Buying $300,000,000 In Real Estate | The Untold Story of Pace Morby

how much debt do you technically have 255 million something like that pace morby is the guy for all things real estate he hosts a show triple digit flip on Annie he owns thousands of rental properties and he does it all with something called creative financing which is a really fancy way of saying he's able to build wealth without using any of his own money total amount of real estate that we own is somewhere around 300 million today we get to have him break down exactly how he invest in real estate the best ways to get started and how you are able to own your own home even if you don't have a ton of money so really hope you enjoyed this one as always if you're not already subscribed totally free takes you a split second and as a thank you here's a picture of a greeneyed blue redey tree frog how's that let's get on with the episod enjoy welcome to the iced coffee hour big fan really appreciate I freaking dude seriously you are the king of YouTube I tell everybody all the time the king of YouTube gram stepz thank you man very nice thing is that's a great title why you say that Jack me oh here's the thing is people behind closed doors like people that are trying to build YouTube channels they all compare their channel to what you're doing four years ago 5 years ago still today you have continually reinvented yourself and done a great job you guys are killing it thank you I really appreciate it but today is all about you and you've done some pretty incredible things and you were also telling me about something right before we shot this podcast episode that blew my mind I had no idea that this statistic actually existed and I told you I cut you off and I said wait wait we got to save it for the podcast so Graham can react to it and I can get an authentic reaction oh it's not that big of a deal you probably already know this uh there there's currently 600,000 homes that are non-performing in the United States and so um we're starting a business right now we've got a Servicing Company that's like take these houses off of our plate just take them and so we're dividing them out and conquering these houses I mean literally 600,000 houses the services will services will pay you they'll pay you $1,000 to just take over these houses can we get this in layman's terms yes what do you mean by non-performing so uh people that are living in the homes that went out and got a loan right there's a Servicing Company that's receiving those payments on behalf of the the lender the homeowner stops making a payment and it's very expensive for a bank or a serer to actually foreclose on a home and so a lot of times they just don't they look at the house and they go it's not worth it for us and so they go we we will actually pay somebody to take this mortgage and take it take over the mortgage 600,000 of them a year just sitting there these Mor the mortgage servicing companies will pay you about $1,200 per house to just take them off their books so if you want a th000 houses today they'll pay you a million to take the houses now what's what's the normal range for non-performing houses 600,000 to me in the US seems relatively low my understanding is that there's a few million per year prior to the pandemic that just people fall behind on payments they more than like I think it's more than 120 days late it's in the millions you're talking millions and millions we're we're talking right now just the ones that people will pay us to take I see so it's a subset of those corre that what's the situation on that is it just there's they're not so underwater on it but it's like just you know right on the line of like okay maybe we could break even on this but it's interesting because what we were what we're planning on doing in that business is essentially going to the serer and saying pay us $1,200 per house to take them off your books what are we going to do with them right I'm not just going to take over a thousand houses that's a lot of Burden because now I've got people living in these homes that now I'm the bank right I'm the note holder that's a problem I don't just own the house I'm the lender on the house now so I have to do something with these houses I have to either a get them performing again so calling the homeowners and saying hey let's renegotiate let's make sure you're taken care of which is what we is the ideal situation or B we go hey let's short sell these or C we go to them and offer them cash to walk away like cash for keys to walk away and then we put them into the portfolio or D you could wholesale them to fixing flippers or I guess in other ways you could wholesale or you could fix and flip them Fix and Flip them yourself if you choose to do that which I'm not I don't love fixing and flipping it's just a big construction game that's all it is sure and what's the status on these houses were they bought recently like in this past year or so and also like are they in fine condition kind of just that's a different statistic so houses that were bought in 2021 2022 there's about 450,000 of them that are already underwater from people buying them in 2022 and now the market has gone down an average of about 16% in the last year that you know the US and so those people that bought FHA or VA they're significantly underwater right is that like disproportionately high it's very high yeah I mean think about payments are so low though I mean interest rates are really still lower than if they bought the same house today 20% less but nobody's buying in the past few months and already is underwater like with the super high interest rates and also the high prices yeah if if they put 3% down they're underwater yeah you have to think it it's going to cost them 6% just to sell so like right off the bat and they're losing 3% assuming the Market's the same and then imagine the market goes down 5% I think that's the part that most people don't understand about real estate is if I buy a house today for 200,000 and then I turn around and sell it for 200,000 most people think oh you're going to break even but people that are in real estate we know man you're going to lose probably close to 10% because you've got real realtor commissions plus closing costs sometimes you'll have inspection stuff and you'll have other weird concessions that you have to pay as the seller the seller pays all of that expense so what's happening right now for us like I've got an email just popped up here like 15 minutes ago this is actually one of my big business models is that people come to me and they go hey I've got a house in San Antonio I'll let you just take over the house and the mortgage at 3.6% so I haven't taken I haven't bought a house over 4% in a long long time even right now interest rates are at 7 and a half 8% right for homeowners what I do and what people know me for is I just take over other people's existing mortgages subject two or I buy them on seller so explain this deal they got a 30-year fixed rate loan at 3.65% what do you do in that situation they're behind on it yep so they bought they bought um let's see they're they're not behind Okay so they're not behind on payments okay three bed two bath house 1235 ft it was built in 2021 so basically brand new sure okay first lean position 192,000 their payment on that house is $155 so I immediately look at that and they go we're trying to sell this but if we sold it and paid realtor commissions and all that stuff we're going to walk away having to write a check to get rid of our house so somebody like me comes along and goes the asset is actually not really the house the act the asset is actually the debt a 3.65% that I don't have to apply for that's the craziest thing about real estate I don't even have to apply for that loan I don't have to assume it I don't have to apply for it nobody checks my bank balance nobody asked for my tax returns nobody asked for anything no job history nothing I literally go to a title company they transfer the deed into my name I now own the property the deed the mortgage stays in the seller's name now don't a lot of these mortgages have a do on sale Clause yeah 100% so I so what happens there so do on sell Clause is something you should definitely be worried about um I own title companies across the United States so we do see them from time to time it's about one in 500 times that a sub2 transaction this is a sub2 transaction where the seller walks away mortgage stays in their name I take over the existing mortgage what am I going to do with that property I could do a variety of things I could turn that into a traditional rental I could do Section 8 depending on the neighborhood I could do midterm rentals like traveling nurses corporate rentals sober living is really really good if you want to do sober living I love sober living not because I operate sober living but because I find operators who do sober living and they pay double the rent rate to operate sober living does that make sense so I don't know what that sober living is like somebody goes into a drug addiction Center and the government essentially gets them through pays for that um service and then when they leave they need a place to stay the government pays that $650 to $750 per bed so most of these silver living facilities have 7 to 10 beds in a house and the government's paying $750 per bed they don't have to be licensed to do this it's a big business in Beverly Hills when I was an agent you would almost have to you would almost have to ask when someone you would have these houses with like seven to 10 bedrooms in them and it got to a point where I got so many calls and I would automatically say this is for silver silver living because there were so many of them and they would offer more than what we were charging in rent yeah double interesting most of the time double yeah so you look at a house like this that is my payment that I'm taking over right because I'm taking over somebody's payment is 1155 bucks a regular rent rate on this is, 15500 or yeah about, 15,600 bucks so on a reg Cody Sanchez friend of mine she always trashes Real Estate Investors cuz she's like oh I don't want to go buy houses because I'm only making $400 a month in cash flow I'm like yeah if you're doing traditional rental but if you do midterm or short-term which is Airbnb or you do sober living you're double cash flow plus I have a fixed debt for 30 years right and what happens to rents every three years I get to bump my rents 150 bucks my debt doesn't change but my rent I can just keep bumping my rent every three years now what happens though if the do on sale Clause this comes up this is great it does happen Okay first time um there's a couple of things about this and this is something that real estate agents don't know but it is in in the the real estate exam it's like that 20% that they fail on it's the uh it's called an executory contract okay so have you ever sold a car cash I have okay and you have a title right and you sign the title you notarize it and you hand it to your buyer y when does the buyer become the owner of that car I believe as as soon as they sign right as soon so they don't sign you are the only one that signs okay right so you sign over the title the second they have possession of the title is when they become the owner why because they now control the asset sure does that make sense so they can go down to the DMV or MVD whatever they call it and you can record that document today or you could record it in a week you can record it in 30 days but you're the owner because you control that document does that make sense yeah okay so what triggers the do on sell Clause I'm going to come back to that what triggers the do on sell Clause probably when you report it right there you go okay when the deed is transferred right so this is interesting Jack you're not a real estate guy right I have a house but that's about it love it okay Okay cool so you have a house you have a mortgage right so you pay a payment yeah and you're the owner yes cool so think about this if I go to a grocery store and I use a credit card you're a big credit card guy you like credit cards right I go buy groceries with a Visa credit card those groceries come to me but I use somebody else's money to buy them who's the owner of those groceries me how do you know you use somebody else's money because I have possession of them okay possession but you also have something else what else do you have the receipt oh okay okay the receipt proves that you have ownership right so in real estate what is the receipt it's the deed Whoever has the deed or control of the deed is the owner of real estate so your mortgage company is not the owner of your house right no they're not they're not just like the credit card company is not the owner of those groceries so there's the debt and then there's the ownership documents they're not the same they're exclusively separate so you're saying you just hold the deed you can okay so let me get to this I'm building up to it sure so if I take over a deed on a two transaction right here on the San Antonio deal okay if I take over the deed and let's say in 6 months the mortgage company notices this is when he says do on sale Clause this is what that means mortgage company goes hey Pace took over that house subject to without paying off the debt they transfer the ownership from owner a to Pace without paying us off they have the ability not the obligation they have the ability to demand that I pay them off because I I bought the house that's just in full with the en yes in full usually it's like 60 days or something like that yeah so they have to go through the foreclosure process to make it happen Okay so that's called the do on sale Clause so that poses a risk to two people poses a risk to the person who sold the house to you and then it also poses a risk to you who just bought the house where you're like I didn't put any money down I took over the the mortgage payments I've now got tenants in this property I'm cash flowing those tenants are paying down this mortgage that I just took over this thing is awesome all of a sudden I get a letter in the mail that says we demand you pay us that's the do on sale Clause what do you do in that situation you could do a couple things one you could sell the house but what happens if you don't have Equity well you could refinance it but that doesn't really that's not fun because now you got to bring money to the table or you can go back to the bank and you can renegotiate with them which is usually what we'll do and say hey just so you know we did buy it subject to but we're performing and we're making the payments 90% of the time they're fine with it the first time I ever had the do on sale Clause happen to me and you're going to enjoy this as a as a a very intelligent real estate guy it's a house on Lost Dutchman Trail