JF1956: Raising Capital & High Level, Complicated Deal Structures with Adam Finkel

Adam has been involved in over half a billion in debt and equity placements. We’ll hear details on some of the more complicated structures he’s worked with, what he learned, and what he can share with us. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:

“Start small and build your track record” – Adam Finkel


Adam Finkel Real Estate Background:

  • Adam is the Founding Partner and Principal at Tower Capital
  • Since 2015, the firm has been involved in over $500 million in successful debt and equity placements on behalf of investors across all major asset classes
  • Based in Phoenix, AZ
  • Say hi to him at https://towercapllc.com/
  • Best Ever Book: Anything that Malcolm Gladwell writes


The Best Ever Conference is approaching quickly and you could earn your ticket for free.

Simply visit https://www.bec20.com/affiliates/ and sign up to be an affiliate to start earning 15% of every ticket you sell.

Our fourth annual conference will be taking place February 20-22 in Keystone, CO. We’ll be covering the higher level topics that our audience has requested to hear.


Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Adam Finkel. How are you doing, Adam?

Adam Finkel: I am well, how are you?

Joe Fairless: I’m doing well, and looking forward to our conversation. A little bit about Adam – he’s the founding partner and principal at Tower Capital since 2015. The firm has been involved in over 500 million in successful debt and equity placements on behalf of investors across all major asset classes. Based in Phoenix, Arizona. With that being said, Adam, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Adam Finkel: Absolutely. I grew up in Boston, I went to Arizona State University for school. That’s how I ended up out in Phoenix. While I was in college I didn’t really know what I wanted to do, and I knew a couple of guys older than me that were in commercial real estate. The market was pretty good at the time – this was 2003-2004 – and I decided to check it out.

So I went and got my real estate license, got an internship going into my senior year of college. I was working for a boutique, full-service commercial real estate firm based in Scottsdale, Arizona. There I was representing landlords and tenants with their office leasing, doing some office, industrial, retail… A lot of smaller deals, but a lot of transactions and a lot of great experience, understanding what motivates tenants and landlords, and just how commercial real estate operates in general, getting exposed to some different asset types… And then I joined up with a larger, regional tenant rep firm called Travers Realty Corporation based out of L.A. They’ve since been acquired by Cresa. When I was out in L.A, I was only on the tenant side I was representing. A lot of law firms in San Fernando Valley, a lot of surgery centers in the Beverly Hills area, and then a lot of creative companies in the West L.A. and Hollywood area.

Well, I started to get burnt out on tenant rep leasing, to be honest, and I segued back to Phoenix and found myself a position over at Johnson Capital, where I was a commercial mortgage banker. I had known the partner that I was working with over there for many years, a guy named Neal Churney. He was president of our Central Arizona CCIM chapter, and he really mentored me and taught me the skills and underwriting, evaluating commercial properties, and I was financing mostly apartments while  I was at Johnson Capital.

Then a large publicly-traded company out of Bethesda, Maryland called Walker & Dunlop, who specializes in Fannie, Freddie and HUD loans for multifamily properties – they acquired Johnson Capital at the end of 2014. That’s when really the stars aligned for me to start my own structured finance firm that we named Tower Capital. And along with my best friend, Kyle McDonough, who I met at ASU, and we’d always wanted to do something together – he was on the private money lending side, and we joined forces and created Tower Capital… And that’s what I’m doing today.

Tower Capital is a boutique commercial real estate structured finance firm based  Phoenix. We finance a wide variety of different types of assets, whether it’s multifamily, office, retail, industrial, and from stable properties to transitional properties, ground-up developments, we financed large masterplan communities… Doing deals  pretty much all over the country, but our footprint is mostly West of the Mississippi. I would call ourselves a regional firm, and we let our clients take us to different markets.

Joe Fairless: I wanted to talk a lot about Tower Capital and what you are doing, but just to ask a follow-up question or two about your tenant rep leasing experiences… You were representing tenants like law firms and surgery centers – what are some tips that you have for tenants when negotiating leases with landlords?

Adam Finkel: Well, I think that when negotiating  a lease you really need to figure out what is most important to you. That maybe be getting the lowest rents, that may be getting the right buildout that you want, that may be having flexibility with having options to expand, or get out of your lease early…

I think sometimes what people try to do is they make the mistake of over-negotiating and not picking out what’s the most important to them. So what I would say is find out what’s most important to  you and then really focus on those areas, because it’s always a give and take. You can get a little here, but you might have to give a little someplace else.

Joe Fairless: Hm… Know what you want going into it, where your priorities are, and where you can give a little bit on the other side, with regards to those points. You mentioned rent, flexibility, buildout – another name for that is tenant improvement (TI)? Any other major categories to consider?

Adam Finkel: In what regards?

Joe Fairless: Just negotiating points, like “Hey, I wanna know what’s important to me, so here are some things to consider, and then I’m gonna pick and choose in order of priority which ones are most important.” You mentioned three of them. Are there any other major categories to consider?

Adam Finkel: Well, I’ll tell you one thing – one of the negotiating tricks that we used very often was extending the lease term. By committing a longer term to the landlord, they can justify quite often providing additional TI dollars, maybe additional free rent, that sort of thing. So sometimes people will go in and maybe they’re only thinking about doing a three-year lease, but if you can do a five-year lease, then you’re typically gonna get a lot more out of the landlords… So that was something that we utilized quite often – tenants have the ability to stay in the space longer.

Joe Fairless: And from a landlord’s perspective, is it the same thing – know what’s important to you? …or are there any other nuances to it?

Adam Finkel: Well, I think for landlords – they’re always trying to create as much stability in their properties as possible. Typically, unless they believe that we’re in a situation where rents are going to be increasing at a very positive [unintelligible [00:07:58].23] at a fast rate, they may want shorter-term leases, so that as the tenants roll, they can replace them with higher-picked tenants. However, quite often the landlords really want stability, so they’re pushing for longer terms. That’s really what I saw… And again, it comes down to just basic skills of negotiating, of knowing what’s most important to you and where you can give a little to get a little.

Joe Fairless: Let’s talk about Tower Capital. How do you all make money?

Adam Finkel: We make money when we successfully facilitate a loan funding. And we get paid by the borrower, out of escrow, upon closing of the loan, typically anywhere from 0.5% to 2% of the gross loan amount. That’s how we get paid; pretty simple, pretty standard.

Joe Fairless: What’s a typical client who comes to you? Who are they? I’m not looking for names, but just in general – who are they and what’s their scenario or situation where they then come to you and you offer the solution?

Adam Finkel: Absolutely. Our typical client is an experienced, high net worth investor; whether they’re a private investor or they may be part of a company, they have experience, they generally have several properties under their belt, and they’re looking to go out and either refinance or acquire additional assets.

Generally, our clients are based on the West Coast, many being located here in Phoenix. We have a lot of clients from Arizona, a lot of clients from California, and also Canada – Toronto, Vancouver… Arizona is a very desirable place for investment, because of the warm weather, the population growth. We’ve really expanded our economy out here since the downturn.

I believe that Phoenix is supposed to have the highest rent growth out of any other market. For the next five years I think that they’re predicting 5% to 6% rent growth… So it’s a very strong market, where a lot of people wanna be… So we seem to draw a lot from folks from the West Coast and Canada, where it’s gotten very expensive, and cap rates are very low… And people can still get more bang for their buck.

I don’t know if we’re considered the secondary or primary. I think we’ve been considered the secondary [unintelligible [00:10:15].10] primary, but the folks from the primary markets are chasing yield, and seeking higher yield, and secondary or tertiary markets is where the cap rates are higher.

Joe Fairless: And I see on your website that you have services that provide preferred and joint venture equity. Can you elaborate on that?

Adam Finkel: Sure. Being a structured finance firm, we are able to capitalize entire stacks. That’s going to include a debt piece and an equity piece. Typically, on larger projects we will assist our clients where we’re basically going out to one institutional equity source and we’re marrying them together and introducing them to our clients… And whether that’s general partner, or a limited partner situation, or a preferred equity situation… There’s a lot of ways to structure the deals, and typically you’re going to have the senior debt, and there’s gonna be a mezzanine financing piece or B-Note, and then you have your different equity layers.

We can get very complex when you’re really trying to push either loan-to-value or loan-to-cost, and there’s different types of capital sources that we can mix and match to find the best structure, that’s gonna be most in line with our client’s objectives.

Joe Fairless: Can you tell us a story of a project that you’ve worked on that was a complicated structure, and just walk us through it a  little bit?

Adam Finkel: Sure. We’ve recently financed a 212-unit ground-up horizontal multifamily property – otherwise known as single-family floor rent –  in the Northern Phoenix submarket of Deer Valley. That was about  a 52-million-dollar total project cost. We brought in a large national bank to come in for the 65%. So it was a 65% loan-to-cost loan. Then we brought in a private equity group to come in with an additional 20% preferred equity piece, and then we also brought in a general partner as well… So really going up the entire cap stack, from the debt all the way to the equity.

Joe Fairless: And for anyone that’s not familiar with loan-to-cost versus loan-to-value, and why you use loan-to-cost versus loan-to-value, can you elaborate?

Adam Finkel: Well, loan-to-value is typically going to come in when you’re  just buying an asset; usually, it’s a stable asset, you’re not doing any rehab, or limited rehab. Where loan-to-cost really comes in is on a construction project or a heavy rehab project where the loan is based upon the cost, not necessarily the value… But you will have different parameters. They may say “The loan amount isn’t going to be more than 80% of cost and more than 70% of stabilized value.” So the lenders are always going to want to know that they’re not over-levering and that the borrower will be able to either sell or refinance them out when the project is complete, and the lender will be made whole. So that’s why they set those limitations for loan-to-cost, as well as loan-to-value.

Joe Fairless: Then the second piece, you mentioned you brought in a 20% preferred equity piece. For anyone who’s not familiar with preferred equity, will you elaborate on what that is?

Adam Finkel: Preferred equity can be used in place of mezzanine debt, or subordinate or junior notes to the senior loan. What that basically means is you have your senior loan/first loan, and then if people wanna go higher up on the cap stack, quite often the senior lender will not allow a subordinate lien, or another lien against the property… So that financing has to be structured as equity, or what we called preferred equity, where typically the equity provider is receiving a preferred rate of return; call it 8%, or 10%, or 12%.

They’re gonna get that money first, before the sponsor gets any of their money. And then they may or may not have some back-end participation. Typically, most of the deals that we do, it’s really almost structured as debt can be paid current or at the end, and there’s really not (typically) a huge amount of back-end participation with the preferred. It’s really just meant to be a secondary debt piece where there’s just no lien, and they’re gonna get a set amount of yield, and that’s how it works.

Joe Fairless: And then you mentioned that you brought in a general partner… I was under the impression you all were brought into the deal, that there was a general partner in place; so is this partnering up with the current general partner that you brought in?

Adam Finkel: Yeah, so it was a co-GP that was able to provide the balance sheet that would qualify for the senior loan amount. When someone’s getting a loan on a commercial property, typically whoever is signing on the guarantees or the non-recourse carve-outs still needs to meet a minimum net worth equal to the loan amount. So sometimes when developers are out there and they’re trying to build a large project, they don’t always have the balance sheet on their own, so they need to partner and bring someone in that can provide that additional support for the financing.

Joe Fairless: So typically it’s net worth is equal to loan amount. What about liquidity?

Adam Finkel: Liquidity is typically going to be a minimum liquidity of 10% of the loan amount after the down payment. The lenders wanna know that the borrower isn’t putting every last penny into the property, and then if something goes wrong – they need to replace the roof, an air conditioning goes out – that the borrower has the funds there to complete those projects as needed.

Joe Fairless: You said “minimum 10% of loan after down payment.” What have you seen it go up to for that requirement?

Adam Finkel: It’s really kind of a case-by-case. Typically, on construction deals, the lenders wanna see additional liquidity; that could be 20% or 30%. It’s really all over the place and case-by-case.

Joe Fairless: And what are the main variables that that’s dependent on? Is it new construction, or are there other things besides that?

Adam Finkel: It’s going to be dependent upon the borrower’s experience, the property, where it’s located, and really just the lender’s overall comfort with the project in total and the borrower. If the borrower has a BK, or credit issues, the lender may require some additional liquidity.

Joe Fairless: Based on your experience, when you bring in a co-GP into a deal, who is a balance sheet person, what percent of the general partnership do they typically get for that?

Adam Finkel: It’s really a case-by-case. I believe they’re pretty much 50/50 partners. So it just really depends on the co-GP’s involvement and what they’re doing, not only in this instance where they’re providing a balance sheet, but they are also providing a lot of back-end/office support as well… So it just really depends on their involvement and how much the sponsor needs them, I suppose.

Joe Fairless: What’s been the most challenging project that you’ve worked on in your career?

Adam Finkel: I think in general, construction, along with equity raising is the most challenging. I can’t point out one project in particular, but as far as the equity goes, there’s a lot of pieces that have to be put into place to meet the capital provider’s box. If the sponsor doesn’t have experience in this particular asset class, like say they wanna go out and they wanna do an apartment project, but they have all of their experiences in retail… Or if they worked for a company where they were involved in commercial real estate, but they weren’t actually the general partner or the key principal…

The vintage of the property can make it challenging as well. In Phoenix, when we’re capitalizing a lot of these value-add apartments where maybe they were built in the ’70s or ’80s, the equity people don’t wanna see eight-foot ceilings. They wanna see ten-foot ceilings or higher… So that can be challenging if you don’t have an experienced sponsor.

Sometimes people try to bite off more than they can chew. What I always advise people is start small, and then build your track record, and then work your way  up. It gets challenging sometimes when people go in and the project is a bit too large, and they’re stretching… Those are always the most challenging situations.

Joe Fairless: Based on your experience, what’s your best real estate investing advice ever?

Adam Finkel: My best advice would be to… Really, kind of what I’ve just said – start small, make your mistakes on a smaller deal, bring in people that can help you, that have experience operating that particular type of asset, and really take the time to learn the operations, and then really just build your track record. That’s gonna make it a lot easier for you to find capital partners, whether it’s debt or equity.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Adam Finkel: I am.

Joe Fairless: Alright, then let’s do it. First, a quick word from our Best Ever partners.

Break: [00:20:04].02] to [00:20:48].25]

Joe Fairless: Okay, best ever resource you read on an ongoing basis to keep you sharp on the industry?

Adam Finkel: Wall-Street Journal and GlobeSt.com.

Joe Fairless: Best ever book you’ve recently read?

Adam Finkel: Anything by Malcolm Gladwell.

Joe Fairless: Does he have a book our recently? I was reading him 6-7 years ago, but I kind of last track of his stuff.

Adam Finkel: The last one I read was David & Goliath. I’m not sure if he has come out with anything recently. I know he’s got a podcast now…

Joe Fairless: Yeah, I know he’s got a podcast, too… Okay, cool. Just wondering. It looks like Talking to Strangers is the latest; on sale September 10th, so it’s out… Talking to Strangers.

Adam Finkel: There we go.

Joe Fairless: There you go, Malcolm. You’re welcome, Malcolm.

Adam Finkel: You’re [unintelligible [00:21:25].24] material for me.

Joe Fairless: [laughs] What’s a mistake you’ve made on a transaction?

Adam Finkel: Getting too aggressive in my underwriting assumptions.

Joe Fairless: Will you elaborate on what assumptions were more aggressive and now you’ve reined it in?

Adam Finkel: I would say probably trying to push rents, or the other thing would be when looking at  a rehab deal, kind of knowing how much to really put into the property that’s gonna get you the most value, and not over-improving for the tenant base that you’re trying to attract.

Joe Fairless: Best ever way you like to give back to the community?

Adam Finkel: I do a lot of charity work within the community, fundraisers… I’m always trying to get involved in different things, especially anything with kids. We’ve done stuff with Boys & Girls Clubs, we’ve done a lot of things locally here in town to support various types of organizations.

Joe Fairless: And how can the Best Ever listeners learn more about your company?

Adam Finkel: I would say go to our website, www.towercapllc.com. Anyone can feel free to email me directly at adam@towercapllc.com.

Joe Fairless: Well, Adam, thank you for being on the show, thank you for walking us through the 212-unit development deal, the capital stack and the nuances of the capital stack, and talking about your experience as a tenant rep leasing professional, and then some tips for anyone who is in the process or will be in the process of negotiating either with tenants, or with a landlord during whenever they’re securing or leasing a property.

Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you again soon.

Adam Finkel: Thanks, Joe. You too, have a good one.


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JF1892: She Sold An Apartment Complex To Purchase A Hotel with Nichole Stohler

We don’t get to hear about hotel investors much on this show. Today that’s changing with Nichole talking to us about her investing story, which includes pivoting from multifamily and into hotel investing. This wasn’t intentional, but the returns were looking best with hotels, so they took that leap. We’ll hear about Nichole’s multifamily properties and how she sold a complex for a $1.2 Million profit in 18 months. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:

“Find someone who does what you want to do and find a way to add value to them” – Nichole Stohler


Nichole Stohler Best Ever Show:


The Best Ever Conference is approaching quickly and you could earn your ticket for free.

Simply visit https://www.bec20.com/affiliates/ and sign up to be an affiliate to start earning 15% of every ticket you sell.

Our fourth annual conference will be taking place February 20-22 in Keystone, CO. We’ll be covering the higher level topics that our audience has requested to hear.


Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Nichole Stohler. How are you doing, Nichole?

Nichole Stohler: I am doing great. Thanks, Joe.

Joe Fairless: I am glad to hear that, and looking forward to our conversation. A little bit about Nichole – she’s the founder and host of The Richer Geek Podcast, a podcast for empowering high-income professionals to find creative ways of building wealth and financial freedom. She owns 90 units and has a 64-room hotel under contract. Based in Phoenix, Arizona. With that being said, Nichole, do you want to give the Best Ever listeners a little bit more about your background and your current focus?

Nichole Stohler: Sure. First of all, I believe in being a W-2 entrepreneur. So I still work full-time, and then I’m partnered with my husband, who does really all of our property management and operations. And we primarily got started in multifamily properties. That’s my husband’s background. He was in property management in that space. We pivoted, because we got an unsolicited offer, so we ended  up selling one of our apartment complexes, and under 1031 we were not finding the cap rates and really the returns we were looking for, so we pivoted to hotels a few years ago. And then we liked that model so much that we now have an additional hotel under contract.

Joe Fairless: Wow. How many units was the apartment community you sold?

Nichole Stohler: The apartment community was 50 units.

Joe Fairless: And what did you sell it for?

Nichole Stohler: Two point five. No. No, no, sorry, three.

Joe Fairless: What’s 500k… Details, right?

Nichole Stohler: Yeah… It was an unsolicited offer that came three times, so yes…

Joe Fairless: Fair enough. And what profit did you make on that?

Nichole Stohler: We were a little over 1.2.

Joe Fairless: Congratulations.

Nichole Stohler: This was when the market started to get a little crazy, and we’re here in Phoenix, we keep everything local, and it actually still has not slowed down in terms of apartment complexes in Phoenix.

Joe Fairless: When did you purchase that property?

Nichole Stohler: We purchased it in 2015.

Joe Fairless: And you sold it when?

Nichole Stohler: 2017.

Joe Fairless: Okay. So what was it, about two years? Or did the months line up where it was less than that?

Nichole Stohler: It was less than that.

Joe Fairless: About how long did you own it?

Nichole Stohler: Gosh… About 18 months…?

Joe Fairless: 18 months, okay. So 18 months and 1.2 million in profits. What would you say were some of the drivers for getting that increased valuation?

Nichole Stohler: Stabilizing the property, getting an on-site person that was able to manage a lot of day-to-day… That particular property, once it got stabilized, then never had a problem filling it, because there was a waitlist. There were people who were very interested. It’s a good location, too. I absolutely can’t emphasize that enough, just where it is in the Phoenix Metro area… And the property — it was a C property, so it was close to a bus line, and some of those things that pretty key features.

Then the other thing is I just think because of the craziness in our particular market, the unsolicited offer came from someone that was under their own 1031, and they were coming from out of state, and they were really just so anxious to find something… And it just was a very steady, not a lot of turnover in residents, not a lot of drama… Just a very good culture in the property itself.

Joe Fairless: Did I hear you earlier you said it was the third unsolicited offer?

Nichole Stohler: Yeah.

Joe Fairless: Was it the third one from the same person?

Nichole Stohler: Yes.

Joe Fairless: Well, how did that go? Tell us.

Nichole Stohler: Well, we weren’t actually wanting to sell. It was a good property, like I mentioned… With a waitlist, and a very consistent stream of residents. So basically, those folks that were under 1031, they just kept coming back, because I think they saw that it was a good resident culture type of property.

Joe Fairless: What was the first and second offer?

Nichole Stohler: Oh, gosh… My husband negotiated all of those pieces, so unfortunately I can’t — but I know the first one was “Yeah, that’s not worth it for us to sell.”

Joe Fairless: [laughs] Fair enough. You mentioned 2.5… Was that one of the offers, if you recall? If not, that’s fine; we’ll move on. I’m just curious.

Nichole Stohler: Yeah, I believe it was. He would have more of those details, yeah.

Joe Fairless: Fair enough, fair enough. You mentioned you stabilized the property… What was the property like when you purchased it?

Nichole Stohler: What had been happening is that the owner was more absentee, and not really involved. This is the other thing – we self-manage; my husband handles the self-management of the property… And we’re not managing other people’s property, just our own. And the owner at the time was very absentee, not heavily involved… People felt like their issues weren’t getting addressed… And people talk within the community, especially if you’re talking about this particular within Phoenix, and close to the bus line, and those types of things. So it’s just a lot of turnover and dissatisfaction with management.

Joe Fairless: Was it a local owner, or out of state?

Nichole Stohler: Yes.

Joe Fairless: It was a local owner?

Nichole Stohler: Yeah, but they had like 30 other properties, so…

Joe Fairless: Alright. So then you got this under contract to sell, and then I imagine initially you looked for other apartment communities, because that’s what you were used to… If that is the case, then what happened?

Nichole Stohler: That is absolutely the case, because that’s what we were used to, you’re right. That’s what we knew and we understood. Now, the story actually starts about two years prior, because we had actually been considering already investing in a hotel, just separate. Not under 1031, just as an additional investment. We had been introduced to someone who’s been in the hotel industry for 20+ years through our broker, and we were just kind of sharing information — we were very intrigued by the hotel numbers, and that’s why we were considering investing at that point in time. And we didn’t pull the trigger… Then when the 1031 came – now we’re under a deadline, and we’re selling this particular property, and we’re not finding any multifamily that meets our cap rate and our return on investment criteria, we reached out to the gentleman that we had met prior, and asked if he had any thoughts on hotels that were available.

The markets are different. As you network within your local area, you’ll meet people in different niches, and the folks in those niches really know that area and they know what’s happening. In his case, he had his pulse on all the different major hotels within the Phoenix Metro area, and he knew of this off market opportunity. So that’s how we were able to find a good deal as well, and it was really because of his expertise in helping us through that process.

Joe Fairless: Oh, I love that. How did you meet him initially?

Nichole Stohler: The broker that sold us a couple of the multifamily properties introduced us to him because the broker was helping him look for land, and he was looking to build a new hotel… And the broker, as they got to chatting, was very intrigued also by the numbers and the types of things this that this hotel guy was mentioning, and he said “At some point there might be other deals with folks that are in other areas.” So he introduced us really in the vein of kind of a referral, that maybe we could be working together.

Joe Fairless: And then the hotel investor/expert knew the market, identified or knew of an opportunity that was an off market deal, and then pointed you in that direction, and you ended up closing on that deal. Correct?

Nichole Stohler: Yes.

Joe Fairless: And in that scenario, do you give that investor any cash for hooking you up with that deal, or is it just you take them out to dinner, or none of the above and it’s just a handshake, “Thanks a lot. I’ll remember this”? How do you approach that?

