Stepping Into Prosperity, The Inspirational Journey of Real Estate Investor Anthony Chara

Foreign bowling here with Pivot to Prosperity brought to you by Pivotal Real Estate Investments. And I have with us here today Anthony Chara. Anthony, welcome. Thank you for coming.

Hey Jenny, thanks for having me on.

You're welcome. Let me read your bio. You have an illustrious background. I've known of you for many years and I'm so glad to get you on the show here. You are a real estate mentor and educator and you have multi unit apartment investments all over the place, Truly all over the place. You teach people to successfully analyze and invest in apartment complexes and you also teach due diligence, asset management, raising private money, value add and deal structuring strategies. And that's just a few of the things that you teach. I know the main focus being on apartment investing, both as an instructor and an investor. Specialties are commercial residential apartments. Educator, mentor, public speaker and real estate investor. Welcome. So what is left out that's not in, Tell me what's in between the lines there.

What's in between the lines? Jokester, prankster, smartass, Quite a few other things.

Well, and we just had you at our local ria, the Central Florida Realty Investors association. And I'll say you brought the biggest crowd that we've had in several years. So it was great. Everybody was really happy to come and hear what you had to say and then you had your boot camp. And like I was just telling you before we came on, I know quite a few people in there. I wish I was in there too. But I commend you for your following. It's, it's impressive. And so let's talk about how you first got into buying apartments.

Well, it actually started with me just wanting to go to the next level. So my wife and I had probably 7, 8, 9 single family homes and condos and I was getting tired of doing the onesie twosie type thing and happened to be at a business opportunity meeting with someone. Well, there was about five or six of us and we were looking to invest in a different project. Completely outside of real estate was a business, an actual business that somebody wanted to open and they were looking to raise money for it. And one of the, we went around the table and introduced ourselves and one of the people sitting around the table happened to mention that he had 450 apartment units. And it was like, well, this is great because that's the next level that I wanted to get to. So the, the meeting was done. I asked the gentleman, his name is Ron, if I could take him to lunch and kind of pick his brain about apartments. And he said, sure. So we went to lunch and spent about an hour and a half, two hours just sitting there having lunch and talking about apartments. And he really hooked me with it because one of the things that he talked about was that out of his 450 units in his heyday, this was back in the mid-90s. I originally met him around 2003. Ish, 2002, 2003, 2004, somewhere in there. And he mentioned in the mid-90s he was doing pretty well because he was making about 140 to $150,000 in passive income. And that was pretty impressive until he added every single month. And I'm thinking, wow, okay, how do I get into this field? And so he, he talked to me about that and shared some information with me and then I was pretty much hooked at that point. I knew that I wanted to jump to the next level because I was tired of doing one thing at a time. And then I also met up with another person, a gentleman you probably heard of, George Antone. And he and I met at a different event and there were three of us originally that started going out and looking for apartments and started buying apartments. And then we also realized that there was a lot of information that was missing from the training that we were getting because we made a lot of mistakes when we first started up. We started up in 2005 and between 2005 and 2009 we bought three or four hundred units. But we had made a lot of mistakes and so we decided that we were going to start teaching our own classes. So that's how I got into it. And then because of the mistakes that we were making, because we didn't know what we didn't know, we were learning a lot of stuff the hard way, we decided to start our own training and go from there.

Great, great. What was the name of your company back then?

Oh, way back then. It was called ADG holdings when we first started up. Long, long, long time ago.

Ah, okay. Well, yeah, you've been, you went through the down, down cycle there too. I, I've been in real estate since the 80s, so I've seen a few myself. But yeah, I wish I was liquid after that. I, I was wrapped up with kids and soccer and should have been acquiring multi unit properties too.

Yeah, me too. Matter of fact, I did a presentation last night in Baltimore and I'm sitting in a hotel in Baltimore because of the presentation. I've got a one day workshop coming up tomorrow and somebody asked me, they said, well, based on what I know in real estate investing because I've been doing it for 30 years, since 1993. What would I have done differently? And I said one of the things I told them is I would have started with multifamily a lot sooner because my wife and I put a lot of money down on single family homes for the down payment and closing costs. And that ate up, just like you said, all of your liquidity. So when the market turned and things were really good for investors to actually buy some of these distressed assets, we no longer had any money to do that. So I would have, the one thing I would have done differently is I would have gotten a multifamily faster rather than put down the huge amounts of money that we did on the single family homes because we would have been much further ahead than where we are even today.

