composer-ea1p8ucze_editor-clip_clip_sam-dogen-financial-samurai-chad-carson_2023-jul-13-0250pm_financial_samurai_p
00:00:00.000 | Hello, everybody. It's Sam from the Financial Samurai podcast. And in this episode, I have
00:00:05.400 | with me a special guest, Chad Carson, author of The Small and Mighty Real Estate Investor.
00:00:12.180 | Welcome to the show, Chad.
00:00:13.180 | It's great to be here, Sam. Thanks for having me.
00:00:16.120 | Thanks for coming on. You have a great story because you played football at Clemson, a
00:00:21.560 | powerhouse school, and then you went on to do something that seems very entrepreneurial
00:00:25.920 | and you started investing in real estate. So football, college sports, real estate,
00:00:30.560 | two of my favorite things in life. Can you share with the audience how your football
00:00:34.840 | journey came to be?
00:00:36.800 | It was always a childhood dream of mine. My father played football at Georgia Tech in
00:00:41.000 | Atlanta. And so I grew up going to games with him. And it was sort of a father-son bonding
00:00:44.960 | thing with my brother as well. And I love the helmets and the idea of it and the stadium
00:00:49.360 | and the noise. And so luckily, I also had a little bit of size to actually match my
00:00:54.160 | dreams of wanting to play college football. And when I got into high school, I grew up
00:00:58.160 | to be about 6'3" and eventually 230 pounds in college. So I had enough of a build to
00:01:03.560 | be a linebacker, which is what I played in college. And I was sort of on the bubble of
00:01:08.060 | getting a college scholarship at a big school. And you might find it interesting. I got pretty
00:01:12.520 | good grades and I actually got recruited by some of the Ivy Leagues to play, by Harvard,
00:01:17.920 | Princeton, that kind of thing. But it came down to money and also location. And my parents
00:01:23.960 | did pretty well. They made good income and I would not have gotten any financial aid
00:01:27.920 | at the Ivy Leagues and no scholarships. And I would have had to take on some debt and
00:01:33.440 | or get a full scholarship to play at a Division I-A school like Clemson University. And I
00:01:39.000 | chose the scholarship.
00:01:40.000 | So you got a full scholarship?
00:01:42.000 | Yeah, full scholarship and played all four years. And it ended up being the captain on
00:01:47.960 | the team my last two years. So I was very lucky in a lot of ways because some of that
00:01:53.120 | is just luck of being in the right place at the right time. But I also had a good time
00:01:57.160 | playing.
00:01:58.160 | Wow. And so now as an adult with two children, how do you view that decision now? Because
00:02:05.000 | so few people get to the pros. I mean, for you as a starter, as a captain, four years
00:02:10.160 | at Clemson, did you try to become pro for the first year? How did that go?
00:02:14.840 | I tried. It was always my dream to play college football. It was just sort of an opportunistic
00:02:18.800 | dream to play NFL. It wasn't like, "Oh, I really want to do this." But I got recruited
00:02:23.560 | or the scouts were saying, "You should go try out." And I did the test and I basically
00:02:27.760 | flopped. I did really poorly my senior year. And my heart wasn't in it. I didn't want to
00:02:32.960 | keep grinding away at it. I could have played in the Canadian Football League, but I just
00:02:36.600 | decided to hang it up and just say, "Yeah, I'm done. Let me figure something else out
00:02:41.400 | with my life." Football is one of those things that's so intense and there's so many injuries
00:02:46.360 | as well that if you make it four years and you still are relatively injury-free, I think
00:02:51.400 | you should call it lucky. I got my school paid for. Let's move on.
00:02:55.240 | Yeah. I mean, I've seen some pro football players, so many, they retire at 26, 27. A
00:03:01.680 | couple guys or one guy left before earning his 20 million contract if he just stayed
00:03:06.520 | one more year. Is it that brutal?
00:03:10.040 | It can be.
00:03:11.040 | Or is it a mental thing? Like, what's going on?
00:03:13.240 | I mean, there are definitely the knee injuries, the shoulder injuries. I'm a little more concerned
00:03:17.240 | about the head injuries long-term. And that's something that you never know what that really
00:03:22.400 | looks like. And the science is still kind of developing on that. But I don't know. For
00:03:26.960 | me, at least, it was, there's other opportunities out there. I've played this card for a long
00:03:31.360 | time. I was interested in entrepreneurship. I actually applied to medical schools as well.
00:03:35.360 | So I was like, "I want to study abroad. I want to do some other stuff that I haven't
00:03:38.400 | been able to do yet." And so for me, it was like, "There's other options. Let me go just
00:03:42.360 | do some other stuff."
00:03:43.360 | Right, right. And if your daughters, how old are they now?
00:03:47.120 | 10 and 12.
00:03:48.120 | Okay, 10 and 12. So you've got six to eight years. What if they got Ivy League, but you
00:03:56.360 | have to pay full price, or they got into a school like Clemson on an athletic scholarship?
00:04:04.000 | How would you guide them to which path to choose?
00:04:07.920 | I am definitely more in the value camp. I see a lot of value in good public universities.
00:04:13.240 | I've had a good experience. I actually got recruited to play William & Mary as well.
00:04:17.720 | I don't know if that's your alma mater.
00:04:18.720 | Oh, really?
00:04:19.720 | Is that your alma mater?
00:04:20.720 | Yeah, yeah. That is my alma mater.
00:04:21.720 | And I think there's so many great professors. There's so many good experiences you can have
00:04:27.440 | anywhere that having a bunch of debt or having to spend a lot of money as parents on something
00:04:35.200 | that, yes, I'm sure there's some financial returns, but a big part of me, even my story
00:04:39.680 | with as a real estate investor and a small, mighty investor is working it backwards from
00:04:43.480 | the type of lifestyle you want. And I feel like going in the grind of having to pay off
00:04:47.880 | all that debt and having to get a really high paying job, as opposed to the opportunity
00:04:51.240 | I had, have no debt, I'm pretty sure I would not have become an entrepreneur at 23 years
00:04:56.120 | old if I had had a lot of debt. I probably would have gone the more traditional route
00:05:00.240 | and tried to pay it off. And maybe that would have been fine as well. There's no telling
00:05:03.920 | what would happen. But I'm pretty happy that I did that because I've really enjoyed the
00:05:08.280 | flexibility and the entrepreneurship lifestyle. And I feel like debt is such a saddle for
00:05:15.080 | a lot of people. It's something that limits your options, especially when you're 23, 24,
00:05:19.680 | 25, that if you have an opportunity to not have to do that and still get a good education,
00:05:24.160 | I think that's where I would, if my influence mattered, if they listened to me, that's the
00:05:29.320 | counsel I would give.
00:05:30.560 | Got it. So what did you actually do right out of Clemson at 23?
