183: Ditching the "American Dream" & Finding Ways to Live a Wealthier Life

This is the Real estate rookie, episode 183.

Sometimes we got to be aware of, like, our biases of, like, okay, this may not be a place I may want to travel, but this is. The data proves that there's a huge demand, and so now it's changed my attitude around. Okay. Just because maybe I don't like this particular vacation rental market, it may not mean that it's in high demand. So I'm going to default to Tony. He's like the geek when it comes to software, and it's like he busts out all this, like, data, and I'm like, sold, Sold. I'm good. Okay.

My name is Ashley Kerr, and I'm here with my co host, Tony Robinson.

And welcome to the Real Estate Ricky podcast, where every week, twice a week, we give you the inspiration, information, and education you need to become a real estate investor. So, Ashley, care. What is going on?

Not much. I've dropped my crutches, so I was allowed to get rid of them. So now I'm just hobbling around crazy.

So I actually took a impromptu road trip to Florida last week, and so I had to have my crutches for about half the road trip, and then the second half I got to get rid of them. And, yeah, so it was nice progress. What about you, Tony? Yeah, what's new? How's your foot?

My foot is also healing. I took my boot off today for the first time, so we'll see how it does. But keep them busy. We're actually going to be out in your neck of the woods in like, four days or no. Yeah, yeah, shoot. Like four days. Yeah, we're going to be out in western New York in, like, four days. We just bought a bed and breakfast out there, so we're excited to check that out. And then as soon as I get back, we're actually going to be walking the Big Bear resort that we have under contract with our contractor, so we can start getting the bids together. So. And then after that, we leave to Denver for, like, three days for the Ricky Boot Camp. So I'll barely be home over the next week, but it's. It's all for a good cause.

Yeah. And actually, Tony, since we've been recording this podcast, I mean, a ton of snow has accumulated outside, so hopefully by the time you get here, it's all melted.

It's melted. Hopefully. Fingers crossed, I'll bring some good California weather with me.

Yeah. So today we have a very special guest on Tony, who is our guest today.

So today we've got none other than my partner in Alpha Geek Capital, Mr. Omid Tiranirad. So Omid's actually Sarah, my wife there, their cousins. But he's the third leg of our tripod when it comes to running Alpha Geek Capital and he just recently quit his job. So we, we kind of talk about his journey of going from, you know, he was at the same company for almost 18 years and kind of taking that leap from doing that to come full time with us in the business.

Yeah, I, I think, yeah, we touch on that for sure, him quitting his job and. But we'll also go into partnerships and how you guys have structured it, how you guys kind of started out and also what it looks like now, what are the roles and responsibilities. So if you've been thinking of getting a partner, this is a great episode to listen to as to how they structured their partnership, how they keep the lines of communication, open, alignment, everything like that that you need in a good solid partnership.

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Omid, welcome to the show. But before we really get into anything about you, tell us all the dirty details about Tony as your business partner. We want to hear it all, man.

Oh, I got so much to share, I can't wait. I don't even know where to start. So.

Omid, well, go ahead. You can start with yourself. Start from the beginning of your real estate journey. Tell us a little bit about yourself and why you even start. Decided to get into real estate.

Sure, absolutely. So I'm first generation, so my parents both came from different countries, very different backgrounds. But I think the, the common values that they had were, okay, you're going to pursue the American dream. So that was go ahead and seek out, get good grades, go to college, get a good paying job, buy a house, have some kids, retire at 65. And so fast forward as I, you know, I got my job, I got married, I bought my house. I really felt that there was like a sense of something that I was missing. And so I'd worked this corporate job at the time for 16 years. I had excelled in the job, I had moved up and at some point I decided, okay, I needed something else or what I was doing wasn't really fulfilling me. And so I started kind of looking in other places. I actually can't, you know, just like everybody else, I came across bigger pockets, started studying and somehow I came across Tony. I don't, I don't even know how this happened. Yeah, so you know, the power of social media, just like hitting a button, saying I like something with that. David Green posted and this was around the time when I was getting more serious about investing. And so.

Fast forward.

Invested in as an LP and apartment syndication on a couple deals. I mostly investing in short term rentals and quit my job. And now I'm here talking to you guys, which is bizarre. Like I would have never thought that in a million years I'd be on the show with you guys.

So can I, can I give the backstory? So, yeah. So Omid is, he's my business partner, but he's also my wife's first cousin. So me, Sarah and Omid were like the three legged horse that runs Alpha Geek Capital. And so, you know, obviously Sarah and Omi knew each other. They're family. And Sarah and I, we've been dating since we were 17. So like, you know, and I have seen each other, you know, family parties and things like that, but I wouldn't say that we were ever like super, super close before we started investing together. And what Omi you just talking about when you mentioned the social media thing is, you know, rewind to 2019. This is before I had my first deal and Omi and I were kind of in the same space. Like we were both, you know, separately educating ourselves about investing in real estate. And it was actually David Green from the OG podcast. I was on his Instagram profile. You know, he had like posted something I clicked through and you know, on Instagram it shows you followed by xyz and of the people's names was on, there was Omid. I was like, what the heck? You know, it's like I didn't know he was, he was into real estate. So we started talking, you know, and you know, finds out we're both trying to do the same thing and actually pulled it up Omid. So I pulled up the email. So on October 15, 2019 at just before 11pm, I sent Omid an email and I said, hey, like I know we have been talking about maybe doing a deal together, but I got this deal, do you want to partner on it with me? And he replied in like I don't like three minutes. And he was like, I'm in. And that was like the, you know, the start of this long relationship. But last thing, right? The funny part is that that email that I sent, that was a Shreveport house that we end up losing $30,000 on. So not the best start to the relationship. But it worked out I think really.

