JF2239: Real Estate Is Not My Passion With Stephen Davis

Stephen is the Founder of Real Wealth Academy LLC, and started investing at 27 with wholesaling. He has experienced flipping, buying rentals, and now holds over 4,000 apartment units. He now focuses on consulting and mentoring people to help them begin in real estate, and today he shares advice, lessons, and what he believes people should have before looking for assistance.

Stephen Davis Real Estate Background:

 

 

 

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Best Ever Tweet:

“I love my real estate, but I don’t like managing it” – Stephen Davis


TRANSCRIPTION

Theo Hicks: Hello, Best Ever listeners and welcome to the Best Real Estate Investing Advice Ever show. I’m Theo Hicks and today, we are speaking with Steve Davis.

Steve, how are you doing today?

Stephen Davis: Excellent. Thank you so much for having me.

Theo Hicks: Thanks for joining us. Looking forward to our conversation. A little bit about Steve – he is the founder of Real Wealth Academy. He started investing at 27 with wholesaling. He also has experience in flipping and rental properties and now holds over 4,000 apartment units. He is based in Houston, Texas and you can say hi to him at his website, which is https://getrealwealth.com/.

Stephen, do you mind telling us a little bit more about your background and what you’re focused on today?

Stephen Davis: Well, I’m really focused on consulting at this point. That’s where I spend all of my time. I love my real estate, but I don’t like managing it. People are shocked when I say I don’t like real estate… But that’s just managing. It’s not my passion. Would I ever sell my real estate? No, only under one circumstance – to start another business or to buy more real estate. I love having a second stream of income. But my passion is teaching.

The last 30 years or so, I’ve been a consultant and teaching people how to do what I did. The motivation came from the suffering that I went through when I was working 60 hours a week and struggling… And I won a national sales contest; my reward was they cut my pay by 20 grand a year. That pain of realizing that having a job is the highest risk position you can possibly be in, and that you have absolutely no control. I understand that people are suffering. I understand that people don’t understand money, because it’s not taught in high school or college. That is my mission, is to help ease the pain by teaching people how to use real estate to build wealth, to build passive income, to build that second stream of income, and I love it. That’s where I spend all my time.

Theo Hicks: Perfect. Let’s focus on the consulting. How long have you been doing this consulting for?

Stephen Davis: I’ve actually been mentoring and consulting for 30 plus years.

Theo Hicks: Okay. Do you have a program, or it’s a one on one type situation? Is it the group mentoring?

Stephen Davis: I do a combination. I start people off in group mentoring. But some people, that’s not enough for them. It wasn’t enough for me. I had to get mentors one on one to drive me towards my goals. I do a tremendous amount of one on one. I don’t like to work more than 40 hours a week. But I would say that I’ve done 25 hours of consulting and I love it. It’s not even like work. It’s just sitting with people and seeing their eyes light up when they realize there is hope, that there is something that they can do differently to make a difference financially for them and their family.

Theo Hicks: Do you think people need a requirement to have a mentor or a coach of some sort in order to be successful?

Stephen Davis: Yes, because if you want to learn it on your own, in other words, you say, “Look, I’m not going to pay somebody, I can figure this out on my own” it can take five to 10 years to learn what I can teach them literally in a one eight hour session. And not just me, there’s a tremendous number of great mentors and consultants out there. But I can cut 5 to 10 years off the learning process for people in a one-day class.

Theo Hicks: We did a blog post about mentorship, and one of the things that we focus on is making sure that you’re in the right position or you’re actually prepared to have a mentor… So what are some of the things that you found of people who maybe come into your program and end up not being successful? Is there a thread or a common theme with these individuals? Can they just get a mentor whenever, or are there things that they need to do first  in order to set themselves up for success?

Stephen Davis: I think that there is something that they have to have first. It’s got to be a burning desire to change, because building a second stream of income is work, just like your job is work. If you don’t have that burning desire to do it, a clear understanding that you have to do it, then the mentor can’t instill that. They can share all the facts, they can show you the mechanics of investing, they can show you the mechanics of building that second stream of income, but it’s up to the individual to decide and make a strong commitment that they want it.

For me it was the pay cut. That pay cut was the impetus. When I saw the guy who gave me that pay cut, I wanted to hug him, because it changed my life. If he had not cut my pay, I might still be working 60 hours a week broke. We call it our ‘Why’. Why do you want to do this? Is it more time with the family, more time for romance, more time for travel, more time—and he goes, “Man, here’s my why. My wife of the last 20 years has come down with dementia, which will eventually lead to Alzheimer’s.” He said, “I’ve got to leave her enough money that she will be taken care of.” There’s his burning desire.

