How To Position Yourself For Success With Gary MacDermid

One of the biggest pieces of advice that I've ever had that. That. That made a difference in my life, and that was buy real estate everywhere you get stationed, and you'll make more money than the Navy will ever pay you.

Welcome to Right Around Real Estate, the show about how to passively invest like a pro. On each episode, I interview real estate experts who give their top investing advice, strategies, and tools, and I break down their insights into practical steps to avoid the pitfalls and make better investments. I want to help you passively invest like a pro. This is Ritter on Real Estate, and I'm your host, Kent Ritter. Hello, fellow investors. Welcome to another episode of Ritter on Real Estate, where we teach you how to passively invest like a pro. Today, my guest is Gary McDermott, and Gary is the president of U.S. private Equities. He's a former naval officer who transitioned into being an engineer and then transitioned now into what he's calling the cash flow engineer. And it's. So I'm kind of interested to dig into that and unpack that a little bit. So, Gary, thank you so much for being on the show today.

Well, thank you for having me.

Yeah. So before we get into everything, you know, let's start at the top. Just give people a sense of who you are and how you got to where you are today.

So you're right. As you just mentioned, I did get my start in the US Navy. I really had no idea what to expect because I wanted to go to college. But my father woke me up one day senior year, and he basically told me that he had bad news. And that bad news was there. There was no money for college. However, the good news was is he had a plan, and that was to drive me to the recruiting station. And he opened the door and he said, take your pick. Army, Navy, Air Force, Marines. I recommend Navy so you can see the world. And so, not knowing anything, I chose Navy. And the reason I bring that up is because, ironically, that was the way that I got my real estate career started. It was actually just after boot camp. There was a group of 20 of us in an A school class, which is the first school after boot camp. And there was a master chief who's a higher rank just giving us advice. And what he told really was probably one of the biggest pieces of advice that I've ever had that made a difference in my life. And that was buy real estate everywhere you get stationed, and you'll make more money than the Navy will ever pay you. Now, when I heard that at 18, I had no idea really what that meant, but the guy sounded very convincing and it sounded cool to just buy a house or buy real estate. And so that's what I focused on. It took me a couple years to figure out how to save money, but thankfully around that time it was a lot easier to get lending, as many of you may remember. And so that was how I learned and started with passive income investing.

Gotcha. And so that was a big pivot point for you. And I think it's funny, I was just thinking about how you have those points in your life where somebody comes in, gives you a piece of advice. You gotta decide whether or not you, you know, whether or not you take it. Right. But you were, you were able to figure it out and how long did it take you to, or I guess how many houses did you end up accumulating? How many places were you stationed and how long did that take you?

Yeah, so, you know, you know, I got my. I bought my first house at 21 in Seattle, then I bought another one in Hawaii. And when I was stationed at Pearl, and then I also, I spent a lot when I, when Pearl, I spent a lot of time overseas. And so I actually bought a. One of those groundbreaking condos in the Philippines. It was actually the tile. I bought it before it was built. So it was the first time I'd ever tried one of those pre constructions. But. And some of the countries overseas where they rely on foreign investments, they really put together an attractive package. And so what they did, I remember I was in my mid-20s, I just handed a stack of checks, they filled them out and dated them every month for a few years until the building would be built. And it was almost like a pre installment sale, but when you take the risk and knowing that that building was going to be the tallest residential building in that country in the central business district, and the reputation of the architect and some of those things, I didn't really know exactly what I was doing. I didn't consider myself an expert, but I at least did look at some of those things. I mean, there are so many similar opportunities out there. But that was kind of the first time that I tried international investing. And it was a little bit different, but that worked out well. You know, the checks got deposited every month and the building was built. I got to see it. It was really amazing. And to this day it still is one of the nicer buildings in the country. So that was kind of how I got my feet wet. And then everything after that is when I had to really study and Scale and turn it into a business. But that was the beginnings.

Gotcha. Well, I think that's pretty interesting. I mean, you grew pretty quickly from kind of being like, I don't really know how to buy a house or even really saved to buy a house to say, well, we're going to buy a pre construction condo in the Philippines. Right. So I think there's like a big leap there. So I know you spend a lot of time talking about mindset, so I'm curious to ask you, how does your mindset evolve over that time and how do you kind of get to the point where you're willing to take that risk? You feel like you've and done the research and then, you know, kind of as you move on from there.