That like the takeaway I think with that was just more like it was really a stepping stone just to get our feet wet. And I know Tony's message is often just take action and just kind of, you won't know until you actually start kind of getting involved in some of the day to day activities. And that's really. That led us to wanting to seek out apartment syndication, to meeting, networking with a bunch of people that eventually led us to short term rentals.

Omid, how did you guys structure this partnership? And did it take a lot of negotiating or did you just say, well, well, let's do it 50, 50, because we're each going to put in half of whatever that half is, money, energy. And did you have roles and responsibilities defined, kind of go through what that structure looked like in the beginning? And also have you made changes to that since then?

Yeah, that's a, that's a great question. So I think we just kind of went in there blindly to a degree. Right. So it was, you know, I think sometimes I am just expecting, I don't say spontaneous, but I just have an idea and I don't know necessarily how I'm going to do it. We're just going to kind of work it out along the way. I knew that Tony's skill set complemented mine. So you know, in my line of work before we did disc profiles and so I would kind of like learn through interacting with people. Okay. This person is a analytical person. And so for me, like being more of a.

You know, I, I take action, but I don't necessarily know, like look at the details as much. And I know Tony is more of a analytical look at the details. So I was like, okay, he'll compliment my skill set. We'll figure it out, we'll make it work. There's not that much risk in it per se because it's not. There's no money out of pocket. At the time, I mean that at the time it was okay. This was a, a br where the, the lender funded the rehab portion as well. So I was like, okay, it's not that much risk. I just want to learn and I feel like this is a great opportunity to learn. So that's kind of how we initially started and I think over time as we've kind of completed different ventures, we've more clearly defined things along the way. But I think that's something that we just kind of figured out over time.

Yeah. And actually really quick. I think that's part of the reason why Omid and I work so well together is because we're both, in some ways, you know, we're like, what's, what's the saying? Like fire, aim, shoot, or whatever. Like, you know, we'll shoot first and kind of ask questions later kind of guys. And we're both kind of go with the flow. So I think that's what made this partnership so successful, is that we're similar in that way.

When you guys structured this partnership in the beginning was this like, we're just going to test out one deal, or let's go and see what other deals we can find. Right away, what did that kind of look like?

You know, there wasn't even really clear dialogue around, like, where it was gonna evolve. It was just more like, hey, let's just do this and see what happens. And. And that was it. And then, you know, after that, it was, you know, I just started calling him partner and then. And then he's like, hey, there's this, like, Black Friday deal to this Rod Khleif event. Do you know who Rod Khleif is? And are you interested in multifamily? I'm like, I don't know what you're talking about. I don't know Rod Khleif. But, you know, if you're into it, I'm into it. I'm gonna, you know, I'm gonna buy the ticket. Let's go together, and let's kind of learn along the way. So for us, it was just more like, okay, this is a journey and we're just gonna kind of figure it out. And, you know, that's kind of what we did.

And that event was, like, super, I think, critical to our partnership as well, because we, you know, we. We walked away from that event, I think, with a better sense of what we wanted to do as a partnership. I mean, it was apartment syndication. That's what we were initially planning to do. That didn't work out, but it still kind of led us to some, you know, it led us eventually to doing the short term rentals. But I think that, you know, spending three days together at this event, you know, soaking in all this, like, information about real estate investing, like, really laid the foundation for everything we built from there on out.

Yeah, it gets you all hyped up and motivated together.

Yeah, yeah. Ironically, I mean, you know, we. We've still talked to some of the same people that we met at that event, and we've been on, like, parallel journeys with short term rentals and even just, like, relationships we built through, like, a coaching program we joined. I think it all allowed us to kind of learn along the way and kind of shorten that. That learning span for us to. To kind of Invest or just like understand just like the different spaces and niches in real estate. Because I think one of the biggest things, it's like, you know, I think we have a very big a threshold for like discomfort. So for me, like, just throw me kind of like what Tony said, throw me in anywhere or Tony, I'm just gonna kind of figure it out and learn and I don't mind spending time to learn it and master it. And then it was like the education piece. So like learning education about, you know, whatever the particular niche is and you know, are we interested in cash flow and appreciation are, you know, depreciation and all those things we kind of learn along the way. So just a bunch of different items and then identifying the niche. There's so many, I think you, you go to these presentations and you're like, I want to do this and I want to do that and then. But you don't really realize, I think it's hard to kind of narrow down once you've been presented so many opportunities. Okay, what actually works or what fits your skill set or like where you are in your, your current like real estate journey.

What are the different roles and responsibilities you guys have in your organization now before we kind of get any further?

Yeah, so currently I tag team operations with Sarah. So Sarah and I both do operations, which that includes.

Communication with our handyman cleaners, addressing anything guest related. Also I do guest relations, investor relations. So we have the funnel of the alpha geek website and it leads to a calendar. And then essentially I'm the guy. I don't know if I'm, I told somebody today I'm like the chastity belt. So you have to like get through me to get to Tony and Sarah. So like if you can't, if I'm not, you know, just. So I'm like the first layer of protection in a way. So. But, you know, but, but I'm also the guy that just kind of assesses. Okay, like is, you know, I, I had a call today and somebody filled out a partnership or they're interested in partnership, they don't have enough funds, but they're also interested in learning. And I, I know you guys always talk about.

How can you bring value. So this person had a lot of analytical skills. We have an opportunity with like acquisitions and so we just started talking and I, I loosely said, hey, you know, we may have an opportunity. And he was all in and he's going to send me his resume. But I think it's just being even able to identify parts of our Business and where I can fit them in the business. But primarily, yes, the investor relations is the role. Yeah.

Omid, you have no idea the floodgates you just opened up. You know, how many people are going to fill out that form now and start sending resumes?

Oh, God.

I know.

Oh, hopefully not. Yeah, no, I mean, no. You know, as long as they bring value. Yeah. So.

