REPLAY: WHY One Rental at a Time is EASY PATH TO WEALTH

0:00Nicky Glazer, this stunning tour. The thoughts of death I don't like to dwell on them for longer than like 10 or 15 hours a day, so... November 19th, Yamabah Theater No wonder women rushed to have kids were being trained for it since we were kids. They're like, here's a baby doll. Here's an easy-bait coffin! I got one of those, I stuck my head in it. I was like, I want out of this narrowness. Tickets on sale now at Yamabah Theater.com Don't miss Nicky Glazer, Yamabah Theater! Alright, so I guess I should do my introduction. You'll see a little bit more of this in detail on one of the slides.

1:02I've been investing in Fresno for 15 years, so I started actually in 2003. So last seller's market, everybody remember the last five years, so I invested in 2003 up through the crash and back. So we'll talk about all of that today and what that felt like, all of that. I have just shy of 200 units today. I started with a single family home on Norris Drive, which we have a story about. I will tell you, did a bunch of 1031 exchanges. We'll go through the whole story here. But basically, I did what a lot of you said. I had a day job. I worked for technology companies in the Silicon Valley selling software. I was a commission sales rep, commission sales manager, commission sales VP, so I ran things from the west coast to the country to the world. So I know what it's like to travel and build this as a side hustle. And I successfully replaced my wife's income five years ago, or now six years ago, and replaced my income about 18 months ago. So I left the rat race at 45 because of Fresno rental properties.

2:06So we're going to talk about how that happened and all of that. The last thing to say is I used to present for a living. So I'm here for you. So if you have a question or something that doesn't make sense, just do me a favor and raise your hand. Hopefully we interact. If I go 20 minutes and I'm the only one talking, I might have fun with you and just stop and ask somebody a question. So it might be better for you to ask me questions so I don't call on you by accident, Michael. I'm just saying. He was with me before. So is that fair? Does that make sense? And you can hear me, okay, right? Awesome. All right, so this is what we're going to do. I actually start all of my meetups now talking about uncomfortable truths. I think getting excited about real estate investing is easy to do. That adrenaline we all feel we start to vibrate at this low rate. But there's some uncomfortable truths that if we let them consume us, can just take us out of it. So we're just going to talk about them. There's actually more than this, but I like to talk about these five.

3:08Just a level set kind of who I am and the kind of value you're going to get out today. I did create one slide on our story from a single house to financial freedom. So we'll go through that in detail. I do have keys to success because Stratton was nice enough to prep me on this group who is going to be here. So I thought about it and I created my keys to success, what I would hope to in part. Because 16 years ago, I was you in a chair, right? I started back in 03, but I was coming to meetups in 2002 just like you going. I don't know anything. I want to network. I want to meet folks. So I know what it feels like to be you sitting in a chair listening to someone because I was you 16 or 17 years ago. So I want to tell you what I think the keys are just starting out. The other thing is I talk to a lot of new people that get stuck. They feel like they're being active. Right? They're going, I'm busy, but they do not make in progress. Do you know what I mean? Being busy but no progress. So I have four questions. It says three, but there's actually, oh, it doesn't say three more. There's four questions that I'm going to propose to you.

4:10And if you can answer at least three of them, you're in a good shape. But if you can't answer them, that's self reflection times. Like, okay, I got to stop being busy and feeling good. I need to have a direction. So we're going to talk about that today. I'm going to highlight some early mistakes. It's great to sit here and talk with you and I can tell you all these great stories about all these great units. But that would not do you any good. I got to tell you about the mistakes I made at the beginning and the things that I would do different. I do have some core beliefs, which are different than keys to success because I think you have to be, if you're going to be in this people business, you have to have some core things that you hold on to. So we're going to talk about those. As Stratton said, we're going to talk about getting to four. Right? What is the keys to getting to four going from zero to four? So we're going to talk about that. So I'm going to talk about what happens after I left the rat race because, you know, this was February 1st of 18. What am I doing since? I am doing a couple of fun things, often talking at meetups and on a YouTube channel and the likes. So we'll talk about that.

5:10I did a blog today for bigger pockets and actually a video that I'll post. What is today? Monday? It'll post Wednesday. On what I would do if I had to start over. So if I was you in a chair, was zero. What would I do? So we'll talk about that. I brought that special just for you. And then I heard some of you might want to talk about raising private money. So I thought I would give you my keys there. And then the last thing is everything I do now learn more and follow me and all that good stuff. Cool. And how much time do I heard we got like two hours? Yeah, it was much time. Look at it. Awesome. I can talk. All right. So uncomfortable truths. Number one. Everybody I've ever met. I was a commission salesperson for a long time, usually a 50-50 split, which if you don't know what that means, it means I had a base and I had commission and the commission I had variable so I can make a lot of money. Lots of people like to talk about the income number. I'm here to tell you as somebody who left the rat race, it's not about the income number. Right. It's about making sacrifices, living below your means. I call it here playing good defense.

6:13For me, what I had to get my head wrapped around because when I had this epiphany at 30, I was making a six-figure salary but spending everything. I was living paycheck to paycheck. And what I had to do is I had to start living on less. So instead of living at the razor's edge, we eventually got down to where we were living on 50% of our income. Why that's key is because I was then able to earn, save, invest. Right. So it's that ratio. People don't like to talk about it in this Facebook and Instagram world. They always like to talk about the six-figure paychecks and all that fancy stuff. If you can understand what a need and a want is, you can really get good at this game because you cut out the wants. You sacrifice. We had to sacrifice for 15 years. But now we can have all the fun toys we want. Right. So you have to do that. I'm sorry, sacrifice is key. Here's another one. How many of you have shiny object syndrome?

7:19In real estate investing, all of you should be raising your hands or at least most of you. Hulsailing today, flipping tomorrow, note investing, mobile homes, lots, fire damage. I mean, God damn, there's like 17,000 things you could do. Stop it. I'm here to tell you, you only have to get it good at one thing in this business. And that can retire you from your day job. When you're out of the rat race and you want to pick up more stuff, go for it. I retired from the rat race. I replaced two six-figure incomes as a buy and hold landlord. Now that we are both done, we picked up flipping. We replaced our income again. But we didn't do any of that other stuff until we were out. Only have so much time in the day. We have a growing family. I traveled all over the world. Crazy life. We did one thing. So stop the shiny object. If you're new and you don't know yet, go kick some tires. But pick one. And then like dedicate 90 days minimum. Don't do Monday this, Tuesday that, Wednesday this.

8:22Feel me? We good? We're okay so far? Not scaring anybody? All right. Your personal network matters. How many of you talked to your friends today and said you're going to a real estate meetup tonight? That's it. You all don't have friends? Seriously. How many of you told somebody in your network you are going to a real estate meetup today? Wow. Okay. Fine. What when I was doing this, I was telling everybody I was going to go to a meetup and I found out very quickly who was negative in my group. I just told them I was going to a meetup and I got a 30 minute diarrhea of why real estate is bad? Why it's going to steal my money? Why shouldn't waste my time? I should stick with stocks or some, you know, cars or I don't know some crazy stuff. If there are people in your world that don't like your vision, don't like what's possible, cut them out. Now some of you, at least in my case, they were family members and like close family members. So you can't quite cut them out but you can reduce that noise.

9:27That's a hard thing to do. I get it. But if you can just replace one negative person with a positive person, somebody that's here today for example that is also a meetup, that positive juice you get from friends, just the handshakes we get coming in, right? That's awesome. You need to pick me up in this business. You're going to have lots of bad days, I'm sorry. But if you have friends that have been there too, you're going to be doing okay. So always, always, always evaluate your close network. In my case, I had two people that were really, really close to me that I had to eventually cut out. They were negative and always, even when I was successful, they still told me I was going to lose everything. Forget it, gone. I'm sorry, it's one of the, again, uncomfortable truths. Told you the stuff was coming. Bad things happen. If you were going to be a buy and hold landlord and I've been one for now 16 years, I'm here to tell you that bad stuff happens. Tenets don't always pay. General contractors don't always do what they say.

10:32Stuff breaks. Mother nature is a bitch. You know, roof's leak. Right? Bad stuff happens. Right? Just know. And not that you have to expect it, but don't get so high and so low. If you can condense your highs and lows, you're going to survive in this business a lot longer. Right? If you just, that's something I learned back from selling software where I would make hundreds of thousands of dollars potentially. If I could just balance the highs and lows, I would last a lot longer instead of just freaking out all the time. And the last one I want to put out here is anyone, anyone, anyone, anyone, anyone in this room can be successful. I've interviewed high school dropouts. I've interviewed felons. I've interviewed people who started at 50. I've interviewed a teenager. Right? That has to have get dad or mom to co-sign. Anyone, anyone, anyone who's willing to put in the work and follow the process can be successful in this business. Okay? How are these uncomfortable truths? You guys still like me and maybe want to leave? No? We're okay? All right. Let's have some fun.

11:37So here's my story. I'll go through it quickly. It all changed for me on my 30th birthday. I always self-evaluate. I've just, I've always been wired this way. I'm in sales, right? First of the year, January, thereabouts. I set my yearly goals. July, my birthday is in July. I reassess where I'm at and I go forward. So around the 30th, my 30th birthday, I go, what am I doing? I'm, I didn't know my parents called successful. How many of your parents said, go to school, get a good education, get a good job, make lots of money. And you're successful. That was my family. And here's the deal. My family, there is, I mean mom, dad, cousins, aunts, uncles, nobody in my family, other than myself has a college degree. They, they, they generally served in the military or were high school dropouts. When you look at my family tree, you see white trash like trailers, mobile homes, I mean like, like, meth heads, that's, that's my family tree. Seriously, that, that's who's in my family, like cousins and, like, bad stuff. So I was, I was the successful one at 30, making six figures. But I knew that I, I couldn't keep running this fast for much longer. I was going to blow up, have a heart attack, get addicted to drugs, something. Right, because you got to replace that.

12:50So I realized and then I read rich dad, poor dad, who in here has not read rich dad, poor dad. You, you are going to fix that, right? You're reading good degrees and rich dad. No, I'm serious. If you have not read that book, it is the only book I've ever read covered a cover five times in a row. It fundamentally changed my life. It is not a great written book. It's not going to win any pull it surprises. But the mind shifts from the get a good job, get a good education, you know, your successful to, hey, control your world, passive income, rentals, buy and hold, it changed my life. If you don't buy that book, like, in the next 48 hours, I'm going to come find you. Yes, sir. Would you recommend the cash book quadrant? It's kind of the same thing. I've read, I read every one of his books. Rich dad, poor dad is the only book I've read five times in a row. All the other ones are regurgitation and marketing pieces. The other one I read twice was retire, retire, retire, retire rich.