Yeah, right. That mindset was huge. I mean, mindset was pretty much everything. Because you have to remember I didn't believe I could do any of these things when I was sort. When I was forced to enlist in the navy after high school. You know, I didn't really think that I could ever have my own business. I didn't really think that I could. I didn't know anything. I didn't even know what passive income was. So mindset was huge. And there were three basic mindset shifts that I had to make. And the first one was just visualize visualization. I remember, you know, I was told at a young age you have to, you know, you can put, if you do, you can, if you put your mind, you can do anything if you put your mind to it. But really what I didn't know is the visualization piece. And that is, you know, do you, the question that would be asked is, you know, do you have to believe it to see it or do you see it and then you need to see it before you can believe it. And so that mindset shift for me was a lot of times I had self limiting beliefs. Like I didn't believe that I could do a lot of things. And so the moment that I started to kind of open my mind, you know, like other people are doing this. It doesn't have to be just a small subset, like almost anybody can do it. And then sure, sooner or later I was able to like basically just open my mind that, you know, I could do anything, I could really believe. What, what, what, what I was told as a, as a child was that you put your mind to it. So part of that was just you have to open the door and accept the fact that there's a possibility. Then the other couple mindset shifts that I had to make were scarcity to abundance. You know, along with the self limiting beliefs, there was also just that mindset of scarcity. You know, we're going to run out of money, we got to save it. And then when you start looking at it, you know, like just even recently, right. That we've got more money in the world right now and we're printing more and more of it. And so that just means that there's more out there. So instead of looking at like cutting costs, just look at it as investments or you know, if I have to pay some, if I want to learn how to play golf and I have to pay, I could learn on my own, I could read or I could just pay, find the top instructor and pay and that's a cost. But I wouldn't do things like that before because I didn't have my mind. Right. And so when I started understanding that it was, you know, shifting from scarcity to abundance, that's when stuff started happening. That's when, you know, took a lot of the pressure of worrying about money and costs and just worrying about how am I going to build my revenue or how am I going to build my top line, how am I going to build my portfolio? And the sooner you focus on that, instead of worrying about costs and bottom line and some of that stuff, it may sound counterintuitive but psychologically it was more relaxing and it just helped me power through a lot of the stuff.

Yeah, I love that idea. I mean, I've definitely had to go through my own journey with limiting beliefs and that scarcity to abundance mindset. I think when you set out as an entrepreneur, which you now have especially you have to have, the only way you grow is through an abundance mindset. Right. And the idea, like you mentioned, the idea of cost versus investment.

Right.

I think that's so important because if you're only focused on, oh, this is going to cost this much, we can't do it, then how are you ever going to grow? How is your business ever going to grow? Right. You have to have that faith, like faith over fear mentality is like another way to think about it. Right. You got to have the faith that you do this and it's going to bear fruit and it's going to, and the revenue is going to come in. Right. I think that's really difficult to grasp. I think it's a really difficult concept for people.

Absolutely. I mean it took years, it wasn't easy and it really just took being around people that were like minded and being around People that thought the same way because what, you know, spending time in the military and the government, sometimes, you know, there's, there's, there's negativity and, and it's contagious. So as I started to, to make these mindset shifts, it was very important. Just like, you know, you have a support group I don't really necessarily look at as a support group. It was just that the, the less negative things and, and that you hear in a day to day activity, the, the, the better off it is to kind of power you. And when you start hanging around people that are motivated, positive and just kind of pushing you, that, that really makes a difference as well.

Yeah, absolutely, absolutely. So we talked about the limiting beliefs, we talked about the abundance versus scarcity. Was there a third one?

