Podcast #103 – My Story – Money Savings Ideas Before the Simple Passive Cashflow (Scarcity Mentality)

YouTube Link:https://youtu.be/HOeBP0w00eI

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Download the FREE 2018 Rental Property Analyzer for free: https://simplepassivecashflow.activehosted.com/f/14

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math! Here are the Show Notes:

I started to a hobby to make Mead or fermented honey wine. It’s pretty healthy because of the good bacteria cultures.

I started it because I needed to diversify from my Kombucha hobby because moving to Hawaii I was worried that there was going to be a fruit fly infestation that would wipe me out.

Got to be diversified with multiple streams of income!

Notebuyerbootcamp.com – Coupon Code “simplepassive”

It’s been a busy month after wrapping up the closing on these two latest deals. If you are interested in the deal flow, make sure you are a part of our Hui Deal Pipeline Club.

I recently met George Ross who came to speak to my Syndication Mastermind for a private dinner. If you have need the movie “The Founder” you know the lawyer had a very big impact to Ray Kroch.  George was the legal counsel to Donald Trump during his rise and “retired” once he hard Trump was running for presidency. George He held court to the remaining 15 of us for 3 hours after dinner until midnight telling stories for the past. Very insightful to know that this man shaped the Trumps business sense.

He is known as a master negotiator and he gave us the following relationship advice:

“In marriage, I tell my wife that I make all the Major decisions and she can have the Minor decisions… In all my years of marriage, we have not had one Major decision come up.”

The recently launched YouTube Channel just clocked in at 17,577 minutes or 293 hours or 36 working days. So there much be one person watching my content around the clock which on the clock.

I need a little bit of a break and took the time to reflect back on how far I have come from 2009 and buying that first rental property. By the way remember to incorporate “play” into your day.

The first twenty tips came from myself but after sharing the list and finding the other ex-cheapskates out there we have been slowly syndicating more and more bad ideas. Note: they are not in any particular order.

Our parents will be so proud of us!

If you want to add more, please email me and I will keep growing the list. And if you like I can add you initials at the end to cement your legacy.

If you call me collect, I will not pick up!

Money saving ideas for the shameless…


  1. Stack Mr. Rebates shopping portal and Groupon discount codes with gift cards purchased from eBay or Safeway with more gift cards and Mr Rebates shopping portal. To sign up go here: http://www.mrrebates.com?refid=413597
  2. Take a shower at work to save on utilities, water, and electricity – as a side benefit you go to the gym more often (do your 3S’s there, shit, shower, shave)
  3. If you work in a startup company that caters food, it’s a no brainer— eat at work and bring food home. Maybe you can even befriend someone that works there and join them for lunch from time to time. For extra credit consider a life of “intermittent fasting” and totally binge at these free meals.
  4. Wash your car in the rain. No mineral deposits left while it dries. Video of me demonstrating this: https://youtu.be/kZkYnkXOI7Q
  5. Costco leasing to own program
  6. Buy an Anker powerbank and charge it at work.
  7. Always take a pee before leaving for the day.
  8. Try to poop at the same time every day while at work… get paid to poop. Time is money and flushes cost 10 cents.
  9. There are soft drinks available at restaurants?
  10. Why are you eating at a sit down restaurant, you have to pay tip?
  11. If you must, order food to go and eat on the premises. Best of both worlds!
  12. Wear clothes with the tag on it and return it.
  13. Buy a snorkel from Costco to go to Hanama bay while visiting Hawaii to return it. Another Hui member caucions that on many electronics there is a 90 day return policy.
  14. Use an app like GasBuddy to find the cheapest gasoline station, better yet, double stack your Costco credit card (4% cash back on gasoline) and buy Costco gas.
  15. Cash flow, cash flow, cash flow. Also, see uncle Kohlers team for tax optimization (easily the single largest expense in your life) http://keystonecpa.com/~keystone/images/5_Cash_Flow_Strategies_for_RE_Investors_eBook.pdf
  16. This one is a bit morbid, but an important one. Set up a revocable living trust with your lawyer to avoid probate expenses following the death of your family members\
  17. Susie Orman’s advice – make coffee at home and save yourself the $5 Starbucks Vente frappucino
  18. FAST (intermittently, not forever)! Skip breakfast daily (work yourself up gradually) and when you’re ready to get to the big leagues, attempt to fast for an entire day (no breakfast, lunch or dinner)
  19. Solar panels (maybe?)
  20. Free (coffee) money, this one’s really easy ($25/quarter or $100/yr) w/ BofA and Amazon http://www.magnifymoney.com/blog/consumer-watchdog/better-balance-rewards-card
  21. Maximize and optimize what you’ve got BankPurely has a 1.30% APY since April (not sure if promo rate?) but most banks have 1.0+% (which is 10x the 0.1% APY rate given by most conventional brick and mortar banks like BofA, Chase, WellsFargo)
  22. https://www.depositaccounts.com/savings/
  23. Become an Uber driver or deliver post maters? (not a big fan)
  24. If you have a spare room not in use, AirBnB it from time to time
  25. Check out EventBrite or other social event platforms for free lunch/dinner/drinks
  26. InvestinAHP.com        or email me for a few Burnzone book with your mailing address
  27. Buy Mod Pizza’s mega salad for $11.27. Dinner for days!
  28. Paid online surveys (not a good use of time)
  29. Coupons (think http://www.freestufffinder.com/)
  30. Use www.bensbargains.com or slickdeals.net before buying anything online
  31. Use Honey or Ebates or other discount portals for Amazon/eBay or other internet purchases to save a few %
  32. Certain credit cards provide 5x bonuses (Chase Freedom has rotating categories) and Chase Business cards are good for auto-pay things like internet with extra bonus categories
  33. Make a Ghetto Latte at Starbucks and other fun

Growing up in Hawaii where a gallon of milk is $8, I was taught to save money in strange ways. (I don’t drink milk)

Some of those were pretty bad which develop into unhealthy money mindsets.