13:50One of those ways. The only one I recommend is rich dad, poor dad. It's got three or four mind shifts in it. Yeah, that talks about, you know, on this side of the equation. No, rich dad, poor dad. Only one I recommend. Okay. So I was a busy tech professional who, oh, by the way, hates to fly. I'm a nervous flyer. I've done, I've done red eyes to Japan, can't sleep. You can try to drug me. It doesn't work because I feel every bump. I literally like grab the handles. I'm freaked out flyer, but it's the only way I made any money. So I did it. The other thing is I had a growing family growing up, right? And family was important to me. We have one daughter. It was important for me to help razor. I had her young. I was a teenager. But it was important for me to put food on the table and all of that. But do you know what it takes to get a platinum reward card for Marriots hotel? It's the worst day of my life. Seriously, they sent me this. It looks like a credit card, but it weighs like a pound. It's like made out of titanium or some garbage.

14:55It's like really heavy. It's like, thank you very much. You spent a hundred nights in our hotel this year. That was the worst day of my life because I stay at other hotels and to think that I just ate at Marriot a hundred times. And then I was at Hilton and Radisson and all these others. I was like, I need this. My life's over. Right? So that's not good. So I had a busy life is the point. And I still built this buy and hold rental property. So another thing. I don't think I've said this yet. I actually live in Mountain View, California. If you don't know where that is, think Google. Like I'm literally a mile from the Google Googleplex. And I've been in I've lived in I grew up in Sunnyvale. And I lived in Cupertino and Mountain View. Right? So I'm a barrier kid. I tried to invest in my backyard because every real estate book said back in 2002, invest 30 minutes from home. Anybody ever hear that? I tried. Doesn't always work. Right? So we eventually after a year, literally 52 Sundays because every Sunday my wife, Olivia, who's not here today, but she usually comes with me.

16:00Every Sunday for 52 weeks, we drive around the Bay Area because we were certain of all the books would be right. And then eventually we would find the street where cash flow would exist. Didn't work out. So we pulled out the California map. We started drawing circles and lo and behold Fresno popped out. Two and a half hours somewhere I live. I have to drive two and a half hours home after this is over. Right? So it's a five hour trip to look at one house. That's how committed we were. And the other fact that's often funny for folks is I have never spent a night in Fresno. Why? Why? I like sleeping in my own bed. Did you see how many nights I spend in hotels? You think I need another night in a hotel? Yeah, it's literally that's it. I would rather drive home and get home at midnight or 1 a.m. It's been another freaking night in a hotel. It's like not going to happen, right? So again, that's Fresno. The other thing that I'll point out here just because we have time is about 2008, 2009. We were probably at about 80 doors. The market was kind of shaky. If you remember, this is right before it rolled over and got nutty.

17:08I actually went out to Texas and Nevada, Utah, Arizona, trying to see if I wanted to create another team. And I'm like, nope, I'm committed to Fresno. I'm going to stay in California. I'm going to go for it. I didn't want to build another team. The risk is being a buy and hold landlord, especially out of area is the team. And once you invest the time creating a team, you don't want to let that go. I fired the first five property managers I had. There's nothing worse than being out of the area having to come see your property manager saying you're fired. Give me the keys, give me the leases over, right? We fired one a year. It averaged about nine months. That's hard. So once you find a property manager and I've been with the firm, I'm now with over a decade. You're not you're not going anywhere. So the property managers would you hand it over to the new ones with your only handover service? I was talking to Alan. I handed them over. I think you had it all 18 years. Yeah, so I don't have that option. Alan lives here in Fresno and has that option to say I'm going to keep the good ones and give them the ugly ones. I don't have that option. I never wanted to talk to my tenants. Sorry.

18:23I want that ring fence. I don't want a phone call. I could be in Japan for all places or Australia or Chile. Who knows? I don't want to I don't want to know. I had no option. Since day once since having one house, I've had a property manager. How about the message? In that aspect, the very casual aspect or the leases? Well, they've five of them got fired. And now I have that. It's tough. Right? It's property manager is that thing. And I talk about it. I teach how to build a team and manage a team. And that's one of them. It's the property manager. Yeah. Well, so the property manager is again, as he buy and hold out of town investor property manager number one. Why? Because when you find the right ones and that's their job, they're going to give you a ring fence to GCs, to realtors, to insurance people. They're going to help with that. But you as an individual, you need to network as well. When a personal goal I had when I was in your chairs, it's trying to meet two new people a week. You do that for 12 or 13 years. Your network's pretty cool. Right? So even if you just met one new person a week, like sitting in the chair and you don't know anything, you're going to learn a lot more in 52 weeks.

19:32So that's something I did. But yeah, I would have had realtors and bankers just man. Super random. I don't want the headache. I don't want them to know I am. I am a very. I have this outer candy shell that I like to pretend I'm all hard and tough. But I'm an ui gooey center and I have feelings. So I don't want to talk to somebody who owes me rent and hear some sob story and say, okay, you can live there for free. Because that's probably what I would do. I want to pay a property manager be the badass and say no all the time. So that's the real answer. I wish I could be all tough. But I don't I don't want to hear the sob stories because I grew up dirt poor. And I know what it's like when dad's not working and mom's a stay at home mom and you got to make a choice between electricity and food. I have those memories. I don't want to have those tough conversations frankly. That's probably doesn't make me cool, but that's the truth. So the biggest one that got me and this is only on reflection is sometimes when you are property manager, that's a side job. Right, you get that eight or nine or 10%.

20:44But your main job is a real estate broker or maybe a money lender. So when the market goes up or down and when one side is busy or not busy, their focus moves. So like when the crash happened, it suddenly they become the short sale person. They're going to do all of that and they're not going to be doing their job with property management. Or you know, that's that's the big one for me now is I want the owner of the company to be an investor and I don't want them to only own their house. I want the owner to own dozens of units because I want them to put this in place and I don't want them to be a realtor. I think it has realtor in their arm. I want the owner to be an investor because they're going to think like an investor. The reports will be like investors. That's what's important to me. Regency properties. Brad Hardy's team. I know Regency. So two questions. One on the property management side. What was your questionnaire for interviewing property managers? And then my second question is what's your criteria for renters? Like those dogs, you know, three times?

21:46So property managers, I didn't have a questionnaire in the beginning. I should have. For me, when I got in, if I were to do it today, I would ask about the principal. Tell me about the owner. How long have they lived in this case Fresno? Did they lived here ever? Were they an expat from LA or the Bay Area? And they've been here seven seconds. Right? In this case, Brad, his dad, his family, they've been here for generations. Right? How many units do they own? What are they doing today? Right? Did they, did their dad buy them or mom buy them and give them to them? And they're just milking them? Are they buying new stuff? Right? What are they looking at? Are they only looking at high end? Are they doing low end? Where are they? I would try to figure out as much as I could about the owner. Then it would be okay. Who am I going to be working with? Right? Do I get one throat to choke? So one person sends me reports? Or am I some big pool? And on Monday, I talk to Mary and on Thursday, I talk to Jose and on Wednesday, Sally. Right? How do I get structure? And then when do I get my reports? And what's the, what's the process? Right? And not only what's the process? It's for a problem tenant, but what's the process to, to reward a good tenant? That's the big one. If you can keep good tenants a year longer, you're being a landlord would be so much more successful. Most landlords make a mistake. They only want to think about the bad tenants. 98% ish of my tenants are awesome. One percent need some babysitting and the other one percent are freaking crooks. Right? So everybody knows about the one percent, right? Because the cow's

23:14going to be a landlord for the law, it says how you take care of them. So don't tell me about that. I get it. Three day notice, then I've got it. But how am I going to reward the 98%? Most property managers don't want to talk about that. And most investors don't know to ask about that. That's what I would do. Did I answer that question? And now as far as tenants, you have to be really, really careful on your rules. So I have a box that we fit in. And my property managers, they run through the checkbox. I think it's three times income, no evictions in the last 24 months, dogs under 10 pounds. I think. And I forget the rest, but define your box. And then if they fit, they fit. And if they don't, they don't. Because you don't want to be sued. Bad, bad, bad. Can you say reward or take care of your tenants? So in the past, if you have paid me rent on time for 12 months in a row, there's a very good chance unless you've never had a rent increase for three or four years, you won't get a rent increase. If you've been there three years in a row and have had no misdrens, I'll likely paint a bedroom or replace carpet.

24:15Or some, I will do some capital expense, right? Because I want to keep that person. I will spend hundreds of dollars to keep them. No, I mean, that's like, that's true mailbox money. The more people that's real mailbox money, I will, I will spend hundreds of dollars. And eviction is a thousand dollars. So if somebody's pays me three years in a row, shoot, yeah, I'll paint their house. I'll paint the interior again, no problem. 675, 750, whatever. Done. Right? We're doing good so far. Awesome. Keep the questions coming because I don't want to talk forever. Oh, first rental experience. So here's the deal. So I already told you we spent 52 weeks. Remember every Sunday. Then we come to Fresno. I find this house on Norstrive, 1818 Norstrive, East 9373. You can look it up on Zilla. I bought it for 107 grand at rennet for 1095. I didn't know any difference, so I put 20% down. I had the money, I had the credit. I didn't know what else to do.

25:15Because that's what you do, right? You always put 20% down. I don't know. So it cash flows. I get them in. We think we're going to get 1095. We get 1095. They move in two weeks later. We celebrate, we pop champagne, we think we've got it. I wish I could bottle that feeling up because I've never had it again. I mean, it's that exciting, right? Because a year we spent looking for this freaking thing. Then bad stuff happens. Husband and wife split up two weeks into moving into my place. The wife takes off. We hear Arizona could have been in Mexico. We don't know. We never hear from her again. Husband decides he's not very happy with this situation. Decides to stop working and become a professional drinker. Doesn't pay rent. Decides to create a wine wall, which means take a empty wine bottle and crash it through my drywall.

26:21And because I'm in California, it takes me two months to get rid of them. So we spend a year looking for this place. We pop champagne. We get first month and deposit and not a penny more. After about 90 days, maybe it was 100 days of them moving in, he's out. We now get a bill for 15 grand. To repair it. You think his deposit covered that? No. So I bring this up because most people I talk to, they would have sold that Fresno house. And a heartbeat. They would have taken a loss. Think about it. You and your significant other has spent a year looking for something local. You decide on Fresno because that's what the California map says. Oh, by the way, I'd never been to Fresno except one time when I drove to Yosemite at 13. I knew no one. It still shocks me that my wife didn't say sell that thing, move on.

