We work with hard working professionals looking to opt out of investments for the clueless. I mean mainstream investing, we work with people, we have a direct relationship while enjoying higher returns and a quicker path to financial freedom. I personally move my endorsement from turnkey rentals to syndications as my network has grown, however, the downside of many of these deals is that you need at least $50,000 to invest and the frequency of deals that meet my criteria is sporadic. Check out my article about passive cash flow calm slash fund and learn how I always have cash on hand by using the American Home preservation fund as part of this one two punch to be ready for a great deal while still making a double digit return. I’ve been investing in HP since 2016. HP is a crowdfunding solution to the mortgage crisis in America. We’re collectively the fund and investors like you pull their money together and get great bulk discounts and distressed mortgages. It’s a business model that I think gets stronger Should a bump in the economy come because this is where there will be even more distressed inventory for HP to purchase. The American Home preservation fund aims to keep people in their homes so you can make a 10% return while making a positive social impact. Invest in as low as $100 by going to HP servicing.com slash investors. And if you want the Free Bird zone book and learn about George Newberry story, please send me an email at Lane at simple passive, casual calm. This is a story about a dude named Lane he moved to the mainland and bought one place to stay. And then one day he went try to rent them out. And then he became one real investor May. Hello simple passive cash flow listeners. This is Episode 200. Now we’re not gonna have another drunken episode like Episode 100. But I still wanted to get you guys to know me a little bit better if you’ve been new to the podcast or listening from the start. Since I started this podcast in 2016, in the last a year and a half or so, our hooey deal pipeline club which if you want to join us go to simple passive cash flow calm slash club has raised over $30 million to go and acquire over a quarter billion dollars of real estate. We are currently in way over 3500 units. And we’ll see what we keep doing in the future. I think we’ll still pick up deals at cash flow and I think we’re pretty good and in the face of recession, to join us and join also our networking to go to simple passive cash flow calm slash club, and something I’m even more proud of is creating our community. A lot of us got together back in February what I call it the hooey three multi day I think it was three or four days of masterminding in Hawaii and we’ll probably do the same thing in 2021 probably Martin Luther King weekend. If you guys want to check out the highlight video To simple passive cash flow, calm slash hooey three and check that out, and I’m here I go read in my chapter. This is audible, the engineer who escaped the rat race and achieve escape velocity by Lane Kawaoka.
I walked the linear path for much of my life. raised as part of disappearing middle class program me to study hard in school, checking the boxes on extracurricular activities, cramming for the CTS and getting a high GPA to get into college, or to live a practical life. Growing up, we were told to waste nothing and turn off the lights every time you leave a room. I still feel guilty to order a soft drink at a restaurant as opposed to tap water. In college, while all their courts were playing frisbee in the quad, I was stuck in the basement of the industrial engineering lab. What why was I not playing in the sun because Google told mean, what the highest paid undergraduate professions were driving on autopilot for much of my early 20s. I went for a higher level master’s degree and tested to become professionally licensed as an engineer for the job security. Upon entering corporate America, I spent my first five years of my career working for a for profit private company as a construction supervisor, managing a bunch of entitled journeyman who were older than my parents. Facing the rigors of junior level employment. I played my role as a young guy traveling 100% of the time for my company, sacrificing quality of life as I navigated the operational clusters, toxic management and other backstabbing pawns in the company. I have a lot of scar tissue from the decade of working for the man, not to mention building someone else’s dream. You tell me how engaged you would be if meeting poke protocol was to sit next to your supervisor. And not speak unless directively instructed to or if you were asked to address a director to levels up by Mr. or Mrs. title. One day an internal company email went out notifying of a friend slash ex direct report who had died in a work accident. My boss was uncompassionate about the situation looking out for the big bad machine first, mostly his annual bonus and agenda. This really put things into perspective for me. As a corporate Road Warrior, it was novel being on a company expenses all the time and maxing out on airline and hotel points. But you can only have steak and lobster so many times. The only people who cared about my platinum status. Were the other suckers in first class who are working for the paycheck or it and acceptable quarterly review. Although I’m grateful that I had a well paid job post 2008 recession treated the most important resource time for money, the linear path and still delayed gratification, living below my means and an overall scarcity mentality of saving money instead of earning more, being more, I was in trance by the face of Wall Street marketing to blindly put money into a company sponsored 401k plan only to hope and pray that compound interest would carry me to a secure retirement. Let’s not even talk about the student loans I have. I knew where this path was going. I mean, I did the math, and it told me so this is my story of how I freed myself financially, how I took ownership of my life direction, and the series of events that allowed me to find my calling. Seeing the economic matrix, a steady diet of ramen noodles and a free birthday latte per year, made it possible in 2009 to purchase my own home too. Live in being a bachelor who has only home on the weekends, I realized that having this large home was a waste of money. I made the decision to rent it out and become a real real estate investor. You might be thinking that this was the big change. But at the time, it was simply a lot of beer money after collecting the rents and paying the mortgage. I don’t know if it was the beer or being loved drunk with cash flow, but I opted out of the linear path in my early 20s. From that point, I don’t know powered podcast books and other online forums on every keyword iteration of passive real estate investing, and a few hundred dollars a passive cash flow per home. The process was simple. Buy a rental property where the income exceeded the expenses in the mortgage, then rinse wash repeat. Like a space shuttle that accelerates through gravity and escapes the atmosphere in zero G. This was my way to financial freedom. Up to that point, the biggest breakthrough in my life. was discovering the mp3 format that compressed and played music digitally in my teens. Using this intellectual technology I progressed intentionally, to 11 rentals in 2016.
At that time, a few of my friends wondered why my ramen noodle dialog was being replaced by Starbucks coffee and yummy double bacon and egg breakfast sandwiches. They want a piece of the action to da It was about seven years later since the little red hen who did all the work by herself. As much as I liked helping people. I got tired of answering the same questions. So what does any other late Gen X millennial do but start a blog? Unfortunately, the words I write even if spelled correctly do not usually make proper statements in English. So I uploaded my simple passive casual podcast to iTunes where I could ramble and honestly talk about what I was going through as an investor. I began living markets consciously opting into more meaningful engagements with people and projects and searching for meaning and purpose. It was big. I was beginning to ask myself after sitting on the beach with my unlimited supply of pina coladas and time than what needless to say my motivation for working in a hostile work environment that I once tolerated dwindled, so I switched to work in the nonprofit public sector. I started to see the economic matrix where people essentially traded time for money and the rich let others build their dreams. being an introvert, I was paradoxically energized to see my audience grow. As I began in person meetings and online groups I sponsored. I provided hundreds of free coaching sessions to guide newbie investors. With my engineering background and a little bro science. I saw patterns arise in the stories from well paid professionals who were led into an unfulfilling life. On a line with their passions, abolitionists, Henry David Thoreau said, the mass of men lead lives of quiet desperation and go to the grave with the song still in and people do not have any time to look inwards and are consistently living with anxiety and self doubts because they are working like machines in order to meet their basic needs without the financial freedom to find their true passion. Why did so much hard work leads to financial scarcity and lack of fulfillment. This self searching group of hard working professionals searching for more, all had a common thread, a moment that pushed them over the edge and made them realize that the path they were on was unacceptable. These are some of the tipping points that I’ve gained from my many chats with investors. Seeing younger, less experienced workers get Red circled as future management and advance meant through the company Fast Track being fired to cover up shortcomings in a budget, internal theft by upper management and affair by a superior lead to bankruptcy of a startup company, affecting many innocent employees. Chronic drain of working with deadbeats getting lost in office politics of getting your objectives completed when they do not align with your boss’s objectives. A retirement party for co workers catered with crappy Chinese noodles due to the cost control when you don’t get the job because you don’t have enough gray hair when you don’t get the job because you have too much gray hair, being criticized for not being business devotee from those who live paycheck to paycheck themselves when you have a personal portfolio of a few hundred friends All units. That was me sending through LS meetings that should have been suffice with an email. circle jerk meetings where the boss’s dumb ideas are exalted by their minions. When your boss with no technical experience misuses terms like artificial intelligence, big data, machine learning and deep learning, being enslaved with the golden handcuffs, seen an ambulance come to the offense routinely during the layoffs season. Being around the negative w two work workers speak and adopting the prevailing victim mentality. The Road Warrior gets in early quit on Friday Friday morning to see the spouse at home with the poor boy watching your friends receive the Seiko stainless steel watch retirement
if you found a calling and something you’re good at and truly love doing good for you. Keep doing what you’re doing and consider yourself lucky. If you relate to any of the moments above read on the one idea. My online journal, my podcast resulted in the many emails of gratitude and acknowledgement because that was empowering people with the How to and inspiring them to take the leap of faith to change your financial life forever. I suspect that most effective part of my message was showing people that if me, a little awkward engineer could do it. How bad could it be? I started uploading my peer group and through osmosis This brought me to a Tony Robbins event I literally walked on burning coals. There were a multitude of top down and bottom techniques Tony Robbins spoke about during the intensive four day event. One of the lessons was things happen for a reason. And boy was I glad I did not leave to use the restroom when he outlined the six human needs. Number one growth to contract bution three significance for uncertainty, five, certainty and six love and connection. He was the game changing moment. Tony Robbins said the most important thing is contribution because the secret to living is giving. If you catch on to that, you realize that there’s nothing you can get that comes close to what you can give. Life is calling all of us to be more than just about ourselves. And that is when we get that spiritual hit. Apparently Mr. Robbins did not endorse the mission of sitting on the beach with unlimited supply of pina coladas and taking food porn pictures, while gallivanting the world as a tourist, like many of these other financial independent guys out there, nor did he support playing it safe with a bunch of passive investments. Later that Easter, I was baptized and the message was to go forth and help others. Then another of my mentors realized They legend Robert Helms said, when you are successful, you have an obligation to send the elevator back down.
I made it to my penthouse, and now
this elevator, I’m going to send back down to help other folks. We all have a finite time on Earth, an empty canvas to create a legacy. This is one my shot. opting out of the linear path was not about getting financially free and safe sailing off into the sunset, but it was about standing up for change and creating the greatest impact. The fan mail all followed a common thread of pain, many hard working professionals who are busting their butt on the linear path, or being misled down a comfortable life of unfulfillment. Many of them are enslaved by the golden handcuffs, running in the hamster wheel of the day job working for somebody else. Some like doctors, lawyers dentists, accountants and engineers make more money to get the big house and nice car. But in the end, they are just a bigger hamster. dogma of Wall Street. Buy and pray method is a cover up to insidiously steal investment returns from people who are doing all the work. Life is a three phase screwjob. Phase One, you enter the workforce with the worst jobs and the lowest pay. Time is abundant. Phase Two, when marriage and kids enter the picture, and alien grandparents too. This is the time when one should be excelling at their time consuming career. Money is abundant. Phase Three your teenage kids hate your guts and your health starts to fail. Time is abundant. The next chapter My mission is to teach empower good people to realize the powerful wealth building effects of real estate So they can spend their time on more important ventures and passions instead of working long hours and worrying about their financial troubles. In real estate, we use leverage and by teaching others, I’m leveraging other people to achieve their financial goals in hopes that they will to send the elevator back down for the next person. Simple passive cash flow calm seeks to educate those looking for diversification, and better returns outside the traditional investments such as mutual funds and stocks. This is part of a large effort to redirect billions of dollars going to the corrupt Wall Street rollercoaster, and help the shrinking middle class find safer and more profitable investments in projects that benefit Main Street, such as affordable workforce housing rather than luxury housing for the rich. The true meaning of wealth is having the freedom to do what you want, when you want and with whom you want. Building cash flow via real estate is the simple part. The difficult part occurs after you are financially free to find your calling and fulfillment. But that’s a great problem to have. And if you guys haven’t yet please book a call with me I’d like to get to know all my investors personally and if you’ve been listening to this podcast for a while we’ve never connected shoot me an email at Lane at simple passive cash flow and I’d like to hear from you.