00:05:35.360 | I took a break. I had this Forrest Gump moment when I was out training, thinking I was still
00:05:39.600 | going to the NFL. It was like 98 degrees in South Carolina humidity. And I got done running
00:05:45.600 | a wind sprint and I just laid down on the field and I was like, I'm done now. It was
00:05:49.160 | just like Forrest Gump. I'm done. And I called my agent right after that and said, I know
00:05:54.800 | probably there's no teams that are going to call and try to get me to play, but if they
00:05:57.800 | do, I'm done. I'm retired. And I decided to go to Europe for a little while. I went to
00:06:02.920 | Germany for a month and just did a study abroad experience. I worked a little bit painting
00:06:08.240 | houses for my dad who had some rental properties. And then I went back and took some classes
00:06:12.640 | at Clemson. I talked the athletic department into paying for some classes. So I think I
00:06:17.280 | took entomology and Spanish and philosophy of science, just some fun stuff, just because
00:06:22.960 | I didn't know what I wanted to do. But I also took a business class and I met this professor
00:06:27.040 | in this business class who's a real estate investor. And he seemed to have this really
00:06:31.000 | flexible lifestyle and he was an entrepreneur. And he just really intrigued me what he was
00:06:36.080 | doing. And I said, you know what? I think I'm going to try that for a little while.
00:06:39.800 | And I started talking to him after class and he is still to this day a mentor of mine.
00:06:44.160 | He was a private lender to help me get started. He loaned me some money. He gave me a lot
00:06:48.320 | of advice, just a friend. So you never know what's going to happen when you take a class
00:06:53.280 | at a university and it goes from there.
00:06:57.520 | Right. Got it. It's interesting that you had the NFL thing and then you had the moment
00:07:02.120 | and then you started on real estate. And so tell me about the book. It's a big book, 380
00:07:08.040 | plus pages. It's very thorough. It teaches everything you need to know about analyzing
00:07:12.680 | property. And one of the things that really struck out to me was this quote or this statement,
00:07:19.680 | "Own the minimum number of investments that accomplish your goals. Instead of 10x, you
00:07:24.280 | want to half x." And I thought that was really an insightful line. Can you talk about what
00:07:31.200 | that means?
00:07:32.200 | Yeah. This is a part of my experience was I went down the 10x, let's go big path because
00:07:37.480 | I was as a new entrepreneur, you're always absorbing information from different sources.
00:07:41.680 | And I went to classes and a lot of the real estate I think is more susceptible than other
00:07:45.440 | places. There's a lot of rah-rah, let's go big, you can do this, buy a lot of properties.
00:07:51.680 | And I got taken up into that a little bit my first few years. And I have a business
00:07:57.240 | partner by the way. So we're 50/50 business partners and the two of us got started buying
00:08:01.200 | properties and we started flipping a lot of houses. That was our business model early
00:08:04.480 | on. And it seemed to be the logic was if that's working, if you can make $20,000 or $30,000
00:08:10.840 | per flip, why not do 10 of those or 20 of those or 30 of those? And so we as new investors
00:08:16.640 | were like, "Okay, I think we can do that." And so we just started turning the volume
00:08:19.920 | up. But the problem was, we actually did that, we did pretty well. But the problem was 2007,
00:08:26.040 | we had 33 properties that we bought in one year.
00:08:28.840 | In 2007?
00:08:29.840 | In 2007.
00:08:30.840 | That's tough, man.
00:08:31.840 | The storm clouds are brewing. And so not only do we have a tough economy ahead of us, and
00:08:37.040 | we kind of saw that, I didn't predict it, I didn't see it coming, but you could feel
00:08:40.400 | it as it happened. But then we also had this moment, my business partner more than me,
00:08:44.880 | I think, where he's like, "What are we actually investing in real estate for? What
00:08:48.200 | are we trying to accomplish?" And the business model we're going now, you have to hire employees,
00:08:52.880 | you have to spend a bunch of money on marketing, there's a lot of overhead. And so we had
00:08:56.560 | sort of this realization that, "Wait a minute, there's an alternative path. We could just
00:09:00.160 | kind of keep this business smaller, simpler, grow a little bit slower, have less risk."
00:09:06.800 | And still, for me, I made a list of things I wanted to do. And I wanted to do things
00:09:10.120 | like hiking in the middle of the day, playing basketball for two hours, pick up basketball
00:09:13.880 | is one of my favorite things to do. I wasn't married yet, but I wanted to have a family,
00:09:17.400 | I wanted to get married, have kids, I wanted to spend time with my kids and be present.
00:09:21.480 | So when I looked at all those things, money was definitely a factor, but it was more about
00:09:25.720 | time and mobility and flexibility. Those were the currencies that really mattered the most
00:09:30.640 | for the things I wanted to do. And so our idea at that point was, "How about build a
00:09:35.680 | business model, a real estate investing model that focuses on working backwards from that
00:09:39.760 | lifestyle first?" And it turns out that sometimes keeping it smaller, simpler, accomplishes
00:09:44.560 | that lower risk, it accomplishes a simplicity, it allows you to move a little bit slower,
00:09:49.480 | and yet it still can accomplish all of your goals if you want. That's the mighty part,
00:09:53.280 | small and mighty. I don't think you have to compromise your ambitions. You might have
00:09:57.400 | to delay it a little bit. You might have to maybe not be quite as aggressive as other
00:10:01.320 | people who are maximizing their leverage. But in the end, the tortoise is still beating
00:10:05.880 | the hare, I find, and I think it's a good approach.
00:10:09.480 | Well, tell us about the 30 properties you bought in 2007, though. What happened to that?
00:10:14.000 | Because I remember that was a very, very painful time for the next five years or four years.
00:10:18.720 | I would say 90% of the deals we did were good. We flipped a lot of houses. I remember our
00:10:24.280 | best flip, we made $65,000 on one flip. So that was nice. We had other properties that
00:10:30.440 | were rental properties, a couple of multifamily properties that had good cash flow. I got
00:10:35.880 | a lot of properties with seller financing and private financing. So I wasn't susceptible
00:10:39.620 | as much to the bank lending issues and the commercial loans like a lot of people were.
00:10:44.200 | But then we had about 5% or 10% of our properties that because we were going so fast, because
00:10:48.600 | we were just being lazy or sloppy or whatever you want to say, we bought in the wrong locations.
00:10:53.800 | We underestimated repair costs. And so there was enough of a problem there that we had
00:10:58.600 | to like screech the brakes. We had to feed those properties using a lot of the cash we
00:11:02.560 | had made for the last two or three years. So luckily, we didn't spend much money. We
00:11:05.680 | set all that money aside, most of it. And I lived very, very lean anyway. But we needed
00:11:10.920 | it. We didn't make any profits for the next couple of years. If we made some profits,
00:11:14.600 | we spent it fixing up properties, negative cash flow. But I would say by 2009 or end
00:11:21.240 | of 2009, we were convinced that we're okay. We're fine. We're not going to have to. And
00:11:25.880 | then we started, the good thing was on the other side of that, of course, was a ton.
00:11:29.920 | There are a lot of good deals. And so any real estate investors still standing at that
00:11:34.440 | point who still had access to money, which we did, because we had a lot of private lenders,
00:11:38.440 | we still had a couple banking relationships, we were able to scoop up some of the best
00:11:41.840 | deals ever for the next five, six years. Like it didn't stop in 2010. I mean, some of the
00:11:47.680 | best deals we bought were in 2015, 16, even after the recession.
