How to Build Wealth and Lead A Life Worth Living with Terry Moore

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host.

Welcome to episode number 130 of the Insider's Edge to Real Estate Investing. This is your host, James Nelson. I'm principal and head of Tri State Investment Sales at Avis and Young. And wow, episode number 130. Amazing to think we have been going strong now for over two years. This started off as a little bit of a crazy idea, I guess in the depths of COVID maybe not so crazy today, but at the time I was not even a consumer of podcasts. And so, you know, while I certainly had more free time, as many of us did kind of hold up at home, I started looking into what was out there and said, hey, this could be a great way to reconnect with people, a way to interview friends, mentors of mine, incredible investors and to share that message. And so that's, that's exactly what we've been doing. And the whole point of the show is to make you the most successful investor possible. In fact, the title of the show, which is the title of my upcoming book, the Insider's Edge to Real Estate Investing. I really believe that real estate investing is such an incredible opportunity and asset class because you can gain that inside edge, right? And that will help you outperform the market. So today's show will certainly provide that for you, but with a whole lot more. And this is really, really a special episode. With us today we have Terry Moore, who is someone who I met through my mentor, Blaine Strickland. He had a summit where we all came together and I had heard incredible things about Terry. But there he presented on his book Building Legacy how to Build wealth and Live a Life Worth imitating. So first of all, let me tell you a little bit about Terry. Terry is a very accomplished real estate broker, but more importantly, he helps real estate investors make the most important financial choice of the next decade. So he is a top apartment broker, has received 10 major recognitions from the Broker of the Year, Dealmaker of the Year, CCIM of the Year. The list goes on and on and on. Terry has a very interesting background. He worked for one of the world's largest bank, he owned a hardware store. He was a shopping center developer and then became a hyperactive income property brokers. He describes himself, but I think what is so amazing about this book is that he not only shows you the how to get into investing, but he tells us about the why. And we talk about that in this interview. But I want to share something very personal that he wrote. I won't share the whole inscription when he gave me this book, but sometimes we talk about real estate, just about the numbers and the income, the expenses, the profit. But there's a really deeper meaning here that Terry talks about and he talks about legacy, which is in the book. So what he wrote for me is that legacy is a more worthy objective than just the material wealth. And he goes on to say that it is about what people think, say and do because of your influence. Legacy is built by living out of your values, by investing in others. And these chapters challenge and invite readers to lead lives worth imitating. So just really, really powerful stuff. It's going to certainly come through in this interview that I'm going to bring to you shortly. And you know I don't plug the show notes enough. You know I know I tell you they'@james nelson.com I'm sure they're on itunes, Spotify, wherever you're seeing this episode. But I am taking more time now to make sure that there's more detailed information in the show notes and most importantly so you can also find out how to learn more about the speakers. So whether it's how to follow them on social media or their website, how to get their book. So that's all going to be in the show notes. So definitely give that a look if you like what Terry has to say. And with that we're going to have a brief word from our sponsor and we'll get right into that discussion with Terry Moore.

A Different Approach to Putting Our Clients First Avis and Young's Tri State Investment Sales Group sells multifamily office, retail, development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more.

Okay. Welcome, Terry. It's wonderful to have you on the show. I know we had the pleasure of meeting in person at our mutual friend Blaine Strickland's conference. I'm such a big fan of your work, and thank you for sending your book. And so I'm so happy that you can join us today to discuss all the incredible principles that you've shared with us here.

Well, Jim, it's an honor to be with you. You were famous long before I met you, and it's a joy to hopefully add some value to the mob that listens to you. Your thousands of followers, I see them in the stadium. In fact, they've disappeared over the mountains and into the plains. It's great to be a part of your team.

Well, you're too kind, but I know, and I gave your proper introduction before. But the list of your accomplishments are far and wide. CCIM of the year, top 5% brokers in San Diego. The list goes on and on. So I've got to ask Kerry, because the book. And again, I'm strongly encouraging everybody who's listening to this to pick up a copy of Building Legacy Wealth. Top San Diego Apartment Broker Shows how to Build wealth and Lead a Life Worth Imitating. And if you all have listened to me for a while, you know that there's not a lot of books out there that I recommend in this space because there's so few of them that I think do a really good job of explaining how to look at investments. And, Terry, even though the subtitle talks about your experience in San Diego, but clearly these principles apply certainly across the country here, if not around the world. Terry, I'd like to start by asking the why? This is the Simon Sinek question. Because you talk about building legacy wealth, and that should be obvious. Why would someone want to be wealthy? But then you go on to say, and lead a life worth imitating. So maybe talk about why investing in real estate can ultimately give you this life worth imitating.

