JF2425: Attaining Your Passive Income Goal with John Soforic

John grew up in a blue-collar area just outside of Pittsburg; his family had coal miner and farmer roots. At the age of 24, John graduated college with $200k worth of student debt. By the age of 30, John had a wife and two kids to take care of, and the same student debt to pay off.

Real estate turned it all around for him. His goal was to attain $20k in passive income, and he pursued it one house after another while having a full-time job as a chiropractor. Later he wrote a book called “The Wealthy Gardner” where he talked about winning financially and taught others life lessons on prosperity.

John Soforic Real Estate Background:

  • Attained a net passive income of 20,000/month
  • Now a full-time property manager and author
  • 25 years of real estate experience
  • Portfolio consists of 110 doors freely owned (no loans), and has flipped 75 properties while working full-time
  • Based in Mount Pleasant, PA
  • Say hi to him at: www.wealthygardener.com 
  • Best Ever Book: The Checklist Manifesto

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Best Ever Tweet:

“I stopped reading books that I liked. I stopped watching TV that I liked. You sacrifice.” – John Soforic.


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’re speaking with John Soforic.

John, how are you doing today?

John Soforic: I’m doing fine, Theo. Thank you.

Theo Hicks: Well, thank you so much for joining us today. Looking forward to our conversation. A little bit about John—he obtained a net passive income of $20,000 per month and is now a full-time property manager and author. He has 25 years of real estate experience and his portfolio consists of 110 doors freely owned, no loans. He’s also flipped 75 properties, all while working a full-time job. He is based in Mount Pleasant, Pennsylvania, and his website is https://wealthygardener.com/.

So John, do you mind telling us some more about your background and what you’re focused on today?

John Soforic: Sure. I thought it was also funny to hear it said, because when you say “property manager” – yeah, I’m a property manager of my own properties. I’ve managed my teams, I’ve managed my people… I don’t know what to call myself, though. I’m an owner? Yeah, but I manage my stuff. So yeah, that’s what I am.

Who am I? I grew up in a blue-collar area just outside of Pittsburgh. My grandfather was a coal miner. My other grandfather was a farmer. My parents, when they got together, they moved into half of a trailer, not a full trailer. So I’m the first person in my family to ever go to college. I graduated as a Chiropractor at the age of 24. What that meant, Theo, is I graduated with $200,000 worth of student debt. So from day one, I have no income and $200,000 for the student debts. Within a year, I’m married, within two years, after marriage, we have two kids, and you’re in it. My wife stayed home with the kids.

It took me till about 30 to realize that I’m not getting off this treadmill, because all of a sudden, I’m just paying for food, shelter and clothing and this big enormous student debt that nobody sees. So it was looking a little helpless at the age of 30 for me, and that’s where real estate started happening in my life. It became an avenue where I was able to get one house after the other; I just started slow.

I made a big goal. The big goal was that $20,000 net passive income. So I took that swing and I got busy. And because my mind was directed, my body followed that. By the age of 50, I was able to attain that goal. And at that point, I wrote the book, The Wealthy Gardener, because my son was coming out of college and he was going to face exactly what I had just faced. And this was going to be my book though, The Wealthy Gardener – it was just between he and I, about how to win financially in the real world. How to be a gardener, meaning a garden is a metaphor for your life, how to be a wealthy gardener. So it was just between he and I.

Long story short, when that was over, we published the book. The book took off and it was translated in six different languages. It was taken over by a publishing house in New York, they gave me a six-figure advance… It’s a big deal, and that’s why we’re here today.

Theo Hicks: Thank you for sharing that. So Wealthy Gardener is a book; you mentioned how you set that goal to attain $20,000 per month in passive income, and you did all this while working full-time. So right now, you’re full-time in real estate, but when did you leave your job as a chiropractor? Was that right away when you were 30, or did you wait until you achieved your goal first?

John Soforic: No, not at all, Theo. I needed the W-2 income. I see that you’ve talked about the BRRR technique with other guests on your show… Well, that was mine, right? So I would go in and I would buy a distressed property, and then I would fix it up and rent it and refinance it. And we were doing that repeatedly, over and over, until I ran out of money; then I started flipping and doing that. So that doesn’t happen unless you have a job, right? I’m the only job in the family, so I need a W-2, because I walk into a bank without a W-2, I’m not getting a loan. Nothing happens without that 40 hour work week for me. So when I say I retired, I retired at the age of 49 from chiropractic.

Theo Hicks: Got it.

John Soforic: When you say I’m full-time into real estate right now, it’s 10 hours a week. So that’s full-time. That’s my kind of full-time, right?

Theo Hicks: There we go.