27:26But no, we had a conversation. She goes, that's not supposed to happen. You know, tough situation. Let's keep going. Oh, by the way, Norse Drive goes on to be a great story. That property goes from 107 to 269 or 67 or somebody sees it in Zillow. We do a 1031 exchange out of that. We move 150 grand into a five unit building that we still own today. So it has a great story, but think about that start. Come on in real estate in the right place. Hey, man, how are you? My car. Sorry, man. Don't worry about it. You find me. So again, think about if you're new to this business, how would that first buy and hold experience work in your family, work in your relationship? And you'll see later in the discussion, you need to be on the same page with your significant other, your investment partner, however you're doing this. Because while your first experience, I pray and hope is not as bad as mine. Somewhere in your investing career, a bad day is going to happen.

28:27And you can't have somebody who's 98% in and 2% out, come back and start nagging or going, hey, I told you so. And this or that. Be in or out. Yes. How did you handle that? I told you so. It never happened. She's been on board since day one. Not from her, but from everybody else. Again, you need to have that upfront. You need to tell you need to get good at this Norse drive story and tell them that this could happen. So I'm saying you had a lot of friends and question you. Oh, yeah. I come from a family where everybody's a gene. How do you handle the people that go? Michael, I told you so. You wasted a year. You cut all of them out. So again, that's part of, yeah, part of my uncomfortable truth. People had to be removed from the discussion. I just stopped talking. If my mom was on board, my dad was actually a negative one. I just stopped talking to him about, first of all, you can't talk about money because all he's ever done is spend everything in his checking account so he doesn't know what savings is.

29:27Yeah, so you just stop talking to some people, even if they're in your family. You need to have that fortitude because you always talk about document your story. Yeah, and part of your stories, the failures, how did you handle documenting your failures? So first off, I document everything. I'll do this cover cover, I'll cover documenting a story on one of my last slides, but knowing and being 100% honest with who you are and what's going on and the bad stories and now celebrating Norse drive. You know, you got to put it all out there, the good and bad and what really happens when you're in this long enough is the good dwarfs the bad. But here's the deal. If you only talk about the roses and not the manure, people aren't going to believe you. They're not going to believe you. So have those stories because they will happen to all of us. They may not be that horrific. Like happen to us on our first deal. And here's the other thing I've had thousands of tenants and I only have two stories like that. It sucks that my first house was one of them and the other one was in an apartment building if you want we can talk about it at the end. But that first one would have crushed most people and when Olivia's in the room, I go, thank you, honey.

30:29I'll just go, thank you, honey for keeping going. She gets all the credit in the world. So again, 15 years we ran. So again, we started in no three, which was kind of through 0708 depending on how you look at the charts, which was even a crazy or sellers market. Then what we've seen the last five years, think about that who's been doing this for less than five years. Here's the deal. If you've only been doing this for the last five years, you only know the sun. Nicky Glazer, this stunning tour and the thoughts of death. I don't like to dwell on them for longer than like 10 or 15 hours a day. November 19th, Yamavath Theater. No wonder women rush to have kids were being trained for it since we were kids. They're like, here's a baby doll. Here's an easy bake oven. I got one of those. I stuck my head in it. I was like, I want out of this narrative tickets on sale now at Yamavath Theater dot com. Don't miss Nicky Glazer, Yamavath Theater. It's about to get stormy. I know what it's like in the sun and in the worst hurricane, tornado, fire, the 08 to like 10 nasty.

31:38So I can talk about all that. Yes, man. Sure. Yeah, yeah. Yeah, yeah. What's on your right? How did you guys get up to 15 minutes to get up? So this is about the first house? Okay, great. I just want to make sure. So we were committed. We didn't know if we could. We believed that real estate investing was our path to financial freedom. We both knew that our high tech jobs. We could do them, but they'd also kill us early. They're that stressful that many hours, all of that. And we didn't want that for each other. And she always knew I was gone. She had a job where she was in the count. So she was home helping raise our daughter. But I was gone half the year. And that's we like each other. So we wanted we believe that real estate was our path. We're not going to create a company. We weren't going to write music. We weren't athletes. We weren't going to create something. Our only path is the average human being was real estate.

32:38We fundamentally, that was the one tenant that we believe was real estate was our only chance. And we talked, we talked all the time. We just kept going for it. That's hence the story one rental at a time. We're just kept rolling to the next one. And that was really the crux of our belief. We didn't know. We had no family members that have ever done anything in real estate. We had no family members there. We're entrepreneurs. We had very few that graduated high school. But we just had this unquestionable belief that real estate would be the way. And it didn't start well. Obviously. So again, we did the last seller's market. We rolled over in the depression and we've been through the return. So I call it a cycle and a half. Happy to talk about any part of that if we go out and get into Q&A. Because it's a lot of fun. Who in here does not know what a 1031 exchange is. Awesome. So here's the deal. One of the things you're going to see with real estate is you have all these little tax things that you can use to your benefit.

33:42What happens today when you sell an asset like a stock and make a profit? Who gets a piece? Uncle Sam, the IRS, whatever you want to call it. Here's the beauty of owning real estate that's appreciates. You can sell it in something called a 1031 tax deferred exchange. It's an IRS code. There are a bunch of time limits and rules. So read them later. But here's the deal. I told you about Norris Drive. Right? We bought it for 107. Say we sold it for 270. We had a gain of 163. Is that right? Yeah. 163. We did a 1031 exchange and paid the IRS zero. What happens is you sell it. You take the profit. You hold it in this little intermediary. You create this other thing, this light kind exchange. And you move the equity over the new thing. So we sold a house. We exchanged, correct me. We exchanged a house for a five unit apartment building and paid Uncle Sam zero. Do that with a stock. It can't. Right? I do. It's on Vassar.

34:45Are you using the opportunities? I've looked at them. I am I own stuff in them actually. Yeah, I've actually bought more stuff there. I do not like the requirements of an opportunity zone. I don't like the lock in. No, but I've looked, but I don't like the lock in. I don't like any time the government tells me what I have to do. I fucking have a fundamental problem with that. It's just like, it's like, it's me to my core. Sorry. The other thing is we never sold anything other than if you read my book, I actually sold one by accident when the everybody saw this $8,000 tax credit that came out in like 2009. Everybody remember that? So back in 2009, real estate was falling off a cliff in Obama. And who was the Treasury guy?

35:46Anybody remember? No, after green. Anyway, some other white guy goes, we have to say real estate is falling off a cliff. It's going bad. So what they said is if you buy a new house, we're going to give you $8,000 back on your taxes. Everybody. This is something the government did because real estate was so bad. So what happens here is, and again, I just tell everything. So I bought a house right before that was announced. This $8,000 tax credit comes out. My property doubles in escrow. So I closed escrow at say 80. I sell it for 160, 30 days later. Just because the government gave me this artificial bump because everybody wanted real estate for like seven days. That's the only thing we ever sold for 15 years. Other than that, I was buying whole. Didn't flip, didn't wholesale, nothing. If you were to ask me to sell something back then, I'd say, you kid me a deal is so hard to find, I'm not selling anything. Other than that one exception. Cool. Again, Olivia retired five years ago. I left February of 18.

36:49Now we spend our time giving back. We do turn slum-lord properties today into pride of ownership. We buy them cash, spend 40 or 50 grand, and then we sell them to new landlords, typically from the Bay Area and my network. So that's what we do. That's our story. So keys to success. Being bought in together. If you ever have a question about whether or not you are bought in together, tell the version of the Norstrive story. How, and how that ends, will tell you if you're bought in together or not. Olivia was bought in even more than I knew at the time and that story only strengthened it. Another thing is we bought deals all the time. People are now telling me, hey, Michael, you've been doing this a while. Should I wait for the crash? How many of you are thinking about, hey, I'm going to get smart. I'm going to wait for the crash. Come on, now be honest. Oh, you guys are liars. With apartments, yes. Yeah. Yeah, I'll talk about that in a minute. Yeah, multi is freaking ridiculous.

37:50But yeah, here's the deal. We were buying home investors. We had this story one million time. I bought something about every six months of our career because I'm not smart enough to time a market. If you are doing your math and you understand it only by good or great deals, it doesn't matter. And I'll get into what a good or a great deal is in a minute. I use conservative financing, fixed rate debt, you know, all that stuff. Do the deal. I don't think you can really time the market, especially today. Interstrates are in the four. I did deals as high as 12. Today, interest rates, if you don't own anything, could be in the fours. Three. Oh, you're killing me. I can't get those. I own too much. Another thing that's important, when I look back at our career, the one thing I did well, and it's just kind of how I'm wired, is I'm an early morning person, and I spent 60 minutes every day for 10 years looking at the Fresno market. And here's the deal. I knew no one. I had no MLS access. I simply used realtor.com.

38:53I started by understanding your criteria, looking at that every day, documenting it, seeing how it changed. There was a time where I could talk about the Mayfair or the Tower or downtown better than real estate agents that lived in Fresno. Because I looked every day for 10 years, at least once. I still do. Yes. But I occasionally take a day off now. So I started with, because I didn't know any difference. I started with three-bedroom, two-bath, two-car garage, single-story homes. 62, 50 square feet, lots, up to 8,000. I didn't know any different. I now get more, lot more events. But I looked every day for 10, probably for the first 18 months at that criteria only. And I got really good at understanding what a bad deal was, an average deal, good and great. Because I looked every day. It takes practice, but you can do it. Did you use any other resources to get a milliliter of the market? No, I would create lists and we would come down every other weekend and drive neighborhoods and all of that.

39:57But no, we didn't have Zillow. We didn't have property radar. We didn't have all this stuff that you all have today. I had realerture.com and a two and a half hour drive to Fresno on a Saturday or Sunday, followed by a two and a half hour drive back. Didn't do bird dogs, didn't pay people to drive for dollars. There was no direct mail, hard lifting. The other thing that's kind of odd about our story is for the first 15 years, I bought everything out of the MLS. Everything. I had no buys from sellers. I did buy one thing on auction.com during the absolute crash. It was a Madera duplex. But other than that, everything I bought was available to everybody in this room. I had no special access. I just worked harder. I might be one step ahead of you, because I'm pretty sure you're ready to do this. That's okay. We talked about something the other day that was really interesting. If you said if you would go back, you'd stop buying cheap property.

41:01Yes. Can you talk about that? That is on the slides. Thank you for bringing that up. Again, ask questions. That right there is the worst thing that will happen. That's on another slide. We can certainly finance everything. So again, because I've been doing this so long, I saw people. And this is going to happen this time. There are some people that you know in your network that had been freaking killing it the last five years. They are living high on the hog. They got new cars. They probably have two or three new cars. They probably moved. You know what I'm talking about. I know some of you know what I'm talking about. When this thing turns and they are highly leveraged and they're shit-girly dumb cash flow, they're going to lose it all. I knew people that were worth ten million dollars without estate properties. That once this turn in those first couple of dominoes fall, they couldn't get out of the way. They declared bankruptcy and lost everything. More than one person.