And Ash, you know, it took us a while to get to this point where we've got more defined roles. You know, I think when we first started, like there was, you know, we were all just kind of doing everything, you know, and kind of stepping on each other's toes and doing all these different things. But as the business has matured, we've really kind of settled into our different roles. So, yeah, Omid and Sarah handle all the guest communications, Omid's handle all the partnership relationships. I'm focused more so on like the acquisitions. You know, like, I think most of the deals we found so far have been, you know, from me kind of doing a lot of that work. And then I handle a lot of like the technology pieces. Right. Like our property management software, our pricing tool, our email automation tools. So we've really kind of settled into our groove now that we've been doing this for a little over two years now.

So going forward with your partnership, you guys are building your team. Can you kind of talk about Omid? You touched it a little in the beginning, what your strategy is now and your focus now going forward.

Yeah, so I think like, specifically we're continuing to grow like the partnerships. And so Tony does acquisitions for me specifically. We're, we're looking to identify people that kind of fit the culture. So, you know, just, I think there's a lot of investors out there. There's a lot of people that, there's a lot of capital. And I think sometimes what's challenging is, you know, we're going to have a long term relationship, so we want to be able to work with people that we enjoy being around. And also they have similar goals in terms of like, you know, for us, like the partnership is a cash flow play to a degree. So like, is that what they're looking for and in terms of like, what we bring to the table. So, you know, we run a short term rental from A to Z. And so is this more of like a passive investment for a partner and, and that might be more ideal for us because then, you know, we can have autonomy. We run everything. And you know, they collect their, their monthly check for, you know, the distributions that we provide.

You mean you don't want somebody to come in and tell you how to do the layout and the design and what the paint color should be.

You know.

My point is, is that you guys know what you're doing and that is what operator. If you are going to be an operator, you should know what you're doing and what works. And you guys are confident in that. And that's why you're saying the ideal investor is somebody who wants to be passive and not to be hands on and make the color choices and, and things like that.

Yeah. And you know, I think we do involve them to an extent, right. Like when we're, when we're designing the space, we'll typically share that with them. Any major decisions around the property, like, we will typically go over that with them as well. But yeah, like the minutiae of the day to day grind, like I'm not gonna reach out to the partner and say, hey, how do you want us to respond to this message? Right? So there, there's some, some balancing there. But Omid, one thing you mentioned, and I want to touch on this cause I think it's important to, to call out is you talked about like goals and things like that. And I think that's one space where like me, Sarah and Omid really kind of balance each other out. Right. Like, so we had like our, our annual planning meeting maybe like a month ago, right. Like coming up on a month ago. And, and like, yeah, like Omid, like share what, what my goal was and share kind of like where we landed.

You know, it's like Tony's like, yeah, you know, no big deal. I just want like $5 billion in real estate acquisitions over the course of the next 10 years or. And then, you know, I was like. And then of course, Sarah's like, wait, billion with a B or with an M. And you know, for me, I'm like, let me look at my answer. Because we're sharing answers and I'm like, let me adjust mine. And I forgot where Sarah was. But I mean, I think for me I was like maybe like 100 million or you know, something's pretty say 500 million. But I had to change my answer because I was like, okay, let's be more realistic. Somewhere in the middle. And you know, I think we landed on 1 billion. And. But I think it's just funny. I think the one thing so like, you know, we talk about our partnerships, like what are like some pros and cons of partnerships? And like what are your pet peeves and like, Tony's like, you know, what I, what I love about him is that he always is, like, setting the bar super high. And sometimes.

For me, like, is it. I'm always trying to assess, okay, is this realistic? Like, is he being crazy? Again, like, and, but, you know, I.

So I think, I think that's what I'm trying to assess. And like, I'm trying to find some middle ground. I'm like, okay, this is more realistic. But. And then Sarah's like, you know, she just, you know, on maybe on the other end of the spectrum a little bit, like, hey, let's just do, like. You mean more work? We're gonna have more work. Like, is this realistic? Like, and so. But yeah, no, I think it's. It's kind of fun to kind of have those discussions to kind of figure out what makes sense based on goals and.

You know, seeing where we land. I mean, a great example of that was. And Sarah likes to share the story where she, like, Tony told the realtor, after we closed on the first Joshua Tree property, all right, we're going to close one per quarter, moving forward. And then the, the Joshua Tree realtor was like, what? Like, he's like, there's no, like, he, he just had this, like, reaction. Like, and he, you know, his, his personality. He's like, I don't want to like, can I use the B word? Like, is that allowed? Like, he just, like, like, like, he's just like, he has a very strong personality and his reaction was just like, he's very sassy. That's like a more PG term. He's more sassy, but, you know, fast forward. And we were able to close, I think like one. One a month or something like that. So we're able to kind of go beyond. So I think, I know you guys talk a lot about, like, mindset and, and limiting beliefs, and I think sometimes I, you know, we get caught in that. Like, for me, I, I was like, okay, I have my one short term rental in, in Tennessee. I'm good. I'm done. And then, you know, Tony, like a month later is like, hey, what about Joshua Tree? And then I was like, oh, I don't like Joshua Tree. That place is not interesting to me. And, but again, that was kind of me rolling with the punches. I'm like, all right, let's. Let's try it. So, and it was like a. Already an existing Airbnb, so there was a little bit less risk. It was already like an established property, but this property was. It was producing I think it was like 30,000 gross. And I mean if we would have kept it, we ended up selling it. But if we would have kept it, that easily would have been $100,000 gross grossing property. So that's the irony. And you know, Tony doing the research on Joshua Tree and you know me trying to maybe.