So, I mean, there's a third mindset shift that I had to make and it was just, and I don't know how much of it was just a mindset as more of a strategy and it was just kind of, as we just talked about eliminating negative energy from your life, the other mindset or strategy that I looked at was just kind of positioning yourself for success. So you know, like I mentioned, if you wanted to learn how to play golf really well, you would seek out somebody that was really good, had the track record. And so I had to do that with business and real estate as well. It was just, you know, I learned, you know, from a master chief at a young age. I don't know whether or not he was an expert, but he pointed me in the right direction. But when you really want to perfect the game and you want to get really master it, you really have to start looking for people that have that track record, that have been in business that have done what you wanted to do and more. And so that was sort of the, the last piece that I sometimes look at as a mindset shift was, is just sort of curating the places that you're going to be, the events that you're going to be at, the people that you're going to meet, because you have a lot of control of that. If you want to do, even if you're just looking at prospecting. I mean, if you're, if you're prospecting, are you going to do that at like a shopping mall or you know, a dollar store? Are you going to try to do that at a country club or somewhere where you're more likely to get somebody of the caliber that you would want as an investor to do business with? And so that sort of shift into Just positioning yourself for success is. Is what I kind of look at as a strategy or a mindset shift. That that kind of helped. It was another piece that helped me to be successful in a shorter amount of time.

Yeah. I mean, and the takeaway I really have from what you said was you talk about, you know, finding people who have been successful and either, you know, creating maybe it's mentorship or coaching relationship, or, you know, in some way following them and kind of the same idea, like the Tony Robbins idea. Right. Success leaves clues.

Right.

And so don't reinvent the will. There's probably people out there that have. That have done this or similar things, and you can kind of short circuit that path by just understanding what they've done and learning from their mistakes.

Right, Absolutely. And that was a big key is, you know, to reinvent the wheel every time you want to do something or get better. It's just that we don't have enough hours in the day, and. And so that's the most efficient way that I found is to learn from other people.

Yeah, absolutely. Well, I think that's powerful because I think everything starts with mindset.

Right.

And I think you've outlined, I think, three areas to really focus on to make you successful. Right. These limiting beliefs and how you get over them. You started talking about visualization. Right. Believing you could get there. So seeing yourself there kind of before you were there.

Right.

I think is a really powerful tactic. And then you talked about the scarcity versus abundance, which I think you have to be willing to invest. Otherwise, if you're not doing things differently, how are you ever going to have different outcomes? And then lastly, finding mentorship is one way to position yourself to be successful. But it also sounds like you're just being thoughtful about your business, putting yourself in the right markets, putting yourself around the right people, just in general, I think kind of these takeaways. So I think those are really powerful things that can help anybody be successful.

All right, thank you. Definitely want to share anything that I can.

Yeah. So let's switch gears a little bit, I guess, kind of, kind of propelling off of that. I know you talked a little bit, or we had talked a little before about kind of your goal setting formula. You've kind of. You talked about how you're an engineer and you kind of maybe reverse engineered this formula for creating set. Can you share that with the folks and maybe can help some others out there?