00:11:52.920 | What would you, if you have a percentage breakdown between properties that you own for cash flow
00:11:59.840 | and properties you own to remodel and flip? What's the target percentage breakdown now?
00:12:06.760 | And what's the portfolio breakdown now?
00:12:08.720 | 0% flips now. We don't do any flips. I live in Spain right now. So we've been here for
00:12:14.040 | the last 12 months. And we really transitioned more into the buy and hold model. But for
00:12:19.040 | us, the flips were just a substitute for people like you working your investment banking job
00:12:24.000 | or your Wall Street job or somebody who's a doctor and they're working that job or somebody
00:12:28.080 | who's a teacher. It was just the way we paid the bills. And so starting off, it was 100%
00:12:33.640 | flips for the first two years. And then starting about 2004, maybe a year and a half then,
00:12:40.200 | we bought one rental property, but we did it very creatively with a smaller down payment
00:12:43.680 | and seller financing. So we really had to be very scrappy in order to be able to, because
00:12:48.480 | we weren't very bankable. For us as an entrepreneur to go into a bank and say, "I'd like to borrow
00:12:52.520 | money, 30 year fixed money." They're like, "You're basically unemployed as far as we're
00:12:58.840 | concerned. So forget that." So we had to start a little slower on the rental process, which
00:13:04.160 | was fine because we weren't ready yet. For us to go buy a bunch of rentals without cash
00:13:07.800 | reserves, without the backing was not a smart move anyway. So it kind of flipped from 100%
00:13:14.040 | flips to 90% flips to by the time we got to 2009, 10, which was about five, six years
00:13:20.080 | after we started, I would say we probably did 10 or 20% flips, 80, 90% rentals. And
00:13:27.440 | now it's 100% rentals.
00:13:29.160 | And how big is your portfolio now?
00:13:31.880 | We have 33 properties, but then out of those properties, we have some multi-unit properties.
00:13:36.920 | So it's 100 units total and I have a 50/50 partner. So I kind of look at my version of
00:13:41.800 | the portfolio is like 16, 17 properties and 50 units. So I'm kind of on the bigger side
00:13:47.360 | of small and mighty. I've also been doing this full time. So this has been my career
00:13:53.560 | and this is how we paid the bills. And the thing I've realized though is that I could
00:13:58.120 | have in 2009 when we started making those switches and this transitioning, we could
00:14:02.800 | have gone the path of trying to grow out of this. Like, all right, let's just get bigger.
00:14:06.520 | Let's manage more properties. And even at the size we were, we started coasting and
00:14:11.560 | we'd sell some, we'd buy some, we'd sell some, we'd buy some. We haven't tried to significantly
00:14:16.760 | change our portfolio, especially the last five, six years. We've kind of kept it where
00:14:20.320 | we are and reinvested the capital into paying off debt, into doing other ways to restructure
00:14:26.240 | our capital instead of just buying more properties, buying more properties.
00:14:31.560 | And given you have a partner, did you set up a LLC?
00:14:34.240 | Yes. Yeah. So we just had hired an attorney to help us do it and set up a simple LLC.
00:14:41.120 | And we're literally like, we're both the managers, we're both the 50% owners. We didn't really
00:14:46.680 | know what we were doing, I'll be honest, when we first started. And a lot of people ask
00:14:50.200 | me about how do you, partnerships don't usually work, they usually fall out. And part of that
00:14:54.720 | was just luck. But I think the part that worked out was this was a friend of mine first and
00:15:00.960 | we went to seminars together, to classes together. We also divided up the tasks. So when we first
00:15:06.960 | started, I was the acquisitions person. I was the person who talked to private lenders
00:15:10.280 | and banks. He was the one who managed the remodel and then got it sold or rented out.
00:15:15.160 | And so we got literally like split the business in two. And over the years that's changed.
00:15:20.120 | He's got a tech company, he's got an internet business. So over the years, he's kind of
00:15:23.400 | spent a lot of time on that, which has been good because that business has made a lot
00:15:26.280 | of money as well. And we've looked at it as like interchangeable parts. At some points,
00:15:32.080 | I'm the person doing a lot of the work, other times he's doing the work, but it was very
00:15:35.080 | clear whose roles and responsibilities were what, how we're getting paid. And so I think
00:15:39.800 | that clear communication and then just having some similar goals that both of us wanted
00:15:44.320 | not to go and keep on growing and keep on syndicating and doing all that. We had pretty
00:15:49.280 | similar goals on what we were trying to accomplish.
00:15:51.760 | Got it. So in terms of capital raising, what's the source of your capital now in terms of
00:15:57.840 | buying a new property?
00:16:00.280 | Either a private loan, which just means going to an individual who's made us loans before
00:16:05.560 | and they either have the money in the bank, just they just have cash money, or they have
00:16:09.000 | a self-directed retirement account. It's been a really common tool we've used. So maybe
00:16:13.720 | they have a million bucks in the retirement account, but they only want 500,000 in the
00:16:18.680 | stock market. They want to have some exposure to real estate as well, but they don't want
00:16:22.000 | to do all the rental work or they don't want to own a rental in their retirement account
00:16:25.000 | for whatever reason. So they'll just make a loan to us. And originally that loan was
00:16:28.360 | a 10% interest loan when we were flipping houses. And so it's like a hard money loan
00:16:32.920 | basically. But as we grew and as we hit the recession, we went back to our private lenders
00:16:37.240 | and said, "We're going to pay all your loans off because we can't afford to pay 10% interest
00:16:41.240 | or we can just start paying you 6% interest and we'd be happy doing that. We can cash
00:16:46.000 | flow it at that interest rate." And we had two or three of them switch to that. And so
00:16:50.320 | we've been paying them 6% interest for years. So it's either that or we use our own cash
00:16:56.440 | these days just to pay cash for it.
00:16:59.120 | Got it. It is interesting now in this higher interest rate environment, I mean, it looks
00:17:03.280 | like inflation definitely has rolled over 3% CPI in June, 2023. How do you see the lending
00:17:11.440 | environment now and how do you see it going forward over the next 12 to 24 months?
00:17:16.320 | The thing I've noticed is that the lending goes in cycles. And I like to study the history
00:17:20.960 | of real estate investing. And if you look at people who invested in the '70s and early
00:17:24.640 | '80s, this is nothing. This whole interest rate change is pretty similar, especially
00:17:29.400 | in the early '80s where Volcker raised interest rates a lot. And the common theme I heard
00:17:34.600 | studying that time in the market was people had to get creative with how they got their
00:17:39.120 | financing. It wasn't just, "Let's go to the bank, let's plop down 20% and let's make it
00:17:44.040 | work." You either had to put a lot more money down or you had to maybe get a lease option
00:17:49.400 | or do a partnership with somebody or get seller financing. That was much more common in the
00:17:55.200 | past, I think, because interest rates were so high. If you got an FHA loan in, I might
00:18:00.680 | get the year wrong, I think it was 1984 or so, your interest rate might have been 16%,
00:18:05.520 | 18%. I can't remember the exact numbers. And if you had somebody with an existing loan
00:18:09.360 | or somebody who owned a property free and clear and they were willing to loan their
00:18:12.760 | finance to the property at 12%, that's a 4% spread from the market rates. And so similar
00:18:20.320 | to today, if you can find a private lender who's sitting on some money and some cash
00:18:25.000 | in the bank, and maybe they're making 4% in a CD or a treasury, but they'd like to get
00:18:29.440 | a little bit more and still be in a safe investment that they understand, offering them a first
00:18:35.440 | position mortgage on a property that's worth 500,000 and they loan you 300,000 and you
00:18:41.280 | pay them 6% interest. I mean, there are people out there who will say yes to that. That's
00:18:46.280 | not an unreasonable proposition. Yeah. It is interesting. So it seems like part
00:18:52.240 | of the activity is finding the source of capital and that keeps on going. It's not just investing.