Sometimes we got to be aware of like our biases of like, okay, this may not be a place I may want to travel, but this is. The data proves that there's a huge demand. And so now it's changed my attitude around. Okay, just because maybe I don't like this particular vacation rental market, it may not mean that it's in high demand. So I'm going to default to Tony. He's like the geek when it comes to software and it's like he busts out all this like data and I'm like, sold, sold. I'm good. Okay.

He's a, he's a lady in the streets and a freak at the spreadsheet.

Yes, yes, yes, yes. Absolutely.

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Okay, so before we move on to a different topic, omit, I just have to ask and Tony too. Do you guys have weekly calls? How are you guys staying intact as a team? What does that look like? You know, you had your annual meeting. Do you have quarterly meetings? As you guys are just text. They're constantly texting each other. What are your lines of communication like?

So I mean you can't text Tony because you've seen his phone. I mean like, you know, I don't know if he ever sees it or not. I mean, I know like Sarah's his chastity belt, right? For messaging.

I actually messaged her. I had a question about like Airbnb locks the other day. I just text her to ask.

Of course. Yeah. It's funny because it's like, okay, if I need something done, I'm gonna, I'm gonna do the group text that includes Sarah that I know she'll tell him because it's like, sometimes it's like, we need these docs signed and where's Tony? And I'm like, I don't know. I mean, I know, but I don't know. I'm like, okay, he's not gonna respond. Let me just tell Sarah, tell him to sign a docs.

But, you know, it's. So Tony's version of yelling at you is basically he'll send you a task, right? So like, that's like, you know, because he does he get upset. Like, I don't know if he ever raises his voice. He just does like, he kind of like squints his eyes and then he just kind of looks to the side. So I don't know if you've ever seen those videos with like him and Sarah. He'll just kind of like look to the side. And that's his version of like, I'm pissed. So if he. I don't know if he's done that to you yet. But you know, if he does, that's. That's his.

I'm definitely gonna notice now if he does.

Yeah, that's a signal. So. So, like. And so I interpret like, okay, you send me a task. Oh, I must not be doing something right. So. So. But yeah, we use Monday. So we use Monday.com. and that's kind of our version. We originally were using Wrike. We've transitioned to Monday. And you know, we have kind of a combo of Monday and just text messaging. So I think we use Monday just overall kind of like action to do's. And if there's anything that needs more immediate attention, we'll just send messages. Just text message. And I, you know, I. I feel like I'm privileged because he responds to Mayan sometimes. So it's like pretty good. Yeah. But yeah, so I would just say it's a combination of those things. And Sarah and I were very late adopters to Reich. So, like, Tony would yell at, like, again, not yell at us. He'd do the side eye thing. And it was just like, hey, can you guys like, look at your task? And we're like, what task? Oh, yeah, right. So I think that's like his.

That's very organized that. And, you know, let's say Sarah and I maybe are a little more scatterbrained with some of those things. We're very task driven. But I think he keeps us organized. So now we've been better adopters of Monday and that's allowed us to stay more organized, especially as we're scaling, there's. We have to, like, there's no other way other than to just leverage the system. So that way, because we're including more people as we're starting to grow.

Omid, I hate to burst your bubble, but Tony actually has an alert set in Monday to remind himself to text you every once in a while just to check in. It's actually gone off while we've been on the podcast before.

That's awesome.

But I really want to get into the exciting part. And one of the biggest reasons we've brought you on today, we had my business partner Darrell Clinch on not too long ago, talking about him quitting his job, and saw that now you have quit your job too. So congratulations.

Thank you so much.

I think it was maybe a month or maybe six weeks before you actually quit. We had been in the Smoky Mountains together, and I have to say, if you knew you were going to quit your job, then you did not, like, show it at all to me. I was shocked when you announced it and you were like, talking about how you'd eventually like to. So congratulations.

No, thank you so much. Like, you know, for me, it was just like. So I was in. Almost in denial because I was just so used to the mindset of, I wake up, I do my job, I go home, I collect my paycheck. And I think so many people get into that routine and they're afraid to make that decision. And, you know, Tony approached me, so it was actually at the BiggerPockets event in New Orleans. He approached me, caught me completely off guard. And, you know, I didn't know what to say at the time. I was just like, he must have planned this, like, way in advance because he's, he's like that. Like, he like, has it all planned out, like, like a mind shark. Like, he just like mind tricks on me. And so I was like, oh, all right. So it's same, same reaction. I had to like, every deal we've done. All right, like, but I, you know, my wife, she was there at the time and, you know, I think she was very supportive. And so I, you know, after I committed to it, started doing the math in my head. So I know in Darrell's episode, you guys kind of talk, talked about that. So, like, when he was presenting it to me.

I was doing the math in my head. I was like, okay, this is my gross income. This is my net income. This is what I contribute for my 401k. So I was making a. I had a six figure job and then I contributed like 27 something percent a year to my 401k. So with a company match I was probably, it was like probably 30 plus k before. 30k before compounding on that every year that would be Contributed to my 401k. So my original plan before Tony approached me was okay, I was 40 at the time. When I hit 45, I'll have a million dollars in my 401k. And at that point I feel comfortable where there's a safety net and I'll walk away from my W2 and do anything I want. I mean at the time I was like, okay, let me get more involved in short term rentals. So I had a five year plan. Fast forward, we were, that was probably what, a year and a half after getting involved in short term rentals that I ended up quitting my job. And I think that the. What pushed me was one, with Tony, but two, thinking about all the things that I've always wanted to do but was too afraid to do. And I, and I think hopefully that's. This speaks to a lot of listeners. Like when you think about wealth, wealth, a lot of people define it as, you know, financial wealth, but they don't look at all the other things. You see these TikToks and it's like the new wealth is time and experiences. And so but that really speaks to me because I think for me it just. Okay, so I feel like I have all the basic necessities and so there are other areas that I really want to kind of work on. So the timepiece, so having the time, wealth, physical wealth. So just being in better shape. I see so many people that were in corporate jobs, like a lot of my peers and they're my age and they look like they're 50. So you know, I'm trying to do the opposite. I'm like, how can I stay looking like Tony and Sarah? You know, and so hopefully if I'm just around them, it'll just force me to look like them. I don't know. I have, I have my black shirt by the way, my black shirt. So I never liked wearing black shirts but Tony said it's required now that I'm a part of alpha geek. So I don't know if that, you.