Some downright unethical but hey if you are a cheapskate, own it!

I don’t condone any of these tactics but look, it is no coincidence why you folks continuously have so much money to invest and pay your bills on time unlike 4 out 5 of my Birmingham rentals every month.

Join the Hui Deal Pipeline Club!

Podcast #100 – My Story – The 100th (Drunken) Episode with Abhi Golhar – Who is Lane 2.0

VIDEO VERSION: https://youtu.be/azbjx9fhVbU


YouTube Link: https://youtu.be/x1FsDcF0d2E


Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Pardon the grammar… I’m an Engeneer, Enginere, Engenere… I’m good with math! Here are the Show Notes:

Lane is dringing Maui Brewing Company Makawao beer and POG IPA and homemade mead (honey wine), Abhi – Whiskey

Hi, I’m Abhi!

How old are you? 1985

How much simple passive cash flow do you have coming in and from what investments?

At this point my cashflow is a little lower because some of sfhs are offline because I’m trying to sell them and my syndications are in the ramp up stage but I’m around 3k. more importantly I have very low expenses and essentially financially free. My salary from my paycheck is 4k at the-end if taxes and that’s what I use to put right back into my business. That’s 3k not including my day job.

– What are your healthiest habits? How do these help contribute to being your best, most productive self?
Intermittent fasting.
Used to do paleo but has evolved to keto
I used to do crossfit but the 225 lb deadlifts twenty one times for three rounds really got old. Its for people in their twenties
Got a trainer who won the hawaiian iron classic
Keep changing goals

– What do you attribute your ability to be prolific and productive to?

I don’t have that many distraction
I got lucky with initial positive feedback

I work really hard/consistent
Make tweaks frequently. If you follow me around I do weird things. or going to the restroom put coffee in microwave and then take a call like a machine

– Looking back what do you wish you had done differently along your journey so far?

I wish I would have gotten a personal mentor to call me out on my and minimize the hours of mental planning and scenario

Q1) You mentioned that you have spent close to $60K last year in coaching & mentoring programs/events, can you share some insights on how do you determine which ones worth investing your time & money into, which aren’t, and how to avoid the scammers/pitfalls? Are there ones that you recommend trying out or avoiding?

Get feedback from actual students. Make sure there is no referral fee going on.

Allocate a development allowance. 10 percent of your income.

A mentor taught me never to speak bad of others so I won’t here publicly. But if you guys get to know me I tell you what I think. Another example of going an inch wide mile deep.

Q2) I’ve listened to most of your podcasts (and yes I did leave reviews :-)) but can’t say every single one so apologize if I missed it if you shared already – how do you manage employer/manager after they learnt you were doing this REI “side gig” with the eye of quitting your day-job? I am sure quite a handful of your listens work for companies that have requirement of disclosing outside business activities that require either company/manager approval, or Compliance clearance, varying level of scrutiny , or maybe just a disclosure. What would be your words of advice or caution on how best to navigate this when one cannot fully launch into investing full-time?

I have a humorous article of what to do in a day job.

But honestly people don’t rreally know what I do. I am a government worker who drives a mercedes at work and smiles a lot. It does not make sense. Its good that my parking lot is really big so no one really sees me.

I work in a non profit so I try to respect that they are paying me for my time.

Honestly if they find out I bet the “clock watchers” will become whistle-blowers. my mindset is that it won’t be a bad thing. It will just pressure me to work my ass off and get out of day job and take that leap.

I just like how authentic I can be in the way I work with people… In the I interviews for the this last job they asked why should we hire you?

No one else has a masters degree and real world experience that I do and willing to be paid the salary level and will be happy there.

If people give you a hard time this is all about lifestyle creation. Financial freedom gives you the freedom to do what you want. a recommended real is Mark Madsen “How to not give a fuck”. Its not about living life like a cavalier but opting into a conscious life of people and projects that are aligned with you.


Podcast #98 – Fundamentals – How I lost $40,000 as a Passive LP Investor

Youtube: https://youtu.be/D7j79XknQqg

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Pardon the grammar: I’m an Engeneer, Enginere, Engenere… I’m good with math! Here are the Show Notes:

Summary: I brought a house for $43,000 in 2013 and the operator ran the property into the ground and I sold the property for a net of $7,000.

This is the dark side of investing as a passive.


2013 – Had 43,000 in my SDROTH IRA, The deal 9% and 50/50 split on profits. I got the referral from a Self-Directed IRA company. I asked them where should I invest this money because I did not know any better. If you are looking for a good SDIRA custodian let me know.

