. And it’s actually a great cross between history and business, and how there are certain actors and players in there who straddled both lines, who had the business connections and then went to meet with Theodore Roosevelt to push things into action to help them in their business.

 

John Carney: That’s very cool. I’m going to look that up. That’ll be online in the show notes. Well, along with books — look, I always have my favorite sport quotes and business quotes. Is there any quote out there that you think is that one motivator? You’re having a bad day, a deal is about to fall apart, you’ve got to figure out how to save it for your client, save it for all your hard work and effort.

 

Dan Burkons: Yea there is. It’s from my Dad who is a source of tremendous quotes, I always go back to what he told me when I started out which is: if it were easy, everyone would do it.

 

John Carney: There you go. That holds true for sure. Cool. What about any recent or, over the course of your career — where you and a client have found the perfect deal but you’ve got some obstacle, and you had a come from behind victory that you’d like to share?

 

Dan Burkons: Man, there’s been a lot, because I feel a lot more often than not, getting a complicated commercial deal, whether it’s apartments or shopping centers or whatever, to the finish line, there’s almost — there’s very few deals that are without major road bumps, bumps in the road or obstacles. I’d think if one comes to mind, but it might not do that on the spot here. But there’s always something — there’s always something wrong, and there’s always some player in the continuum who has a different motivation than you that is getting in your way. And I think the talent of somebody who can put deals together and get them closed is — you see those obstacles, whether it’s, hey the lender backed out, or this issue came up with inspections, or the seller changed his mind, it’s really finding out — it’s getting behind the people — oh well P&C bank is now saying this. Okay, who is the decision maker? Get to the decision maker, whether it’s a buyer, seller, lender, appraiser, an inspector, don’t just let it happen to you. Find out who is the one creating this roadblock, what is their motivation, how can you help them change their mind. whether it has to do with: give me the money or money off the price, or if it’s an inspection issue that came up say, “Alright, I want to meet with you Mr. Engineer, I want you to show me exactly what the problem is and then let’s figure out what the solution is. And by the way, don’t you think there’s a less costly solution to this?” And those sorts of things that’s really drilling down into any problem to get to the root, deal with the root person raising the objection and then finding a way to overcome it.

 

John Carney: That’s fantastic. I’m glad that you shared that because — would you believe that every problem has a solution if you’re willing to work hard enough?

 

Dan Burkons: I believe that — look, there’s a few that are real tough, like Israelis and Palestinians and stuff like that. For the most part, yea. I do believe that every problem has a solution.

 

John Carney: Right. We’ll add a caveat. Asterisk real estate problem. Okay, well great. I think that just carrying on what Dan just said, you know, I learned this one day, and I think I might have heard it on a podcast or read it in a book: if you just wake up and expect when you go to work that you’re going to be putting out problems, and you’re going to do it with a smile on your face, eventually you’re going to have an expectation, and you’ll kind of build up that problem-solving muscle. And you won’t’ be as phased as much; you’ll become a cool operator, people will want to do business with you. Perfect.

Well that’s kind of wrapping up. We’re right on the thirty-minute mark, Dan. So I’d like to thank you for joining me in the locker room today. Where can the audience find you to carry on the conversation? Or if we have any out of state investors or local investors that want to get a hold of you to learn more about the Cleveland apartment market?

 

Dan Burkons: Yea, first of all John, thanks so much for having me, this was great, I love your show. I’m honored to be a part of it. And as far as investors who want to come talk more about Midwest apartments or anything of that nature, getting into deals and so forth. You can reach me at my office is: 216 2642018. Or if you look me up on the web its danburkons@marcusandmillichat. You’ll find my website, you’ll find my link my email address etcetera.

 

John Carney: Perfect. Well we’ll post that on the show notes it will be on my website. So there you have it folks. I truly hope that you picked up some actionable advice today from Mr. Daniel Burkons. Make sure to check out the Real Estate Locker Room Show on iTunes, Stitcher, Google Play and hit that subscribe button 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 all about I’d be really grateful if you would leave us a nice five-star review that other investors like yourself can find this show and join the conversation. The post-game report show notes, links and additional content related to today’s show will be available on my website: johncarneyonline.com/podcast and while you’re there feel free to drop your email address into the opt-in and we can keep in touch through the monthly newsletter where we offer other investing insights, tips, tricks, hacks and other good stuff. Remember to stay focused on your goals, have fun and stay in the game. I’m your host John Carney and until next week: work hard play hard and profit hard.