Other people, it’s just they want a better life for their children. You’d be amazed how many people enroll in my group because they want to teach their kids this material so that their kids don’t suffer with the same fears and insecurities that they did about money. So they’ve got to have a big enough ‘why’.

I actually turned down a guy who wanted to buy a program from me. I sent him home, because all he talked about was money. Money, money, money, money, money. I’m like, ‘Money’s not going to change your life, unless you have a plan for that money.” I sent him home with my goal setting workshop and said, “Fill this out. Come back next week, and we’ll talk about it.”

You’ve got to have a huge burning desire.

Theo Hicks: I’m not sure what your structure is, but let’s just say you do an hour a week with someone for a year. How much is that talking about the actual mechanics of, “Hey, here’s how you find a deal, here’s how you negotiate, here’s how you underwrite, here’s how you manage it” versus mindset, focusing on having the right mindset to actually go out and do these things?

Stephen Davis: That is the best question I’ve ever gotten in an interview. And you know, the answer is probably 60/40. 60% of the time I’m working on their mentality and 40% or less on the mechanics, because real estate is easy. I was hard. It was hard for me to get myself to do it. I had read multiple books on real estate investing, and guess how much real estate own? None. Because I couldn’t get myself to take action. Then when that pay cut came and I ended up with bad credit and no money, that motivated me. I just wish everybody would be smarter than me. Don’t wait for a financial catastrophe. Do it before the financial catastrophe.

Theo Hicks: What’s the most common mindset block you’ve seen that people have from—maybe let’s not even say getting started, but—well, it could be getting started. I guess I’ll let you answer that any way you want. What’s the biggest mental obstacle you found in the people you’ve consulted?

Stephen Davis: Self doubt is the number one. A lot of times, people have tried other things. I’ll pick on multi-level marketing, even though multi-level marketing works for certain people. They tried multi-level marketing and they failed. They tried maybe even a franchise and failed. As Anthony Robbins says, “What people start believing is that the past equals the future.” It doesn’t. You just haven’t found the right consultant, you haven’t gotten the right support. They doubt themselves because of past failures.

My lesson is that that is not failure, it’s simply a result, and what you do is you analyze your results, and change or modify your behaviors so that the next result is different. It may not be perfect, but it’s going to be better than the first result. It’s got to be self doubt. That breaks my heart, when people who I know are smarter than me, better looking to me, better built than me, and I’m like, “You think you can’t do it and I did it? Come on.” I was a dumb 27 year old kid, bad credit, no money. If I can do it, you can do it.

Theo Hicks: I know a lot of people I’ve talked to who are consultants/mentors, or have consultants and mentors – really, if you kind of break down really anything, it comes down to what you’re doing every single day.  So what is one of the most important habits you think people need to have or successful people have? What’s that one thing that people do every single day that you’ve found common between everyone who’s successful? And on the other hand, something that people who aren’t successful aren’t doing.

Stephen Davis: I think that successful people wake up every day and they either have their goals written down or they have their goals memorized in such a way that it’s the forefront of their thought, when they wake up in the morning. It’s at the forefront of their thought when they go to bed.

I’ve got to refer to Stephen Covey. He talks about one of the habits is, “Put first things first, and put the big rocks in your life first, then the pebbles,” if you’ve seen that video. The successful people put the big rocks in first. They put their family, their romance, their travel, their work. I like to break finance into two parts of a balanced life. There’s career and there’s wealth, and they’re two different things. But those are both big rocks, they go in first. They don’t watch a lot of TV, they don’t waste time. They’re constantly focused on those big rocks. Then people who I see fail are focused on the pebbles. They’re focused on television, they’re focused on anything to distract them from getting to the first things.

I borrow again from Stephen Covey – people get caught up in the thick of thin things. They’re wasting their time. People who succeed don’t let that minutiae get in the way of their big rocks, their big goals and their focus is on those every single day.

Theo Hicks: What’s something that someone can do before they have it memorized, before it’s become a habit, a routine, to have that momentum? What’s something they can start doing to remind themselves of this? I know some people use Post-it notes, and some people have vision boards. What have you found to be the best way to remind themselves of this every single day?

Stephen Davis: I kept a journal. I have to admit that I don’t anymore. But when I was between 27 and probably 40, I had a journal with my goals written down. When I first wrote them down, I would review them every morning. That was probably for six months or longer. And then I would review them about once a week. And I’m not sure how long that was – it wasn’t very long, maybe a year or two – before they became ingrained, and I knew exactly what I wanted and what was important. I think writing your goals down is paramount to beginning this process.

Theo Hicks: I liked your rock and pebble analogy. When you were explaining that, I just thought of  having a massive five foot stone in my house with whatever my goal is written on it and every time when I wake up, I look at this massive rock with my goal on it, and maybe like little pebbles that have the words TV and Netflix or whatever on it. I wonder if anyone does that.