Nichole Stohler: I think you could do all of those things. In our case there’s a little bit of an additional involvement that we needed from him, and he is still actually involved with us today. The first thing is in getting a commercial loan for a hotel without having any experience – now, yes, you could bring in a management company that has hotel management experience, and then maybe at that point we’d be able to get the loan… But he was instrumental because we basically said “He’s gonna be part of our management team, and he’s going to help us pick out a general manager, and help us manage expenses.” So he has a portion of equity in the company that we formed, that purchased that particular hotel.

Joe Fairless: Oh, perfect. Okay. And then in that type of scenario, what is the percent range that you would give to someone for that role?

Nichole Stohler: I think it really depends on the situation. In our case, we were very new to getting engaged, so he has a much higher percentage on that particular hotel… But he’s also engaged in this new hotel that we have under contract, and at that point the percentage is much lower, because we have the experience… But we still want his support and mentorship and oversight. So it’s kind of graduated from–

Joe Fairless: So it just varies…

Nichole Stohler: Yeah.

Joe Fairless: Fair enough. And what would be the range? You  said “high” – what is high in your mind and what is low in your mind?

Nichole Stohler: I think high could be between 30% and 50%, depending on what that person is doing and what they’re bringing to the table. Basically, we become more of a money partner, and he becomes more of a doer. And then, in the next hotel, if we’re more of a doer, but we still need that oversight, you could be talking more like 10%-20%.

Joe Fairless: Okay, fair enough. Thanks for that. You mentioned earlier you were intrigued by hotel numbers when you initially were introduced to hotel investing… Educate me on what that means, please.

Nichole Stohler: Sure. We were used to multifamily C type of properties, for the price range and for the cap rate at the time, which has changed significantly lower. Hotels, for the same cap rate or better – and in today’s market better – you are not in a classification that I would consider C. In our case, were’ in select, limited service types of hotels, and the travelers and the clientele are business folks that are looking for convenience, because we’re close to an employment center. So off the bat, the first thing that’s interesting is you have a higher profitability for the number of rooms. You have a different clientele than you do in C multifamily properties. And then because you have a different clientele, the services and the incremental ways that you monetize a hotel are different, and I think more varied, more opportunities than there are in multifamily. So those are some of the things that we learned, and we were educated on, and the returns looked significantly higher.

Joe Fairless: What are some of those ways to monetize hotels?

Nichole Stohler: That’s a great question. One thing to think about is in a hotel you’re going to offer free Wi-Fi, and someone’s gonna login – almost everybody uses the free Wi-Fi… They’re gonna login, and there’s a splash page.

Joe Fairless: Upgrade.

Nichole Stohler: Yeah, you can upgrade, and you can also — on that splash page, you can sell advertising space with local restaurants, local venues, folks that want to get their information out to a captive audience who’s traveling in town. So there’s monetization of the digital side of things. There’s also packages and events you can offer. So you can bundle those with a stay, and maybe golf… Some local event that’s happening, as well.

You can also monetize your breakfast space… And I’m gonna say that because we’re in limited service, and limited service almost always has a free type of breakfast, and there’s a space for that. And then depending on how the hotel is set up,  you can then rent that space out for events and for smaller business type of meetings… So there’s a lot of interesting different ways to monetize, versus in multifamily what we might be looking at is we’re going to upgrade the units, we’re gonna add a stackable washer-dryer, we might add covered parking that people could pay more for, a storage unit… So just different ways to monetize that are more business-to-business focused.

Joe Fairless: The splash page for the Wi-Fi, where you sell to, say, local restaurants – that’s really interesting. I feel like that could be done with an apartment community, too; perhaps not a splash page via the Wi-Fi, but maybe it’s working with local restaurants and getting them some sort of access to the residents through monthly communication that already goes out to them from the property management company.

Nichole Stohler: That is a good idea. We never did that because the resident type that we had – I don’t know that that would have been as efficable for them…

Joe Fairless: Right, right…

Nichole Stohler: But I definitely think in your A properties, 100%. Or your B properties, yeah.

Joe Fairless: Okay. It makes sense. And when I hear hotels – this is the ignorant part of me, because I haven’t studied up on hotels, and I’m sure you’ve come across this, and you know where I’m headed probably already. But when I hear of hotel investing, I think “Ugh, it’s going by the wayside. We’ve got Airbnb, we’ve got these different vacation rental places online… I just don’t see how hotel investing is the future. I think that is the past.”

Now, I don’t necessarily believe that, but that’s just my initial perception. So what are your thoughts about that type of thought process?

Nichole Stohler: I can totally see that, because if you’re the type of person that stays in a short-term rental – an Airbnb – and you had a great experience, and you’re thinking “Well, this is fabulous. It’s more space, private home…” And the thing in all of that that I’m describing is it’s an experience; it’s something typically — when you’re going on vacation, you want something different. I’m still working full-time in corporate America, I’m in technology sales, and I travel for work. When I travel for work, first of all, I’m booking through our booking system, which today is really all the primary hotel chains that are required that I would book through… But the other piece is I just want convenience. I just want to be as close to the employment center as possible. I am not going to swim in the pool… I might use a fitness center. I’m not going to be exploring the area…

So the difference in why we like limited service is we are focused on that business traveler. We are focused on people that want to come in, they know exactly what they can expect from the hotel. They have a brand preference, they aren’t worrying whether “Did the pictures on the website really depict the way the home is?”, because you definitely hear those kinds of stories… They wanna know what they’re gonna get and get convenience, and for a good quality price, which is also in that limited service type of hotel. It’s just a different market, and I think there’s room for everybody, because there’s different travel preferences based on what you’re trying to experience.

Joe Fairless: Okay, it makes sense. The limited services part – you’ve mentioned that multiple times. What’s the opposite of limited services? Is it full-service hotel? And if so, what are some examples that we might recognize, or brands we might recognize that are on that end of the spectrum, and then your end of the spectrum?

Nichole Stohler: Sure. Limited service basically means that you’re going to have key amenities, like — generally, in Arizona you’ll have a pool. I’m not sure necessarily in all areas of the country, but you’ll definitely have a fitness center, you’ll have a hot breakfast, you’ll have free Wi-Fi… But you won’t have an on-site restaurant. And that is a key market segment difference. And then you also have different segments, like extended stay, which have in-room suite areas, or little kitchenette areas… So in limited service you’re not gonna have that either. So you’re gonna have a room with those amenities.

The types of brands in that limited service would be Choice Hotels, Quality Inn, Comfort Inn – Some Comfort Inns; some might actually have restaurants as well. It would be Holiday Inn Express, La Quinta… Those are some of the key limited service types of hotels. Now, when you get into a full-blown Marriott, or a full Hilton, those are gonna have generally restaurants, and other pieces. And then you go up a spectrum. If you’re talking about AJW Marriott, this is a resort hotel, with multiple pools, and a spa… So different levels based on the band within the hotel industry.

Joe Fairless: Which one is yours?

Nichole Stohler: Which brand?

Joe Fairless: Yeah.

Nichole Stohler: We have a Quality Inn, and then the other hotel that’s under contract is a Country Inn and Suites.

Joe Fairless: Now, when you went to buy the Quality Inn, is there an opportunity to rebrand it to another type of hotel?

Nichole Stohler: Not necessarily. That’s a great question. Because the contracts for the branding are longer-term contracts, but you may come into a hotel that’s in either a cycle, where it’s repositioning, or it needs to be repositioned. As an example, the brand itself may say “We no longer want hotels that don’t have an elevator”, as an example. So as an owner, your choice is “Okay, I put in an elevator, or I rebrand to something else, where I can just continue to have stairs only.” That’s one type of example.

Joe Fairless: Okay.

Nichole Stohler: So that does happen as well. You’ll have your long-term contracts, and then you’ll also have contracts that don’t come up for renewal, and you also have the opportunity to change.

Joe Fairless: And if you change – say you wanna go from Quality Inn to Best Western, or something; do you have to pay the Best Western brand licensing fees in order to do that, or do they pay you because you’re now bringing in revenue for them? How does that work?

Nichole Stohler: That is what’s unique about hotels, too. We definitely wanna hit upon that – the franchise piece of it. And yes, there are franchise fees, but those are negotiable, based on either the franchisor’s desire to be in that specific area and the incentives that they’re offering, or your negotiating power based on that you have a great location, those types of things. So you do have those fees.

And to speak about those a little bit… It’s like “What do you get for those?” First of all, when you’re talking about hotels in this specific market, where you’re a business convenience traveler, they’re looking for a specific brand type that they can know and recognize, and there’s a lot of value in that from a pure marketing standpoint. But there’s marketing you can do on your own as the hotel as well, but you’ll definitely be receiving loyalty program people, online booking, those types of things. National advertising, mobile apps – all of that that’s developed as part of being a franchise owner.

The other piece is a really close network of other franchisees that are sharing best practices continually, and very specific to the brand that you own, but the challenges and how they’re solving them, and being able to leverage that knowledge and expertise continually, in your own hotel.

Joe Fairless: Got it. What’s been the biggest challenge of the hotel business on the deal that you currently own?

Nichole Stohler: The biggest challenge – and I don’t know that you would necessarily have this in every area of the country. In Arizona we have a very seasonal market, where the summertime is our slowest time. This is not when people are coming to Arizona, when it’s 115 out… And our most busiest time starts really in October and goes on through to April. So the challenge with that summertime is you still have high costs; you still have your mortgage, of course, and your debt service, but you have high cooling costs that you have to maintain, because you do have guests that are staying.

So the hardest thing comparing to multifamily is it’s not a consistent revenue, even if you just were to say “On average, our occupancy – here’s what we could expect.” We have average occupancy as well, it’s just that it’s maybe 100% during the top season and lower during the low season, so you have to be very studious and diligent about putting away reserves. You have to be very cognizant of those months. You can’t assume every month is the same.

Joe Fairless: And what type of reserves do you put away? How do you think about that?

Nichole Stohler: We always think about it in terms of three months of reserves, to be able to cover those fixed expenses, and then a  little bit of buffer on top of that. And then we also know what our breakeven is during those months, and we’re not necessarily running crazy specials, because we still need to make sure we’re at breakeven.

Joe Fairless: You’ve got a 64-room hotel under contract – what can you tell us about that deal?

Nichole Stohler: The negotiated purchase price is 5.2 on that. It is right in Phoenix Metro Area, a really fantastic location, close to a number of employment centers, as well as very accessible to major highways… Tons of opportunity, because the current owner really has treated the business like a lifestyle business. So a lot of opportunity for negotiating corporate contracts, digital advertising… Some of those things that I’ve mentioned as well.

We’re mostly excited about the location and the upside that we see almost immediately with some improvements that we would be implementing.

Joe Fairless: And what are some improvements?

Nichole Stohler: Well, one of the first things is that that particular property – and to your point about rebranding – it’s actually going through a rebranding, and the entire lobby and downstairs area and exterior has been remodeled, and it looks very fresh and clean, and very inviting. The rooms themselves are dated, and absolutely need to be upgraded, so that will be our first capital improvement project that we’ll be doing as  soon as we take over the hotel and updating all of those rooms to a more modern look and feel.

Joe Fairless: About how much does it cost on a per-room basis to do that updating?

Nichole Stohler: The total projected cost on that is $300,000, and we’ve got 64 rooms.

Joe Fairless: So that would be about $4,600. Well, let’s say $4,700. Okay, cool. Based on your experience, what is your best real estate investing advice ever?

Nichole Stohler: Best real estate investing advice ever is to find a mentor. And where do you do that? Find someone who does what you want do, and deal with them; offer to help them out, find a way to add value, and learn from them in that particular niche.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Nichole Stohler: Alright, let’s do it. First, a quick word from our Best  Ever partners.

Break: [00:25:34].06] to [00:26:12].13]

Joe Fairless: Best Ever book you’ve recently read?

Nichole Stohler: I just read “How to be a capitalist without any capital.”

Joe Fairless: What’s a deal you’ve lost the most amount of money on?

Nichole Stohler: Way back in the beginning, in 1999, we bought actually for properties, all kind of duplex/fourplex, that type of property… And we used credit card cash advances for our down payments. They were seller financing and they were all in disrepair. So we had to put all that on credit cards. We didn’t know how to manage residents, we fell deeper into debt, gave back the properties, and ended up moving in with my parents to pay off our debt. That was 1999. [laughs]

Joe Fairless: A long-lasting lesson, I imagine. For someone who is in a situation where they’re considering that type of structure, what are some specific things you tell them to do or not do?

Nichole Stohler: In the seller financing?

Joe Fairless: Seller financing, credit cards… Pick whichever direction you wanna go.

Nichole Stohler: The first thing is the reason we got into trouble is we didn’t understand how to analyze property, and we didn’t know how to manage residents. You can find deals, but if you don’t understand “Is it a good deal?” Just because you don’t have to get a mortgage, or you don’t have to put any money down, it doesn’t mean it’s a good deal… And then the other piece of it is how do you manage ongoing– so I would really understand the numbers. If you’re doing things like you’re taking out a home equity loan, and you’re leveraging that to put down payments and buy rental properties, just really understanding the numbers, especially on a very conservative level. What was the worst rental amount for that particular area or that particular type of home during the past ten years, and if that lowest, kind of under a stress test – what are the expenses that you could typically see? You just plan for the worst, and then you’ll be fine. But you have to plan for the worst, because – Murphy’s Law, that’s what will happen.

Joe Fairless: Best ever way you like to give back to the community?

Nichole Stohler: My husband and I are active Rotarians, and we particularly love Rotary because my husband likes to give back to veterans, and I love pets, and particularly dogs and rescue animals… And the thing about Rotary is it’s really a local organization that gives grants to different types of organizations. So you can be involved, raise funds, and then give back to  different areas that you care about.

Joe Fairless: Best ever deal you’ve done?

Nichole Stohler: Best ever deal… I would say that hotel. Just the incremental value that we’ve seen in the hotel, and the fact that it’s in a market where there’s a lot of growth that’s happening just now. When we bought it, that wasn’t happening. We had awareness that it could be, and those things are absolutely coming to fruition – new factories, new employment. Meanwhile, it’s been positive cashflow and consistent year-over-year growth with operational improvements.

Joe Fairless: When do you plan on selling it?

Nichole Stohler: We wanted to wait and see after some of this development continues, because we think we could continue to get a very attractive return at that point in time. So I would say probably in about a two-year window.

Joe Fairless: You made 1.2 on the apartment community… How much do you think you’ll make on that?

Nichole Stohler: The 50-unit?

Joe Fairless: Yeah.

Nichole Stohler: We already sold that.

Joe Fairless: Okay, but I’m talking about the hotel. You made 1.2 on the apartment community, right? And then you said your best ever deal is the hotel.

Nichole Stohler: Yes.

Joe Fairless: Okay. So  you sold the hotel as well, the one that you were just talking about?

Nichole Stohler: No, not yet.

Joe Fairless: That’s what I was wondering – how much do you think you’ll make on that when you sell?

Nichole Stohler: Gosh. Upwards of two million.

Joe Fairless: And the best way the Best Ever listeners can get in touch with you?

Nichole Stohler: The best way is on my website, which is TheRicherGeek.com.

Joe Fairless: Where did you come up with that name?

Nichole Stohler: Well, because I’m in technology, and my podcast is (and that’s my podcast site) for people in technology… So it’s kind of a play on words, where we call ourselves geeks.

Joe Fairless: [laughs] Fair enough. Well, Nichole, thank you for being on the show and sharing your experiences as an apartment owner, as a hotel owner, as a real estate entrepreneur, as someone who has had some challenging deals, as well as some incredibly successful deals… And how you’ve pivoted from multifamily to hotels, and how you transitioned with some help of people who have been in the industry for a long time, and then  attracted them to partner up with you.

I really enjoyed our conversation, and I learned a lot. I hope you have a best ever day, and we’ll talk to you again soon.

Nichole Stohler: Thanks so much, Joe.

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JF1891: How To Wholesale 70+ Deals In One Month & One Market with Jamil Damji

Jamil and his company have a tremendous operation, and have their eyes set on more. Already completing 70+ deals per month, they want to keep it going until they are the largest volume wholesaler in the country. Jamil will share how he built the company to what it is today, and how he will continue to grow it moving forward. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:

“Wholesaling has been given some blemishes” – Jamil Damji


Jamil Damji Real Estate Background:


The Best Ever Conference is approaching quickly and you could earn your ticket for free.

Simply visit https://www.bec20.com/affiliates/ and sign up to be an affiliate to start earning 15% of every ticket you sell.

Our fourth annual conference will be taking place February 20-22 in Keystone, CO. We’ll be covering the higher level topics that our audience has requested to hear.


Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Jamil Damji. How are you doing, Jamil?

Jamil Damji: I’m awesome. How are you, Joe?

Joe Fairless: I am awesome as well, and looking forward to our conversation. A little bit about Jamil – he specializes in wholesaling, and in fact, he wholesales 70+ deals a month, in one market, and that one market is Phoenix, Arizona. With that being said, Jamil, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Jamil Damji: Absolutely. Thank you so much for the introduction, Joe. Yes, my name is Jamil Damji, I am one of the owners and co-founder of Keyglee. We are a wholesale operation based out of Phoenix, Arizona. Our goal is to be the largest volume wholesaler in the country. I think we’ve hit that at this point right now, but we’re always hearing of and learning of new cats in the space that are crushing it, and we welcome them.

Joe Fairless: Okay, your goal is to be the largest volume wholesaler in the country… Why not have a goal of having the highest margin wholesaling company in the country, and not be focused as much on the volume?

Jamil Damji: That’s a great question, and I think in terms of margins versus volume, we’ve definitely seen margins shrink… I think the reason why we’re more of a volume-based versus a margin-based operation is because of our focus. Typically, wholesale companies are very strategically focused on acquisitions… And because of that, many operations in and around our state – and other states as well – are lacking in their dispositions, or their capacity to sell their deals. What that’s created in the wholesale space is some grey area, obviously, right? You hear of wholesalers locking deals up, not performing on those obligations, and creating all kinds of havoc for sellers, and expectations in terms of their time, and what they thought was gonna happen in a deal, and because of that, wholesaling has been given some blemishes.

So what we saw a few years ago when we entered this space was we would show up to a buy appointment with a seller, and there’d be ten other people there, for the same appointment. That was driving the prices up… But what we were also finding happening were those deals weren’t closing. So these wholesalers were going in, they were tying these deals up, and then just not performing on them. And that set off a light bulb in our heads to realize that “Well, maybe if we focused on being able to connect with more qualified buyers, who could take those deals, we’d be able to add value to the space. And that’s exactly what we did. So we focused our operation on building out really heavy dispositions of product, where other wholesalers would bring us their deal, we’ll evaluate it based off its investment worthiness, and if it’s a deal we feel we wanna put resources behind in terms of manpower to market and sell, then we’ll option the deal and go to town and sell it.

So great question, Joe. I love that you got right to the meat of it, because that doesn’t allow us to have very high margins, just in the sense of our model being more of a service for other wholesalers than going and buying super-deep.

Joe Fairless: Very interesting. Well, there’s money to be made in every type of business, that’s for sure, from the Walmarts to the Neiman Marcuses. So when you are partnering with other wholesalers, what type of joint venture structure do you have with them?

Jamil Damji: Typically, we work off of an option. The reason why we do an exclusive option is, first of all, it protects us from our seller or  a partner not then performing  on the option or not. Saying afterwards “Hey, look, I don’t wanna sell this deal anymore”, we’ve gone and spent time marketing it. So in order for us to gain equitable title and marketable title for us to then shop to  our buyers list, we use the instrument of an option.

Joe Fairless: And for someone who’s not familiar with how the mechanics of that works, can you elaborate?

Jamil Damji: Absolutely. A part of wholesaling is marketing your contract. Your contract is your purchase contract when you go to buy a property, be it a house or a building. And that, if you’re the principal on that deal, gives you some opportunity, and you can actually market that contract to people to essentially purchase from you… But in order to do that, you need to have that purchase contract. Now, us being a third-party, not the original party to that first purchase contract, in order for us to be able to send this deal out to our buyers list, we need to have what’s called an option. And that option is basically an option to purchase, so we are then optioning to purchase that contract from the original contract holder, and through that instrument we now have the legal right to market that contract or that property.

Joe Fairless: And then how are they compensated, versus how you’re compensated?

Jamil Damji: It’s typically just the assignment. So our seller, or our deal supplier, or our JV partner – however you wanna phrase that – will bring us a deal, we’ll option it from them, and then once we find a buyer, so  if we’re successful in finding a buyer, which nine times out of ten we are, we will then turn around to our partner and exercise the option. So that exercising of an option would then trigger an assignment to be drawn up between ourselves and our deal supplier. So we would then convert the option to an assignment, so our original contract holder will receive an assignment fee at closing. Now we’re the contract holder, so then we would then assign our rights to the end buyer. Typically, we’re talking about HUDs that show two assignment fees, if that makes sense.

Joe Fairless: Yup. So let’s talk about a typical deal, or maybe even better, a specific deal, and what the wholesaler who brought it to you made, and how much you made.

Jamil Damji: Awesome. I’ll give you an example of a deal we just did yesterday. Our wholesaler in town brought us a deal in Tempe, Arizona, a  great little city in our spot here. It was a hoarder house, so not financeable to the retail public… Just completely trashed on the inside. A lot of deferred maintenance, potential mold, biohazard… You know, the whole nine. Your nightmare property.

So the newer wholesaler goes and contracts the property for 200k. And we see ARV (after repair value) on that property to be somewhere in the 330k(ish) range. So he has a good buy; at 200k he has a good buy. So he tried unsuccessfully for about 2,5 weeks to sell that deal, and sent it out to a few buyers, he posted it on Craigslist, he went on Facebook, he tried and tried, was unsuccessful, brought the deal to us… We auctioned it from him at 220k. So his potential profit would be 20k.

We then marketed it to our buyer pool at 235k. We were successful yesterday in finding a buyer, so our buyer opened escrow. We then converted our assignment with our supplier, so he’s gonna make $20,000 at close, we will make $15,000 at close, and our buyer is extremely happy because he has a new property in his inventory to go and flip.

Joe Fairless: Wow. In that example, about how much do you think it would take to turn that puppy around and get that property move-in ready?

Jamil Damji: The beauty about hoarder houses is they look a lot worse than they are. So I would say just based off of square footage — because we’re seeing cosmetic remodels coming in at around $25/sq.ft. typically right across the United States right now. That’s not including biohazard, or not including structural problems. So this is just straight up cosmetics. So I imagine based on square footage that property is gonna cost around $30,000 to renovate, probably another $5,000 in cleanup and biohazard. So about 35k total.

Joe Fairless: Okay. Yeah, so they’re still gonna have easy 50k in equity. Okay… It’s an interesting model. So really, the reason why you all are having the success you are is because you’re a place that has access to a bunch of people who have money. So you have qualified buyers, so if a wholesaler has a deal, but doesn’t have the list to get that deal closed, then they come to you — or you also find your own deals, and then share them out with qualified buyers, right?

Jamil Damji: Absolutely. So we source our own deals, I’d say — in a month we’ll do anywhere between 70 and 90 houses. So out of that, 10 to 15 of them will be our own sourced deals. So that just kind of tells you, it’s not a big portion of what we do.

Joe Fairless: Cool. I was gonna ask that, so thanks for mentioning that. Let’s talk about how you build the qualified buyer list, since that’s the key…

Jamil Damji: Awesome.

Joe Fairless: How did you do that?

Jamil Damji: So we like to think of ourselves more of a technology and data company than we are a real estate company… Although that’s what we trade in. So what we did is we really focused in on looking at the buyer profile. What type of buyer have wholesalers been typically going after, and then trying to find the periphery around that. And those were a lot of fancy words; I’ll get into more detail about it.