Aloha this website
offers very general information concerning real estate for investment purposes every investor situation is unique always seek the services of licensed third party appraisers inspectors to verify the value and condition of any property you intend to purchase. Use the services of professional title and escrow companies and licensed tax investment and or legal advisor before relying on any information contained here and information is not guarantee as an every investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind above all else. Do Your own analysis and think for yourself because in the end, you’re the only person who is going to look out for your best interests.
If you want to skip out on a Zoom meeting, or at least give the impression that connection difficulties are making it impossible for you to attend, do two things. First, get your fingers positioned over the ALT + V and ALT + A keys to turn off your webcam and audio, respectively. (Command + Shift + V and Command + Shift + A on your Mac.)
Then, right-click on yourself and select “Rename,” if it’s available. Once you’re ready to “depart” the meeting, replace your name with “Reconnecting…” but don’t click OK just yet. Hit ALT + V and then ALT + A to drop your video and audio, and then click on OK to change your name. With luck, it’ll all appear pretty seamless—your mic and webcam suddenly cut out, and you’re now struggling to “reconnect” with great difficulty.
0:00
Costco there was a little flyer in the lunchroom saying that the last day for complimentary food and drinks at the food court will be Friday me. Which kind of is a sign of the times is like we’re getting back to swing of things. The pity party is over and we’re getting back to work. This is a story about a dude named Lane he moved to the mainland and bought one place to stay. And then one day he went try to rent them out. And then he became one real investor. All right, welcome, everybody. This is the May 2020 monthly market update. You guys can access a lot of past my update everybody at simple passive cash flow calm slash investor letter, but we’ll get going here. Obviously a lot of this this month will be surrounding the COVID-19 demick in news
1:01
affecting our real estate investments
1:04
from there, if you guys haven’t heard about me My name is Lane Kawaoka a professional engineer or ex engineer, I’m still have the P. I have a podcast called Simple passive cash flow found on iTunes, Google Play I Heart Radio and also have a pretty robust YouTube channel and if you would like to join our tribe, we have a free Facebook group for to get to know folks in our group a little bit better. So I’m going to run through there’s quite a bit of articles this month. If you guys know my style run through it pretty quickly, but here we go. The shopping center business reports that gap Macy’s koehlers bowls and to furlough most employees as stores remain closed or and COVID-19 and demmick are up Business Online reports that Under Armour to furlough 6600 workers beginning April 12. And I’m going to go a little bit chronologically here to kind of recap the month of April. So I put it this way, because hopefully it puts things a little bit more context for everybody to see how the story unfolded. Of course, March was the first last month march was the first month that COVID-19 kind of took effect. In my opinion, that second third week of March is when things emotionally turn towards kind of the fear base. And what we’re going to kind of see is how the story kind of unfolded here with a lot of big businesses furloughing and people having to stay at home. Commercial Property executive reported beginning of April that us braces for more job losses. Economies expect this week’s unemployment claim number to jump well beyond the record three people 3 million filed last week. And then later on, they reported unemployment ployment claims top 6.6 million. And I do believe later on the month, you know, these numbers and estimates have increased. So with people unable to go out a lot of restaurants and other industries just not able to make money.
3:23
Unemployment, skyrocketed.
3:27
Also in the beginning of month, April 3, Warren Buffett, Berkshire Hathaway sells part of their Delta Southwest Airlines steaks, sold about 18% of his Delta Airlines and 4% of their Southwest Airlines. So this is right after I’d say a lot of the big Fallout, the initial fallout of the stock market. A lot of this is you know, kind of duh, obviously this stuff happened. GDP fell at 400 Point 8% annual rate the first quarterly drops since 2014. Worst dropped since 2008. Consumer spending plunged 7.6% the most since 1980. It accounts for 70% of the GDP. Services drop the most on record driven mostly by one industry, health care and demick require providers to pull back on most often drivers like electronic procedures and routine visits. I know in our who invested group, like a lot of the dentists really got hurt bad and a lot of the non emergency doctors wouldn’t take in and do their procedures. So it’s really unusual how this pandemic impacted some people very greatly. And others they were relatively unimpacted next quarter economists are projecting at least a 30% annual decline or a business online Line reports that US economy loses 700,000 jobs in March due to efforts to contain spread of Corona virus. And you can see if you guys are tuning in on the YouTube channel when we do this live you can see sort of the comparison
5:18
on on a graph of how
5:20
the monthly change in job gains normally were hovering around 100 to 200 jobs have created 200,000 100 to 200,000 jobs created July, August, September, October, November, December, January, February, then in March and negative 700,000 per week in review them. I have a couple of these reports in here. This came out in the beginning of the the month. So again, kind of showing how things progressed. Some of the you guys can read it. On the screen here, those of you guys are on the YouTube but I will read some of the highlights here. So they’re commenting and appearing to be past the peak of infections but the US US GDP is expected to contract severely in quarter two, before giving up to stronger growth starting in quarter three supported by government stimulus and pent up demand. They’re calling calling for a second half of the year recovery. Certainly going into 2021 things are looking strong from this and a variety of other sources and this, this is reported by CBR ri. Some of the other highlights here Dallas Fort Worth Houston, Atlanta are hopeful markets to watch as their economies begin to open in phases and these are a lot of the early adopters of those trying to get out there
6:52
quicker than others I do believe in.
6:56
In Texas, a lot of the restaurants are kind of open at this point. I’m glad Her talking to some other partners, frontline workers get access to 3 million hotel guest rooms. And this is one of those, you know, kind of warm and fuzzy articles, where despite the suffering of massive pandemic business loss, the lodging industry is pulling together to provide temporary housing for workers on the front lines. Part of this is probably got to be some kind of trade in the background with the government and the hotel industry. But it’s the right thing to do. I think these are some, you know, some nice, people aren’t staying in hotels, right? hotels are hurting really bad. We’ll kind of get into some of the data that supports that here in a little bit later. The question that’s on everybody’s mind and honestly, what made me a little anxious this month and last month, is are people going to pay their rent? Wall Street Journal’s tried to scare everybody by releasing this article. That headline, nearly a third of us apartment renters didn’t pay for rent. And I don’t know where the heck they’re getting their data from. But this was entirely not true from my point of view, and, hey, maybe they’re just, they’re just taking their survey from a lot of more primary markets, like California, where people got it in their head and they don’t need to pay rent this month. I don’t know where the heck they get that numbers from Instagram. But this is an example of fake news, in my opinion, I mean, Wall Street Journal wrong, but depends how they sampled their data. I like to use these more industry publications multi housing news, reported that the majority of residents paid April rents reported that nearly 70% of rental households across the nation paid their rent this month and then that that was the first week of April. And then the they reported later on the month that rent payments hit 89%. And this is pretty typical what we saw across our portfolio, you know, anywhere from a normal normally collections are in the 95% range, you know, you’re gonna have people not pay period any month. But the impact that Coronavirus and the pandemic had to that number was we saw in the month of April and a little bit for that was a maybe a few point decrease from there. And that’s what is kind of shown across the multi housing news. Another source commented that the rent payment rate at 93% of prior month so it’s, I think this is to be expected. This is what sort of what I personally inspected across my portfolio. You know, there were some slight decline in collections but it is wasn’t a big deal. And those who were going through some trouble we were able to make individual plans with and they eventually caught up later, at the end of the month. Thus far, it is the first week of May. This is not not good data, but thus far it looks like collections are tracking maybe a little bit less than what it was in May. But still overall, I’m, I’m pretty, pretty relieved from what I’m seeing.
10:36
We’re going to kind of dig into some of the individual asset classes and see how they’re, they’re faring. But multi housing news is has an article will student housing be impacted? And Heck, Yeah, it is. A lot of kids had to get pulled out of colleges couldn’t finish up the year and a lot of parents, here’s the deal. A lot of parents are the ones who make the financial decisions and a lot of parents are a little apprehensive is their kid going to go back to his or kids school is going to open a time. So a quote that I pulled from here is, it was common that I think the reality is in a fairly likely scenario that some of the pre leasing will be backloaded until parents and students feel comfortable with the university’s fall semester will open. That’s a wait and see. And this is this is why in my box, I don’t really focus on student housing because very impacted by times like these office leasing now commercial property executive had an article and they quote, tenants and landlords are all trying to work together on understanding the respective needs for one another. I’d even go as far as say lenders are doing the same thing. Everybody is trying to play nicely in that sandbox. And we can all understand that right now. People are not going into the office. They are taught to work from home for the most part, and that this is dropping the demand for housing or for office space. And maybe it might lead to a longer term trend that people don’t need to go into the office. We didn’t need all these good meetings to get things done we’re good with work working virtually I know I am. Short term rentals. I think these are the ones getting killed the most there was a great article. You guys can check out CB lab COMM But was entitled can Airbnb survive Coronavirus, air DNA which is a great source for data for you guys who do do short term lease lease rentals. They said that there was a dropping 80% compared to the previous week in the beginning of March. bookings in New York City, San Francisco and Seattle had dropped more than 50% compared to the week beginning January, and drops over 35% in Washington, DC and Chicago. Again, this is another reason why I don’t invest in short term rentals. And you guys, there’s an article I wrote about the cons of short term rentals at simple passive cash flow calm, slash STL. For short term rental or str. Slash str is that URL. Another image of some of the Airbnb bees from air DNA showing on a graph. All much of a decline from the beginning of March to the end of April. In terms of bookings contracted, I think a lot of like, you know, here in Hawaii, and I’m sure this is across the nation. There was a lot of government regulation over they wanted to shut down down these short term rentals and people who had short term rentals, they’re desperate they need to pay their mortgage because they weren’t getting any, any type of tenants to come through. So they’re being very strategic or tricky on when they would list it so they would hide it away from their the government regulators. Again, which I don’t really condone doing that type of stuff. I don’t stick to a normal investment like workforce housing, something that that everybody needs. So here’s a graph that retreat advisors put together where they just put all the asset classes on a graph and show which ones get impacted the most. Some of the more sensitive to a pandemic short term rentals sniffs which are assisted living developments senior house Students housing, gaming, lodging I think these are like a lot of the hospitality think Las Vegas. And then strip malls and malls are impacted some of the things that aren’t the bottom of the list of you know, little impact or short term rentals, apartments, industrial storage.
15:34
And that that leads to the, you know, what should you invest best value in a downturn might be workforce housing says multi housing news. They came up with this white paper, assessing the impact of a recession related to COVID-19 crisis might have on apartment properties. So they came up with this analysis on Which they created this category of vulnerable industries, which is comprised of those who work in hospitality and food. So you know, thinking restaurants or people like that. And, and like hotels or casinos, that type of stuff. They took those type of people who are getting hit the hardest. And they tried to figure out where did these people live right like if you if you are a landlord, you have one of these people working or paying your rent. So they realize that 52% of these guys are living in houses, they’re renting houses.
16:45
Another 28% are in single family home.
16:50
And if it sorry, the 52% was houses that they own themselves 28% our rent, they’re renting single family homes and just 18% of these guys are In apartments while they found the rentals. So, again, the conclusion of this article was that a vulnerable industries hospitality and food, only 18% of these guys are an apartment and therefore the single family home landlord is going to get hit harder. things to think about right because you know, you try and bulletproof your portfolio to whatever can happen. And pandemic is just one of those things that we have just added to the list. So CB re came up with this executive summary in the beginning of April. Some of the highlights here are, you know, all this will lead to increased multifamily vacancy and declining rents over the next two months. And they expect the multifamily market to bottom out in quarter three and begin a recovery in 2020. For. So they’re seeing us kind of popping right out of this overall vacancy expected to rise at 2.7 percentage points to 6.3 in quarter three and fully recover in 2021. The Federal Reserve pledged to keep interest rates near zero until full employment returns and inflation exceed so so that’s something to keep in mind for those of you guys who are always constantly monitoring those, those rates and wanting to refinance or or pull money out.