One more time, thank you very much for taking the time to share your story with us Dan.

(Music Out)

End Audio

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JC 010: How to Identify the Perfect Insurance Agent with John Mark Tichar

May 10th, 2017 | no comments

You want an insurance agent with real estate investing experience

Insurance is a business expense but not all agents are created equal. Learn what skills and experience you want your real estate insurance agent to contribute to your team and portfolio.

John Mark Tichar joins us in the locker room this week to share his real estate story and pro tips for success in the competitive business of real estate and insurance.

When you shop for insurance are you seeking an agent who has the relevant expertise and knowledge of what it’s like to have skin in the game? Before settling into his roll with the Oswald Companies as a full time commercial real estate insurance agent John Mark worked for a real estate developer, multifamily property manager, single family home fix n flip investor and financial services provider.

“There is no silver bullet for success” John Mark attributes his success to showing up every day and working hard. He distinguishes himself from other insurance agents with his history as a real estate investor, property manager and project manager. John Mark’s experience of getting his “hands dirty” allows him to identify with the emotions and risk of his clients.

John Mark earned the real estate game by being proactive and doing the hard work. Find a mentor, get hand on experience and create your own opportunity.

Real Estate is a Team Sport

The fundamentals of investing are the same at all levels of real estate. The team is the same for 20 properties or 200 properties. The quality of the investment, your team and the experiences is what matters. The volume of property you own is second compared to quality of the investment.

Insurance

You don’t want a generalist insurance agent. You want to have an insurance agent who has invested in real estate at some point in time. Insurance is a line item in your operating budget. However, as an owner you must have a serious approach to mitigating risk.

Favorite athlete – Mike Piazz

Recommended reading –

  • The Millionaire Next Door by Thomas Stanley & Willima Danko
  • Talent is Overrated by Geoff Colvin

5 Key Points:

  1. Be consistent day in and day out
  2. Get up, go to work and learn on the fly
  3. To be successful you have to focus on a niche
  4. It takes time and persistence to be successful
  5. Understand the costs & risks up front

Success tip – “Duplicate your success and learn from your failures “

Thank you for taking the time to sharing your story with us today John Mark.

John Mark works at Oswald Companies in Cleveland, Ohio http://www.oswaldcompanies.com

You can connect with John Mark on LinkedIn or email him direct at john.mark.tichar@gmail.com

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

The Real Estate Locker Room Show with John Carney

JC 010: How to Identify the Perfect Insurance Agent with John Mark Tichar

[00:00]

(Music Intro)

Announcer: 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 on-going success. Now it’s time to kick-off and level up, with new ways to grow your real estate business.

 

John Carney: Welcome back to “The Real Estate Locker Room Show.” I’m your host, John Carney, coming at you today from Cleveland, Ohio. Today on the line, we’ve got a great guest, John Mark Tichar. He is the Vice President, Real Estate Sales Leader and shareholder at the Oswald Company’s headquarters in downtown Cleveland, Ohio. So, this is a valuable team member we’re going to be talking to. We’re going to be talking about insurance: John Mark works on the high commercial end, multi-family and commercial projects.

John Mark graduated from John Carrol University in 2005 and began his working career for a real estate developer and contractor called Woodfield Homes, West of Chicago, in a town called Rockford, Illinois. There he managed a construction schedule and subcontractors of five to ten projects every six months, valued between three and five million.

John Mark also provided property management and asset management services to investment property. During his time with Woodfield Homes, John Mark spent his off time looking for his own investment properties and focused on distressed and foreclosed single-family homes in the Rockford area. His first two deals yielded 25K and 20K in equity respectively, while providing cash flow: positive cash flow. It was during his time on construction projects, managing investment property and eventually owning investment property, where John Mark found his passion and true calling for real estate development and real estate investing.

Prior to joining Oswald Companies, John Mark worked in financial services, both in insurance and wealth management, so he has a lot of experience there. And over the last seven years at the Oswald Companies, he’s had the opportunity to apply his real estate background skills to service the unique risk management and insurance needs of his clients, established real estate developers and investors.

Welcome to the show John Mark, and thank you for taking the time out of your day to share your story with our audience and join me. How are you doing today?