house was in foreclosure I catch up the AAR right it was $21,000 you know what that means catch up the errs uh was that just the Lost payments there you go so they they were behind on five months of payments I came up in and I caught up the payments the very next day I took the deed to the house but I kept the mortgage in place and bought it subject to so I get a letter about a month later and it's a bank called Johnson Bank really small Branch like teeny little Branch four branches and the letter says we demand that you pay us we're we're calling the do on sale clause or the acceleration Clause as sometimes they call it and so we call the bank I luckily get a hold of magically it's such a small bank I get a hold of the actual owner of the bank I go hey my name's Pace we caught up the the aers I bought the house sub2 what's the problem he goes oh no no we saw that you caught up the AAR that's great I appreciate that a lot of our clients buy sub2 it's not a problem but there's a better way to do this with a bank like us I go okay what's the way to do this so he says I suggest you do it one of two ways either a deed the property back to the homeowner so that it doesn't it Tri UNT triggers the do on sale clause and in that case now have him deed the property back to you but don't record the transaction so essentially holding the title and what we do in those situations if the do on sale Clause happens I deed it back to the homeowner homeowner resigns the deed back to me but I hold it in a safety deposit box but now isn't the city going to get involved because now it's let's let's just say the property is going to be reassessed at a different price now now the city is not reassessing the property at the latest sale price correct yeah they get reassessed yeah but would they not though because you're not recording a deed no in in in a sub two transaction no they're not re they're not reassessing now is that not a problem with the city or a state I feel like a state like California would be cracking down and and because they want their money and they want the the city and local revenues on that I've we've never ran into it and the average time we hold the property is 7 to 10 years anyway right we'll refinance or we'll pull Equity out of the deal or we'll sell the house or whatever else never ran into that at all never once and what if you miss a payment isn't there risk to the 100% 100% just like if you if Jack misses a payment on his mortgage there's risk to his mortgage company right there's definitely risk to the homeowner for sure but they're putting a lot of trust in you not to make that right so it depends right so there there's two different well let's go back to the Johnson Bank thing real quick and I'll put a cap on that and then we'll go to that because this is a really good question so that's one way you can do it or you so you can buy it on an executory contract that's what that's called right so when you sign your title over on a car that you own and you sign that off in that situation that's called an executory contract means he has not executed the final part of the transaction and he holds that in limbo until your let's say you sell a car to a home owner or to the next car owner he changes the car tires he paints it he could essentially take the title never record it and then hand it to the next buyer and upcharge it does that make sense MH that's an executory contract so you can do it in an exe an executory contract where it doesn't get recorded or B you can do it as a lease option where the option price is the mortgage balance the day you execute the option does that make sense sure okay so that that overcomes the due on sale cost but then that also implies that the seller is actually paying down the mortgage correct right so you put in the lease option that the payments that you the buyer or the lease option tenant is paying actually pay down the mortgage and the buyer gets credit for those payments and what about in the event of a lawsuit let's just say someone Sues and they they try to go after the property but the property's not in your name the property is in the seller's name or vice versa they get in a lawsuit and someone sees well there's a deed to this house that they technically own right what would happen so what you do is your agreement for sale in Arizona or contract for deed or land contract or whatever it's called in other states technically an executive contract it the agreement gets attached to the property and protects you from a loss Su the deed does not get transferred if that makes sense so somebody com after the property trying to to sue the owner will pull up and go oh wow the owner actually doesn't control this asset anymore it's this person who controls the asset couldn't anyone who gets sued technically say well no I transferred the deed over here and he just never recorded it isn't that a way to get out of any lawsuit if someone tries to Sue I see people do it all the time I had somebody that when I was a contractor 10 years ago I had somebody owed me money and I go I went to go sue them and they transferred the deed to one of their other llc's on a property I tried to sue them on happens all the time I feel like there's got to be a clause in there because otherwise every everyone would be doing this just like every asset they it's happening thousands of times in every stat it's happening recording them yeah happens all the time if you look in any state it's called an executory contract it's legal it's been around for hundreds of years it's happening all the time I bet you in Vegas it's happening a thousand times a month or more our title companies we probably see 10% of the time in Arizona 10% of the transactions we see are called agreement for sale transactions which means the deed does not get transferred a Servicing Company holds the deed in limbo until the the buyer ends up doing something with that that property does that make sense so what's the risk because I'm I'm still skeptical man there's a lot of risk but yeah there's a lot of R random first offhand little question i' I've been like thinking in my head for a while if somebody is holding a note and they're making a mortgage payment paying for the utilities and everything like that for example in that the numbers that you provided right there yeah as soon as they become a renter their monthly expense on the house is just going to be immediately increased and what you're doing is basically paying them back the 5 to 20% or whatever how much Equity they have in the house you're saying in this situation so this person that I'm taking over their morgage yeah they're not staying in the house oh that's Cardinal that's like cardinal sin of creative Finance you don't you never let the homeowner stay in the house you you buy the house from them so there's two ways to do this there's subject two right that's me taking over the existing mortgage and then there's seller finance okay what what's the difference between the two difference is seller finances there's no debt right the seller then finances me right and the way I explain that to people is um the way I um explain seller finance is I sold an F1 actually sold another F150 last week Kelly BL Book value is 20 grand I sold it for 47,000 on seller finance how did I do that I went to somebody who doesn't have credit and I said hey make me $500 payments at 4 $40,000 plus interest and I can sell or Finance you right we just created a promisory note and that's the agreement between two parties seller or Finance pretty simple um subject two means there's an existing debt right I'm taking over car payments would be subject two right if you go on my YouTube channel you'll see I buy people's cars subject two in subject two people have pain in seller finance the sellers are have they have a desire for gain okay subject two handles a need seller finance satisfies greed okay so when you say well there's risk for the homeowner well typically I'd say 80% of the transactions that we do with subject two the homeowner is in foreclosure they're in some really bad situ a they're going to lose the house anyway and we come along and go guys do not let this house go to foreclosure that debt is a really good debt I'll pay you 5 grand or two grand or a th000 bucks or I'll pay your moving expenses to move to an apartment do not let that house go to foreclosure let me catch up your reers let me get the the mortgage back in good standing and rebuild your credit and I'll take over that house and the responsibility of it now that's not going to be like somebody that doesn't want to be a real estate investor but I'm a real estate investor that's what I want cuz otherwise how am I buying rental properties mhm I'm going to a mortgage company and I'm having them pull my credit they're going to limit me to 10 maybe 12 mortgages at a time and I'm going to put down 20 30% especially in this economy I'm going to get a mortgage at 7% 8% I haven't gotten a mortgage over three 8% in probably 7even eight years this seems like something the mortgage industry though would love to crack down on because maybe wouldn't they want to get these loans off of their books at 3% so they could the mortgage company this is this is happening all behind the scenes anyway if you go back and you watch The Big Short these guys are swapping mortgages all the time mortgage companies don't hold notes MH what mortgage companies do is they originate a loan and then they sell the loan off but even but the original investor M now wants to have that 3% loan paid off charged off this they want to get that off their books to make way for something at 6% or 5% yeah the value of their loans go down because they have all these 3% loans out there when you could get 6% right now yeah 100% but I don't think they have the technology or the the know the KN how to go back and go all right we're going to go to these ones and know whether these are homeowners or Real Estate Investors and nor can they come and call a note on a 30-year fixed deal if you haven't violated or done something wrong right subject 2 has been around for hundreds of years but don't they still reserve the right yeah to do the to call the loan even even if you call them I've had I've had the I've had the do on sell Clause call to me five times where we were not able to negotiate with the bank and every single time we just the property back and repurchase un a lease option okay it do on sale closet and I've never known one person one person ever that has lost a property du on sale never once it's the Boogeyman and it's like the number one thing that real estate agents and Brokers bring up to me because it's something they were taught in real estate school or maybe like continued education credits and I'm like guys that's a boogeyman find one person that's ever lost a house to do on sale cuz they all bring it up to me but none of them have an one single example ever Y and I've even when I'm the creative Finance guy everybody in the country calls me I've never met one person that's lost a house to do on sale Clause never once and I've had it called on me but I know how to overcome it sure and it is it is a risk for sure yeah how did you get started in all this what's uh what's your background um I was a contractor for a long time and um I worked for Open Door offer pad Zillow I was their contractor and I would go around and I would set up all their locations so I set up Dallas for them and Vegas for them and I would take the rede and Just Bounce Around setting up construction sites and I was um you know I owned my own construction company and I did about 7,000 Renovations for these guys so I knew the industry up and down and I had this homeowner that would not a homeowner she was a flipper her name is Bethany and Bethany calls me up she goes hey you have a great reputation I see you flipping all these houses for the these other investors come flip a house for me and I go flip a house for her I'm a contractor I got my cruise so we go crush it for done do a second house done she calls me for a third house I show up early and she comes up behind me pulls up behind me knocks on my glass and she goes get out of your truck right now she like makes me come and sit on the back bed of my truck and I'm like what did I do and she's like why aren't you in real estate I go what do you mean she's like every contractor I know shows up late they overbid me they overcharge they make excuses you are the opposite opposite of that why are you a contractor I go I I don't know she goes why aren't you in real estate and I go I am in real estate and I was lying to myself I thought I was in real estate EST and she say something that that really shocked me she said you're not in real estate you're a service provider to me and I'm in real estate you are a simple Google search away from being replaced and I was like dang she says you're as replaceable as a mobile notary I can Google and get a different mobile notary you're as replaceable as a real estate agent if I don't like my agent I'll switch them out you're as replaceable as the mortgage company you're as replaceable as my private money lender I'm going to ask you again why are you not in real estate you figured out the hardest part of real estate which is the construction right like when you built your house I'm sure you had delays and you went there was budget things and change orders and all that kind of stuff that's actually the hardest part of real estate is the construction and Renovations and the permits and all the pro like that's the hard part and I go I guess I don't know where the deals come from I have no idea where the deals come from I just assumed that you guys know something I don't know and I also don't know where the money comes from and so she broke it down and she said she says I want you to send out a swath of postcards and I'm like postcards like I don't know anything about sending out postcards and she stops and she calls me an askhole she's like stopping an askhole and ask like you keep asking all these questions take some freaking action pull out your phone and call this postcard company I'm like but what do I tell them she wases you don't have to tell them anything they know what the heck to do they know where to send the postcards what they should look like what ZIP codes blah blah blah blah blah so I she makes me a call right there I send out 10,000 postcards and I get my first deal two weeks later I got a a deal from a lady named Janie mson I made 25 Grand on it and I was like this took me me three hours of work to do this why am I a freaking contractor it took me you know I'm working as a contractor making good money I made I made my first million dollars in a year back in 2014 2013 from open door open door paid me they never squabbled at prices they paid me on time I was their shining Golden Boy and I took home a million