Break: [04:37] to [06:38]

Theo Hicks: A big question that we get a lot is – I’m sure you get this a lot, too – is how do I get started? How can I use real estate to quit my full-time job? And what’s kind of assumed in that is that you have a full-time job, and so the real question is, “How do I do this while I’m working a full-time job? How do I invest in real estate? How do I quickly scale my business while I’m spending 40 plus hours a week doing something else completely?” So you mentioned that you’re doing BRRR and rehabs and fix and flips, all while working as a chiropractor… So what are some tips you have for people who are listening to this, who have a full-time job, want to get out of that full-time job through income through real estate? How can they accomplish that, practically? When did you work on your real estate business, and how are you able to do time management and make sure you’re spending enough time in there? And what happens if something happens while you’re working, things like that?

John Soforic:  Oh, no doubt about it. Let’s look at it though,  break down a week. Let’s really talk about turning off that TV. Let’s talk about all the frivolous things that we can do. I had to do that. I stopped reading books that I liked, magazines that I liked, I stopped watching TV that I liked… You sacrifice. There’s people out there that have two jobs; pretend you have two jobs. And you know what, live a lifestyle as if you lost one of your salaries in the house. I can tell you this – that’s exactly what I did. We saved 50% of my income. And then even though we had more and more and more — people say, how do you do it? Well, that’s how you do it. Without money, you don’t do anything. At least I can’t speak of it. Somebody might have a no-money-down technique out there. That’s not me. Mine was earning, and mine was saving, and I was buying used cars from other people when people bought new cars. And so it just works out gradually where you’ve got to get the money in the bank, and then once you can do that, you can buy a property, and that’s how it happens.

I was just talking to kid the other day, he said, “How did you get into real estate?” He knows I have a big business. I said, “Well, how much money you’ve got in the bank?” “Nothing.” “Well, you live with your parents. You’re making $70,000 a year. Save your damn money, and within one year now, you’ll be qualified to become an owner.” Now, who wants to hear that? Nobody. Sorry, that’s how it works in the real world. You have to earn it; it isn’t given to you. Now, I don’t know what else to tell people.

So I wrote a book for my son, I wanted to have him understand the hard truths. I want him to understand – yeah, you’ve got to put the money in the bank. It’s all about getting the money in the bank, not how much you earn. And that’s the problem. You’ve got to be frugal, you’ve got to have profitability in your house. And I’m saying this, I’m sure there’s people out there saying, “Well, I don’t have any money at the end of the month.” Well, change your expenses; there’s just no other way. Change your expenses, change your income. That’s the key to real estate investment, right there. You have to have money in the bank to be an owner of anything.

Theo Hicks: Yeah, it sounds like it’s more of a—obviously, practically changing your spending habits. But something else that you said in the beginning is how you had this moment when you were 30, and then you didn’t retire until you’re 49. So 19 years you spent patiently saving money, doing a deal, grinding, until you achieved your goal, right? 19 years. Someone hears that and says “I don’t want to wait 19 years.” So what’s your advice for someone who maybe has that instant gratification hump that they need to get over? Is it just hard truths, or is it something they can practically do to start to be more patient think longer term?

John Soforic:  I would say I’m okay with that, Theo. To be honest with you, I was too, you know. People with an ambition, they’ll feel that agitation, and that’s okay, no big deal. That’s called constructive discontentment. And I say use that, make that your friend. And yeah, you put a path there of 19 years. I get that. But I won’t tell you like I’m an ox in the middle of a field, grinding away with sweat rolling off my back, just being miserable for 19 years. I will tell you this, that there is joy in progress. And in my 20s, when I wasn’t having any progress, I was miserable. I wasn’t getting anywhere. But in the direction, when you have financial direction, there’s a joy in the days of that. Your ambition is being fed through your results, and there’s goodness there. It’s not as bad as you think. In fact, it’s good, it’s fun.

I look back at those times and I kind of miss them a little bit right now, when I’m on top of the world, and “Get out of my way, I’m ready to run through this wall, now!” And you’ll say, “Well, you didn’t have your goals then.” “Yeah, man, but I was powerful then.” And that was a good time. That’s what it feels like when you’re winning. So you just have to start winning; it’s fun to win. That’s all.

Theo Hicks: [unintelligible [00:10:55].18] you talk to a lot of people who are aspiring real estate investors; what would you say would be the one thing that you’ve seen hold people back the most from either getting started or once they’ve gotten started, continuing to scale and getting closer and closer to that goal?