Yeah. So I am an engineer, so I do like to make systems and processes, probably overthink things, but I've sometimes been asked, you know, from other folks just, you know, how is it? Like, sometimes it might be something as simple as, you know, wanting to start an exercise routine or, you know, whatever it is, is like, how are you able to just pick something and then just do it? Because I've. My background, you know, I was in the military. I did a lot of advanced things there. And then. And then I was an engineer, and I did design for nuclear power plants. And so there was a lot of complexity there. But how do you transition from one way, then do another thing and then go, you know, start a real estate? And so sometimes people would ask, and really, it just. I did kind of break it down to a little bit of a system. But it does require the mindset shifts. And so that first one, you know, the five steps that I looked at, we kind of talked about them already without really going into specifics, visualization. So actually visualize what it is that you're trying to do, actually see yourself doing it, and understand what it looks like, what does it taste like, what does it smell like. Then the next one is to seek counsel. So in the way that if you want to write a book and you ask maybe your uncle or your parents, like, hey, I'm thinking about writing a book. Can you give me some advice that's not really seeking counsel? Because odds are they haven't probably written a book and they may talk you out of it. So when we. When we. When I say seek counsel, that really means to just find somebody that's actually done it. Find somebody that's done it at a high level. Ask them, you know, what does it take? I'm thinking about doing it. Have that educated discussion. And then what you do after you visualize, you see what you want and you've sought the council with somebody that can actually lay it out, they may not be somebody that can help you day in and day out, but they could certainly tell you how difficult it is or what you might need a, you know, start where you would start. That's when you work backwards. So you set that goal for whatever it is, you know, it has to be specific, you know, measurable, achievable. I remember when I was looking to actually transition and retire from my career and start my own business. My. My goal was, is to retire. And I actually put December 31st of that year. And that was specific and measurable and time sensitive. So. So. So do that and then work backwards. So if you wanted to, say, read, you know, 10 books a year or whatever, it is you could take that number, you know how many pages there are and you could divide that by the number of days. So the key is, is to take that goal, break it down into actionable steps that you would do either weekly or daily, and then set the bar low. Not solo, but you want to set it low so that when you set that target, whether it's a daily target or weekly target, you know, if it's real estate, you want to say make one offer a day, seven days a week, you want to set that bar low enough that it it on your weakest day, you can still achieve that target. But at the aggregate of doing that day in and day out, week in and week out, it will get you to your goal. So that was the other thing was is to actually take that and dissect it, work backwards and then the next thing is to commit to it. A lot of times people have that goal. It's in your head, you don't tell anybody. And sometimes like, I'm guilty of this, I didn't want to tell anybody because I was afraid if I told somebody and then I failed, I would look like a failure. But really that's counterproductive because that means that you're not committed, you don't believe in that goal. And so the sooner you take that goal out of the fourth dimensional mind and put it down in a two dimensional space and write it down and even share it with somebody, that's when you start feeling that level of commitment. And then the last thing after, if you've made it through all that and you find you might find it helpful, I mean, we're all human so you could do all that, but still you are going to have those weekdays. And so that's when it's important to have an accountability partner. Ideally somebody that is trying to do something similar, maybe not the same thing, but it would be helpful if they're doing it something similar to you. If you're a real estate investor, maybe having somebody, a real estate investor as well, but you want them to be maybe a little bit further ahead so that you look up to them a little bit and that there's a relationship where on your weekday when you, when you're wondering if you're going to make that one offer because you're just tired for whatever it is, you had a bad day, they're going to hold you accountable. And that was really the five step process that I use and that has worked for me ever since.

I like that, I like that. So for step one, visualize where you want to go right, have a clear path. Step two is seek counsel. So seeking advice on. From somebody who's been there, on what it really means to get there. Right. What it really takes to get there. Step. So then you can make an informed decision. Step three, you actually set the goal, but then step it backwards into individual, actionable, daily, weekly steps. Right? So set the annual goal, but say, okay, what does that mean for me? Daily, weekly. How do I accomplish that? You know, that's one area where. With reading. So I had a goal a couple years ago. I just. I really wanted to start reading more. I just couldn't find the time.

Right.

Because I thought about it as, oh, I got to set an hour or two hours aside to read. And that was one place where I just started reading, you know, for even. Just 10 minutes a day. And, you know, but over time, like you said, the 10 minutes adds up. It's. It's, you know, maybe it's a chapter a day, a few pages a day. I mean, it adds up over time. And all of a sudden, I had read all these books, and so, I mean, that was just one little place where, like, I really saw the impact of breaking that down into, like you said, you know, on your worst day, what can you accomplish? And in aggregate, that adds up. So I thought that was really powerful. And then commit publicly. I love that. And the last two are kind of like accountability. Right. Commit. Commit publicly to it, and then find somebody to hold you accountable. Somebody that you can, you know, kind of be your cheerleader or maybe. Maybe your drill sergeant if. If you need it on those tough days.

Right. I prefer the drill sergeant approach just from being in the military, but, yeah, there you go. It works.

That's right. So, no, I think that's a great framework. I think that's something that anybody can pick up and do, and I like how that down. So I appreciate you sharing that with everybody.

No worries. Yeah.

So let's shift gears now to what you're doing at US Private Equities. Tell us a little bit about the business and how. I mean, you've gone from Navy to. You talked about you're an engineer, you're designing nuclear power plants, but now you're running. I think it started as a real estate business. Now it's even maybe beyond that. But, you know, tell us about what you're doing. But talk about how real estate kind of led you through this path.