42:02So remember what I told you earlier? Uncomfortable truth number one, sacrifice. Right? Don't be that person. Because sellers markets change and that good times will end. Be conservative. I know you just look for a yield in your buying properties. Do you have a certain amount of cash flow? I know you get this question all the time. No. Yeah. So what I... So this is a whiteboard, right? Do we have pins? Thank you. So I'll actually do this at the end. I'll actually give you my equation at the end. But just what it is briefly is I want to know how hard my money is working. So it's a very simple equation. I will generate it. I don't know if that's going to erase. So that's... No, not a dry erase. Oh, let's somebody else look. This is... I'm the talker and other people do stuff. So I want to know how hard my money is working. And so how much money does it take to get going? What's my expected yearly cash flow? I want that to be north to 6%. So I'm going to be between 6% and 8%. Again, we're buying in California people. This ain't Cleveland and Detroit.

43:05So that's what I'm looking for. I don't... Cash on cash. I call it yield because... Yeah. I don't want to get into other... I'll give you my formula. It's like cash on cash, but not quite. So people call it cap rate, but I'm going to show you the math and you call it what you want. I don't look for like $100 of a door or anything like that. I want my money working certain hard. I want it to go out and come back and bring friends. So that's what I do. So one thing I did is we got out in 2007. We had eight houses. Actually seven houses in a duplex. And the reason we got out was because I came to a meet-up like this. And I was like, I can't buy the ninth one. These prices in Fresno were stupid. Right? That house I bought for 107, I could buy the one across the street for 270. But unfortunately, it still rents for 1100. Right? It barely worked at 107. How the hell is it going to work at 270? What are these people doing? And everybody wants one. Some people want two.

44:06This is what was going on in 2007, right? Crazy. So real estate meet-up like this. Somebody came up to me and goes, hey, did you ever think about commercial? Again, I'm stupid. I go, I don't want shopping centers and office buildings. Why would I want commercial? He goes, I remember the pad on the back. He's like, oh, Michael. No, we mean apartment buildings. And specifically small apartment buildings, five to ten units. We actually found one, I think. Thank you very much. So what this meant was, is you can commercial is a type of financing. So condos through four plexes are bought with residential financing. Commercial is five units in a bow. Don't ask me why five. I have no freaking idea. It's the law, as far as I know. So what we did is we started to look at small multis. And what we found is multis were a lot better. So if you remember North Drive, we bought for 107 sold for 270.

45:07I already told you we bought VASR, five units. We bought it for 220. We sold Norris for 270. We bought VASR for 220. But here's the kicker. Norris still rented for 1100. VASR rented for 3 grand. Does anybody see the problem with that? Neither did I. So I quickly did a 1031 exchange out of all of my houses at silly ridiculous prices. And we went from eight units to 80 units. Because we took equity out. We did a 1031 out of houses in the small multi-families. But here's the deal. There was some chatter up front. I don't know if everybody caught it. I believe, and I have this later in the slides, that markets get nutty. So 2006 to 2008, single-family housing was nutty. I believe because of Grant Cardone and the syndicators of the world, that multi-families are nutty, specifically bigger apartment buildings. Like stupid, I own some of these things. And I'm selling them now because people are paying 30% more than their worth.

46:10They're looking at some of the C class stuff I own and paying me like it's an A class property. If you want to take it off my hands at that, I'll take it back in about five years when the debt resets. No problem. So again, markets can get nutty. And if the market's getting nutty, look elsewhere. So in 07 and 08, that meant look at the anything but a house. Today, I would not spend a second of time looking at multi-families five to 20. I probably wouldn't even look at four plexes. Right? Because everybody in the brother is there. And here's the deal. There's like, for every four plex, there's, I don't know, 30 houses. But if everybody's looking for four plexes, the math gets silly. So that's my, and I have it again later, but that's what I think about multi-s right now. I think they're just insanely priced. Start low cap rates. And going lower. I mean, we're talking Fresno in the force now? Yeah. It was in the 7's in 08.

47:12In the force? That's like LA cap rates. Are you freaking kidding me? Oh, come on. Are you at all interested or have you had any air being made? I do not own any air being bees. I only have property in Fresno. I don't know if at least the stuff that I buy would qualify for air being bees. I have lots of people in my network that do air being bees. Some in Lake Tahoe, some in kind of vacation spots. So I know about the model. I do not own any. Do you think that the people who wanted to buy the complex this year thinking about selling and they were buying the flow over Christy? Do you think they wanted to turn them into air being bees? Well, if they are, they're stupid. Because these are not generally... There's a lot of laws cracking down. Exactly where I was going. The Airbnb model, especially in California, is about to have a wake-up call. Because our legislation likes to get in the way. And it's going to eventually get in the way and it's going to become less attractive.

48:12So you would advise and buy it again? If you're going to look at air being bees, California ain't your place. It could work. Right? You want to go to North Carolina, South Carolina or Texas? Places that are more business-friendly? Yeah. It could work. I get it. I get the model. I have a buddy of mine that's all he does. He's killing it. I wouldn't touch an air being in California. Well, let me kind of talk about a guy. If you've got this from the bigger pockets episode. A guy who all of his air being the tenants are based on construction. So as soon as the market turns, like everything's gone. Yeah. Like everything's gone. Yeah. And the same thing in Utah, we've looked at doing air being bees and saying, joy, my family and I. And then we got a letter from the city saying that they're going to find us and give us a film. Yeah. Woo! That sounds like fun. Yeah. Like just stupid shit like that. I'm not for air being bees. If you live there, you have a lot more. You're able to do it a lot more. But more I see this. I know people are still doing it.

49:15I think it's the same person. Yeah. People are behind a pool of part of the complex system. And the tenants out. And they do every unit and air being bees. That will work until it won't work. And it won't work spectacularly. Okay. Thank you. Very welcome. Here's the deal. Again, I'm sorry. Did I have another question? I'm sorry. I missed that. I thought that was a back scratch. I'm just going to ask you how do you feel about the whole rent control scare? That's a good question. So I actually did a podcast or a video on this recently. That doesn't make me so nervous. Does it? No. So again, when the government gets involved, so first off, does everybody know that California in one of the houses passed, I think it was a 7% max plus cost of inflation. So it's basically 10%. You can't rate 9% or 10% based on cost-deliving. So you can't raise rents by more than everybody know what we're talking about. And as a landlord, that should freak you out.

50:16Right? Because they're basically saying, they're dictating how much you can raise rent. But in reality, after owning lots and lots of units for lots and lots of times, I can't think of any year in history where I have raised an existing tenants rent more than 10%. It just doesn't happen. If you move them in at market, that doesn't happen. It shouldn't happen anyways. But here's the deal. Tenets are going to lose in this situation. Because I already told you I take care of my good tenants. Remember that story? One of the things I did for my good tenants, if you paid me every month on time for 12 months, I wouldn't raise your rent. But now, if it passes the second house and the freaking government gets in my way, I'm going to raise rent every year because I'll never get it back. So my good tenants will lose. Now, I will be sensitive. I'll raise it half as much as I could and all that stuff because I want to take care of them. But the government is telling me to raise rent every year. That's what it says. It's stupid.

51:18But if those are the rules, I can't argue the rules. I'll play by the rules. So I doesn't bother me at all. I know you've moved off to buy multi-families, but what do you buy them? Yeah. And then say someone is way under market rent. Yeah. Like the deal I seen earlier in the year, one of the things was like those six units. Yeah. So I have $300 on the market each one. Yeah. So as you're going to go in right. So let's just do a pretend, right? Let's say there was a 10 unit building on Lomona. Oh my god, I own one of those. And they are 500 rent when they should be 750. Everybody follow me so far? Right? And you buy that, or I buy that, and that's what the situation is. So first thing is, you can't go in and raise rents from FOT. You only can raise it 50 bucks. That's 10%. Easy math, right? I'll take them out. So here's the loophole. Yes. You give them a six-day notice because they've probably been there longer than a year. They have to leave. And then I go spend $100,000 of capital improving the property.

52:19And then I rent them all out for 750. You have to do all the front. But here's the deal. This is always worked. One of the things you'll see later is I made a mistake of buying cheap properties. Less like this, 10plex. And here's the deal. If you try to take a tenant paying 500 that should be 750 in a building that's worth 500, and you try to take them to six, they are going to not pay their rent. They're going to force you to evict them. And you know, 90 days later they're going to leave anyway. The building's not worth 600. Just because the market says 750, the building is a slum-lord building. It's been under-managed, under-capitalized, the building sucks. That's the landlord's problem, not the tenants problem. It needs to be improved. It needs to be brought back to life with 100 grand in capital in this example. So tenants are going to, unfortunately, some tenants are going to be asked to leave. I know you're not an attorney, but are you able to evict a tenant and then have them sign into a new lease after a small period of time do you know?

53:22Well, why would you, I would never, if I had to evict somebody, I would never rent to them again. So I'm not, that doesn't even compute. So you can just so that you can increase them. I would never game a system. I would, I grew up dirt poor. I would never do that to someone. If I want them there, I want them there. But if they're a 500 paying tenant, they can't pay for any more. They can't qualify. But I want to raise, I want to spend 100 grand to bring the building back to life. I'm going to go get 750 tenants. I'm going to give them a full 90 days to leave, help them find some other place to live if I can. But no, I would not play that game. Okay. Yes, sir? Yeah. Yeah. It's like a typical real estate bank in South Africa. Oh. So I'll answer that question this way. So I have, let's call it 50 houses and I don't know whatever it is, call it 150 apartment buildings. Here's a question for you and use these numbers. What do you think the average 10 year is of my housing, people in my houses.

54:22Meaning how long do they stay on average? Five minutes. Yeah, that's fair. Let's assume they're B tenants. You know, 50, 50 cash versus section 8. They're eight years. Eight years is my average house. Because people want to live in houses. They want to have a yard for their dog. They want to, you know, place for their kids in the backyard, all of that. My guess what the average is for an apartment building. Two and a half. The average turn for a house is about 7,500. The average turn for an apartment building is about 3,500. Start playing with those numbers. And you can very quickly realize that housing is typically a better investment. So are you in so many apartments? Because when I bought them, the market was different. Ha, ha, ha. He thought he caught me. Well, that's... Yeah. No, remember the statement here? Multi is where cheaper. Yeah. I wouldn't do it today though. That's how my brain works. So are you disclosing all your... I have listed three of my largest buildings at 30% above what I believe they're worth.