John Soforic: One thing… I would say the one thing that prevents people from pulling the trigger and buying their first one, I would say they’re afraid. My first property, I can tell you that my hand shook, and it was a small property; my palms were sweating. I didn’t sleep that night. That’s how it starts. But you have to feel the fear and do it anyway. I would say that people aren’t really in touch with their worst financial fears, sometimes. What’s the worst thing that can happen in your life? Sometimes you’ve got to use your fear, sometimes you’ve got to use your dreams. What’s your why? What do you want for your life? I don’t know, man, it seems like that bounces off people’s heads and they don’t hear it, but that’s exactly what I did. I got in touch with what I wanted most and I’d trade a lot of things I want right now for what I want most. So no excuses. You either step up to the plate or you don’t get ahead. You can just be a procrastinator for life, and you normally will, because you’ll never say, “I’m never going to do this.” You say, “I’m going to do it someday.” And someday is where dreams die. So that’s what happens, it’s really dangerous thing to do.

As far as scaling up, I think they just get busy and they run out of money. Quite frankly, they stop earning. I get that, I ran out of money myself, and then I started transitioning, since I had nothing to do and to buy anymore, I transitioned into flipping, because I was using this BRRR strategy, so it seemed to be a natural approach for me.

And keep in mind, when I say I’m doing all this stuff, I have workers working for me; I am a full-time chiropractor, I have a family, we kept intact, I am still married… And there’s just a lot of that going on. And you can gain money through outside sources if you turn off the TV; it just gets back to that — I am a guy that believes in sacrifices, and I don’t tolerate excuses.

Theo Hicks: It’s kind of actually a good transition into what I want to ask you next… So this is going to be more for established investors, but maybe not… But you mentioned how a problem with scaling is running out of money. And you mentioned that earlier about with your book, and how I’m sure that’s been a pretty good source of income for you.

So what advice do you have for people who have a lot of expertise, a lot of knowledge on what they’re doing – what are some things that they can tactically do to create and replicate the success you’ve had with your book? So how to basically create a best-selling book. How do I know what to write about? Is there a certain tip you have on writing a best-selling book? And then once it’s done, any tips on marketing the book to make sure it gets a lot of exposure, and things like that?

John Soforic:  I would say write something that you care deeply about, that you won the game in. That gives me credibility to be able to write about money. And I’m sitting there thinking, before I wrote a book like, does the world need another book? I think about that… No, probably not. But what can I say?

Well, I can say this – I’ve learned a lot along this really tortured path. I’ve learned this, and there’s a lot of people with financial pain. So what’s the pain point that you can solve? And I would say that, if you’re looking to make money, I would not go the direction of books, that’s for sure. I did get rewarded with a $100,000 advance from a big company, all that kind of stuff, and the book is doing well and all that… But it’s really a small amount per book that an author really takes home as far as royalties.

I would say that what you could do maybe more profitably with your knowledge is can you make a course? Can you make a course that is remarkable to other people; like, not remarkable to you, but remarkable to others? And then you have something. Because courses – you have a 90% profit margin on that kind of stuff. Books – geez, man, you’re getting into the sea now. And anybody can write a book; you can self-publish anything. If you can put a sentence together, you could write a book and call yourself a published author. But I would say, Theo, that if you’re looking to make money, get out of the book business; real estate’s a great place to scale and just learn your way through it. You guys have an interesting platform right here, and I noticed your book has 91% five-star reviews. That’s impressive. So maybe they should look there as far as earning money; read your book, the book on syndication.

Theo Hicks: I always love it when people plug that syndication book. Alright, John, what is your best real estate investing advice ever?

John Soforic: My dad, he had just a couple duplexes, but he always just drummed in my head that it’s not about what you earn, it’s about what you keep, period. It’s about what you keep. That’s the best advice I have for me. That’s the best advice I have for others. And you’ve got to get your lifestyle in line to make that happen. It’s about what you keep. That’s the score.

Theo Hicks: Okay, John, are you ready for the Best Ever lightning round?

John Soforic: Let’s go.

Theo Hicks: Alright. First, a quick word from our sponsor.

Break: [15:33] to [ [16:12]

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

John Soforic:  You know what, I think one of the more helpful books that I have read – and I read a lot, I read a couple of books a week – is a book called The Checklist Manifesto. And I promise you this, anybody that’s out there listening, right next to The Wealthy Gardener—let me plug my book—the Checklist Manifesto will speak to you, because it’ll get you in line for systems, man. And I’ll tell you what, you’ve got to get your systems together; a checklist, 1, 2, 3, 4, the bigger you get, the more complicated things get. It sounds like a small idea. I promise that book will revolutionize your thinking. It’s a good, good book.

Theo Hicks: Yeah, I love checklists. I always have my little checklist right next to me for things that I need to get done. And it feels good to cross it out, too. As you said earlier about — there’s joy in progress and results.

