Hey everyone, it’s Mark Ferguson with InvestFourMore and welcome to another episode of the InvestFourMore Real Estate Podcast. I have a really awesome guest for today’s show. Tim Rhode who has been an agent, who sold over 2,500 homes, also a real estate investor who has bought and sold over a hundred homes. Eventually exchanged his properties into some larger commercial projects.
Now, as he likes to say, he relaxes and has a ton of time with his family, does some non-profit work. I’m really excited to talk to Tim, find out how he got to where he is now, learn a few things about investing and then also he’s got a lot of great tips for people looking to get started investing and saving money. Tim, thank you so much for being on the show, how are you doing?
It’s great to be on, thank you so much Mark, appreciate the opportunity.
Yeah, great to have you. I would love to start with how you first got started in real estate. What drew you to it, what circumstances got you into that business?
Well, I was a late bloomer in life at 25 years old, I was a part time grocery clerk painting addresses on people’s curbs to buy diapers for my then small kids but I always love monopoly and always loved the thought of real estate when I was young.
As a part time clerk guy, I actually bought my first home then and just really started the listing and selling piece because I wanted to get in to the investing side so much. Around 25 I started as a listing agent and did pretty well from the start.
You started back in the 80’s, hopefully that’s okay I mentioned that but what was it like being a real estate agent back then first starting out. You said you started out pretty well, I know it’s rough for a lot of agents to get started because it takes some time to build business. How did you find success early? What were some things you focused on?
Well, first of all, it’s really funny. There was no fax machines, this was… I drive 60 miles to get a contract signed and then call somebody and say, all right, I got a signature because it was just a different era then, there was no social media, there was a lot of advantages now that there weren’t then.
It’s a totally different era but I think that everything’s the same, it’s all about relationships with people, about your ability to connect. Whether you’re listing and selling, whether you’re investing, no matter what you’re doing, I think a lot of it is just interpersonal relationships. I think that’s one of my secrets was, when If first started, I could not market people, I didn’t have the presence they have.
The one thing a new person has is work ethic and that’s the thing I think that set me apart is I was willing to do anything anytime and was not afraid to prospect, get in the trenches, learn everything I possibly could to how to master my craft.
That’s great, we have a few people on our team as well and you can really see the difference between those who are willing to work at it, just go for it and those who kind of get stuck in education mode or scared to talk to people, don’t want to make any mistakes. In real estate, really, the best way to learn is just go do it and the more people you talk to, the better off you’re going to be.
Boy, you got that right Mark. I had a sign over my desk, it was step right up and risk rejection. While I was listing and selling, I had a rule, if I had three listing appointments in a day, I did not have to prospect, if I had two listing appointments I prospected an hour, if I had one listing appointment, I only prospected it two hours and if I had no listing appointments, I had to either knock doors or talk on the phone for three hours a day.
During that time, I built up a staff and they knew, just don’t bother me from nine to noon because I’m prospecting.
That’s awesome. I have no statistics for this but I would bet, 95% of agents don’t have rules for that, time they set aside to prospect is kind of a wing it, hope things go your way during the day and see what happens.
Sure. I think being deliberate about anything you do, it really does make a big difference and if nothing else, it’s just a matter of what are three things I want to get done today, who were five to 10 people I want to talk to today and who are two or three people I want to see today and just check those off. Just having any kind of plan is so much better than hap hazard.
Yup, exactly. Obviously you were very successful, sold 2,500 houses which is phenomenal. How did you move… I guess, before we get started with the investing, I mean, I’m assuming you built up a team or was it just you working your whole self that time, did you work with other agents? How did that happen?
The first thing I did is about a year and a half into the business, I brought an escrow person on to do all my deals and I paid her $48,000 with four weeks paid vacation when I was barely making $100,000. It was a really bold move and what I wanted to do was just shore up that part of the deal to where she was taking care of my escrows from as soon as it went in to escrow, when it closed, she’d have all the contacts with people.