Your average fix and flip buyer – they wanna come in, buy the property dirt cheap, completely run down, turn it, make a profit, and make 30k to 50k. Well, there’s also a lot of buyers out there that are just interested in cash-flowing equity. So we deal with hedge funds, we deal with REITs, we deal with portfolio owners, and they will pay actually a higher dollar price than your average rehabber. So what we do in terms of our capacity to build that list is a lot of outreach. We’re looking at buyer profiles, we’re looking at social media accounts, we’re looking at Facebook, Instagram, LinkedIn, and just assessing a person’s capacity to potentially be a real estate investor. I’ll  give you an example of what I mean by that…

So if you’re on Facebook and we notice that in your profile picture Joe is standing in front of a Ferrari, he also likes Rolex, and he also likes the duPont Registry… So now we’ve got some factors here that show us that you might have access to disposable income, or you might be the kind of person that would gain access to disposable income. So what we’ll do is we’ll send an outreach message. Typically, that’s just an introduction, introducing our company–

Joe Fairless: Outreach on Facebook?

Jamil Damji: Yeah, it would be on Facebook, LinkedIn, Instagram…

Joe Fairless: Like an instant message.

Jamil Damji: Correct, correct. So we’ll reach out through either social, or we’ll try to find an email account through a skiptrace service… And once we have made that initial outreach, not everybody responds. A lot of people just ignore the message. But a good 30% of folks will actually respond, because what we have to offer to a person who is in the business, who is — like yourself, for instance. I know that you invest in apartments, in syndications. So if I was to find a multifamily property, or have access to a multifamily property that would be a great value-add opportunity for you, if one of my outreach or one of my intake specialists sent you a message and said “Look, our business is identifying distressed property in the multifamily space. Would you be interested in talking about or seeing some of our deals?” there’s a high likelihood that you’re gonna answer “Yes.” You’re gonna very quickly look at what we have to offer, and suss out if you think we’re a waste of time or not, but that at least starts the conversation.

Joe Fairless: Is that what the message basically says? “Hi, we’re such-and-such. Would you be interested…?”

Jamil Damji: “We’re such-and-such. Our company specializes in finding distressed property that has some great equity potential, or potential value-add opportunities. It looks like you could be a potential real estate investor, and if you are, we’d love to hear from you. If you’d like to opt into our list, you can do so here. Or you can respond and we can carry the conversation further.” That’s essentially what that message says.

Joe Fairless: What tools do you use to identify the audience that you’re reaching out to initially?

Jamil Damji: Searches. On Instagram hashtags are awesome. We’ll look at #azdoctor, #azlawyer, #azaccountant. We look at high value professions, and we work from there. We go vertical and lateral in our searches. We’ll look at “This profession has a higher likelihood of having higher net worth individuals”, and then once they’ve exhausted that category, they’ll start a new one. So searches on social media, hashtags, Facebook groups…

Also, when we’re looking at Facebook, who you’ve liked, what commonalities we have. Our Facebook accounts that we have for our intake specialists – they’ve all liked those Ferrari, Rolls Royce, Lamborghini, and so when there’s a shared like between two individuals, that’s made known to you as a Facebook user. So if you like Rolex and I like Rolex, and you and I are potential friends, when I come to your page and add you as a friend, or try to message you, I’m gonna be notified someway on Facebook that you and I both like Rolex. So that’s gonna tell me that this is a man who understands timepieces. You might potentially then be a real estate investor.

Again, we’re taking leaps here, but we’re looking at commonalities that we see in this space, and then moving from there.

Joe Fairless: Sure. Do you have people doing individual searches, or is there some sort of software that you use?

Jamil Damji: Both. It starts off with the software that we created, where we’ll sift through and we look for specific types of images. Once that’s all filtered down, then it’s actually a human being doing the rest of that. So we filter a lot  through bots, and our own software, and then once we get into actually doing the outreach, that’s when it’s a person.

Joe Fairless: Okay. So your software identifies the list of people, and then your people do the outreach.

Jamil Damji: Correct.

Joe Fairless: And when the software identifies a list of people, does it give you the Facebook URL, or does it give you the person’s name, and then your human being has to go search for that person’s name? How does that look?

Jamil Damji: Depending on the…

Joe Fairless: Social platform?

Jamil Damji: The social platform, exactly. On Facebook it’s a name, on Instagram it’s a handle… LinkedIn is a little more difficult, and I don’t know the exact procedures, because I personally haven’t done any of the LinkedIn outreach… But I know we do really well on it. They’ve just got so many more filters and so many more ways to protect people from communication. It’s LinkedIn’s way, right…? But again, we are a real business, doing real things, so we’re no blocked from communicating; we just have to go through a  couple more steps.

Joe Fairless: Do you all pay LinkedIn, for example — do you pay for their extra services, where you can send those LinkedIn messages, that are sponsored, or that get to people’s inbox?

Jamil Damji: I would imagine that a few of our accounts do, yes.

Joe Fairless: Okay, got it. What’s something that you all have done, that did not work, when trying to build a qualified buyers list?

Jamil Damji: The one fail that I could really look at was — when you’re looking at real estate, it’s tough to just go in and say “Okay,  if you have purchased a property before with cash…” and that’s like the go-to for everybody in our space; they’ll go check tax records and they’ll say “Okay, these people all purchased in cash, so these people would be real estate investors.” That was probably one of our biggest fails, because we went into a new market in Las Vegas, and we tried just searching through tax records and the usual data sources to build our buyers list, and we found our conversion rates were just dismal.

So for us, what we saw really working was going outside of the box. So not going strategically to “Look, I’m gonna go find cash buyers, and reach out to cash buyers, or people who have purchased in cash before”, but finding guys on the periphery, finding people who really haven’t entered the space yet. I think that’s where we gained our most success… But doing the opposite is where we had our biggest failure.

Joe Fairless: Based on your experience as a real estate investor and entrepreneur, what’s your best real estate investing advice ever?

Jamil Damji: Do it. I got involved in wholesaling because I saw a need; these homebuilders were looking for these specific types of properties, and I knew that they were having a hard time finding them. So instinctively, I thought “Well, maybe I should call these people who have for rent properties in these neighborhoods, and see if they might be potential sellers.” And just kind of trying to connect the dots… I think we overthink how hard it is to make money in this business.

There’s all kinds of people selling coaching programs for hundreds of thousands of dollars, and that’s great for them, but I think that for your average person who wants to get involved and is really desperately trying to find a niche in real estate, I think they need to look at the space, just connect the dots in front of them and behind them, see where they’re going and where they might have been, and find a way to create value. Find a way to bridge those thoughts. And the best thing that you can do is take action and make mistakes. If you’re not taking some action and if you’re not making mistakes, you’re not learning, I think it’s just time that people stopped talking about what they wanna do and just take the first step. If you take the first step, it’s amazing how the world opens itself up for you.

Joe Fairless: What were you doing prior to founding this company?

Jamil Damji: I was in Los Angeles, trying to be a comedian.

Joe Fairless: Oh, I didn’t expect that.

Jamil Damji: Yes, yes. I know we have something in common… I checked you out a little bit, Joe; I did a little homework, but–

Joe Fairless: You just used one of your bots.

Jamil Damji: [laughs] I didn’t. I actually did it myself, but…

Joe Fairless: Oh, okay…

Jamil Damji: …I was an improviser, so I spent years in Los Angeles writing sketches, performing at UCB, and trying that out. I think it did a lot for me in terms of confidence, it did a lot for me personality-wise and just being able to be lighthearted, and really to play games with things. So that’s what I was doing prior to this. It’s a complete 180.

Joe Fairless: Which is not anything related to tech and data… So one fo your co-founders…?

Jamil Damji: Yeah, one of my co-founders brought to the table some great technological skills, and really innovative thinking. I have always been a great connector. I connect with people well, I network very well… So I kind of stumbled into this space, and while in this space, I looked around and saw people just thriving. And because of that, I engulfed myself into the model, and talked to and connected with as many people as I could… So what I brought to the table when we founded the company was just a network of individuals who were already doing business with me. So plugging that network into the systems that my other partners brought to the table was what allowed us explosive growth.

Joe Fairless: I love it. How many qualified buyers do you all have?

Jamil Damji: We’re probably pushing around 80,000 at this point.

Joe Fairless: Holy smokes. When you send out an email to them, what’s the open rate?

Jamil Damji: We’re at about 30% right now. We’ve had some times when it was low. We had moments when we were down to like 12%, and our bottom line was suffering for it tremendously. But through better engagement, and just having more conversations with our buyers… Our staff is constantly on the phone, constantly reaching out and communicating with these qualified buyers… So that communication, and building those relationships is what’s creating that open rate. That, and also knowing what time of day do you send your blast out at. We see an 8% differential between sending a blast out at 10 AM versus 1 PM.

Joe Fairless: Which one’s better?

Jamil Damji: 1 PM.

Joe Fairless: 1 PM Arizona time?

Jamil Damji: 1 PM Arizona time, correct.

Joe Fairless: Okay. 4 PM Eastern time… Are you mountain, or are you–

Jamil Damji: We’re mountain, we’re mountain.

Joe Fairless: Okay, so 3 PM. Got it. Cool, that’s interesting stuff. With that list, what do you send them (if anything) other than a new deal?

Jamil Damji: Nothing.

Joe Fairless: Strictly deals, that’s it.

Jamil Damji: Strictly deals. That’s what they’ve opted in for. I know we’re sitting on a  goldmine of data; it’s one of those things that I’m sure there’s gonna be a point where we figure out how to monetize it beyond what we’re doing right now, but at this point we’re just focused on wholesale deals.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Jamil Damji: Let’s do it.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:21:42].24] to [00:22:23].11]

Joe Fairless: Alright, best ever book you’ve recently read?

Jamil Damji: The Autobiography of a Yogi.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Jamil Damji: Not having the original seller’s initial on one page.

Joe Fairless: What happened as a result of that?

Jamil Damji: We didn’t have a valid contract and they were able to resell to somebody else at a higher price.

Joe Fairless: Best ever deal you’ve done?

Jamil Damji: A land deal in Chandler, Arizona. I bought the land for a million dollars and we sold it for 2.6.

Joe Fairless: What’s the best ever way you like to give back?

Jamil Damji: I really like driving around and handing out cash to homeless people. Not in a way that’s for social media or for anyone’s benefit, but I just like to get out, connect to people, see what’s going on in their life, shake their hands, give them some money… I’m not doing it in judgment, I’m just doing it because I care.

Joe Fairless: And how can the Best Ever listeners learn more about what you’re doing and getting involved with your company?

Jamil Damji: You can find me on Instagram at @jdamji. You can learn about our company… We actually teach our models, so if you went to www.astroflipping.com/jamil, you can find out how to learn what we do. And if you just wanna buy our deals, go to www.keygleehomes.com, and if you wanna sell us your house, go to www.keyglee.com.

Joe Fairless: What’s Keyglee? How did you come up with that?

Jamil Damji: Give us your keys and we’ll make you happy. [laughter] It’s pretty simple.

Joe Fairless: Alright, I didn’t see that coming…

Jamil Damji: [laughs] I’m surprised, because you should have been able to catch a bad pun.

Joe Fairless: I know, right? Yeah… I like it. I like that. And it’s “glee”, it’s not like “happy” or “excited.” I like the word “glee.” I think the word “glee” is not used enough in the English language, so thank you for doing it more.

Well, Jamil, thank you for being on the show, talking about your company’s business model, how you’ve gotten success being the wholesalers’ wholesaler, and how you partnered up with wholesalers, specifically on the JV side, what a deal looks like, and then how you’ve built your qualified buyer list, just through software and then also through manual outreach.

Thanks for being on the show, I really appreciate it. I hope you have a best ever day, and we’ll talk to you again soon.

Jamil Damji: Awesome, thanks so much.

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JF1852: From No Real Estate Knowledge To Over $40 Million AUM with Michelle Bosch

Michelle immigrated to the states to study business and work a normal job like most people expected. She did that, and she was not happy. Thankfully she came across real estate investing as a way out of that. Now doing syndications and buying and selling land, Michelle and her team are doing really well and she’s here today to share her story and knowledge with us. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:

“I wish he had focused on the who of our business a lot sooner, we’ve been focusing a lot on the team” – Michelle Bosch


Michelle Bosch Real Estate Background:

  • Co-founder and CFO of Orbit Investments and a full time real estate investor since 2002
  • They have over $40 Million AUM
  • She has bought and sold over 4,000 pieces of real estate and built the 3rd largest land investment and auction company in the US
  • Based in Phoenix, AZ
  • Say hi to her at https://www.michellebosch.com/
  • Best Ever Book: This is how we rise


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Theo Hicks: Hi, Best Ever listeners. Welcome to the best real estate investing advice ever show. I am your host today, Theo Hicks, and today we’ll be talking with Michelle Bosch. Michelle, how are you doing today?

Michelle Bosch: Wonderful, Theo. Thank you for having me.

Theo Hicks: Absolutely, and thank you for joining us. Looking forward to our conversation. A little bit about Michelle, she is the co-founder and CFO of Orbit Investments, as well as she’s been a full-time real estate investor since 2002. Currently, she has over 40 million dollars worth of assets under management. She has bought and sold over 4,000 pieces of real estate and built the third-largest land investment and auction company in the U.S. She’s based out of Phoenix, Arizona, and you can say hi to her at MichelleBosch.com.

Before we get into the meat of the conversation, do you mind telling us a little bit more about your background and what you’re focused on now?

Michelle Bosch: Sure, absolutely. I am originally from Honduras, so just to give you a little bit of background – I’m an immigrant to the U.S. I came here in 1995 to study Business School, then an MBA. I went to work, like everyone expected, and hated it, and started looking into real estate — well, before real estate, into other business opportunities, but then looked into real estate. We knew absolutely nothing about real estate, nothing regarding how to build a home. My husband’s also from Germany, so how we build and construction in general was completely different.

It was a little bit overwhelming for us, because most people start with houses, and that’s what we wanted to start with… And we had no clue, so then we decided to focus actually on land. The reason why we focused on land was because, like I said, we didn’t know anything about how to estimate repairs, how to deal with tenants, or deal with toilets; they were getting broken, or roofs, or repairs, or molds, or anything of that sort.

So I had humble beginnings in the land space, and then we were able to really quickly scale that, and we went from doing our first year 60 land deals, to the next year doing a little bit over 100, and then the third year deciding, “Okay, we are working our butts off. Either we go big, or shrink back up.” We decided to go big and started selling our land through live auctions. Here in Phoenix we would have about one a quarter, so about 250 pieces of land in one day… That’s kind of where we started.

Then in 2009 we were in the incredibly fortunate situation of having created incredible large cash profits from selling land, either through cash or through seller financing, so quite a bit of cashflow coming in as well… And we were sitting in quite a bit of liquidity. And Phoenix was for sale, so we just went crazy shopping for homes. We could get them for anywhere between $30,000 and $50,000 and we could rent for $950 to $1,100 every month.

Then just three years ago, in 2016, we started in the multifamily space, syndicating our first deal, partnering with someone that knew how to do this really well, and now three years later we’re getting actually ready to sell that first asset. Then we moved on to two additional syndications in two other markets… So that’s where we are now. But we continue to this day to do land, just because it is so simple to work. You have virtually no competition, you don’t have the typical three T’s, of the tenants, toilets and termites. You don’t have to deal with mold, you don’t have to deal with anyone letting you into the property, getting a key to get into the property, because there is no key… [laughs] You just walk into the dirt.

At this point, all of the land that we do right now flip, we do it site unseen. We don’t need to be going to the property anymore, and that’s who we were able to actually scale, by just using Google Earth, maps, coordinates that we can send our buyers to, or when we’re buying, to really assess and do our due diligence upfront. We really don’t need to visit the property.

So it’s simple – we have developed a really good process to find sellers that don’t want their property anymore, and it’s a numbers game at this point. We have a team that is a very well-oiled machine, that we can really rely on to operate as we would operate. And I know you’re gonna ask me this a little bit later, but I wish we would have focused on the Who much, much sooner in our business. I would say during the last maybe six to seven years, our major emphasis has been on developing our team, on making sure that we hire based on core values, that even if someone has the expertise and skillset, that they must also align in core values and in our mission in order to join our company. That has really brought an incredible amount of ease and effortlessness for my husband and I.

We work together on this business. We’re one of those weird couples that can actually work together… And really just having that unique ability team to rely on has been just instrumental in us being able to move from being generators of results inside of our business to really being creators of opportunities for our business.

Theo Hicks: I appreciate going through all that; lots of things to hit on… We’re gonna break it into first talking about land, and then your syndication deals, and then some more high-level stuff about building your team. First, what part of Germany is your husband from?

Michelle Bosch: He is from the very South, from an area called the Lake of Konstanz. This is absolutely beautiful. It borders to Switzerland on one end, to Austria on the other… We actually fly into Zurich when we go visit every year. We’ve been doing that yearly pilgrimage thanks to real estate, for the last 22 years. He’s just right across the border, so 45 minutes after landing and getting out of customs in Zurich, we are on the German side and enjoying a beautiful area of Germany. Just incredibly orderly, clean, flowers everywhere, vineyards… I always tell him, “What a pity that the Germans don’t really advertise this area so well”, because it has nothing to be envious about or jealous about if you compare it to Tuscany. It’s just that Tuscany has an incredible amount of advertising that is being done for that area and that region in Italy… But it’s beautiful. It’s very, very quaint.

Theo Hicks: Yeah, that’s great. I just ask because my mom was born in Munich, so it’s always interesting to see people–

Michelle Bosch: Oh, yeah? About a 4-hour car ride or 3 hours by train. We’re actually going to be right now in September at Oktoberfest. I’ve heard for years about Oktoberfest, and I’m like “Jack, we need to make it out there sometime.” Especially since we had our daughter – we have an 11-year old daughter – we’re restricted to that school schedule. She’s usually back in school by the time Oktoberfest comes around, but I’m like “We’re just gonna go ahead and do it. We’re gonna pull her out for a week.” We already have tickets to it, our flight’s booked, and we’re excited. [laughs] Yeah, because he’s been talking about it for 22 years, and I’m like “I finally want to experience this.”

Theo Hicks: There you go. Alrighty, so let’s start off by talking about the land. In particular, you mentioned that you’re able to buy these properties sight-unseen. I know some people do that for properties as well. You mentioned a few things that allow you to do that – Google Earth, maps, coordinates… We don’t have to necessarily dive into that, but you did say you’ve got a well-oiled machine process, and I just wanted to go over that process of how you’re finding these deals… You said that  you’ve got a good way of finding people who no longer wanna have their land… So how are you finding them, how are you evaluating them, and how are you finding sellers in the back-end?

Michelle Bosch: The first step is basically identifying an area that you want to buy land in. Usually, there’s three types of properties that we’re after. Either an infill lot in the city, a lot that is in the path of growth, so on the outskirts of the city, or a recreational property, which can be out in the boonies, or close to lakes, or ski areas, or anything that you can think of recreational.

Here in Arizona it’s usually — I say “out in the boonies”, people that wanna go and set up a camper, or come out there with their RV on the weekends, or wanna go riding their ATVs… And the more washes the piece of land has, the more attractive it is for them. So we have to be open-minded when thinking about land. We always think of like “Oh my gosh, it’s got a ton of washes”, and that’s actually — a property that I can think of, one of our very first 40 acres in really rural Arizona, had quite a bit of washes, and we’re like “Oh my gosh, we’re gonna be stuck with this. What are we gonna do?”

And then there comes along a buyer that says “I am actually looking to pan gold, and I want a property that has quite a bit of washes”, because the mineral rights actually come with the property here in Arizona. In some other states the railroad companies own the mineral rights, but here in Arizona you have that situation. Or someone says “I don’t want it flat, I don’t care if it’s buildable, because I just wanna take it out there with my kids and ride our ATVs on the weekend.”

So the first part is basically identifying an area, and then once you have identified an area, you wanna procure a list of owners in that area, and you want to sort that list  by vacant land list owners only. Ideally, that list should have the owner’s mailing address, so you can actually contact them. And then what we do is we send them what we call our land profit generator proven letters. We tested quite a bit at the beginning until we ended up with the letter that we have been using now for quite some time. It is signed by me.

We even tested at the beginning having Jack sign the letters, and we had higher response rates when it was a lady soliciting them. So they go out with my signature. Invariably, there’s some people that still cannot conceive that a lady is soliciting them, so they will ask for Michael instead of Michelle.. But that’s okay… [laughter] And you send them a letter, pretty much. Then people will call you based on that letter, and they will raise their hand and say “Yeah, I do have this piece of land. I am interested in selling.” And we basically go through a script that we’ve developed to find as much information as we can, and gauge motivation from the seller.

We make offers. In the process of making offers we don’t take very long, because at this point we still don’t have our property under contract… So we do a relatively quick value analysis just to give us a ballpark. Most of our offers are anywhere on the 5 cents to 25 cents on the dollar of value of the property. We send those offers out, and then invariably, contracts will come back in accepted. You send that to a title company, close on the deal, and if you have been doing this for quite some time, you will more than likely the moment that you have an acceptance, you will start marketing the property, so that you can start doing that in parallel.

You also have the scenario where you don’t even have to use your own money, but you could do what we call a double-close, where you find a buyer and then that buyer really pays your salary, and the difference – they cut you a check, and there’s no money in the deal. Or you can assign a contract to another investor. So there’ different ways to do it, you don’t have to buy it. It’s just that for us it’s such lower price amounts that we just go ahead and buy it. Unless it’s a higher-priced property, then we’ll either put an option on it, or do a double close to find a buyer first, and then close on that transaction.

So that’s pretty much the process… And a lot of the selling can be done online as well. You don’t have to have your own website, you don’t have to really be tech-savvy. You just need to go to the places where people are already looking for real estate. We list our properties on Craigslist, on Zillow, on LandWatch, on Facebook Marketplace. Actually, Facebook Marketplace for the last year and a half has been fantastic… So we’ve been using and shifting a lot of our focus towards Facebook Marketplace to sell quite a bit of our land… And there, again, you can send them coordinates, plat maps…

This is all information that you will probably acquire upfront, in the process of the purchase, but basically as you are accumulating all this information in the process of you purchasing it, or putting it under contract, this is the same information that you’re gonna be using to market your property and find your buyer and send your buyer out there if they need to go look at the property before they invest.

Theo Hicks: That’s a really good, succinct six-step process for essentially going from beginning to end. There’s a few follow-up questions, starting with your script in your letters. Do you mind just telling us what you’re — you don’t have to tell exactly what it is if you don’t want to, but what’s the letter… Don’t go through the entire script, but…

Michelle Bosch: Yeah, yeah. I don’t have it handy, so I don’t know it off of my head anymore. On the letters it is a numbers game, but the number of mailings that we have to do in comparison to houses is minimal to get a deal. You can expect from a mailing of 100 letters to get anywhere between 8 and 16 callbacks, and then probably 2-3 deals, depending on the area and the property that you’re after. If it’s rural or infill lot. An infill lot will probably require a little bit more, just because it’s in a city and there’ll be a little bit more competition… So that’s what I wanted to say on the letter side.

It’s basically a letter that says “Hey, I know you own property in such-and-such county here in Arizona (or Texas, or wherever you’re at), and I’m really interested in buying it from you. I can pay you cash, I can help you get rid of the burden of property ownership. I close quickly, I have a track record. I’ve been doing this for so many years now.” Or if you don’t have that track record, you can say “My company is looking to buy and acquire in this area we’re moving in, and if you would be interested in having a quick cash sale, please give me a call.” And you give them the contact information. There’s a little reference.