18:39
CNBC reports that JP Morgan Chase to re raise mortgage borrowing standards as economic outlook Garcons. So, people are saying, well, like there’s gonna be a lot of distress inventory of this COVID-19 thing which I don’t really quite buy. I mean, if it was if it gets that issue I probably wouldn’t buy it. But the problem is with this theory is like, what’s happening is the lending market is getting more difficult. So if your deal gets better, which I’ll argue that may or may not be true and your lending gets worse, then is it really a better deal, I mean on lending as part of this whole equation. So, from from, you know, middle of April, customers applying for a new mortgage will need a credit score of at least 700 and will be required to make a down payment equal to 20% of the home value. So that credit score need is coming up. So the change highlights how banks are quickly shifting gears to respond to the darkening US economic outlook. So what does that mean? Well, more apartment renters and people renting because they can’t meet the qualifications to buy a house. And I think this also means Lower condo prices, because they’ll be less demand for condos. Because a lot of the guys who are on the bubble with lending are the guys who don’t have much money at all. So they’re trying to get into condos as opposed to you know that that second or for lifetime house, the bigger house. Other developments and this is more affecting us on our our multifamily apartments or bigger commercial deals, people are always asking, you know, how does it impact us? So, fannie and freddie mac backed agency that is now requiring six to 18 months of payments in reserve. And this just means that we essentially we can kind of borrow less less proceeds, which slightly lowers returns, not much but it you know, this is all just kind of moving the needle very slightly. It depends on the debt service coverage ratio of the deal. But this can have a negative impact on whether a deal works or not. There have been also some changes in forbearance based on some of the agency debt and ultimately I think this flows down to the single family home mom and Paul landlord. See some of the the guidances and the policy that the Fannie Mae Freddie Mac, the big guys rolling up to the bigger operators in syndication deals, top 15 fastest growing mega cities on on here. First one is Gonzo. I don’t know if I’m saying that right. Cairo, Jakarta, Indonesia Tokyo at 33 million New Delhi but the point of putting this up The discussion that was happening in this article is, with this whole pandemic, thing may potentially being a part of our lives in the future. Perhaps these mega cities are less of a option people is going to be, you know, people are going to want more space, they’re going to want to move to the suburbs. The United States biggest city, which is New York has 15 million people, which is only 15 on this list. So that’s the question, right? Are these bigger cities? Are people going to want to live downtown? Are they are they going to want to move out to the suburbs and have more space? I think these are some of the more the macro trends. If you’re an investor and you’re buying an individual deal, that makes sense. I think it’s sort of it’s sort of this doesn’t matter to you. I mean, I think this type of data is for the guys who are investing Like 10s of millions of dollars, and they’re buying it on an institutional level, but you as a mom and pop investor should always be buying the outlier deal that doesn’t matter if it’s in the deep in the heart of the city or out in a tertiary market. I think that the biggest things are are you buying at a discount? Are the rents undervalued and his ability to pump rents? We talked a little bit about which asset classes are hurting the most and which ones are more resilient. This is a slide on which sectors
23:38
and mainly what markets are to be on the lookout for.
23:44
As I mentioned earlier, some of the biggest impacted
23:50
sectors are leisure and hospitality employment. And those ones that the top some of the top 10 are Las Vegas. Orlando for Mickey Mouse the Florida coast Orange County and then San Antonio, San Diego, Miami, Austin Charlotte Los Angeles. So not saying that there will be a you know, these are at risk thing not to say that there’ll be another pandemic in the future, right? Who knows, but this is just another thing to kind of keep on your radar. Add your add on to your laundry list of other things tornadoes, floods, hurricanes, locusts and append them. Which industries did better this past month? Well, grocery stores went up 26% and the losers were closing clothing. I’ll be closure of all the malls and people just aren’t the only way to impress anybody. You don’t need to buy clothes again. Your times had a cool article. I like how they have you know, their interactive graphs. You know, people are spending more money on groceries, less on travel. shopping and transportation, who are the winners, shops, supermarkets, General merchants and e commerce. Home Improvement saw an increase. I don’t know how they became essential stay at home or so they’re able to stay open. But I went to Home Depot to buy some seeds to plant in my garden because I was bored and then the line was like going outside. And some of the losers were airlines cruises fitness. A lot of gyms are hurting. movie theaters lodging and apparel. Alcohol sells well. I’m just another way of you know, movie theaters. I’m sure some of the losers movie theaters, events and attractions, toys, entertainment, book retailers arts and crafts, music sporting goods were some of the big losers. Some of the winners were gaming and video streaming and music streaming. So a lot of people playing at home playing video games, passing the time. Again, I I bought one of the Echelon bikes that you work out and there was like a one month backlog. And I also bought a better webcam to come to you guys at 4k and that thing is still on backorder last month we reported that Cheesecake Factory was going bankrupt. Well, the RV business online reports that Rona capital invest $200 million to keep them alive. So you guys can continue to have your cake. At least that’s the ticker symbol for Cheesecake Factory or a business online officer reports at Amelie buys multifamily development site on South Broadway in Denver. Now for those you guys know who Amelie is Emily is a developer that focuses on residential Class A. So these are pretty hip places to live a lot of like, I would say like the yuppies will live in Emily’s they’ll have a movie theater inside the amenity someone might even have bars. I would call them Class A rentals more than luxury type. But you know they’ll they’ll build in a lot of the big sick primary markets and big institutional player but when the way I read this type of article is like, I’m kind of seeing that all Mali, their their institutional player, they’re going to do the research, but maybe when they go on ups, maybe when I think that a, by the time they actually build the thing, the market has maybe got an overheated, starting to pull down. So you guys can interpret this type of news however you guys want, but that’s just my two cents. Commercial cmbs late payments starting to mushroom. So this is another kind of stress tests on different asset classes on some of the late payments. delinquency is starting to happen and well, below you’ll see a lot of these hotel retail multifamily industrial office all had sub 3% delinquency, and hotel jumped all the way up to 20%. One every five hotels are behind on their payments. One on every 10 retail 10% are behind on their payments and multifamily industrial and office are all around 5% or less so they are less impacted by this bill. Again, you know, this is a data hotel and retail are getting killed out there. One of the biggest
28:40
hot topics that’s been happening in our Facebook group is people are complaining that they can’t evict people. And so here is a map put together by Marcus and Milla job, outlining which states have moratoriums on eviction.
29:01
Most of them do at this point.
29:04
Some of the ones obviously a lot of the blue states will have this. Some of the states with no programs are Oklahoma, Arkansas, Missouri, Georgia, South Dakota. Well, no one who lives in South Dakota and nobody cares about that. states that suspended court eviction proceedings, not necessarily had an eviction moratorium where New Mexico Wyoming, Idaho, North Dakota,
29:37
Maine, Vermont,
29:39
and
29:42
I don’t know what that is. I don’t investor near Kentucky, and Virginia. Hey, simple, passive casual listeners. I’m wearing my sleeve shirt here because we make our money in our sleep. One of those things that I’ve been playing around with is tradeline hacking, and if you haven’t heard of that, it’s a great way to make Make some side cash hundred a bunch of books off each credit card every month. To learn more go to simple passive cash flow calm slash tradelines and check out our E course to learn all about this cool way to make some money on the side. We’re going to get into a little bit of actionable things you guys can do and I’ve been, I have been keeping a list and a running note sheet of all the COVID-19 cares act. developments at simple passive cash flow calm slash COVID-19. serve a living guide. Always consult your CPA attorney and do your own due diligence but here Here are some of the developments that happened this past month. So you guys should have received your your share of the 16 million checks the most checks through direct deposit, may 4 Iris will start the seven paper stimulus checks. And I’m pretty impressed how much how quickly they actually moved in and actually got the eight out to where it’s needed most. One of the biggest perks of the cares act is that you’re able to take $100,000 out of your retirement funds and what I call jailbreaking getting it out of those property mutual funds and into real investments. So the cares Act allows each person so you can you can take 100 grand and your spouse can take 100 grand penalty free normally there’s a 10% early withdrawal penalty, but with the care under the cares act, as long as you’re impacted by the COVID-19 thing, which in my opinion, are to consult your own professional or get a new professional. We are all impacted. So you might, you might be able to take that out and pay the taxes back in three years, I think is the what the guidance to say. If you don’t want to withdraw, maybe you want to, now’s the time you’ve been mulling it over at home, you want to do a rollover. Here’s a nice rollover chart. Whether going from Roth traditional simple IRA, SEP IRA, 457 403, B or any design Roth account, a lot of the retirement information is located on my GOP site at simple passive cash flow calm slash q RP, which is short for a qualified retirement plan. So here is a map of the United States showing which states small businesses were able to get the payroll protection aid. A lot of during the first 10 days of the federal government small business rescue program. It was crazy guys. I mean, the money was just going out and One of the headlines was that the bigger companies who were asking for more got help first because the lazy banker just want to get it out. And it’s easier when you disapprove the top five guys and instead of the bottom 5050 something guys, I guess you don’t blame them when the goal is to get the money out. Again, a lot of more COVID-19 developments we have a great webinar that we did on April 15 with my CPA, again that that video is hosted at simple passive cash flow calm slash COVID-19. So if you guys haven’t been keeping up in March, beginning of March, the Fed drop the funds wait rate to zero percent. And the analogy I like to use is we gave up all our dry powder at that point and I was actually kind of surprised they they dropped it so quickly. Normally they’re dropping the rate, maybe a quarter point more half a point but they dropped to think like a full point or more just in a matter of a few weeks. So no more dry powder, which is a little scary, but then they came through later on and signed the cares Act, which is 2 trillion or minus would be a gazillion dollars. In my opinion, you got to pay that back probably with higher taxes in the future. Some of the provisions of the COVID-19 cares act enacted on March 27, was a five year carry back on net operating losses. And I would consult your CPA on on a lot of these things. On one of our deals, we had submitted the K ones back to the CPA
34:43
to take advantage of some of this stuff. Here’s some markets likely to experience a longer post COVID-19 recovery, Florida because of the high population of visitors and 19 percent of their population is over 65 and older, New York mostly because of the density. They might have a lot of people moving out is what they do they say and off 63 million tourists per year so a lot of visitors there. And Illinois because of everybody knows Illinois everybody wants out of Illinois. One of the reasons the high corporate taxes, they have a 45% increase in January 2020. High property taxes. People are just leaving that city that poor city of Chicago source on this a CL and Associates a markets likely to exceed a long recovery. Again, more California. They locked out 40 million people for many weeks is economic, devastating high gas taxes, unfunded pension liabilities and they ranked Number 48 of all US states and overall economic freedom. Well, that’s why they call it the Socialist Republic of California. Nevada is another one that’s going to see it hard. 56 million tourists 50 million are in Las Vegas. Just going to be those casinos and hotels are going to be hit the hardest. airline hub cities like Dallas, Atlanta, Chicago, New York, Denver, Orlando, Washington, DC, la Seattle, Charlotte, Houston, Seattle, are among the top airports for passenger traffic. And then oil dependent markets because you know, behind this COVID-19 there was just another big headline of all the crude oil dropping prices. A lot of these are like Houston, real estate sectors likely to experience and how enhance building operation regulations, which is typically not good for the mom, Pon vesser. Sometimes the institutions can actually benefit from this. But these are lodging facilities or apartment communities, retail centers, gaming facilities, health care, office buildings, commercial conference facilities, entertainment centers, outdoor assembly venues, I’m sure they’re going to tell everybody to wipe surfaces like five times a day or do whatnot. It’s just going to make business harder in these sectors impact on COVID-19 on development. You could see incorporating more hands free amenities like motion, active doors, restroom faucets, tissue dispensers, parking gate, doors and building designs. You know, more point of sale stuff come out. I mean, like when I would go pick up my food it just kind of befuddled me how you saw that like sign the credit card thing and put the credit card and I guess or like press the screen I’m like, can’t they like just call it good and as soon as it touches touches, utilization of new building materials, inclusion of pandemic in forced mature clauses in construction contracts. I know on our syndication documents I think that word got like thrown in in like future feature versions, which is just added to the laundry list of things that can go wrong. upgrades to h fac systems regarding air quality and circulation and regular on site health inspections during construction before certificate occupancy is cut. But it’s not all doom and gloom why real estate will remain a preferred investment class. Post COVID-19 is still in a low interest rate environment. Americans need a place to live like apartments they need a place to shop like grocery anchored retail and produce distribute goods in warehouse and distributed facilities.