2014 – Heard this dude was a scam artist from my network but it was too late. Lets just watch this. I started connecting with other clients via the interwebs and learned they had another market that they did this in to which was MS.

2015 – Heard there MS portfolio went underwater, taxes not paid

Mid 2016 – Got the letter saying they were going under and I had several options,
1) Deed in Lieu – had a lease purchase agreement
2) I did not really understand the other options but basically wait in court forever
For about a few months everything was fine. The tenants were paying their 500 dollar rents and I was pretty lucky compared to the other investors who tenants had trashed the homes. This is when the story started coming out on what this shyster did and the poor property manager that took over these problems.

Note that this was in my SDIRA so you can’t bring in outside funds to help the property or that could throw out your tax sheltered status per the IRS.

Early 2017…The property went offline

From the Property Mangement:
“The home is in pretty bad cosmetic shape. Keep in mind it looks worse than it really is. The photos will be shocking but most appears to be cosmetic repairs. The exterior just needs cleaned up (cut grass, trim hedges, clean and small repairs to gutters and down spouts). However, the interior had a bathroom leak on the second floor, there is alot of trash. It will require new flooring throughout, a new vanity in the bathroom as well as new caulking around the tub. It will need some patching and painting of the interior walls, a new drop ceiling tile and about a 30-yard trash out. I could not test the mechanicals but they appear serviceable. No way to really know until you have them up and running though.”

Summer 2017 – The city had a lot of complains about the grass not being kept.

We could not find these lost Western union checks – they were written out to my personal name.

August 2017 – House listed 25,000 with the broker fee 4000. Average days on market 180 days for a retail ready.

Average days-on-market for homes between $10,400 – $15,600 = 138 (in zip code 16101)

Time suck!

A couple offer/counters.

November 2017 – Property sold and I walk away with $7,000 after sales commissions 9

I only had about $12K in my Roth IRA. I could have kept building that amount via a fund or private money lending (although that was a small amount) because my contributions were 20-40K range. In a Roth IRA you can take out contributions any time. I used to do this for an emergency account but because I am pretty good at finding good deals I would rather have the cash and minimize administrative headaches that takes time away from deal finding, networking, and making podcasts. The fees were about 25 a quarter so that would have been 1% a year. Each transaction I would have done would have been an additional $50 dollars to execute along with the time it consumed.

More information on my recent transitions to syndications please check out my previous podcast.


Lesson learned: don’t invest with anyone you don’t know, like, trust, or outside 1 degree of separation. There are deals out there being passed around via daisy chain style where no one really knows who each other are.



See pictures

April 18 & 19, 2018 – See you in Chicago


On April 18 & 19, 2018 I will be attending notebuyerbootcamp.com in Chicago-Land!

Why the heck am I going to a note buyer conference? Have I got shiny object syndrome again?

Not to worry I am speaking on a panel about raising private equity 😛

Use $200 off coupon code “SimplePassive”

One takeaway I have gotten from the past couple months of open phone calls with your folks is that after turn-key (SFH) rentals, your natural progression is to forge a path on either syndication as a LP, BRRRRs, or non-performing notes. In that order of popularity from my unscientific study.

If you make it out there… I’ll buy the first drink!

__________Event Information_________

AHP’s CEO Jorge Newbery and 10-years of contacts will gather to share what they have learned about NPL (non-performing loan) investing in order to inspire a new breed of note investors – those who want to achieve superior financial returns and an extraordinary social impact.

Come to learn and connect with some of the leading note investors in our country! It doesn’t matter if you’re new to note buying or a seasoned vet, you will learn step by step how to build & scale a note buying business.


The Simple Passive Cashflow Latte

A post just for fun…

When I need that jolt of energy to write an article or do the day job I make a The Simple Passive Cashflow Latte using these ingredients.

Please support the site and buy through this link.

Ingredient Why What Brand
12-16 OZ

Brewed Coffee

Because coffee is the drink of the gods, caffeine Bulletproof (non-moldy beans), Kimera Coffee (Nootropic infused), or Kona Coffee (to support the 808 State)
Butter Fat – because it’s not the 1990s anymore KerryGold because it’s organic. I like the salted version because it’s more widely available but the salt adds depth to the taste
1 Tablespoon to 1 OZ


MCT are medium chain fats, the key to brain function and good skin. Basically modern day snake oil. Bulletproof Brand has XCT Oil but I use this Mickey T Brand (isolated 8-Carbon Caprylic Acid Molecule) which is the same thing except a lot less marketing costs. You can use Coconut Oil in a pinch but the taste isn’t that great.


1 Tablespoon to 1 OZ

Whey Protein Powder

Whey is the cheapest form of protein. This is a way to add a bit of sweetness and blends into a foam. Life is always better with a bit of foam! Optimum Nutrition is the go-to brand for thousands of wannabe bodybuilders so stand on the shoulders of these giants and do the same.
1 Tablespoon to 1 OZ

Collagen Protein

This is the most expensive protein that has benefits for skin, joints, bones, hair, and digestion. Sort of like drinking bone broth without the flavor. I use Natural Whole Nutrition Vital Proteins Collagen Peptides.

I have also used Collagen Hydrolysate under the Great Lakes brand.