bucks back in 2013 2014 and took home after taxes um and then Bethany also pointed out to me she says if you were actually in real estate and you made all that money you would have taken home 1.6 I'm like really I knew nothing about cost segregation I knew nothing about uh you know depreciation knew nothing about any of that stuff so here I paying all these taxes and so she sat me down and she really taught me how to get into the business I got my first deal and that first deal was a cash deal do you want me to tell you how I got the deal okay so I I knew nothing I didn't know how to fill out a contract I didn't know how to comp a house I didn't know how to do any of that stuff but Bethany says says send out the postcards so I send out the postcards third phone call I get is a lady named Janie Janie retiring school teacher has lived in the house for over 40 years think she's renovated that house as a school teacher no house is in horrible condition 40 years not renovated the hot water heater was like 25 years old like the fact that it made it that long is surprising so she calls me up and I go I go hi this is Pace she goes um you buy houses right and I go yeah but I had no idea what I was doing right I and she goes so what's our next step I go I don't know so I literally get on the other line I go can I ask my partner so I call Bethany on the other line the lady who told me to send out postcards I go I got a lead but I don't know what to do she's like you go on a freaking appointment you idiot go to the house take photos go meet the person like what do you think you're going to do okay that's how little I knew about the real estate game right and so I get on the other line I set the appointment I go meet with her and I walk into her kitchen we start building Rapport I look on her kitchen table and there's real estate agent cards there's postcards there's letters she's got a whole massive amount of people that have been marketing to her and so I asked her the question I was like really genuinely had no idea I'm like why have you not sold your house like you've got all these people what do you need me for she goes well I've met with 15 people already have you ever met like when you were doing listing appointments did you meet with anybody that would take the time to go to 15 like take 15 agents time usually no no it's like two maybe three right so she went through 15 before she called me so she I go okay well what what's kept you from selling the house and she says I have an offer but it's not high enough and I go what's the offer now here's the thing before I tell you what her offer was on my drive up to the house I call Bethany and go what should I pay for the house I give her the address she comps it she says as a fix and flipper Bethany was a fix and flipper I would pay $150 for the house side unseen so don't offer her anything over 150 I'll partner with you on the deal I'll be your partner and we'll go flip it together I go okay so when uh Janie says well I already have an offer but it's not high enough I go how much is it she says 165,000 and when you're brand new like Jack you haven't been in any of these appointments could you talk a lady from 165 down to 150 that's about to retire ah almost certainly no hell no like hell no I'm like what do I do here so I came to the conclusion I couldn't help her so I told her I couldn't help her and as I was walking out of the house I stop and I say look I can't help you I can't offer that much money but is there anything I can do to help you and she's like I'm so confused you want to help me but you don't want to buy my house what are you a Boy Scout and I go yeah actually I am a Boy Scout I'm I'm an eagle scout and I was like all proud of it cuz when I was growing up my mom's like you have to get your Eagle Scout cuz one day somebody's going to ask you are you an eagle scout and you're going to be able to say yes I'm like I've never been asked I know I you were an eagle scout no I said I've never been asked ever yeah but you're still young gram you got plenty of time you got plenty of time you can do it you can still do it so I said yeah I'm an eagle scout and she goes what do you what do you what could you do to help me I go I got Crews I got my guys they can come load your truck we can do whatever you're a retiring school teacher I love my school teachers she like you really want to help me I go yeah I want to help you and so what ends up happening is she goes you really want to help me yep I want to help you so she walks me to her backyard she opens up the sliding glass door and she shows me these three bunnies that are Flemish bunnies if you guys Google Flemish bunny they're this big like lit the size of a-year-old child that's cool weird in Arizona right it's hot 122° so I'm like what do you want me to do about this and she says this is why I haven't sold my house I my granddaughter bought these for me I've been taking care of them I don't know what to do with them I can't take them with me to Oregon where I'm retiring and I got to get rid of them so long story short I call my mom my mom comes and picks up the the Flemish bunnies takes the Flemish bunnies and takes them to my mom's little farm and Janie's like wow you solved my problem this is amazing are you sure you can't pay me $170,000 for the house I go no I can't and she's thinking like any moment I'm going to try and manipulate her into a lower price right so I go home two weeks later I get a call from Janie and she says hey I'm a school teacher I always give my kids homework and I gave myself homework today the day I got to make a decision to sell the house and I I'm I decide I'm going to sell the house to you I'm like okay but I can't pay you 165 I don't I can't she goes I don't care what your price is you're the only person I met with 15 people before you and 15 people after you everybody came in with a clipboard and ab criticized my house people tell me they can't list the house unless I fix the windows they told me like it basically this house should be boarded up and she goes I whatever your offer is I'll take it and so I bought the house for 150,000 I drove I picked up Bethany went up there filled out the paperwork bought the house for 150 Grand and I went and made 25 grand for basically 3 hours worth of work and I was like how do I do this more so you wholesale it I wholesaled it to Bethany got it cuz I told Bethany I was like I don't want to be in a Fix and Flip I got enough flips going on for other people and so I I assigned it to Bethany and I walked away with 25 Grand I'm surprised she she met with that many people and not one person would offer her more than the 165 if Bethany's willing to pay 175 for it yeah it's interesting Bethany ended up selling the house for a little over um 400 Grand and so I look at the deal too and I was like that's a great deal so I made 25 Grand Bethany ended up netting like 50 60,000 bucks on the house um but typically like the people the only people that are interfacing with a homeowner in that situation are not actual fix and flippers this is the thing about that industry that nobody talks about it's either a real estate agent or a wholesaler people that are fixing and flipping are too busy fixing and flipping they're not out marketing they're talking to agents and they're talking to wholesalers to get their deals so Bethany was the actual fixing flipper she was willing to pay more money because she was direct to seller in that essentially in that situation right the 165 came from a wholesaler who was going to turn around and sell it for 175 to somebody else I just didn't know it at the time M I didn't really understand wholesale at the at the time even though I just did a wholesale deal so here's what happens I make 25 Grand on that and then I made I got three more deals that month in my first month I made 50 Grand in my first month I'm like holy crap this is how I got into creative Finance so I go to the title company I open ask her on all of these transactions and there's a lady named Eileen Brown that I end up meeting Eileen Brown has been in the trans in the industry for 48 years like the OG knows everything about everything everything and she's like where where did you come from like you opened four contracts I've never seen you before did you used to open your title stuff over at a different company I was like NOP these are my first four contracts like she's like in 30 days like who are you and I told her about the bunny story and she's like oh my gosh this is great like how where are your leads coming from and I go I tell her and she goes so you have more leads I go yeah but I can't help them she goes what do you mean what's going on with the leads and I go well the other leads I have I I got 50 leads that month I got four contracts and I said well the other 44 people that I have that are leads don't have any equity and some of them want too much money right as an agent I'm sure you listed houses for people that are just like I want to sell my house for 300 Grand over what retail is and you're like dude what are you talking about right and like we just closed a $20 million apartment complex in Springfield Illinois a couple weeks ago I paid a million over retail but I did no money down seller finance on 265 units this stuff like Eileen Brown goes go back to those people that want too much money or the people that don't have equity and bring those to me and I'll show you how to do subject to and seller finance and I'm like subject what and sell what's seller finance so she whiteboards all these things out for me shows shows me that I could go back to those leads that essentially were dead for me and I got an extra four contracts that month just from creative finance and I walked through with her and I found that the amount of bunnies I could find essentially like all these people had a different version of bunnies that were keeping them from selling ien taught me how to go find all the bunnies help the people that don't have Equity that are going to foreclosure like maroba County if you guys look up I don't know how Vegas is but maroba County where I'm at three people get foreclosed on every day and I look at those people like you're getting foreclosed on your credit's going to be destroyed let me come in and fix your credit let me take over the existing debt I'll turn it into a cash flowing property and I'll rebuild your credit I didn't know that that existed at that moment until Eileen told me I had to laid down on the ground I was so blown away I was like how is this possible she was like well I've been doing it for 48 years I'm like this is happening she's like yeah do two or three of them every single week I was like no way so I did that for four or five months and then I I got my first do on sale Clause called on me I got I called an attorney the attorney like oh yeah this is easy I've ran into these this is what we do boom boom boom like okay so what's the worst thing that could happen in these do on sell CLA that's it boom and I lit the world on fire bought 300 single family homes and 1500 multif family doors all creative Finance so what's your pitch when you walk in to the homeowner are they all behind in their payments is like the no like the fir like one of the best seller finance stories I could tell you is I got so good at finding the bunnies for for the wholesalers and agents that agents would call me and go hey my client wants too much money they don't need the money they just want a really high purchase price again seller finance is typically gain related and subject two is pain related right they have a painful situation seller finances like I just they're greedy and justifiably it's at their house right so I would get wholesalers that would call me and I got a wholesaler called me like four years in and this is just a good story that tells you how this is all structured and exactly how the flow is wholesaler's name is Tom Tom calls me up he goes hey I've got a property on 1906 South 78th Place seller looked at Zillow and the Zillow price is 100 Grand she wants 110 grand for the property this happens all the time so as a wholesaler what do you have to pay what as a wholesaler what do you have to buy that for 80 75 no way lower than that cuz the house isn't wor 100 Grand it could be worth 100 Grand if it was renovated right so as a wholesaler you would have to pay probably 40 45 so Tom is like bewildered he's like how the freak am I going to buy pay your house for 100 grand he meets me at a ria like a little real estate investor Meetup and he says you're the creative Finance guy right so if I ever have a weird lead I can call you go yep and that became my business I just went on other people's appointments that had impossible leads so Tom calls me up and goes hey you want to come meet with uh Susan is her name so I go to appointment I meet with Dale and Susan we meet in their little house they had a they have tenants in the house but they told the tenants to leave for a little bit so I could come in and toward the property standing in the kitchen and I said uh same thing I said to Janie mson four years prior I said what's kept you from selling the house she says everybody keeps lowballing me and I want to retire we're sick of dealing with the tenants what do we call those people we call them tired landlords they're done like they're not great operators they're sick of switching out toilets and light fixtures and stuff so um she goes I can just keep getting lowball they go let me guess and this is my pitch this is how I convert from a cash conversation to a creative conversation I go um well let me guess you're probably getting offers around 40 maybe 50,000 bucks and she's like yeah how how did you know I go cuz if I was going to buy the house for cash I would probably offer that same amount as well and you see what I did there I'm like if I was going to offer that much if I was going to offer cash I'd offer that much too she's like what do you mean you're you're not going to offer me cash I go no if you were going to sell the house for 4050 Grand you would have sold it to somebody before I got here you want more money so I typically will match somebody's price as long as they give me terms and she's like what's terms she has no idea what terms are and so I tell I told her a story about my first transaction I ever did F1 was an F-150 as a contractor I had an F-150 that had like 320,000 miles on it so I went to Kelly Blue Book and I go what's this truck worth she says or Kelly Bluebook says 5,000 bucks so I go put it on Kelly blook what offers am I getting at 5,000 bucks what off what price Jack three yeah 25 and half 25 two and two and offer a grand you're cuz you're smart but my my highest offer was 3,100 bucks sure but that truck was being used for my construction company so it made more me more money being used I and I was willing to deal