39:00
Continue strong demographics, population still going up and favorable tax treatments with all the goodies in there like the 1031 carried interest, capital gains opportunity zones, cost segregations etc. So I’ve been watching a lot of other informational videos with my time and one of these is some content done by Richard Duncan economists. Um, you can see some of his past work and podcasts at simple passive cash flow calm slash Duncan, but I subscribed to his newsletter, it’s a paid program. So it sounds like some free stuff. But you know, he he kind of outlined some demand shocks as inflationary demand shocks that will increase demand and push prices higher. And that’s what happens in a war and the deflationary demand shock that increases demand and pushes prices lower like however in a Coronavirus example Like this. So that’s how a situation where a war, inflationary demand is and a deflation in demand like how we’re at now. It’s just interesting that like, kind of hear from more academic viewpoint of what what’s happening here. Some of the supply shocks were decrease supply push prices higher was the oil shocks in the 1970s and other deflationary supply shocks increase supply and push prices lower, which can be a event like the general globalization. There was a big controversial headline that came out where California was forcing landlords to reduce rents by 25%. Even if a tenant cannot demonstrate their hardship or need, allowing judges and the court system to set rents and change the rental agreements already in place. I’m not going to read the other two books. point, but you guys are probably getting upset. But hopefully this does not go through in California. But this is another reason why you don’t invest in California or if we state that stuff kind of happens. More than a third of the population lives in states that are partially reopened or will soon This might be obsolete by now. I think the things to watch out for are Texas and and George are are some of the front runners in this and see how they react. I think most people who are kind of, you know riding that the fear train, are scared of that second wave. Will it happen? Will it won’t? I mean, it probably will. But yeah, there’s there’s two kind of voices out there. One that you know, says you know, enough is enough. We need to get out there when you get the economy going. And of course the other one is, you know, we need to kind of protect human life. One of the best models I’ve seen of this Is this thing right here, that kind of predicting that we got to the peak? Now we’re gonna see the second third wave. And then how does the vaccine fall into all this? I’ve been following a lot of the vaccine happenings at stack news.com. But everybody’s, you know, thinking that it’s either going to be later on this year or, you know, some people are like, well, three years from now. It’s been affecting the stock market every day. And that’s why I don’t invest in the stock market, so emotional. Whereas I think, you know, where we’re tracking with collections and May, and how we’re already kind of getting back to work. I think the impact is very little. I don’t want to say that too soon, because I don’t feel like we’re out of the woods. But you know, that’s why you invest in real estate and especially cash flow for these situations like this. All different ways that people are kind of viewing this pandemic and how we’re coming out is going to be at Nike swish is going to be a V is the beginning of the end or, you know, some people are even optimistic. One quick reminder that that, you know, some of the older HIV AIDS SARS MERS Ebola measles Zika virus, you know, the six months after show, sometimes a quite a big, big of a gain. After SARS, things bounce 14 and a half percent. Stock market returns are going to go up and down.
43:40
But I think you know if that’s why, again, you invest in real estate, this was a model that I made last month, which kind of showed Well, at what point does my real estate book down in value? Well, the first step here was the Black Swan event happened which is the Coronavirus then fear set in I will say this was probably in the beginning. till March 15. And then when the stakeholders began, business income definitely decreased. Companies cut jobs as as outlined early in April. But I don’t think we got to a point where the tenants couldn’t pay the rent. And again, I don’t want to jinx thanks for myself. But um, based on where collections are, I’d say the books kind of stuck between us tenants can pay rents, and we didn’t really see market vacancies go up. Hopefully this this, the trend doesn’t continue. But there were a few other stock gaps to happen before our prices go down, which is decrease market rents, which impacts lower operating income, which means less income for properties. And then that impacts the macro market to be higher cap rates, which equates to lower property values. And this is why we invest in real estate. I think after all, this is all said and done. People are Gonna be just dumbfounded. How much was $2.3 trillion was spent to basically have people stay at home and not just stop the economy. How are we going to pay for this? I don’t know. But it’s probably going to be higher taxes in the future or finding some ways to get at the retirement funds of everybody. Investors are kind of cheering in their homes because when you own rental properties, you own commodities, you want houses and as things inflation starts to happen to pay off all these debts, I’m pretty much riding on the right side of the wave of this thing is your properties kind of go up as inflation starts to happen. The kind of wrap things up the with the news, you know, to take a page out of Edward de Bono’s philosophy yellow hat which is the optimistic hat to counteract all the fear mongering out there. Here’s some of the good things that’s been happening you know, appreciation for stay at home spouses. I don’t think people realize how much work that was to, to watch the kiddos, people getting outside and walking around and embracing physical fitness. I look outside in the evenings it looks like Halloween out there with all the people walking around, although they’re not wearing any costume. Virtual Learning being accepted. And I think in our corporate settings, less streaking meetings. Amen to that. We’re actually getting things done and we don’t have to see each other face to face. People. I think what’s nice is people are questioning the news and media. There’s so much information out there and people have their smartphones and their computers and trying to figure out you know, the nobody knows what’s really the fact out there. There’s some reports and some real like, like videos of like hospitals. being filmed and yet there’s other things that are being recorded. Number five here appreciation for teachers who watch our kids. I think this week is Teacher Appreciation Week.
47:14
So if you have a teacher, I would encourage you to get them something nice even though there’s not going to be that last day of school for them on number six time with our smaller family units. And let’s face it, if you’re kind of listening to this economic report, you’re probably in the upper half of the economic scale and you may be doing the white collar warranty. Nothing wrong with that. It’s just, you know, I think we can all be fortunate that we are able to just call grubhub and get takeout and, you know, we we have our jobs and we’ll continue to bring in our salary and income. And at the end of the day, this is just a time where we We just work closer to our immediate nuclear family. And another cool thing or the creation of virtual wine tastings and zoom cocktail parties. We had a couple of these, these with our simple passive cash flow group and our mastermind recently, a lot of fun. And it’s a thing now for wine tastings, check it out. More VOD, some other trends online shopping more effective through Amazon and visa remote base environments, outsource it. contactless transactions coming. I think you’re going to see about a lot more and more telemedicine for medical and veterinary clinics. So that kind of wraps up the the monthly report. Um, the next few slides are about what’s going on with me personally, as I kind of make my way through this world. I’m always trying to find ways to grow and This month what I put together was I created a completed my trade line course, which I’ve been working on in 2019 to guinea pig for you guys. So I made $10,000 putting authorized users onto my credit cards and in my spare time and so I put a resource out there for you guys to check out simple passive cash flow comm slash trade lines. There is also a company force along with that if you guys want to dig into it and actually do the hobby make up the six five figures I guess I guess you could make six figures you have enough credit cards. Next on my list is I’m I’m trying to help out people getting started with this real estate thing and I’m trying to work on the turnkey remote rental course already have a couple modules in my ecourse and simple passive cash flow calm slash course but I think then the feedback I’m getting from a lot of people appreciate the feedback from a lot of you guys that said, it’s just a lot of stuff. So I’m trying to break them out into more individual shorter courses for you guys. How I get contributed to this world this month? Well, we a lot of the K ones come back and we gave our passive investors a lot of great losses on their taxes. Here’s an example k one from one of our investors who put in $100,000, they got back $98,000 of passive losses on line two, they’re also way I tried to communicate, contribute to the community was I gave away my ecourse access for the quarantine time because I figure a lot of people are busy or not doing anything at home, they got a little more time on their hands. And look, these are interesting times uncertain times, whatever you want to call it. And I just feel like people needed a break. So I just figured I’d give it away for free. For the time being, it’s normally 800 bucks. Hopefully, if you guys like it, you guys will pay for it. So we can try and find and use the money to improve the program for the next guy coming through. But for just the rest of this month, that coupon code is cool. Okay, oh, you have access to that expires at the end of this month. However, other ways that I got significant this month, my stocks did not go down 30% in value, so I felt very special about that. I didn’t have stocks, I don’t invest in that stuff. And it didn’t go employed. There’s always a you always have to try and create uncertainty in your life, um, and there was a lot of uncertainty in my life. staying at home just watching I would watch a lot more news than normal.
51:53
And there’s always a little low level of anxiety that is my tans going to pay rent and as of today, With me looking Okay, with a little bit easier, one month at a time, and I think we’re kind of coming out of it, but I’m not going to jinx myself. Some things I achieve certainty. So we lock, the lending market kind of froze up there March. But we have our lenders locked up for our next project. And things are looking good there. So it’s always nice to have some certainty in your life that you can kind of move forward and kind of tackle the next project. I think it’s hard to find love and connection in our lives these days. But you know, virtual cocktail parties was one way of doing it. But soon we’ll be able to get out there and hang out with each other. Once again. Some new articles and podcasts I like to highlight again, the trade line article, learn how to make I made $110,000 in 2019. And I’ll continue to do so simple passive cash flow calm Straight lines and the cares act guide, double pass a casual comm slash COVID-19 to see how you can get some of your whether it’s the PPP, Hero protection, or the idol grants, or some of those. Some distractions I had to deal with is, you know, being at home and kind of a lot of the world slowing down a little bit, I have no excuses not to get anything done. And there is time to do, what, what I need to do. It’s just of all a matter of priorities. And this is why I encourage all of you guys to get a coach, my coach really helped me define what I needed to get done and what are the barriers and also man, like I said earlier, like my coaches effectively just calls me on my Bs and keeps me moving. And some people aren’t willing to pay a little bit money for that, like Well, that’s cool. But um, all people in my peer group who do Real Estate and you know, entrepreneurs will swear by it their their coach, which is kind of a glorified accountability partner but um you know some people believe one thing somebody the other All I know is I want to be like one subset and seven to follow what they do some fun things I bought this month we call them doodads because they don’t put money in our pocket, but let’s just acknowledge the fact that we’re just blowing some cash on that. I bought that Echelon mirror. actually haven’t used it yet. But I got it working all over report next time on how it’s been working. And I really like popcorn. So I found this thing on Amazon where it’s like a 10 pack variety set. I didn’t know there was 10 varieties of popcorn. But you can you can see which one you like the best. I like that mushroom one out on the left side but they give you like 10 bags 10 different varieties of popcorn kind of cool. Some of the lessons learned I had this month was the pay consultants navigate that PPP of idle grants and loans. Um, this is something I’d really like to spend my time on. You know, I have the COVID-19 guide that you guys can pick through and to see if it’s appealing. But, you know, I’m kind of changing the way I do business where I stopped trying to be cheap, easy and free. Because normally I get hurt, hurt doing that. So weighing back to see what I get from the PPP and idle grants. And as a group, we have a book club, you can join that at simple passive cash flow calm slash lien hack. And the title that we are reading by Mark Manson is everything is theft. I thought it would be a cool book about
55:52
with everything uncertain in the world.
55:57
It’s a book about hope, and I like Mark Manson. He’s kind of got a more of a stoic viewpoint on the world. And
56:04
it’s a good book on philosophy.
56:09
And again, if you guys are interested in joining the passive investor accelerator mastermind we do a couple calls on Mondays every month, you get the course for free, we have 50 plus numbers in there now most of which are accredited. So if you guys are tired of kicking tires with the other people at the local Ria, who don’t have money, or the other trolls on the online, free online forums out there, and you want to actually build real relationships with real people who are sort of filtered and coming into this community, go to simple passive, casual comm slash journey, we just got a membership coordinator to help facilitate some of the networking because it’s all about getting people to connect within our group and to extract the most value we can for each member and they kept things off Here’s a little thing I found on Reddit I guess at Costco there was a little flyer in the lunchroom saying that the last day for complimentary food and drinks at the food court will be Friday me, which kind of is a sign of the times is like we’re getting back to swing of things. The pity party is over, and we’re getting back to work. So again, a lot of this stuff here. Consult your own legal professionals. This is information is presented for informational purposes only. But unless we have any questions we’ll see you guys next month. Oh Ha.
57:44
This website offers very general information concerning real estate for investment purposes every investor situation is unique. Always seek the services of licensed third party appraisers inspectors to verify the value and condition of any property you intend to purchase. Use the services of professional title and as companies and licensed tax investment and or legal advisor before relying on any information contained here and information is not guaranteed as an every investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end, you’re the only person who is going to look out for your best interests.