00:18:58.560 | You got to find that source of capital. Yeah. And part of that is just networking
00:19:02.160 | with other investors. Like the best private lenders I found were former real estate investors
00:19:06.120 | who just got lazy and who just didn't want to go out and do the deals themselves. And
00:19:09.680 | so there's a double benefit there when you're a new investor or you're new to a market by
00:19:15.080 | borrowing money from somebody who knows what they're doing. They don't want to lose their
00:19:18.080 | money and so it's very beneficial because I would show the deal to my private lender
00:19:22.280 | and they would be like, "Nope, I'm not doing that one." I'm like, "Why not? Why wouldn't
00:19:25.960 | you do that deal?" And so then I would get an education from these people who have a
00:19:28.880 | lot more money than I do. And I find that to be very helpful is to surround yourself
00:19:34.060 | by other people who have skin in the game and actually be willing to listen, be humble
00:19:37.880 | enough to say, "Hey, this person actually knows more than me because they've been investing
00:19:41.620 | for a long time," or they just have a concern that's legitimate, maybe I should listen to
00:19:45.760 | that. And so that was my original strategy. And then I sort of expanded that toolbox to
00:19:51.640 | also start talking to sellers. I think getting seller financing some form or fashion is a
00:19:57.440 | lot harder to negotiate. It's not something that if you go on the MLS and make an offer
00:20:01.080 | on the MLS, it's not very common that a real estate agent is going to help you negotiate
00:20:04.880 | that. And so typically you got to go directly to the seller. Typically you got to kind of
00:20:08.800 | filter out which properties you look at. I like to find properties that a landlord has
00:20:12.600 | owned for 20 or 30 years because they have a higher likelihood of having equity in the
00:20:16.320 | property because the property's gone up in value. They paid the loan down in many cases.
00:20:20.460 | And so you have a lot more options when you're sitting directly with that landlord and they
00:20:24.320 | might want to exit the property management business. And so by you managing the property
00:20:28.080 | for them by buying it and continuing to get them a cash flow over the next five, 10, 15
00:20:34.760 | years, it's not an easy negotiation because you got to build some trust with them. But
00:20:37.680 | I found those to be some of the best deals in the end because I now have a relationship
00:20:42.240 | with that person. They now probably have another property or they're willing to loan me more
00:20:45.560 | money. And so you don't need many of those. You could just get two or three of those relationships
00:20:49.320 | and that could set you up for the rest of your deals that you have.
00:20:53.440 | Yeah. Oh, that's interesting. Yeah, relationships sounds like it really drives a lot of capital
00:20:58.260 | sourcing and a lot of deal flow. You have this great formula and it talks about the
00:21:05.040 | numbers in terms of seeing a hundred deals, viewing a hundred deals and then making. Can
00:21:11.400 | you talk about that count from a hundred down to that one offer?
00:21:15.480 | Yeah. So it's for anybody who's been in sales, buying acquisitions of real estate properties,
00:21:21.440 | real estate investments is a lot like any kind of sales funnel. So a sales funnel means
00:21:25.380 | if you were trying to sell your product, you've got to talk to maybe a hundred people who
00:21:29.460 | are potential prospects and you've got to filter them and say, all right, maybe 20 of
00:21:34.520 | those people actually meet the criteria of somebody who would be a good fit for this
00:21:38.640 | product. And then out of those 20 people, you talk to them and maybe one or two of them
00:21:43.960 | are willing to talk to you and receive an offer. Now those one or two you make an offer
00:21:48.560 | to maybe, you know, maybe you make four offers and maybe one of them accepts your offer.
00:21:53.280 | So out of a hundred people, you get down to four. And that's, that has been my experience
00:21:57.980 | in the real estate game. Not necessarily the exact same numbers, but every time I've talked
00:22:01.680 | to a new investor who's like, ah, I can't ever find any deals. There's no deals out
00:22:04.800 | there. My answer is always like, well, how many offers have you made in the last month?
00:22:09.040 | And they're usually like one. So I said, you got rejected on offer on one offer you made
00:22:14.440 | one of one and you're telling me there's no deals in your market. Like come back to me
00:22:17.860 | when you've made 10 offers and then we'll, we'll see how it works.
00:22:22.240 | I think this is really smart going, thinking about a funnel top of the funnel is wide and
00:22:26.680 | it goes down to find that one deal. And I've read books about creativity and how it's not
00:22:32.440 | just, Oh, you just think about it. It's like you kind of work on many, many prototypes
00:22:36.800 | before you find that one amazing thing. So it's just like the Dyson vacuum cleaner. It
00:22:41.640 | was like 3,500 little shifts. And so that, that, that's a really very important thing
00:22:48.000 | for investors, real estate investors to think about now in terms of just kind of managing
00:22:53.340 | the properties. Cause I, I feel like I'm a small, mighty investor because I have, I think
00:22:57.600 | I forget now like three in San Francisco, one Tahoe and then Hawaii. I can't manage
00:23:02.920 | more than really ideally three or four in San Francisco. And also I've, I've hit my
00:23:08.280 | limit in terms of how much property tax I want to pay because that's just ongoing and
00:23:12.960 | it bums me out twice a year when I got to pay that. How do you view, you know, property
00:23:17.920 | taxes and do you have kind of like this mental hurdle limit and how do you, do you have,
00:23:23.040 | I guess, property managers to manage and do you have problems managing your property manager?
00:23:28.360 | Yes, I'll tackle the property management part of things first. And for me, just the end
00:23:33.920 | result is that like living in Spain this year, for example, I've tracked it because some
00:23:38.000 | people didn't believe me when I told him before, but I typically spend on average about two
00:23:40.940 | hours per week managing my, my rental properties. Now, that being said, I used to spend 60 hours
00:23:46.820 | per week building this portfolio. So I don't want people to get the impression that this
00:23:49.760 | is like a real estate starts off like a, like a startup, startup company with a lot
00:23:54.200 | of work. It ends up more like, I think it can end up like a blue chip stock. Like I
00:23:57.880 | think there is that transition point. But for me, the way I was able to get it down
00:24:01.600 | to two hours per week were, were team and systems, team and systems. So like team is
00:24:07.040 | I have property managers and in particular, like I have different properties within my
00:24:11.440 | portfolio, but I have student rental properties and student rental properties are much more
00:24:15.720 | time intensive because the average, average time that a student stays is probably a year
00:24:19.480 | and a half on, you know, some people say a year, some people say two years, every once
00:24:22.440 | a while you get lucky and get a English PhD student who stays seven years, but like that's
00:24:27.040 | about, that's about the best you got. Right. So on average, you're always leasing properties.