Know, that's the uniform.

That's the uniform. Like it's like the black shirt. So yeah, so, but yeah, so financial wealth, social wealth, time wealth and physical wealth. So those are the four. And a lot of times people trade their time and their physical wealth for that financial piece. And I, and I Had friends who are attorneys, who are doctors and they have no time for their families. They don't go to any of the, they can't coach, they can't go to any of the games.

They're consistently tired. So I thought about it and it's like, okay, I get my time back and fast forward now I've been able to coach.

I was doing Orange Theory and I was the. They had like this like dry try like competition which is basically like, you know, overall fitness, like competition. And I was like, I had the top time for males in my gym and like I would have never done that under the circumstances I had before because I was able to commit to it every day.

And then I've been able to drop off my kids at point some school, pick them up and drop them off. Before COVID I never did that once, like, and I missed out on so many years of that and being able to do that. And now there's just so much upside in terms of like opportunities long term. So I was willing to trade my salary for those things and I think I was afraid, I was afraid of giving up that salary. But I think in the long run I'm going to be a lot more happy. I'm already, you know, have way more flexibility and you know, what I want to do is be able to like inspire others to do the same because I think so many people are stuck in the, they want to work, they're afraid to walk, walk away from their six figure job. They've done all the right things, but they're just afraid to take the risk or walk away from a six figure job.

So Omid, you took a pay cut, correct?

Yeah, yeah, I did, I did take a pay cut.

Okay, so were there any things that you had to cut out of your life or was that just like you, your, that was your extra money anyways or did you have to kind of rearrange your, your budget that you have for, you know, your livelihood?

So I've always consistently lived way below my means and I've always just needed a few things. The gym, the beach, somewhere to hike, hang around the kids, some good food and that's it. Like, I don't need a lot of like fancy things. Like. And so I think for me I've been able to just maintain a lifestyle living. I could probably live off of a.

I don't know what income, but when the way I structured even my pay, I would always, I have increases in my pay, but I always lived off of 4k net income. So that was no matter what my income was, it was always my paycheck was every month was $4,000. And so even though I was making six figures, even though I was getting bonuses, it didn't matter because I put all the additional income into my 401k so that I could compound it faster at a younger age. So that's the way I thought about it. So my 401k became, I, you know, I'm doing the same pay now, but my 401k, instead of it being invested in, in stocks and it's now invested in real estate. So through acquisitions that we have, you know, I have a percentage of ownership and that's allowed me to still kind of grow my port, I guess my retirement portfolio. And.

That'S how I have been able to kind of justify it while getting back kind of some of those other things. So I feel like financially I'm in the same position. It's not better socially. I've been, I always wanted to be active in social media, but I never had time. That was like a very low priority item. And when I was working.

My W2, it required a lot of hours.

And so now I've been able to allocate some time for that. The timepiece with family traveling. I've traveled more in the past six months than I have in the past two years. And they're just, every month there's a, there's where we're going somewhere and you know, you know, shout out to my wife for allowing this to start, enabling me to, to go and travel because she gets comments all the time from people, a lot of naysayers who say, oh, he's, he's gone again. Oh, okay. Like, and I feel like they're stirring the pot in a way. But I, but I think sometimes people don't necessarily understand kind of what's going on or like what sort of dedication I have to kind of like the long term play in terms of like the real estate piece. Because maybe right now, today the income's the same, but I think you look fast forward five, 10 years and there's a larger trajectory.

For just like our financial independence.

I mean, a couple things I want to highlight, right? So like when you look at going full time into the business, there's the benefits that you mentioned, obviously, I think another big one is that you accelerate your ability to scale. Right. Like when we first started Alpha Geek Capital, the only person that was full time in the business was Sarah, my wife. And she was really just focused on like the guest communication side of things. Right. But she wasn't focused on like growing the business per se. And then when I went full time at the beginning of 2021, we went from, you know, we had two, almost three units when that year started and we ended that year with what, like 11 or 12? Right. So we scaled a ton in those 12 months and now we just finished Q1. And with you being full time, we, I can't even, I think we've already closed or under contract. Like we got like nine properties already this year. Right. So it's like as you, as you add more fuel to that and you free up more time by going full time, you're, you're, it's like an exponential curve that you're on when it comes to growth.

Yeah. It's like taking that short amount of time that you're going to be taking that pay cut so that you can build up and get to that replacement salary. And let me ask you this, are so at your old job, were you, was it a set salary that you knew how much you were getting every month or was it like commission based where it changed and then how does that compare to how your pay is now? Did you kind of have to adjust when income was coming in and kind of when you had to pay your bills and things like that?

Yeah, so nothing's really changed in terms of like my lifestyle or income. I think for me it was essentially at a fixed salary and it, and then there was a bonus structure. So there's a bonus depending on how the company had performed. So at the end of the year you would, you know, you would see anywhere from like 2015 to 30k bonus, I would say so. So that bonus is nice at the end of the year. I mean then you can kind of use that to invest or you know, whatever it is that you want to do. But I, in terms of the fixed salary, you know, I'm, I'm contributing a big percentage into my 401k. So I had the fixed amount every month. So in terms of the fixed amount, it matches. So there's nothing has really changed in that, in that sort of piece. And what was the question again?