Right, right. Well, you know, and, and it's funny because as I talk to people, especially in our local RIA that are flipping houses and whatnot, they are so addicted to that, that adrenaline when you resell the property. Right. If you're not a buy in holder and they really aren't as open to thinking about what if they couldn't be there working on the property or overseeing the work on the property every day. You know, they need to have some kind of a backup source of income. And slowly more and more, I think that syndications and the whole passive income opportunity is becoming more and more recognized as especially educators like yourself are out there and teaching people that it's a possibility because so many people just have a W2 job and learn about the four 401ks and, and IRAs and just don't think about what else they can do.

So, yeah, well, it's just like me when I first started up. I had no idea that you could raise money from other people. I had no idea that I'd even be owning apartment buildings until I met George. And then to use one of my other mentors, a gentleman named Robert Allen's phrases, the blinders came off. Yeah, blinders come off. And it's like there's this whole big other world out there as long as you're willing to look for it. And you're right, a lot of people get stuck. That was me when I had my last corporate job. All I knew was you work pretty much until you die and you invest in your 401k and oh, it's a good idea to do that because you put Money into the 401k and your company does a certain match and that's how you become wealthy and then not necessarily wealthy, but you can retire and have a nice retirement. And I realized, you know what? I'm not living.

Yeah, yeah.