John Mark.: I’m doing great John, thanks for your time and thanks for the invitation to be on your show. I’m looking forward to it.

 

John Carney.: Perfect. Well let’s kick this off. I like to ask our guests a question to kind of get the conversation going. This is the Real Estate Locker Room Show, so we’re going to ask you a sports related question and tie that into the business of real estate. Growing up, was there one particular athlete that you admired? A professional athlete or an amateur athlete that you looked up to?

 

John Mark: There was. My first love in sports is baseball. I’ve played basketball and football as well, but baseball my first true love from a sports perspective. And I was a catcher basically my whole entire young career as a baseball player. Mike Piazza from the Los Angeles Badgers was my favorite player. A little-known fact about Mike Piazza is that he wasn’t even drafted into major-league baseball. He was identified outside of the draft by a scout and was invited to try out for a team. So he basically came up through the ranks of baseball to become one of the baseball greats. It’s just a great story of persistence and never giving up on your dreams. Those are some of the characteristics that I liked about Mike Piazza.

 

John Carney.: Looking back at that particular athlete, I remember Mike Piazza’s playing days. He really put catchers on the map, so to speak, especially in the national league. Was that story inspiring to you as a young athlete, looking up to Mike?

 

John Mark.: It was inspiring. He’s a guy that just did a great job. His job day-in and day-out was very consistent, and as I was growing up he was the catcher to emulate. He was just a great role model that I thought would be good for me to portray myself against and emulate to the best of my abilities.

 

John Carney.: We’re going to now jump over to the nuts and bolts in the real estate side. But I like to draw the comparison between the business of real estate and the business of the team aspect, and just go back to what we learned in our younger years competing on teams. Because it’s very much a team-driven industry, and you have insight into how commercial developers and property owners and operators work at a very high level, and you’re a valuable player on their team by offering the insurance solution, would you give us a little bit of the background on how you settled into that niche in the real estate game?

 

John Mark.: Yea, part of the bio that you read discusses my, or shows my early involvement right after college. As a college graduate, I didn’t really know what I wanted to do exactly after college, and I had started to read books in my spare time about business. One of the themes that kept on hitting me, just kind of in my gut, and just a thought that I could never shake, was real estate. At that time, I didn’t know what that meant or what that looked like, but it was just a concept that I thought really resonated with me.

And so, during my years working at Woodfield Homes, I learned a lot on the fly, through just consistent application: getting up out of bed and going to your job, and doing to the best of your abilities, and learning on the fly, and just through that time I really came to enjoy and loved the game of real estate. And after that, when I came to Oswald, in the insurance base, it’s just such a niche driven industry.

 

If you want to be very successful you’ve got to focus in on a niche. Or firm is the fiftieth largest insurance broker in the country, so we have a lot of niches in private equity, construction, manufacturing and whatnot. We didn’t have a big presence in real estate, so I just decided to put to use my experience, both with the job at Woodfield, managing investment property and then eventually owning my own investment property. The foundation I think of any real estate operation in the country really, is what I experienced, and understanding the fundamentals and the foundation of what those operations look like. I feel this has really set me apart against my peers. And basically, I would contribute my success to just getting out of bed every day and hustling for business. There’s no silver lining or silver bullet that I think puts people on the map right away. It takes time and consistent persistence. So it’s just the daily application of using the work ethic that I’ve been blessed with, and going out and developing relationships and being a trusted advisor, and just over time being able to win over clients based upon my attitude and the extra things that I bring to the table that’s different than my competitors.

 

John Carney.: So, showing up and consistency is what is driving your success at the moment. Do you look back at when you made a change? In your down time when you were working in your first job for the construction company, you could have sat around on the weekends and gone to baseball games and hung out with your friends, but you chose to go out and dig up properties, and then put in the time and energy and money, your own time energy and money, those three precious resources, into fixing up these homes and running them as a business. So, do you believe that that experience just helps you identify with your clients better, especially on the insurance side?

 

John Mark.: Absolutely. I think one is: I get respect from my clients, having known my background and the fact that I got my hands dirty and have actually gone through the act of real estate investing versus standing on the sidelines like maybe other advisors and talking about the philosophy of real estate and of investing and how it should look which is a lot different than getting your hands dirty and having done it.

Understanding the ups and downs of real estate investing and the cycles and the challenges that everybody faces on a daily basis is what really sets me apart.