Lately, I have been using Collagen Protein – A little more expensive but good for skin, joints, hair. This is lieu of the whey protein.

Other optional pick me ups:

1 Teaspoon (pick only one)

Cocoa Powered for a Mocha

Vanilla for a Vanilla Latte

Turmeric for a yellow mess


Cocoa improves blood flow (not saying it’s going to be like Viagra but at least it takes like Chocolate)

Turmeric – Google it

Vanilla – Google it


Bulletproof Cocoa

Turmeric powder

Bulletproof Vanilla


For those of you who are into the whole autophagy intermittent fasting protocol (12-hour daily fast) this is pretty good for you too because you are basically drinking a MCT oil drink. The only recommendation is to eliminate the whey protein. Also if you really want to geek-out, blend the whey separately because it is the most unstable. By blending separately you allow the butter and oil to cool down the hot coffee and protect the whey from heat.

Blend and serve in a mug that says “What Would You Attempt To Do If You Knew You Could Not Fail” or “Life Begins at the End of Your Comfort Zone”.

Please note that some of the links found on this website are affiliate links. And at no additional cost to you, paid by the seller, I will earn a commission if you decide to purchase which helps pays for the various costs of running this website. Please understand that I have previously used these products. Do not feel the need to purchase these products but if you do please use these links. If you have any additional questions on how I optimize the use of these products please let me know.

SimplePassiveCashflow.com Financial Freedom Independent Mentor Freedom~Number Value-Add NOI Teams Mortgage Integrity Charity Income Escape~the~Rat~Race Empowerment Equity Portfolio Legacy Entrepreneur Millionaire Ink~it~up Choose~Your~Path Prudent~Leverage Net-Worth Stabilized Appraisal Small~Deals E-Myth Pro-forma Network Turn-key Re-position QVD Appreciation=Icing~On~The~Cake Working~for~the~Man Stocks=Ponzi Who~needs~a~401k Cap-ex Assets Rates Cap-rate Syndication 9-to-5 JOB=just~over~broke Wisdom Risk/Reward Retirement~Now Work~On~Your~Business~Not~In~It No~Crystal~Ball Tax~Benefits Inflation~Hedge 1031 Manage~Team Leadership FYIFV Revenue DSCR IRR LLC S-Corp 1099 Schedule-E DTI FannieMae Good~Times Systems Reserves Note Rich Delegate Market Statistics Investing Strategic Proactive Bucket~System Frugal


AHP Update & Free Burn Zone Book!

CORRECTION: Hi folks, I checked in with AHP and they told me the “American Homeowner Preservation 2015A+ will continue to pay up to 12% to investors.  We expect to continue accepting investments into 2015A+ through May 24, 2018Currently, we are preparing the SEC filing for our next fund, which will open sometime after 2015A+ closes. For the next fund, we intend to pay up to 10% to investors” 
As you guys know I don’t work with anyone I don’t know, like, or trust. And now add “1 degree of separation” to that list. (I got burned for a $40K loss as a LP on a deal that I started in 2013… More on that story in a future post but if you want to know that referral came from an IRA custodian).
Jorge Newbery is one of those guys that I met on my travels in 2016. He has been sponsoring my podcast from the start and been a mentor helping me along because he used to go after heavy value-add recourse loan apartments back in the day.
He wrote this book “Burn Zones“… Email Lane@SimplePassiveCashflow.com your mailing address if you would like a free hard copy.
And I have some cash in InvestinAHP.com like the deals the Hui Deal Pipeline Club (Sign-up if you have not) I have skin in the game too.
Inline image 1
Wondering what AHP is? Here is a past webinar:

Podcast #94 – Fundamentals – Ask Lane: MFH latest underwriting hacks, GP/LP Splits, reading an executive summary, mobile homes

Stories from my SFH portfolio… Show notes below:

One of my longest tenants went AWOL. 🙁

“They did send in a partial payment of  $965 that we received on Monday..  They now owe for January and $385 past due.  for a total of $1,263  I am not sure why they are being so uncooperative for the inspection”

A couple weeks later…

“She has been in the hospital again.  I gave her our direct number and she said she will call.  She is also supposed to bring the late part and will bringing last months rent in about a week and half.  She apologized for the trouble of getting her, but she was not able to return calls.”

I like to work through and with my property management.

They alerted me of the issue.

“Seems like valid reason for being late. Maybe we can ask for hospital invoice or doctor note just for record keeping. We might submit to the potential seller to explain the gap in the rent rolls. That way we can verify it too. “


The dishwasher stopped working in this home.  It looks like it needs a new sprayer arm and wire harness for $285.89.  But the bigger picture is there are rodents in the home that chewed the wires.  See pictures.

We will need the approval to repair the dishwasher but first, we will also need to get a quote for rodent removal.  The quotes for rodent removal are free so I will send someone out to see how extensive the rodent issue is.  I will keep you updated and we will go from there.

Our tech went to this property and reported the following:

dishwasher model# gz8945pg35 wire harness was chewed by rodents also spray arm has burn spots estimate for repair $285.89

Sign up for the Hui Deal Pipeline Club to get access to a Sears pricing list to see how my you are getting screwed for by your property management.

Our tech made a temporary fix to wires so dishwasher is working now.  We also recommend to do something about rodents otherwise they may cause more issue….