Working for somebody else. So one of the other things that I talk about, too, is I learned that back in 1997 is that the big thing a lot of people don't realize is we pretty much. You. You have this. You have this yourself, right? You have your job. And pretty much everything about you revolves around your job. When you go on vacation, when you go to work, when you take lunch, everything revolves around it. And there's things that a lot of people miss out on. They miss out on. Like you were talking about being a soccer mom, right. You miss out potentially on your kids soccer matches or basketball or softball or baseball or whatever it is. You miss out some of those things. Or dance recitals, because your job dictates certain things. And so in 1997, my wife and I had a conversation because my job was literally killing me. I had developed claustrophobia from all the traveling that I was doing on airplanes for the my last corporate job and knew that something needed to change. So one of the things that we did is we decided to focus on us and what we wanted to do in our lifestyle. So what we did is we flipped the script. And by flipping the script right, we were in the center. And then we decided to design businesses that revolve around us and our lifestyle. And one of the things that we do like to do, ironically, is travel. So even though I developed claustrophobia from all the traveling, I think the reason that it happened is because I was stressed out because I was traveling for the job, not because I wanted to travel, but because I was being forced to travel in that particular position. And so once we had that conversation about how do we change this, everything completely opened up for us. I left my corporate job. I started a couple small businesses in Denver, but I didn't really have a passion for them. And it wasn't until the early 2000s, when I went to a meeting and heard Robert Allen, that we decided to really get into investing. We had actually been doing investing since 1993, but it was all we knew was, buy a single family property, turn into a rental. Buy a single family property, turn in a rental. We didn't know you could do wholesaling, fixing, and flipping. We didn't even think we could buy apartments. Never even crossed our mind until we started getting some of this education. And then all of a sudden, it's like, wow, right? And then I Met my partner George, and we started going out, buying apartments. And then the whole thing just completely turned around. What we did is we created the lifestyle that we wanted, right? That was the lifestyle we wanted here. And then had everything, our businesses, not our jobs, but our businesses revolve around our lifestyle. And that part of that lifestyle is wanting to travel. So we. I teach all over the world. I've taught on cruise ships. I've taught in countries like Saint Kitts, Bahamas, Guadalupe, British Virgin Islands. Matter of fact, next month, my wife and I are going to Fiji. We're actually doing a training class in Fiji with some students. And it's a great way to. For us to live our life and write a lot of this stuff off as business trips. Because the other things that we learned was that if you. If you read the IRS tax codes, if you have, you know, you go back here and you have your job and everything revolves around your job, right? When you get your paycheck, the first thing that comes out are your taxes. So you pay your taxes, you pay your insurance or whatever, your savings, right? That all comes out of your paycheck, and then you live on what's left over. Well, when you flip the script and read the IRS guidelines and you actually start businesses, right? The. You run everything through the businesses legitimately and legally for what we're doing, and then you pay taxes on what's left over. So it's completely different way of thinking that. That we've processed in 1997 to figure out, oh, you know what, we're living the wrong way, right? We're paying all of our taxes first here and then living on what's left instead, let's flip it this way. And we'll live on the money that we make, and then we'll pay taxes on the remaining balance. So we also lower our tax burden. And once we started doing that, we started having fun. It was kind of funny. It took my. My wife probably about seven. Somewhere between seven and ten years for her to get out of her job, because I kept trying to get her to quit. She'd come home a couple of days with these big handfuls of hair because she's ripping her hair out, just being frustrated. She had 120 people reporting to her. She was the director of a healthcare organization in Colorado. And it was just, you know, it was. It was very frustrating situation for me. And, you know, she'd come home, be all frustrated, and I'd say, well, you know, you don't have to work, right? We have enough income coming in you don't have to work. And she's like, but I love my job. It's like, well, it doesn't sound like it today. She goes, well, that's today. But most of the time, she loved her job. And then one day she came home in the middle of the day. It was like 3 or 3:30 in the afternoon. She usually didn't get home until sometime between five or six unless she told me she was coming home early because sometimes she'd have a doctor's appointment or dentist appointment, and rather than go back to work, she'd do that and then come home. And I knew about it. So she just comes pulling up one day and I'm in the garage. I just finished doing some yard work. And I looked at her as soon as I saw her coming in. I figured out, okay, she's either sick or she no longer has a job because she didn't tell me she was coming home. And so I looked at her and I kind of went up and down like this and looked at her so, well, you don't look sick. And she said, nope, I'm unemployed. And she told me later that my reaction completely surprised her because as soon as she said she was unemployed, I went, congratulations. And I gave her a big hug. And she was. She was in shock. She's like. She was expecting me to say, well, where are you? What happened? Where are you going to go? I was like, I didn't care, right? It turned out she got laid off because she told her boss what he needed to hear, not what he wanted to hear. And there was this software rollout that they wanted to do at the company. And she told it's not ready, it's not done, It'll bomb. And it wasn't her department to do this. They weren't doing the software. It was a completely different third party. And she just flat out told him, it's not ready to go, it's not going to work. He's like, no, it needs to be done in a week. She's like, it won't be done in a week. It cannot be sent out. And so he decided to let her go because that wasn't the answer that he wanted to hear. And it was shocking. And then six months later, they let him go because she was considered one of the darlings of the company. And then things really went downhill. Once they let her, he let her go. So they ended up firing him. And here it's been, I think it's like eight years later now. And she was going to take off a couple of months to figure out what one to do when she grew up and she realized, you know what? I don't need to do this.

Yeah, it's powerful, changing your mindset and opening other doors and whatnot. And. And that's a large part of why I named my company Pivotal, because I feel like since I started in real estate, I pivoted from one aspect to another doing. Doing real estate in different ways, but I still was buying huge properties from. From. From entities, different entities, even in partnerships. And I didn't think about me doing it for myself. I always thought it was just too much money. I couldn't do it myself. And so it was kind of a major pivot for me to start realizing, you can do this stuff. You really can.

So just like you said, it's a mindset, and it's also about knowing what you don't know.

Right.

You don't know. A lot of people don't know that, hey, you can work for yourself. You can invest for yourself to be your own boss. Most people like my generation, and maybe even your generation. I know my wife's generation. Your parents taught you, you get a good education, get a good job, work for the company until you die.

Yep.

And that's just. That didn't work for me. So I'm glad I left.

Yeah. Yeah. My parents thought I should stay working for the Department of Transportation my whole life.