Why would these authorized users buy trade lines? And why would they pay $502,000 to these brokers first, a lot of them, they want to get a credit card approved to get the best rates on the loan. I mean, if you’re sitting at a 600 FICO credit score, you’re going to get the best score I believe at like 656 80. And that could mean a difference of paying like a half a point, quarter point less, which we all know that could be a lot of money at the end of the amortization schedule. A lot of these guys are more sophisticated people in my opinion, from what I see they’re not broke people trying to get their credit score from 300 to 450. So they can go out and get a car loan. They’re interesting that a lot of them are business owners and they’re trying to just optimize their credit to get a massive business loan.
What is tradelines? If you guys have credit cards, there’s a function on your credit card called as an authorized user. So what authorized user is this person pretty much piggybacks on your credit. And now when the credit bureaus check, it can also report on your authorized user credit, the authorized user or the person piggybacking on your account gets a boost and credit score and then they pay you for that. So that’s where this becomes a nice little way of making some side change. To me. I think it’s so fun when I get an email saying that I just made 200 bucks and I like to go out to nice restaurants once a while and it’s nice to know that my little hobby trade lining pay for it, go to SimplePassiveCashflow.com/tradelines and check out the ecourse which is on sale right now.
This is a nice way to make 10 grand on the side, the way it works is authorized user goes on your account for a couple of months, and then you take them off. And most cards you can have two authorized user per card. So if you do the math, it’s like one every month one of these things every month on average, to add and take off an authorized user takes about five minutes. So let’s just say you had a car that was 15 grand credit limit, and it was got a back in the day, 10 years plus and the broker is telling you, we’re going to give you 200 bucks every time an authorized user signs up after the two billing cycles typically go around. So the broker will tell you, hey, add this person on this account. Here’s other social security birthdate address name, you add them on your account. A lot of times this can be done through your credit card portal. And then in a couple months, you get an email from the broker saying hey, everything’s all good. You can remove them now But yeah, I made 10 grand doing this in my 2019 year, go to SimplePassiveCashflow.com/tradelines and check out the E course which is on sale right now.
How much money can I make during the straight line and stuff, that’s a combined factor of how much credit card limits you have, how old your card is. And basically, the longer the credit card is, ideally, you want to be above two to five years to get the highest price. And then the more credit limit you have, the better it is. So before you get started with, you know, sending your inventory over to the credit card authorized user brokers, I would try to call up your credit card companies and get that credit limit increase as much as you can. There’s a lot of techniques out there to do this. So you can Google it. I just trying to tell him I have a lot of income and a lot of business income to get that credit limit increase as much as I can. You know, every few years, every couple years, I try and get new cards so I can keep building the pipeline. A lot of times they won’t take these cards if it’s less than two years. So keep building the pipeline. A lot of these credit cards, you can cycle up to authorized users. And when you’re cycling on each authorized user for two months, then you can do the math, you can cycle these cards quite often. Some cards like Chase, I’d be very careful. They’re a lot more sensitive than the rest, of course, at this time of recording this as the case but these things can change. Again, that’s why I would really urge joining our Facebook group to be on the forefront of the latest happenings. This is the story part of the game playing. Then one day he went try to rent them out, and then he became one religion but still may
Now our trade lines safe and that this comes up again and again. And look, I’m not going to warrant your identity being stolen from you. But I will tell you that I’ve been doing this for over a year and nothing has happened to me in the past and I’ve been around other people doing this, you know, trying to trade pacts how to, you know, best optimize this and protect yourself. Again, that’s in our secret Facebook group that we have, you guys are welcome to join as ecourse members. But you know, that’s why we try and stick to these, these brokers that play the third party between you and the authorized user. Make it so that this is a secure process as possible. Make sure you don’t have the credit cards sent out to the people you know, have it sent to you personally and I’ve never activated them. And now would be a good time to create an account on something like Credit Karma to monitor your credit scores or any kind of alerts that might be popping up. And I’ll just get into the habit of checking in on your credit card statements to see if there’s anything fishy. A lot of times you can catch it early, you can just kind of wipe it from your account. Since doing this, I haven’t really seen a drop in terms of my credit scores. But another best practice is to make sure that you set individual alerts in with the credit card company, you know, like more than a $1 transaction shows up. So you can be alerted to if anything fishy is happening. I don’t know about you, but the way I look at this world today, where we’re all connected with the internet is you know, the hackers have access all the information out there at will and it’s just a matter of time to one of your card cards gets compromised. So whether you do trade lines or not I always just get into the habit of just monitoring your transactions knowing it’s just a basic fact of life at some point. You know, based on all the online accounts that we have and credit card transaction online purchases we make you know those unscrupulous guys will get ahold of our information. So the best way to mitigate that is to just accept it. But to verify the transactions that are happening and to be vigilant, more and more tips are being shared in our Facebook group. Is this going on as being the next one day he went try to rent them out, and then he became one real investor me
Alright, first off, what are trade line, you’re putting somebody on your credit card as an authorized user, and then the authorized user is going to get a nice little bump in their credit score. And whether it happens or not, well, it doesn’t really matter, but they’re paying you money to do this. And what the intention is, is that the credit bureaus will check that you’d be attached as a credit card authorized user to you. And that person might be able to use that to go and apply for a new mortgage at a better rate, they might be able to get a loan for their business. You know, we’ll use brokers that is sort of the intermediary between us and them to kind of keep things secure. You know, again, safety is our number one thing, why do people buy the trade lines again, you know, they might want to try and get new credit cards, trying to get the best rates from the loan. Business Loans, you know, it’s it’s kind of neat when you get the request to add them as authorized users, you’ll get social security numbers from them. You’ll get their address. And I’ve done a little bit of googling and seeing who the heck are these people? And a lot of times, it’s not who you really think it is. It’s you know, sophisticated business people trying to get loans. I mean, you know, who thinks of this stuff, right? I’m who, who would have thought before you bought this ecourse that you could make monies with trade lines. But there’s another side to this of people using trade lines to increase their credit score, you know, so if you’re trying to get above that 650, Mark, or 680 mark for the best Fannie Mae, Freddie Mac loan rates out there being an authorized user using these services, but on the other side of the spectrum, or maybe you get on one of your friends or one of your family members as an authorized user on their cards, if they have a strong credit card. Definitely This is something that’s not very talked about very much. But, you know, let’s use a story advantage and keep going to the course. This is the story but as you gain the benefit, one day he went try to rent them out, and then he became one But still may
0:00
So I walked away from a 20 year career and it like a sea level. Sea level it career I spent my whole life building killed it. So go all in on real estate. This is
0:15
a story about a dude named Lane he moved to the mainland and bought one place to stay. And then one day he went try to rent them out. And then he became one. That’s still me.
0:29
A simple passive cash flow listeners today I got I got snow pentas one of my partners of mine and we are going to get to know him a little bit better.
0:38
How’s it going? Oh, man, I’m awesome. psyched to be here. How you doing man?
0:42
Good. Good. Hit that subscribe pillow and mash up button hit the bell, right.
0:48
I know. I should get the bell up here. So I should do?
0:52
Yeah, so a lot of you guys don’t know what to talk about. We do this on YouTube, and we throw it up on there. So pretty much all My content today is found on the podcasts. It’s also on the YouTube, I’d say more stuff on YouTube these days. But yeah, let’s get to know you a little bit better. I guess you know how much simple passive cash flow Are you making today? And how are you doing that?
1:14
You know, right now everything’s invested in real estate, so I just do multifamily real estate Currently, I’m all in on multifamily. So, to that end, everything that we got everything that pretty much passively comes in is usually poured directly back into the business, right. So whether it be in terms of earnest money, whether it be in terms of just putting, you know, eating my own dog food, so to speak, put it into the deal itself. So really, I mean, aside from a couple hundred grand that’s pretty much it. And after all that I pour everything right back into the business, so it’s right now we’re in growth mode, you know, and that’s all I’m focused on at this point.
1:53
I mean, I had Mike mccalla Wits on the podcast recently he wrote the book. Profit first and I was telling him it’s like, yeah, I mean, we don’t really take a profit. We’ve just put it right back in equity and the deals and hopefully the magic happens.
2:08
That’s, that’s, that’s it. That’s it. I mean, the thing is, though, is that we’ve we’ve done a lot of deals, I know that we’re doing right, right now, we’re really, really good at picking the right deals. And we’re very, very careful with how we underwrite and how we get in on it. So I would say that I, it’s less about hope and more about we know what we’re doing.
2:31
This I think we do at
2:34
what point did you kind of come to this more abundance mindset side where you felt like you had enough money to put food on the table and, and you don’t have to worry about paying the bills with a salary. Yeah, man,
2:47
you know, well, a part of it is that with my journey, the way I did it was I used to have a corporate america job. I used to be a CIO Chief Information Officer of publicly traded companies did all that and it wasn’t Until, and I was also doing single family to at the time right long, like I’ve done six single family small multi family for 16 years. But I’d say about going on four years ago decided you know what? multifamily is where it is a friend of mine told me about multifamily and this is what it needs to be doing. So when I decided to transition from this single family, small multi family to doing big multifamily, that’s when first that’s where the spark went off is that I mean, I decided that’s what I’m going to be doing. And I gave myself a timeline, I gave myself a basically a goal. To say that on this day, I’m going to be I guess, I’m going to take out my last consulting gig and I’m going to focus on just building up the business while working at a regular consulting gig and packed up everything moved to Cleveland, Ohio, where I’m at right now and really got to work on working as a consultant and building this this multifamily real estate business and true to form just like I set out in my goals that I write every day religiously. I set up my goals to really define what I’m good at how I live my life that far off. That’s what I do. But I decided that that within within I think it was a 12 month period from making that decision. You know, I hustled man, I hustled hard, that’s what it took to get there.
4:26
And people always like to kind of understand you know, what were you in that situation where you finally made it? You know, say I was gonna go from single family to multifamily and more as an operator, then sure, passive investor, but like, How long were you doing the single family homes? How much how big was your portfolio at that point? So you decided and then how did the day job overlay on top of this? You know, were you kind of still working the day job while doing the multifamily kind of explain the the timelines holidays? Sure,
4:55
sure. Sure. No, I actually started single family 16 years ago, maybe a little longer when I was working at a company in Virginia and I was a CIO I was making great money and the reason why I got into multifamily or single family at the time and small multifamily was just to be a backup in case something happened with my job that’s the only reason why I did it. You know, wasn’t about it wasn’t about building legacy wealth. It wasn’t about trying to build something big is all about in case something happens I’m going to have some extra income right? So I started focusing on single family small multifamily and really tried to build that portfolio up. I think by time I finished up by time I left Virginia that no but four years in my started all that might have had like small portfolio like under under 100 units, like it would fluctuate between 80 to 100. And you know, nothing crazy, but then it was, but I I pretty much kept it pretty, pretty. flat for many years, just had some things going on in my life at that point and especially 2008 backed away from from all that. But I would say that the last job that I had brought me back to Virginia, I started selling off all my assets. And I was talking to a friend of mine, and his Real Estate Attorneys again going on about four years ago, he says, So tell me about hey, how who, who buys these big properties? Who how’s it, how’s it done? And he explained, multifamily syndication to me. So once I understood how it works, and what it takes to really put a deal together, I’m like, Well, I could do that. I work in corporate America. I’m not afraid of the numbers. I’m not afraid to do the hard work. So that’s exactly what I did. I just put myself I just got committed to studying every single thing I could find on multifamily syndication, syndicating deals overall, and got myself in front of some great mentors got myself in front of some great people that helped me build The business and that’s really what it took. You know, it’s not gonna say by any stretch, it was easy. But you know what? It was totally, totally worth 100% worth it you know now I’m all in on this real estate all in 100% on it.