But hey just got my AHP and private lending not monthly payment J

Mold in one of my properties

Buying a drone-

For the past few years I have been amazed the amazing drone shots.

J Martin posted some shots in Changmai, Thailand and I started to ask him which one he used. Basically there are two of them that everyone gets one that is mobile and in 1080p (300) the other which is larger and in 4K (1000).

I’ve been adding videos to our YouTube channel and think that the 4K is where the future is. I’m making the leap to get the 1000 dollar version. I also am going to consider it a business purchase so I can get a nice entrepreneur discount too. Sometimes I think in amazement how crazy that would be to buy such a toy for a miser like myself. But then I figure I would take cool shots for our investor club when I do due diligence. How cool would it be to take shot of drilling rigs for exploratory drilling? Yup we are going there.

A couple of years ago when we were working our first project in Iowa which we ultimately dropped we did some video and it really brought the project to life.

As a side note, I had shinny object syndrome kick in and thought I would be able to make videos for other companies. Imagine I could go to a CrossFit and record their outdoor workout or go to a wedding (and get free food).

Then I thought that I could get a dime a dozen (commodity employee) or Millennial good with computers to do the tedious editing for me.

But then I stopped myself. But the whole mental exercise brought insight about what I want to ultimately hit my Simple Passive Cashflow number when you work on things for joy and engagement. What better to help people share awesome visuals and be around people on their special day like a wedding or birthday party.

So I heard Uncle Buck Joffrey started intermittent fasting a few months ago and lost 40 lbs. I started doing IF when I started renting out my first home in 2010. I can remember reading the ebook “eat stop eat”.

Ralph Waldo Emerson
“The first wealth is health.”

I needed to step my game up so I decided to find a personal trainer. So stay tuned for that. After spending 60k in 2016 and 30k in 2017 on training and mentorship I truly see the value of it. Of course, as you know I am someone who takes action. I can also say being on the other end mentoring you guys in my paid coaching program that it’s neat seeing the barriers broken. Honestly, I don’t feel like I do much but the results are amazing. As an ex crossfit coach myself, if you would asked me if paying someone 90 dollars to count my reps and pass me the weights… I would have thought you were crazy. But now I get it!

Wanted to share a trend that I have been seeing in the past 6 months in MFH (idk how it manifests in sfh?)

The class c assets are getting beat down by cap rate compression (delta between cap rate and interest rates) and therefore a lot of the experienced investors are getting into class b because the per cost unit is getting pretty much the same. This is moving away from the normal business plan for turning class c to b. The thought is… heck might as well go for the 1980s build instead of 1960-1970s stuff for the same price. Having a newer asset might also be a little more conservative way to go with this stage in the market cycles because in a correction A will move to B… And B will move to C and the lower class D/C in the tertiary areas will see most of the vacancy or rent concessions.


I got to pondering looking back when New Orleans was hit by Hurricane Katrina there were short-term disruptions to gas prices especially since Houston is a major think tank for the metro industry. I expect Federal money which might have been focused on (helicopter money) be spent on infrastructure spending or tax cuts NOW be redirected to damage recovery.. Which will manifest as tax breaks, loan subsidies, or other incentives offered to entice investment capital to flow into affected markets.

Definitely an opportunity in the short term to go in there and develop to take advantage of the fiscally earmarked casually funds.

As a long-term buy hold investor what I am keying in on is what the big institutional players (like insurance companies) will do. I suspect they will actually have to pony up and pay claims in Houston and Florida which will divert funding away from their Plan A: financing new class A multi-family apartments in other markets. This results in less new developments coming online which is great for Class B and C mfh investors who have been struggling with the recent cap rate compression.

Other random thoughts:

  1. Low / no equity homeowners will walk from their properties and focus on rebuilding their lives as renters for the next 2 years. These foreclosures will certainly impact values in numerous communities throughout Houston.2. Many insurance companies will re-think the coastal markets and their policy premiums for same. This, along with the inevitable increase in flood insurance premiums will also impact buying power for future homeowners.3. Landlords will be in demanding higher rents as there will be a shortage of housing for the next year or while properties are rebuilt.

    4. Long-term impact can only be speculated on since this was an epic storm that caused billions in damage to homes, autos and businesses but those purchasing SFR’s better buy very, very low or they could be the next distressed sellers.

Changes in MFH Underwriting and getting deals

I’ve had some hurdles here.  It seems the standards in submitting LOI’s have been changing the past 9 months. What changes have you been seeing from the front line?

1/ Business conditions are dictating POF with the LOI.   Based on the latest sophisticated investors are underwriting deals with 80/20 terms,  1% interest only and 1.25 DSCR.

It’s becoming more common for brokers to review the buyers’ underwriting before accepting an LOI to present to the sellers.  The brokers view these terms as aggressive and are reluctant to submit my LOI.  It matters who your lender because it comes down to team and a portion of it is your lender.  Large deals have been falling out of escrow due to over-aggressive underwriting that cannot find financing.  Las Vegas lenders are underwriting at 65/35 LTV, 1.3 DSCR.  You can change your underwriting to match Las Vegas standards, giving brokers more comfort, and therefore remain on the ‘A’ list or do nothing.