We have actually developed a proprietary software, so that helps us manage all our deal flow… So part of that letter, when it goes out, there’s a little reference number on the side, that even if someone calls me back and I miss their call, they can leave a voicemail and I have an outgoing recording that says “Leave me your reference number, and with that I can look up your information, and I can look up your property, and I can call you back”, if that’s what they want, a callback. Otherwise I’ll just send them an offer. Because that’s all I need really from them; it’s nice to talk to them on the phone, just because, like I said, you can talk to people on the phone and you probably get a higher acceptance rate, but it limits you in terms of either you hire three people to help you, or you outsource it to a call center, so that they can help you receive those inbound calls, and you are able to personalize that call a little bit more… But there’s only so much volume you’ll be able to handle.

Or you can decide  – if you still have a job – that you’re gonna let it go to voicemail, or outsource it, whichever way… And perhaps you personally are not gonna make that relationship with your seller on the phone, but it’s gonna give you the ability to scale, basically, and send out much more letters, send out much more direct mail, and be able to service many more inbound calls, and therefore send out many more offers, and get more contracts accepted, and so on and so forth. So that’s just on the letter side.

When you’re receiving the call, the questions that you wanna ask people are along the lines of “Are  you the owner of record?” More than likely, I would say about maybe a little bit over 50% of the people that we get either they inherited it, there is a divorce of some sorts… Some kind of a hardship has happened, or mainly they’ve inherited it and they’re miles away from that property, and they don’t wanna have to deal with it… And it’s either in the name of their parents, or of the estate, or whatever… So you wanna ask them, “Am I dealing with the owner of record, or who are you in relation to the owner of record?” You wanna make sure that you are talking to the person that has decision power.

Then you wanna ask them about the property. “Can you confirm the size? Does it have access? Does it have utilities? Electricity? Is the road access paved or unpaved? (Because we’re talking land here) Do you know if it’s difficult to get in a septic tank, or have you had your land percolation test?” It’s basically a test that they do to figure out how fast water drains in order for you to be able to put in a standard septic system… So you basically go through a series of those questions to try to see what is out there in terms of value already in the property; any improvements that they have done, fencing it, or anything of that sort… And then  you can ask if they have an idea of what they would like to get for their property. That’s pretty much the gist of the script.

What you’ll find out is that during the course of that conversation, if you are servicing the calls, which is how we started — actually, both Jack and I would take all those inbound calls, and because when we had just moved here in the U.S. our English wasn’t so good, we struggled at the beginning. I’m like “No, you take that call.” “No, no, YOU take the call.” “No, YOU take the call.” Because we were really concerned and self-conscious about our accent, and people feeling like they could do business with someone that sounded like a foreigner.

Honestly, we were very concerned about that. And actually, it was never an issue. People loved talking to me and telling me their stories of how they had purchased that piece of land… If it was here in Arizona along with another lot in Florida, but they had decided to go ahead and retire in Florida, and now they didn’t want their property… A lot of out-of-state owners. And it really gives you the opportunity, when you take the call, to really connect and hear from your seller as to what’s going on with the property.

Theo Hicks: Very detailed. This is a very solid episode for those who want to get into the land game. The last question before the best real estate investing advice ever question, which is “How are you formulating the offer price?” I know you ask them what they want, I know you said that you do between 5 and 25 cents on the dollar of the value of the property, but how are you determining that actual value? Do you have software that you use, is there a formula? How does that work?

Michelle Bosch: Yeah, our software actually is tied in with Trulia and Zillow, so we can see comparables very quickly. Otherwise, a simple Google search if it’s a subdivision and I don’t find anything on Zillow or Trulia; I can just google it and get a feeling for 5-10 minutes at most for value, and go ahead and make my offer anywhere between 5 to 20 cents on the percent of that… And send it out, and see what happens.

There’s gonna be people always that are not gonna be accepting that offer, and they might even write you back, saying “Hello, how do you dare write me such a low-ball offer?” But then you have a ton of others that actually accept your offer and wanna do business with you. That was your question, right? What was it?

Theo Hicks: Yeah, that was the question, how you’re valuing the property. So basically all the properties are comparables.

Michelle Bosch: Well, one more thing is in an infill lot situation, that’s where it would vary a little bit. You might not have comparables, because say a subdivision is completely built out, and perhaps you’re looking at the last infill lot there to acquire. So how you would do that is you would basically look at the average price sale of homes in that area, and then figure out basically per square foot what a builder would be having to spend in terms of building a similar-sized property now, and then from there say “Okay, about 20%-30% of that value is going to be going to the land. So the land is really worth this much, and of that I’m going to offer 10%, 15%, 20%.” So you kind of like back into the value of the land based on the value of the house. So that’s the only place where you kind of need to back into it. Otherwise it’s pretty much straightforward for the most part, and it’s just looking at comparables, and size, proximity, price per acreage that has sold in the area that you’re looking at.

Theo Hicks: Alright, Michelle, what’s your best real estate investing advice ever?

Michelle Bosch: I think the best advice ever – and even to this day we continue to apply it and we need to remind ourselves, because as we have transitioned in our journey as investors, you get so enamored with “Oh my god, I can entertain so much complexity now.” But my best advice would be to always, no matter what it is, even if it’s an apartment syndication, to keep things simple. The key to prosperity is simplicity, and to keep things simple. That would be one. And then the second would be to really focus on your Who and on building your team that is rock-solid, that is people that share your same core values, that are going to have the same intentions that you are, that really rally behind your vision and the mission that you have for your company as a business owner; that is the biggest a-ha.

Theo Hicks: Alright, Michelle, are you ready for the Best Ever Lightning Round?

Michelle Bosch: Sure! I can do this! [laughs]

Theo Hicks: Alright. I’ve got faith. First, a quick word from our sponsor.

Break: [00:22:49].28] to [00:23:50].14]

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

Michelle Bosch: I am actually in the process of reading it right now, and it’s called “This is how we rise.” It is by a lady by the name of Claudia Chan. She is the founder of the S.H.E. Summit. Part of what I’m really interested right now is in really advancing women and getting many more women into real estate. So it’s a leadership book, and I would highly recommend it. She talks a lot about whole life leadership – in order for you to become a business leader, you really have to develop yourself personally, and in order to develop yourself personally, you really need to develop yourself spiritually. When you go to that place of spirit, because nobody wants to talk about that too openly — but when you do go to that place of developing yourself spiritually, you start thinking about leading in your life with a purpose, and everything that you do in leading in your business, and in your community, with a purpose. I would highly, highly recommend that book, “This is how we rise.”

Theo Hicks: If you had to start over today with little or no capital, how would you do that?

Michelle Bosch: I would go back to doing land. When we started doing land, how we did it was lower-priced property, high volume. I would probably turn that around, just because I can entertain a little bit more complexity now, and I would have had the benefit of that experience… So I would now focus on slightly larger-priced properties when it comes to the land, but I would definitely go back to the land… Because what I like about land is that it gives you the opportunity to create large cash profits if you just do a quick flip… Which we call one-time cash, by the way, in our family.

And if we decide to do seller financing and really carry the note, become a bank, and have someone pay us monthly payments every month on our land, that’s temporary cash… So it allows us to go from one-time cash, to temporary cash, and then use that money to go and park it into passive cashflow type of investments such as apartments. So that’s what I would do – I would build my team around core values much quicker than I did in the beginning, for sure, and leverage the knowledge that we have, the capability, the confidence, the courage.

We always say that our process has been a process of following what we call the four C’s, which is we committed to something simple, which was land… But that helped us build the courage, the capability and the confidence to move into the next asset class, which was houses. And then after doing that for some time, and 50 rentals later, in three different markets, we’re like “Okay, we committed to that, we mustered the courage, we gained the capability, now we have the confidence to move to the next big project.” So leverage that, leverage our network, and then move as quickly as possible again into passive investments and get what we call our Security Plan in place through passive investing in plays as quickly as possible.

Theo Hicks: Alright, and then lastly, what’s the best ever place to reach you?

Michelle Bosch: The best ever place to reach me I think would be to just go to my website. It’s www.michellebosch.com. Of course, Facebook, Michelle Bosch, Instagram @MichelleBoschOfficial. We have a free Facebook group called The Land Profit Generator Real Estate Investing Group – very active; it’s an incredible community of very generous people; generous with their time, with their knowledge, that really help each other just figure out land deals if you’re starting at the beginning, or if you don’t know what the heck you’re doing. It’s an amazing resource to have. And just a source of inspiration every single week. “I have three offers accepted. I just closed on a deal.” Just last week we had a gentleman – his first deal was $18,000. Another guy said “I just sold something for $35,000.” The next lady had another offer that go accepted, and so on. It’s a place to come in and celebrate your wins, and really share your struggles, because everyone else there is going to help you get over those. They’re a very, very giving community.

Theo Hicks: Well, Michelle, I really appreciate you coming on the show today and going into extreme detail on how to get started in land. This episode should be called “The Ultimate Blueprint to Buying Land.” I’ll quickly summarize the six steps… Number one, identify the area, and you went over the types of land you can look at. Step two is you get a list of owners – you said specifically sort by vacant land only – contact those owners, and then send them your letter… And you went over exactly what to include in that letter.

We talked about the pretty high conversion rate of these rate of these letters for land, compared to other real estate niches.

Three is to screen the calls. You went through some of the questions to ask and how to approach actually screening the calls from a logistics perspective. Four, make offers… Again, you went over exactly how to calculate the value of your offer.

Five is as the signed contracts come in, send those to your title company to close, and then step six, which kind of like 5.b) at the same time, once you get that contract, you can start to market those properties, and you gave us examples on how to do that.

And then your best ever advice was two parts. One, keep things simple; don’t make things super-complex and just confuse yourself; if it ain’t broke, don’t fix it, as they say. And then you also talked about how you should focus on building a team that shares the same core values and mission and you, and that trumps someone who’s highly skilled in land, for example, but doesn’t share those values.

Again, I really appreciate taking the time to speak with us today. Best Ever listeners, thank you to everyone who listened. Have a best ever day, and we’ll talk to you soon.

Michelle Bosch: Thank you for the opportunity.

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JF1797: How To Optimize Nutrition & Exercise To Perform At The Highest Level #SkillSetSunday with Nate Palmer

Nate is on the show today as a nutrition and exercise expert. Why is this important for us as real estate investors and entrepreneurs? If you’re ever going through your day and feel like you’re dragging, this is important information for you. Nate will walk us through what and when to eat each day to extract the most energy out of our bodies so we can perform our best all day. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:

“I like when people aren’t full from lunch, I find it easier to get the rest of the day done when you’re not full” – Nate Palmer


Nate Palmer Background:

  • Coaches entrepreneurs to become unstoppable by weaponizing their nutrition and training
  • Host of The Million Dollar Body podcast, Bestselling author of Passport Fitness
  • Passionate about helping humans perform at a higher level
  • Based in Phoenix, Arizona
  • Say hi to him at https://n8trainingsystems.com


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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Nate Palmer. How are you doing, Nate?

Nate Palmer: I’m doing awesome, Joe. Thanks for letting me come on and chat.

Joe Fairless: Yeah, my pleasure, and looking forward to our conversation. A little bit about Nate – he coaches entrepreneurs to become unstoppable by weaponizing their nutrition and training. He’s the host of the Million Dollar Body Podcast, and he’s the author of passport fitness. He’s passionate about helping humans perform at a higher level, and he’s based in Phoenix, Arizona.

Best Ever listeners, first off, I hope you’re having a best ever weekend. Because today is Sunday, we’re gonna do a special segment with Nate called, as you know, Skillset Sunday. The purpose of Skillset Sunday is to help you hone a skill that’ll help you in your real estate endeavors… And certainly, fitness and nutrition is tied into what we do as real estate investors, and having the energy to do whatever we need to do to make things happen.

We’re gonna be talking about specifically how to optimize nutrition and exercise to perform at the highest level. With that being said, first, Nate, do you wanna give the Best Ever listeners a little bit about your background and then we’ll go right into some ways to do that?

Nate Palmer: [unintelligible [00:03:19].24] for over a decade now. I’ve worked with a ton of different people from a ton of different realms, and what I’ve seen is that instead of thinking about getting onto a diet, which is I feel like a lot of what America does right now, if we can change the paradigm, especially of these high-performers, of these growth mindset individuals, people who can basically eat what they kill, work for commission, then you can change your entire life, because all of a sudden nutrition doesn’t become this complicated thing, it becomes all about performance and how we can maximize the way we feel, our energy, our mental focus and our clarity on a daily basis. So now we’re performing at a higher level, we’re thinking faster, we’re feeling better, and then we get all the physical benefits that come along with that. That’s what I’ve been really passionate about for the last couple years, and that’s where I’ve found the most joy, and I’ve also seen the biggest changes physically and mentally with all my clients.

Joe Fairless: So it’s starting with a mindset shift, if I’m hearing you correctly… It’s nutrition = performance; so if we associate nutrition with performance, then we don’t have to worry about dieting, and we really are going to be more focused on what we consume and what the cause and effect is for how we can perform. Is that accurate?

Nate Palmer: A hundred percent, Joe. And I know that the Best Ever listeners are growth mindset individuals, because they’re gonna be listening to a podcast and consuming your information – but no fluff, no BS information – to help them with their careers, with their investments, with their finances. So now if we just change the paradigm a little bit around nutrition to be the same thing, wouldn’t that be the best of both worlds?

Joe Fairless: Yeah, I like it. I like making that association in our minds. Besides saying that, how do you help entrepreneurs do that, and hardwire that connection, versus just hearing it on a podcast and being like “Yeah, that makes sense”, and then “Oh, shiny object over here. Let’s talk about something else.”

Nate Palmer: Great question. I think the first piece is education. Talking about that high-performance nutrition becomes a little less sexy, because we have to learn about not only what the macro-nutrients do – protein, fats and carbohydrates – what those do to our body and how they impact us, but also how our bodies are impacted by hormonal shifts and what we can put in to impact the energy output, to impact our hunger signaling, to impact our insulin regulation and our blood sugar.

Once you can learn those pieces, which is not as complicated as it sounds, then it doesn’t necessarily come down to “Clean versus dirty food, this food is paleo, this food is not.” But when you look at it, you go “Oh, that’s a protein, that’s a high-fat food; that’s gonna be a great way for me to stabilize my blood sugar and have energy all  day long.”

Joe Fairless: Okay. You’ve got a book, you’ve got a podcast… In addition to the book and the podcast, what are some other ways to learn what the cause and effect is, and learn some of those things that you mentioned?

Nate Palmer: I wrote all this up into an eBook; I call it the Million Dollar Meal Plan. I created that to basically educate people on what these foods are, and then how to manipulate them to get the result that we want in our bodies, in our lives  and in our careers.

Joe Fairless: Okay. And that is on your website.

Nate Palmer: Yeah, and I can give you a link for that as well.

Joe Fairless: Okay. But it’s on your website — I’ve got n8trainingsystems.com… Is that the right one?

Nate Palmer: It’s so clever that I spend 90% of my time explaining “No, it’s an 8. It’s not ate.” [laughter]

Joe Fairless: Well, you dug your own grave on that one.

Nate Palmer: You’re right about that.

Joe Fairless: Alright, so that’s on your website – the eBook The Million Dollar Meal Plan. Will you give us the cliff notes version of that, just to educate us a little bit during this conversation?

Nate Palmer: Absolutely. I think the first big thing is breakfast. Everyone does breakfast wrong, and it’s no one’s fault except for watching commercials all the time; they say “This is a healthy part of a nutritious breakfast” and they show you a big bowl of cereal, they show you orange juice, they show you milk, they show you toast… They show you all these high-energy, high-sugar foods. But in reality, what that’s gonna do is it’s gonna spike your blood sugar up.

If you think about that flow state as being — if you’re on an airplane and you’re in that comfortable riding zone that’s really smooth sailing; that’s like flow state. That’s where you wanna be. What happens when we eat a banana, or a muffin, or something like that, a high-sugar breakfast – we’re gonna spike ourselves up over that state, and then our insulin levels, for most of us who have a non-ideal relationship with our insulin, that’s going to bring us back down below the ideal smooth sailing state. So then we signal our hunger, so we eat another thing at like [10:30]. You’re like “Wow, why am I hungry? I just ate.” And then you go up, and then you’re back down, and then you’re up and then you’re back down, so you’re never really existing in that middle ground where we wanna be or where we feel our best.

So the way we start this is with breakfast. We wanna get out of that standard American breakfast, that standard American diet of high sugar, high carbohydrates, and we wanna think about our breakfast as being a high-protein, high-fat breakfast.

What I like to do is tell my clients “Pick two things. Find something that takes a little longer to make, something you can make with your family, whatever that looks like.” Generally, that’s gonna be like omelets, 3-4 eggs, some avocado, a little bit of cheese even is totally fine, and some vegetables. That’s a great breakfast.

If you’re someone who’s out the door at [5:30] in the morning you probably can’t cook up a whole omelets and make a whole thing of it, so I help those people get a good, healthy protein shake in their life; that’s going to give them the nutrients they need for the day, it’s gonna help them stay satiated and full, and basically level out their blood sugar so until lunch they’re feeling really good, really energized.

Joe Fairless: What about oatmeal?

Nate Palmer: I love oatmeal; it’s a non-gluten carb, but I don’t like it for breakfast, especially if you are in the trenches, doing your most important, hardest work for the day in the morning. I think it can kind of slow you down. It’s similar to having that Chipotle burrito at lunch, where you’re just like “I’m a little tired now. I wanna take a nap…”

So I think that oatmeal is great, I think it has a place in this style of eating, but it’s not breakfast time.

Joe Fairless: Okay. So breakfast – omelette, avocado, veggies, or a protein shake. No toast, no orange juice… Why no toast, why no orange juice, why not cereal?

Nate Palmer: Great question. Because most of those things for the most part, Joe, have a pretty simple, carbohydrate load. And those simple carbohydrates break down into sugar a lot faster in our bloodstream. And when we get that big boost of sugar, then we need our body to produce insulin to match it; and if you’re out of balance at all, if you’re carrying around more than 20% body fat, if you don’t necessarily feel 100% on a daily basis, most of the time we are what’s called “insulin-resistant” at that point. That means that our insulin doesn’t go up and match exactly the right amount for the blood sugar we have there. It’ll go a little bit up and then cause that rollercoaster of energy throughout the day, so we’re never getting into that smooth sailing, flow state that we want.

Joe Fairless: Okay. So we’ve just had an omelette for breakfast, and now it’s lunchtime. What do we do?

Nate Palmer: At lunch I like to eat a little bit lighter. A high protein – definitely some meats, or some eggs, something like that, and then a lot of vegetables. What this can look like is a big salad, which is great because if we’re on the road a  lot, if you’re driving around, you can get a salad from anywhere; whether that’s Chipotle, or Wendy’s, or at a restaurant with a  client. Everyone has salads. It just makes it really easy… And because we want to make sure that we have the energy for the afternoon. Because most of us will have that bigger lunch, especially if you go out with clients, and then you start feeling tired, you’re not necessarily willing to get on the phone and do the work you need to do, or it’s a lot easier to phone it in from that [2:30] point on, right?

Joe Fairless: Mm-hm. The response from someone is “A salad doesn’t fill me up.” What do you say?

Nate Palmer: That’s totally fine. I actually prefer if they’re not filled up. Because if you think about it, back when we were a hunter-gatherer society, it wasn’t like you’d just be like “Man, I’m hungry. We should go to the fridge and grab some mammoth burgers.” It was like “Man, I’m hungry. We need to go hunt an animal. We need to go actually out into the jungle and kill something and eat it.” So what happens then is your body switches into a sympathetic nervous system state. Sympathetic is most often known as fight or flight, but it’s a spectrum. If you have that sympathetic nervous system lightly turned on, you’re gonna be more focused, you’re gonna have more clarity, you’re going to be more in that zone, ready to hunt, ready to work, be creative… I find it’s a lot easier to be on camera, or sit down and do long periods of writing… Anything like that is easier when you’re just a little bit hungry, or at least not full. So I like that, if people are not necessarily filled up from lunch.

Joe Fairless: Not all salads are created equal. What are some things to watch out for when you order a salad?

Nate Palmer: Great question. Again, I would try to keep the carbohydrates kind of minimal here’s, so that’s avoiding croutons, anything crunchy in the salad, and also avoiding creamy dressings. It doesn’t need to be a high-fat lunch as well, but fats are okay, so I always advocate either a vinaigrette or an olive oil and vinegar dressing. That’s the best possible option.

Joe Fairless: Okay. So adding slabs of bacon, or a steak – you’re all for that?

Nate Palmer: Yeah… You definitely wanna make sure that it’s not just a bacon salad, right? We’re still eating for performance here… [laughter] But I think that having that framework is more important than necessarily me spelling out all the rules. Because if you [unintelligible [00:12:48].08] steak and a bunch of eggs and throw some Ranch on it, you’re like “Wow, that advice that guy gave me was total BS! I’ll maybe just try with some chicken and less dressing next time, see how it goes.”

Joe Fairless: Right, right.

Nate Palmer: A lot of this is all about figuring out what works for you too, so that’s why I don’t necessarily like to give you “This many grams of carbs, this many grams of proteins…” It’s kind of a testing, retesting, seeing how you feel, making sure that you personally are dialed in for your energy… And I think this framework is helpful, but not necessarily a scripture, you know what I mean?

Joe Fairless: Yeah, I get it. I like that. And what about dinner?

Nate Palmer: Dinner is awesome, because if we’ve been eating pretty light all day, that’s when we can have that oatmeal, that’s when you can have some more carbohydrates…

Joe Fairless: You celebrate with oatmeal? [laughs]

Nate Palmer: Whatever… I’m eating oatmeal for dinner [unintelligible [00:13:35].11]

Joe Fairless: I’ve been so good all day, I’m gonna have a big ol’ bowl of oatmeal for dinner to celebrate… Said no one ever. [laughter]

Nate Palmer: Okay… That’s fair.

Joe Fairless: Okay, what do we eat for dinner?

Nate Palmer: So this is when you can go home and you eat with your family and you don’t necessarily have to cook something for the kids, and then for yourself that’s separate; you’re not eating tilapia and asparagus. It’s a little bit more — my clients, these entrepreneurs that work really hard all day, they’re able to go home and break bread with their family. So for dinner we’re gonna have  a carb, a protein and a vegetable. That can be rice, that can be potatoes, sweet potatoes, pasta sometimes… And what the great thing about that is – once we have that higher carb diet at dinner, we actually go into that parasympathetic nervous system state; that’s a rest and digest state. So that sleepiness you get at [2:30] – well, now we’re gonna use that to actually increase the restfulness of our sleep, and give us more energy into the next day.

Joe Fairless: I like that.

Nate Palmer: So it’s kind of contrary to this — I’ve heard a lot of people say “Yo, don’t eat carbs after six, seven, eight o’clock”, and that’s just an arbitrary rule.

Joe Fairless: Yeah, that makes sense. That will also help with people who have a hard time sleeping. I didn’t hear any dessert during any of these meal times. [laughter] For people who enjoy dessert, what are your thoughts?

Nate Palmer: I think desserts are totally fine. If you have some sort of physique goals, if you’re like “Man, I wish I could lose 20 pounds”, probably not best to eat dessert every single night. But with a program like this, if you have dessert after dinner a couple nights per week, and really just pick something that you love and enjoy it a lot – I think that’s totally great, and it fits with the plan perfectly. Because the dessert is not necessarily gonna put you into a high-performance mode; you’re not gonna crush a piece of cheesecake and then wanna go to a big meeting, right? But if you’re at home and you’re watching HBO, why not? This performance eating plan gives you that flexibility.

Joe Fairless: Okay. And what about working out? What are your thoughts on working out, so that we can set ourselves up for success to have peak performance?

Nate Palmer: I think that’s a great question, Joe, and I think that a lot of people, especially recently in the past couple of years, have been very into wellness, rather than necessarily training. And I think that training is kind of the second step. Once we get our nutrition dialed in and we have a little bit more energy, then we can amplify that by adding in a training or a workout component.