Now, there’s escrow assistants everywhere and people have built up, back when I was doing this, there weren’t teams and other agents were using that against me. Tim Rhode is going to have one of his unlicensed clerks to help you and you know, just there were a lot of us at us but I recognized early on, if I did my unique 10% which is prospecting and actually taking the listings.
And really monitoring what’s coming in, what’s going out, what’s left to invest, the E-myth side of the business. Those were the things that I wanted to focus on and all the details of putting on lock boxes and putting up signs and writing the ads and just all the other more clerical tasks that need to be done, I wanted to hand off as much of that so I could focus on A, what I was good at and B, what would lead to the most amount of net dollars for us.
That’s great advice and we try to do the same thing, a lot of people do use the team, a lot more teams like you said now but you people do try to use that against you sometimes but if you have one agent working on their own and they go on vacation, you know, you’ve got nobody working for you then.
The team concept I think is really beneficial and like you said, for some people, it’s hard to let go of doing everything yourselves, it’s a trust issue, kind of your ego gets in the way but when I hand things off I don’t like doing, they usually get done better and faster than if I was doing it myself.
Exactly. Actually, I would tell the team I’d have a picture of my staff and I’d say, here’s Memory and here’s Valery and here’s Loopy. Here’s my cellphone, you’re welcome to call me but you won’t want to. You know what? I’m just a figurehead and I’m really good at selling and I’m going to help get people to your door but as far as all the details, these ladies are just focused on service and they’re going to really work their butts off for you.
And then I go back to my staff and I’d let them know, A, what’s our plan, they want to move to Albuquerque at this price, they got to be there in 60 days, this is why they’re selling. This is what they’re concerned about, this is what our quirks are and I just let my staff know, how important each customer was to us and each idiosyncrasies and what things were most important to them and just we’d naturally, people aren’t going to do it as well as you at first but like you said Mark, they’re going to get better than you.
Because that’s their nature, they’re more service oriented probably and things came up and mistakes were made, we just had a motto, it doesn’t happen twice, let’s figure out where we went wrong, how we can correct it, we don’t care who’s fault it is, fix the problem, fix the system, move on.
That’s awesome. One thing too that you said about hiring someone early on in your career that was a huge chunk of your salary, I think a lot of people wait until they’re too busy to actually hire someone well before they hire anybody and it becomes this big mess.
But the sooner you can hire somebody, I think the better off you are as well.
Yeah, totally agree there.
All right, it sounds like you got a great team back together back before there was this team concept that’s really prevalent now in real estate. How did that kind of move into the real estate investing and you personally buying properties?
Well, early on, I was really aggressive with my investing, if you remember me saying, I was a part time grocery clerk before I got into real estate, another good thing of that is I didn’t have a lot of expenses and I’ve always realized, that sucks and if you’re in debt right now listening to this, you know what I’m saying. We lived really lean in those years because I always lived as a grocery clerk you know?
When my income went form 30 grand to 60 grand, to 120, to 310. My expenses only went up to 60, 60, 70 and all of a sudden, the gap between A, what’s coming in, B, what’s going out and C, what’s left to invest kept growing.
I was extremely aggressive with my investing early on. Most people don’t have the risk tolerance I had that I figured I didn’t have anything to lose. I was so aggressive with my investing, I would go out and write a long escrow to buy a property like a six month escrow and have to make an extra 40 grand to come up with the money to buy the property and I would just go hustle and sell a bunch of real estate and make 30 to five of the 40 grand.
Put 7,500 on a credit card, get the tenant in there, fix the carpets, candidly eat peanut butter and jelly or mac and cheese for like six months, get back to square one to where I paid off the credit card, we got the tenants in there, everything’s smooth and then go do it all over again.
We were really super aggressive on getting somewhere, I didn’t know why at that time. I was just focused on attaining financial freedom at a young age so I’d have the options to do what I wanted to do for the rest of my life. Never bought a boat, I never bought an RV, never bought the trappings that most people did, I drove the same car for 10, 15 years.
All paid off cash and put all of our excess income into rental properties and land in the path of growth and duplexes and four plexes so we would get somewhere.