A lot of time you will needs POF with the LOI.  Use an angel… anyone who is an ‘Angel’ on the LOI, will be given the option to KP and co-sponsor ( if qualified ) the deal if the LOI is accepted.  The average $/unit for a C-class, value-add, stabilized asset in a C to B- area is $55-85K.  The POF for a 200 unit property at the top end is $5.95M.

2/  Post close liquidity equal to 10% of the loan.

3/  Proof of net worth equal to the value of the property.

4/  Hard money; the standard is becoming 1% of the purchase price (I haven’t submitted an LOI with hard money yet; .5% hard money and see if that places me in best and final).

Question: I heard you say in the podcast that you have a team in Atlanta. How did you go about building a team there? Is there a podcast episode on that?

I think it’s no secret that as the sellers market matures, turnkey properties not in war-zones are becoming endangered species. When I began picking these things up in 2013 you could get inside the loop highway (under an hour commute to the city center) and get a 1980-1990s product. Now you are looking outside of the loop highway and in 1940-1960 properties. The good turnkey providers are frankly making more money selling to retail buyers than us cheapo investors who has got a million questions. The stuff I see coming out on most lists are properties that you would not want to buy. Unless you have someone boots on the group (who is not trying to sell you) and is agnostic to the transaction, you are going in blind to a loaded minefield.

I am beginning to leverage my contacts and finding investor focused real estate agents who know what to look for in a rental property. This effectively cuts out the middleman in the transaction but it requires you to know what you are doing in the first place (two to four transactions or a mentor) so you can coach your agent and arrange for contractors. You find one person who is good you find the others because good people associate with good people.

I feel like the SimplePassiveCashflow Facebook group has reached a tipping point where everything you need from a peer investor network is here. You just have to go about it the right way. One wrong way I see it done and I see it done in other groups and BiggerPockets is being an “ask-hole”. Asking a one off question and not contributing to the community is a sure way to get crickets and a one off answer. But you miss the point, which is to build a relationship. Put your perspective goggles on and think… how can I add value to someone or others? What do they need?

So my call to action is if you want to team up with me and help me source properties and teams let me know. The rest please stand by for PML deals and others on the Hui Deal Pipeline club.

We need to stick together and work collectively. As a Hui. I know what happens when you read a few websites and podcasts and go it Rambo style because I did it myself when I first got started. You will get eaten by the sharks and you won’t know what got taken from you. You leave so much money on the table that you don’t realize a couple years down the road.

I don’t want to discourage anyone from not buying because at the end of the day even with the prices as they are it’s still better than the equity markets. I currently believe that there is a 50% chance we will see a recession in the next three years so keep investing just as long as the numbers make sense. If you don’t know the numbers or think you know get someone to help.

Where do you think the crossover point is?

I am talked to over a couple hundred people over the past year and for those people SAVING less than 30K per year after their day job should invest in rentals or turnkey rentals in a market like kansas city, memphis, atlanta, birmingham, not seattle, san francisco, california…

The short term goal is to gain landlord/acquisition knowledge and build a cashflow base of a couple thousand every month. But once you achieve that you should step up to larger passive partnerships/syndications because the return to pain in the butt ratio is greater. People who call/email/write on forums fail to see this two phase journey. People hear the benefits of MFH and come up with the ridiculous 1000 unit goal when they have not even see if they are borrowing material on their first buy and hold. Eventually, a lot of people quite a fizzle out while starting out on the MFH road when they should have done sfh and this insight.

As much as I advocate for “simple” I am really an advocate for the minimal effective dose to maximize returns with minimal effort.

So I’m trying to learn how to evaluate syndications as a passive investor. I was looking to a deal that was presented to me near your last one and I ran a quick analysis. What do you think?


– 1990s build A class than B/C Class @ 120k per door and value-add reposition is from B/C to A, risky at this market cycle in event of a recession and rent contraction (Usually we are buying at 45-65K a door with a stabilized building that have over 90% occupancy)

– Loan is 80.25% LTV -> too high? – (This is not really a factor – you want to be borrowing as much as you can and this is why you are going with such syndication to buy in bulk with others and get better terms. When looking at the loan you need to look at the term such as loan length, if it is recourse or non-recourse, and pre-payment terms)

– Loan is 36 months -> dangerous in this cycle (5 years and less is dangerous, just closed on a property in OKC for 10 year 4.22% 3 year interest only)


– Sponsors experienced – how did you verify this? (Talking to investors who were in past deals. Relying on my network to discuss reputation and character. Note: This is not going to be completed by emails or phone calls.)

– Investor waterfall favourable – (Waterfalls create complexity and typically they mean less returns for the passives. Generally, the best terms for investors is a simple 80/20 or 70/30 split. Waterfalls raise a red flag for me. I have seen people balk from a high sponsor fee but that is just one thing, if it’s a deal then the sponsor should be able to take what they want. A deal is something that is underwritten very conservatively – see below)

Based on my limited and growing knowledge, I wouldn’t invest in this deal if I had the funds. What do you think?