00:24:32.360 | So I used to do that myself. I learned how to do it, but it's much more time intensive.
00:24:36.280 | So we hire property managers. I have two different property managers who we kind of split it
00:24:40.320 | up between them and they do a great job. They have people who are constantly working on
00:24:44.680 | that and I get texts from them. So I give them $500 per month or $500 per transaction
00:24:50.080 | that if they have a problem that costs $500 or less to fix, they have my authorization
00:24:54.040 | to go ahead and do it. Don't call me. I'll look at it on the, I'll look at the report
00:24:57.440 | later. I'll, I'll see it. But if it's over 500 bucks of our refrigerator costs, 900 bucks,
00:25:01.800 | then they'll text me and it's usually it's a quick response. I'd yep. Go for it. Thanks
00:25:05.520 | for asking. Thanks for getting a quote. Let's do it. And they'll go and procure their refrigerator.
00:25:10.760 | They do it all. Yeah, they do it all. Yeah. And how much do they make? I guess they make
00:25:16.120 | a, in my case, a 10% a fee of the collected rent for per year. So if you have, if you
00:25:24.760 | have $10,000 in rent collected that month, they make a thousand dollars. And if you were
00:25:29.920 | a hundred percent vacant, they wouldn't make any money. So there's an incentive for them
00:25:32.480 | to keep the properties full. But there, but so I find it to be pretty closely aligned.
00:25:38.040 | I think my interest in the property manager's interest, they, sometimes you have to push
00:25:41.760 | back a little bit on expenses. Like if they say, Oh, well let's just do that. Cause it's
00:25:44.960 | simple. And that's the contractor who we told first. I might have to some, some, sometimes
00:25:48.480 | say, Hey, let's get another quote. That seems pretty high. I think it would be good for
00:25:51.280 | a dreaded for 700 bucks. Let's, let's do that. But, but that doesn't take much time. I mean,
00:25:55.560 | I've been able to do that pretty easily. That's, that's, that's the 10 to 20 minutes per week.
00:25:59.680 | And the worst case scenario, I had a septic tank that went out this year and that's, that's
00:26:03.080 | awful for everybody. Right. The tenant, first of all, has to deal with that at the house
00:26:06.480 | they're living in and septic tanks for all those who live in big cities or when you don't
00:26:10.080 | have a sewer system and you're living outside the city sewer system, you have your own sewer
00:26:14.360 | system in the backyard and they break and they have problems. I don't recommend them
00:26:18.240 | for rental properties, but we happen to have a couple that have them. And so we had to
00:26:22.000 | deal with that as a much bigger, um, much bigger bill to fix it. I think it was ended
00:26:26.320 | up being eight or 10,000 bucks and we had, it took a while and the tenant was upset.
00:26:31.520 | So I mean, there's, there's some problems like that. But again, my property manager
00:26:34.800 | is the one who is on the front line. I'm the one communicating with them. And most of the
00:26:39.280 | time, most of my time is spent actually doing bookkeeping and just looking at the reports
00:26:43.200 | and just focusing on the numbers and what's going on. And to get to that point though,
00:26:48.760 | first I had to find, find a good property manager, have a good relationship with them,
00:26:52.560 | train them, train each other a little bit to expectations and then also building systems.
00:26:57.040 | So I still, I still manage process. I still manage a few properties myself from Spain
00:27:01.560 | from where I am. But in those cases, those are my single family houses with longterm
00:27:05.880 | tenants and sometimes I'll empower them if they want, they cut the grass themselves.
00:27:10.240 | For example, part of the lease, they, if there's a big problem, I'll say, Hey, if you have
00:27:14.560 | a heating and air goes out, here's the, here's my go to contractor. Just call them. Don't,
00:27:18.560 | don't worry about trying to crack me down. Just call them. I trust them. They'll go out
00:27:22.240 | and fix it. And so there's, you know, there's a vast difference between a student rental
00:27:28.120 | apartment and Airbnb managing that with a long, a longterm rental and a single family
00:27:34.120 | house. I find that to be a much different property management proposition. So for somebody
00:27:38.920 | who had, I mean, I know in your case, I'm not sure how often they turn over, but from
00:27:43.320 | a management standpoint, it's, um, that those would be more, more of my lower, lower management,
00:27:49.640 | single family house type. Is it lower management but lower returns the
00:27:54.040 | single family? Cause I'm just, I've yeah. Single family and then a condo. It's basically
00:27:58.560 | that for me. Yeah. The cashflow is always going to be lower as a percentage of the value.
00:28:02.600 | That's, that's the game with single family houses is that they're like a, you know, a
00:28:06.640 | quality dividend stock that's going to get like a, you know, 1% dividend or zero dividend,
00:28:11.200 | but they're going to be tend to be the ones that grow over time. And so the game with
00:28:15.480 | single family houses has been, let's buy them. You're not gonna make much cashflow for the
00:28:19.520 | first three to five years, but the, but the rents are going to grow, the value is going
00:28:23.560 | to grow. And in some cases I might sell that property and use that as like a chess piece
00:28:27.840 | to buy another property or to pay off another property. Or in some cases, like I have some
00:28:31.560 | keeper properties that I don't ever want to sell, or at least not for a while. And because
00:28:35.240 | they're, because they're low maintenance, because they're in a great location, because
00:28:37.800 | I get seven applications every time I rent it. So you can sort of pick and choose. I
00:28:41.720 | got, I've, we basically called the herd. We've sold off some of the properties that were
00:28:44.920 | the least desirable, highest maintenance, highest issues with tenants. And we've kept
00:28:49.680 | the ones that were easiest. And, but, but we strategically use the ones that we didn't
00:28:53.520 | keep to sell them either to do a 1031 exchange and buy another one. Or in some cases we just
00:28:58.040 | bit the bullet and paid the taxes in this and use that to pay off debt on, on other
00:29:02.680 | properties.
00:29:03.680 | Is there, um, I guess it's, it's a people business. And so do you have any kind of tips
00:29:09.880 | or red flags in terms of finding a great property manager and also finding great tenants? Are
00:29:16.000 | there just some common red flags that people overlook that they shouldn't?
00:29:21.000 | Uh, well, with tenants are a little simpler in that I would say you just got to have some
00:29:25.160 | written criteria and you got to stick to them. And there's so many reasons to do that. There's
00:29:30.600 | one fair housing laws say that you're supposed to have just objective financial criteria
00:29:35.800 | and you don't even want to try to go there of trying to be, Oh, this, I have a gut gut
00:29:40.120 | feeling. This person's a, seems like a good tenant. You just don't want to do that. You
00:29:43.000 | want to have objective criteria, but it also makes sense from a business standpoint because
00:29:47.560 | I, when I was a new, a new landlord, a lot of my biggest problems were when I had those
00:29:52.280 | kind of those edge cases where I was like, Oh, it seems like a nice person. You don't
00:29:56.000 | have to try to have a big heart, you know, man, but it seems like a good situation. But
00:30:00.600 | if you, if you would have just looked at their debt to income ratio, or if you just want
00:30:03.800 | to look at their credit score, it would have told you they don't qualify. Like it's just,
00:30:08.160 | just a hard line right there. And I have found, you know, maybe you miss a couple opportunities
00:30:12.600 | here and there where people who could have done it, but, but you also miss the 95% of
00:30:18.040 | the cases where they probably would have created a problem at some point. There's a reason
00:30:23.080 | there's typically a reason there. And so we've just, we've given our property managers, here's
00:30:26.920 | our criteria, credit score and debt to income ratio, amount of income. And we've had far
00:30:33.440 | that not to say we have zero problems, but we've had far fewer problems by doing that.