with the headaches it was giving me versus giving letting somebody buy it for 3,100 bucks so I tell Susan just like I tell tell every seller the same the same story when I was going on appointments now I got a team that does that but I tell Susan I go I go on Kelly Blue Book I get people calling me lowballing me just like you're getting low balled right now and I decide to go get belligerent just like you Susan like I go belligerent I go all right I'm going to change my listing from five grand to 10 grand because then in that situation if I do get low balled I'll get low balled at 5 grand but what happened is nobody even saw my post nobody looked at it people laughed at it probably didn't even message me and um a couple months later didn't sell my wife comes in and she goes hey sweetheart like is there any way you can get this truck out of the driveway I got to like kind of move around it to get into the garage every time I'm like what do you want me to do and she's like why don't you take payments for the truck I was like oh my gosh that's so freaking genius so I literally put my truck back on Craigslist I change one thing I say F-150 will take payments so I say Susan do you think I sold my truck for 10,000 bucks she goes probably I go I sold it for 122,000 $500 with $11,000 down and I go that's what terms is and she's like I'll do that all day long and she goes okay so you'll give me 110 I go I will come up to 110 as long as you give me terms that make sense for me and so that was a deal I got Z down 0% interest you can pull up the the deed of trust that we created most of my seller finance deals are 0% seller finance because I'm matching their number and a lot of them are no down payments obviously that that requires some um credit credibility right they got to see my track history they got to see who I am but the average deal I probably put 5% down no credit check I have never had my credit checked on a single deal nobody's ever asked for my job history nobody's ever ever asked for my tax returns not a single time out the last 700 transactions i' done creative Finance not one time everyone goes through title we get Title Insurance on every single one depending on the state like Atlanta I buy buy a lot of deals in Atlanta always goes through a closing attorney in Atlanta because they're an attorney State not a title state and that's what I've just focused on I focused on if I don't have the if I don't have money how do I buy a piece of real estate and I thought like the radio stuff like no money down and all that kind of stupid crap I was like dude just freaking scam artists out here as a blue collar contractor I just was like I heard it on the radio as I'm cruising around I'm like all of that is fake but I can tell you you can look up any address you can look at this address by the time you guys list this I'll be the owner of this property or by the time you guys put this podcast up this house on 8110 s of San Antonio Texas I get it gets brought to me today I will be the owner tomorrow in one day that's how fast creative Finance is I don't have to go through credit checks I don't have to go through appraisals I don't have to go through inspections I will become the owner of this property today that one lady how long of a term do you get um oh with her that one is 20 20 years 0% interest in fairness she would have been better off just taking the 50 and investing it yeah but we're not talking about Graham stefin of the world right we're talking about people that can't even handle one um they can't even handle one rental right at all so these re tired landlords it's I bought a 43 unit last year a 30 unit a 30 unit a 50 unit 109 unit 138 unit and a 256 unit all the exact same way all the exact same way we had when we were negotiating a 300 unit on like really close to the strip it was a zero down 0% seller finance deal too um but I we're going to have to follow up with that one how much is that one um that one's like 50 mil oh wow yeah my biggest deal I closed last year was 109 million deal in in um North Carolina Charlotte North Carolina 4 partner with people on that I used to when I was brand new right so what I would do is I would go to people like Graham Stefan who have a fancy pek watch and I go hey man you obviously have money can you be my private money lender in the very beginning I didn't have the credibility to entice them to be my private money lenders I had to entice them to be My Equity partner so I would do that they'd come in with the down payment and the closing cost and maybe the furniture cost to get the Airbnb up and going if that was my strategy but then I got credibility I learned how to raise money that I didn't have to give away Equity so I haven't given away equity on a real estate deal in probably 5 years and what rate are you getting for uh private money so on my flips I get 10% no points on my long-term um stuff where I go all right I'm buying it like this sub two deal let's let's give this as an example if I was brand new what I would do is my total cost to get this deal um the guy who's bringing it to me it's an assignment so this is cool you can assign these sub two deals Okay so so uh he'll get paid 10 grand as an assignment fee the closing cost will be three grand and then I'll probably spend five grand cleaning up the property and getting it getting it rented out so I'll be into it let's say 20 grand if I'm brand new this is what's cool about creative Finance too it if you were a real estate agent and somebody comes to you Graham and says I want to buy an investment property tomorrow guess what they have to have not only they have to have good credit job history tax returns and everything under the sun the loan officer is going to ask for and then they're going to ask for more 2 weeks later then they're going to ask for more 2 weeks later you've been through this a bunch of times like dude how much more information do you need just get the freaking loan done the worst part about that is that the down payment has to come from their own sources in Creative Finance I can get a private money lender to bring that money in nobody's going to nobody cares where my down payment came from right so somebody will come in with that 20 grand and I'll pay them 12% interest and then I'll utilize the cash flow to pay them off for probably the first year maybe two years so give them 12% interest on their 20 grand does that make sense yeah so how many like doors or houses do you have now close to 1,800 how do you manage all that so I have a team I have a I have a Molly we everybody that knows me knows Molly Molly's my coo and then I've got an asset manager and then I got a team but when I first started it was when you when you get up to like 20 rentals you can primarily manage that yourself like you and maybe your spouse and it gets to a point I think you're at 10 that you go dude this is like starting to become a job and you Outsource that to a property management company so I have property management companies that we Outsource it to I've never started a property management company it was never something I wanted to do and so I have property management companies like in North Carolina I have a lot of assets Florida Texas um Atlanta specifically um Nevada I have a bunch of properties here and Arizona so I have property managements companies there and then I have an asset manager that manages them and then I have a CO that manages her got it does that make sense and what do you look for is it cash flow or do you go for appreciation I don't care about appreciation I tell people all the time that um Equity comes Equity goes but the cash always flows so like look what happened in La this last year the the what happened was when I first started I was like how do I get cash flow then when I understood the tax benefits of buying real estate I actually care more about the depreciation right there's a lot of people that you hang out with that all these rich people that get these big swaths of money and these guys are giving away 40 50% of their income to the IRS I'm not paying any in any of my income I don't pay any income tax I pay consumption tax and employ employee tax and property tax and all that stuff but my money that I make I don't pay any income on it because I use real estate to offset that so the main thing I care about is this a property that will cash flow number one and number two I care about the debt that comes with it and then number three I care that it's going to give me the tax benefits that I need to pay no tax pay zero dollars in tax what do you think of the current market right now it's unbelievable for me think about it all these people the the it's like the golden age of creative Finance because people went out in 20 19 20 21 and 22 and they obtained all these two three and 4% interest rate loans now the market change and shifts and people that are in foreclosure right now or people that are going through a job change or whatever it is this is what's happening if let's say I buy a property that is Cash flowing 300 bucks and all of a sudden my rent rates come down what do I do with that asset one I either a I don't cash flow on it which is not a that's not a new strategy that's a strategy I can withstand or b i divert and do a different exit strategy go midterm I do short-term I do sober living I do something along those lines and I amplify my cash flow then why isn't the strategy just doing that from the beginning like just doing all sober living all for yeah because like if that's your alternative to make more money would you just start with that I so I started with Airbnb this is a great question so I started with Airbnb because I thought okay lot more cash flow this is super exciting I'm going to go this route I think Airbnb is so overhyped it's ridiculous so I get in I get up to 75 airbnbs and then regulation starts setting in in Atlanta and I'm like dude I've got 15 airbnbs in Atlanta now the regulations are coming in you have to have a license there now and you can only have one pro property per license I have 15 properties so I didn't know I had to learn through my mistakes and so my properties in Atlanta I kept them all but I then diverted them to sober living you have to kind of get educated along the way I didn't know that from the beginning I mean on my first deal with Janie I didn't even know how to fill out a contract right you got to figure these things out along the way it's the same thing with like real estate agents agents don't learn how to comp a deal comp a house in real estate school they got to learn that out on out in the field it's funny most agents are going and doing a listing appointment and listing their first house before they even know how to value a property right they're listening to their broker they're listening to somebody else so you kind of have to have guidance along the way to to to navigate the waters if that makes sense so why are you comfortable sharing all this information it sounds like you kind of figured out the code and I don't have to look for deals when I teach people how to do this like these deals are coming to me from other people that I taught like go go put this on YouTube Somebody figures out how to do it they s sell me the deal last year we bought oh they sell you the deals they assign them to me they're doing all the work got it but very rarely do people actually approach you directly now what so homeowners yeah well homeowners stopped I I stopped doing postcards and billboards and all that kind of stuff about six years ago and what we did is we started doing cold calling a couple like probably four years ago did you hire people for that yeah we we use a company called start virtual.com that's like they're in the Philippines they do the cold calling and the texting and they do the Outreach but that's only like 30% of my deal flow 70% of my deal flow right now comes from people that T I taught whether on YouTube or at Aria or something else they go out they go get the contract and they bring it to me and Molly and we gobble them up and when did that start actually taking a significant amount of probably four years four years ago four years ago yeah I like right now I could turn off all lead generation and just sit here and I turn down 80 or 90% of the deal that get sent to me my whole inboxes is flooded with these all over the country and you look at them personally or is there first filter do Molly does for the first part for the most part so like Jimmy Al is the first guy I ever taught how to do a sub2 deal two and a half three years ago I was like wow okay if I could teach people how to do this I don't have to go out and Prospect anymore right it's kind of like being a broker it's like I go teach agents how to go do listings and I don't have to go do listings anymore so that's what I did I taught Jimmy Al was the first guy and here he is now three years later still selling me and he's making good money yeah make 10 grand on he he didn't have to do anything on this you know what's funny about this this is this is how good Jimmy is Jimmy didn't even find that deal Jimmy taught learned what I taught him went to a local Ria taught like 13 or 14 real estate agents to go hey if there's expired listings or there's listings that are on the market for 100 days and they're not selling which is massive right now days on Market have gone crazy so if you want to go get a deal right now you and I could go get a sub two deal in Vegas in four minutes like that's how easy this is so Jimmy teaches these agents go he goes hey go to expired listings or go to other agents that can't sell their listings I'm a buyer so now he's got agents bringing him deals and then he assigns those to me so he's not even the one doing the prospecting anymore geez it's crazy so that he sent this to me at 4:37 we started at 5: this is 23 minutes before I sat down like this is all day now the only people that are emailing me are people that I taught directly 3 years ago now what's happened is it's kind of compounded and my YouTube channel is at like 150,000 subscribers now so you know we get 5 million views a month a lot of people learn from like I'm buying a golf cart with creative Finance I bought a boat with creative Finance I sold my truck on Creative Finance I bought a Kia on Creative Finance isn't some of that more work than it's worth buying a golf cart on 100% sounds like but for some like here's an interesting thing that that was a complete waste of my time as an individual think about this so I get a camera guy he comes in he starts working for me he goes oh man I'm working for the sub two guy I'm this I'm working for everybody knows me as a sub two guy right and I and my other videographer Eric is standing there he goes dude you don't even know what sub two means and I and my new videographer his name is Jose goes yeah okay well show me just show me