55:24And two of them are in escorted clothes in the next two weeks. Did one of them weren't close? One already closed. And you got it, right? Yeah. Yeah. I got one I wanted to. And you just bought more houses. I'm buying houses. That's what my math says. Buy houses. Yeah. It's a bad... So I remember that you gave me that figure. Was that change in the long and the last of the... of the community itself? Yeah, I mean, I own... You can assume all my stuff is B, B minus. And if I have bought seas, but I upgrade them. I put in the granite and the flooring and all that stuff. I want to keep everything about a B. If you think of the monopoly board, I want to be that red and orange. I don't want anything like Marvin Gardens, that yellow and whatever that is down the other side. I don't want that and I don't want purple and light blue. If you think about the board. What's your rule about the neighborhood? So I have this rule about... Because again, I don't know Fresno, right? So... He's asking a question he knows the answer, too.

56:24So I have a rule that... If I'm willing to buy the house... If I'm willing to have my wife... She's a little thing. Go to it by herself. Get out of her $100,000 vehicle. Go in and check it out. And not feel like she's going to get car jack when she comes back out. Even if the house is free, I'm not buying it. If that's the situation. That's kind of my criteria. Yeah. Yeah, so I'll buy in some... And again, that's during the day. It's not midnight. I'm like 1pm, 2pm. We're talking midday. We're not talking 2am stuff. That's a different level. You all know what I'm talking about. Come on now. So another thing that I believed in the beginning is I believed banks would always lend to me. I had a 6-figure job at 800 credit score in money in the bank. Guess what happened from 2009 to 2011? No bank would lend to me. I was the enemy.

57:25I felt like when I walked in the Bank of America, alarms would go off. I mean, I just felt like the enemy. That's how they treated us. So you have to find other ways. And I have a slide just on raising private money. Because I got pretty good at that. I used hard money first and then found private money even better. So we never stopped looking for deals, hints to the story of one in a time. My goal through all of this is to make my next purchase better than the one I just did. That's kind of a mode that I've always had. And I got pretty good at doing that. The other thing is because we had this crazy, busy life, trying to raise our daughter and keep her safe and sane, we outsourced everything. We had property managers since we had one house. And we spent some time with these people. And then we spent 10 percent. All right, we don't pay that today, but that's what we paid in the beginning. We outsourced contractors, painters. Yes, I did come paint a unit one time just to prove I was a man. I'm freaking never doing that again. I hate it! But again, so we outsource everything.

58:26So here's the deal. If you're new and stuck, this is where you take out a pad of paper and write down these questions. area. This kind of feels open-ended. Some people will say, you know, I want a 322, but really what I mean by buying criteria is what would you say yes to? Is it cash flow per door? Is it a 10 cap? Is it something 50 grand under market? What is your buying criteria? Because until you can tell me that in 30 seconds or less, you're going to spin your wheels or waste money. Because you're going to say yes to something that doesn't make sense. And I don't think either of those options are good. If you're going to just spin your wheels and do nothing, then go do something else. If you're going to just say yes to the first thing that somebody that Scott comes by and says this is a deal by it. What you should. No, you shouldn't. Unless it fits your buying criteria.

59:26Everybody get that one? And again, it can be your buying criteria. If your buying criteria is, I want a yellow house on the third street with a vowel in the name. I don't, whatever it is for you is you. That's your buying criteria. Nobody should talk you off of it. Okay, so if you know your buying criteria, what is an average deal in your market? Let's just say that your buying criteria is you want 10% on your money. Let's just say, if you want 10%, what is an average deal in your market? Is it eight? Is it seven? Is it four? What is it? So take your buying criteria. Like I told you earlier, I looked every day for 10 years. I got really, really good at understanding what my buying criteria is and understanding and processing out 98% of the deals because they were below what was a good or great deal. Okay, so if you know what an average deal is, what's a good or great deal?

1:00:26So again, using the 10% just because it's a round number, is a good deal 10%? Is a great deal 12%? What is it? You do not spend a freaking dollar until you know your buying criteria, what an average deal is, what a good and great deal is. If you follow what I teach. Okay? Because otherwise you are gambling and that's not how you get rich in this game is by gambling. Okay, and then the last thing is, I added this question later, is you need to figure out what you are uniquely good at and outsource everything else. You stop being a control freak, stop wasting time on things. I should never have painted that unit. Yeah, I wanted to stroke my ego as a man. It was the stupidest thing I could have done. I could have been looking at more deals. I did a horrible job. I'm sure they had to repaint it after I left. It's dumb. So figure out what you are going to...

1:01:27Nicky Glazer, this stunning tour. The thoughts of death, I don't like to dwell on them for longer than like 10 or 15 hours a day. So... November 19th, Yamabah Theater. No wonder women rushed to have kids were being trained for it since we were kids. Like, here's a baby doll. Here's an easy-bake oven. I got one of those. I stuck my head in it. I was like, I want out of this narrative. Tickets on sale now at Yamabah Theater.com. Don't miss Nicky Glazer. Yamabah Theater. Look at that and be comfortable outsourcing the rest. Anybody have questions about these four? These are important for new people. All right, works for me. Yes, sir? For buying criteria, you've always talked about digging deep into one area, not why. Yes. What is your reasoning on that? Because, again, I have a very busy day life or day job when I was doing this. I could only focus on so much data. The MLS, when you're looking at 322s, probably has 12 or 1,300 listings if you looked at everything.

1:02:31And I couldn't process that and adjust for the daily changes. Right. I had to go, okay, 322, got it. That's all I've ever lived in, so that's all I'm going to look at. But Fresno's huge. It had, you know, 800,000 people when I started, or 750. I'm going to look at two zip codes. Because now it goes from 1,200 to like 120. And sometimes 80. I could look at that in 12 minutes or 15 minutes. And I could see what changes. I could see price drops. I could see stuff come on, come off. It's just a lot better way to learn. And when you do that, it becomes very easy to go, okay. Now I'm going to look at 422s. Okay. I'm going to go back to 322s where I'm going to go to another zip code. You can very easily build off that. If you just looked at everything, data overload, your human brain can't do it. My day job would mean I'd lose half of that stuff. It'd be. So focus is good. Are you looking at pending and sales as well? See if an idea of what thing. In the beginning, no, I couldn't, in the beginning, I didn't even know to do that. I just looked at what was available. Would you do that now? I would look at that today. To see what things are actually going to be. Yeah, I come on, come off. Yeah, exactly. But I didn't do that in the beginning. I would though.

1:03:33If you guys are a whole selling, take that single-prochery marketing. Honestly, a lot of people try and go all over. Shotgun! Shotgun, everything. Pick a zip code, pick a criteria if you want to go single-family home, pick it out, down to 322s. Single-family is only 9307.06, that's very exciting. Yeah. And then start that. Learn, learn, learn, learn. Because at this point, whole selling is a real estate. It's all marketing. Correct. So I'm kind of confused with your, what is a good or great deal in your life? Cool. Awesome. Let's do it. Because when you say, you know, because pretty much we're saying that the market's been a dictate what's a good or a great deal. Whereas we say everyone in the census is going after multi-family right now, what you think is a bad investment. But the market tells you that's, you know, what you just sold your forms, essentially, that's a good deal. That's a great deal for the seller. It's a horrible deal for the buyer. But you know what I'm saying? I feel like a market will lie to you in a sense if you're talking about what's a good or a great deal in the market. Oh, I heard you saying. I missed it. He's looking at the sales and saying that the sales, it's a good deal.

1:04:34It's based on your buying criteria. Yeah, it's based on your buying criteria. What type of yield do you want on your market? What do you want in return? So I want an 8% return on online money regardless. I don't care where the market's at. Because it doesn't make sense to have, it's like having money in the savings. That's pretty much. You're not going to be making it. So unless you're making 8% on the money, you won't lie. Yeah, well, here's the deal. Let's play with that. Let's just play with this example. Because this is what it is for Fresno today. If you take list price and the rents that are available, again, using Section 8 caps and all of these other areas, just assuming that, today Fresno is about 5.5% to 6%. Assuming you pay list, you're buying turnkey stuff. Let's assume it's 6 for easy math. That's average. Okay? Now let's say you only want good or great deals. And we'll just use 2% differences. So a good deal is 8 and a great deal is 10. So how do you do that? You either go to an average deal and offer less.

1:05:37You find a way to create value and create more rent. Maybe there's square footage that can be repurposed as a bedroom or something. Or you find multiple houses on one lot. There's ways to create value or you just have to offer less. So if you find a good deal, which in this example is 8, and you only buy great, which is 10, it just means you have to offer less. And that's where it helps happen to scale a whole set. Yeah, because you can repurpose. Yeah, if you only add 10% to your personal family's portfolio, but you're willing to sell off 8s to others because they want 6s, you're going to freaking kill it. Brilliant strategy. Multiple exit strategies, home run, your hero, you're going to leave teaching next year. Do you have everybody's best friend? Okay, early mistakes. This was a question earlier, I think Scott asked. I was too laser focused on cheap properties. This is important. There's not many things I say that are important. This one's one of them. So how many of you have been told you're supposed to buy under market properties?

1:06:42That's what I believed. Right? Let's use some numbers. Let's say the house is worth 200. If you can get it for 150, have you won? Well, then this can also say yes. Because you got 50 grand under value, right? That's exact. Now you got it. No, that's what you were. You are naturally right. Here's the problem. I made this mistake on all of those first 8 properties I bought. I made it every time. I bought properties for 20 to 30 grand under value. Because if I spent 15 grand, I can get 15 grand in artificial equity or forced equity on that bullshit the bigger pocket stocks about. Everybody know? But here's the problem. I just wasted a shit ton of cash. And when I started, my constraint was cash. Let's use some examples. So that, let's just use Norris Drive, 100K house. It was 107, but we're going to use it 100 grand.

1:07:43Let's say it was worth 125. I already told you earlier I had to put 20% down, right? I didn't have to know, but that's what I did. So I put 20K down. Let's say I spent an extra 10 grand the first time. We're not talking about the guy that destroyed it. But let's just say I put 10 grand. So I'm into that property, $30,000. If I would have bought a house for 125, perfect, already done, cleaned, no make ready, I would have only had to put 25K down. No make ready. I made this mistake over and over and over again because I wanted cheap. I was looking for cheap. I wanted to buy it under value. I wanted to, you know, it wasn't called burr when I started, but I wanted to burr. I wanted to get all this forced equity. I wanted to add to my net worth. Fucking can't spend my net worth. Right? But cash matters. And I burned my cash. I would have been twice as big if I would have bought clean versus cheap. And that is hard to rationalize, but do the fucking math. Right? Those deals are hard. They weren't back in.