No, that’s great. It’s funny, I did kind of the same thing. I didn’t get started, I bought my first rental when I was 30 so I was a little older but I’d flipped with my father before that and yeah, I had a daily driver my 91 ford mustang for about 10 years.
You have a car payment, expenses are so important when you’re trying to invest and trying to get ahead and so many people, they need the SUV with the $800 month payment, they buy the most expensive house they can afford to live in and they don’t have any money. It’s almost impossible to save when you do those things.
Yeah, it’s funny you know, you and I have never talked before this call and I did a little research on you and I saw a lot of similarities but it’s almost like there’s a certain personality trait and we’re the ones that get somewhere financially and candidly, I’m 57 years old.
You were talking about selling stuff in the 80’s, I don’t care, I don’t have any problem talking about age and stuff like that. I got grey hair now and my line to people in their 20’s and 30’s is, when you get in your 50’s and 60’s, you’re going to either hug yourself or curse yourself for the decisions you’re going to make today.
That’s for finances and as well as health and fitness. I look around now, I’m 57 years old and I’m going to go climb mountains and ski them tomorrow and I don’t have to work, I just get to play and I’m in great shape and it’s because of the wise decisions I made when I was younger that is allowing me the financial freedom and the fitness to go do what I want and have the fitness to go climb mountains.
Yeah, I say, get after it early and watch what’s going out, I touched on this before we started recording Mark. The most important quotient in getting somewhere in my mind. Yes, it’s important to make a lot of money, yes it’s important to learn how and where to invest wisely but the piece I see people miss is Vince Lambardi talked about it, defense wins championships.
What I mean by that, defense is knowing what it cost you to run your business. Know what your personal expenses are, knowing what your leakage is, where are you wasting money that’s stopping you from investing and getting somewhere. That’s the piece that I’ve coached hundreds of real estate investors, I’ve talked to thousands over the years that are in this world and that’s the piece most of them miss I find Mark.
They miss it because it’s the least fun thing to do. Nobody wants to see you know, how much money they’re spending on things, they want to see the money they’re making and it is tough, I mean, I have to make myself do that as well as far as looking at the business and seeing over spending money.
It is much more fun to come up with new ways to make money than it is to cut expenses but you're right, it’s so important because there are a lot of people out there who are making 200, $300,000 a year or more. And they’re still not saving any money.
Exactly. I once coached a person that made a million dollars a year for 15 years before I started coaching them and they had very little to show for all the money they had made. Coached another person who came to me, they were making $700,000 a year and they were spending somewhere between 600 and 900, they had no idea.
It’s just to me ridiculous if you’re making that kind of money, how you’re not getting somewhere. Then you meet people with a millionaire next door mindset that are a janitor for 15 years and about to retire. It’s all lifestyle choices and mindset choices.
Yes, for sure. I’m curious too. How much do you think that has to do with where people live and are located you know? If you’re living in San Francisco, obviously your cost is going to be a little higher than if you’re living in Ohio. Does that play affect you think?
I think that plays a big effect and I also think, even more, is who do you surround yourself with? You know how they say you’re the average of the five closest friends you’re around. What are their spending habits? What’s their mindset towards money and investing? You find a lot of people with the keep up with the Jones mindset are doing just that and is more important to have all the trappings of a great life but it’s kind of like feellionaires, they’re fake millionaires.
They look great on paper but if you look under the hood, they’re A minus B, what’s coming in, what’s going out is not in great shape and the tribe I run with we try to be what’s called 100%.
Mark are you familiar with Robert Kiasaki’s gain cash flow?
Yes I am.
That’s kind of a dumb question. In the game as many of your listeners know, the object of the game is to have your passive income, meaning, income from… that’s coming in without you working, being larger than what it cost you a month to live. In the game when you’re passive income is larger than your expenses, you get to turn the game board over and the time I run with, with Go Abundance and One life fully lived, we’re all about the being 100%.