There’s a couple different things you can do to get the best results, but I always advocate at least getting four days per week of some sort of exercise, even if it’s only 15-20 minutes in the morning, and I love the idea of bodyweight movements and bodyweight exercises. The reason for that is that bodyweight stuff is a lot more bang for your buck. Think about the difference between doing a pull-up and then doing a lat pull-down on the machine. When you’re doing the pull-up, you’re actually — if we’re going back to that paleo ear, caveman times, pulling up tells your body… Your body doesn’t know that you’re not being chased by a saber-tooth tiger; all it knows is stress. So when you’re pulling yourself up, your body thinks that “Hey, we need more muscle tissue to get up, and we need less non-functional tissue (fat) that’s keeping us tied to the ground.” So in order to get more of those things, we have to kind of shift our muscle-to-fat ratio. So that’ll just happen more naturally doing body movements, rather than doing dumbbell movements, or machine movements, or things like that.

Joe Fairless: Will you just elaborate a little bit more on that – the difference between a pull-up and a lat pull-down, where you’re basically doing the same motions? Why is the pull-up better than doing almost the same thing on a machine?

Nate Palmer: Yeah, totally fair. So a lat pull-down, or a biceps curl, or a benchpress – anything where you’re moving an external load through space – is called an open-chain exercise. The counter-move is like the pull-up or a push-up. If you can get the same load, that’s gonna be a better exercise for your body in total, because it’s a closed-chain movement, which means that you have to think about actually moving your body through space; you have to continue to build deeper and thicker neurological pathways from your brain to your muscles, and you’re gonna activate more muscle fibers, which results in bigger muscles (which is great), more calories, and then the ability to burn more calories later because the muscles have grown and need to be replaced.

Joe Fairless: We don’t need a home gym then. We just need a spot in our room and just do bodyweight exercises… At minimum, right?

Nate Palmer: Yeah. Have you used a TRX before?

Joe Fairless: Yeah, I have.

Nate Palmer: That’s one of my favorite tools, because you can take someone who’s really strong and you can give them really intense exercises. I’ve used it with my grandma; I brought her in and had her use that as a support to do squats, and rows, and things like that… But it’s a super-versatile tool, because — I think just straight bodyweight exercises in your room can get boring after a while.

Joe Fairless: Right.

Nate Palmer: If you can get past that, or you find something that does work for you – that’s one of the greatest things you can give to yourself as a gift.

Joe Fairless: Was yesterday a typical day for you in terms of nutrition and fitness?

Nate Palmer: Yeah.

Joe Fairless: What did you have for breakfast, lunch and dinner?

Nate Palmer: Yesterday I had a protein shake; I had 50 grams of protein, and it has 4 grams of carbs in there… And then I had two tablespoons of peanut butter in there, with some coconut milk. So pretty high-fat, high-protein.

Joe Fairless: What protein mixture do you use?

Nate Palmer: I use a whey protein isolate. I get it from a site called True Nutrition, because I can basically edit the flavors, and additives, and stuff. I always get a vitamin and mineral boost, because I live in Arizona and I tend to sweat out most of my minerals.

Joe Fairless: Okay, cool. Lunch?

Nate Palmer: Lunch was fajitas. I had fajita vegetables – onions, peppers – and then chicken thighs. I ate that with some guacamole and cheese, and no tortillas.

Joe Fairless: Okay. And then dinner?

Nate Palmer: Dinner – my wife and I went on a date; it was our eighth wedding anniversary, so we went to —

Joe Fairless: Congratulations!

Nate Palmer: Thank you. We got some Greek food. So I had a big plate of the Basmati Rice, I had some of the gyro meat, I had some hummus, a had a pita, and a couple glasses of water.

Joe Fairless: Props to you for remembering what you ate yesterday. I don’t know if I’d be able to remember what I ate yesterday, especially on the spot like that… You didn’t have any alcohol. Do you drink any alcohol?

Nate Palmer: I do, but I try to keep it to the weekends, or very seldom on weekdays at least.

Joe Fairless: Okay, and what do you drink when you drink?

Nate Palmer: I go with the sorority girl special, so I’m always drinking Vodka Tonic, or Vodka sodas.

Joe Fairless: Yeah, yeah. Almost as clean as you can get when you’re drinking alcohol, right?

Nate Palmer: Yeah. I feel like it’s a great way to not wake up with a hangover, so it doesn’t impact my training schedule. It also provides a little bit of hydration, and then there’s also no caloric mixers in there. When you drink alcohol, your body kind of goes into shutdown mode, because you’re basically poisoning it with the ethanol. So while it’s ringing the alarm bells and shutting everything down, everything that you’re intaking, like the cranberry juice, the coke from the Jack and Coke, or those [00:20:35].13] that’s all getting put into fat storage. So I would like to set myself up in a way that when I do drink, that I’m not recovering for three days.

Joe Fairless: No snacks in between meals yesterday?

Nate Palmer: No, I’m not a big snacker. I try to just — if I feel like I’m hungry, either grab a big glass of water, or go do some work.

Joe Fairless: I told you before we started recording I’m selfishly gonna really enjoy this conversation, and I’ve enjoyed it even more than I thought I would… And I thought I’d enjoy it a lot. So props to you. Thank you for sharing valuable information. It’s all connected – our body and how we perform, is directly tied to our nutrition and our fitness.

Anything else as we wrap up that we haven’t discussed, that you think we should, as it relates to your expertise?

Nate Palmer: Yeah. One thing that I’m really passionate about is having people drink water in the morning. A lot of people will get up and grab some coffee first thing… But there’s two things about that. Number one, you’re breathing out moist air all night, which is actually how you burn fat; it’s at night, it’s not in the gym. So when you wake up, you’re generally dehydrated. So the best thing you can do for your body is put 24 ounces of water in your body first thing when you wake up.

The second thing is wait an hour before having that first cup of coffee. We do that because when you wake up, your cortisol (stress hormone) – a lot of people associate it with body fat, but it is necessary and good – spikes up to wake you up, to get you moving. So at about an hour mark that cortisol starts dipping back down, so that’s when we have that first cup of coffee, and we can actually kind of jump off the sympathetic nervous system experience that we got from the cortisol and  use that to jump right into a little bit of a higher caffeinated, higher productivity.

Joe Fairless: I’m getting something right then. I’ve been drinking  a liter of water with a scoop of wheatgrass for the last four years.

Nate Palmer: Oh, nice.

Joe Fairless: Yeah. And my wife does the same. She doesn’t drink a liter of water like I do, but she drinks a glass and a half of water with a scoop of wheatgrass every morning when we wake up. She drinks coffee though; I’m gonna tell on her. She drinks coffee. I don’t drink coffee. I stay away from caffeine.

Nate Palmer: Okay… That’s probably better.

Joe Fairless: But there are many things that you discussed that I am not doing, that I will start implementing because of our conversation… So thank you so much for being on the show. How can the Best Ever listeners get in touch with you or learn more about what you’re doing?

Nate Palmer: The Best Ever listeners can get in touch with me on my website, n8trainingsystems.com. I have a lot of articles up on there. Then I’m also pretty active on Facebook. I have a really great Facebook group called Optimal Self Fitness Nutrition and Mindset. We’re always talking about cool little ways to optimize your body, optimize your brain, get more out of your day.

I’m just really trying to help people reframe nutrition, which has become this clean versus dirty dogmatic debate to “How can you become more, rather than less? How can we stop talking about/toning down on losing weight, but instead be, do and have more?” [00:23:25].06]

Joe Fairless: And what is the structure in which people pay you to work with them? Will you talk a little bit about that?

Nate Palmer: Yeah, so I work with a lot of clients one-on-one; we do some coaching — basically, it’s problem-solving, habit and lifestyle development around the idea of performance… So figuring out how they can eat the right breakfast, make sure their family has the right food, where are they going for lunch when they’re eating, and as well as we do a deeper dive into training. So I work with a lot of clients one-on-one that way.

Then I also have a course called The Million Dollar Body, where I break down all these topics into depth, and people can access all that information on their own.

Joe Fairless: Excellent. For the course and the training, how do people learn more about each of those things?

Nate Palmer: For the course – I am just releasing that in the middle of June.

Joe Fairless: Oh, this episode will be airing after that, so… The course is out, people! Go check out the course.

Nate Palmer: And the best way to connect with that would be via Facebook, and we can just have a conversation to make sure it’s the right fit for you.

Joe Fairless: Cool. Alright, good stuff, Nate. Hey, thank you so much for being on the show; I thoroughly enjoyed it. I hope you have a best ever weekend, and we’ll talk to you again soon.

Nate Palmer: Thanks a lot, Joe.

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JF1796: What Is Residential Assisted Living? How Can You Profit From It? With Emmanuel Guarino

Emmanuel is here to share his story and experience with residential assisted living facilities. We’ll hear the mistakes they made on their first deal, and what they’ve done now to eliminate making those same mistakes again. We also hear what they do to help other entrepreneurs and investors build their own residential assisted living facility. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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“When you add up everything they get, it’s actually a really good deal” – Emmanuel Guarino


Emmanuel Guarino Real Estate Background:

  • Realtor for residential assisted living in Arizona
  • He trains entrepreneurs and investors at the Residential Assisted Living Academy in Phoenix, AZ
  • Based in Phoenix, AZ
  • Say hi to him at www.ral101.com
  • Best Ever Book: How To Win Friends And Influence People


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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Emmanuel Guarino. How are you doing, Emmanuel?

Emmanuel Guarino: Hey, I’m doing great. Thanks for having me, Joe.

Joe Fairless: Well, I’m glad to  hear that, and it’s my pleasure. A little bit about Emmanuel – he is a realtor for residential assisted living in Arizona. He trains entrepreneurs and investors at Residential Assisted Living Academy in Phoenix, Arizona. With that being said, do you wanna give the Best Ever listeners a little bit more about your background and  your current focus?

Emmanuel Guarino: Sure, that’d be great. Well the Residential Assisted Living Academy – what that is is we teach investors in how to invest in residential assisted living homes; how to start them, how to create them and how to run those businesses.

We got involved in that – my father and I – about 7-8 years ago. He had heard a  gentleman about 15 years before that who said “You’ve gotta get into assisted living, in that space.” We’ve all heard, the baby boomers, and this and that. And this guy was in front of the room and he was saying “You’ve gotta get involved.” And then my father went up to the guy and he said “Teach me, show me how to do it.” The guy said “Well, I don’t do it, I think you should do it.” So my dad is like “I don’t know where to go, I don’t know what to do…”, and around that same time my grandmother – her health was starting to decline. She lived in Upstate New York, we live in the middle of the desert in Arizona, and we wanted to go visit her, and we were noticing that hey, she probably shouldn’t be living on her own. Then we said “Well, we’ve gotta put her into an assisted living, or we need to move someone into the home, so that they can take care of her.”

The reason why not everyone wants to move someone into a larger facility is that the level of care isn’t very good. You might have one caregiver for ten or twenty people in that facility. And then the idea of bringing a stranger into the home to take care of our mother, our grandmother – that’s a little dicey situation on its own. So at that point we said “You know what – this is the time to get started in residential assisted living.” So we started our first residential assisted living, we made all the mistakes in the world, and on the second one we got better, and by the third one we had it down and we had perfected it… And people were coming up to us and they were saying “Hey, you’re doing this. We wanna learn how to do this. How do we do it?” And that’s how we started teaching on this topic. That’s a little bit about us.

Joe Fairless: Thank you for sharing that background. I would love to learn more about the mistakes on the first one… So let’s just talk about those.

Emmanuel Guarino: Sure. One of the big mistakes – and I’m at an event right now and people are coming up to me saying “Well, don’t you need this, and don’t you need that?” and one of the things that people always think is “Well, don’t you need a van for all the residents in the home? Don’t they wanna go to the movies, and restaurants, and the opera, and this and that?” And when we started, we actually bought  a $50,000 van for the residents, so they could go out and do those types of things… But once you’re in the industry, you realize that’s really not a daily thing that’s going on. They’re in the home, they’re there, they’re relaxing… The idea of them going to the movies, and this and that – that’s a whole lot for them at this point. So that was one of the early mistakes we made – buying a $50,000 van. We drove it from the car dealership to the house, and then from the house back to the car dealership. So that’s kind of a funny one from that standpoint.

Joe Fairless: Okay. So that’s one mistake. You said you’ve made a bunch of them, so what are some other ones?

Emmanuel Guarino: Well, we’re not so bad, right? …but one of the other mistakes I would say is maybe not doing it in the right area. This is a business where you wanna make sure that you’re doing it in the right area. So we have three homes, they’re in three very different locations; we have a scale that we use – level one through five. Five is high-end, one is low-end. And we have a level three, and a level four, and a level five.

Our level four and our level five – those are our favorite homes. Then the level three home – it’s okay… But it’s kind of like being a realtor – when you sell a $200,000 house, you make your 3% or 6% commission; when you sell a two million dollar house, you make your 3% or 6%, but it’s not a worlds apart difference of what you’re really having to do in regards to work… So that was one of the mistakes – instead of maximizing our work, our efforts, we were saying “Well, let’s start small and then let’s move bigger.” That’s one of the key mistakes when people are wanting to get into anything – they start too  small, when really they need to be thinking bigger.

Joe Fairless: Sure. So the levels correspond to the value of the property that’s being purchased?

Emmanuel Guarino: Quality of the home, quality of the area… Yes, exactly.

Joe Fairless: Okay. So what were the purchase prices of the first, second and third house that you all have?

Emmanuel Guarino: The first home was around 550k all-in, and that was an existing business; so the real estate was 500k, the business was 50k. The second one was a single-family home that we actually converted. It was a five-bedroom, four-bathroom home, and it had a giant, great room in the middle of this home.

I remember my father taking me to this home when he said “I find the perfect home, man. You’re gonna love this.” And we’re walking through this home and it’s got this 30 by 30 room in the middle of the house, and I’m like “This is weird.” It was just like “Oh, my goodness…” And my father told me that the realtor told him that they used to throw ’70s style parties in that room. I don’t know what that means; that was before my time, but… They were getting crazy.

Joe Fairless: People were getting down, and really high, I think…

Emmanuel Guarino: [laughs] So nobody wanted that house; I wonder why. And we were able to pick that one up — I believe that one was about 650k; we put about 150k in renovations into that home, turned that from a five-bedroom, four-bathroom home into a nine-bedroom, six-bathroom home where it is today.

Then our nicest home, in Scottsdale – that one we actually bought for around 800k; we’ve put about 200k into that one, so that one was about a million all-in.

Joe Fairless: And what did you do to it with that 200k

Emmanuel Guarino: It had a four-car garage that we actually converted into about five new bedrooms. That one was almost like more of a custom-type project, because there was probably about 2,500 square feet to that property, and we added on about 3,000-4,000 square footage to that home for that Scottsdale property. So that one was almost like a custom type project that we did there.

Joe Fairless: And how many bedrooms does the third one have now?

Emmanuel Guarino: That one is – you’re gonna love this – a 10/10. Ten bedrooms, ten bathrooms. In fact, that one actually has an extra bedroom that’s attached to the side of the house, where it has an entrance through the backyard, where if one of the residents’ family members wants to stay, instead of staying at the Hilton or Sheraton when they’re visiting mom or dad, they can actually stay at the home, for a small fee. So that’s a really cool thing we have about that home. So I guess it’s an 11-bathroom, 10-bathroom home that we converted that one into.

Joe Fairless: What is the fee for them to stay there for a night?

Emmanuel Guarino: Yeah, that’s a great question. Right now across the U.S. the average to live in an assisted living home in a private room, a facility or a residential facility, is $4,000 to stay in a home. So that’s covering food, that’s covering care, that’s covering everything for them. It sounds like a lot, but really when you add it up, it’s actually a good deal for the most, when you really think about it.

For our homes – our level three home, our middle of the road home is about $3,500/month per resident. Our little bit nicer ones are about $4,000 and $5,000 per resident, and then our nicest home is about $5,000 to $6,000 per resident to live in the home.

Joe Fairless: And then how much to rent out that 11th bedroom for the night?

Emmanuel Guarino: That one it’ll be $50 or $100 for them to come over there and stay if they wanna visit mom or dad… But really that’s one of the cool amenities, and that’s one of the reasons why people pay more to be in that home. We really didn’t even touch on the numbers too much.

Just as kind of an example for the listeners there, let’s just say our level four home, the one right in the middle – that one has ten residents who live there, and they each pay around $4,000/month to live in that home. So that home brings in around $40,000 of gross income each month… But there’s expenses; there’s caregivers who are taking care of the residents, there’s electricity, food, things like that. So the expenses on a home like that might be 20k-25k at the end of the day. So that one home, after all that is said and done, could be netting 10k, 15k, 20k a month, with that one single-family home.

Joe Fairless: And you said there are ten residents who live in the second one?

Emmanuel Guarino: Yes. Ten residents in all three of ours, actually.

Joe Fairless: Okay. And I think you said the second one is a nine-bedroom, right?

Emmanuel Guarino: Yeah. That one has one room that a couple of the residents share.

Joe Fairless: Okay. Is that common?

Emmanuel Guarino: You know, it’s not as common as you would think. Sometimes we think “Well, isn’t that like college? Don’t they wanna share a room with a dorm mate, and things like that?” And really, when someone’s moving into an assisted living, they’re going to want their own private bedroom. And the better way to think about it is it’s kind of like a hotel. I’m in a hotel right now, I’m at an event, and if they gave me an option, they said “Mr. Guarino, you can have a private room for $100/night in our hotel, or you can have a shared room with a total stranger for $75/night. Which would you prefer?” As long as I have the money, I would probably say I want the private room, 95% of the time. That’s the same way it is with an assisted living.

The children who are moving their mom and dad in, they would like for mom to have a private bedroom, private bathroom if possible; so those are all added amenities, and again, one of the reasons why someone might pay more to live in one of these homes.

Joe Fairless: You mentioned the expenses… What’s an expense that can sneak up on people if they’re not careful?

Emmanuel Guarino: That’s a great one. Really the big one is gonna be our caregivers. That’s a hard cost that’s gonna be there. Sometimes people say “Well, I wanna pay my caregivers $30/hour, because they’re working hard, and I want this and that”, and that’s great, but the business is gonna start to crumble if you’re not keeping all those things in check. So the staff is gonna be one of the biggest expenses; actually, the biggest expense that you have.

Then the other one might be your food cost… Because everyone needs to eat in that home, making sure that you’re keeping your food cost down. So  your manager, Gene and I, we’re not personally in the homes, taking care of the residents, taking care of the staff. We’re overseeing our manager. So our manager is making sure that we’re getting the best deals at the grocery store, buying in bulk, all of those things, to make sure to keep those costs down.

Joe Fairless: What is the hourly rate range for the caregiver?

Emmanuel Guarino: Usually it’s minimum wage plus a couple of dollars. If they’re there for a very long time, many years, and things like that, obviously we’ll give them incremental raises as time goes on… But usually that’s what you see as the industry standard – minimum wage plus a couple of dollars.

Joe Fairless: What’s the process for estimating how much food should cost?

Emmanuel Guarino: That’s a great question. Usually, what we see is about $5 to $8 per day, per person. Now, that sounds like crazy; like “What are you feeding them, stone soup over there?” But $5 per person per day… You and I – it’s lunchtime coming up here in a second – could go to Outback Steakhouse and spend three times the amount on one meal, for one of us. But with this home, we’ve gotta remember – they’re not eating out; that’s your most expensive way of eating. They’re eating at the home, and it’s not pre-made food; we’re making food from scratch.

The other thing is we’re buying in bulk, and we’re preparing food in bulk, so that brings down the prices as well. And then the other thing is – at this stage of their lives they’re just eating less. They’re not moving around as much as you or I would be, they’re not in the gym running five miles a day or anything like that, so they’re eating less.

So we might have unlimited Jumbo Shrimp or anything like that, but they might be eating one or two, and you and I might be eating six or seven or eight, something like that. So usually that’s what we see – about $5-$8 per person, per day.

Joe Fairless: And you mentioned that you and your dad aren’t doing the actual running around and getting groceries, and stuff… I think you said your manager is. Is the manager the same person as the caregiver?

Emmanuel Guarino: Yes, that can be the same person as the manager. In our homes we have caregivers who are taking care of the residence, and then our manager is above them. In some homes maybe one of the lead caregivers will be the manager for your home. In ours, we have a specified manager, and her job is just to oversee all three of the homes. That’s her full-time job. And if she needs to jump in and take a shift, she’s ready to go; she’s trained to do that. But her job is really to oversee the staff, oversee the residents, make sure that the homes are running great, and then our job is just to make sure that she’s doing her job from that standpoint. So working on the business, not in the business is the way that we teach on how to run these homes.

Joe Fairless: How much are they compensated?

Emmanuel Guarino: A manager can be compensated differently, depending on – like we were saying – what they’re doing. If they’re a caregiver, let’s say, and let’s say they’re just taking on a little bit of extra duties being the manager, we might give them $500 or $1,000 additionally to do that job… Because the manager’s position is more of an entrepreneurial healthcare position. They need to be there when they need to be there; but if there’s nothing going on, they don’t need to be there.

So with a caregiver who’d maybe take on that position, it might be $500 or $1,000 a month. If we have someone who let’s say gets licensed through the state to be a manager of one of these homes, and let’s say they just wanna hang their license on the wall, that also might be $500 or $1,000 a month. But if it’s someone like our manager, it might be $1,500 per home, because she’s doing a little bit more, and we’re putting her in charge of everything.

We have a saying that we tell her – “The less we hear from you, the more you get paid.” Because if she’s calling us every two seconds, we’re having to do the work. So “The less you call us, the more that you get paid” is what we usually say.

Joe Fairless: Anything else as it relates to this business that we haven’t discussed, that you think we should?

Emmanuel Guarino: Well, there’s tons of stuff to be going over from that standpoint, but one of the big things when someone’s considering doing this – what’s nice about this industry is doing good and doing well. You get to help a lot of people, you get to make a lot of money. We talked about the money a little bit here… But for any of the listeners who have ever put a loved one in one of these homes, you understand the feeling of “I wish I didn’t have to do this. I wish I knew certainly that they were getting better care than they were”, and what’s nice about this is when you own one of these homes, you get that feeling of doing good and doing well. You get to help a lot of people and make a lot of money, and that’s what we’re all about at the Residential Assisted Living Academy – teaching people exactly how to do that.

Joe Fairless: What’s your best real estate investing advice ever?

Emmanuel Guarino: Oh, my goodness… The best real estate investing advice. I would have to say “Buy low, sell high”, from that standpoint. [laughs]

Joe Fairless: Yes, that’s tried and true, that’s for sure. We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Emmanuel Guarino: Let’s do it.

Joe Fairless: Alright. First, a quick word from our Best Ever partners.

Break: [00:18:13].02] to [00:18:58].16]

Joe Fairless: What’s the best ever book you’ve recently read?

Emmanuel Guarino: How to Win Friends and Influence People. And then in addition, Outwitting the Devil, by Napoleon Hill. Those two right now.

Joe Fairless: What’s the worst deal you’ve done?

Emmanuel Guarino: Worst deal I’ve ever done? How much time do you have? No, I’m joking. The worst deal I’ve ever done – I took on a listing that I just never should have taken on, and it was just the ultimate time-waster. I was about 3-4 months of my life that I’ll never see back… But the lessons I’ve learned from it were very valuable. So even the worst deal can still bring good things, I guess.

Joe Fairless: So if you were presented a similar opportunity, what questions would you ask where you would approach it differently in the future.

Emmanuel Guarino: I guess what I would have done is — I took on the listing and it was a little bit too long, and I see things throughout; so if I tell them “Hey, I’m gonna work hard for four months”, I’m gonna work hard for four months. And at that point what I should have done is said “You know what – let’s try this for 30 days, and then let’s come back, let’s discuss, let’s see if we wanna move forward.”