Well, I get, I think it's not really going to apply to you, but what would be your advice? You seem pretty money savvy. What would be your advice to somebody who is going from a fixed salary to okay, now they're getting, you know, they have multiple income streams from their different properties or something they're gonna be living off that might change? Like, yeah, oh, this month we have to replace a hot water heater. Your cash flow is not going to be as much or things like that would be your advice to kind of plan that out. Because that can be scary getting that fixed income every single month. Going to a variable income.

Yeah, absolutely. I think, you know, we're very fortunate in terms of like the cash flow for the short term rentals. But I think just identifying what you can live off of and setting a reserve. So I mean, we have a reserve kind of set aside just for anything that can happen. And I know people's idea of reserve varies. Some people aren't as liquid, they put all their money into stocks or.

Whatever type of investment. But I think the idea is, for us, what we felt comfortable with was, okay, I had, between my wife and I, we had four different short term rental loans in our names. So in terms of debt to income for traditional loans, we weren't going to qualify for any more loans that were traditional. We'd have to go into like a DSCR loan or some other commercial loan product. So at that point I felt like, okay, the leverage of the W2 income and the salary.

It didn't have as much benefit by being in the job anymore. So I think like the name of the game for me was like cash flow. So how can I create cash flow that'll replace my income and through these assets? And so the niche that was identified was short term rentals. And so with that just you can walk away with one or two. Like it doesn't require that much. And so it's just a matter of finding the right location that works for you. And do you have the appetite to run your own Airbnb business? Some people don't. Yeah, some people don't have the personality or the time or.

The know how. And not everybody has a Tony J, you know, who just busts out data, you know, like, like in their sleep. So but maybe it's finding a partner that does. So I think that's for me, what, what I was able to do was, okay, I can do operations, I can talk to people, I can build teams.

Now if somebody's in that same position and they have capital and they have a good paying job, find somebody who's good at systems, who likes data and you know, go to these Facebook groups, go to local.

You know, meetup events and there's, there's so many people who are just wanting to get their feet wet and just need the one person to, to maybe partner with.

I think the other thing I want to comment on omid is like how we, how we kind of manage cash flow because we do it, I think a little bit differently than other real estate investors. So for the rookies that are listening, Ashley and I interviewed Mike Michalowicz on one of our rookie replies. I think it was episode 132. And Mike, we interviewed him about a book called Get Different. But Mike also has a book called Profit First. And in that book, Profit first, he breaks down how entrepreneurs should manage their cash flow. It's a, it's a relatively quick book, quick read, but a really impactful one if you implement it. And that's what we've done in our business. So every month we don't really look at like, I mean we look at them, but we don't, we don't really manage our distributions based on the net cash flow. Right. Like if a property nets, you know, a thousand bucks, we're not going to look at that as the money that we distribute. Instead, we use a percentage of the bank balance every month. So every month on the 25th, I go into each one of the accounts for every one of our properties and I see how much capital do we have available in the actual bank account. And then we have have different percentages set up for different ways we allocate the funds. So a certain percentage gets held back for operating expenses, another percentage gets held back for taxes, another percentage gets held back for our salaries, and then another percentage gets held back for profit distributions. And so we take a small salary every month for running the business. But then throughout the quarter we have this big profit bucket that's building month over month. And at the end of every quarter we take a profit distribution as well. So that's kind of how we've managed our cash flow as well.

I think that's great you guys. Thanks for sharing that. Yeah.

Omi doesn't have to worry about that anything, you know, it just shows up in his baby.

He just gets to check.

He doesn't know where it comes from. Yeah.

Did you guys want to share a deal with us at all for your deal review?

Okay. Yeah, so go ahead.

I'll let you guys take team it.

You're gonna do La Flora?

Yeah, whichever one man, you pick one dive into it.

Yeah. Okay. Yeah. La Flora. So this is one, it's off market deal. So we, we relationship with a builder. He essentially comes to us and says, hey, I have a tiny home in Joshua Tree. Are you guys interested? We say yes. And then so I think the purchase price on this one was it's a 400 square foot tiny home in Joshua Tree.

333 I think was the purchase price on it.

But Omi, before, before you keep going, I think, you know, you glossed over that like, like dive into that a little bit. Right. So like one of our secret weapons in Joshua Tree has been our ability to get off market deals. You know, we've gone direct to seller, we've worked with wholesalers, but one of our unique strategies is going direct to builder. So Omi, maybe if you want to talk about how we built that relationship and how beneficial it's been for both parties.

Yeah, so the we. So Tony had identified this tiny home in Joshua Tree and I was not a fan. I was like, how much is it per square foot foot? And what's so big about these? You know, again, talking about biases and like it's not a good property and you know, of course trust the process. So fast forward, he's like, yeah, let's make an offer. And like, like I normally do, okay, let's just do it, you know. And so, so I went ahead and I, I, I approached the, the person who was selling the property, who's also the builder. And so I was trying to ask a lot of questions to identify specifically how we could get this one under contract or how we could be competitive. So I asked a lot of questions. I realized he's a mass builder. He wanted somebody who can close quickly and he didn't want a lot of nonsense. So not too many questions don't bother him. Like his time was very valuable and he really had zero patience for people in general. So I basically told them and he wanted to build a long term relationship because he's a builder, he wanted to also be able to build on the particular lot or on a future lot. So I essentially listened, identified what was important to him and I told him, hey, look, we're, we're short term rental investors. We're looking to scale. We want to, we're interested in your product and how can we be, you know, what is a number that would be competitive for us to be able to not only secure this but also buy future deals?

We proved that we could close. So we ended up, he, he accepted our offer. I think it was asking price. So we offered asking price and accept the offer. We close right away, no issues.

And then fast forward a couple months and he had another property. And so he essentially at this point just started approaching us and said, hey, look, I have this property. Ironically.