It was really when I started managing my boss’s investment properties. It was a small company, Woodfield Homes, and I worked with the owner on a daily basis. I got the manager’s investment property, and I applied the financials to an Excel spreadsheet and just looked at projected expenses. I applied projected appreciation over a period of time, and the math was just a compounding effect and was just a powerful calculation for me. And it just really gave me a very deep impression, a very good impression of real estate. I think that was the visual that I needed to really have the lightbulb go off and say “I know I like this business, but now I get to see the power of real estate financially and what it can mean from a lifestyle perspective.” That really made me come to just really love the business.

 

John Carney: So, that’s a great experience early on, and it sounds like the principle of Woodfield Homes was there as a sounding board and a mentor, if I’m reading between the lines, is that correct?

 

John Mark.: Correct, yes. I mean, he basically had this investment property and I went out and it was sitting vacant, just because it wasn’t part of his core business. I saw an opportunity to collect an additional six or seven thousand bucks a month in rental income. It was a multi-family property. So in my hours working for him, I would hire his subcontractors, and we would go fix up this property and get it rented and then I would sign leases with the tenants; I would manage the cash flow and the expenses; I would handle tenant issues; any move outs I would get them re-leased, so it was just a very hands-on experience for me. I didn’t read a book about it, I didn’t go to class for it, but it was just an example, or an experience that was the best way for me to learn. That’s the best way for me to learn, is just by doing it on a daily basis. And every day you learn something new and you apply little nuggets of learning experiences, and you apply those going forward and slowly things continue to get better and better, and you get better at your job.

 

Your right, that was spot on. He was a great mentor, it was a great opportunity for me to even get into that, have that experience. So for that I’m grateful for his willingness to let me run with those projects.

 

John Carney: Yes, that’s a unique opportunity that, now that we’ve dug into it a little bit more, sounds like you created your own opportunity: you created the opportunity and ran with it. It wasn’t given, it was created. I love stories like that, it’s very entrepreneurial. What I’m interested in sharing with our listeners right now is that you have that story, and you mentioned it’s kind of a smaller scale investment property. You have the opportunity every week to meet with your clients who own much larger operations on the commercial side. Can you talk a little bit about the parallels you see between an investor starting out with a few small, single family homes or a multi-family, and scaling that into something large? And do you see the team players that the larger operators have as identical, similar, different? Could you give us a little bit of insight into what you’ve learned just by playing at such a high level?

 

John Mark.: Yes, I think you kind of hit it on the head there: the team is the same. The actions are the same and the only difference is the number of zeros after the comma. If it’s six zeros, or nine zeros, or twelve zeros or what have you, that’s the only difference. But the fundamentals of property management: tending to tenant needs; having an attorney draft up a solid lease agreement that promotes tenant flexibility throughout a term of the lease; working with a local banker, or if you’re a more sophisticated operator, working with friends and family and or other sources of equity and debt to achieve the financial results.

 

Having a good team around you: a property management team and contractors that you trust, that you know do quality work, that don’t cut corners and that you understand the costs up front, so that way you’re not looking at a job after the fact and racked up an extra ten thousand dollars in costs or what have you.

 

Working with an insurance advisor to help you understand the multitude of risks that you face on a daily basis. Some of which can be mitigated through daily best practices in your operations. Others tend to be much larger that you want to have financed by an insurance company.

 

And so, whether you’re starting on two properties or two hundred properties, you hear a lot of stories about people getting into it just all of a sudden acquiring 100 hundred over the course of a year, or stories like that, which I think is great. But the number doesn’t really matter, it’s the quality of the investment that matters, and it’s the quality of the team that you have around you. It’s the quality of your experiences that if you have those, that allows you to scale quicker and better. And you get through that learning curve quicker with a better team.

 

If you don’t have a good team around you, you’re going to be struggling with your experiences, wondering why you’re experiencing what you’re experiencing, without a good team.

 

And so, to your point: it’s a team sport, whether you’re just starting out with a trusted banker, like I said before, or trusted attorneys and contractors, or taking those resources and creating an in-house department encompassing all those various needs as a real estate investor. So, in my opinion, the difference is, as I’ve said it in the beginning, the number of zeros.