That’s a little thing that I do with a lot of my listings now… A lot of agents want to list the home for a year, or two years, or six months… I say “Let’s do this thing for 30 days, and if you’re not proud of my performance, then all that you’re out right now is 30 days. So what’s the worst that can happen? Let’s do this.”

I’ve found that to be the best, because then I’m earning that trust with them, I’m showing them what I can do, and so that’s really that lesson that I learned from that listing, for sure.

Joe Fairless: Best ever way you like to give back to the community?

Emmanuel Guarino: I have a big part of my heart for the special needs community… I have a good friend I love hanging out with and being friends with, Jordan; so whenever I get a chance, I love hanging out with him.

Joe Fairless: How can the best ever listeners learn more about what you’ve got going on?

Emmanuel Guarino: Ral101.com. On that website we have videos, we’ve got a free book for you, and then we also have the number for our discovery call, to help you find out if this is the right opportunity for you… Because it’s not for everyone. But if it is, that’s a chance to find out if it is the right opportunity for you.

Joe Fairless: Well, thank you for talking through the three properties that you’ve got, and the details about each of those properties, how you think about them in terms of levels based on the area, and the value of the properties, and what you did to each of the properties, as well as some of the biggest expenses with this business model… So thanks for being on the show. I hope you have a best ever day, and we’ll talk to you again soon.

Emmanuel Guarino: Thanks, Joe.

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Joe Fairless and guest Corey Peterson on a Best Ever Show flyer

JF1631: What Does Success Look Like? Money Isn’t Everything with Corey Peterson

Corey saw real estate success early in life, not his own, but his step dad at the time was wildly successful, and it was from real estate. After that, Corey read Rich Dad Poor Dad and started his own real estate journey. He was doing well, a lot of people saw him as having massive success. But one day, he realized he was too consumed with work, missed his son’s game, and realized this was not his idea of success. Now hear how he balances real estate success AND family success. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Corey Peterson. How are you doing, Corey?

Corey Peterson: I’m doing wonderful, brother.

Joe Fairless: Good, I’m glad you’re doing wonderful, and welcome to the show. A little bit about Corey – he is the owner of Kahuna Investments, which is an apartment investing company. He’s managed and acquired over 95 million dollars in real estate. He’s the host of Multifamily Legacy Podcast. Based in Phoenix, Arizona. With that being said, Corey, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Corey Peterson: Yeah. I started off like a lot of real estate investors do – broke and with a dream. I barely graduated out of high school, I was probably not voted “Most likely to succeed”, and I was a used car salesman. I didn’t get to download from the mother ship until I was 32 years old… But something magical happened. My mom was married to this man named Bruce. I call him Bruce Wayne. Now, he wasn’t that man, but he was loaded, and he had a home in Hawaii, and mom invited me and my girlfriend (now my wife for 17 years) to go there and visit. And when we got there, we went to his house and it was right on the beach. He had cars, and fine art, and his phone wasn’t ringing. He looked like he was living the perfect life. And I asked him, I go “What do you do?” and he said “Real estate.” He owned apartments.

Now, I wish it got better, because Bruce was kind of a prick, but… [laughter] But what he gave to me was the perfect, immaculate picture of what success should look and feel like, because Bruce had time and money, and he [unintelligible [00:03:54].20] real estate and apartments. So I left the island thinking he was the big kahuna.

In 2005 I read Rich Dad, Poor Dad, and all I could do was think about Bruce, like “That’s Bruce.”

Joe Fairless: Of course.

Corey Peterson: And I started my company in 2005, I named it Kahuna Investments, because I wanted to be the big kahuna. [laughs] From there, I started off as a wholesaler. I had no money, no credit; I started wholesaling deals. I went to REIAs, I started finding people that had money, I would sit by them, ask them what kind of deals they like, and then I’d go find them [unintelligible [00:04:25].02] up a deal. I did that for about a year and a half, and then I learned how to raise private money, and I raised my first piece of private money by accident… Really, I was a used car salesman, but I actually got licensed to sell stocks and bonds and mutual funds; I was a financial advisor, Series 7/66 license.

So I took what I learned in the financial world and really when the market dropped — and I learned that people would actually give me their money. I started doing lots of fix and flips, and in 2011, at the apex of me doing lots and lots of fix and flips, and almost actually losing (I guess I’d call it) my Why… What happened was — this business can consume you. And for me, it almost consumed me, where my son is like “Dad, are you gonna be at my game on Saturday?” and it was at like three o’clock. I’m like, “Yeah, no problem, sonny. You bet, you know I’m gonna be there.” But inside I was like “I’ve gotta go look at three homes Saturday.” So I go early in the morning, and long story short, I got there at the end of the game, and my son came off the field and he was crying. He’s like, “Daddy, you promised. You promised.” And it shook me to my core.

Here I was, in the public’s eyes I was a huge success, but as a dad and as a father I was failing. I’d put money in front of my kids and pursuit of love. For some reason, in that broken state — kids are resilient; even though I hurt his feelings and it really hurt me, I dropped him off at home, and then by myself, in my car, I’m asking God to forgive me, and I drive by an apartment complex… And this is the same apartment I’d driven by millions of times, but on that day and that broken state — I used to say “I wish I could own an apartment.” That day I said, “How can I own an apartment?” and when I did that, everything changed.

My mind went right to Bruce. I go “Bruce. Life. Time and money. Apartments.” That was the vision.

I bought my first apartment in 2011. I bought it for 3.2 million, I raised 1.4 million dollars of private money, and I just actually sold that property last August for 8.8 million.

Joe Fairless: Congrats on that. That’s a good return.

Corey Peterson: And that’s what I’ve been doing ever since – just doing apartment deals. Buying for cashflow. I think with apartments it allows you to have balance. You can do work once, and get paid time and time again. And personally, what I feel like I’ve really mastered is how to raise capital. And not just how to raise capital, Joe, but really how to raise it at the right cost.

Joe Fairless: What do you mean by that?

Corey Peterson: Well, when I was a financial advisor, I dealt with a clientele that in stocks, bonds and mutual funds; that’s what you sell. And when people come in — and if you ask any financial advisor, if you ask your financial advisor, you say “Hey, what’s a solid return? What can I look for?”, most of the seasoned advisors will tell you 6% to 8%. If you can make 6% to 8%, you’re doing great. And that’s what’s preached to that demographic of people, and there’s trillions upon trillions of dollars in the stock market, we all know this.

So I used that same philosophy, and even when you break it down even further – you talk about an income product. What can produce income in the financial world (stocks, bonds and mutual funds) that’s safe? You have Treasury bonds – that doesn’t give a yield. You have CDs, we know that doesn’t give a yield. Bonds – a lot of people invest in bonds. On average, a bond is probably between 2% and 4%. I would say on the average around 3%. So most people are getting 3% on their money, and that’s where they put the biggest bulk of their savings.

When I was an advisor, when someone came in with a million dollars, a 401K, the bulk of their money we put in more fixed income products. That’s their safe money. So I took that concept and I used it into my multifamily process. And what I do is this – I offer my investors what I call a 6% pref. Now, that’s pretty standard in the industry, but here’s where I changed it up. So I give my investors first [unintelligible [00:08:33].05] of all profits based on the cashflow, and then when we sell the property, I define this payout, I give them an additional 6% annualized, meaning that my investors will only make 12% on their money, total.

What that has done is it allows me… Because I believe this – if you can raise capital at the right cost, whoever has the cheapest cost of capital can win.

Joe Fairless: Yup.

Corey Peterson: But I realized if that’s my avatar — there’s lots of “smart money”, Wall-Street money, savvy money… It’s hard for me to compete with those types of investors. But your doctors, your dentists, your attorneys, anybody that’s in the stock market – your average working person that retires from a company and has a big 401K, that IRA money, I can attract that and I can beat Wall-Street almost every time. And I think what we provide which is what is most valuable is consistency. Most people wanna get off the rollercoaster, they want consistency in their returns, and they’re willing to take less yield for consistency. So that’s what I’ve used to lower my cost of capital.

Joe Fairless: That is a low cost of capital, and props to you for being able to attract investors at that level… But it’s still a great return, too. How many deals have you done with this structure?

Corey Peterson: [unintelligible [00:10:00].23] I had it 8% and 8%. I had a 16% structure. Then I went to 7% and 7%, and now I’m at 6% and 6%. So this year we did about three deals, probably about a 4.6, 3.6, so that’s 8 — about ten million dollars this year, and that 6% and 6% process.

Joe Fairless: And that’s in equity, right? The ten million in equity?

Corey Peterson: Yeah.

Joe Fairless: Okay, so you raised ten million dollars worth of equity at a 6% preferred return, and then when you sell, an additional 6% annualized return, so in total they’re making 12% annualized return.

Corey Peterson: Yup.

Joe Fairless: And when you went from 8% and 8%, to 7% and 7%, to 6% and 6%, I know you had at least one investor say “Corey… Excuse me, what’s going on over here? Why does it keep getting lower?” Did you have that happen, and if so, what was your response, and what was their response to you?

Corey Peterson: It always happens. You also have to understand where you’re at in market conditions, right? Right now there’s more money chasing deal-makers than there is deals, good quality deals… At least that’s my opinion. But sometimes your perceptions are reality; for me, that’s my perception, and I choose to make it my reality.

So those are usually not that hard of questions, because if they’ve been with me for any term of time, what they’ve seen is the consistency that every quarter we don’t send checks, we ACH people’s money; we give our reporting every month. We have a Wall-Street-grade property packet to our investors that’s very detailed in our reporting; it’s full open book, and we communicate really well. And I say, “Guys, listen, the cost of capital has just gone down, and I wanna work your money, but I’ve gotta have it at these new terms. This is what I’m doing. If not, I wish you well.” Usually, by that point they’re just kind of like, “Dude, Corey, just give me some of the Kahuna, dude. I just want it. I’m used to it, I like it, and I just want more of it.” But that’s honestly because I’ve created relationships. These are my friends. Or at least in my mind I treat my capital like it’s gold. And by doing that, I think they’re willing to accept a little bit less. Not that I’d lose the people, Joe. Absolutely. Was I willing to lose some people? Of course. Because when I lower my cost of capital from 16% to 12% – listen, that helps everybody. It’s even easier to become more consistent with your investors, because you have a lower hurdle to meet…

I hear a lot of investors talk about great returns, Joe, but I’m not sure that they always give them. And I think by just being realistic and saying “Here’s a solid return. Yeah, I know it’s not the 20%, but that’s speculation money. I’m the place where you put your safe money, your real money.” And this concept, when you put it that way – people are looking for alternatives like that to the stock market, because they know the stock market is a freakin’ whirlwind. Look what just happened – nobody made money in 2018. Some did, but most of the market lost their money.

Joe Fairless: Right. With the type of reporting that you do, talk to us about what your system is for generating that reporting, and then how frequently you provide that to your investors.

Corey Peterson: We use Appfolio, but we use a couple different — not just Appfolio. When we provide a — we call it our dashboard, internally… It’s a combination of what’s going on with the properties, we have a property packet, “Here’s the site, here’s how many units”, we give some of our internal metrics that we track, which is what’s our occupancy… That’s gonna show up in the report anyways, but we give how we incentivize our leasing staff, how many new leases did they get, what’s the rental increase on the new leases, what’s the credit scores? What about our renewals, how many renewals did we get? How much increase did we get? Because we believe in this thing that our tenants expect rents to go up, and we never disappoint them, ever. Even if it’s $5, we will get everybody on board with “Every year you can expect a little increase in the rent.” Well, that’s how we grow the value of our property; we know this, so that’s how we program it.

But then we have an income statement, a 12-month cashflow, a balance sheet, all our bank statements. We have this one thing called the Variance Report. In fact, my Variance Report is my favorite, because it takes our budget, and then it has the last three months of what we actually did, so you compare it to our budget and we’ll say “Hey listen, our budget for labor was this, and we’re either above, median, or we’re below.”

I actually tell my investors to go there first, because not all of them can read a big P&L correctly and see what happened. So they can go to that report and get a little bit better synopsis of “Oh. Okay, now I understand.” And not only that, I take the time to read the reports and give a good synopsis of what truly went on in our deal. It takes time for me to do this, and this is one of my personal touches, this is where I actually get involved, but I think it means a lot to the investor… And by taking care of the capital, the capital takes care of you.

Joe Fairless: And you send that out monthly?

Corey Peterson: Monthly.

Joe Fairless: What are some questions that are typical after you send it out, from your investors?

Corey Peterson: Now, this is gonna sound really weird, Joe… We’ve been raising millions of dollars, and I very, very rarely ever get an e-mail. In the last six months I’ve gotten no e-mails. Nobody says anything. But if they do, it’s usually “Thanks.” I mean that wholeheartedly.

Joe Fairless: Oh, I hear you.

Corey Peterson: It’s like, “Yeah, great.” Because when you give an open book like that… Here’s the biggest question sometimes we’ll get – if we did a big capital improvement project, it’s gonna hit the P&L and it’s gonna look like “Oh man, we lost $100,000 or something. We lost a lot of money this month. What happened?” It’s usually that. And I go “Remember when we first bought the property we set aside half a million dollars in cap-ex, that’s been sitting in our checking account? We spent that money.” So we already had it in reserve, we already knew it was there. Yes, it comes off in the P&L, but if you look at our cashflow statement, you’ll see that we made money. [unintelligible [00:16:27].11] made income that month, we just spent some of the money that already had in reserve for the property, which we had already planned on doing.

It’s just about helping people understand how to read a financial statement. That there’s more than just a P&L. There’s a P&L, and your balance sheet, and a cashflow statement. Those are really the 2-3 things that you have to have. And then, of course, we even teach them how to look at our accounts payable. We want you to look, because we monitor that accounts payable. It’s important for us to not have a lot of bills outstanding.

Joe Fairless: Going back to the structure that you started with, 8% preferred return and 8% annualized return on the sale, so a total of 16% return on the money, assuming all things go according to plan and you’re able to do that – how did you come up with that structure?

Corey Peterson: I think just trying to look at other people’s PPM’s. And here’s what I did – I asked my lawyer, I’m like “Listen, here’s what I think I wanna do, and you tell me how to write it in a private placement memorandum”, and here’s how it actually reads. So we give 50% of ownership — on our deals let’s say it’s a 50/50 and ownership. So because our investors are equity partners, they get 50% of our depreciation. So in that aspect, that’s the one thing they truly split with us 50/50. But on payouts, we define that in our waterfall process, in our private placement, we say it’s a 6% pref, and then based on cashflow [unintelligible [00:18:03].08] and then upon sell, it’s a 50/50 split until our investor gets a total return of 12%, that includes the pref. So that’s kind of how we worded it.

But for me, how I came up with it, it was like “Man, there’s gotta be a better way to lower my cost of capital”, and if I’m honest, it’s all about Corey, but maybe it is. I believe that the sponsor, the guys that are doing the deals, should make a lot of money, as long as I can do it and give my investors a solid return.

Some people are beholden to their capital, I believe; I’m beholden to my capital, but I’m still the captain of the ship. And I just looked at the industry and there’s lots of people that are like “You’ve gotta do volume, you’ve gotta do all these deals.” And I’m like, the way I structured it, I don’t have to do a lot of deals. If I do two or three deals this year, I’m a nirvana, because when it’s all done, when it’s a real true split, it’s like maybe a 60/40, where I’m getting 60% of all my deals, and for most syndicators, it’s totally the opposite; it’s 70/30, and they’re not getting the 70%, they’re getting the 30%. So it’s just that I’m like “How do I create this to work for me?”

Joe Fairless: And when you describe the structure with the 6% preferred return, or whatever it is (6%, 7%, 8%, whatever year we’re doing, it doesn’t matter), let’s just go with 6%. When it’s a 6% preferred return and then it’s 50/50 until the LPs receive 12% annualized, if it’s worded that way, as an investor you say “Wait a second… So I’m not getting my 12% and then [unintelligible [00:19:45].19]? I’m getting 6% and then we’re splitting 50/50 and hopefully I get the 12%?” What do you say to that?

Corey Peterson: Normally, we sound exactly what it says. Yes, that’s what it says, and I need you to be comfortable with that. Now, in all honesty, here’s what we’ll probably do, because I always like to under-promise and over-deliver. Now, because I’ve already set the rules of 6% and then 50/50 split until you get 12%, but let’s say if we didn’t hit that and it was gonna be less, and I still gave them 12% — because I can still give up my profit as the sponsor if I wanted to, right? And normally, I do. I’ve never had to, because we always made more, but if I ever got to that spot, I could look like a hero to my capital by saying “Guys, I know it reads this, but I just want to make you [unintelligible [00:20:34].27] Can I just do that?” And boom! Now I’m going above and beyond.

I’ve always believed — you’ve just gotta be honest with people. I already know that they’re only getting 6% to 8% in the stock market, and that’s my avatar. So who does this work for and who does it not? It doesn’t work for Daddy Warbucks. That savvy, sophisticated investor, whatever that person looks like.

Now, who does it work for? I have lots of people that come in, and — I had a call yesterday from a guy that’s out in New York, he’s got a million bucks, and he’s gonna invest it with me, and I went through the same process, and he was like “Man, that sounds like a pretty good process. I like it.”

I always say you attract the right people and you repel the wrong. I believe there’s more people that hate the stock market than there are savvy people… And how I find them is through networking and through marketing. It’s not marketing, but when I say marketing, I’m going to events and meeting people, and I have a staff that’s trained, that works for me on my behalf, for my company, and they go out and meet people, just like I did when I was a financial advisor.

I learned from Edward Jones – that’s who I worked for – one of the best companies, by the way, to learn financial services… Because as a financial advisor, you know how I started in Edward Jones? They make you go door-knocking, door to door. That is the process – you go meet people, you show them your process, and things would start happening.

Now, there’s lots of different ways to raise money. This is just the way I do it, it works for me, but I don’t have to do a lot of deals to make a lot of money.

Joe Fairless: Taking a big step back, what’s your best real estate investing advice ever?

Corey Peterson: Number one, stick with multifamily. I don’t know if that’s the right way to say it, but… I’ve tried to be successful, and I’ve been somewhat successful in wholesaling and doing fix and flips, single-family business. I made a great living doing that, but I became super-wealthy, multi-millionaire, when I changed to apartments… So I believe it’s the right vehicle for cashflow.

A real good one is, listen, don’t ever ask people for money. Only ask who do they know. If you do that, you take all the pressure off of people, and now they’re critically looking at whatever you’re presenting, and then the right people will always self-select. That’s huge.

Joe Fairless: Got it. We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Corey Peterson: Yup.

Joe Fairless: Alright. First, a quick word from our Best Ever partners.

Break: [00:23:14].04] to [00:24:19].13]

Joe Fairless: Best ever book you’ve recently read?

Corey Peterson: The Richest Man In Babylon.

Joe Fairless: Best ever deal you’ve done that we haven’t talked about already?

Corey Peterson: Eagle Village. I bought it for 12.7. In one year we’ve increased the revenue $360,000, which is almost five million dollars increase in value.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Corey Peterson: Not understanding who my partners were.

Joe Fairless: What do you mean by that?

Corey Peterson: You’ve got to know thy operating agreement and know thy partner. And because I didn’t read the operating agreement and how the voting procedures and stuff was working, I lost control of a deal that I was supposed to have control of. That cost me. I had to quickly buy out one investor to get my percentage correctly, and that cost me a pretty penny.

Joe Fairless: How much?

Corey Peterson: $250,000.

Joe Fairless: Best ever way you like to give back?

Corey Peterson: Through my podcast and through teaching and coaching, and just trying to really educate, letting people know that there’s alternative ways to make money.

Joe Fairless: And how can the Best Ever listeners learn more about what you’ve got going on?

Corey Peterson: Honestly, my podcast is the best place – the Multifamily Legacy Podcast is where I tell my story. I just say “Here it is. This is what I do and how I do it.”

Joe Fairless: Corey, I really enjoyed our conversation. I learned a different structure that I hadn’t heard of and come across yet, with the 6% and 6%, or 7% and 7%, or 8% and 8% preferred/annualized return… And your story about Bruce the prick, who had time and money, and also some of these case studies that you’ve done.

And your approach, raise capital at the right cost, as well as your second piece of best ever advice, “Don’t ask people for money, ask who they know.”

Thanks again for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Corey Peterson: Thank you, sir.

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More Creative Ways to Attract Leads Joe Fairless with Tommy Mello

JF1607: More Creative Ways To Attract Leads #SituationSaturday with Tommy Mello

Even if you currently have more leads than you can handle, at some point they may slow down, or you continue to scale and need more and more leads. Either way, having more ways to bring in leads can only benefit your business. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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JF1584: German Immigrant With Only 2 Suitcases Grows Real Estate Biz To 3,800 Deals with Jack Bosch

Jack traveled to the US to finish school for a year and go back home. That plan fell through however as he met his future wife and started investing in real estate. Starting with raw land, trying wholesaling, tax liens/tax deeds, eventually moving into commercial and multifamily properties. Hear how he grew from nothing to a very successful investor and apply the lessons to your own business! If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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Jack Bosch Real Estate Background:

  • German immigrant, in 1997 he came to US with 2 suitcases and a bunch of student debt
  • Has negotiated, bought, sold, rehabbed, as well as owned and managed over 3,800 properties since 2002
  • Currently he holds a large portfolio of properties in land, single family, commercial, and large multi-family properties
  • Based in Phoenix, AZ
  • Say hi to him at http://orbitinvestments.com/
  • Best Ever Book: Turn The Ship Around


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Theo Hicks: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I’m your host today, Theo Hicks, and I am speaking with Jack Bosch. Jack, how are you doing today?

Jack Bosch: I’m doing excellent. How are you, Theo? I’m excited to be here.

Theo Hicks: I’m doing great, excited as well, and I appreciate you joining us. A little bit more about Jack before we get started – he is an immigrant from Germany who came to the U.S. in 1997 with two suitcases and a bunch of student debt. Since 2002 he has negotiated, bought, sold rehabbed and managed over 4,000 properties. Currently, he holds a large diversified portfolio of land, single-family homes, commercial real estate, large multifamily properties… So he does it all. Currently based in Phoenix, Arizona, and you can say hi to him at jackbosch.com.

Jack, before we jump into the conversation, can you tell us a little bit more about your background and what you’re focused on now?

Jack Bosch: Sure, absolutely. I would love to. As you already said — first of all, I’m super-excited to be here; this is a great show, I’m a listener myself. I’ve been in real estate for 16-17 years now; I’m originally from Germany. I came over here to the U.S. – really just for one year was the thought, just to finish a college degree. Then fate hits, I met who is now my wife; she’s an immigrant herself from Honduras, Central America, so we’re a very international family… And we decided to give this thing a try, and stayed here; we got work visas, worked successfully in the U.S., and through this process after five and a half years got a Green Card… But about halfway through we realized that this job thing is really not as good as it was made out to be. I was traveling 100%, I was constantly gone, I was working 60-70 hours/week, I was not making any money, and I was just tired.

We started looking around until we found real estate, and through a trial and error process – I wish podcasts would have been around back then – we made it work, and we’ve particularly focused on one technique… We stumbled into that technique, we didn’t even know any better; we just happened to come across land parcels instead of houses… So we flipped them, just like other people flip houses, and we ended up doing more and more. We realized that was actually so much easier, simpler for us than houses, because we didn’t know anything about houses… But these land parcels worth 10k, 20k, 30k or 50k – we were able to pick them up for 5 to 25 cents on the dollar, so really pennies on the dollar… And when you buy them at that level, you can do a lot of stuff wrong and still make a profit.

Our first deal we bought for $400 and sold for $4,000. Soon enough, we stopped looking at houses and only started looking at houses again once the real estate market had crashed and we could pick up houses for pennies on the dollar.