This one property led to another three. And then there was additional I think we have, we had seven under contract with him and then now we're going to be at 11 tiny homes with him particularly. And you know, the irony is these tiny homes, there's such a high demand. But this is the, the challenge for somebody that wants to buy these one typically you're going to have to hire a builder. The turnaround time is what, a year from planning. So nobody's going to sell these because they spend so much time like into like engineering and so and then the few that ever go on market sell way above market. So we're able to get them at pretty much market price and off market. So he now comes to us few things. He likes that we close quickly. He likes that we are low maintenance and we have good communication with him. We try to just, you know, he's kind of a grumpy guy a little bit. And so it just like how can we keep things positive but like, and maintain a positive relationship. So it's worked out really nicely.

It's been mutually beneficial because for us, Ashley, like we have a very consistent source of deal flow for a property that we know has performed well. It's easier on his side because he doesn't have to worry about listing the property, you know, dealing with different sellers or someone getting under contract and then backing out. So it's really been a mutually beneficial relationship. And like Omid said, by the time this episode airs, we'll have bought 11 houses from this guy and they, they all perform really well. So Omid, sorry, you know, I didn't mean to get you off tangent there, but if we want to go back to the floor and maybe walk through what we picked that one up for.

Yeah, so this one we purchased, I'm going to say Q4 November ish of last year, I'm going to say October, November ish. It's all becoming a blur. But 333, 10% down loan, it required.

About what, 20k furnishings plus you know, design etc. Etc. So total out of pocket. It's going to be probably closed like between like 65ish, I'm going to say with like closing costs.

So this particular property has actually become our best performing property. So ironically one day. So this is supposed to gross. This will easily gross maybe 110 to 120. And the price point being 333. Like you can't find properties at that price point for that type of gross. Usually you're going to have to spend 600 plus to get that sort of gross. And 600 is on a conservative side, usually it's more like 7, 800 to get a gross of 120k. But ironically, Sarah, she designed it and I was not a fan. I'm always not a fan. I'm just like, it's kind of funny, but I wasn't a fan of her design. She's like, hey, what do you think? And I was like, oh, that's cool. Like, it'll either do really well or it's not going to do well. I think that was my reaction. Like, I think that was my response. And we, we agreed to like proceed forward with the design and it became the most popular design of all our tiny homes. So it's actually our now become our consistently most sought out tiny home. And I think it's like booked out like two months in advance or so, give or take. And we got to raise rates, clearly because it's like, you know, we're not charging enough. But.

Yeah, yeah, it's doing well. Cash on cash return is probably 50 plus percent.

Omid. I think that's a really great point to touch on, is that you have these tiny homes that are all the identical layout, but it's the design and the design has made such an impact on that one that it's outperforming the other one. So I think that's a lot of people, and even I did this for my first Airbnb was going, hey, who has furniture laying around in their basement that they don't want anymore that I can throw in my Airbnb? And you just proved that taking the time to actually design it and add that aesthetic to it can really give you a way better return than just throwing in mismatched furniture that you find on the side of the road or from, you know, your parents basement.

No, I think that's a, that's a great point because when we look at the, the portfolio itself, we've optimized and kind of made adjustments along the way. So because we've had the same model, we've been able to kind of get feedback from, from guests and even from like social media. And we've been able to kind of keep making different adjustments along the way. And I think we've have a more polished product moving forward because of it. But we also, when we launch these, we are launching them more polished than they were initially. I think our very first one, I think we initially looked at it and we were like, okay, this is going to gross about 40k.

And then Tony's like, oh yeah, we'll do 60 no problem. And of course, I'm a skeptic and I'm not believing it. I'm like, there's no way this place is going to do 60. And we've made modifications along the way. And I think what happened is like, during summertime, which is I would say like the low season because of the heat, we really had to look at, okay, how can we make our property stand out so that way we can make it gross even during low season. So we made a few adjustments to the property, and at that point, from September on, every month, it kept the growth, kept going. Up to now, like, it's averaging close to like 9, 9 plus K a month since we made the adjustments to that property so that this Property will do 100k plus. And the irony is again, limiting beliefs and thinking, oh, okay, this can only do so much. But I think it just continuing to do your education, receive feedback from your guests, make the adjustments and try to optimize the property so, you know, guests want to come back.

Awesome, brother. So, yeah, we've had some definite success with those tiny homes in Joshua Tree and appreciate you owing for building that relationship, man. So I want to take us to the, to the rookie request line. So for the rookies that are listening, if you would like your question featured, give us a call at 8885 rookie and maybe we'll play your question on the show. So, Omid partner, are you ready for today's question?

Oh, man, I don't know. I'm like, not prepared, but let's try it.

All right, so today's question is from John from Fairfax, Virginia. And John says, I have a question about putting offers on deals. You guys talk a lot about putting offers on, but not on having the financing lined up. And I'm wondering, how do you do that? How does the seller have the patience to get you to put the deal together? You know, it might take some time to get partners or a bank to get approval on the deal. So what's running around my head is how are you making offers without having any financing lined up right away? Love to hear you guys talk about that. And that's funny, Omi, because we do that all the time, right? Like, well, we're like, just get under contract and we'll figure it out.

Yeah, you want to control the deal.

Yeah, yeah, very true.

And I think it depends on, like, your. It's going to completely vary depending on your local market and what the market environment is, and then building a relationship with your realtor. What sort of experience you have. So if you can't get pre qualified, I mean you should definitely get pre qualified to get some sort of loan whether, even if it's a.

Hard money lender. So sometimes you may not, let's say not qualify for like a traditional loan. If you get, build a relationship with a hard money lender where you get something, that's a great place to start. But I don't know, like Tony, do, do you have any. I feel like you always have the great answer, so I'm gonna. Yeah.