 

John Carney: And to get to the larger number of zeros, everyone starts somewhere. And the nice thing about this industry that I like, or the business of investing, is that it’s unlimited based on everybody’s personal motivation. Give us a brief summary of the importance of understanding your own risk profile, and then why having the right insurance agent who understands that risk profile is critical. I’ve had experiences where, early on in my investing career, insurance was a business expense, but it’s one that you always look to minimize, right. It’s very important but people always try to minimize that because it’s a business expense, it affects the bottom line. So, give us a little bit of professional advice on the best approach to insuring your real estate portfolio.

 

John Mark.: Yes, I’m certainly happy to do that. Let’s just be honest, insurance is not the most exciting topic to talk about, right? You don’t sit around the cocktail parties talking about your insurance agent or insurance policy. I totally understand that. But you’ve hit it right on, insurance is a line item in your operating budget, right? Just like legal is, and just like your interest rates are on your loans. You can argue the same thing from a lender perspective or your accountant or your attorney. But from the insurance side of things, I think the number one thing for an owner to do is to take the topic seriously, first off, and then secondly, shortly after that, is to really take the time to stop for a moment and think that these risks out there, that they could happen to you.

A lot of people sit back and say, “that’s never going to happen to me, that won’t happen to me.” I think a really true statistical investor will actually take the time to help you understand how that might happen to him or her and what they could do to mitigate that from even happening in the beginning. So, I think the best way to do that is to team up with an advisor who knows real estate.

 

When I started looking at houses in Rockford, Illinois, the first thing I asked my mortgage broker, or banker, as well as real estate agent is, “Have you worked in real estate before?” And the only key members that I chose to work with in those areas are people that have invested in real estate before. Whether they owned real estate at the time was irrelevant, but the fact that they actually took the time and invested their time and their money into real estate told me that I’m dealing with somebody who absolutely understands each step of the process. And so that should be the same thing with your insurance advisor.

 

Whether your insurance advisor invests as a private or silent investor in deals, or has a small portfolio on their own, I think you need to take time to interview them and understand their experience in real estate, because you’ll come across a lot of insurance agents that are generalists. They’ll walk into a manufacturing company and act like they know manufacturing, and they’ll turn around and walk into a non-profit and act like they know the intricacies of a health and human services organization, and then private equity, and so on. You just want to make sure that, while it’s understandable to have a diverse book of business, you want to make sure you’re working with someone who has the majority of their book in real estate. That way they can bring to you the information that is meaningful for you, and making you aware of things that you may not even be thinking of in the first place. Because you don’t know, and that’s the job of advisors, to inform people of what they don’t know, to better educate them on how to manage those risks going forward.

 

So I think, as an investor, capital is very intensive, a capital-intensive business. You’re constantly leveraging your dollars, so the financial risks that you take, and risks that might come about with your lenders, investors, financial loss to the organization, then you have your physical loss from the properties, with acts of god that just – wind and fire and hail and so on.

 

And then you have the operations risk of property management and tenant risk and understanding how the tenants are taking care of the property. And that boils down to your lease that you have with the tenant and ensuring that they’re carrying their own insurance that will indemnify you and protect you based upon their negligence. So, there’s a number of risks that an owner has, and has to manage on a daily basis.

And the insurance advisor just becomes much more valuable than just a broker. Somebody who’s going out into the insurance marketplace. You know, you fill out an application, you get a bunch of quotes, that’s not statistics. That’s not complex. It doesn’t really show any expertise, it just shows that you can go through a process. But then turning that information into business conversation, specific to real estate investing – that’s the piece where I think there’s true value of an insurance advisor.

 

So I would just encourage all the owners out there to work with an insurance advisor that is in the real estate investment business, and take it as seriously as you would your accountant. Because the last thing that you want to happen is a 50, 75, 100 thousand, one million dollar claim situation that is totally unforeseen, that kind of hits you out of nowhere. And you go to your insurance agent, they haven’t talked to you in two years, and you say, “Hey I got a claim.” And they say, “Hey, it’s not covered.” Then you have a bigger problem than you would have originally. So, that’s just my perspective when it comes to insurance and it doesn’t have to be time consuming, you don’t have to spend hours and hours and hours on it. You have to find the right person who can understand and be that advisor.