Which means, we have 100% of our expenses covered through passive income. Many in our group have 10, 15, there’s a guy in there with 150 income streams. We call that horizontal income, most people want a bigger paycheck, that’s vertical income, one bigger paycheck.
We want horizontal income, we want a lot of paychecks coming in from rentals and notes and businesses and a lot of things that you’re out changing the world, having fun with your family, doing the things that help keep you fit and alive and enough money to come in to pay for the party is coming in because you sacrificed early in life and focused on the right things.
No, that’s great advice but really, good point and I think a lot of my listeners are kind of in the same boat trying to get there with buying rentals or real estate and I know it’s tough for people who don’t, aren’t making a lot of money.
Do you have any advice for those who it’s tougher for them to say if maybe they don’t have a huge income, what can they do to try and get to that point?
Yeah, here’s a few things, first of all, really? If you're listening to this, I hope you take it serious and hope you’re going to hear me say over and over and I told Mark about this. My biggest thing is those ABC’s, what’s coming in, what’s going out, what’s left to invest. Break each one of those down in your world and look at how can I increase my income?
Where is my leakage on what it’s caught me to run my business and what it cost me to live and then the third piece is how can I become wiser with my investing and you're doing it that way. Listening to podcast like this. If you break down each piece of those individually and you really focus on your game, what you make sure you can manage and what you focus on expands.
Let me give you a couple of examples. One, if you're in debt and you're listening to this, you can do the Dave Ramsey total money make over and really focus on all right, what debt am I going to pay off first as I increased my income? If you're listening to this and you don’t have any money but you have access to great deals, why aren’t you partnering up with people? I’ve got a good friend of mine Shawn Lawry who is part of the communities we’re in.
He owns six or seven rental properties now and has put up very little of the money but he’s in the trenches finding great deals and he’s found people to partner up with that each of them get a different piece of the deal for the expertise they bring to it.
My challenge to you is, get out of the mindset that I can’t do this because I don’t have the money, look of find the deals, find the people who can finance them for you and it’s all about changing your mind. One thing I pulled up before this call and I’d be happy to share with your listeners is a couple of forms I created back in the day, one is, Tim is now an investor plan.
I heard you talk about Tony Robins on an earlier podcast. Tony has outcome purpose action plan, I had also on there how I see my team, what I’ll be doing, where will I find the sources for deals and where will I find the sources for money?
This was something I had written early on in my career of kind of changing my mindset from a I list and sell homes to I only want to invest. And then, another form might be to share with your listeners Mark is property sources. We had like 13 fishing lines we had in the water of where we’re going to find deals.
You know, Tim is now an investor plan is a piece of the mindset of it and the property sources is a piece of the how can I increase my income piece of it. We were just always looking at how can we up our game to earn more, spend less, invest wisely so we get places faster.
Great information. Basically you’re saying, there’s no short cuts, there’s no magic system, that’s just going to give you a house. You’ve got to work at it.
Yeah, you know that. That’s the funny thing is, people want something for nothing, they want to take a pill and be in great shape and they want to listen to this podcast and all of a sudden five houses are going to jump in your lap, heck no.
There is no get rich quick, it’s get rich on a firm foundation that keeps that wealth building. I’ve been through three cycles now, I always do the cycle of the 1990’s down turn and the 2000’s down turn and the 2008 down turn. Of course I got a chunk taken out of my butt every time but we’ve never filed bankruptcy or never had to give any properties back or anything like that because everything we built, we built it on a solid foundation and built them with cash flow and just with an eye to I don’t want this taken away.
Right. There’s a lot of people now who think… you know, prices have gone up a lot in many parts of the country. I’m in Colorado where we’ve seen prices double the last few years and whether you think the crash is coming or not, I have some opinions on that myself but a lot of people think, with prices going up, we’ll see another crash.
What kind of advice do you have for people about surviving a crash or you know, being willing to go through a crash instead of just sitting on the sidelines?
I think a lot of it depends on one’s earning ability. If you’ve got a lot of money coming in from another source like you are selling real estate or a mortgage broker or another type of income coming in. Then you’re probably able to weather a downturn more than others.