Theo Hicks: What part of Germany are you from?

Jack Bosch: I am from the very South of Germany; I’m from the South-West, South of Stuttgart… There’s a big lake called Bodensee, or Lake of Constance in English. It’s about three hours West of Munich, an hour North of Zurich, Switzerland. It’s a rural area, there’s not really that many big cities around.

Theo Hicks: Okay, my mom was actually born in Munich. Pretty cool.

Jack Bosch: Oh, nice, nice. It is cool, yes.

Theo Hicks: Let’s talk about the land parcels then – how did you come across that investment strategy starting out?

Jack Bosch: We came across it by looking into tax liens and tax deeds. Imagine our situation – we’re from Germany, we’re from Honduras, having student debt, basically starting with nothing here in the country… So after a few years working, we bought our first starter home, with 3% down, an FHA loan, and stuff like that; a mortgage up to our neck, and we bought cars with payments, and stuff… We realized we needed to get out of that, but we had very little money to invest, a few thousand dollars… So we were like “We’ve gotta find something that we can get into with very little money”, and something also that’s not very complicated, because again, we didn’t know it… So we tried household selling, and we got a deal under contract, but that deal fell apart because we really had no idea it would cost $1,000 or $10,000 to repair a kitchen or a bathroom, or repair a roof… So we completely estimated everything wrong, and as a result, nobody wanted to buy the thing, and we backed out of the deal.

Then we came across tax liens and tax deeds as the next piece. In the tax lien and tax deeds – first of all, it blew our mind, because in neither Honduras nor Germany does that process exist, like it does in the United States. They actually issue a lien against the property for the non-payment of property taxes, and then they auction that off; then the lien holder three years later forecloses on that – mind-blowing to us. Or even worse, in states like California – or even better, depending on which side you’re looking at it from – and in many other states (Texas) they just take the property and literally just sell it to the highest bidder.

So we looked at that, we attended auctions, we bought some liens, we tried to buy some deeds, but we always outbid… Or when we bought a lien, it was redeemed, it was paid back three weeks later and we made like $4 in interest, or so… We were like, “Okay, that doesn’t work.”

One day we had a thought. That thought was “Well, these people that haven’t paid their property taxes – they obviously don’t want these properties anymore, because otherwise they would have put them on the market, or they would have just– I mean, shouldn’t these guys be willing to sell their properties directly to me, months or years ahead of these auctions?” Once that thought came up, we started figuring out if we can get their mailing address, if we can figure out some criteria – which property owners would be most likely to give away these properties.

It took us a little bit, but we figured it out, and then we started sending direct mail to those guys; first only to people that owed property taxes, but now it doesn’t even matter – we have refined this technique, so it doesn’t matter if they owe property taxes or not.

So we sent out 500 letters and we literally got something like 50 phone calls back,  a 10% response rate… Which is extremely high, I understand, and every single caller had a piece of land. There was not a single one call [unintelligible [00:08:07].03] on a house. So we were like “Okay, what do we do now?” Well, we figured we don’t know anything about real estate, we don’t know anything about houses, we don’t know much about land either, but if we make a low enough offer — we figured these people don’t want these properties anyway anymore; if we make a low enough offer, we should be safe from all eventualities and we should be able to still make money. And that’s what happened – we offered this guy $400 for his property, that we figured out was worth about $8,000, and he accepted it. So we bought it, and we literally the next day after buying it, we sold it to the neighbor for $4,000.

We had done nothing to the property, there was not even a tree on the property. Just a piece of land, just dirt. So we realized it’s simple, and we can handle that. Two weeks later we bought 40 acres for $500, and sold it for $10,000 on eBay.

Then we ended up doing more and more and more deals, and after about 10-20 we were like “Let’s not even look at houses anymore, because this is working really well”, and it has continued to work ever since, and now we’re even teaching it. “This works really well, so let’s not even look at houses anymore”, and we didn’t look at a single house until we had done about 2,500-3,000 deals, and the market had completely crashed in 2008 or 2009… I went to a REIA meeting and they basically disclosed what the prices of houses were at that time, and I was like “Oh my god, we can buy houses.” That’s when we started also buying houses, and since then we have built up a very nice portfolio of rental homes, too.

Theo Hicks: Fast forward to now, what percentage of your investment strategy involves flipping these land parcels?

Jack Bosch: Well, of these 4,000 deals that we have done, probably over 3,900 of them are pieces of land. It’s the overwhelming strategy that we have used for 17 years, that we do full-time; we have a team buying and selling them now, we have students that do this all over the country.

The other ones are houses that we flipped, and then we said “We’ll build up a portfolio of free and clear rental houses.” We call them our moat. Basically, if we ever want to stop doing anything — the downside of flipping usually is when you stop flipping, the income stops. So if you wanna retire at some point in time, we realized that we need to roll some of the money over that we made in land flipping… Because with land you can do everything you can do with houses; with land it’s just without the complexity of the houses, and for less money… So we just started rolling our profits over and buying houses. We bought over 50 rental houses that we own right now, we flipped another bunch of them that we just didn’t have a use for in the moment, and then also a few years ago we started stepping one up and started buying larger apartment complexes. But 3,900 – basically, 96% or so of our properties that we have flipped are all land… And we’re really using the other asset classes as a storage of the wealth we have created in land.

Theo Hicks: That’s a solid investment strategy. What are some challenges you faced from starting off to where you’re at now, specifically in regards to scaling? 3,000 land deals is a lot. What systems have you put in place to be able to handle such a large deal load?

Jack Bosch: To handle the deal load, at some point in time you need both systems and a team. We have one guy in our circle of students who is doing about 150-170 deals a year; it’s just his wife and himself, with one virtual assistant. So you don’t need a large team to be able to do 100-200 deals a year, but you do need usually online systems.

We use a software that we actually created ourselves. We named it the Investment Dominator. That software is basically a CRM for land flipping. It walks you through literally from A to Z. So what you need is a place where you can store your information and follow a deal from A to Z, from beginning to end. Nowadays we’re also outsourcing everything. In the beginning we were stupid, we didn’t know; we just took everything in-house, we did everything in-house, even taking the phone calls. We didn’t even think that there would be such a thing like a call center that could take our phone calls. Of course there are call centers to take your phone calls, we just didn’t know about it. Now we use a call center that takes the phone calls when we send out our letter.

We use a mailing house to send the letters for us. The mailing house is outsourced, they already know us, they have our template, they have our thing… All we need to send them is a list and say “Send 500 here.” They’ll send them out.

Then we have a relationship with a call center that has trained people for our system, that literally as our letters hit, they know exactly how to answer them. Then when the deals come back to us now – because after they have taken them, now we do the deal analysis, and for that we have team members in our office; we have a couple virtual assistants that go and find the area of the property, that find the value of the property, they find aerial pictures, and things like that; our software supports that too, and automates a lot of that, too… But even without that – when we started, we didn’t have that – we were able to organize it that way.

I just look over them and make sure that the values are right, and then based on that we use a formula to make the offers. Then we go send our offers out, and when they get accepted, we go and market them. It’s a step-by-step (6, 7 steps) process that you follow, but at every step you can nowadays put in automation and systemization in this system. As a result, people do 150 deals just without even having much help.

Theo Hicks: From your experience doing approximately 3,000 or so land deals…

Jack Bosch: About 3,900, yeah…

Theo Hicks: …3,900 land deals, what is your best real estate investing advice ever?

Jack Bosch: The best real estate investing advice I would think is — and I’m realizing this again now, when we do our large seven million dollar apartment complex deal, with financing involved… Just right now, literally, we’re in the process of closing on 147 units in Oklahoma… And it’s complex and convoluted and complicated, and you have to provide hundreds of pages to financing, and all this kind of stuff… When I think of that, if somebody would have brought me such an apartment complex deal back when we started, my eyes would have glazed over and I would have been screaming, running the other way. That is because at that time neither my wife, nor I, had any real estate experience; we didn’t know.

So my biggest real estate takeaway or my biggest advice is that wherever you are right now on your path to real estate investing, and wherever your level of knowledge, your level of confidence, your level of capability and your level of courage is, you need to find the method that fits that combination of C’s – Confidence, Capability, Courage and so on. Basically, find something that you can handle right now with the knowledge, confidence and capability that you have right now. I know knowledge is not spelled with C, but it sounds the same.

Basically, find that spot that you can take action right now. Again, if I would have gone for multifamily back then, I would have failed, because I didn’t even understand the terminology. By finding land – and these are $10,000 to $100,000; these are not the million dollar lots in downtown – we found a method that allowed us to take action and be successful where we were, with the lack of knowledge we had, and the time that we had, which wasn’t a lot.

But if somebody’s already successful and is already doing a bunch of deals, then great – find something that matches that. But bottom line is a lot of people fail, I think, because they’re taking on things that are too complicated for their current level of capability, knowledge, courage and capacity that they have in their life.

Theo Hicks: That is very, very solid advice. Are you ready for the Best Ever Lightning Round?

Jack Bosch: I am, bring it on.

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

Break: [00:16:12].12] to [00:17:28].15]

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

Jack Bosch: Best ever book I’ve recently read must be a management book by the name of Turn the Ship Around. I loved it, because we do all these different things, and we have a team of almost 20 people, if we take our contractors, virtual assistants and so on… Because we do multiple things – houses, and apartments, and the education side of things, teaching others how we do these things…

It’s a great book about creating a management structure where everyone is empowered, and knowledgeable, and has the right and has the authority to make decisions without having to go to their superiors up the chain. By implementing that as much as we currently can – and we’re constantly implementing more – it has really made everyone’s lives so much better, and it has created also a culture of fun, where people feel like they’re in charge of their own jobs, and in charge of their own roles, and they have decision power. It has created somewhat magic in our company.

Theo Hicks: This one’s going to be specific to you – best ever German meal?

Jack Bosch: It’s gotta be schnitzel, right? With french fries, or mashed potatoes, or fried potatoes. That’s gotta be the classic one, right? [unintelligible [00:18:42].07] that’s what my mom made for me always.

Theo Hicks: My favorite is Rouladen.

Jack Bosch: Oh, yes. Rouladen is very good. It has changed now… When I was little it was always schnitzel. Now you can find some schnitzels here, but when I go home, my mom always makes Rouladen, which is a mean one, a really good one.

Theo Hicks: Best ever deal that wasn’t your first deal or your last deal?

Jack Bosch: Best ever deal was one piece of land – on the land side – that we bought for $1,860 and sold for $86,000. Another one was a property we paid $5,000 for, that we still own. That is probably worth a couple hundred thousand dollars, and we’re just keeping it, because it’s in the path of growth, and the city is approaching. It’s probably gonna be worth more like half a million in the next 5-10 years.

Theo Hicks: What’s the biggest mistake you’ve made in real estate?

Jack Bosch: The biggest mistake I think is to not outsource enough… Because again, I think we spent a lot of extra money on building a large team – at some point in time over 35 people worked for us – that ate up too much of the profits of the land business. Nowadays we run a volume of well over 100-150 properties a year with basically three people.

Theo Hicks: What’s the best ever way that you like to give back?

Jack Bosch: First of all, we love sharing what we know, but we also love supporting a school for the poor in Honduras, where my wife is from. It’s an amazing school; the kids are getting bilingual classes there, and on top of it, the high school is a vocational school, so they learn a profession. By the time they graduate from high school, they are fluent in English and they have a profession, which in Honduras allows them to literally step out of poverty, start their own shop, start their own store, start their own — whatever profession they learned… And it’s 70% supported by only donations. We donate to them on a regular basis. There’s several buildings on their property that have our name on them; not that we wanted to, but they put it on there.

We find 100% of the money goes there, and we see the immediate impact in the life of kids, that otherwise wouldn’t really have a chance in life.

Theo Hicks: And then lastly, what’s the best ever place listeners can reach you?

Jack Bosch: The best ever place listeners can reach me – that would be either on JackBosch.com, or we have a Facebook group called Forever Cash – Land For Pennies… You can go there, it’s a free Facebook group where we hang out and help each other with our deals. I’m in there every day, answering questions and just posting stuff and hanging out with our friends in the land business.

Theo Hicks: Well, Jack, I really appreciate coming on and talking with us today. A truly inspiring story of how you came over here from Germany, expected to stay here for only a little bit, but met your wife and started to become interested in real estate. Wanted to get into something that didn’t cost a lot of money, wasn’t very complicated, and that’s when you discovered the concept of flipping land. You talk about how rather than attempting to purchase them at the actual tax lien or deed auction, you have a marketing approach that allows you to contact these owners before it gets to auction; you talked about how you had that 10% response rate with all land, so you did land deals up until the crash…

Jack Bosch: We continue doing land deals, and by now we don’t even focus on the tax delinquents only. Now it’s every land between $10,000 and $100,000 is a target… But we continue doing that. Just in 2008 we started adding houses to it.

Theo Hicks: That’s what I meant to say. And then we also had a conversation about how to scale, and essentially you wanna have a system and a team in place for all of the recurring duties. It doesn’t need to be a huge team, but you mentioned how you created your own custom CRM program for a place to store information and follow the deal from A to Z. You also mentioned how you outsource the incoming phone calls through a call center, your direct mailing through a mailing house, as well as team members and VA’s to analyze your deals, as well as creating a formula to help you set offers, and a system for marketing those deals once you got them accepted… And then finally, you gave your best advice ever, which I think is fantastic advice. That is to figure out your current C’s, your current confidence, capability and courage level, and find something that aligns with those that you can do right now. So don’t take on things that are too complicated, and don’t wait until you doubled your current state; figure out what you can do right now, even if that means flipping $400 pieces of land.

Again, Jack, I really appreciate you coming on the show. Have a best ever day, and we’ll talk to you soon.

Jack Bosch: Thank you very much for having me.

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JF1454: Brothers Building Blockchain – Real Estate Style with Joe Snyder & Chris Brown

Joe and Chris are teaming together to make real estate investing easier for everyone. Using Blockchain technology, they have digitized a lot of the intermediary pieces and even automated a lot of it. You’ll just have to listen in to understand what I mean. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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Joe Snyder Real Estate Background:

  • Serial entrepreneur
  • Successfully initiated, built, scaled, acquired, merged, and exited multiple companies over the last 15 years
  • Built his initial wealth investing in real estate
  • Based in Phoenix, Arizona
  • Say hi to him at https://www.lannisterholdings.com

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Do you need debt, equity, or a loan guarantor for your deals?

Eastern Union Funding and Arbor Realty Trust are the companies to talk to, specifically Marc Belsky.

I have used him for both agency debt, help with the equity raise, and my consulting clients have successfully closed deals with Marc’s help.

See how Marc can help you by calling him at 212-897-9875 or emailing him mbelsky@easterneq.com


Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Joe Snyder and Chris Brown from Lannister Holdings. How are you two doing?

Chris Brown: Awesome, man. Thanks for having us on, and great to meet you.

Joe Fairless: Yeah, my pleasure. Nice to have you both on the show. Your company, Lannister Holdings – well, Joe, I know you successfully built, scaled, acquired, merged and exited multiple companies over the last 15 years, and you initially built your wealth in real estate, so why don’t we first start talking about your background and your focus, and then that will lead us into Lannister Holdings?

Joe Snyder: Sure, absolutely. Chris and I both have been real estate investors. Our family has a real estate brokerage in the Phoenix area, a division there as well… So we are intricately linked to real estate, and real estate investing, and have been for a very long time.

I initially started my entrepreneurial, professional, adult entrepreneurial career by investing in real state in 2002, and that went really well until 2006, and then it went kind of badly for a little while, and then it’s gone well again, so that’s nice… And Chris has been a real estate investor [unintelligible [00:04:36].29] Chris, do you wanna tell them about yourself a little bit?

Chris Brown: Yeah, I’ve also been in real estate investing for many years; our family — we’re brothers, by the way… But our family is deeply involved in real estate investing, selling, brokering – all the normal sort of things that you get into once you get into real estate.

I have a background in programming and mathematics, so I’ve spent a lot of years building apps, working as a professional software developer, working as a freelancer, building our own software development company and expanding that.

Joe Snyder: So those experiences brought us to form Lannister Holdings, and Lannister Holdings is a blockchain development company based out of Phoenix, Arizona. We are publicly traded, so we’re traded on the U.S. OTC market, under the ticker symbol NBDR.

What we put together was this internal focus on the syndication and packaging and existing legal structures for syndicated real estate investment, as well as we have Lannister Development as a subsidiary, and Lannister Development is focused on building software and technologies, decentralized systems, and that’s really Chris’ world, for our client-facing division.

So we are working on use cases and working with prospects and clients across many verticals, not just real estate and not just finance. But our internal focus is building out the tools and the technologies to run existing syndication, legal frameworks and methods on the blockchain, using smart contracts, using token use cases, all of those kinds of things, with folks just like you, who are doing syndication, who are bringing people together to make group real estate investments.

One of the specific things that we’re working on and talking with different interested parties and partners on is master limited partnerships in the state of Arizona specifically, which is where we’re based… But master limited partnerships and structures like that where you have a kind of illiquid pool, and where we believe that blockchain technology and smart contracts and token use cases can come in and reduce costs, and reduce risk, and add liquidity to these existing structures of investment.

Joe Fairless: I heard everything you said, and I wrote down a lot of it, but I still think “What…?!” [laughter] So dumb it down for me like you’re speaking to a two-year-old right now.

Joe Snyder: I’ll let Chris do some tech piece, but let me just–

Joe Fairless: Well, I don’t need a tech piece, I just need the two-year-old speak… So I’m in real estate, I’m an apartment syndicator… What do you do exactly that can help me out?

Joe Snyder: You’re an apartment syndicator, so you have a traditional method and a traditional legal framework that you are bringing people into and they are combining these in order to acquire whatever blocks of apartments and blocks of real estate that you’re currently acquiring, right?

Joe Fairless: I have  groups of accredited investors I work with, and we buy a property. Correct.

Joe Snyder: So our technologies allow that process and that transaction to be digitally contracted, digitally secured, and allow the ownership of those pieces of those assets to be tokenized on a crypto token, so that your investors have an added layer of transparency and security, they also have reduced costs from all of the transaction points being digital, as opposed to a paper or a pen or things like that.

Then on the other side of that transaction there is liquidity for the investment between the parties through the tokenization… So it can go down to heirs, and be split, it can be transferred to other parties… So there’s a whole layer of operations and systems and contractual risk mitigation and cost reduction that can happen by doing that exact same process that you’re doing, with the same legal structures and the same rules and filings that you’re currently doing, but on a decentralized system, with technology, as opposed to the traditional system.

Joe Fairless: Thank you. That’s helpful. I don’t think a two-year-old would get that, but I got that one, so I appreciate you taking it down a level for me… So let me just restate some of what I’ve heard and then we’ll build up from there. What you’re doing now, it would allow an apartment syndication group to do what we do, but do it digitally, and you’re suggesting that it would be more secured, and  also it would allow the ownership to the people who own it to then have liquidity through the tokenization of it, and then they could transfer some or all of their ownership to other people through that process. Is that accurate?

Joe Snyder: Yes, that’s correct, and depending on jurisdictions, there are some legal questions about which of those exact structures you’re using, but essentially yes.

Joe Fairless: So why would I want to do that? As someone who puts the deals together, why would I want to do that? Why would I want to change what I’m doing now?

Joe Snyder: Let me have Chris step in there a little bit and talk about why there’s a technological difference between what you’re doing now and how there’s cost mitigation, and then we can talk a little bit more about from the syndicator side of how that looks. Chris?

Chris Brown: Well, I guess the real question is what are the problems that you face as a syndicator? Now, when I’m thinking about this from a technical perspective, I’m thinking about “Who’s trying to purchase a piece of this?” and “Who’s managing the piece of this that they’re purchasing?” and “Who is selling these pieces?”

The digitization in the middle there allows for facilitation of the trading part of that really, and saying “What is a piece of ownership? How do we track a piece of ownership, and how large or small does that have to be? How quickly can we transact that and how can we maintain that we know who the owners  are, when they bought it, the chain of title, and everything else that happens inside of it?”

Does that necessarily make your life as the person putting the package together easier? I believe so. I think it adds cost effectiveness of being able to know what the smart contracts are and initiate them at any point, with any set amount of buyers and anything else. Now, you already have those contracts in paper; you have to do them in paper with all these people, and then go and, I imagine, file them, and do all the other steps in the process, which each step costs money.

The digitization here removes a lot of those intermediary pieces, or automates those intermediary pieces, which lends strength to the process itself, so this is no longer in the hands of people, but we’re going between digitized smart contracts that say “If this many people put the money in, we go out and we release the money to the manager to buy X property.”

Joe Snyder: That’s the technical working of it, and how we see it as real estate investors and as people who also have experience with and inside knowledge on how these technologies work and integrate and disrupt systems, we as a company have the core belief that blockchain decentralized ledger token use cases are the core basis for the future of financial transactions and transactability.

So not only is there the risk mitigation, some liquidity factors, all of those pieces, but also there’s the potential to be first in these spaces, and to be some of the first people deploying these things in this way. It does add the potential of accessing larger scales of capital than the existing syndications as well.

Obviously, we’re building these tools for existing businesses and existing syndication groups, just like [unintelligible [00:12:36].12] blockchain tools for existing companies in manufacturing, and logistics, and infrastructure [unintelligible [00:12:42].29] So we believe that working with people who wanna be first in their industry, who want to be earlier adopters of these technologies and these deployments in these real-world existing regulatory use cases, that there’s added benefits right up front as far as security and risk and costs, but also that there’s long-term added benefits of being the people who do it this way from the beginning, and there’s of course the potential of compiling and owning swathes of intellectual property around those processes, because most of this space is very thin.

Joe Fairless: Okay. And I think maybe we can do an example that’s not syndication for real estate, that might simplify some things… Because in my mind, you talk about being a first-mover – hell no, I don’t wanna be a first-mover in this. I’m dealing with millions of my investor dollars, and I do not want to be on the cutting edge of this; I wanna be safely in the middle if I do it… I definitely don’t wanna be at the beginning.

Before we go into a more simplified example, help me understand — you mentioned security of system, but then you also talk about being a first mover, and to me, those are going against each other…

Joe Snyder: Well, first of all, there’s a difference between first-mover and early adopter. Blockchain is being integrated into everything that you’re currently using. IBM is integrating it, JP Morgan Chase is integrating it, Walmart is integrating it… So this is the future of financial transaction technology, we believe that. Our public company is established on that fact.

When we’re saying early adopter – there’s a difference between an early adopter and a first-mover. An early adopter is somebody who’s looking at existing technologies that have over a decade of proof behind them, that are being deployed by the world’s largest corporations and governments every single day for similar use cases, and saying “I want to use those tools for these verticals as well.”

That’s the conversation that we’re having with multiple markets, not just real estate… Across the spectrum of all of the businesses, scaled business, that has all of these contract points, all of these interaction points, all of these verification points. Blockchain allows a supply chain to be inspected transparently, securely and quickly, in a way that has never been possible before.

You providing that early adoption — and not necessarily you; there’s lots and lots of syndication going on out there, there’s lots and lots of this kind of work being done, and that’s an adventure for us, which we love… But the people who are using these tools and deploying these things in the real world, in our belief, in our experience with the market, are having an additional value point to present to their investors, to present to their syndicators, and then additional capital pool from the existing pools of capital that is out in the crypto token and cryptocurrency markets as well, which is not necessarily being [unintelligible [00:15:54].28]

We’re not really a crypto company… Do we know how to build those tools? Absolutely. Do we work with companies that do those things? Absolutely. But we’re not really a crypto company. We believe that the decentralized ledger technology, that the security and the transparency and everything that comes along with that as a core technology is the future of how business operates, how financial contracts get transacted, how mortgages get transacted, how they get packaged, and sold, and securitized – all of those kind of things are the pieces that we are looking at disrupting and impacting. And it’s not a first-mover, but we believe it is still in early adopter phase, and that’s a positive thing for us. We believe that that’s a win, not an expense.