1:08:43Oh, back then. Now. Remember when I started? Do you have you looked in the subject to, I don't know if you're doing that much of your marketing first. I don't do any of my own marketing. I don't have a team. I have friends like you who call me with bullshit deals. Just kidding. That's my buddy. No, I don't. I've looked at subject two. I would consider doing them. I would consider any creative way to help a seller out if I could find a way to profit and hold long term. But again, remember my model. I do only do two things. I buy and hold forever. Or I buy ugly and I flip the turnkey. That's all I do. I don't believe in adding extra stuff. Like there was a time I'm alive where I bought lots. Because lots were on sale. And I profited from them. But I don't want to get the city notices and get bring out the trap. Nah. Do what I do. Focus is good. Move on. Would I be opposed to learning subject two? No. Would I be opposed to learning probate? No. But these are my two models. And they got to fit in that box.

1:09:47That's what we do. We can talk about cheap property. Are you afraid of doing something that you find is a lot of fixer? Fixer. Yeah. So once you look at kind of livable but needs a new kitchen. Bathroom needs to be updated. Right. For 25 grand. You can raise the value 40 grand. Right. So you get this artificial 15K pop. Feels good. Freaking burns a lot of cash. So sorry. No, please. I know you said like you don't like the burn method. No. Well, I didn't. Well, fair enough. Yes, yes. So the burn method you can pull out all of your cash. If you buy it, right? Yes. So how did you do with 90 burn method and just putting 20%? You just put 20% down each time and not be buying it? Yeah. So we did. So the first one we bought, we did 20% down. The next two we bought, we did 10% down. We did an 80% first 10% second 10% my equity. Our cash was gone. But that time a year and a half had gone by and again we were in the last seller's market.

1:10:47So we went back to that first property and did a cash out refi. They handed me $50,000. I went about two more properties. By the time I did those two, I went back to the second one. I did a cash out refi and bought another one. That's how I did that. So it was great. Like, you timed it perfectly. I was lucky, I guess. Yeah. I did not appreciate my cash. This is a big thing. It's kind of saying it twice, but this is the real deal. I only had, I started this whole financial freedom with 40 grand. I understand that's more than some, but it is a lot less than a lot of people that I know in this game. I only had 40 grand. That's all I had to my name on my 30th birthday. That's all I had. And, you know, we built it from there. Again, timing and cash out refi. 1031 exchanges, all of that. Here's another one. I didn't appreciate return on time. Here's the other deal about the Burmeth it's specifically or buying cheap properties. Not only does it consume cash, but as somebody who has a worldwide responsibility and is on an airplane too often,

1:11:49the other thing you don't appreciate is all the time it takes. You got to do this in this gotchas and this change orders and this winery. This window broke and had a break in and somebody stole the door, threw a rock through a BB through the window and returned on time. Think about return on time, especially if you have a full time job, especially if you have family responsibilities. Remember, you can get sucked into something that is not right for you. The Burmeth it is awesome. I posted it today on bigger pockets. It is awesome. If it fits you, if you have the knowledge, if you have the experience, if you have all of this, but if you don't live in Fresno, you're on the freaking other side of the planet half the year. It's probably not the right model for you. And you know no one. However, if you live here, you have a GC in your back pocket like your dad. It's probably a good idea, right? I'm with you. Good job, dad. Hope you're boy out.

1:12:51The other one was, I always assume banks would be conservative. I've actually one of the things I got known for is this thing called no alligators because I thought negative cash flow wasn't hard enough. Everybody know what negative cash flow is, right? It's basically a property that eats part of your paycheck, right? You have to go to a day job for it to pay. I assumed, and I already told you the answer, when I did my cash out refi on my first property where they handed me 50 grand, that the bank would be conservative. And I thought they wouldn't let me produce a negative cash flow property. Nope, they were happy as hell to loan me as much money as I can because I had a six-figure job, and they knew that I would pay for the delta out of my own pocket. I am a cheap, rational bastard, and that fucking killed me every month, writing an extra $200 to pay for my stupidity. Don't buy negative cash flow properties. Don't buy them, don't create them. They kill you every month. And here's the deal, people that lost $10 million in equity lost because they had too many alligators.

1:13:52It got to a point where even though they had the money to pay for them, it just didn't matter because they were whacked in value to 50%. And then like, it'll never come back. They eat up $250 a month. Take them. Go on. Okay. Anybody tell me what time it is? How we do on time? Okay. Paid a clock. Perfect. Yes, sir. What's the number you caused your first property? I refied it for too much money. Let's just say it was worth 200 grand. I took out 150, which meant that my original loan of 80 was paid off and they handed me $70,000. I now paid a higher rate because my purchase money interest rate is lower than my refi cash out rate. And pretty soon I'm paying $1,200 a month on a $10,95 house. I thought the bank would never do that. I thought banks were fricking conservative. Nope. They are not as conservative as I was led to believe. Now commercial banks, they are conservative.

1:14:53All these syndication and LPs and GPs and all this stuff, those people are going to lose or the LPs. They're going to be asked to hold their money longer or take haircuts. Those commercial lenders are going to be just fine at 60% of LTV. Those LPs, they're in trouble. I didn't appreciate that markets would take certain asset classes at different times to ridiculous highs. That house on North Drive should never have been worth more than $175. It went up to $270. The rent never changed. Over five years. State at $10.95. It never made sense. Today apartments are ridiculous because everybody wants to be Grant Cardone and bigger is better. There's just not that many of them. And there's thousands of people listening to this guy every day. Everybody, every third person I meet is a syndicator. Not good. It's going to be ugly. And the LPs are going to get crushed. And an LPs stands for a limited partner. They are essentially the equity piece of a deal.

1:15:55They are going to take big haircuts or have to have their money locked up for decades longer than they thought. Mark my word. It's going to be ugly. So, Corbolis. Again, Olivia, I would say Olivia, this one's for you. Make sure you're significant other husband, wife, boyfriend, girlfriend, whoever. 100% on board. If you don't know if they're 100% on board, tell them a version of the North Drive story. And say, honey, what would you say? If the answer is great, let's do it again. You got one. If the answer is, ooh, that hurts, so let's not do it. It's risky. Move on. Or keep talking. One or the other. Never buy or create an alligator. Never buy makes sense. People get that. Don't buy stuff that, you know, it's negative cash flow. But don't create them either. And I made that mistake because I thought banks would be conservative. Here's one. Live where you want, but invest where the numbers make sense. I happened at the time I had to live in the Bay Area, all the tech jobs and blah, blah, blah, blah, blah. But invest where the numbers make sense. For me, that was Fresno and I'm happy I'm here and I'm staying.

1:16:56I believe in only buying affordable housing. Does anybody here that's not a real estate agent? So, realtors don't get this because you probably know what is the median home price of Fresno County? Bingo. You an agent? You're not a licensed. All right, that's good enough. It's 269-263 somewhere in there depending on who you watch. That is a number you should be tracking quarterly. It doesn't move a lot, but you should always be asking yourself if you're going to invest in Fresno. Or if you're thinking out of state, you need to ask yourself what is the median price of that market? Always know that. I want to invest below that and likely 20% below that. So, 200? Yeah, 200 is kind of my number. I want to produce in-product that is sold for 200 or less in my slum lord to Pride of Ownership, but I'll only buy stuff below the median to add to my rental portfolio. Is that for easy getaway? What's that? I want multiple exits. I want to be able to sell the homeowners and investors if I have to sell.

1:17:59If you feel comfortable at 200, you could cash out your whole portfolio for your- Oh, I could- if I chose to, now I would never do this because some neighborhoods would have lots of foresale signs, but I could unload everything. I think everything would be in contract in 15 days. Dance. This because everything is affordable. You don't want Park Place and Boardwalk when the market changes. I have lived through a full cycle. Affordable housing always has buyers. Be- protect yourself. If you- here's the deal. There are some people in here, or maybe people you know flipping Fresno homes in the 400s. If they haven't been crushed already, they are about to be. Their hard money costs are going to go up. Their whole times are going to go through the roof, and they're going to lose their ass. So, last time the market crashed, it was negative, right? And one year, right? So, this time around, what do you see?

1:18:59For the medium single family homes? No, the crash. It was a good- There's a good- there's a good- interesting debating topic. How many in here think the market's going to crash? We're talking about single family homes, not departments. What are you defined by a crash? Oh, let's say 20%. Because last time it was 50. No. 20% or more. Anybody think Fresno is going to go down 20% in the next two years or less? I think it'll stay in the next two years. I'm sorry. Yeah, so any 20%, 30%, 10%. And two, yeah, I'm picking a number. Two years. Three years. I don't care what it is. Here's- here's what I think. And again, I've invested through a full cycle. So, here's the riddle. What really caused the crash last time? Seven or more degrees over lending. Lending caused the crash, right? And it's because everybody had lyre loans and two in 28s and you could just watch the four closures when the two- and when the two-year period ended and went from 1.9 to 7.9.

1:20:00These are interest rates fixed. You could see them roll over. I mean, like, you could watch it drum roll in the MLS. What is different today? They crack down. Well, until very recently, there are no lyre loans. There are back very recently, which is kind of scary. Consumer confidence is still down. Consumer confidence is still down. So, what's different today, verse- oh wait. Lyre loans don't exist? Everything is fixed. Everything is fixed is the big boy. When you have a fixed rate mortgage with a three or a four on it, it's pretty hard not to be good. Because if you even lost it, you'd have to rent somewhere and you'll probably be above your mortgage. So, I do not believe Fresno's median will fall below, call it 255, certainly below 250 in the next two years.

1:21:01So, I do not see a 5% drop. And I believe the 5% drop will be a mathematical problem. Because you know what goes into the median? There's all that high price shit. I think all the 400 and above is going to get clobbered. If you're selling 400 and K stuff, that could be 300. So, that's a 33% hit. But I don't believe stuff priced at the median and below will be affected. And in fact, I believe it will appreciate. It's just the law of math. There's not many of these. And there's a bunch of these. All the new builders and all those folks. So, I believe if you have something in the 400 and above, you could see a 20% price drop. You could see 25%. But I believe that will be washed out by the folks below the median getting growth. So, mathematically, I could see a 5% adjustment. But I think it's going to be bifurcated above and below that line. So, I don't buy 400. I don't buy 300. That's my belief. Make sense?