7:14
At what point did you quit the day job in there was that
7:17
Oh, so so that was that? Yeah, so that was I quit the consulting gig, the one I mentioned earlier. It’s been three years now three years ago. And you know, I’ll tell you what lane I’m not gonna say it’s all sunshine and rainbows every single day of my life these days, you know, hey, there’s there’s everyone’s got a bad day ever. Sometimes they face some pretty bad stuff. But there’s not a single day I would ever I would never I would never even think about going back to that. Just I just don’t, I just didn’t think about it. You know, I, I am very pleased with how, how we’re growing the business and very pleased to partner up especially with people like you to really, really build something that’s really cool. You We got some cool stuff in the pipeline here that is just awesome. You only get to do that and build those opportunities when you really commit yourself wholeheartedly to to a project. So the only way to get it done
8:13
submit a lot of the guys this thing, they’re still in their day jobs. Or maybe they’re even haven’t even started investing yet. You can kind of go back to your single family home days. We call this the Han Solo moment. It’s like, you know, Star Wars Han Solo and Chewbacca or just lowlife smugglers and then Luke and Leia, you know, it could be the right people or the right idea. And then their their life to that pivot point for you. What was that pivot point? Or if there’s some kind of story from your corporate day that you can be like, that was the moment that change
8:47
my path? Well, you know what it was, it was happen a couple times, but it didn’t. It’s funny how it didn’t click, you know, till till the second time, really the first time when I was doing Working as a CIO as a young 3030 something year old guy working at this publicly traded company running global technology in my early 30s is ridiculous, right? It’s crazy. managing these multimillion dollar budgets. And I know like I said it started doing the single family thing. And when when things got when the company decided they’re going to make a change, even though the company was doing great, I was performing very well. My team was doing great, we were keeping it so we kept all the systems up and running, we’re innovating. The company decided we’re going to make a change. So they come to you and they say, pack up your stuff, get lost, you’re done. Now, I’ve focused everything I put my whole heart and soul into that company, right like any good C level executive or any executive for that matter, pretty much anybody listening you should be doing if you’re working for a company or you’re going all in on the company’s what you’re doing right? But what I did not do to my own detriment was really focus on building that passive income on my own for my own self and for my family. That’s where I did not do that correctly, you know, I should have I should not have relied on these, these outside forces to really take care of me and my family like I did. You know, that’s that’s what that’s what killed. That’s what killed me right there, you know, and allowing that to happen. not once, but twice. The second time, though, was was the time on I’m like, I’m not gonna do this ever again. I’m never doing this again. I’m not gonna put myself into the into predicament like this. And that’s why I decided that real estate was it because despite all the problems I had, over the 16 years that I’ve been doing this, from going to job to job to job trying to hold my head above water with these different companies. That real estate kept on throwing off money every month, every quarter every year. I’m not going to say that it was always like You know $100,000 a year coming in from real estate most saying that it was just passive income. But that’s one thing is for certain is that that money came in, you know and that’s that’s the thing I realized I’m like, you know what, I’m not doing the corporate thing anymore I might do one last gig I’m gonna do a consulting gig and I’m just gonna go all in on real estate So I walked away from a 20 year career in it like a sea level. Sea level it career, I spent my whole life building killed it. So go all in on real estate. So I mean, take some take some courage to do something like that.
11:36
For the first time they told you to get loss. Yeah, they told you to pack up you didn’t have any anything in your portfolio at that time then
11:45
I had like some single families and some small multifamily that’s it
11:49
well, at least you had the you had the kind of the proof of concept at that point, right. Yeah,
11:53
yeah. Yeah. Well, that’s exactly it. Yeah. Because even though and that’s the thing, though, it’s like they so they ripped me. I’m at home with Giant house that giant mortgage and car payments and I’m like, oh, man, what am I going to do now? Unfortunately, I still had some some money coming in, you know, to support me. But that’s that’s the power of the passive income, you know is that money kept on coming in, right? And help kept me above water thankfully because if I hadn’t done that, if I had discovered the power of real estate, man, it would be a different different life story we told you today.
12:26
So that time, how did your portfolio take the next step in the next like, month or two after? Well, anything changed like after that after that fire lit under your butt?
12:38
Yeah. Well, you know, the thing though to it, unlike some other people you might have had on your show for me, it was I didn’t add anything new. Right. I was because at that point in my life, my mindset was not was not set properly. Right. I was still thinking like an employee. Right. I was still thinking like an employee. Again, nothing wrong with thinking like an employee, but other than the fact that oh my god, I need to get a job, I gotta get a job like right now I gotta send out resumes right now Hurry, hurry, hurry, you know. So even though as an entrepreneur and as a kid, that’s all I ever wanted to be as an entrepreneur, I put that aside, so I couldn’t be an employee. Right. So I think that the fire didn’t happen until later. You know, until that until more recently, when I decided that, you know, after getting fired from yet another job, I was like, you know, I’m not doing this anymore. That that really, really kicked off. me doing this thing wholeheartedly. 100% all in, you know. So I think that that early on. I don’t think it was ready. You know, it was one of those things that that I’m sure you might have heard. I think it’s an old proverb. It says something like when the student is ready to teach yourself shall appear. I think at that point, I wasn’t ready to be taught, you know, I wasn’t ready. I was still in the mindset of an employee. I wasn’t doing self improvement. I wasn’t reading books away. I’m reading books today I was doing a these things that any successful entrepreneur should be doing, you know, to really be successful. I wasn’t doing that, you know, to my own detriment. I needed to be doing that stuff. I do it today. But, you know, it’s why this is I just wasn’t doing before you know.
14:21
So let’s kind of talk about this, this topic of you know, where do you go LP or GP, you know, you’ve got a few rental properties, you’ve got some experience under your belt, but, you know, you start to realize it after having five 810 single family homes, just not scalable. It’s not going to get a substantial passive cash flow coming in every month. You’ve you’re, you’re obviously a success story, but I’m sure like myself, you’ve seen a whole bunch of guys fail at this. Oh, yeah. Any comments on like, the percentage of people that try to take the next step and what is it if you can talk about like, you know, people trying to make this decision on Their own in their head right as they work their hundred 200 k job on the side too, right? Yeah,
15:07
yeah. I tell you what lane I mean
15:12
to, for many, many people, there’s guys out there on the internet. They’re putting up these courses Hey $4,000 I’ll teach you everything you need to know. Do it Sign up now. Man, I tell you, I mean, hey, listen, we have a program, happy to sell it. However, what you don’t see is the amount of work that goes into finding and putting together a deal. That’s an obscene amount of work. And we might go through a lease 100 deals before you find one. Right one that actually pencils out, and has shows a glimmer of hope that it could be something that you could invest in and get a nice return to hit the targets that we establish right Not including all the relationships you have to build with the brokers. So that’s that in itself is a full time job calling on brokers Hey, buddy How you doing? Got any deals for me? Hey buddy hi to continuously making phone calls talking to brokers. That’s how we that’s how we find our deals. Anyway, we’ve got our deals primarily through broker broker relationships, right? Then of course, vendor relationships, right and maintain those relationships, maintaining relationships with our lenders, as well. And the lender brokers who I mean, I’ve already talked to, to my lender broker four times this morning on a variety of different deals refinancing three deals right now, you know, so it’s like all that. Everything I just mentioned is a full time job. So as an executive, as a C level executive or hell any executive for that matter, even even if I’m working at a company as a developer, I don’t know how I would do that. And also try to do what I’m doing today. It’s it’d be extremely Ordinarily hard. That’s kind of the reason why we what I would do anyway, if I were in that predicament is just partner up with, with a good solid operator that knows what they’re doing. They have a great team. And they know how to underwrite deals, they know that the dealer put together then they know the reasons why it’s a great deal and go all in on that. I mean, in reality, they get equity in the deal. They get, they get a return, they get all the tax benefits. It’s not a bad gig, you know, sign a bad gig at all for an LP. You probably see a whole bunch of these guys just like I call it like the dreamers. Oh, you just I just want to highlight what you said there. Like, obviously, you have to work hard and everybody knows that and these guys will like, Yeah, but I’m, I’m special. You know, I work really hard. I’m like, Alright, do you do have a college degree like, I mean, not saying that. That’s important, but you know, that’s why I like working. One of my criteria is that you are a professional. Right and Not saying that college is worth anything I’m actually kind of against the whole traditional educational system but shows a level of commitment that, you know, most people come into this. What’s that? What’s that, um, that movie with the flying dog never ending story or something like that.
18:20
Like he goes to like the thing and it’s zapped somewhat the lasers. Like you’re not worthy, you’re not worthy. Yeah, a lot of people just are just gonna get zapped with the lasers. And yeah, I think what you said there like, you have to work your butt off but you also have to like have these special skills of like, navigating key relationships with brokers, lenders, etc. Partners,
18:43
man, that’s what
18:44
these hard workers cannot.
18:47
They can’t do it, man. I mean, listen, I don’t want to sound like you know, I get down on people that don’t have to work but I mean, yeah, I meet them. I meet him at different events and they say they want to become a syndicator and They don’t dress the part. They don’t act the part. They don’t say the right words. They can’t spell and lie. That it’s and I’m not saying that, that, you know, this is harsh I say it’s exclusive little club or anything else like that. It requires a great deal of effort. That’s all I’m saying. It’s like, it’s it’s very hard to convey over a podcast or or it’s just difficult to convey that way but it tight. I started you know,
19:34
I started on a real estate conferences because I find the other guys the guys who listen to like thousands of hours of podcasts, and they tell me things I don’t know about this weird calculation of some noi thing or I’m like, Alright, man, like, you know, the academics. Yeah, well, I know all about that I’ve seen you know, like, let me tell you, like, Oh, okay. Adios. Have you done you know and but then you ask your buddy and you’re like, yeah, that guy isn’t the jack you know? Yeah, that’s all I got and they just the part two right?
20:09
There was one so one of my students he actually went to a seminar and someone the headliner at the seminar actually said to a group of 200 people fake it until you make it like, Oh my god, no, man, listen. You know, guys like us, we have a fiduciary responsibility. Right? That’s that is key. We have a responsibility to our investors, we have a responsibility to our families. We have a responsibility to the people that invest with us as well personally, friends and family aside from aside from other investors to and to everyone else that is relying on that project’s success, right. There’s no time for fake it until you make it right when you when you’re when you’re messing with other people’s livelihoods. There is no faking. My opinion, that’s just what I think, you know, it’s like I would never ever say that and I would never recommend to someone fake it until you make it. It’s more like, study learn, understand how to put this deal together partner up with someone that knows what they’re talking about. Work with them get to know them. It’s a long long long journey this this was not something in my case. Anyway, that happened overnight. It took took me 16 years, right took me 16 years to become an overnight success. Right. That’s that’s how it is in this business in my opinion, anyway.
21:34
I mean, and then also, like, you can’t do this while you’re working a full time job now. Like maybe pick up your first small apartment building but you know, I yeah, it gonna work. It’s just not possible.
21:48
I mean, it might be possible to get like, say a 30 unit. You know, handed over a third party management and you’ll probably get the price steal from you is what they’ll do more than likely What I mean by that is that because you’re focused on your job like you should be, it’s gonna be very difficult to also watch all the expenses on on this third party and what they’re doing. Right? And how do you negotiate that contract to, by the way, right? If you’re doing 30 units, you’re starting off 30 minutes, that means you’re paying 10% we’re not paying anywhere near 10%. Right for our for the management of our assets. But what they’ll do is they’ll cut you a break. You know what, just for you, lane, I’ll do it for you for five and you’re like, Wow, cool, okay, but then they start, start fluffing it in with all this extra stuff. You know, oh, we took a trip, please. The door lock, painted a room that didn’t need to be painted. And they’ll find ways to get their money out of you. Right. And having those relationships like I said earlier, it’s like that’s another vendor relationship. You got to keep a close eye on what money gets spent. Right, what money gets spent on what assets and you notice, for instance, we do this all the time in our office, to assets side by side to different location. How much are we spending on a unit turn over here versus over here? Why is this one less than this one? What’s going on? Let’s have a call, let’s figure it out, right? Or is the two different vendors to me too, they take this vendor and put them over here, right as well, right? different things like that. It takes time to run those analysis and know how to really figure out how to do that kind of stuff. If you have 30 units. It’s very hard to find someone that’s going to care. And that’s that’s probably the biggest issue, you know, with some of the smaller deals anyway.