00:30:38.960 | And so that's the tenant side property manager side. It's like, it's like hiring any team
00:30:42.600 | member team member. And I look at go back to football, the sports is some of the best
00:30:46.800 | football coaches. They, they see themselves in the, in the people development business.
00:30:52.200 | They're in the business of, of recruiting. They recruit like when you're a college football
00:30:56.320 | coach, your number one job is recruiting. And so I see myself as a, as a owner of a
00:31:00.920 | business of picking not just any old property manager, I pick the best, like go to the ones
00:31:06.720 | who have some kind of quality that you identify as like, wow, they're really, they're like
00:31:10.840 | 1% they're on the ball. And so in my case, I have two different kinds of property managers.
00:31:15.600 | One's a bigger has a bigger operations, a lot of systems. They have hundreds of properties.
00:31:19.640 | I have another property manager who is kind of a boutique property manager and they have
00:31:23.480 | zero overhead. They have no office. They're working remotely. I love that. Like, I think
00:31:27.240 | that's really scrappy. And they, they, they kind of, they're kind of like me. They like
00:31:30.480 | to just kind of work from home and do that and they make it work with technology. And
00:31:34.120 | so both of them do it in different ways. But I identified in both cases that, Hey, these,
00:31:39.720 | just watching them before I even hired them, like, all right, they're the ones who are
00:31:42.240 | kind of rising to the top of my idea, my mind, studying them, talking to them, talking to
00:31:46.760 | their, their clients. I was very slow to move to them. And when we did, it was a very deliberate
00:31:52.680 | decision to hire those people.
00:31:55.000 | And definitely it's improved the quality of your life much more.
00:31:58.200 | Oh, it's, it's night and day. Like I, this is not the first time we've lived abroad.
00:32:02.440 | We lived abroad in Ecuador and my property manager, they remodeled properties for us
00:32:06.520 | while we were in Ecuador. They sent me, they handled it. They charged a fee for that, which
00:32:10.520 | they should by man, by doing a bigger project. But I'm telling you, it's when you get the
00:32:14.680 | right team members, it's not just like twice as good. It's like 10 times, a hundred times
00:32:19.000 | better having quality people. And sometimes you got to go through some, some tough ones
00:32:24.840 | or some make some mistakes, learning who the good person is and who they aren't. But I
00:32:28.760 | think, finding that person, how do you do that is by talking to referrals, talking to
00:32:34.520 | other clients, talking to other, other owners. And then just, you know, like I believe that
00:32:38.840 | most people have a good gut feeling on, on the character of the person. Like, I think
00:32:43.400 | if you, if you study their character, are they looking you in the eye? Are they kind
00:32:46.440 | of, are they too fast for you? Are they talking too fast? Like there's just some of those
00:32:49.960 | things that we've learned over hundreds of thousands of years of evolution or whatever,
00:32:53.720 | you know, like, you just, you just sort of know whether they're the person who's going
00:32:56.920 | to, who's shooting you straight or not.
00:32:58.120 | Got it. I got, I got a question for you because I have this one tenant that I brought in last
00:33:03.800 | year. They have family, it's a good tenant, great tenant, like ideal tenant, I think.
00:33:09.400 | But I feel like she has contacted me more than she should. And then my problem is I'm
00:33:16.240 | always quick to respond. And I create this, you know, this mechanism where, oh, my, my,
00:33:23.600 | so she asked me, for example, oh, can you bring in my garbage bins? Because we don't,
00:33:29.520 | we're gone for a month and a half. And I was thinking to myself, you say you have a housekeeper
00:33:35.120 | who's comes every couple weeks, why don't you just ask her? But it's like that close
00:33:39.680 | and open of a relationship. Like how, what, what would you recommend? And then she says
00:33:44.120 | like, oh, do you mind cutting the trimming the bushes or whatever? Because, you know,
00:33:49.440 | it doesn't look good. But in the lease, it talks about them maintaining. What kind of,
00:33:56.480 | how would you recommend I get out of this situation? Because I'm like a nice responsive
00:34:00.000 | guy, but I'm like, man, I think I have to slow my response times or something.
00:34:03.520 | Yeah, I probably, I probably struggle with the same thing, Sam. Like, this is where having
00:34:08.200 | a business partner is good. Like my business partner is also a nice person, but he's a
00:34:11.520 | little bit more like, no, it's in the lease. Like, sorry. So, so, so maybe it's, maybe
00:34:17.640 | it's like have your, your, your silent business partner behind the scenes who says, you know
00:34:22.240 | what? We can't, if we did that every single time, it would just, I'd have to drive across
00:34:26.520 | town, like find some excuse. But like, I don't know, like I find that like, I learned a lot
00:34:32.200 | from kindergarten teachers and first grade teachers and second grade teachers and how
00:34:35.360 | they set the expectations. You know, like when a kid goes into class the first day,
00:34:39.240 | it's like, they seem a little bit mean almost. The kids are like, Oh man, like this teacher
00:34:43.560 | is serious. That mean teacher on the first day is almost always the best teacher. Then
00:34:49.680 | everybody loves that teacher. They're so amazing. And I find that to be very similar with landlording.
00:34:55.800 | I've had to learn this the hard way as well. That if you, if you're, if you push the rules
00:35:00.720 | a little bit harder upfront and say, Hey, this is what, this is not the rule. This is
00:35:03.520 | what we do. And they kind of learn their lesson like the first graders, second graders do.
00:35:08.680 | And then your life's a little bit easier after that.
00:35:10.280 | Yeah. I mean, it's interesting. She says, do you mind, you know, planting some succulents?
00:35:15.080 | So actually what I did was I went above and beyond over the past month and I went to the
00:35:19.240 | landscape score. I, you know, I got 20 bags of mulch. I planted 70 pounds of succulents.
00:35:26.920 | I mean, it looks good now, but I decided to do that as a teachable moment with my son
00:35:31.440 | to get him, get his hands dirty and do the work and to see what it entails. But the problem
00:35:36.560 | is she's going to come back from like, like a dingy yard. She didn't maintain herself
00:35:40.960 | to this. I think it's like a $5,000 landscape job. And then I'm like, Oh my God, what is
00:35:46.480 | she going to expect from me going forward? You know, like it's almost like she's lonely
00:35:50.280 | and it's like, she just wants to talk.
00:35:52.080 | I know. Well, the problem with owning rentals directly is that they, you have, it's easy
00:35:57.040 | to have this temptation to, to just get involved. And I think one of the benefits I've had is
00:36:01.400 | that I am very not handy.