Of course it comes back to your debt level and where the rest of your debt is but as far as I would still be investing, if I was a younger person just building in this, I think I might put a little more down and play it for more for the long term and keep a little cash on the sidelines. I would definitely still be a player in this.
great advice and I know a lot of people who got hurt in the last crash, I mean, there’s a completely different lending environment in the mid-2000’s where investors were getting 5% down loans, sometimes no percent down loans and people were just betting on appreciation is the only way to make their money.
I always kind of tell people, if you invest the right way, if you’re putting money down, you're getting awesome deals, you have cash flow, you know, you can survive a crash and a lot of people did just fine. But you hear the horror stories about the people who are looking for that get rich quick without doing a lot of work and those tended to be the people who got hurt the most.
Yeah, some of those people unfortunately got their butts kicked so bad that when 2006 and 2008, depending on we were different areas, got it a different time, some of them got so… once bitten, twice shy that when it was time to invest again, they wouldn’t step up and take any risk.
I think another thing that plays into all of that is what your risk tolerance is. Some people have a higher risk tolerance than others, some are lower as I stated before, back in the day, my risk tolerance was really high because we wanted to get somewhere and I figured, what did I have to lose, now I’m a lot less aggressive because we’re in a different place and things change over time.
When you’re just building, boy, I say, make as much as you can and get after it as best you can.
Yeah, I’m kind of in the same mindset, I have 20 flips going right now so I keep myself busy on the investing side and trying to buy rentals as well. I have question. When did you decide that it was… or you were in a good enough position to go from working, being an agent, to becoming just an investor?
That’s a really good question. So I sold from like 25 to 40 and I looked up at 40 and I was at the time listing 15 to 18 homes every month. I was like a real estate listing machine but I was really burned out on it and there was more and more disclosures and all the crap that there is now was just getting worst and it’s just more and more legal forms and documents. Just more and more and I know it’s good to protect the consumer and stuff but it just sometimes gets a little out of hand.
So I looked up at 40 and I was just blown away from where I’ve gotten from a part time grocery clerk painting addresses on their curbs to buy diapers for my kids at 25 to more money coming in than what it cost us to live. So I just looked up and said, “You know what? I want to try something new” and I just flipped my first home and done pretty well with it but haven’t done a lot with it and just decided I’m going to shut down my listing and selling business and go over and flip homes.
And build the rental business and just kind of transitioned over a three year period. As I said earlier on this call I wrote that Tim is now an investor plan and we’d already had probably at that time let’s say eight to 10 rentals and about 10 to 15 a month passive income coming in and I was living off like let’s say seven to 10 a month. So it really wasn’t… I didn’t have a ton of money when I retired but I knew because we didn’t live large.
We didn’t have big expensive taste that I was going to have enough money to come in to fund a party if I just flipped a home a month which is what we did. I just concentrated on flipping one home a month and then I’d ski a 100 days a year and go to the ocean and catch a lot of abalone and mountain bike a lot. I am not one that’s driven by some maybe in worth a 100 million or so. I call it getting the goods in the woods and help other people live a good life.
So I am more into making sure more than enough is coming in to fund the party for the rest of my life and then really enjoying the balance of a great life so.
That’s funny and it is interesting we haven’t talked before this but a few years ago I was selling 200 houses a year as an agent. I was a REO agent and a HUD agent so I ensue foreclosure work, that market dried up significantly and I just focus more and more in the flipping and it is so much more fun to flip houses than sell. You can make great money as an agent but it is so much more fun to invest instead.
You like your clients better. They don’t lie to you. I was a listing agent and what drove me out was one, the paperwork and two, the lenders and the buyer’s agents who would tell you, “Hey everything is fine. Don’t worry, tell the Jones’s they can move out on the 14th
and then about the first, you get the, “Oh darn they didn’t qualify after and I’d have to call my clients and say I’m so sorry this just fell through and I know I told you can move” and it just breaks my heart.