23:27
Yeah, I’ve kind of found that you really need to be above 80 or 100 units. I mean, everybody talks about it. So this is another one of those things, these podcasts like rupees book rupees. A know these rules like oh, you need to be over 56 units to get a property manager in the office. But in real life, you need that person and the handyman. Yeah,
23:48
yeah, yeah, for sure. For sure. I need an even 56 units, depending on where it is, uh, I don’t know if that’s feasible. Honestly. It’s more like 100% Canyon is probably the minimum but yeah, man, I mean, and now nothing wrong with say starting off with 30 units and two months later buying another 56 units and two months later, if you want to do it that way, I suppose you could do it that way as well some really really wants to do this on their own. But man, I can’t I can’t even imagine working on an office job and trying to run that number of units, three different properties by yourself, like keeping it as an asset manager as hard man, that’s hard work. It’s hard work for what like what is the overall goal you know if the goal is to get that passive income. difficult to do, man that’s that’s that’s tough work. That’s tough work.
24:38
If you’ve been following my journey, I’ve been selling my initial real property and transitioning into syndication deals lately for more purely passive investment strategy. One critical part of my portfolio is the American Home preservation fund, or what folks in the hooey call HP for short. George Newberry once apartment owner, operator and mentor to me is that Now sponsoring the podcast is private fun, which by the way also accepts non accredited investors cuts the middlemen out and allows you to invest directly with him to fight the mortgage crisis in America. join him by purchasing distressed mortgages while getting a double digit annual return paid monthly. Find something else better out there. Well let me know. Feel good knowing that you are helping families stay in their home after buying their underwater note at a huge discount, invest as low as $100 by going to HP servicing comm slash investors. And if you want the free bernsen book, please send me an email plain and simple passive cash flow calm.
25:42
Well, that’s a light bill.
25:49
So we’re in this COVID-19
25:53
crisis. We’re just another day at the office for folks like you and me but right but I know you’re you can’t go as much water like a two week experiment that you’re kind of tinkering on, or a six and a six month project you’re working on, you know,
26:09
I don’t have a six month one but I do have a year one so back in December, I create a list a book list, right of all the books I’m going to read for 2020 I create a list on a sheet and then I have a checkbox check check off every single one every so book a week, basically, right I got I got a hold of all the books, put them all on my phone. Right now I’m reading The Autobiography of Albert Einstein. And yes, very interesting guy. But the books are mainly consist of autobiographies. For people that overcame some really hard times. You’d be amazed at the hard times that Albert Einstein had as a young scientist, but what it took to overcome something would listen to a lot of eyeless a lot of stuff on sales and marketing as well social media marketing and also on on sales, you know, so it’s those things that pretty much make up the book list, right? And much of my, my real estate stuff is all made up of I do listen to some real estate, but most of it is just by networking, masterminds, things like that. That’s how I that’s how I engage that through real life problems and resolving them. So, yeah, that’s definitely a lot of fun. But yeah, I mean, try reading a book a week, that’ll change your life. I promise you, I’ll change anybody’s life.
27:28
It’s good stuff. It’s awesome. Any kind of like, personal, like, two week project, something, uh, you know, thinking in the daily routine or something like that,
27:38
you know, uh, trying to work out at home. So, so far, since all this stuff happened. I can’t go to the gym anymore. I can’t go to CrossFit. Right, which is what I was, which is what I usually do. So now I’m having this so far. This is what week two, this was discovered it thing. Now. It’s all about working out at home and Tire man it’s it’s tougher to do at home than it is to work out at the gym with a group of other motivated individuals. It’s it’s tough but I will make it I’ll get I’ll get through it.
28:12
I do CrossFit too and then like yesterday I got bumper bumper plates at home I got my patio but I was just I just put in like 135 which is like nothing and I just dead lifted it like 10 times I was like that was boring
28:27
it’s easier to do when other people are around right? Yes, the thing you know, it’s I don’t know. I don’t know what it is. It’s kind of like there’s other people there and there’s just more energy in the room. I think that’s what it is.
28:38
Yeah, total accountability. thing like getting the the mirror or the bike thing the peloton or at clon I don’t know what it’s called.
28:48
Yeah, the peloton. peloton Yeah,
28:49
but they told me that the bike there’s so many orders for the bike that it’s not gonna be here till like May or June,
28:56
right by then this thing will should be over.
28:59
Yeah. Yeah,
29:01
I mean it’s got to get over soon sooner than later I would imagine
29:05
yeah for sure. We’re just lucky it’s about the Spanish Flu then all the crossfitters would be dead you know the Spanish Flu when after like there was a stronger immune system the more like it attacks yourself. Something like that.
29:20
Oh, really? I have no idea. All
29:22
right, all like the young guys here like super fit. They all died.
29:28
Wow. All right, man.
29:33
Um,
29:36
what is your simple passive cash flow number that you’re shooting for these days? What What is that for you? on a per month,
29:46
you know, per month, you know what it’s like what we did, my wife and I, we, we basically cut our expenses. early on. Anyway, we cut all of our expenses so we can just focus on building the business. Part of it is the sacrifice and got to keep in mind, you know, I’m the guy that had the corporate america job making bank at the huge house with granite countertops and cathedral ceilings. I had three cars at a Corvette at a Hummer Mustang convertibles and all this stuff, right? Got rid of it all to focus on building the business. Right? So back then, it was it was only like 10 grand a month, you know, it cut out everything. Everything was cut out. Right? So it really wasn’t that much. And, you know, and any money that we get is all thrown back into the business over and above that number. You know, that’s that’s basically how we did it. You know, it’s it’s, um, yeah, that’s that’s pretty much it. You know, it’s, it’s not a big number when you think about it, because by the time you think about it, you know, the government’s gonna steal half of it, right, you know, taxes. And then then you have to live off the rest, you know, cover your expenses, so Not much not much at all.
31:04
Yeah, and a lot of it is like equity that you kind of roll into the next one and the next Yeah, that’s right. Well I mean what’s your What is your your wife say when you kind of say hey it’s it’s gonna work just give me four to six years the magic will happen you know you’ll see it or you start your life will start to change you know that is that kind of which a deep discussion or
31:28
not you know i i am i’m very very very lucky that my wife I met her before before really I got into all this stuff like as a full time gig the way I’m doing it now. So she, she knows me She knows the story. She knows my personality. And she often tells me she goes I have no doubt I have 100% certainty that you are going to do exactly what you say you’re going to do. She has no zero doubt She believes in Me 100% she’s on board, you know. So I am extraordinarily lucky that my wife is on board. She believes in me, she believes in what we’re doing. She’s she sees it already. I mean, isn’t like this is all like, pipe dream stuff. You know, I tell her. I’m closing this deal on this day, boom, it happens. She’s like, she’s not surprised anymore. She couldn’t be surprised a long time ago. Right. But, yeah, it’s having a spouse, especially in this business. And that will support you is extraordinarily hard. You know, it’s because yeah, I mean, I’ve, my, my friends that are in this business that are like top performers. I mean, that’s one common trait is that their their spouse at home supports them. 100% and I’m happy to say that my spouse is in the same boat now. It’s awesome. It really is. It’s great.
32:54
It’s great. I have the reluctant spouse guide on my website, guys. Simply Passive cash flow calm slash spouse. It’s not a joke. It’s for real.
33:04
No, I know I know it’s real no I got
33:06
it. I got it. What do you guys do when you close a big deal but anything specials or some kind of
33:13
sushi man, sushi? That’s just
33:19
like a little celebratory thing. When my when my other partner comes into town, it’s usually vegan food, you know, he’s a vegan. I’m vegetarian, so it works out great. You know and it’s that’s a little celebratory thing you know that’s by with the wife anyway. Yeah, we I think we always celebrate something we celebrate in a very small way. It’s it’s sushi, some very small we don’t. For right now for the time being. We are very, very careful with how we spend money necessarily invest, we do invest our money, but how we spend our money on things like that. We’re very very careful. how we how we do things, you know, we’re not reckless or careless or anything else like that, you know, it’s very important that we spend money where it needs to be spent properly. For us anyway, it’s how we do it. Yeah, that’s how to do it
34:13
that said, What is something you recently bought? or thinking about burning your cash on over time savings or improvement of quality of life?
34:22
Well, you know what, doing this stuff is a real big deal for us. You know, it’s like we have the bulletproof cash flow podcasts that we do right. And I upgraded the camera got a new camera coming in. That was like 200 200 bucks. The Logitech one, but if anything is gonna help get our word out there. No, no, no, no, it’s actually it’s a used camera man. Okay, so use when it’s easy to use canon t three i. So, yeah, we’re going to hook that up and we have a whole bunch of new equipment coming in just to really improve the audio and video Right But like I said, Yes, we’re just very very careful with how we invest not only do we invest our money outside properly other people’s money we invest our own money very carefully as well.
35:13
It’s funny because yeah, those those Logitech guys, they barely send out emails, but they sent out this like, new 4k camera.
35:20
Yeah, the Bri. Oh,
35:21
yeah, yeah. The fria I bought it. Well, not the real the real for the windows one, but this one’s for the Mac. It’s like,
35:28
okay, okay. Okay, so that one is, I don’t want to geek out in front of front of your audience. But yeah, the debris out of the bruise is supposed to be a really good camera.
35:40
Yeah, so people can see like, the crusties I have in my eye for waking up super early. That’s not the best thing.
35:49
That’s right. That’s right. You want to zoom in and check it out. There we go.
35:52
Yeah, not too. Not too close. But yeah, if you’re on the YouTube channel, you can check that out. Yeah, there you go. Something that you recently changed your mind on because often ego gets in the way of greatness. And I see a lot of people, they just have some messed up thoughts and I’m like, All right. Okay. Sounds good, dude, you know? Yeah,
36:12
yeah, yeah, yeah. Yeah, you know, um, I wouldn’t say it’s recent. But I’ll say that it’s, it’s so much changed my life when I realized that. So back when I was an executive at, you know, working as CIO, I thought that all it took was for me to do a good job and keep technology up and running. And if I do that, I’ll get paid and everybody will be happy. systems are up. I’m innovating. Everybody’s getting paid. What can go wrong, right. And then they hand me the box right at the end of it all. The that was wrong. That’s incorrect. Totally wrong. The way that it’s supposed to be. Then one thing I did not do It did not network with the people that worked at the company. I pretty much kept to myself I focused on I got there early, work my ass off, sit there too late, you know, I was putting in 1213 hours a day at this company. Right? And, you know, it’s working hard for them. That’s why it’s supposed to do right. And I still got handed the the box now. And meanwhile, there’s guys, they’re still working at the company that were known to be somewhat of questionable character. They’re still working there. Why they took the time to network with the other executives. And they and they went to all the meetings, they went to all of the the conferences and things like that to getting to get really engaged with the community with the community of the business and also the community outside of the businesses. That really connects other people in that in that space. I think Mac cases, finance, right? So other people in the finance in the finance world knew of the company and knew of that individual made them worth more money. Right? It’s kind of like the same thing that we do ln, you know, it’s the same thing. I mean, we got to do the same thing we’re getting out there, we’re building our personal brands, we’re getting out there, we’re building our businesses, it’s the same sort of thing, you can’t come out of nowhere and expect to buy a 200 unit property if nobody knows who you are and what you’re about, you know, it takes time to build that, you know, takes time. So that’s, but anyway, I was totally wrong about that, you know, now, this business is all about partnerships. This business is all about delivering value to other people, in a way that you’re giving someone, everything you can, you’re giving your partner’s everything you can know everything, you know, and and that’s, that’s how I operate anyway, if I do everything I can from my partners to try to make things easy for them knowing that in one way, shape or form, it’s all about Come back. That’s how I do business. So,
39:02
yeah, it’s um, I mean, you can see it in your investors, right? Like, I know, like a lot of my guys are engineers. So it’s the typical person is, if they’re under a million dollars net worth, they’ve kind of saved their way up to that like 700 to 800,000. And there are total like, like developer type or person or compute in their cubicle. Not really expanding outwards, were the guys who are a million and a half $2 million net worth and above. Obviously, they’re already investing. But they’re the ones that got out of the engineering role and more into the sales engineering role. Right?