Right. So, I mean, real estate was. Was the backbone to everything that I do. I mean, having that passive income to not have to worry about it really was what able to help me to transition from the military and also from being an engineer. And then as far as what we do now, I mean, we just refine the model. I mean, I learned from somebody that had been doing this passive income model that we use for over 30 years in multiple markets and also internationally. And so what we do is we just. And this is often when you look at any business, it's what problem do you solve and what need do you serve? And so when you look at the way that we modeled our real estate investment and the way that we build portfolios, we're trying to solve a problem and serve two different audiences. We're trying to solve problems or three different audiences. Actually, if you look at the home seller, because we are acquiring homes, so we're solving a need there where somebody wants to sell or may need to sell. That's one audience that will serve. So we're buying a property. We're acquiring a property, a home, and we're going to convert that into a home that we're going to help a family that really wants to own their own home, but currently can't because of credit or other reasons. So now that's another audience that we're going to serve. And so a lot of times, you know, 50% of people or more now nowadays that want to own their own home can't. And so what we do is we're solving that problem by offering, we use a lot of rent to own or lease options and sometimes installment sales where we're going to be able to help that, that audience and that family that, that, that right now would not believe that they could own that home. And so we set them off on that journey to home ownership. And that's a pretty powerful way. We've helped a lot of families that didn't think that they'd be able to own their own home. And that's powerful. And that's what kind of helps, is the fuel for this. So when you break it down into that, you know, what need do you serve? The most successful businesses, you know, if they're, if they're solving big problems and serving big needs, it really helps drive that business. And so that's kind of the way we look at it. Then the third audience would be we are having to monetize it and make some type of passive income. So with the way that we structure this, we're able to also generate a return. Rents right now are higher than mortgages. And so by offering a rental that's going to have a bit of a spread over the mortgage. And there's other powerful ways that we monetize too. There's tax benefits, you know, cost segregation studies. We treat single family like multifamily in that we can do some of those advanced cost segregation studies and things like that that can really minimize the taxes while maximizing income. There's a whole series of that, but that would be a separate show. Just in general, what we do is we solve problems and serve needs. And then beyond that, we've actually started trying to help with some of the affordable housing. We're also doing some land development. We're doing manufactured. We're looking into modular and tiny homes this year as well. But we have started developing some lots. I'm just simple right now. And then we also invest in other businesses. So we. We've done some angel investing and are also looking at partnering or even doing some acquisitions as well. That's just how we've kind of evolved from doing real estate, but just keeping those business concepts and just maintain, you know, looking at other ways to have passive income.

Yeah, I think, I think that's fantastic. So you've. The initial passive income you had from those rentals that you bought as you were moving from place to place in the Navy kind of fueled your ability to go off and start now this bigger, more, more focused business and help a broader group of people serve a broader group of people, people, as you said, including a number of folks from the people wanting to buy houses to wanting to sell houses to investors wanting to invest in these type of properties. And so that real estate really kind of started as a catalyst, it sounds like, but by ultimately giving you that freedom to have the choice to kind of go to the next level.

Right. And that was a big part of it. Without having that first passive income to be able to step away, that was the game changer. And that, that really, I feel, was the first step and will always be a part of anything that I do.

Really cool. Really cool. Gary, I think it's a great story and appreciate you sharing all the mindset pieces as well and how you got yourself to the point to believe you could do all this.

Right?

Because, I mean, I think that's a pretty incredible leap from a guy as, you know, 18, 19 years old joining the Navy to now running this business and doing all these. These different things and breaking into angel investing and starting to do a real private equity company. So very cool story. So as we start to wind things down, I want to take you through our Keys to Success round. I got four questions I want to ask you. The first one is if you were going to invest passively with somebody else, you were going to invest in somebody else's real estate deal, and you can only ask them one question. What would that one question be?

That would be easy for me. I would just ask for references. And that's basically. I mean, I could ask all the questions in the world, but, you know, track record and I mean, that's pretty easy to find. So that would be. If it was only one question, I would just. That would be. My fail safe would just be to ask for references.

That's great. What are you most proud of in your career?

I'm most proud of just, you know, the. I'm a civil servant at heart, you know, the military service and just. I'm most proud of what I had accomplished there and just being part of something that's bigger than myself.

Very cool. Yeah. Thank you for your service. That's incredible. And as you are, as you're thinking about it, what is a book that everybody should read?