so I go to the Whiteboard and I start writing it out I was like wait hold on what would make sense to a camera guy so what I do is I go to Craigslist I sit down on my desk like literally 10 feet away and I go Jose what camera what camera do you want more than anything he goes I want the A7 S3 I want the aperture this I want the 50 blah he's saying all the stuff he wants so I go on Craigslist can't find it in Arizona I go on Craigslist in LA and I go oh cool there's a guy selling an A7 S3 with these three lenses he doesn't have a light with it but it's all good I go would you want me to buy this he goes yes I go cool so the package is being sold I think for 4,500 bucks okay and I called the guy up right there this is all recorded we put this on the YouTube channel and Eric's sitting here recording the whole thing obviously Eric's a smart guy I call the guy on Craigslist and I go hey I'll pay you uh five grand for your bundle and the guy goes what are you talking about five grand I got it listed for 4500 you idiot and I go well it's because I'm going to ask you for a favor and he says well okay what and I go it's going to be a little bit weird but I'm a wedding photographer which I'm not but Jose is on the weekends I'm a wedding photographer I don't have the money to buy the camera equipment and I know I can make more money if I had that camera equipment would you let me buy that camera equipment put an agreement together and make you payments every time I go make money on a wedding and the go goes yeah you'll pay me five grand no problem so we give him 500 bucks down Jose goes out buys gets the camera equipment and goes out and starts doing stuff on the weekends is it more work for me to do that a lot of trust for the seller though CU I feel like camera same thing bolt off and like of course but it's the same thing with when you buy a car the bank is trusting you but what collateral do they have right what how usually they're verifying with your credit so they have that kind of hanging out or down payments times yeah right so we we give him 500 bucks it's it's not as easy when you go watch the conversation with the guy it's not as easy as like hey I'll give you five grand yeah well I guess it's easier to track down the car and repossess it than it would be finding some some guy's camera right so but I'm just telling you there's nothing you can't do with creative finance and what I the reason why I do the golf cart stuff the reason why I do the truck and the Kia and the watches and stuff on Creative Finance is just to show people that you can literally buy anything with creative finance and then when you really understand like the history of all these companies like Dupont and all these big companies that are the biggest richest families in the in the country they all built their fortunes off seller finance and creative Finance every single one of them Walmart uses creative Finance in everything that they do and so when you start understanding how simple it is it seems complicated because the terminology is there but name something you want you want a house I'll go get you a house with no credit check I'll get you I'll get you a house right now with 3.25% interest amidst everybody out out there in the country is going I can't get a house I can't get a house because interest rates are at 7.5 I'm like what do you guys this is the greatest time in history for me I would do that why wouldn't you that sounds good to me let's go I guess it's such a small subsection though because there's for any home that's listen 600,000 houses right now that Mr Cooper is saying take these mortgages off our PL guess anything that's listed right now I know any agent would just scoff at that now I'm not dealing with that anytime I he anytime I hear that from an agent I I'm talking to all agents out there you're telling me as a real estate investor is that you are inexperienced and you didn't actually learn real estate I know if I came to that when I was at C banker and brought any sort of deal they would immediately say NOP we're not getting involved too much liity because your your broker is a listing Centric broker if you go to a broker who is dealing with agents who are out there investing and flipping and building stuff they'd be like 100% it I I call it the bank teller Paradox it's like you go to a bank teller and they say sorry we have to put your check on hold for seven days cuz it's Bank policy and you're like what are you talking about so you take your check and you go to your branch that they know you and they deposit and they release the money right now have you ever had that happen to you okay you guys I've ran big construction companies so it's happened to me a hundred times I've learned same thing with title companies I go to a title company they go what's this what's seller finance they don't there's agents that don't even know what seller finance is and you go go on landwatch.com right now there's 12,000 listings on on landwatch.com just on seller finance 12,000 go on Vegas's MLS right now 200 listings right now on seller finance subject to and seller finance just because agents don't know it now here's the thing I'll argue with agents the average agent makes less than $40,000 a year what am I taking their advice for the average agent 90 plus% of them don't even make a full-time living as an agent so the last person I'm taking real estate advice from is an agent unless they are a top earner and when I talk to a top top earner agent they go yeah we we can figure this out so the strategy is you go to right now go to the MLS filter down to listings that are over 100 days and you tell the the agent hey I'm I am willing to pay full price would your seller be willing to let me take over payments probably 50% of the time the agent's not going to know what you're talking about so what you do is you follow up guess what you do again you follow up again the next week you know this when you did listings you don't land every listing you get just like I don't call I don't call an agent or call a homeowner that's in foreclosure and they pick up the phone and I get the the deal immediately 70% of our deals come from 13 follow-ups that was the most important thing that I learned in real estate was 70% of my deals come from 13 follow-ups so somebody's like I'm not ready or I'm not this or I'm not that great no problem I'll follow up in two weeks or I'll follow up in 30 days or whatever it is you want a rental property yes okay where do you want a rental property here in Las Vegas or I mean I would also take somewhere in the midwest okay Midwest is too easy where what what part of Midwest where do you want to go uh Mississippi Miss Mississippi is very easy okay if I got you a rental property zero down let's say under three or under 4% interest you would want to manage that property or would you want to partner with somebody that would manage it for you uh I mean I would probably prefer to partner with someone so I just focus on this podcast okay I will find you a property in less than 30 days that will not require your credit it will not require money out of your pocket nobody will ask for your ta tax history your job history nothing and you will go through a title company get Title Insurance in less than 30 days what's Jack's obligation if you did that mm would report on it here on the ice coffeee hour guys go to my every single address I buy it's all reported on public record what's Jack's obligation though so this is the challenge right so if you want to be somebody that jumps into the industry you got to make a decision there's only three ways to make money there's three ways to make money as a real estate investor only three wholesale Fix and Flip or Buy and Hold I don't know that I take you as a Buy and Hold guy yet unless it's in your backyard I do plan on buying and hold I get I get that so that's why I'm saying like if you live in Vegas why not buy a ve one in Vegas because it makes people feel more comfortable that is ideal you know what I'm saying so if you want a Vegas deal I'll get you a Vegas deal easy right Ryan pan you guys know Ryan pan he's doing these deals as well him and his team have my team do their transaction coordination people in the real estate industry are really really doing it's just the agents are not educated at school and they're not educated by their Brokers so what happens is where else do you get education if you're an agent that's it but Jack's buying this property what does Jack do go and I feel like You' just be throwing me a bone at that point I feel like need to you know what yeah in a situation like that like what's Jack doing every month he can't just do no work nothing and just get a check for no you would have to hire a property management company I'll refer you one um there might be cost to get into the property but I you I could refer you a partner there's we have a lot a lot of people here in Vegas like uh Kevin Cho would be a really good fit for you young guy lives here in Vegas Kevin Cho comes in as a private money lender in the deal or partner you're 5050 with him he bring you bring the deal I'll bring the deal you bring the deal he brings the money you guys are 50/50 Partners you guys hire a property management company you sit back and get checks and then once a year you you got to get a report from your your uh property management company says hey Jack just so you know tenants leaving what do you want to do do you want to raise the rates we suggest you do because blah blah blah blah blah you'll still have to have involvement you probably have an hour a month of involvement in looking at emails and stuff like that and then the property management Comey to call you go hey we need a repair request we need2 200 $200 more fixed on this thing your tenant punched a hole in the wall whatever you'll have you'll still have to have involvement are you saying this is just a hypothetical situation actual I would actually do this I guy just take the deal for himself why why would he or Kevin Kevin why why is Graham so skeptical all the time because I'm thinking I wouldn't do I wouldn't want to partner with anybody well you wouldn't but you would right in the beginning on your first deal 100% I also have I have money I could pitch it towards but why would you do it with money if you want to learn how to do it without money your that's that's a good point you know maybe I'm just too easy to convince which is great Graham and I have an amazing D like dichotomy because I am one way in so many things and he's the exct here here's what I think I think I think that I'm sold I think one of the take all my money I think one of the smartest people on the planet is Dave Ramsey but I think one thing I disagree with him on is the debt his debt conversation everybody I know that's worth a lot of money let's take Dave Ramsey's ability to sell courses and sell all his backend products out M how does Dave Ramsey buy property he says he property cash but where does that cash come from it comes from his influence and it when you're talking about your audience your audience doesn't have influence like that so how does your audience go out and and buy real estate they have to use leverage Leverage is powerful and everybody wealthy uses leverage I'll say it's safe to say his wealth is from a very strong income and 100% of course supported by lucrative Investments most and yes but mostly by a very strong income right but his his rhetoric of don't ever incur debt actually puts people well it's incur debt but 15year mortgages I believe I believe in all that so I I think he appeals to the lizard brain human beings the people that live in fear versus the people that are want to be the one or the 3% and say I want to make half a million dollars or more a year those people need to learn how to acquire skills not learn how to save more money and we all we all know you're not going to you're not going to live a good life by trying to figure out how to not buy Starbucks now that's one thing that does help by scaling back Starbucks I don't buy Starbucks I I only buy I I only use your coffee so here's a good question why would I why do I not use my own money why do you not use your own money yeah because because you could use it on other things I there you go so think about it so if I can get somebody else to come in at 10% right or even be an equity partner so I don't have a payment to them and it's not really a loan it's them being a partner but I could use my cash on wholesale or Fix and Flip or my cash flow and I could go buy other businesses like um title companies that have a like you go buy a title company for 200,000 bucks you're making 800 Grand in your first year it's crazy so why wouldn't I just go buy more title companies my return on my investment is way more than 10% so my question is why would I ever put money into a flip I don't flip on the TV show The A&E TV show that we're on um all those houses we don't use any of our own money nothing zero zil nothing why would I use my own money for Real Estate when there's all real estate is such a secure investment because it's solid it's tangible you can put a lean on the property it's easy to put money to go get money so why would you ever use your own money I'm just curious because I do understand where Graham skepticism is coming it's like for me I actually no I don't I don't know where the skepticism but here's the I I think if you understood the exact reason for the skepticism you probably would understand so this guy Kevin right why would he partner with me when he could just be doing this on his own or why would you just not take this deal yourself what is the benefit of my presence you got that's an interesting thing you guys you you guys don't know me too well so you don't know like my community and how strong we are and like you if I show up right now if I go hey guys we're going to go to a a ice cream thing before I go to the airport I have 300 people show up we have a go-giver network everybody's always helping each other out it is absolutely insane people help each other to help each other out first and foremost and collaboration over competition is way more powerful so the other thing is it's fun yeah but this is a business relationship actually air more I know this obviously it's benefiting me so it would make sense that I air more on your side but I would say just as a philosophical standpoint I do air more on your side I do love the Buddy stuff the the Friendship stuff where it doesn't necessarily have to be very transactional I've said this to Graham before in the past one point of contention he and I have is he is a very much more transactional type person yeah and you need you need that you need that in a good balance right like a a good marriage in both business and and relationship has has that perfect balance for sure but for me I'm on the more