Joe Fairless: I appreciate you elaborating on this. I’ve got friends in this space and I highly respect them. They talk about the importance of blockchain to the real estate industry and how it lends itself to real estate in particular… So I’m just looking to be educated on this, so I appreciate you talking through some of these questions… And I’m just asking them as I’m just thinking of them.

You mentioned the security of the system being greater than the traditional method… How is it more secure if it is in the first-mover stage?

Joe Snyder: Again, just to clarify, it’s not in the first-mover stage…

Joe Fairless: Okay… Early adopter?

Joe Snyder: Early adopter.

Joe Fairless: Okay, early adopter. How is it more secure if it’s in early adopter stage?

Joe Snyder: Sure. Chris, do you wanna talk about the security site?

Chris Brown: In general, we’re talking about cryptographically secure, distributed ledgers, so you have consensus among multiple peers who all are interested parties, and generally for the benefit of the system itself. Doing things like that, if you have, let’s say, four banks that wanna work together, four primary banks in a country, or something… Each of those banks can become part of the same system, become part of the consensus network, saying whether a transaction is valid or not. Then between those four banks, they now have a verifiable, up-to-date, almost real-time ledger of all the transactions that they need to track.

So you could apply that to credit, or here you could apply it to real estate and the division of the package of assets inside the system, where you have a certain number of actors working together to create a consensus about whether or not a transaction took place, whether or not somebody sold, or bought, or was paid their dividend, or anything else.

Once you have that piece, then you have a layer of security against fraud or corruption inside that system or that market itself. And if we look at what these contracts are and what these pieces are here, we’re talking about basically creating slivers of securities and knowing where those securities exist, who owns them, who’s running them, who’s keeping them… It’s very important; it’s the whole point of regulation and registration and everything else.

So we’re moving those to a place where we know what has happened, because the ledger is only secure and only continues when the previous transactions are verifiable… So every transaction is verified by a unique ID from the chain of the previous transactions. I’m sorry if that doesn’t entirely make sense on its own, but essentially, a transaction can only occur if every transaction before it in line is the correct transaction. So if you tamper with the previous transaction, the rest of the transaction IDs are no longer valid, so we can no longer trust that chain of events, which means you can’t go back and tamper with any [unintelligible [00:19:30].11] or else that transaction itself wouldn’t be valid.

Joe Fairless: Sure. Okay, it makes sense. So as a real estate investor who is listening to this and they would like to learn more about this, how can they take the blockchain technology and actually apply it in their everyday scenario to do transactions?

Joe Snyder: Call us! [laughter] Our sales teams are ready to talk to you now. [laughs]

Chris Brown: I think speaking from the side of real estate investors, I think these tools are really just starting to get built and starting to spin up. You’re gonna see a lot of really interesting sort of crowdfunded real estate ventures that allow investors to come into deal sizes and at prices that they’ve never seen before.

It’s very unlikely that I can go with $10,000 to a fund that’s buying 50 million dollars’ worth of apartments, and even get inside the door to talk to their sales team. But as these technologies come forward, you’re gonna see a change in the way that securities are handled, because we’re gonna be seeing  a world where you can create your own market for anything you want, at any time, and have it be verifiable and secured by a larger group of people, especially in these large, public blockchains that are currently available, and the ones that we’re gonna see in the future, for handling these sorts of markets and these sorts of financial assets.

So at the moment, [unintelligible [00:20:56].14] for a real estate investor to have a daily impact in their lives, just to know that these tools are coming, and as they do, you have to watch out for what’s real and what’s solid and what’s well done and what has a great team behind it, and what does not. And when you find those things that have great teams behind them and they’re an awesome technology and they’re really allowing a new level and a new type of investing in any sort of asset, not necessarily just real estate… Imagine I could open up a fund to buy a wind turbine and 200k people could buy pieces of it. It becomes a point where you’re automating the internal pieces of what it is to be a market, what it is to pay dividends and what it is do all those things, that you stop caring how many people are involved in the vehicle itself.

So that’s really gonna be a focus point, I think, from my point of view, also as an investor and also as someone who’s currently actively buying property… It’s something very interesting that’s coming on a very short time horizon, so it’s something to watch out for.

Joe Snyder: And additionally, Joe, for folks who are doing syndication or who are structuring master limited partnerships, or who are bringing together groups of investors to do this stuff already – those folks we definitely can help and talk to and review the use cases, and where their jurisdictions are, and things like that, specifically in the state of Arizona.

Arizona is a very blockchain-friendly state from a legislative standpoint; that’s one of the reasons that we’re based there. Arizona has a blockchain sandbox at the state level that does allow us to work with the state, deploy these technologies in real-world use cases for financial instruments, and for up to two years, for up to 10,000 people before the full regulatory processes are required, and things like that.

So depending on where investment groups are or where people are, there are some differences in what can and can’t be done right now as far as the registrations and the rule of law. But we are actively speaking to different investment groups and different syndicators about their particular deals and how to deploy those via blockchain, via smart contracts, with token use cases, as opposed to the traditional paper models.

So those are active, and if there are people out there that are listening to this that are interested in knowing more about that, or talking with anybody, you can reach us at LannisterDevelopment.com and our Contact form is on there… Or @lannisternbdr on Twitter, for sure.

Joe Fairless: Awesome. Well, I was gonna ask you how the Best Ever listeners can get a hold of you, but you’ve just mentioned it. Thank you so much for being on the show and talking about your technology, for educating me from a high level how the process works. I’m sure we could have a conversation for days on end, without breaks, about the technology, and I’m sure Chris would be in his own personal Nirvana if that were to take place… So I appreciate you two coming on and talking to us about this, and I hope you two have a best ever day, and we’ll talk to you soon!

Joe Snyder: Thank you so much. Have a great day!

Chris Brown: Thank you. Have a good one!

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JF1328: How To Sell Your Property Quickly For A High Price #SkillSetSunday with Jayden Pudney

Today we have one of the youngest wholesalers actively closing deals in the country on the show. Jayden may be young but he has a ton of knowledge and experience already. A lot of what is covered today is focused on finding deals, finding buyers, and closing deals for wholesaling. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

Today is Sunday. First off, I hope you’re having a best ever Sunday… Because it’s Sunday, we’ve got a special segment for you called Skillset Sunday. The skillset that you will learn or hone today is how to sell your property quickly and for a very high price.

With us today we’ve got Jayden Pudney, who is gonna walk us through and talk to us about that. How are you doing, Jayden?

Jayden Pudney: I’m doing good, Joe. How are you?

Joe Fairless: I’m doing well, and nice to have you back on the show. Best Ever listeners, you can hear Jayden’s best ever advice – episode #641, titled “How one of the youngest guests on the show closed his first deal in high school.” Very intriguing.

Jayden is the author of the “The $8,000 Phone Call.” He is the youngest wholesaler in Arizona – perhaps you were… It’s been a while since we talked. You’re based in Phoenix, Arizona, you’re a wholesaler and an investor, so talk to us about selling. What should we know about how to get the highest and quickest sale of our property?

Jayden Pudney: Well, I think what it really comes down to is knowing your buyers and knowing the area. I think if you know what your buyers can pay for a certain property, whether it be a single-family residence, a multifamily or a land deal, I think that’s really gonna narrow down what you could sell for and hone down on what you could sell the next properties for.

Joe Fairless: That makes sense. So what research do you do to know the buyers? Then we’ll go into the area.

Jayden Pudney: For a lot of our buyers, typically in Arizona, we [unintelligible [00:02:19].29] continuous buyers – we work with the same buyers – but we do find a lot of different buyers when we do send out a property. So we’ll send one out, and if we know the area very well, we know who’s gonna buy it, but if it’s a new area or a not so nice area, we will skip trace by the area, by LLC, and we will find them that way, to know who’s buying in the area.

Joe Fairless: When you skip trace – first off, for anyone not familiar with skip tracing, what is it?

Jayden Pudney: Skiptracing is a service you use to find the address and phone number and typically a little bit more information on a person that you wanna look up… Or you can find an LLC’s information as well.

Joe Fairless: Okay. What service do you use to skip trace?

Jayden Pudney: We use one of the more typical ones, TLO.

Joe Fairless: What is it?

Jayden Pudney: TLO.

Joe Fairless: TLO, right? Is that what you said?

Jayden Pudney: Yeah, that’s a very common service.

Joe Fairless: Approximately how much does that cost?

Jayden Pudney: On the level we do it now, we pay 40-50 cents for every person that we skip trace. On a more uncommon level, like somebody who just wants to skip trace a few people, it’s gonna cost you about a dollar a person.

Joe Fairless: Okay. Once you get their address, their phone number — first off, who do you determine you’re going to skip trace to get information?

Jayden Pudney: If we do lock up a 3-bedroom 2-bath in an area, say it’s a brick-built home, what we’re gonna do is we’re gonna look at other similar properties that sold in the area; say an LLC just bought one similar, that’s a 3-bedroom 2-bath brick style home, and they bought it for 80k, and we just picked up one for 60k… And I drive by and I see the property and I see that they bought in a similar condition and they’re remodeling it, what we’ll do is we’ll skip trace that LLC, find the owner of the LLC/corporation, and we’ll just give them our pitch on another property nearby.

Joe Fairless: What’s your pitch? On the surface, I don’t think there needs to even be a pitch, right? Because you’re giving them a really good deal… But I’m just curious, what do you say to them?

Jayden Pudney: A lot of them are curious on like — because they’re doing a remodel in the area and they’re curious “Why is this person calling me?” and a lot of them are surprised by the fact that you take initiative and you actually reach out to buyers that bought in the area… Because sometimes it’s like a big corporation that buys homes and flips them, or it’s just a mom and pop kind of business that buy them.

Joe Fairless: Okay. You just tell them, “Hey, I’ve got a deal close by. It’s for this much. Do you wanna buy it?” Is that basically it?

Jayden Pudney: Basically yes, but if you wanna go more [unintelligible [00:04:40].24] perspective, you can say “Hey, I noticed you bought 123 Main Street, and I’ve actually got one down the street from Main Street just like it” and we just kind of pitch them on the idea that it’s perfect for their next flip.

Joe Fairless: Yeah, that’s a very effective way of doing it. What about from a negotiations standpoint? Because part of this is how do we sell quickly and at a high price that makes sense for you. So if they were to push back on the numbers, how do you approach that?

Jayden Pudney: Typically, when we do lock in a property we’re pretty dead set on our numbers, what we lock it up for and what we can sell it for. So if a buyer does come back and say “Hey, I can only do so much”, there’s gonna be some questions on why he only got that number, and if there is a considerable drop, we will explain to them why we think this specific property is worth that.

Joe Fairless: Any common reasons why it’s worth X and not what they think it’s worth that come up?

Jayden Pudney: Typically I would say some of the more common reasons – bricks versus wood-built, years built, and what the style of the home is.

Joe Fairless: Can you elaborate on the style of the home, and how that would vary on price?

Jayden Pudney: If there’s homes selling in the area that look more like a bungalow type property and you have one that looks like a straight shoebox, you’re typically gonna get less for the property because that’s not what the area is selling at and that’s not what people are gonna be buying in the area. They’re gonna want something that looks like the rest of the neighborhood; you really don’t want that oddball property.

Joe Fairless: As far as the area goes, anything else we need to talk about as it relates to the buyers that you can think of?

Jayden Pudney: Not really. If you can find a new buyer, my suggestion to you would be to build the best relationship you can with them. We actually typically send gift baskets and gift cards to all of our buyers that have bought properties from us, and we continue to do so, and they come back for business because they love dealing with us. That’s gonna get you a continuous good buyer relationship.

For most properties now they actually don’t even drive or look inside of our property. They just look at the numbers, they know what it is, and they’re just buying.

Joe Fairless: How much do you invest in a gift basket to an investor?

Jayden Pudney: Honestly, it’s no more than $50 to buy just some sort of gift basket that you can throw together, or a $25 Starbucks gift card.

Joe Fairless: Okay. And you send that to him/her after they closed on a deal with you?

Jayden Pudney: Yeah, and it’s just the same thing we do with our title companies, we take care of them as well. If it’s a smooth, easy transaction, we’ll send them something as well or we’ll send them something every quarter, just to say “Hey, thank you so much for helping us buy and sell the properties. Here’s a little gift basket/gift cards.” That really goes a long way in people appreciating you and continuing to care about you and your business.

Joe Fairless: Now let’s talk about the area. When we started out this conversation, the outcome is to learn how to sell quickly and at a high price… You said in order to do that, you need to know these two things: the buyers who are gonna buy, and the area that the property is in. What research do you do on the area, now that we’ve talked about the buyer?

Jayden Pudney: For Arizona – because that’s our hometown; we all live here, me and my team… We all live here, we know the areas pretty well, we know if we buy in a certain zip code or in a certain side of town, we know the area that it’s gonna be. If it’s more of a C or D, kind of average area, we know what they’re gonna pay for that property, and if it’s a higher class 400k-500k home, we know that we have a smaller list of select buyers that have that much capital, or we’ll just have access to hard money.

Joe Fairless: So based on the area’s price point, which is one of the main things you’re focused on – that determines what buyers you’re gonna reach out to.

Jayden Pudney: Yeah, exactly. If we have a 40k-50k home, it’s gonna raise a lot of interest with a lot of buyers, because one way or another you can raise 40k-50k, plus another 20k for repairs very easily, versus coming up with 400k-500k and 20% down on a hard money.

Joe Fairless: Do you have a different way to approach the buyers who are in the 500k price point versus the 50k?

Jayden Pudney: I would say they’re approximately the same. The way you pitch it is gonna be the same, there’s nothing different. I would say the only thing different is how you deal with sellers. Typically, on smaller, cheaper-priced properties – they’re vacant properties or they’re very distressed, and they wanna get out quickly; it’s either a foreclosure, or they inherited the property.
Typically, properties that are 400k-600k, they tend to know what they’re doing, they know what to expect… Sellers are typically very, very educated.

Joe Fairless: Anything else as it relates to selling quickly and for the highest price that we haven’t talked about that you wanted to bring up?

Jayden Pudney: I would say just knowing the property in and out. Something as small as a less bedroom can really hurt your price point and what you think you can sell it for, because if you come in with the property and it comes up to be smaller, or there are add-ons, or one less bedroom, that can really hurt your purchase price that you bought it for, and that can really hurt your sell side.

Joe Fairless: Tell us a story about a deal that was challenging, but you ended up selling it quickly for a high price.

Jayden Pudney: We did have a property in Nevada, because we do purchase homes in Nevada… This one was specifically in Las Vegas. This one ended up having — it was supposed to have over 1,000 feet extra in permits in add-ons, but once we started to get into it, we realized that the add-ons weren’t there; the lady was unsure of how big her house was, so we had somebody go and measure it. It ended up being just ridiculously much smaller.

That one actually took about two months to get through, because we did have buyers back out, and it was just a big, big mess, but at the end of the day I believe we ended up clearing a $25,000 wholesale.

Joe Fairless: What were some keys to that deal that allowed you to clear that profit?

Jayden Pudney: I think one of the main keys is customer service and providing a service to your seller. We paid [unintelligible [00:10:34].12] we helped her with a moving company, and we did help her move out of the property as well. That’s things that not many other investors are gonna help you do, and that’s kind of what sets us apart.

Joe Fairless: Anything else as it relates to this topic that we haven’t discussed that you wanna bring up?

Jayden Pudney: I think that’s really it.

Joe Fairless: Well, I really appreciate you sharing your thoughts and your experience and your advice for us to get the most out of the properties that we’re selling, and do it in a quick fashion. A couple things that I found really interesting – one is you and the buyer are negotiating back and forth on the price… Take a look at three things – one is brick vs wood build, two is year built, and three is the style of the home, and perhaps come prepared to have talking points on each of those three, so that you can quickly react to their objection with some statistics, number one.

And then the other thing is with the buyers, your approach for proactively finding buyers by looking up who’s bought in that neighborhood a similar property, getting their contact information through skiptracing; you use TLO as a service, about 50 cents a person, or maybe a dollar a person, depending on the volume that you use… And then reach out to them. That truly is the best target audience for that property, and I really appreciate you sharing that with us.

Thanks a lot for being on the show. How can the Best Ever listeners get in touch with you?

Jayden Pudney: They can either get in touch with me through my Facebook, or they can just give me a call. Either one is fine. My phone number is 602-501-2534.

Joe Fairless: Jayden, thank you so much for being on the show. I hope you have a best ever weekend, and we’ll talk to you soon.

Jayden Pudney: Alright, Joe. Thank you so much, I appreciate it.

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JF861: From 9 to 5 Call Center to Multimillion Entrepreneur and Why You MUST Think This Way

Are you working a full-time job right now? Do you hate what you do? So did our guest, and now he is consulting multimillion dollar companies on the daily! If you are about to quit and give up living your dreams, turn this episode on full blast. All of this applies to real estate as well!

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Kolby Kay Real Estate Background:

– Entrepreneur and Owner of The Healthy Primate
– Built, sold and advised over 20 startups that have generated over 50 million dollars in revenue
– Spent 15 years running sales and marketing for companies such as IBM, Hewlett Packard, Microsoft,
– In 2015, he joined UK2 Group where he is Head of Global Sales
– Author of Why Your Life is Killing You
– My Journey to Reducing Stress and Living to Tell About It
– Based in Phoenix, Arizona
– Say hi to him at www.simplemoneymethods.com or www.facebook.com/imkolbykay
– Best Ever Book: The Alchemist by Pablo

Click here for a summary of Kolby’s best ever advice: http://bit.ly/2jESeOh

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JF767: You Bought at the Top of the Market, Now What? #SituationSaturday

Today’s guest purchased a property at the top of the market in 2006, and his intention was to collect a cash flow. Hear how he had a trouble Tenant, moved into the house, and what he did with that property to leverage his next purchase.

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Deacon Hayes Real Estate Background:

– Founder of Well Kept Wallet
– Featured in World Report
– Based in Phoenix, Az
– Say hi at wellkeptwallet.com

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JF765: Why You SHOULDN’T Buy a Single Family Residence on Your First Purchase

Today’s guest is a lender who has been around the block over 20 years and he is about to tell you the best way to jump into real estate. Tune in!

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Alex Joiner Real Estate Background:

– Senior Loan Originator at Mountain West Financial
– Over 20 years experience in mortgage and financial business
– Business degree from Alta Tech
– Based in Phoenix, Arizona
– Say hi to him at: 4802701062
– Best Ever Book: The Holy Bible

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JF755: An Honest GURU of Apartment Syndication and How He Got Started

We only say guru because he really is the real deal. Here how we got started and why he invests in syndicated deals. He’s an absolute genius in the space and shares his Best Ever advice, turn it up!

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Craig Haskell Real Estate Background:

– Founder of Value Hound Academy
– Over 7,200 units owned via syndication
– Author of several books including The Inside Game to Real Estate Value Investing
– Based in Phoenix, AZ
– Say hi at www.valuehoundacademy.com

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JF736: How to Score 50 Deals in Your First 18 Months!

Today’s guest is a Phoenix native who started about 18 months ago… And now has 50 deals under his belt. He shares how he did it and what niche he is currently working. Here’s a hint, he speaks amazing Spanish. Tune in and take notes!

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Jose Carreon Real Estate Background:

– Owner of National Consulting Group
– 50 deals in 18 months
– Say hi at 6025159338
– Based in Phoenix, AZ
– Best Ever Book The 10X Rule

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JF723: Cash Flow Principals and REI Fundamentals with The Real Estate Guys Radio Show Co-host Russ Gray

Hear one the industry’s top voice, Russ Gray of The Real Estate Guys Radio share his Best Ever advice and true philosophy in real estate investing. He shares his core beliefs in REI, opportunities he runs into, and his purpose. Save this episode!

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Russ Gray Real Estate Background:

– Co-host of The Real Estate Guys Radio
– One of the top real estate podcasts in the world
– Pushing 6,000,000 downloads with only once a week
– Based in Las Vegas, Nevada and Phoenix, Arizona
– Say hi at https://realestateguysradio.com
– Best Ever Book Equity Happens

Want an inbox full of online leads?

Get a FREE strategy session with Dan Barrett who is the only certified Google partner that exclusively works with real estate investors like us.

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JF716: ALL You Need to Know about Hiring, Team Building, and Solving Problems

Today’s guest is from Phoenix Arizona and has cracked the code on building a team and marketing. He shares with us his experiences hiring and outsourcing. Hear how he has established himself as a wholesale authority, just click play!

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Martin Boonzaayer Real Estate Background:

–   Founder of The Trusted Homebuyer
–   Specializes in probate and residential investing
–   Based in Phoenix, AZ
–   Say hi at thetrustedhomebuyer.com
–   Best Ever Book Never Split the Difference by Chris Voss

Listen to all episodes and get a FREE crash course on real estate investing at: http://www.joefairless.com

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors.

We make funding your projects easy so you can focus on what you do best…rehabilitating homes. Learn more at http://www.fundthatflip.com/bestever.

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JF712: How He Cleared $52,000 of Debt in 18 Months

In debt? Have you taken a close look at all your expenses? Is there a way to reduce and/or eliminate them? Today’s guest is here to help us skinny up on our capital expenditures, be sure you reach out to him!

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Deacon Hayes Real Estate Background:

– Founder of Well Kept Wallet
– Featured in World Report
– Based in Phoenix, Az
– Say hi at wellkeptwallet.com

Listen to all episodes and get a FREE crash course on real estate investing at: http://www.joefairless.com

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors.

We make funding your projects easy so you can focus on what you do best…rehabilitating homes. Learn more at http://www.fundthatflip.com/bestever.

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JF706: When ‘Driving For Dollars’ Rewards You a 6 Plex at 50% ARV

Today’s guest truly hustles for the deals that will change his life. Originally a Phoenix whole sale specialist, he is now focused on raising capital and long-term buy-and-hold properties. Hear about his creative offer for a six Plex in Mesa, Arizona and how he came out on top!

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Michael Del Prete Real Estate Background:

– Owner at We Heart Houses LLC
– Wholesaled over 200 homes in a few years
– Based in Phoenix, AZ
– Say hi at wehearthouses.com
– Best Ever Book: Good to Great by James Collins

Listen to all episodes and get a FREE crash course on real estate investing at: http://www.joefairless.com

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors.

We make funding your projects easy so you can focus on what you do best…rehabilitating homes. Learn more at http://www.fundthatflip.com/bestever.

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JF697 How to OUTSOURCE and Explore Other Real Estate Businesses #situationsaturday

Need to develop a new investor? Soon enough you will be looking to outsource much of the load that you carry, which is a pivotal part of your business progress. You may like to dive into another investing niche…hear our guest share how he’s doing it!

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Scott Bower Real Estate Background:

– Owner of HBSB Holdings
– Previous guest on episode 510
– Based in Phoenix, AZ
– Say hi at (480) 331-4165

Listen to all episodes and get a FREE crash course on real estate investing at: http://www.joefairless.com

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors.

We make funding your projects easy so you can focus on what you do best…rehabilitating homes. Learn more at http://www.fundthatflip.com/bestever.

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JF687: His Software Filters KILLER Deals in the MLS

Today’s guest is a real estate investor acquisition specialist in Phoenix Arizona who is working with a team to acquire properties with value. He has something up his sleeve and is most definitely closing deals, turn up the volume!

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Matthew McQueary Real Estate Background:

– US Acquisitions
– Bought over 50 homes in 12 months
– Based in Phoenix, AZ
– Say hi at (623) 606-8103

Listen to all episodes and get a FREE crash course on real estate investing at: http://www.joefairless.com

Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors.

We make funding your projects easy so you can focus on what you do best…rehabilitating homes. Learn more at http://www.fundthatflip.com/bestever.

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