00:36:03.000 | Like you're not, you're not there.
00:36:04.320 | I'm not there. I'm in another country, first of all. And then second of all, even when
00:36:08.160 | I'm there, I'm like, Hey, I'm not good at any of that stuff. Like fixing that toilet.
00:36:11.200 | I can't do it. You call the plumber. So I've just written checks. I've written checks.
00:36:15.360 | Even when stuff I could learn how to do, I've just said, you know what? I just can't do
00:36:18.400 | that. I don't, I'm not, I'm not competent to do that. That's not, you know, that's technically
00:36:22.840 | what I would tell her in that case. It's like, you're welcome to do that stuff. You're welcome
00:36:26.480 | to, I'll give you permission to add landscape into the house. That'd be great, but you're
00:36:30.040 | going to need to do it. That's, that's the deal.
00:36:32.640 | Yeah. Yeah. I'm too handy. Like I just look at you too. I'm like, you know what? I can
00:36:36.200 | do that. I'm going to save money and do that. And I don't have this pride of like, I mean,
00:36:40.040 | it's my property, so I might as well make it as nice as possible. And then you kind
00:36:42.800 | of go overboard. So to me, I think that is the value, a huge value of the property manager,
00:36:48.520 | that separation that, you know, focus on business. And this is just business, not personal, but
00:36:53.040 | that's it.
00:36:54.040 | And the money makes work makes sense to people complain about the 10% management fee. But
00:36:57.520 | like if you hired somebody and if you had a business and you hired somebody to be your
00:37:01.120 | human resources person, you wouldn't look at their salary and say, Oh gosh, I got a
00:37:04.600 | big expense there. You say, no, this is an investment. Like this is an investment to
00:37:07.640 | pay a property manager because it allows you to have life. And in your case, of course,
00:37:12.080 | you've got so many other business opportunities and you can do, and I love that you letting
00:37:15.840 | your son see you do. I think that has a ton of value beyond just money. But at the same,
00:37:20.200 | beyond that, I think it's, you've got a lot of other, other opportunities. We can make
00:37:23.400 | a lot more money than landscaping and doing any, any of the maintenance stuff, any of
00:37:27.080 | the management stuff. You, you, you've definitely got other high return on investment activities.
00:37:31.720 | It's amazing though, like scarcity mindset, because I have that scarcity mindset. I don't
00:37:35.320 | want to pay 10% for someone to do it, a job that I can do myself, especially since I'm
00:37:40.180 | in the city where I can manage the property. So that is that scarcity mentality that I've
00:37:44.480 | had that I think a lot of people do have where they don't want to spend the money because
00:37:48.480 | we're frugal and we can do it ourselves, but the returns, the upside could be huge. And
00:37:53.520 | so I'm going to follow your lead when I finally move abroad. Cause I've been talking about
00:37:58.880 | going back abroad once my kids both are over five years old and then hire a property manager.
00:38:04.040 | Cause I think that return on investment will be much higher. So talk to us about, you know,
00:38:08.880 | being 12 months in Granada, Spain.
00:38:10.720 | Yes. Southern Spain, Granada.
00:38:12.440 | I mean, that's unbel, that's amazing. It's great. And your kids are 10 and 12. How did
00:38:17.720 | you decide to do that and how did you set up a education for your girls?
00:38:22.920 | So the origin of the story goes all the way back to when I first met my wife, like our
00:38:27.360 | very first date, we talked about studying abroad or going abroad and living abroad.
00:38:30.560 | It was just a common interest we had. And my wife is a Spanish teacher. And so that
00:38:35.120 | was my pick, that was my pickup line with her. It was like, Oh, we're, we're in yoga
00:38:38.600 | class. And she's like, I teach Spanish. I'm like, I like to learn. I would like to learn
00:38:41.720 | Spanish. That sounds good to me. So that was how I got the first date. But then we decided
00:38:48.080 | before, even before we had kids, we went abroad. We've just, it's just our hobby. We love doing
00:38:51.880 | it. We've seen a lot of value in intercultural exchanges, learning new languages. It's just
00:38:56.520 | amazing. It gives you so much, so much different, a different perspective on life, humility.
00:39:02.000 | And so we wanted our kids to have that. And we did it when they were three and five by
00:39:06.560 | going to Ecuador, to Cuenca, Ecuador for 17 months. And it was just so amazing that we
00:39:12.160 | got, we came back, we have family at home and we had some reasons to come back. But
00:39:15.360 | we said the moment we came back, we're like, we got to do this again. And we thought it
00:39:19.600 | would be too late if we wait too long, you know, maybe high school starts and our kids
00:39:23.080 | are doing activities. So 10 and 12 were, they were actually 11 and, uh, 11 and nine when
00:39:28.240 | we started and we enrolled them in local Spanish schools and we got some help. There was a
00:39:32.440 | consultant who helped us find a house, set up, went and talked to the school. We've never
00:39:37.380 | done that before. Usually we just helicopter in and figure it out ourselves, but we hired
00:39:41.520 | a consultant to help us do that. And it was a great, great idea. She got us into a really
00:39:46.240 | nice local school that was as a public school and it's also very international. So there's
00:39:50.960 | a lot of expats living in the community here. And so, you know, half, over half the kids
00:39:55.720 | are Spanish speaking, but then you also have, uh, she has a friend from Norway and another
00:39:59.440 | friend from Ireland and another friend from Australia. And so there's a, it's a really
00:40:03.160 | fun experience, not only learning Spanish and having to take all your classes in Spanish,
00:40:07.680 | which is a learning growth experience, but also just seeing like, wow, there's just so
00:40:11.000 | many different people who think differently than you and do talk differently than you.
00:40:14.320 | And, uh, I don't know where that's going to lead, but I think it's a good, a good lesson
00:40:17.800 | to have in their life.
00:40:19.200 | Absolutely. I think it's only, I think 60%? No, I forgot what the number of percentage
00:40:25.480 | of Americans own passport is, but it's not, it's not very high. And I hope if more people
00:40:30.360 | can travel and see the world and learn another language, there'll be more harmony and peace
00:40:33.820 | in the world. What do you think is the ideal age to start traveling abroad with your children
00:40:39.840 | where they'll really appreciate their travels?
00:40:43.280 | I think after three, our youngest daughter was three when we went to Ecuador and she
00:40:46.480 | doesn't remember right at the beginning of the trip, but she remembers the end. So I
00:40:50.320 | think, you know, three is I think when you start getting some pretty good, some decent
00:40:53.440 | memories of things and it's from a language learning standpoint, three to five is really,
00:40:58.960 | is, has a lot of good, interesting studies about fluency and ability to speak without
00:41:02.760 | an accent by learning it earlier. I think that's just the brain neuro neuroplasticity
00:41:07.260 | and the tongue. I don't know what all the details of how that works, but my younger
00:41:11.300 | daughter, when we left Ecuador would correct me all the time. I would speak Spanish and
00:41:15.160 | say, yeah, and she's like, and then she would like correct my, correct my Spanish and wag
00:41:21.060 | her finger at me. And I love that. Like I love being corrected by my kids and talking
00:41:25.240 | about my accent. And so that, I think that that age is great. Three, four, five, but
00:41:29.880 | all, but if that's too early, elementary school is wonderful too, because it's just a great,
00:41:34.880 | you can meet so many people by being a family living abroad. We've had that connection with
00:41:38.880 | people here that maybe you wouldn't if you were just going on your own. It's often hard
00:41:43.120 | to break into communities, but when you're an expat or when you're living somewhere for
00:41:46.880 | a shorter period of time and for us being in a part of the school community was our
00:41:51.240 | first community, it was wonderful to meet other parents and to have activities that
00:41:55.120 | just made the experience so much, so much richer.