Stephen Davis: I wouldn’t doubt it. If you go to YouTube and look up Stephen Covey on the big rocks, there’s a video in there where what he does is he pours all these pebbles into the bucket and then says, put all the big rocks in. Well, they won’t fit, because there’s so many pebbles. He says, “But what if you changed your paradigm; started with an empty bucket and put the big rocks in first and then poured the pebbles in?”

See there is time for TV. There is time for movies and entertainment and all that. But not if you put those in first; those are secondary. I actually like your idea. It’d be cool to have lined up the eight big rocks; family, fitness, relationships and romance, travel, career, right on your sideboard or chest of drawers right as you’re walking out the door every day. That’s a pretty neat idea.

Theo Hicks: Yeah, I know people learn in different ways, but that visual you were talking about, with the cup and the rocks – I’ve definitely seen that before. That’s a really good analogy.

Alright, Steve, what is your best real estate investing advice ever?

Stephen Davis: Man, you told me that and you gave me a good warning and I’m not prepared. I’m going to have to go with, “Never give up”. That’s the best advice that I can give you. When you get to your first two or three rental houses or you invest in your first two or three apartment complexes or strip shopping centers or whatever you choose, don’t stop.

I met a guy the other day and he goes, “Well, I’ve had two rent houses for 10 years.” He bought both those rent houses the first year that he started investing. What happened? He stopped. He lost his vision. He didn’t pay attention to his goals. Never give up. Keep moving forward.

Theo Hicks: Alright, Stephen, are you ready for the best ever lightning round?

Stephen Davis: Yeah, you told me about this, but I’m not sure what it is.

Theo Hicks: Well, you’re about to find out after this quick break from our sponsor.

Stephen Davis: Okay.

Break: [00:17:02] to [00:17:55]

Theo Hicks: Okay, Steve, what is the best ever book you’ve recently read?

Stephen Davis: Okay, it’s got to be the Seven Habits of Highly Effective People by Dr. Stephen Covey. That is not a real estate book. It’s a mindset book. But when I finished reading that book, my life was different. It’s an amazing book.

Theo Hicks: If your business, whether it be your consulting business or your real estate business, were to collapse today, what would you do next?

Stephen Davis: What would I do next? I’m not allowed to do either of those, huh? Probably teaching.

Theo Hicks: No, you can choose to do one of those again. There’s that option.

Stephen Davis: I’d go right back to it. Yeah, I would go right back to it.

Theo Hicks: What is the best ever way you’d like to give back?

Stephen Davis: Teaching is my favorite way. I honestly feel proud that I give more than I charge for. The second way is just financial. It’s getting that 10% or more of your earned income out to charities that you believe in.

Theo Hicks: Lastly, what’s the best ever place to reach you?

Stephen Davis: I love email, asksteve [at] getrealwealth.com.  And you can email me any questions 24 hours a day, I’ll get back with you.

Theo Hicks: Perfect. Well, I really enjoyed our conversation, Steve. I don’t get to have these types of mindset conversations a lot on the show, so they’re always very enjoyable.

Just to kind of summarize some of my biggest takeaways… The first one was, why do people need a mentor, and you said very succinctly that if you do something on your own, it’s going to take you a year, five years, 10 years to learn a specific trade… Whereas if you have a mentor, they can teach you that in one session or in one week or in one month or however long it takes, but it’s not going to be as long as it would have taken for you to do it on your own. So a huge time saver.

We talked about when is the right time to get a mentor or what type of preparation you need before you have a mentor, and you said that people need to have a burning desire to change, and that comes down to having a strong why. You gave a couple of examples of your why, which was when you got your pay cut, you gave an examples of someone’s wife who was sick, and people who want better their lives for their children. And then you also mentioned what a bad ‘why’ is, what a weak ‘why’ is, which is just wanting money.

You mentioned that when you’re teaching your clients real estate, it’s actually 60% mentality and 40% mechanics. I really liked what you said, “Real estate is easy. I am hard.” That was a really good quote.

Stephen Davis: Thanks.

Theo Hicks: You talked about the biggest obstacle being self-doubt. You talked about the best habit being putting the big goals first which you said were finance being broken into the career and the wealth, as opposed to the small things, like basic things that are kind of a distraction. And then you gave your best ever advice, which was never give up. Once you start, do not stop.

Again, Steve, I really enjoyed this conversation. Best Ever listeners, I’m sure you enjoyed this conversation as well. Make sure you take advantage of him providing you with his email address. Thank you for listening. Have a best ever day and we’ll talk to you tomorrow.

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