I had a really tough time with that and I think this is a really good point Mark. There is people listening to this that are looking “how can I make the transition? Boy I really don’t like what I am doing over here” and that’s a great question you asked before, “How do you go from juggling these balls over here to moving over to I just want to invest world fund is” and that’s not an easy transition to make and sometimes you’re working both jobs at once while you are making that transition.
But I’m sure you tell your listeners this, the sooner you can get over to the other side where you’re just working for you, the better. However and I don’t know how long you’ve been on your own just doing that, you can’t just stop unless there’s a tenant coming in because if you don’t weed your garden, it’s going to get weed. So you’ve got to keep on working it harder than you think and longer than you think because you’re going to live longer than you think and you are probably going to spend more than you think as life goes on.
For sure and I still have a real estate team. I still have six agents who work under me but I don’t sell myself anymore. They do everything and I have a team manager who takes care of them so I’ve tried to push that off to them and focus on the investing myself.
Yeah, that’s awesome and I’ve got a good friend of mine his name is Pat Hiban. He wrote a book called 6 Steps to 7 Figures, and he did that but around the same time that I just shut my team down and moved up to the mountains. He kept his team behind him and it’s still going while he is still doing a bunch of other ventures. So it sounds like you are still in the office managing the team while often best in enjoying the rest of your life.
Yep, exactly. So it’s fun, it’s exciting. I’d like to say I am addicted to the buying houses so I don’t know if I could ever quit but we’ll see. Now you went from the agent to flipping to investing and then had another big change in your life to a non-profit. How did that happen and tell us about that?
Sure, my non-profit is called One Life Fully Lived. It’s the number one, one life fully lived and I actually had a period in between while I was flipping a home a month my mom called it my walking in the woods phase where I was just a ski bum and I spent a lot of time, just spending a lot of time out in the boonies, figuring out what’s next and while I was doing that I just thought about all the people who aren’t living a really good life.
They’re just getting by and having a tough time and maybe doing things they really don’t like to do. So we started a non-profit to help people dream, plan and create their best lives possible and I happen to be part of another group called Gobundance and Gobundance is a tribe for healthy, wealthy, generous men who choose to lead epic lives. You’d be a great member by the way Mark and we’re living One Life Fully Lived at a mastery level and One Life Fully Lived is Gobundance’s charity of choice.
And what we’re doing is all of us are putting the oxygen mask on ourselves becoming financially free super fit, drinking lumitea skinny
, healthy in our mind, body and spirit as individuals and then we are helping our families, friends, communities and eventually all of humanity just crush their lives. So One Life we have two conferences a year, we have one coming up in Philadelphia at June 3rd
and we have presenting there, billionaire founder of Priceline.com and seven other businesses.
Jeff Hoffman and 50 breakout panels on anything from beginning investing to extensive investing to health and fitness, mindset and how to make a plan, how to do my One Life roadmap, all the things to help people just crush their life. So that’s what One Life Fully Live is all about and we’re really proud of it. We started it six years ago and it’s blossomed into something really beautiful.
That’s great and I have heard of Gobundance before as well. I’ve never done it but I’ve heard it’s an awesome organization and really like you say, you have to take control of your life and make it the life you want it to be. You can’t just expect things to happen to you and planning, setting goals, investing, keeping traffic of expenses, the things you don’t want to do are sometimes the things that make the biggest difference in success and having the life you want to have.
Yeah. I think it’s that and I think it’s being… we talked about this before when you asked the question, is because you lived in San Francisco or Ohio that determines who you are. I think it’s the people who you surround yourself with whether that’s in your own geographical area or online and the community like One Life Fully Lived and Gobundance and Howell Elrod’s Miracle Morning and part of a lot of a different groups and it’s all people who are living life in an exceptional level.
Who care about humanity that want to take people to another level and I think that’s where there’s a lot of power in the online communities today and I’m sure you’re familiar with a lot of the investing ones and I’d bet you, you know a lot of I call them planets in the same solar system or cousins and allies who are doing the same kind of thing with little bit of tweaks, you know?