1:22:02So, understand quality difference. And again, I looked at the MLS or again, realtor.com every day for 10 years. I believe there's really three types of properties listed. There's the slum lord stuff. This is the stuff that is either boarded up or should be boarded up. Pride of ownership, the pretty stuff, clean, granite, hardwood floors, two-tone paint, silver, chrome appliances, whatever they're called. This is the stuff that cheap, well used, but under-renid. This is the other one. This is what I got focused on in the beginning. And it can consume all of your cash. Now, you can split hairs and say there's variances and all of this. But when you're doing your math and you're learning your market, I would just start qualifying stuff. So, you can say slum lord stuff is like this. Pride of ownership, pretty stuff is like this. And then you get used to what's in the middle. Make sense? This is your strategy is buying whole. It is. Yeah, vinyl.

1:23:02I've created very little in my life, but I've created an acronym for Crap. I like to shock people, I like to tell stories. Crap stands for cash rich asset port. You don't want to be Crap. Cash rich asset port. Having a big savings account, big stock market account, I live in the valley. I have a lot of people who have RSUs and stock options. And they like to tell me how rich they are. But they're going to get hammered. The dollar is getting depreciated. Interest rates, nothing in a savings account. Stock, if your money's in the stock market, good luck in the next business cycle. You're screwed. So again, you need assets that are inflation protected with fixed rate debt, taxed advantage, all of that. So, you don't want to do that. Always, always, always, leverages conservative financing. The only reason we never lost the property during the crash is because we were always conservatively finance. No high leverage, everything cash will accept that first one,

1:24:02which again, we did a 1031 exchange, be conservative. Don't, because when the market changes and the business cycle snaps back, it gets ugly fast. Focus on one thing. Again, back to one of those truths. Remember those uncomfortable truths? One of them is you only have to get good at one thing in this business. And for us, it was buy and hold. That's all we ever did. You don't talk to me about wholesaling. I couldn't even spell it. Direct marketing, forget it. Drive him for dollars, forget it. There's other experts in this room. You want to talk buy and hold landlords of affordable housing? There's very few people that are better than me. Here's one. Real estate to people business. And if you're in this room, you get this. But some people don't. And I didn't appreciate this in the beginning. I thought the magic lived in Excel. Right? I was an accountant. I have an econ and MBA. I had an email and I was like, the prettiest Excel spreadsheet when unlock real estate fortunes. My math is simple and I told you I will show it to you later.

1:25:03But it's not. People business. I challenge you. If you are shy, or you're just getting started, pick one of these two goals. Either meet one new person a week or two. Those are your only options. One or two. You're going to be golden in this business. Half my deals come from my network. The other half is just out of the MLS, because I'm still cranking away every day. We just signed an offer. We went into contract on something and just signed an offer before this meeting started. Still doing it every day. So why four rentals? So I've been gracious enough. I've been asked to speak at many events. Some dozens, some hundreds, some thousands. And in the beginning, it was always financial freedom. 200 rentals. I've been trying to buy all the rentals and take pictures with you. But you could see it when they went to their car, they would say something like, we can't do that or that's too big or some other bullshit excuses. But if somebody who truly cares about helping people, that was a failure.

1:26:05If I can't inspire you to do something I've made a mistake. So that's why I talk about four. Because I believe four rental properties can fundamentally change your life. Whenever it gets to four, I consider you a wild success. Because four rental properties over the course of decades will fundamentally make your retirement better. It will change your financial future. It will help your kids go to college. It is that powerful. Okay? The other thing is, is anybody know how easy it is to finance four rental properties today? The first four are ridiculously easy. Fannie, Freddie, we'll buy them all day long. When you get past five, you have to have reserves and seasonings and all of that. The first four are liquidity split, assuming credit and down payment. If the government says four is easy and they're going to buy them, take them. These are the four percent interest rates. People are starting today can get fours. Three. Jesus Christ, threes. Crazy.

1:27:06So again, appreciate that. Get to four as fast as possible. Four rentals can change your life. Cash flow B today. What would cash flow B tomorrow with rent increase? And tomorrow is years, right? Think about the future. What about appreciation tomorrow? And not tomorrow, years. What would it mean when stuff's paid off? Because again, I'm the buying old guy that's old stuff forever. Right? You put them on 15 to 30s or you put them on 30s and just pay them off to 13s. I do 30s. Yeah, it's really tough in California even for resident to get the cash flow off 15s, unless you put 30 or 40 percent down. Yeah, I've always done 30s. There's a couple I've paid off early, but that's not a personal choice. Yeah, but in the beginning, 30 years fixed rate. Go, go with God. Yes. Okay, so, Kiyosaki said, way back? Kiyosaki, yes. 25 dollars, miles of cash flow. You know, that was his- That's condo, yeah? Yeah, so my question is-

1:28:06Hawaii. What is the number of positive cash flow that you feel for a house, not any of your properties? So, that's a good question. I don't look at cashful for doors, but I get this question enough. I would be very nervous if my spreadsheet said less than $150 per door. Right? Because I've been doing this a long time. So, that would even account for vacancy rates? Well, no. So, 150 is my net number. I've already taken out 5 percent for vacancies and evictions, 5 percent for capital reserves, all that stuff. Right? 150 is the true net net net. Natural, natural. Yeah, I don't- I don't fake it, right? I don't go, oh, my vacancy's zero. No, it's never freaking zero. Yeah. I'm comfortable with 5 percent for vacancies. And vacancies and evictions. I don't do 5 and 5. It's 5 for the- Okay. And then again, once you get- Oh, I'm sorry, yes, sir. Hey, buddy.

1:29:07If you- I have four right now. Awesome. Okay, so I'm- Congratulations, you're a success. Yay! Sorry. I think about replying, looking at the milk cash out, but flipping into a 15-year-on-one. Why? Okay. Because so that one, my payment is $5.50. Okay. So you're $27.26. So you've paid three years. What I- You have 27 years left. Correct. And so that one's at like four, I think it's going to have, but I can get it at like four for a 15-year. You're going to have to pay a point, a preysel fees document. You're going to be three grand into this thing? I would. What? So, again, you're going to take a property that's probably cash flowing in 303 and a quarter net net net today,

1:30:07to probably 100 and 115. So on math, it looked make sense. I wouldn't be worth the transaction cost. Take that $3,000, throw it on the payment today. Just pay it off earlier. Okay. Now, if you're going to take a payment from like, let's say you had private money at nine. So what about the other two that I have at five and three quarters and six percent? I can take it at 30 or that four and a half. And flip it back into 30 or something. See, only reason I personally, again, this is one guy's opinion, so throw it away if you don't want it. The only reason I would do a refi is to pull out equity by my next property. I would never do a refineance to lower my payment unless it's like ridiculous, like $400 savings. I get phone calls all the time with banks that basically go like this. For $3,000, I can save you $75 a month. I'm like, all right, my break even is like 36 months. I mean, that's what you're talking about, right, roughly? No, thank you. Now, if you're going to come and tell me, like, I have a commercial building,

1:31:07like I have an apartment that's at six and a half. If you're going to refime me at four and three quarters and extend the term, like, go the other way, and you're going to take my payment down $1200. All right, now we can talk. But I'm not playing for less than $75. Take the three grand, throw it on the principal and be done in 12 years. My opinion. Now, if you want to refine, refine, take money out. That's a different story. Would you do that in the right market? Again, well, in the right market for the right deal, absolutely. Again, you're in growth mode. I did cash out refies to go from three to eight properties, no new money. It was all cash out refies. Then I got to eight. The market was nuts. I couldn't buy anymore because my brain wouldn't let me. And then I did 1031 exchanges. I went from eight to 80. I went from three with my 40 grand. From... Nick Eek Laser, this stunning tour. The thoughts of death, I don't like to dwell on them for longer than, like, 10 or 15 hours a day. So... November 19th, Yamabah Theater.

1:32:09No wonder women rushed to have kids were being trained for it since we were kids. They're like, here's a baby doll. Here's an easy-bait coffin. I got one of those. I stuck my head in it. I was like, I want out of this narrative. Yamabah Theater.com. Don't miss Nick Eek Laser, Yamabah Theater. Three to eight, no new money. Only cash out refies. From eight to 80, all 1031 exchanges. No new money. So for 40 grand you're in the 80 units. 80 units. But again, let's remember, I'm weird. So when I did those cash out refies, I didn't buy a new car. We didn't upgrade our kitchen. We'd wiped in by a silly stupid diamond ring. I mean, we sacrificed everything. We sacrificed everything. Everything went into rentals. Most people don't do that. They go, I'm going to take seven grand and go buy a new motorcycle. Or whatever. I'm weird that way. Yes, ma'am? I have a question about traditional markets. My personal residence? Oh, okay.

1:33:09That's something that you would take all of this money. Money to make your own business or you think it would be wise to pay off your cash. What is your philosophy on your personal? So I'll answer it in two different ways. When we were in growth mode, so I left this Silicon Valley. I've already told you that. Silicon Valley likes to appreciate. So we took over 200 grand out of our primary residence over the years. Two different times, 100 grand, 100 grand, and used that to buy more stuff at different times. So first, we did use our primary as a piggy bank. Now that we've been financially free, we have paid off our primary residence. Yes. But that's, I have options now and I have this and I have that. And I like, oh, we know nobody nothing. But if I'm in growth mode, piggy bank. There's a... Feel me? Awesome. So what would I do today if I was starting over? This again is a bigger pockets blog.

1:34:09It's actually a video that goes up on my YouTube channel Wednesday or Thursday. Immediately, I would... I didn't do that. You thought this was that important? I feel you. That's awesome. Focus. First and foremost, I would live... I would slash my living expenses. We went from living on 100% of what we took home to 50% over about three years. That's fucking too slow. I would have gotten there and said, oh, I would have gotten there in six or nine months. Cut stuff out that is stupid. Figure out what a need... Cover your needs. Cover your kids' needs. I even covered some of my daughter's wants. No wants for mommy and daddy. Needs only. Everything else went in the bank. Because everything you can save... It allows... Earn... Save...

1:35:09Invest. Again, in acquisition mode, do what you can to increase your income. Is that getting a... Yeah, it's hot in here. I'm very... I have a lot of hot air. I'm a sales guy. It's all my fault. I would do whatever you could to increase your income. What this meant for me is I was a sales leader, which meant I made very little money because everybody had to make money until I made money. So I would quit that and I would go become a direct sales professional. All of that stuff. If you're not in sales, maybe that's a second job. Work on the weekends. Whatever you can do, get a side hustle. Whatever it is. I was starting over today. First, cut expenses. Hard, fast. Increase income. Yeah? Then, learn my market. Put in the energy. Figure out what a good, what a bad, average, good, great deals are. Again, you're doing this at odd hours. I worked from 6 to 7 a.m. every day.