John Soforic: You’re one of those guys, Theo, that will get something done, and at the end of the night, you’re going to put it on your list just so you can cross it off, aren’t you?

Theo Hicks: Yeah, there you go. “Stand up from my chair, check!”

John Soforic: [laughs]

Theo Hicks: Okay, John, if your business would collapse today, what would you do next?

John Soforic:  I think that at this stage of my life, I would have to be a writer. And the reason I say that, Theo, is I am a big believer in finding those things that are [unintelligible [00:17:21].05] but you get feedback from the world and you get a positive feedback in. Keep in mind, I’m a self-published author; I’m nobody, and I wrote a book for my son, and it was rewarded pretty heavily by a New York publisher. These are the kind of dreams that full-time writers think about. And so that tells me that maybe there’s a knack there for me. So I would follow that and pursue that, and I kind of enjoy that. So I’d be a writer.

Theo Hicks: Tell us about the best ever deal you’ve done?

John Soforic:  Best ever deal. There was a group of seven duplexes in my town, and I did a BRRR on the whole damn block. I call it the block; one of the nicest blocks in my town. I offered them half price; the people were overseas, it was an estate sell. Half price, zero contingencies, I’m just going to take them no matter what, and they took it. Long story short, I went through a process of fixing those things up, and when it came time to refinance, what happened there was I refinanced all my costs into it and I took another 100,000 out of it.

Theo Hicks: Okay.

John Soforic: And when it was all said and done, that block, earned me $3,000 and still does every month of my life, even though I took $100,000 more than I put into it. And so that was probably the most astonishing deal for me. The people around the town looked at it and said, “Man, that folk must have some money,” and I think, “You guys don’t understand. They paid me to do this. This was better than free to me.” I got $100,000 back and $3,000 a month for life. So that was my best deal, no doubt about it.

Theo Hicks: On the flip side, have you ever lost money on a deal? How much did you lose and what lessons did you learn?

John Soforic: I am not a calamity guy. I always operate from the point of fear. So I don’t have that big calamity story that some people might. I had a bad stretch, I think, at one point in my career. I went through three flips in a row and at the end of those nine months I ended up netting nothing. My contractors, my painters, everybody – they made more money than me.

So what I was doing at that point was trying to keep a team intact. Sometimes what you’ll find is, when you get busy, if you don’t have a next project, then you don’t have work for your guys, they’ll splinter off and go into different directions. And then when you do get a project, they’re not back with you anymore. So I was always trying to keep properties one in front of the other, so I would have continual work for the people working for me. And sometimes I was buying marginal properties because the good ones weren’t around. So that was the mistake for me. I lost money on three in a row; that was a painful time. Because I would have been better off net cash inflow if I just sat around and watched TV. So that was it; don’t buy marginal properties. Even if you have to try to keep your team intact, you just can’t do it. Don’t break the rule of your criteria.

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

John Soforic: I believe in teaching people how to fish. So instead of giving them a fish, I like to teach them how to fish. My way to give back, Theo, is to write the book, The Wealthy Gardener, that was a lot of giving. That was three years, full-time. Sometimes people write in the margins of their life. This was 50 hours a week for three years, man; this was my sacred effort of my lifetime, and that was a serious giving back, first to my son; I couldn’t have done it without him. So he and I were sharing ideas back and forth; that was giving back to me. And whoever reads that book, they just live with me for 400 pages of that book. I can tell you that there’s a lot of people that cry when they read this book. So that was my giving back.

Now, the next one is called The Wealth Essentials, that’s my second book and my last book. So I give back through my time, energy, effort. I try to give my soul back. That’s what I do.

Theo Hicks: And then lastly, what is the best ever place to reach you?

John Soforic: Right now, it’s just https://wealthygardener.com/. That’s where I am, https://wealthygardener.com/.

Theo Hicks: Perfect, John. Well, thank you so much for joining us today and providing us with your best ever advice. Lots of practical advice given today, as well as mindset advice.

So we talked about some tips and tactics you have for attempting to, in a sense, achieve financial freedom while you’re working a full-time job. And I think if I could wrap it up in one word, it would just be sacrifice. We also talked briefly about writing a book, and that don’t necessarily do it if you’re trying to make money. If you do want to figure out how to leverage your knowledge for money, you can focus more on a course that will be remarkable to others. But if you do want to write a book, make sure if something [unintelligible [00:21:50].18] something that you’ve won the game in.

And then you also gave your best ever advice, which is very simple, but definitely powerful, which is it’s not about what you earn, it is about what you keep; again, playing into that theme of sacrificing.

So, John, thank you so much for joining us today, I really enjoyed our conversation. Best Ever listeners, as always, thank you for tuning in. Have a best ever day and we’ll talk to you tomorrow.

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