Right, I’m glad you bought up the surrounding yourself with the right people again, so I wanted to make a point before, it’s kind of a catch 22 where a lot of success, systems teach you to meet people with the same mindset who are successful but then people want to look successful and they spend all this money to look like those people but they’re picking up the wrong habits instead of the success habits of making money, passive income, keeping track of expenses. They pick up the expensive clothes, expensive cars, looking like you are rich instead of the fundamentals of becoming wealthy.
Right, that’s why before I call them “fillionaires” fake millionaires. That’s one thing in our community is we’re very vulnerable, we’re very transparent and we talk. We have adult conversations of the things that matter. We measure what is your net worth, what is your passive income, how much does it cost you a month to live, what’s your weight, what’s your body fat? These are things that are common topics of conversation amongst the people in our community.
Because if you think about it, there are things that is almost like a counter culture, these are the things that people really don’t talk about in public but at our conferences and in our community, these our common topic because they are the things that matter. They are the measuring sticks if you’re getting somewhere with the things that matter in life.
Yes for sure and now if someone is interested in learning more about that or joining up, what’s the best way for them to get involved and find out more?
Yeah, I appreciate you asking that. Go to onelifefullylived.org, that’s the number one, onelifefullylived.org not One Life to Live, that’s a soap opera. One Life Fully Lived and our Facebook group is the number one, One Life Community and please join that and introduce yourself to our communities and get on our mailing list on our website to hear about our other upcoming conferences. We have a program called My One Life Roadmap: The Class you wish you had in School.
We teach people who are you, what’s my dream, what’s my plan, how will I fund it and how will I be healthy enough to pull it off, that’s our basic core teachings of One Life Fully Lived.
That’s great. All right well great information, I have a couple more questions before we head out of here. You’ve told me about success and business and mindset and all of that, as far as investing goes like we said prices are really high in so many areas of the country, in Colorado, California, New York, what if somebody wants to buy rental properties and they live in one of those areas, have you ever invested out of state? Do you think people should invest long distance? Do you have any advice for that type of situation?
Yeah, that’s a really good question. The first thing you want to do especially if you are listing and selling as much as you can invest in your own area because you can drive by, you can touch it, feel it, smell it, you know that area, all things being equal do that. For many of you, you are listening to this and you’re in Los Angeles, San Francisco, New York I would not do that. I wouldn’t invest there if it doesn’t make sense unless you are buying something at wholesale.
Doing something unique and outrageous, I would find somebody.. I would invest outside the area with people with proven track records that you know them, like them, trust them and they’re connected to you in some way. The challenge with that if you don’t know the people is sometimes they are less than truthful on pricing and appreciation and one of the biggest challenges is finding good property managers in areas outside your area.
It’s hard enough finding them in your own area but much less outside your area. We do like some friends of mine do syndications on apartments down in the south and I’d be happy to give you my contact info for stuff like that but that’s what I’d look for and Mark, I don’t know if you have friends that have syndications for either and or systems in place for buying cookie cutter stuff that comes with people you know in the trenches with strong property managers.
Yep, there are some. There’s a lot of companies out there now, I call them turnkey companies that have good rentals and property management and there’s a lot of bad companies as well like you said that over inflate returns, don’t give you all the expenses and make things look better than they are but yeah, there are some great ones out there and it’s possible to do it yourself too but it is a lot of work to find a contractor, find the property management.
Find the agents and learn the market but yeah, great advice and one thing that we didn’t talk about that I want to talk to you about as well is your syndications on apartments. You had mentioned to me that you’ve taken a lot of your properties, exchanged them into larger projects, can you go over why you did that and then how that worked out for you?
Sure, I’m a part of a syndication called DAP and that’s four friends of mine and I’ve touched on before, I have coached real estate investors. One of my best coaching students ever, his name is Andrew Cushman, he is the A in DAP and he’s the horse we’re riding. We own 10 apartment complexes all over the south. We like there because it’s a stable government, up and coming areas, good appreciation and Andrew sifts through like a 125 deals to find one or two a year.