(You are scratching the surface of these: A true analysis of the deal requires you to have income and loss statements and rent rolls going back 12 months and possibly 36 months. This is where analysis totally differs from SFH or units under a dozen. Another part is to analyze the rental comps because 90% of the projections are based on the proforma rents per square footage. A lot of smoke and mirrors can be used by leads and brokers to inflate this number. Comps need to be verified and it is really a touchy feely thing. It cannot be a feeling on hey this 1985 property looks like this 1987 property on the westside of the train tracks looks like I can get $1.12/Rent per SF. Warning…I have see a lot of garbage underwriting play with annual rent increases 2.5%+ a year, expenses increase less than inflation – under 2% annual increases, and total rent increases of over 18% – this is something Patrickherbig.com has really opened my eyes too.  Past performance is not an indicator of success and 2012-2016 anyone could have made money if you were in the right place.)

I saw the last deal you did was at a 70/30 as opposed to 80/20, which is what I understand to be the generally accepted industry standard for syndications.  How do you think about evaluating deals with respect to the profit split, both from the investor and the sponsor perspective?  I’m trying to understand the situations where a “below market” upside would be acceptable and how the sponsors decide what structure to use – is it just based on supply/demand and the reputation of the deal sponsors (ie the sponsors/GPs will make the deal as favorable to them vs the LPs as possible while still being able to attract investors)?

I see a lot of yahoos doing 70/30 splits with silly assumptions like 1% expenses increases and expectations of over 20% bump in rents. I also see a lot of 80/20 and 90/10 deals that are run by folks with long and short track records. Beware of a person with a nice suit. I think I need to personally show up better because of people never the less associate a shinny pdf deck and cool bio page as reliability or perceived value. I would not really look at the GP/LP splits. The way I see it if it’s a great deal then we as LPs should have a large room for error and heck yea the GP should be taking a large cut. But things get muddled by the assumptions the GP is using and quite frankly unless you have analyzed 100-200 large MFH properties and put in a few LOIs I don’t think you will be able to see where the red flags are. There is a YouTube video “Bear and basketball awareness test” https://www.youtube.com/watch?v=Ahg6qcgoay4 where you get fixated on this split stuff and forget the fundamentals of the deal.

Thoughts on mobile home parks/ self-storage?

I recognize as both still being in the real estate category as a good way to diversify away from Real Estate in a heated market. I admit I don’t know much about the two, especially self-storage. From what I have gathered from other investors the Cashflow in Mobile homes is a little higher but there is not as explosive upside as apartments. This upside is really never captured in a conservative proforma anyway. Mobile home parks are a not being made and in times of correction, they are going to be in very high demand.

I have been looking at some mobile home parks and talking to a bunch of you if you are more interested in either a single asset higher risk/reward mobile home park or a more diversified play of multiple parks in one.

Podcast #93 – Fundamentals – 1031 Exchange tips with Russell Marsan of IPX1031

Lane’s note: I personally don’t like 1031 exchanges for sophisticated investors who will one day graduate to syndications because they are not “like kind” exchange. It just goes to show that understand where your advice is coming from. A lender will want you to get a portfolio loan, a lawyer will want you to get an elaborate entity structure, and a 1031 custodian will want you to do a 1031 exchange.
You get to list and buy a property from who ever
I bought 9 properties by selling 2 properties and delayed the taxes
Note: recorded in 2017 prior to 2018 tax changes
a 1031 exchange avoids capital gain and depreciation recapture
Drawbacks – you have to time the sale and purchase of the new asset
In a sellers market you can get a good price but have trouble finding a good asset
45 day rule – you have this time period begins at the close of escrow of the first property you have to identify a list of property that they would possibly close on
180 day rule – you have this time period begins at the close of escrow of the first property you have to close on the replacement property
Try to line up inventory in the pipeline
Delaware Statutory Trust – you close on relinquished property and park the money goes into the exchange account with intermediary
Reverse exchange – alleviates selling property and not finding anything – you can take all the time in the world to acquire the property and then sell your relinquished property, the problem is that it is costly, qualified intermediary else closes the new property, required cash to purchase new property and possibly need a L1 environmental
Section 721 – donate real estate to partnership interest
And exotic exchange ideas

Podcast#92 – #LaneHack – Coaching & Group Coaching Programs

Fill out this intake form and Email Lane@SimplePassiveCashflow.com

More details: SimplePassiveCashflow.com/coaching


Coaching packages including everything Lane knows and following elements:

Pick the path that is right for you:

    • Buy Hold Rentals
    • Remote Turnkey Rentals
    • Go big with Apartment Investing
    • Decoding Syndication as a Limited Partner
    • Raise money from others and Syndicate
    • Building a team


Find & Analyze deals

    • Be able to point out Sucker deals for “Californians”
    • Underwrite the property conservatively via cashflow analysis
    • Get every dollar on the table in the due-diligence period and punch list negotiation
    • Get the best financing option with Lane’s preferred lenders
    • Leverage Lane’s Deal-flow and Rolodex


Put it all together

    • How to setup your personal systems to not go crazy
    • Balance with your full-time job
    • Optimize taxes with my best practices and the proven professionals to advice you
    • Best technology to use
    • Learn the investor mindset and remove limiting beliefs
    • Future goal setting and clear 5-year plan after our program is over


Other possible scope of services

    • Growing your brand
    • Syndicate big and small deals
    • Start your own podcast
    • Internet marketing
    • Networking the right way

More details: SimplePassiveCashflow.com/coaching

Podcast #91 – 2017 Recap – Hui Deal Pipeline Club acquires $50M of real estate and raises $3.5M for syndications

Correction: Hui Deal Pipeline Club acquires $50M of real estate and raises $3.5M for syndications

2017 Recap

An amazing year which started on January 1 2017 me waking up in Atlanta after seeing my Washington Huskies getting destroyed by Alabama in the Peach Bowl and traveling to Birmingham to look at some turnkey rentals.