Thank you. So there's a great writing coach who you know well, Wally Bach. We started with 4,000 pages and we condensed it to 250. He threw out 3,750 pages, and we got down to things that were worthwhile. I wrote the book because I wanted to talk to people about legacy. My wife said, when are you going to write a Get Rich quickbook? Well, honey, I'm not going to write a Get Rich quickbook. This is a Get Rich Slowly book. People will read it to learn how to build wealth. Jim, most of your clients Already know how to do that. Most of your listeners have already done that, But I wrote the book to talk with them about legacy. The painful reality is none of our bodies are going to last an extra hundred years. Blaine is promoting a book, 4,000. The notion of 50 weeks a year, 80 years, 4,000 weeks. But it's time management for mortal. You and I know that we're going to leave this mortal coil at some point, and I hope that you leave a giant inheritance 10 times whatever you wish for. But when you leave, you can leave it all, whoever you leave it to. I don't know the politically correct way to say this, but they could piss it away. But your legacy is different. The inheritance of the stuff, the dimes, dollars, the keys, that's the physical stuff. And that could be lost, gambled away, divorced away, addicted away. But the legacy, Jim, that's what people do. That's what people think. That's what people say, because of your influence, that's your legacy. There was a story about an owner of a sports team. He had gone to Africa, and there was a little kid who was clinging to him as the rich man was giving him a wheelchair. And the rich guy, he had a bunch of wheelchairs to get rid of. And this one little kid wouldn't leave him alone. And he said, no, this is yours. You can keep it. And the guy said, sir, I. I want to look at your face a little bit more so when I see you in heaven, I can recognize you. The guy who told the story said my life had been stuff, and then my life had changed, and it was more stuff. And he says now it's changed from success to significance. So sometime the next hundred years, we're going to go away. Kind of the ultimate question is, so what? Or for what? Or what next? You and I have won our fair share of ribbons and prizes and awards. It's good for the ego. It's good for the pocketbook. The people that you and I serve own property, their leaders. They're people of influence. The question is, what kind of influence? Hitler was an influence. Stalin was an influence. There are dictators around the world that are influential. What do you want your life to amount to? I am fortunate that I serve people who want to make life better for their tenants. And when that happens, guess what? They create value and their property goes up. I try to get one slumlord out of the business every year. That's pretty hard to do. But almost all of my clients build wealth by making the property better for their tenants. And my hunch is you do that as well.

Well, Terry, that was amazing and I so appreciate your setting the stage in this way. And fortunate now we're in our second year. I've done well over 100 podcasts, and I don't think I've ever had a guest on the show speak to the why in that capacity. And really, this isn't just about making financial gain. It's about becoming a change agent and actually improving the stock and other people's lives. So thank you. And I know that this is, you know, having spent a lot of time with you, I know that if you wanted to, you could be on a beach, you could be retired many times over. So the fact that you're still sharing this wisdom, I am truly grateful and I love that that's really the foundation of your book. So that being said, that there are also, you know, specifics and there are reasons of why real estate is such an incredible investment opportunity. And I know you gave seven reasons why investing in apartments can make you a millionaire. So let's get into maybe some of the nuts and bolts, and we don't have to go into all of them. But you talk about leverage, you talk about cash flow, tax shelter, inflation protection, which is a very hot topic right now, paying down your mortgage, the tax deferred exchange, so the 1031, and monetizing your investment.

So again, you don't have to go.

Through every single one of these. But if you were in the proverbial elevator ride and someone said, you know, Terry, you know, what's so special about real estate? And why should someone who maybe has not invested in this asset class before, what would be your elevator pitch to them?