 

John Carney: John Mark, that’s great. That’s a great summary of why investors need to put some time and effort into sourcing the right insurance provider and advisor for their team. Important stuff. Alright, before we wrap this up, I’ve got a couple more questions for you, we’re kind of getting down to our two-minute drill here at the end. You’re a motivated, hard-charging person, and you manage to get a lot done with the same 24 hours we all have. Are you a big reader? Are there any books on business, or books on sports that you’ve read that you’d refer people to?

 

John Mark.: Yes, I think a couple of books come to mind that I have read in the past. I mean, I think we all know the book ‘Rich Dad Poor Dad’ is a popular book that people mention. But there’s a couple other books.

 

‘The Millionaire Next Door’ is a great book, it just talks about daily application of financial discipline and the notion of cutting up your credit cards; that’s kind of an extreme example, but it’s applying due discipline to your financial situation and ‘The Millionaire Next Door’ is a great example of that.
Another great book that I really like, that really resonated with me (I kind of view myself as an underdog in a way) is a book called ‘Talent is Overrated’, I think Jeffrey Colban is the author. He mentions Tiger Woods in his book. About how, in order to be the best at your game, it takes time in that arena. So, in Tiger Woods’ situation, really quick, he racked up more hours by the time he was ten years old than most golfers racked up by the time they were 23 or 24. And that allowed him to be that much more dominant in the field, because at the age of ten or twelve, he was light years ahead of everybody else. In part because of his dad and then just his personal drive. So there’s a lot of ways to make up for talent and the book called ‘Talent is Overrated’ is I think just a great read.

 

John Carney: Thanks for sharing those, I haven’t read either one of those. I’m an avid reader, and I’m compiling a list, especially through talking to all the guests that I’m very fortunate to interview on this show. So, that will be included on the show notes of my website.

 

John Mark.: Nice.

 

John Carney: Is there anything that you do: a daily habit or a practice that allows you to train to be successful in your business and in your life, that you can share with our audience?

 

John Mark.: Yes, a couple of things. I have to be able to work out at some point during the week, or on a somewhat consistent basis. I think with the pressures of business, and the high-pressure sales environment that I work in, you want to have broad shoulders and you have big goals ahead of you that the company depends on you for. And so you’ve got to be able to de-stress, think through the day, process the day and just get it all out, so that way when you start the day the next morning, you’re kind of starting it somewhat from a fresh perspective.

 

And then I’m actually an introvert. So the way I recover and reenergize is by actually being by myself and just taking a few minutes to sit and process my day. I’m a scotch guy and a bourbon guy, so I’ll have a glass of that and maybe write in a journal of some kind and just reflect. The other tip is just to duplicate my successes, but more importantly, learn from my failures going forward.

 

John Carney: Thank you for sharing that. That’s good, sound advice for everybody who’s working on journaling, or a little bit of quiet time to meditate or reflect on the day. Well thank you for joining me in the Locker Room today John Mark. Where can the audience find you to carry on the conversation? Tell us a little bit of where you live online.

 

John Mark.: Actually I’m not a big Facebook person, although if you go on my profile there’s some pictures that I posted of me and my girlfriend recently. But I don’t spend time commenting on other people’s posts or looking at the feed there. I am active on LinkedIn and my full name is John Mark Tichar. So you can look me up on LinkedIn. You can also shoot me an email at john.mark.tichar@gmail.com. I would be happy to connect with folks and network if anybody is interested.

 

John Carney: Alright, there you have it folks. I truly hope that you picked up some actionable advice regarding insurance for real estate from John Mark Tichar. Make sure to check out the Real Estate Locker Room Show on iTunes, Stitcher or Google Play and hit that subscribe button to ensure that you never miss out on all the pro-tips from our guests.

The mission here is to help you elevate your real estate game. And if you like what this show is all about, I’d be really grateful if you would leave us a five-star review on iTunes or your preferred podcast platform, wherever you get your podcast every week, so that other like-minded real estate investors just like yourself will be able to find us easily. The post-game report show-notes, links and additional content related to today’s episode will be available on my website: johncarneyonline.com/podcast, and while you’re there, feel free to drop your email into the newsletter signup form so that you can receive the monthly newsletter and other tips, tricks, hacks and good stuff related to the business of real estate. 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. Thanks again for joining us again John Mark.

 

John Mark.: John Carney it was a pleasure thanks for having me.

 

John Carney: Perfect take care, thank you.

(Music Out)

End Audio

[31.54]

 

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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.

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