A year of changes & 2018 Preview

Let me know if you visit Honolulu! Let me pick you up from Honolulu Airport and have a consult for some tax savings.

  • The first change this year was that old website that looked like "Flubber blew up” is gone and replaced with a decent website. I was also looking back at some old email newsletter that I sent out with some funny Gifs which I will post on the email newsletter and website.


Here is video walkthrough of the new one: https://share.viewedit.com/iPBEYsNWW9uuvsZWJewFb3

  • I have been making additions to the YouTube Channel not found on the website so please Subscribe and Share: https://www.youtube.com/channel/UC3cIIsGKx3osVU5rt2P0HfQ
  • Personally I got up to 825 units… most of which in the second half of 2017 after a very quiet 2015-2016.
  • I am migrating to a new database that will support over 900 investors in the Hui Deal Pipeline Club. Please fill out the following form so I can keep you up to date on the latest deals I come across... The new database is pretty slick so based on your answers.
    1. Acquired $35M Total real estate, 589 units acquired, 2M raised for syndications (Coffee, apartments, RV parks, Private money lending)
  • With the success of our last four syndications and raising the following for the Hui Deal Pipeline club (https://simplepassivecashflow.activehosted.com/f/3) I will continue to expand the opportunities by continuing my membership in an Apartment mentoring group as well as a Syndication Mastermind to get access to higher quality deals. I spent $60,000 in 2016 and $30,000 in 2017 on expanding my network and knowledge and will continue to do this to produce the best deals and content. Going to goals seminar in January and will be thinking of where to take this. – The initiative not to “train my investors down” and improve my due-diligence. Help me help us!
"I started the Hui Deal Pipeline Club because I want to see each of you get to your goals financially so you can focus on what is really important to you. There are other fundraisers out there that will train their investors down to 10-15% IRRs on crappy deals and do "deals to do deals" or to pick up acquisition fees. Between investing alongside you folks and wanted to grow my track record the right way with the best product I know you guys will keep coming back and bring your friends."

Projects to come in 2018:

Action Items:

  • Let me know if you are interested in coaching, group coaching, or the Mastermind
  • Let me know what are you working on these days? What has got you blocked? I might have a contact or input that may help! Lane@simplepassivecashflow.com
  • Can you help me spread the word of the podcast? Can you make an email intro to me of anyone you think would like additional exposure on the SimplePassiveCashflow Podcast?

My goal is to help others escape the rat race. Please share it with your friends and family because after all, once you have left the day job you won't have anyone to have a lunch date with during the 'regular' work week.

We have all heard that you are the average of the 5 people you hang out with most but I would argue that the 5 people you keep in company, can be the end of you. Choose your supporting cast wisely and consciously. Be aware of unconscious mentors, ie podcasts, tv, radio, books you read. I'm all about automation and spending my time of things that are more important.

So you can just copy and paste the below:

Hey Man, I just checked out this blog with podcast where they actually show how to buy passive real estate investments to build streams of income to leave the day job.. They have this free 10 course "Think Outside the Cubicle" series with access to spreadsheets, mindset tips, networking offers, and deal-flow access.. Here is the sign-up for just the website updates: https://simplepassivecashflow.activehosted.com/f/1


Podcast links:


Google Android Phones: https://goo.gl/app/playmusic?ibi=com.google.PlayMusic&isi=691797987&ius=googleplaymusic&link=https://play.google.com/music/m/Iwlprtpxn4qim36w6buokzgg6ha?t%3DSimple_Passive_Cashflow_Podcast


Apple iPhone: https://itunes.apple.com/us/podcast/simple-passive-cashflow-podcast/id1118795347?mt=2


YouTube: https://www.youtube.com/channel/UC3cIIsGKx3osVU5rt2P0HfQ

And if you want to cherry pick for specific investing topics here is the spreadsheet with a summary of every Simple Passive Cashflow Podcast: https://drive.google.com/open?id=1FJ8rBA-SxQ50KJpQP1lppHC9UNLGLS2mIQS899X8__A

With the year closing I urge you to take a time out and ponder the following.

Don’t just read the questions… set the timer for 10 minutes and just think.

  • In an ideal world, what would your upcoming year look like?
  • What do you wish for in the new year?
  • What dreams would you like to come true?
  • What goals would you like to pursue and achieve?
  • What new knowledge would you gain?
  • What new skills would you acquire?
  • How much money would you make?
  • How much money would you save?
  • How much would you weigh?
  • How many miles would you be able to run?
  • How fit would your muscles be?
  • What new, powerful relationships would you like to forge?
  • What exotic places would you travel to?
  • What new job would you have?
  • What promotion would you receive?
  • What fun things would you do?
  • How much time would you spend with your family?
  • What would your ideal, perfect day look like in the new year?