aggressive side my partner so all my Partners I'm a Visionary so I'm more aggressive on let's go buy more let's go make raise more money but I have a counterbalance in all my businesses too I have operators I have nine businesses that I have and each one of those businesses has an operator partner that is a gram I need grams that are like hold on hold on we bought 40 properties last month let's not buy properties for three more months let's stabilize these before you go buy another one and I'm like but there's deals out there so right now I'm turning down deals cuz I you can't stabilize a thousand properties in one month you figure out a good Pipeline and then you have to say no to stuff and when you say no to stuff guess what you do you just say that's not a good deal no because you have to understand that every one of these deals that you're saying no to has bunnies in each one of these stories there's a lady that's retiring there's somebody in foreclosure there's somebody in a bad situation it's very unlike traditional real estate the off-market world the traditional real estate world is like I'm going to call an agent there's a whole subset massive amount massive massive amount there's over 400,000 transactions going on every single month that are off-market deals both either people we won't get into that's it's a whole another conversation that nobody even sees that is a real estate agent so real estate agents have their blinders on and they go well where are all these deals I'm like not paying you commission that's where they are they're paying me can you share with so many units what your monthly take-home is after paying off all the debt like what's the net profit every month uh so after payrolls like Molly Heidi all that kind of stuff U you're probably double six figures so close to 200,000 a month yeah yeah and what does that equate to in terms of a dollar amount of real estate um so the total amount of money total amount of real estate that we own is somewhere around 300 million but again yeah but a lot of those are paying down a lot of the a lot of the money that's coming in is not cash flow to me a lot of that money is that's coming in is paying down the debt right because I have payments I'm paying to sellers now we're bringing in a lot of money but those payments that come in I'm then paying my sellers who are my bank right and then my net cash flow is completely different than what I actually bring in right do you do commercial at all or you stay away from that I don't know commercial very well so I have right now I have a deal in Carson City um which is near Reno I think so I have a deal in Carson City that is a um seller finance storage unit and I'm like okay I could do that I don't have anything in Carson City that's a problem is that determining and turning down why I won't buy in certain areas right now I'm at a point where I have enough real estate in 15 different markets that if it comes to me outside of that market I'm just wholeselling it m but I have a storage unit that came to me this morning Carson City and I go oh it's seller finance 10% down seller finance storage unit I don't really have tenants and I'm dealing with like toilets and trash and all that kind of stuff I will probably buy that deal but it will be my first storage unit deal and what's the return on that net income per year 60,000 so after you pay the seller off after you pay the taxes and insurance the net income would be $60,000 is what he's what he's equating so I mean one storage unit on seller finance is 60 Grand a month or 60 Grand a year for most people they could probably have their wife or themselves probably quit their job and just go full-time real estate with that 60 Grand that's on one deal yeah now does that include Management on that um yeah 8% Management on that is what he assumes in his pnl yeah okay is that realistic for a storage center I think so doesn't don't they usually require that someone like be on site I think it's a smaller one so the ones that are bigger and they have like RV storage and stuff like that I don't know I sounds like I know a lot but I actually don't know a lot I know enough about RV storage facilities because as a contractor I used to build them for people but I didn't I've never owned one so I know what happens I know the mom and pop ones that are like 100 units or smaller typically don't have an on-site manager the ones that have more than that do or the ones that have RV storage where somebody has to pull in and back in a lot of times they need somebody to make sure people aren't backing into people's boats and stuff like that but I I just have stayed in my Lane between I stayed in my lane for a long time on single family I was afraid of multif family but now that I understand multif family I'm like wow this is actually a lot easier than single family once you have the credibility and the resources to manage the properties and why do you invest in the areas that you do uh part part of the reasons I did is because that's where my deals were coming from like Atlanta I the first deal I bought in Atlanta I was I flew out there and I was speaking and somebody that I was speaking in the audience was like I have a deal so I left I went and bought I went to the property go okay I'll buy the deal and now that I own a property in Atlanta and I knew that it's an appre ating Market I started buying more deals in Atlanta so wherever I got a deal in my first year or two years and I kind of set these strongholds like politically I wanted to be in areas that were landlord friendly and I wanted to be in areas that had a population growth of at least 8% a year sorry 8% so just under 1% a year and if they had population growth and good politics I'll buy there now I'm at a point where I don't need more markets I just want more properties in those markets so I say no to everything else got it yeah just out of curiosity I was doing the numbers in my head so if you let's say the longest loans that you have on all any of your properties is is 50 years then wouldn't that make that after 50 years has lapsed and you don't change anything you'd have $300 million right technically in cash way more than that well the assets right well sure 0% appreciation yeah there you go yeah 300 million 300 million but then you're making $200,000 a month which two25 millionar a year about if you times that by by 50 is not 300 million so you're just you're going to continue selling on the properties early assuming that I don't think I what I'll probably do and I'm I'm newer right I'm in the I'm in this part of the business less than 10 years so I don't know what the next 10 years looks like and I know that when you have kids things change when you get married things change when you buy when you decide hey I'm 40 years old things change right so when you were before you moved to Vegas you lived a different different lifestyle than you live today you made different decisions than you did today I don't know what tomorrow holds all I know right now is that I want to continue to um control and own more real estate and my goal now is I look at my SE Suite so my C Suite like CFO CEO coo all the all the people that are on my team I look at them and I go how do I make you guys worth $20 million and so I have to turn around and buy enough real estate that justifies them becoming worth that that's my goal now and sometimes you're going to switch out assets like we had a 20 unit deal that we bought a couple years ago that we went through the inspection everything was fine and then a couple years later we had a sewage backup and we found out that like 5 years prior they basically they didn't literally duct tape but they basically duct taped the Sewer back together we didn't catch it and we had to go in and dump $300,000 into the property and I was like what else do I do we not know about this property and I offloaded the property I sold it so in those situations I'll offload a property but now I've got a 1031 exchange that cash that I have in that property into another asset so I prefer not to be in that situation right you probably as an agent you ran into investors that would go I'm selling this asset but now I have a timeline I have to roll that money into another asset or else I get hit with taxes that's another great thing about creative Finance creative Finance you can do a delay 1031 exchange the seller let's say a seller sells the property to me his payments that I paid to him can actually be a 1031 exchange over 30 years isn't that freaking cool how is that how does that work it has to go through an exchange intermediary so a licensed person that does the 1031 stuff and it bypasses all the regulation for the 1031 in a cast transaction in a creative transaction the 1031 can be delayed over whatever 20 years 30 years 50 years but does that would mean he would eventually have to buy yeah yeah he would have he would have to do something so you're saying let's just say sell a building for $10 million and your agreement is I'll pay you a million dollar a year for 10 years yeah yeah so that million dollars a year what goes into an account where goes it go he he does have to identify an asset okay so it has to go towards an asset he he can't just receive the money it has to go to an asset he's identified but those payments can be Justified towards his 1031 even 2 years 3 years 4 years 5 years down the road does that make sense yes but just not closing on that second property he's already closed on it he just had to go and get debt on it does that make sense so he goes and gets a loan he does whatever but my payments to him can be identified as payments towards that property that's where that money goes and that will satisfy the 1031 okay so he's still he still identifies the property the same way you would identify a property in a regular 1031 but he doesn't have to have all the money to put into that deal as of today he can say hey 1031 intermediary the person that's licensed to do all this stuff this these payments are going to come to me for the next 20 30 years or whatever it is I want those payments to be attributed to this property that I've already identify sure okay yeah there's all sorts of really cool things you can do okay so where is your thought in terms of where the Market's going over the next few years so I told everybody wholesalers don't want to hear this but I have friends that are wholesalers and in January I said guys we're going to be we're going to have a bumpy ride and people are going to get fired people are going to get laid off people that are loan officers and you guys are in the mortgage anybody in the mortgage industry is going to get hammered if you're a real estate agent your days on Market are going to 5x and people didn't want to hear that because they don't understand interest rates and how they actually affect the market no there's so much demand there's so much demand actually you and I talked about this like yeah but like interest rates dude like it's going to impact people's affordability is is a big deal so I predicted last year that we're going to lose 30% we didn't I thought we were going to lose way more I thought it was going to be way worse than it was um I think interest rates are going to go up two more times this year the FED has specifically said we are not lowering rates until we're at this point so I think that we're going to have another decline of probably 12 to 15% Nationwide and then hopefully it stabilizes in 2024 got it are there any areas that you think that you would stay away from I stay for as so if I'm a wholeseller I can wholesell anywhere if I'm an agent I can be an agent anywhere if I'm fixing and flipping I Can Fix and Flip anywhere if I'm buying and holding I stay away from states that don't like landlords um but I also think that there's certain areas that are going to get hit way harder than anywhere else and those are typically the tertiary markets like the the smaller markets like a Corpus Christie is going to get hard hit harder way more than a Dallas or Reno is going to get hit harder way more than a Vegas is Right Vegas has way more demand here now Reno has like Tesla and a bunch of stuff up there but it doesn't justify not getting hit Tesla's been there long enough it's not like they have a bunch of jobs moving in Arizona we have rivan and these big companies moving in and investing billions and billions and Intel is tripling their size in Arizona I think Arizona actually will be somewhat insulated from the economic hit but I don't think we're going to have a meltdown I think that there is enough demand I think the FED has actually done a good job um what do I know at the end of the day other than I'm I'm happy because now there's a lot of people just giving me their mortgages cuz they're underwater and that's what I want I want more more mortgages right or I want to assign more mortgages cuz think about this too you have friends that are loan officers you I don't know if you do you guys ever have loan officers on here no okay they're too boring I guess I don't know so I was a loan officer and um for a couple years and I learned that 50% of people that apply for a mortgage get declined 50% so what's cool about creative Finance is that I can assign I can go get a mortgage from somebody else like that house I showed you in Texas City I for a moment I was like should I turn into uh should I turn into a midterm rental or should I assign it to an end buyer I don't have to assign a deal to a fixing flipper I can assign a deal to an end buyer think about all the end buyers out there that are like I can't buy a house right now so for me this is like the Golden Age of creative Finance I think for the next 24 months I'll have a Heyday and I I I'm buying more properties than I can even handle so how much how much debt do you technically have then uh probably 250 255 million something like that does that not stress you out at all look at I mean look at anybody with wealth name name any company that has any anybody that you've had on the podcast actually has real wealth not like I'm worth a couple million bucks sure they all have debt debt is a powerful thing powerful thing and if my average interest rate is at three maybe three and a half% I think maybe horoi has been the only person without debt he going to but that was just the stress it wasn't even like a financial decision I don't think he's de opposed he was just like right you do look like you sleep very well at night at least you like hydrate or something you don't even need an or ring to track your sleep we okay tell me about this or ring so check this out so I've got this ring i' obviously been married a long time but this ring creates a callus on my finger you can see it and so somebody showed me the aura ring the other day I was like dude those are pretty dope so you're thinking about replacing your wedding ring