1:36:12Because my daughter was asleep. She didn't get up to go to school and get ready until 7. So, daddy had an hour. Get after it. If you're a night owl, be a night owl. Put in the work. Step four. Grow your network. Meet two people a week. Meeting people in this people business will bring you deal flow. Get your credit right. Get your payment money going. Again, C.1 and 2. Then, I would start making offers on only great deals. Scott, we just locked up our first deal together to show you what I mean by this. He wrote 73 offers for me. Until we put something in. Because I'm a cheap son of a bitch. How much do we get from her asking? 50 grand, under asking in the MLS today. Everyone in this room could have seen them. Ha ha ha. I've been doing this a while. What's the address? 27, 97, Newman. And it's two houses side by side. It's a property home by the same family for over 200 years or so.

1:37:1490 years. Yeah, it was like ridiculous. Three bedroom, one baths, both sides. New roof, one, one. It's a beautiful deal. I'm going to sell it for 300. Figure eyes out. Ha ha ha. And then repeat. Until you're financially free. We sacrifice for 15 years. And I tell you this story. Olivia gets 100% of the credit. I don't know about you, but do you have some friends that like to show off? I live in the Silicon Valley. They always like to show me these new houses and these $100,000 kitchens and $50,000 bathrooms. And seven series beamers and nutty things. This is the freaking toxic Silicon Valley. You have showoffs in your family or network. We did nothing. We drove 10-year-old cars. We lived in a condominium, three-story condominium, since 99. We could have moved five times. Didn't upgrade anything. It still had the white subway tile.

1:38:15Stock. Stock. We were cheap, earn, save, invest. Guess what? At 45, I left the rat race. I bought 20 years. What is 20 years worth to you? I think most people retire at 65, so that's what I mean by I bought 20 years. There are friends of mine that live in much nicer houses. Now, very few of them drive nicer cars than me now, but back then they all did. I win because we sacrifice together for 15 years. Makes sense? So, raising private money. Who wants to raise private money? So, I've been lucky enough to raise private money two different times in my career. Both times over seven figures. Today, I've accessed over $2.5 million any day I want it. Because of this process.

1:39:17You need to document everything you're doing. Document your story. The good and the bad. You go to a house. You lock it up for 120. It's an ugly house. It doesn't work. Document the story. I found this house. I thought it was a great deal. We went and sought. We backed out because blah, blah, blah, blah, blah. We find a fire burned house. We bought it for X. We put in Y. We sold it for Z. Document your story. Good and bad. The whole story. In 07-08, I wrote for bigger pockets as one of their published official bloggers. I would write articles. You can still go back, look me up, Michael Zuber. I also had a site at the time called Wealth Building Pro where I wrote about every house I bought. The before or the after, the full story. Today, I would do it in video. Just document it. Walk through. You can go to my YouTube channel one minute at a time. I post every day.

1:40:17Still. Now I do it because it's fun. But document your story. The good and the bad. Share your success. Far and wide. LinkedIn, YouTube, Facebook, Twitter, blah, blah, blah, snap, whatever. Understand the process. If you're going to go ask for money, you need to be a confident in how to do it. And not how to do it as far as money. But how do you create security for that individual that is likely in your personal network? What does title do for you? What does escrow do? What's a deed? What's a note? What is first position? What's second position? What are escrow fees? Do you do interest only? Do you do principal and interest? What's the term? What's the prepayment penalty? You need to understand this lingo and vocabulary better than anyone. And when you do, they have confidence in you. And how do you do that? You practice. You take somebody in this network and you go, hey, you're going to do it.

1:41:18You're going to be somebody that has a million bucks. And I'm going to come talk about a deal. And let's talk about it. And it has to roll off your tongue. How do you do that? Network, network, network, network, network. You never know who in your network may have money or may know someone that has money. And that goes to ask everyone. And I don't ever ask anybody individually unless they're really in my network. And I know they've got money in the bank and they've told me. But I've always approached it in the beginning is, hey, I've been doing this for a while. I pay above average returns at the time back in 08. It was 10% interest only. First position, very secure. We go through escrow and title. You know anybody that would like to earn 10% on a secured first position? I would ask them if they knew anyone. Most of the time with the idea of, I have something. I want some of that. So you can always go around the fence. You don't have to go, hey, Bob, give me some money. Do you know anybody in your network that would like to earn above average return on a very secure investment?

1:42:20Just get used to that conversation. Okay. So what do we do now? So first and foremost, we're still adding to our long-term portfolio. We've added probably 20 units this year. If you're a wholesaler in this room and you want me to buy your stuff, which is totally cool, I've paid wholesalers over 60 grand for a deal. Hey, good for them? Hey, I'm not going to judge nobody's money. I've paid over, I've done as little as a thousand bucks. But I've paid a couple of wholesalers 60 grand for deals over the last 18 months. But I look today usually for seller financing. If I'm going to keep it long term, because I've been doing this long enough, I can structure it so it's a win for them and a win for me. I come in for less down, I have a shorter term. It's more flexible for me. That's what I like to add to my portfolio today. I always come to Fresno anytime I'm asked, because I want a network. I don't live here. If you happen to be hungry and you're looking to wholesale or bird dog or get referral fees,

1:43:22and you want somebody who's got experience and you can say yes in a heartbeat, I have cards here, I'll give you my card and you have my cell number, email. I come to Fresno, I'm not going to get home to 1am because I'm hoping somewhere in here is a deal this year. Somebody here is going to have one. You're going to take my card and we're going to do business together. So I'll come back to Fresno anytime people ask. Typically something we're doing today is we're buying. So I never flipped anything. I said that earlier, right? Except after I left work, I have to be busy because I'm still type A. So now we buy ugly slum lords, we spend a bunch of money. I turn them into pridow ownership, new floors, new granite, all this stuff. And then I sell them to usually Bay Area investors who want a fixed rate, no cost, total make ready called turnkey. We have eight projects currently in flight actually 10 now or soon to be 10. Here's something that I'm playing with. I actually own a building, an office building on Vaness. Vaness and McKinley, right?

1:44:22Yeah, it's cash one to Fresno City. Yeah, right near Fresno City College. It's a gray building white trim if you drove by it. Regency property. I am seriously thinking about, because I own that building free and clear, I am seriously thinking about opening a real estate office there called One Rental in a Time, where I stock it with just real estate professionals, people in the business, to create an atmosphere of teaming. Not a brokerage. Not a brokerage, because I don't want that. Like an open space? Yeah, like a general contractor in space. I want an agent there for sure. I want some wholesalers there. I want teaming. You know, we can mark. I'm willing to market, you know, do 50-50 on marketing. I'm willing to play. But I'm really seriously thinking about turning that into something called One Rental in a Time Office or whatever. But I don't know what to do yet. You described as like a bit wise building but real estate. It's real estate only. I'm not going to try to make a bunch of money on this. I want to break even clearly. I don't want to lose money. I'm not in that game. But I want to create a space where I can have people that I work with,

1:45:23I trust, we market together, we build, we grow. We got to help people. If you haven't figured out already, I'm big on helping people. Sellers included. If you're in this business to be a greedy motherfucker, I'm going to find you out. I'm going to crush you. You need to help people. Right? So, I don't, there are some people in Fresno that are that type. I don't deal with them. Even if they bring me a deal, I won't deal with them. But that's something I'm thinking about. I just want to put that there. So take my card later. If you want to talk, you want to go drive by it. Go nuts. I think it's 1567. North Venice. Anyways, that doesn't matter. And then the last thing is, if you haven't figured out by now, something I do every day is post at least one video. And three or four of you have been on my YouTube channel. It's called One Rental at a Time. Do me a favor, go there and subscribe. Just help me out. I'm over 2,300 subscribers now. I'm trying to get to 3,000. I'm a sales guy. I have goals all the time. So I post every day. But something I do is I do something called subscriber questions. All you have to do is pull up any of my videos.

1:46:23Leave a comment with your question. Call it subscriber question. And then list whatever your question is. Hey, Michael, I didn't understand this. Or I didn't do this. Or give me a video on this. And I'm the only one that sees this. I have no virtual assistance. I have no direct reports. I don't want employees. I'm a simple person. I will, I'll, I'll, I'll, I'll, I'll, I'll create a content for every subscriber question in under 72 hours. It's the way I, I just how I roll. Right? I got nothing else to do all day. It's gonna be that. Yeah, we'll see. Right? So go there. And if you have a question, and you like what I have to say, and you like the honesty that I give you, leave a question. I have documented my story, something that I wanted to do. When I left was document our story. It turned into a book. I have some up here that I'll autograph for you. It's on Amazon. Go buy it on Amazon. It's cheaper that way. It's 1499 on Amazon. I do have some here that I'll autograph for 20 bucks, because it costs me money to get them here. If you want one autograph, 20 bucks is the best way to get it. But buy it on Amazon is cheaper. But it is our story.

1:47:23It's the 15 years. I broke down our cycle into four different parts. The start, the craziness of 08, the crash, the comeback. And then, you know, what we've done since. So there's a lot in there. Some of you have read it already? Yeah. Start it. Come on, man. Right. I'm doing a great job. I don't think. Where's the auto thing? Where's the auto thing? So I'm actually paying a guy to create the auto. All you people that do auto. It's not going to be me. It's, I'm, no, dude, come on. Don't deny you're going to do it. Forget it. It's just too hard, man. I tried to record a chapter. I don't read well. I'm not very smart. Yeah, yeah. And then the last thing is, if you like this whole concept of learning your market, I did break down a course. I finally created one. Could people kept asking? You can go to my website, one rental at a time. It's up there for $199. I do. Because you gave me an hour and a half or two hours of your time. There's a coupon code so if you can save $50. But that again is only for buying hold. I don't talk about flipping or wholesaling. It's if you want to be a buying hold landlord,

1:48:24learn a market. That's what's there. And that's it, I think. Yeah. There's my email. I have my cards if you want them. My website. And that's what the book looks like on Amazon. Nicky Glazer. This stunning tour. The thoughts of death. I don't like it. I'm for longer than like 10 or 15 hours a day. So. November 19th. Yamabah Theater. No wonder women rushed to have kids were being trained for it since we were kids. They're like, here's a baby doll. Here's an easy bake oven. I got one of those. I stuck my head in it. I was like, I want out of this narrative. Tickets on sale now at Yamabah Theater.com. Don't miss Nicky Glazer. Yamabah Theater. Did you know that mosquitoes are like a real monster? Yamabah Theater. Did you know that mosquitoes have killed almost half of all people who have ever lived? Today, people are fighting back. With support from the Gates Foundation, American scientists and partners around the world have developed a new generation of bed nets that can kill up to 90% of mosquitoes

1:49:24exposed to them, helping cut malaria rates in half. The result? A safer, healthier future for everyone. The Gates Foundation. Partners of Human Potential. Search Gates Foundation.org-slashmasquito to learn more.