00:41:57.720 | Yeah. And, and you say you've, you've been there for a year now. Yes. And why are you
00:42:02.600 | coming back? Well, we've asked ourself that question because we're, we're kind of, we're
00:42:07.800 | having mixed feelings. Part of it is again, family, like we have some roots in our community
00:42:12.240 | in Clemson, South Carolina. Part of it, our family lives, my parents live nearby, my brother
00:42:16.440 | lives nearby. And so we just, we miss that. The other part of it is we, we've always kind
00:42:21.440 | of felt torn when we live abroad. We don't feel like we a hundred percent fit in. We're
00:42:24.800 | like, all right, we're kind of like, we'd like to contribute to a community. We'd like
00:42:27.280 | to have some roots here. And so, but then when we go back, we also feel like, oh, we're
00:42:30.920 | the, we love to travel. We like to go places, but we, but we have, we've, we've gotten very
00:42:35.320 | involved in our community in Clemson, South Carolina, beyond just the real estate. Like
00:42:38.480 | I volunteered and we started, uh, one of the problems I saw in our community, like a lot
00:42:42.520 | of us places is the, we're in a small, small town, but you can't walk anywhere. Like I
00:42:47.360 | would push my kids in a stroller and almost get run over by a truck. Just go into the
00:42:50.400 | park a quarter mile away. It's like, where, where are the sidewalks? Where are the bike
00:42:53.720 | paths? Where are the, and so I kept asking that question and all the city planners were
00:42:57.760 | like, well, no, there's some plans here, but nobody's done anything about it. And that
00:43:01.560 | frustrated me as an entrepreneur. And so back in 2015, I gathered some friends, friends
00:43:07.120 | of mine, and we all started a nonprofit called friends, friends of the green Crescent trail.
00:43:11.840 | We've been building a network of biking and walking trails. It's been a long process,
00:43:16.040 | but we raised $3 million. We've finally building the first three miles of trail this year while
00:43:20.760 | I'm in Spain. And so I think those kinds of things, just getting involved in my community
00:43:24.640 | and feeling connected to my place in Clemson has been my personal reason. One of the reasons
00:43:29.880 | I want to go back.
00:43:31.760 | Got it. It's been a great journey, Chad, and it's been great talking to you. If you could
00:43:37.400 | leave us with how new people would want to get started on your path, what's, what's kind
00:43:42.560 | of like a basic step just to get started?
00:43:45.440 | I would say just look at where you are financially. And I would say 10% of where your head should
00:43:51.080 | be is probably looking at the vision of like, this is where I want to go. Here's my financial
00:43:54.200 | independence goals. I want to eventually own assets that produce 120,000 a year, 240,000
00:43:59.760 | a year, like just set a big goal. Like, don't be afraid to set that goal. But then that
00:44:04.160 | where the most of the rubber meets the road is in these practical, tactical little steps.
00:44:09.360 | So if you've never bought a property before, like find it, find one technique that you
00:44:13.040 | like like house hacking or buying a turnkey rental or all the advice that you have on
00:44:18.080 | your website, Sam's great. I like just find one little technique that you can use, implement
00:44:22.760 | it. And that, that one, that one deal you do will be like a university education compared
00:44:27.500 | to even the best podcast, even the best, you know, I hope you, I hope you buy my book and
00:44:31.520 | I hope you use that as a guide. But my, my whole goal with the book is to say, here's
00:44:35.480 | a guide that fills the gap between you either thinking about getting investing or maybe
00:44:40.440 | you already being an investing and you don't know how to transition to the point where
00:44:42.960 | you live off your income. Like I want to fill that gap, but you've ultimately got to do
00:44:46.600 | it. So I would say just like getting that entrepreneurial muscle of actually taking
00:44:50.520 | action, real estate can feel scary because you're borrowing a lot of money. The prices
00:44:54.840 | seem to be really high, but if you have a longterm perspective, if you understand the
00:44:58.800 | fundamentals of what a good deal is, if you understand the fundamentals of good locations,
00:45:03.560 | then you can be sort of counterintuitive to what a lot, you can kind of go against the
00:45:07.520 | grain of a lot of the, the rah, rah, scared stuff on the news and actually just focus
00:45:12.000 | on like a tortoise light mentality. One step, one step, one step. That's my, that's my approach.
00:45:16.600 | And I think it's, it's, it serves the, the tortoise is still beating the hare and the,
00:45:21.400 | and the investing race. I really believe that. And I think it's a, that's really what the
00:45:24.760 | book's about is showing you a way to invest in real estate. That's not necessarily scaling
00:45:29.600 | and buying thousands of units. It's just, if you want to buy five properties or two
00:45:33.080 | properties and just make the most out of those two to five properties, like that's a completely
00:45:37.560 | viable strategy. And that's, that's something I want to support you in and show you how
00:45:42.560 | to do that. Yeah. Well, it's a great book. Can you let the listeners know about the deal
00:45:48.020 | you mentioned to me and where we can find your book? Yeah. So the, the, for the first
00:45:52.080 | month is available. So if you're listening to this in July after July 20th, it's available
00:45:56.040 | at bigger pockets.com forward slash small and mighty writing out the and so I'm sure
00:46:01.720 | we'll have a link to that somewhere. Perfect. And so if you use the code samurai, you can
00:46:06.680 | get 10% off. So that's, that's if you, yeah, there's, there's a lot of bonuses that go
00:46:10.960 | with the book when you get on bigger pockets. Like I have a, a bonus chapter I wrote called
00:46:15.000 | the small and mighty invest small and mighty investing in the, in a high market or at a
00:46:18.640 | high price market. So 2023, how do you adjust? How do you do that? I guess my bonuses, like
00:46:24.080 | I show my schedule, like what I'm actually doing every week for two hours and how I got
00:46:28.000 | to the point where I spent two hours on the, on, on, on my rental properties. So all of
00:46:32.160 | that you can get at the bigger pockets website, but then eventually back in August, it'll
00:46:36.120 | also be available on Amazon, on audible, all the normal places as well. Got it. That's
00:46:41.120 | awesome. You're living the life that I think I definitely would like to live once my kids
00:46:45.600 | are older. And I think many other folks and listeners would like to live it as well. So
00:46:49.880 | thanks so much coach Chad Carson and we'll see you around. It's been a pleasure, Sam.
00:46:55.680 | Thanks for having me. All right, take care. Take care.
00:46:58.360 | Yeah.
00:46:59.360 | Okay.
00:46:59.360 | [inaudible]