I mean the only thing I'd add is that like whenever you put a property under contract, like you always have your financing contingency. Right. So worst case scenario, if you're not able to figure that out within that time frame, just make sure you, you cancel the contract before your financing contingency. But I would try and exhaust every option before, before you have to cancel. Because I think the second you start canceling on people, that's when you kind of build the, you know, the wrong reputation. So I would use the financing contingency if I needed it. But first, yeah, hard money, private money, partners. Like if it's a good deal, I'm going to be going to everybody that I know saying, hey, please, please, please work. Not even please, but hey, here's a great opportunity, work with me on this deal.

Yeah, I think we went to a Ryan Pineda event and then the quote they used was if it's a good deal, money will follow. So I think just find that good deal and money will follow. And that's whether you post it on social media, whether you're posting it in like local, local groups. There's always somebody who has the capital who's looking for that deal and they don't have the access to the deal flow. So if you can bring the deal, I'm sure money will follow.

Okay, Omid, I'm going to take us to our rookie exam. Now this is graded and this will actually be reported as to whether or not you stay employed by Alpha Geek Capital. The pressure is on.

You know, I feel like I'm in college and I'm like, you know, I'm trying to get into like some sort of like organization, like a Greek organization. And like does the hazing process like do I get accepted into the club or not?

Omid, what is the return on investment, the ROI based on the cash flow from the third Joshua Tree property you bought? The clock starts now.

You know that.

I'm gonna say it's like 100 plus. OK, 100 plus. Yeah.

Okay, what is one actual thing rookies should do after listening to this episode?

Yeah. So assess your threshold for discomfort. Because I think a lot of people, they get this idea, oh, I'm going to do this, I'm going to do this. But then when they find out what it really requires in terms of like the extra work and assess your, your threshold for that additional work, are you willing to sacrifice maybe on the weekends, like not hang out with your friends? Are you willing to get uncomfortable? Are you willing to go to a network event and talk to people when you're not comfortable talking to new people?

I think all those items are really big. If you're married, is your spouse okay with you spending more time away from your family? And can your spouse maybe step up with some of those responsibilities at home? So it's like all those little things that I think sometimes are overlooked before actually getting your feet wet into whatever it is that you want to do.

Awesome. Amit. So question number two. What's one tool, software, app, or system that you use in your business?

I have, so I have this one tool and it's called Tony J. Robinson. Like, he's, he's like the software master. So as long as you have a Tony J.

Not everybody has a Tony, Jeff, but you know, I think specifically for our line of business, so Airbnb, our short term rentals, it's Hospitable. And I know there's like different substitutes of that, but I think Hospitable really allows us to integrate pricing, messaging.

Guest experience, communications, all in one. So that's really a lifesaver. I feel like that allows anybody to scale long term. So I would say if it's not Tony, then Hospitable is a close second.

Where do you plan on being in five years? So what's half of 100 billion?

Yeah, I feel like we, we had this discussion because I feel like there was like a ten year plan and there was a five year plan and in theory what half of that was should be 500. But I'm going to say like 300 million.

In acquisition because I feel like it, it'll kind of like skyrocket faster, like as you kind of go towards the end of the year journey. So I'm gonna say 300 million in acquisitions. More time, freedom, leveraging.

And you know, leveraging. You know, just growing an organization and so leveraging the organization and the culture to kind of build awesome brother.

Well, as we round things up, I'm gonna highlight today's rookie rock star. And if you would like to be highlighted as a rookie rockstar. Get active in the real estate rookie Facebook groups. Get active in the BiggerPockets forums. Slide into my DMs or into Ashley's DMs. But today's Ricky Rockstar is Andre B. And Andre says, I caught the real estate investing bug a couple of months ago and have been hard at work since trying to secure my first property. Three contracts, two terminations post inspection. I finally have doors 1, 2, 3 and 4 fully occupied with what seemed to be great tenants. And this was a four plex, all one bedroom, one baths. It was listed at 240. He was able to negotiate down to 210 and then after the inspection got it down even further to 205. And right now the rents are. Or he's going to cash flow about $351 per unit. So amazing job, Andre. Really, really proud of the work you did there, Andre.

High five, man. That's awesome.

Omid, thank you so much for joining us today. It was great to have you. Can you tell everyone where they can reach out to you and find out some more information about you?

Sure. You can find me on IG Omid, the Rad Investor. So O M ID the Rad Investor. Or you can find me AlphaGeekCapital.com and hopefully I'll be launching my YouTube soon. So you can find me on YouTube. OmidHerad Investor. Do I, do I get like a picture? Like, do people ever take pictures with you guys? Like like a digital one for their social media? Is that allowed?

No, no, we charge.

Absolutely not.

Oh man.

Yeah, I'm just trying to fanboy a little bit, you know, since I'm on the stage with you guys, this is like amazing moment. You know, I gotta just. And my hair is like, I got a haircut for you guys, you know.

Just actually, Omid, I already took a picture of us when we first started, actually before we even started recording. So I got you.

There you go. Nice.

Well, Omid, thank you so much for joining us. And to everyone listening, if you guys have enjoyed the podcast and you loved Omid's episode, maybe you actually have a similar story where you have learned from bigger pockets and being able to quit your job. We would love to hear about it. Please leave us a review on Apple Podcasts or whatever platform you use to listen to podcasts. We'd greatly appreciate it and also share the podcast. If you know somebody that would benefit from getting started in real estate investing, please feel free to share the podcast to them. I'm Ashley at Wealth From Rentals. And he's Tony at TonyJ. Robinson. And don't forget that you need to go through Omid Tony's chastity belt if you'd like to talk to Tony and we will be back on Saturday with a rookie reply.

Oh.

Hey rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener.

As a rookie investor. Especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story. Give your experience on how you got it done to help someone else get their first deal.

So head over to biggerpockets.com guest if you want to be a part of our show. Again. That's biggerpockets.com guest and we'd love to have you on.