Yep. Yep. That's pretty much what Sue's parents told her and even mine. When my parents first found out that we were becoming landlords, this was again back in 93, when we. We moved from one house to another house. We turned our first house into a rental. We showed videos of the new house to my parents when we were on a trip to California. And they looked at it and they, oh, that's great. Really nice household. How much do you think you're going to get for your current house? And we said, well, what do you mean? How much are we going to get for it? They said, well, you're going to sell it. How much do you think you're going to sell it for? And I said, well, we're not going to sell it. We're going to turn it into a rental. They're like, you're going to want. Are you serious? Are you stupid? Your renters are going to tear it up. They're going to rip it up. You're going to lose money. And they were totally against it. And of course, the smart thing for me and my wife is I didn't get Discouraged by it, because I'm not going to listen to someone who's never done it. My parents had never been landlords. As a matter of fact, they helped my sister and her husband buy a townhouse in Southern California after they got married. And then six months later, they were announcing they were getting divorced and they moved out of the townhouse the very next day. They put a for sale sign in the yard because they were not going to be landlords. Because all their experience with landlords and rental properties were all these people that had just torn up the properties didn't take care of them. The owners potentially lost money, according to my parents. And how things changed over the years is the last. My parents are both deceased now, but the last couple times that I saw them a few years back, the first thing they'd ask me is, oh, how's it going? How many units do you own now? Because they knew, they could see the lifestyle we were living. We didn't have jobs and we could come out and visit them anytime we wanted to. We didn't have to worry about taking vacation. We could just hop on a plane and go out for a couple of days and visit them and then come home and they completely got it. But, you know, if you, if you just. Sometimes if you just listen to the people that are around you, you get what are called red light people who tell you, no, you can't do it, don't do it. It's too scary, it's too risky. You're going to lose money. Well, you got to take some chances, you got to take some risks in order to be successful. But you, you take what are called calculated risks. So, yeah, you could still lose money. And I have lost a lot of money on different deals, but I've also made a lot more on other deals.

Right? Yeah, yeah. We, we talk about failing forward, hurry up and fail forward so that you can learn your lesson and do better on the next. Next opportunity. So.

Exactly. I've known a few people that failed one time and that was it. It was. Oh, it was too painful. I lost a lot of money. I'm not going to do that again. And then what did they do? They went back to their job because they're thought. They thought their job was less risky. And instead all they're doing is working nine to five and dying slowly doing something that they don't like because they're afraid to let go of that paycheck that keeps coming in instead of expanding. Years ago, I had somebody that I worked with at my last corporate Job who left the company and opened up, of all things, a bingo parlor in Sacramento, California, and then opened up more and more. And one of the things that he said to me many, many years ago was he was so glad he left because his job was keeping him from making money.

Yeah, right.

And it took me a few years to realize that. Probably about 10 years to realize what he was talking about to the point where I left. Because now I get it. My, my job was keeping me from actually making real money. And again, you're just. Your whole world revolves right around that job.

Right.

The whole world just goes around it. So it does.

And I grew up with parents that were, were really flippers at the time. They were always saying we have to stay ahead of capital gains. Right. So I had like nine schools going through to a high school. Wow. It was, it was a lot. And, and the funny thing was every time we moved, we used a horse trailer to move all the furniture. So it's a lot of trips. It was a lesson, though, because they always were making money. And real estate's been in my DNA for a long time. But a lot of people, it's brand new and it's exciting to see how quick they catch on and get that enthusiasm because it's an addicting thing that every property is so different and all I, I really enjoy watching people to light up with it, but. So tell us where you are now. I usually shoot for about 20 minutes. We're at about 20 minutes now, so 20 to 30. How many units do you have now? And where are they at? And tell us a little of that.