39:42
That’s right. That’s right. Well, hey, listen, you can never ever, ever save your way to prosperity. It has never worked. It never will work. The only way you can. You can be wealthy is to invest. That’s the only way the only way to make it happen.
39:58
It just it just kind of Interesting that it’s kind of coupled where the guy who has that mindset where I’m just gonna keep pounding away at what I’m doing not talking to anybody is also the guy not investing their stuff outside of Wall Street type of instance. Right?
40:13
That’s right. That’s 100% true. Yeah, yeah, yeah. Okay, I’m doing I supposed to be doing Right, right. I’m doing I’m supposed to be doing I’m working away.
40:21
Okay. And everything.
40:23
Oh, yeah. Oh man, I was doing all that stuff. I was putting all my money in this 401k thing. I was doing everything that I was told to do. Everything else I went to school. I got two masters degrees. I was a good CIO. I went to corporate america and then they hand me the box. I’m like, Wait a second. I did everything I was supposed to do last night. No, I was not
40:47
that’s why I was saying man I’ll never go to that place ever again man. So happen
40:52
yeah away and select lies with doctors, right? Like, I don’t. Most doctors who aren’t investing their net worth really never get above one to $2 million. Right? But the guys who are holy crap, they’re like four and a half $10 million
41:09
a day. But my one partner, she’s, she’s a young doctor, and she’s a partner on one of my deals. And she’s been able to blow up her net worth tremendously, not just on that deal. But she has the mindset that you just said, you know, she’s she’s investing in other deals as well. Right to help grow her net worth. She’s gonna be very, very successful. She’s in her early 30s. She’s making great money already as a doctor, and she’s blowing up her net worth even more. So yeah, she’s doing great, but the same thing. You know, she’s she’s focused on putting money aside, you know?
41:44
So this is a seller’s market and, you know, kind of in the middle of a crisis, and I’m sure it will go away here in the next few months or whatnot. What should people be focusing on investing in?
41:56
Oh, wow, the stock market is where it’s at, man. I thought
42:01
you’re kind of serious because people will say that
42:04
I’m like, Alright, man. It’s ridiculous, man. I don’t I don’t get it. And I used to do that, you know, as a young kid when I was when I didn’t know any better about real estate or anything else like that I was, I would sit up, sit in my office. And you know, when the boss isn’t looking try to do some day trading and all this other nonsense, man. It’s ridiculous. It’s crazy. I mean, think of it like this, right? So I had a friend of mine, he was gonna throw like $200,000 in some stock or something. And I’m like, once you throw down a deal, man, throw down on a deal. It’s like, Oh, I don’t understand the real estate, business. yada, yada yada. So I’ll put it this way. All right. It is at that time was May the first right. I said may 1, great. What’s your stock? What’s your stock gonna be worth on May 30. He’s like, well, I don’t know. I said I could tell you how much money is gonna come in on May 30. From my rentals, I know, because I have legal contracts, called leases, with all my tenants that say they’re going to pay me. Every month that money comes in, right? It’s predictable. You’re building up equity in a cash flowing asset, you could force appreciation on this asset, you get all that you get, then you also get depreciation on the asset to mean that you can’t do that with a stock. You just can’t do that. I mean, if you were told my buddy, this tells, like you go to Bank of America right now see if they’ll give you a loan to go buy their stock, no one even do that, because they don’t believe in their own company enough. It’s crazy, you know, it’s crazy, but it to me, it’s like, it’s like gambling. It’s like gambling at a casino, you know, because you don’t know for sure. What’s going to happen tomorrow. Right? Whereas with real estate, even during this crisis right now, I mean, we’re still buying. I mean, I’ll look I’m looking at assets now. You know, and the thing is, though, is that At the end of this crisis, it’s not gonna matter, the assets still gonna be there, it’s still gonna throw off cash flow, and we know what it’s going to do because it’s very predictable people no matter what you do, in masses, Maslow’s hierarchy of needs. Everyone needs a place to live, no matter what they don’t need an office, they don’t need a piece of paper, this is stock on it, what they do need is a home. Right? And that’s what we do we give people homes and this is that’s why it’s like, especially this kind of stuff that we’re doing. It’s a it makes total sense to do and we’re not worried about it. You know, it’s they should be investing if people need to be investing in real estate, they should have been investing real estate all
44:40
obviously, you kind of know you can put it on a model and you can kind of tell from deal to deal but for somebody sitting at home who doesn’t have a network, nor has any kind of underwriting experience, what anything that they should kind of stay away from in the world of real estate at this time. Oh, yeah.
44:58
I mean, it’s you know, y, d cos assets, those are the probably the ones that are pushed the most all over all over the place. I mean, especially, that’s not to bash on loop net. But loop net, unfortunately has has a lot of this bad inventory. And what I mean by that is there’s the promise of the super high cap rate, you know, I’ll give you a 15% cap rate, oh my god, the cap rate, the cap rate, the cap rate doesn’t really matter all that much. It’s not the cap rate. It’s the margin you’re looking for, right? The cost of money versus the cost of running the asset, you know, what’s the difference? That’s what you’re looking for. cap rate is important missing. It’s not important, right? What I am saying is that people are getting out there pushing this these super high cap rates and when that person goes and buys a deal, which is usually in a D class area, they get burned, and other stuff with it with a non performing asset. Because everybody was just heads on beds, they just previous owner who approved the seller, rather just put a whole bunch of people in there, drive the occupancy up, unload the property and got rid of them all happens a lot, especially in D class assets. You know, it’s very seedy type of business. Stay away from those places, you know, just don’t do those. Just especially if you’re out of state. Don’t do that. You know, I personally stay away from it. Some people specialize in that stuff, all the power to you go ahead and do that. For anyone that’s in this business and even as a limited partner, stay away from D class assets, invest with a good operator that knows they’re doing with C’s and B’s and A’s that knows how to run a proper asset. Make sure that performs that’s the best way to build great wealth and still enjoy all the benefits that come with managing and running and multifamily asset. I mean, for a passive investor in that way it works out super, you know, they get all they get the benefits without taking on any of the risk, really, it’s very low risk. Very low risk for an LP.
47:02
Yeah, we’re kind of looking at getting away from the class C stuff, which is probably what you’re talking about, you know, like, you’re saying your class D. But for me, it might be a Class C or definitely what a what a broker would call that Class D, or Class C, because they’re always trying to make it sound better than it really is. But yeah, just not worth it. I mean, those are the guys who get hammered the most and this in any kind of weakness, I mean, they get fired for so that they don’t have any savings to
47:30
That’s right. They live hand to mouth, they typically have salaries that are hovering, usually at $30,000 probably even less than that. You know, absolute poverty, you stay away from those places, you know, it’s just not worth the hassle. never buy cheap real estate. There’s a reason why it’s it’s, it’s cheap. No, it’s not. It’s nothing that you really want to be investing in. You just don’t want to be investing and stuff like that. You know, it’s it’s not worth the hassle. Not worth the risk. It just isn’t, just isn’t worth it.
48:03
And to wrap things up our last closeout question is the Tony Robbins question of the art of fulfillment and the science of achievement. So first what is your secret or hack to the science of achievement? Any kind of rituals or things that you found lately that has helped you be more productive?
48:24
Yeah, I mean, I’ll tell you, I’m getting up early in the morning. Going through CrossFit first thing, you know, early, like, you know, you’re waking up at like five o’clock in the morning, to go to CrossFit for six months when we come home. The world is still pretty much asleep at that point, or at least I’m not on the phone anyway. I sit down, I write out my my journal. And then I write out my goals. Right, right. Just one page of the journal one page of the goals like what, what happened yesterday, go and how’s my tomorrow going to be? Right? And when I say tomorrow I don’t mean just like daily goals I’m saying like, what is my life going to look like and I write these goals as it’s already happened. Right and that’s important because I’m programming my subconscious to look for those things to build success you know and I often do that too if you know if today doesn’t go my way I’m writing on my journal and writing in my my goal sheets, preparing a new one just to keep me on on target. But you know, that’s that in itself. That function going working out my body and then working out my mind and then I’m ready for the day that has made all the difference in the world that has changed my life. That those those two things you know, it’s it’s I’m sure you hear about it everyone talks about it on their on these podcasts, maybe or read about it in books and you might think it’s all Fufu nonsense. I promise you that stuff. It works hundred percent. It’s amazing. It’s a life changer. Absolute life changer.
49:59
And what is A secret or hack to the art of fulfillment, any way you contribute back, or how do you kind of keep things in perspective?
50:07
Wow, you know
50:11
that so one of the things that I wanted to do in my journal was that I write about is Oh, I do want to help the children of Cleveland, right? So in December, and I actually wrote it down in my in my, in my goal sheet what I plan on doing charity wise too much. It’s funny, you brought up Tony Robbins, he started his charity, thanksgiving charity, right? I want to do the same sort of thing. So what I’m doing is and I write it down in my goal sheet, I write it down. I want to help these kids. I want to help this kid. So part of what I’m doing is of course, for building wealth for myself building wealth for my family, my investors, I’m setting aside resources so I can do just that. You know, I’m not gonna play something. I can do it yet, but it’s going to happen hopefully this year, right? And with that in mind, that’s how it gives me something to work work for, you know, it gives you something to look forward to as well, because I do get joy just by helping some other people and I’m not expecting anything back. You know, that’s how I do things. I just don’t expect anything back. I just want to give as much as I can. And you know, and hopefully help out these these people make a difference to someone’s someone’s world. You know, that’s, that in itself means a lot. So that’s, that’s how I do it. That’s how I do it.
51:28
Awesome. Yeah, so we’re something I’m trying to do on my site is to get more involved in donors choose if you heard of that website, you can kind of donate to teachers who have like elementary or high school projects. And I have I’m getting going to get ready to launch that to my group, but I want control over what projects we give to Mars financial education type, as opposed to like interpretive dance or building a canoe, kind of a project.
52:00
I have control you know,
52:01
man, I tell ya know, I love it because I know it’s exactly what I wanted. What I want to do with with these kids and you know here in Cleveland is that it’s probably the same journey that you’ve been on, same one that I’ve been on, you know what lane, you you go to school, you, you get a job and that’s it, you go put your money in a 401k you get old and you die and that’s how you’re going to be and then you’re expected to be happy that way. That is not a way to live a life to your full potential. You know, in my opinion, I mean, that’s not my full my full potential anyway. And throughout all of that, the one thing that we’re not taught in school in grade school, high school, college is wealth, wealth building, we’re not taught that, you know, we’re not taught at least I wasn’t, you know, to learn that on my own. I’ve learned afterwards with mentors. You know, and that’s, that’s huge. No, I love that idea, man. It’s a great idea, you know, built tied into some sort of some sort of mentorship program maybe or some way to some way to really introduce finance and Financial Intelligence to some of these kids just be awesome nuts. It’s remarkable interpretive dance. It’s not gonna get you a job. Just Whoa. Well, the ricotta job, Johnny Why?
53:15
Yeah. Making pot, right? Yeah, Fox Fox.
53:22
But yeah, you want to get your contact information. People want to get ahold of you. And we’ll put this all in the show notes. If you guys go to simple passive, casual calm.
53:29
Absolutely. Absolutely. Now if they if they message me at info at bulletproof cash flow, you can find me on Facebook. I’m on I’m on LinkedIn, find me on LinkedIn, too. And of course on Facebook as well. Follow me on Instagram. We’re all over the place very just just google bulletproof cash flow. You’ll find me you’ll find me.
53:48
Alright, man. Well, I guess I’ll probably see you shooting emails out to me and spin around the dropbox when I’m still up at night and you’re getting going in the day
53:57
out. You’re doing awesome. All right, that’s gonna be fun. Thanks. All right thanks so much.
54:07
This website offers very general information concerning real estate for investment purposes every investor situation is unique always seek the services of licensed third party appraisers inspectors to verify the valuing condition of any property you intend to purchase. Use the services of professional title and escrow companies and licensed tax investment and or legal advisor before relying on any information contained here and information is not guarantee as an every investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end, you’re the only person who is going to look out for your best interests.