with an AA ring yeah I would I would bulky it is a little bit bulky I mean I wear it every single day you basically will not catch me not wearing this but yeah it just measures the basically the amount of sleep that you get so you measure your sleep what how does that help you like what do you do with that data you look at it use the DAT to to improve your sleep because it's hard to know exactly how well you're sleeping without actually seeing it on a sheet like you can feel well rested but I also think like the next day a lot of that's in your head so like if you tell yourself oh I slept really well you're going to have a lot of energy or if you tell yourself like I think I had a sleepless night but you don't really know because you're kind of in and out of sleep you're going to have a bad performance I think that's been the biggest thing for me is a lot of the time it'll be in my head and it's just like oh I didn't get a good night's sleep last night but uh we got the aura ring when I got it I I charge it every day so that's why you don't see me wearing it right now but it's been really interesting to see I found that I get the best night of sleep and it gives you like a sleep score uh I get so happy when it's above 90 like 100 is like a perfect night of sleep when you get above 90 you get this like if you get below 90 what do you something I would say for me below 85 is like I generally don't do as well the next day if I get to sleep score below 85 and usually I found that if I go to bed before 11:30 wake up around there's the dat I'll guy yeah uh another thing is it measures the amount of wakeups that you have in the middle of the night and uh I noticed that when I wear earplugs the amount of wakeups that I have drastically decreases so you basically can like split test certain I look at people that sleep with their earbuds in like I'll have my camera guys travel with me I'm like how are you sleeping with earbuds in but not earbuds but ear plugs oh ear plugs yeah yeah so just the basically muting all noise yeah that will drastically decrease the amount of wakeups that I have which is really important because wakeups can pull you out of very sleep which is hard to fall into and the deep sleep like REM sleep is where you get most of your energy the following day okay that's great data and there's a bunch of other cool data like it gives you your temperature I remember my housemate he noticed on his graph every single day his temperature was increasing a little bit he's like what's going on a few days later he was sick now he could have taken precautionary measures once he saw his body exactly and on top of that it measures like I don't wait hold on this measures your your REM and your body temperature yeah it basically divides up your sleep and yeah it measures a bunch of stuff it measures the amount of steps that you take taking a day the distance travel so if I play yeah calories burn so if I it's basically like an Apple Watch but in a ring form also with that's like way more comfortable for like a married dude that thing makes so much freaking sense I would honestly I would strongly recommend it to you I've been planning on getting one for a super long time so where where do I go again or ring.com you L Down Below in the description see we didn't even plan for this to happen we did not even plan for this to happen but we appreciate Ora I love their product I literally wear it all the time one thing I will say though one thing I will say you should get it I will um is that for the most part I don't drink and I went to bed and I think I had maybe like two drinks or something like that went to bed horrible night of sleep and it shows your REM sleep was like next to nothing and the times that I was awake it like shows you these Peaks when like you wake up was just like Peak Peak peep I didn't even realize it so if I have a drink and I go to bed it just screws up my sleep and it shows you like where you wake up I don't even remember any of it but apparently I woke up like four times that's freaking cool the coolest part is just split testing stuff weing like something to cover up your eyes so it's pitch black and you see oh how does this affect my sleep does it make it more efficient less efficient same as theug actually you you um when we started the podcast you said you were sleep deprived because you guys were jet lagged and stuff coming from Austin Jack you can see my sleep to you had I got like a 90 last night really yeah I like you guys are probably texting each other in morning yo bro screenshotting like I do that with my housemates cuz we all every single person in my house is water ring should create a a competitive part of the app where you can like bring your buddies in and you're competing and you get like points at the end of the week that has been one of the best like surprising byproducts of having this ring is that it makes me competitive about my sleep that's freaking cool I'm sure Grand's experienced adult what do you have looking at the units for you um before I buy them um so before we buy them if it's a multif family deal we'll typically hire an inspector to go and take a look at the property or the person who um brought the deal to me cuz these multi most the multi family deals that I'm doing people are bringing them to me and I pay them to be my boots on the ground FaceTime me do all that kind of stuff but they're not even FaceTiming me anymore they FaceTime Molly or somebody on my team it's pretty good that's I mean that's isn't that the goal of a business is to like not be involved I love the fact that you just brought that up man because this is one of the most like contended on topics of this entire podcast the viewers love it some viewers like it some viewers don't but it's about yeah like the reason that you want to build up a business or the reason of continuing to build a business is ideally one day to take a step back or to at least move in that dire I'm I don't know is is that you guys disagree with this yes kind of I like to be very Hands-On with every okay so here's I'm maybe a difference between even you two I'm I love working and you love working too you love working I'm sure I don't want to stop working I just want to work on new things that I can learn that's it so what I do is I go okay like this new thing that Arman who's behind the scene right here Berkeley educated super smart guy the reason he's with me is because I've gained resources and education that have presed presented New Opportunities and now we've got Mr Cooper basically saying hey we'll give you these these mortgages we'll pay you to take these mortgages off our our our books and I'm sitting here going okay how do we do that how do we te technically handle that many properties and I want to expand my mind and try new things and venture out and leave my businesses operating the way they're currently operating I don't I don't want to be in them every day but I still want to enjoy being able to step in the office and say hi to everybody but I want to be out building new businesses yeah that makes perfect sense I'm not the go to the mountains and retire kind of guy or hang out on the beach kind of guy I just want to learn new stuff that's it new people new things new experiences every single day I think that's huge for for me personally like I know for a fact like if I do something for twoo long I'll just get tired of it Graham on the other hand like he has been doing the main Channel thing like the same thing same format for I could eat the same thing every day and be totally fun do we need the grams of the world we do yeah yeah they keep the world okay so are we gonna get you a deal you want a rental 100% we'll do it uh I would love a long-term rental I really would not the best idea I mean why is it not the best idea I think the greatest idea long-term rental yeah I think long-term rental is better what's cool about a mortgage is that two years later you're going to raise your rents a little bit four years later you're going to raise your rents a little bit four years later you're going to raise your rents a little bit now you're cash flowing $ 8900 a month but guess what your mortgage payment is the exact same it's fixed so you're going to continue to cash flow more and more and more and it compounds you also get the the the payoff the mortgage balance gets paid off and you build that Equity you go get three or four or five of those I mean think about like how much the average person would need to buy to completely never worry about money again how many rentals to retire and be done where in Vegas Vegas like do they own them out right no not yet but let's say they're let's say they're 30 years old and they're going to retire at 60 or 65 years old how many properties in probably like two three four there you go so like you B how old are you right now 24 bro how old are you man I've been trying to figure this out this entire time I'm 37 yeah somewhere around there yeah I'm 39 okay de 39 you can tell in the gray the gray hair and the beard right so I look at you and I'm like if you bought one house a year that's it that's it by the time you're 50 years old your your real estate portfol is probably 15 million bucks I will say this much that was actually my plan my plan was to buy one every single year let's buy one I bought my last house in 2021 and I was going to buy in 2022 but the entire Market just continually went I got a I got a question before we wrap up do you believe that buying your primary resident residence is an asset or a liability I think it depends on the price okay bu buy average person just average person we're talking average person here we're not talking about somebody with average person I think it's it's an asset unless they overspend or unless they sell after a few years I love this cuz gr I'm friends with Grant card Cardone we argue about this over dinner I'm friends with other people like kosaki and we've argued about this too I I think they well they go well you should just rent because pouring your money into your your U mortgage is not making you any money I'm like but I'm spending roughly the same amount money on rent and here's the thing that happens with a rent payment it goes up every 3 years my mortgage payment doesn't so over the course of a 30-year mortgage I pay way less money on my primary residence than I ever would on rent the difference is I own something and so I I believe that a primary residence is actually an asset now if you're buying a $5 million home and it's costing you $50 million $50,000 a year to keep it up and pay the mortgage then it's definitely a liability y but for the average person it's an asset so your house right now that you have it's an asset I bought it for the reasons of like wanting to jacket makes sense because he could rent out the bedrooms yeah doing that right now yeah so you should get a second one that's a smaller one right the payment on it is let's say is like 1,200 bucks what's your payment on yours right now my Piti or yeah Pi uh 2300 okay so if you could find a three bed two bath in Vegas for let's say 1,300 bucks a month you could rent it out for 1,700 bucks a month would you do that yeah but I'm just the P at 1300 seems oh I guess maybe with your methods maybe it isn't yeah yeah okay 3% 2.8% I'll get you I'll get you a mortgage in less than 30 days that you can say no to I'll get you a mortgage in Vegas that is less than 3% that I will present to you and you can feel comfortable saying no and you can then go all right I'd rather watch you do I'll come up to I come to Vegas a dozen times a year I'll come up let you walk through the property you do you watch me as I do it and then I'll present you another one and you can say no to that one too and then the third one you'll go dude why didn't I just do this okay that did happen to me with Chandler David Smith he present to me with this with this uh for the dup you turn it down D orlex I think it was a duplex yeah because I didn't have enough money oh yeah it's a it's fine tell tell CH to use creative Finance I think didn't I offer to you that um yeah but I wanted to buy a house I I wanted my own personal house and I didn't have enough money to buy both where was the duplex here uh Utah oh yeah that's different I mean you wanted you I would always suggest people you should buy your primary no it was it was Idaho I mix the two up it was Idaho Falls yep that's where Chandler I was I lived in Idaho Falls Chandler David Smith and I are friends but we've never met we're always dming and talking to each other about real estate he's such a cool guy oh he's awesome I love the guy now I feel like I should get you a duplex I would do a duplex man I would do a duplex if I found you a deal would you do a deal yeah okay we're going to find we're going to find a deal okay I would honestly I would love that that sounds really exciting mine I want one deal I want one home run big deal a big deal meaning like a big house or a good cash flow uh good cash flow low cost to get into the deal yeah I would want something that's probably worth like 3 to 10 million plus oh damn that's what I'm saying like one one like you would move deal no no I'm just saying for to rent out okay I I could get you a seller finance deal at $3 million easy I'd consider it okay if if it makes sense for the you would rent it out for like an Airbnb or would you rent it out for like a to a luxury like a celebrity typ no I don't want I don't want like a house so it would have to be like multi family commercial or like something like that yeah the problem is I would not sell that to you yeah those are so I I've now SP spent my focus now on multif family so those deals I have an a multif family analyst fulltime on my team and all he does is look at those deals all day long and we buy are you buying all of them I either buy them or I wholesale them to my to people that I that learn from me so I like how often would you see like let's say like A10 million like a five to10 million do property coming up seller finance that makes sense every day so you but you can't possibly buy one every day I can't so I either people I I assign them or wholesale them yeah the thing is what he was what he was referring to is what he would be doing for me is more of a h homey thing right but you can't get the homie deal for $5 million that's not just theom here here's here's what I'll do here's what I'll do on a $5 million deal I I would here's the challenge you got to have you got to have somebody operate that too right so what I would do is I would let you come in on the deal if you let me operate the deal and let me be your partner on it I would let you come in on it but I'm not going to let those deals go but one more question for you you mentioned in your life that your life has changed in in different categories like getting married having kids yeah