So as far as one book, I mean, if I only had to pick one book, I would say I would. I wouldn't. That book might be different for everyone because for me, I look at reading as just a way to help with those mindset shifts. That was very powerful for me because it's hard to just find somebody that would just kind of talk you through it. So I would just say, you know, there's a lot of books out there. There's books that can help you better and there's books like, I mean, a couple books. And I know that that's kind of not the exact question, so, I mean, I'm going to share it and then I'll go back to answer it directly. But a couple of the books that, like, helped me to. One of them was how to Master the Art of Selling by Tom Hopkins. And that was very important for me for negotiation. And then there was books like Three Feet from Gold or Think and Grow Rich that help with the mindset shift. So I don't want to say any one of those books. I don't even know that those books would be good for you. But I will say that if there's one book that you should read, it's one that's going to help get you to that first step of visualization. So look at books out there and just vet them and just find one that you feel would help you to open your mind to be able to take advantage of any of the opportunities that might be in front of you that you may not have said yes to if you didn't read that book.

Yeah, I think that's. I think what you said there is just really interesting about, you know, there's opportunities in front of you that you might not have said yes to. Because I think we are presented with opportunities often. I mean, no matter what. No matter what we're in.

Right.

I think oftentimes, if you haven't opened up your mindset. Right. Then you just automatically kind of say, no, couldn't do that. Too busy or this or that. I think first we go to excuses. And I think that was something that I really noticed as my mindset's opened up. And I've recognized that, just like you, I think I can do just about anything. And, you know, the amount of opportunities that start coming in seem incredible. And then I'm thinking, well, maybe these opportunities were here all the time. Maybe I just wasn't receiving them. I wasn't open to it. And I think that was kind of trippy for me to realize. It's like. Like, wow. Like, there really are things out there if you're just listening and if you're just open to it.

Right. And that's why. I mean, everybody has a reason why that maybe they're limiting themselves or limiting the opportunity. So if you kind of think and maybe can have an idea of what that is, then you might be able to go find that one book that I think you should read.

Yeah. So visualize what the book is that you should read and then go. Go find that book. Yeah, that's right up your alley.

Perfect.

Well, and I appreciate you giving us a few. And we'll make sure those books are linked below so people can check those out. But also, I think. Yeah. Finding the right one for you. Lastly, Gary, what is your number one key to success?

Number one key to success is just mindset. I mean, mindset is, you know, everything that we do, even when I. Especially when you start getting away from the engineering side and you start getting into the real side or the business side. I mean, I believe that it's 80% mindset and maybe 20% skills and abilities, and you can hire those or partner with those. So that is the key to success is just the mindset. And when I meet with people today, I can kind of see. I can see where even if there's a spectrum of mindset because I know I was on the worst end of the spectrum. And it's pretty easy to tell where along that spectrum we are when we meet folks. And, and so that for me is the number one key to success, is just changing the mind. I mean, positivity versus negativity, glass half full, glass empty. I mean, those are all things that, that our mind can control.

Absolutely. And I think that is, I think that's an awesome place to wrap things up because I think you're right. That is the beginning of everything. So, Gary, thank you so much for coming on today. If folks want to get in touch with you, they want to see more about what you're doing, how can they reach out to you?

So. Right. So that's a good question. I'm on LinkedIn. Gary McDermott. I also have a website, Gary McDermott.com and if you go Gary McDermott.com forward/free gift, you will get that five steps kind of boiled down just for you to kind of, if you just want to brush up on, Visualize, seek, counsel, work backwards, set targets, commit, and find the accountability partner that, that have a little cheat sheet there. But, but those are pretty much the easiest ways to find me.

Awesome. And we'll make sure all that's available below. So, guys, go click down and check Gary out. And Gary, thank you once again for coming on the show and we hope you have a great rest of the day.

Appreciate it, really. Thank you for having me. It was a great podcast and look forward to working with you in the future.

Absolutely. Thanks for listening to another great episode of Ritter on Real Estate. Hit the subscribe button to make sure you don't miss out on the content that will make you a better Investor. Also, visit KentRitter.com for articles, videos and tools curated just for passive investors. Until next time, this is Kent Ritter with Ritter on Real Estate. Now go out and invest like a pro.