Well, when you buy Amazon and goes up, that's great. But when you buy real estate, you get to leverage it more. So in income property, when the net operating income, when the cash flow goes up, it's sold as a multiple of that and you get to deduct the interest. If you want to borrow money against your Amazon stock, there are federal limits, but you can. So in San Diego county In the last 30 years, apartments have gone up 8% a year, compound average. And somebody who put a third down, they're getting a 24% rate of return. The million dollar building goes up 8%, they put a third down. So they're getting an $80,000 return on 333,000. Trust me, it's 24%. That's a mafia rate of return. Plus, depending on whether you're retired or not, you may be able to get to deduct the interest and the depreciation. Depreciation is that wonderful myth that your building becomes worth nothing in about 30 years. There's hardly any metropolitan area in the United States where the building becomes worth nothing. But if in the arena that you and I serve, where you're housing people, almost everybody you know wants a roof over their head and indoor plumbing. It gets cold where there is not a roof over your head and there's a huge need. You can supply that need. And all the government might be unfriendly from time to time. People need housing. And just in case we have inflation, well, let's see. In the last 50 years, we've had one balanced budget when Clinton was president one time, and nobody since then. Just in case we have inflation and maybe it will be bigger in the next 10 years than it's been the last 10 years, then appreciating assets are a good deal. If inflation only went up 5% a year and you had leverage at 3:1, you're getting a 15% rate of return on your equity plus whatever cash flow you get and plus whatever tax advantage you get. It's relatively easy to pick a stock that will go up 15% a year. Some people can do it. I'm not one of them. I don't know very many people are. And when you invest in a company, you're counting on the management, the CEO, the board of directors to do it right. When you own your building, office, warehouse, whatever it is, you get to drive the bus. You get to choose where you're going to invest, who you're going to serve. Places like Detroit. That's high risk. It might be high reward for some people, but you don't have to be there. You could pick a place that makes sense to you. You can do your market research and pick the places that you think are safer. Maybe because government policies caused a housing shortage, like in San Diego, in many other cities, coastal cities. But you get to choose a thing and you get to multiply the advantage. In the stock market, if you have insider information, you get in trouble. If you are an expert in your asset class, whether it's warehouses or office or retail or apartments, if you know something special, you get paid for doing that. Insider trading. There is no such thing as apartment. It's a sophisticated real estate investor. So as you become more sophisticated here, you get rewarded. If you have special knowledge about a stock and you trade on that stock, there can be federal time. Here, it's just wealth.

You know, I want everyone who's Listening to this right now to hit the reverse 30 seconds a couple times and go back and hear what Terry just said again. Because you know, the way you put that so succinctly of why real estate, why it's such an incredible inflation hedge, and the way that you distilled that was very powerful. You've taken a pretty complex subject and you've really helped broken it down to its most important pieces. So really appreciate that. And now I want to talk about what to actually look for. And you write in your book about all or nothing thinking. And you write, there are no perfect properties. Every property you will ever consider buying has something wrong with it. Smart investors look for properties with the right things wrong with them. Fixable problems. The assets become more valuable after the problems are solved. Some people don't get that. They lose sight of the big picture and the upside of the property and get stuck on fixable flaws. Maybe if you could expand on that, because I think it's so important that especially for those looking to make their own and you know, their first investment, they might be looking for the perfect property. And I think to your point, nothing's perfect, but the problems are where the opportunities lie. Maybe you could speak to that.

Sure. The wealth is built by solving problems. And if the seller is a jerk and if the seller is a slumlord and the landscaping is awful and the painting is awful, all of those are fixable. You get a new owner who's nice to people and treats them well and people like it. You get rid of the God awful colors and you paint them tasteful colors. That's a good thing. Instead of abusing, ignoring your tenants, if you treat them with courtesy and respect, that's a good thing. So the right things wrong with it are problems where you can fix it and you get more rent. The wrong things wrong with it are the sewer messed up, it's got a horrible layout, it's in an area that is declining. So you don't get more rent because you have a sewer system that works. You pay money to get a sewer system that works. But that's the wrong thing wrong with it. If you make the property more attractive, that's where you get more rent. So if the seller is a jerk, well, the good thing is that that's a temporary problem. Once he's removed from the process, once he's out of the escrow, he goes away and all of his problem goes away. If the seller is an idiot and he ignores repairs that need to be done, but they're not so Far gone that the building is destroyed. That's a fixable problem. You're looking for things with a multiple impact. If there's trivia wrong, that doesn't matter. If there's big things wrong, that matters. If there's the seller is a jerk, most people aren't going to deal with it. So you're looking for high impact. Your mentor and mine is a strategic thinker. Both Rod, Massimo, who some of your folks know, and Blaine, both of them have a really good idea what really matters. There's a fellow named William Carey and once upon a time he said, I'm not afraid of failing, I'm afraid of succeeding. But what does not matter, we want to focus on the things that have the biggest impact in solving people's problems has a big impact. When you get more rent, you can sell the higher rent for more money. So the fact that you wouldn't live there is absolutely, truly and doesn't matter. You're not going to live there. But you can get the nicest tenants and that census tract by making it more attractive.