uh what have those changes been getting married is realizing that my wife is way more significant than just a wife she becomes a partner a confidant the calming factor in my life and when you're younger you don't know those things and so you have to change from being a selfish man to understanding you're in a relationship that was hard for me um because I'm just like go go go go go go take over the world type of thing and there's a balance and the great thing that a woman brings to at least a marriage in my traditional marriage is that my wife brings a balance to the kids that I don't bring right and so that's the other thing too is that you start seeing kids and your kids parent things that you do they're like little parrot and you start learning things like oh wow I can't say that I can't act this way I can't get on the phone and bark at somebody about something because then my kids learn that behavior so those things change and then also the way I travel like I flew in today and I'm flying back tonight immediately because I want to be around my kids and it's it's something subconscious it's not a conscious thing my body requires like some it craves being around my kids and so like I'll I'll go um New Orleans Lafayette Corpus Christie um sorry Houston Corpus Christie San Antonio San Angelo to Dallas in a three-week period And I bring my wife and kids with me everywhere I go if I'm gone more than let's say 48 hours I bring my wife and kids with me cuz I you never want I would never want to spend a day without them did you think that was going to be the case before having kids so I come from a family of 12 kids okay so my mom and dad had 12 kids I'm number three so family was really really important my parents grew when we were raised my parents would wake me up at 4:30 in the morning we'd read the Bible together so like being around my family was a lot M and so I grew up I was like oh man I'm not going to have that I was like too much it felt suffocating it like we'd go on vacations and my dad we we'd go to McDonald's and my dad would let us order he's like give me 12 breakfast burritos and and that's all you got so when I got older I go I'm going to have a family and I'm going to let my kids do this this and this and I'm going to and then you start having kids you realize dang my dad was actually pretty smart like he was pretty efficient he was this I thought that I knew better and then when you get older you go I didn't know anything so you guys you you planning on having kids at some point one point one point yeah you're I mean you're really young so um it is the most Joy I receive in my life comes from my children and it's cliche so you understand it but um I also start realizing that I have to be more intelligent with my time and protecting my space I also learned having kids that public school how bad public school is and so I'm doing like you know Heather Taurus from think media and like Sean kenel and all them so I talked to Heather about that I think we're going to start homeschooling our kids and pulling them out of like Traditional School what not private school so private school is kind of the same thing the the problem with PR private school and this is where you know talking I sat down with dinner with Elena and Grant probably 30 days ago and Elena was talking about the problem with private school is you're still dropping your kids off and your kids are now dead set on a schedule and when you're traveling and like right now you guys are starting to travel you guys are going out and doing podcasts and you guys are going to go be on Wolf of Wall Street and Ryan sirhon and all these people people traveling all over if you have kids and those kids are in school and it's Monday through Friday now you have to wait for them to be on vacation for you to go do your business stuff and so you start learning private school doesn't satisfy that home school does and so home school allows you to be an Enterprise owner and be a family man as well do you worry though that they're not being exposed to different people cultures to be honest this sounds really bad I hope they're not exposed to what I was exposed to I was exposed to people grew up playing video games I was exposed to people that were doing drugs I never I've never but you turned out great but my brother killed himself I had a brother hung himself because my brother was exposed to that and I was not susceptible to that type of stuff I never wanted I never drank I've never smoked but my brother hung himself what was the difference between you and your brother I think the difference between me and my brother soor my brother his name is Corbin I named my daughter after him um the difference was that my brother wanted to be the cool kid and he would try and impress the kids that were doing the stupid things and um he got sucked into it and you know there's people that are susceptible to like alcoholism and there's other people could drink every single day of their life and then turn it off I never drank what happened to me is actually the reason why I never drank is I in sixth grade one of my buddies Tyler cor had a brother that came down in the basement completely obliterated I'm in sixth grade so I don't know really what's going on but he's stench like just alcohol stench and he's getting aggressive getting aggressive he starts punching things punching holes in the walls and then Tyler goes oh don't wor don't don't mind him he's just drunk this happens all the time and so something implanted in my brain like that's what happens when you drink and whenever I was around people drinking I was like I'm good like my wife drinks I don't and it was something weird that was implanted in me but my brother like you the second he touched the stuff he just got sucked in so do you think maybe he was a little bit more predisposition to that than you were for sure probably and do you feel like that is maybe just the the just the I don't want to say luck at the draw like yeah I think there's luck of the draw it's the same thing with people have like Hashimoto and people that have autoimmune disease people that have like obesity issues that no matter how well they eat or how they work out their body is just a specific type I think that I got the luck of the draw that that was never something that ever entered into my life you think it's just like biological phenomenon or just statistics well think about this so I have a I have a older brother named chance and hopefully he doesn't ever watch this but my brother chance actually was the one that introduced a lot of these things to my brother brother Corbin and um so chance was 18 or no I'm sorry chance was 16 at the time and he would get Corbin who was like 910 to sneak out of the house and chance would go hang out with his friends and drink and my little younger brother Corbin was like oh cool I get to hang out with like my bigger brother and all his friends well guess what my brother chance is the head of payroll at vivent like he made it out he's like the dude is smart he's intelligent he's got beautiful family he just one day goes I'm done I'm done doing whatever he turned it off but my brother Corbin could never kick it and my parents took him to uh boys camp like they took him to rehab centers they took him to everything you could possibly imagine and um I went on so I'm I'm Mormon and I went on a mission to Korea so I I get home from my mission from Korea and I'm like where's my brother Corbin where's he at where's he at and where's he at like I couldn't I was searching for him for you know couple of months and then I found him in like a drug den and I pulled him out got him a job and three four months later he found himself back into a drug Den it just I it just it gets I think once you get into that world the people I'm not an addict so I don't know but people that say once an addict always an addict I think is just the Clause of what he was into just couldn't get removed from him horrible it's interesting because I have a brother too obviously this is very much different from your example but he and I obviously we grew up with the exact same parents in the exact same house with the exact same like finances the exact same everything right but we are we're fairly similar in certain ways that we would be because we're brothers but we're also very different in a lot of other ways and I wonder if we went under the exact same like parenting right like what would have made us different and I always kind of like toy in the back of my mind at the fact that like could we have been parented a little bit different I know my parents were a little bit more strict on me than they were on him um usually it's the other way around right no man they were they were the first child they're more strict with and then the second it's like that that was my experience my like by the time my parents got to Child Number 12 it it was like I we don't care what time you come home like I you know we've dealt with this oh I had a strict curfew I got grounded for 10 months one for what Mom and Dad are my mom and dad are gonna be watching this uh you gotta be like gigy don't watch this no gigy can watch this she probably heard about what did you do for 10 months bro so I just had I was a bad I wasn't a bad student but like in Middle School like I was a pretty like mischievous kid and typically the kids that are like yeah mischievous the mischievous kids that like end up like you that are like really awesome they're the ones that it really school is really hard on you I school was fairly hard on me like at a at a younger age but then like As I Grew Older I kind of realized okay it's not too bad but it was funny because while I was growing up a lot of people thought that like okay this kid is going to be kind of like the degenerate you know what I mean what's funny is like you were probably talking to everybody making friends with everybody making jokes the whole time but like when you become an adult those are actually superpowers yeah and nobody teaches you that in school like nobody says hey Jack just so you know you're going to end up just fine bro you I was I was generally very good ass friends butst of kid right and um I just basically had a parent teacher conference that went very very poorly what happened uh I it was Mrs Schneider's class Mrs Schneider she didn't know she didn't know what she was doing it's not her fault it's not her fault I remember uh I was going into the class with my mom and we got the parent teacher conference which is never a good sign and she basically just said uh your son and I quote is an extreme distraction in class which basically my mom's a teacher she's school teacher so she knows like she does not want to have to deal with that and she understands where Miss Schneider was coming from she's a very empathetic person which I think is beautiful and she grounded me and uh for 10 months what you doing class um talking to everybody a lot of stuff man so I sat in a normal seat it was a no it wasn't like that man it I sat in a normal row and I would just I don't know man I was just always sleeping in class or I was like throwing things or I was like with my friends it was never like throwing things at someone but it was like playing games with my friends and talking and laughing and like you know what I mean chasing each other and whatnot and she created her uh her own desk for me it was right at the front of the class so she had her Podium right here you could barely squeeze between my desk and the podium and then behind me was the normal row of classes you should when you buy real estate you should have an LLC name that's called Extreme distraction LLC extreme distraction that's a good idea that is a great idea oh that's so good yeah but it actually didn't even end up working me being right in front of her Podium she actually did your mom actually the 10 Monon no yeah so I was grounded for 10 months but initially grounding and why not why not 9 months and not why not 11 months why 10 months let me explain some things I know it sounds kind of weird but she didn't initially ground me with the idea of me have being grounded for 10 months it was just like yo you know you're grounded and until we fix some things until you better yourself then you can become ungrounded so she took away my iPod touch she took away uh my PlayStation controller that I like just got and also my birthday I remember was in a couple of weeks and she goes and I remember we're walking away from the par teacher confer she's like there goes your birthday and I was like how did you feel in that moment I was I was upset but I got it I'm like you know what I mean like I was annoying kid in class like I just I definitely didn't help out with the environment I was just having fun though and then yeah I was just grounded and uh I remember it was actually kind of a blessing because we were actually robbed that year and the people broke into the house they stole a bunch of stuff they didn't steal my iPod Touch cuz it was hidden by that's so good I actually ended up getting my iPod Touch back and my PlayStation remote they take the PlayStation I had the remote still always looking for the Silver Lining oh my gosh but I ended up just kind of correcting some things I I became better I remember like a few months in I got caught cuz I I took one of their old phones the iPhone I was like texting my girlfriend at the time or whatever like late at night and she saw it as it fell out of my pocket or something she's like you're not supposed to have this so I got grounded again and it was just like ground your Christmas exactly so yeah it wasn't I it wasn't that bad and I definitely think I learned a lot of lessons and honestly like who needs an iPod Touch when you're how old was I 13 14 it was probably just a good thing for me not to have that anyways probably well it it turned out great does Mr Schneider know that you're on one of the coolest podcasts of all time uh I don't think she knows that on the podcast dude I would she didn't do anything wrong she was explaining what was happening to my mother so you know Miss Schneider you know if you ever end up seeing this thank you for what you did feel one of one of Jack's school mates needs to send this to miss Schneider please she's a lovely woman she really is like I have nothing bad to say about her so I think it's fine to keep okay we're doing we're we're doing a deal together extreme distraction LLC cool cool down thank you really appreciate you coming on incredible you guys are my heroes I appreciate you guys thank you thank you for making the trip and uh make sure to get your free that you guys Instagram going be L Down Below in the description feel free to check him out his YouTube channel will probably be there too and until next time cool thanks man I would be interested in doing a deal by the way let's do it