Well, I've owned, over the course of the 17ish years that I've been doing apartments, we've owned over 2,000 of them all around the country. I've owned everything from property in Arizona to Florida and then up to Ohio. So if you take that, that triangle within that triangle, there was about 2,000 units. Right now, though, we only own actually 60 apartment units because with prices going up as high as they've been going up, I've been trying to tell my investors and my students to keep their properties, but I keep getting outvoted by the investors who all they, all they see is this huge payday and they want to literally kill the golden goose and just get all that extra money right now and then the monthly payments stop. So I've been outvoted with our investors and we've sold off probably 3, 4, 500 units in the last two years because of how high prices have been. And we've actually had a lot of properties that we haven't even had on the market for sale. And we've had brokers call us up with unsolicited offers saying, hey, I've got an investor who's interested in buying your property. Are you interested in hearing an answer or an offer? And my, what I teach my students is you always want to say yes until you have a reason to say, I should probably change that because that's. So they said yes to say, yeah, we'll take the offer, tell us what they want. And we had a property. Matter of fact, the last big one we just sold, it was worth about 5.2 million. And the, the company that bought us out or the investor group that bought us out offered a 6 million. Actually they offered us a little bit less than we negotiated. Even though we thought it was 5.2. They came in I think around 5.8. And then we came back at like 6.4 or something. And we ended up finally negotiate in on a six million dollar price point. And the investors decided to sell, which is unfortunate because they couldn't find anything to do with their money. So they just paid a huge capital gains tax in order to get out of this deal instead of keeping the cash flow coming in for a longer period of time. So it just, it's just nuts. So we own about 60 units right now, plus I own 43 units at a hotel in the country of Belize. I'm. There's a hotel down there called Mahogany Bay Resort and it's part of the Hilton, it's a Hilton Curio hotel. So you can, you can look it up on the Internet down in Belize. So it's going to be, eventually when it's done, it's going to have somewhere around 300 units. And me and my partners own about 43 of those. Matter of fact, we just bought an additional 34 units. We had eight units plus me and one of my students went in together with our wives and we bought a townhouse because we wanted one just for ourselves. And then we had another person down there that owned a bunch of units and he just wanted, he was selling them off one at a time. And then the salesman decided to ask him if he wanted to sell the whole thing and he said, well, sure. And rather than doing this onesie twosie. So the retail price on the 34 units we bought was 7.2 million. And we ended up buying the whole package for 3 million. So yeah, nice, pretty nice deal. And we, we knew that even though the retail price was 7.2.

It.

Some of the units were more like a fix and flip because some of the interiors were not completed. We knew we had to come up with more money to fix those. So we ended up raising $4 million to buy the 34 units. So the extra million dollars was for reserves and for repairs and things like that. But the other thing that I was really proud about is the fact that we raised, we had more than four point million, $4 million of commitments. We had like $4.6 million of commitments, what are called after doing two one and a half hour webinars. So I was really excited about that. So obviously the deal resonated with our investors. So much so that they, they all jumped on board with us, which was great. Plus, the other thing that we own right now is we also own, in order to diversify, we also own two greenhouses and 11 orange grove lots. And the lots are about one and a quarter acres down in the country of Paraguay. So we're not only diversifying out of apartments, but we're also diversifying out of the country. So again, the things that you know and the things that you learn when you're willing to open up and learn about other strategies and other ways that you can make money, it just opens up so many more doors for us and our investors.

Yeah, it does.

It does.

And, and it's good to dream because if you can dream it, like Disney says, you can imagine it, you can do it. And it's amazing. It really is. So let me, let me ask you. When you don't really want to sell these apartments, do you ever put a clause in there, a reversionary clause, where if they're going to sell it within however many years you have first dibs?

We do. But in this particular case, it was one of those things where I just, I was fine with it overall, as far as selling it. It was not something where I wanted to because I would have had to have gone out and raised more money. And I already had my partners in the deal. So then I'd have to go out and find new partners that were not in the deal that wanted to buy it. So it's not necessarily in there. We do have right of first refusal if someone, if one of the investors wants to sell their ownership stake. But when 90% of them want to sell and 5 to 10% don't want to sell. Yeah, we don't. I don't worry about it. We just sell it, we move on.

Interesting. Well, so yes, it's. You have a really fun lifestyle to hear about, too, with traveling and teaching at the same time. That's really, really a thing that I think a lot of people would, would like to do. And more and more teachers are coming out, of course, but there's only a few of you guys that have been doing it as long as you have. And, and I think that you've got a very dedicated following. And so if anybody wants to, would they reach you?

Well, there's a couple different ways. They can, of course, check out our website, success classes.com successclasses.com they can also email me anthonyuccessclasses.com anthonyuccessclasses.com all right, well, very good.

Well, I want to thank you for coming on. I appreciate it. Hopefully, you know, people can open their minds and think a little broader after hearing some of this discussion. But I very much appreciate you taking the time.

Oh, thanks for having me on, Jenny. And I hope you and all of your followers are very prosperous in the coming years.

Thank you. Yeah, the. The channel is actually called Pivot to Prosperity, so that's the idea anyway. Right.

Excellent.

All right, thank.

You.