Only buys the best so that’s one thing that we do there. I also have over the years exchanged in the buildings leased to Auto Zone. I own a building leased to Enterprise Rent a Car, I did one with a couple of partners, close friends of mine bought a strip center in Texas and that one has been mediocre at best. I’d say I’d batted 85% and the one I wish went well did not but I like exchanging. It’s like you build up and Mark this might be where you’re at, how many rentals did you say you have?
I have 15 right now.
So right when I had 17 with 52 tenants and during the last uptick in 2006 was when I moved from the central valley, Manteca, California we sold everything between 2005 and 2007. I built my home for cash. I exchanged into the Auto Zone and The Enterprise and did some notes and just set myself up to the next level. If you look at it, the listing and selling is level one. The investing and building your portfolio is level two and then I may be showing you your trajectory.
And level three is getting that where it all basically is self-managed to when you’re not quite as fond as flipping homes with the stage you’re in now and you might want to go into another incarnation of your life which is what I did with the Gobundance and the non-profit and the skiing and the family, I just decided you know what? I want to put all my energy over here so I exchanged them on the easier to manage properties and now all I do is water ski in other people’s wake.
I don’t have any single family properties, anything where I get any phone calls whatsoever. I don’t deal with any property managers. I just invest in other people’s properties and get checks every month. So in other words, my whole business is on automatic pilot that I spent less than 5% of my time on and 95% of my life is where my fun and adventure is now. So anybody listening to this, I hope I’m giving you a prospect of what you’re one life fully lived might lead to if you work your butt off now.
If you manage your ABC’s really well, what’s coming in, what’s going out, what’s left to invest, if you write a vision of what a magnificent future would look like to you, you might be living it down the road.
Great information and it’s funny because I have started to invest in commercial properties myself the last year. I didn’t buy any properties for a couple of years because our market got so crazy you couldn’t cash flow anymore and I thought about investing in Florida and different markets and then ended up buying a commercial property, a small one here. I have two more commercial properties under contract.
A whole different ballgame but it’s interesting with different clientele you are working with and a business instead of an individual renting a single family home so it’s exciting. It’s fun.
Yeah, well it sounds like you are on an incredible progressive growth with everything that you are doing. It sounds very familiar Mark, a little different but familiar and similar.
Yep, for sure. It’s interesting hearing your story because it does sound very similar. Well Tim awesome information. I think we covered a lot of different things here from your real estate business to rentals to flipping to One Life Fully Lived, Gobundance, anything else you want to talk about before we head out of here? I know we’ve covered quite a bit.
No, you know I just like to give people my personal contact info. You can reach me at firstname.lastname@example.org
, please do go to onelifefullylived.org. Come to our conference in Philly. I talked earlier about a unique ecosystem, you will love our community. Take a chance, jump on a plane, come join us. It will only cost $250 for a conference. I just signed up for one and it was $5,000 for the same type of conference. We basically give it away because we’re a non-profit.
But the ecosystem is incredible, it will change your life. Come spend a few days with us at June 3rd
in Philadelphia. If you can’t come there we have another conference on October 21st
in Sacramento. Sign up for our My One Life Roadmap, it’s the class you wish you had in school and I wish you the best and hope that when you’re in your 50’s and you’re grey, you’re financially free and you’re super fit so you can rock the rest of your life.
Awesome, great information, great job and that is a great price because I go to a number of conferences myself from real estate to mindset and other things and that’s a steal.
Yeah and the level of people we bring in they are world-class presenters, they pay us to speak. We don’t pay speakers, they pay us because we are a non-profit and we’re all about lifting humanity. So it’s a really, really unique project. I’d love for you to get behind what we do. Our ultimate is to take all these brilliance into the inner cities and change our culture and make it cool to care. So check us out, we’re unique.
You can tell I am very passionate about what I do. I am very passionate about you living your One Life Fully Lived so we can help all of humanity figure out how to dream plan and live their best life. Mark, thank you so much man.
Thank you Tim. Great job, I’m sure we’ll be in touch and have a great rest of the weekend.
I appreciate it Mark.