That makes a ton of sense. And I want to dive a little bit deeper into the subject because you also talk about five important trade offs in apartment investing. And again, we don't have to go through every single one of them, but just to kind of give a flavor. And then maybe you can expand on some of these. Number one, easy management and superior condition versus creating extra value. Number two, prestigious neighborhood versus higher cash flow. Number three, maximum wealth or keeping your trophy properties. Number four, property management versus full control for chance of higher cash flow. Or number five, maximum leverage versus lowest possible price. So maybe talk about some of these trade offs that happen when looking at investments and maybe how you choose what wins out.

So let me start with something simple. I really wanted three desserts last night. And I would really like a slightly lower body fat content. I would like a leaner waist. And each day I make a choice about what I'm going to eat. The easy choices lead to a hard life. And the hard life, the hard choices lead to a good life. So if you buy something really pretty, everybody wants really pretty. And it's going to cost more to buy really pretty. But if you buy something as ugly as homemade sin and it's fixable, then you can have really pretty cash flow. But when you start with something really ugly, your neighbors are going to say, oh boy, that guy must be a slumlord. Look at that dump that he bought. But if you care about what the tenants think in six months or Two years from now, it looks much better and you get the award for renovation of the year. The award is nice. And the higher cash flow is more important. There's always trade offs and you have to pick your heart. One of the stories that comes in my book, somebody that I know went to Weight Watchers for a long time, and this was somebody I saw regularly and I wanted to support my friend. And I know that in Weight Watchers you weigh in and then there's a pep talk. And so I would ask my buddy, so what was the score? And what I was saying was, are you up a couple of ounces or down a couple of ounces? And I would get a report. But the more important question was always, what was the story? And the best story that I heard was, pick your heart. What does that mean? Well, there was a woman who was whining because it's hard to lose weight. And the moderator, the cheerleader front, said, yeah, it is. You know, it's hard to be morbidly obese. It's hard to lose weight, it's hard to keep the weight off. Pick your heart so you can have something really pretty. You can have somebody suck up to you. The people are listening to this can go to their favorite luxury dealer in three years, three hours from now, they can leave with a brand new, whatever, Mercedes, Lexus AB rolls and the money goes down right away. Or they can compete to buy an income property that has problems. And when you tear into the property, you'll figure out it's got more problems than you thought. But if you create a massively bigger cash flow, then you've created wealth because of the multiplier effect. If you want to buy in a fancy neighborhood, a graduate school neighborhood, your tenants are going to be mostly, well, civilized. They're not going to get drunk that much, they're not going to do drugs that much. They're not going to murder their neighbors that much. And if the property looks nice, well, people expect that if you buy in the neighborhood where your janitor lives, where the quick, the fast order cook, or the server works, or the car mechanics assistant works, they're not expecting brand new things. But if you solve those problems, there's a bigger multiple. Your listeners go to Nordstrom or Nordstrom Shopper and they get great clothes, and when they walk out the door, the clothes cut value in half. Or they can do other kinds of things. It's what do they want to find themselves for? They want to be known as the person who spent the most money with their Nordstrom shoppers, they have one kind of life. If they want to be known as the person who put all of their relatives, kids through graduate school, they'll make different choices. You pick your hard, you pick out what you want to do. And there's always trade offs. You can't have it all, we can't do it all. You've got to say no to some things. To accomplish the other things, you just need to understand the trade offs.

That makes a ton of sense. So I really appreciate your sharing that I'd like to move on. And a topic that is near and dear to both of our hearts, and you talk about that one terrific broker is better than many adequate ones. You talk about the value of a fantastic broker not only with just market insight, but also helping you assemble the right team. Would love if you could expand on that.

So one of my favorite clients was actually the son of a broker. And after we concluded a deal, he complimented me. And he didn't just say, you're a good technician. It was nice that he said that. They said, you bring an A team. I said, okay, tell me more. He said, well, you've got a great inspector, you've got a great mortgage broker, you have an insurance person. You know how to do this. So it's not just Terry, it's not just Jim, it's Jim's tribe. And because you are a power force, your impact is multiplied. And part of the value that we bring is not just saying, oh well, whatever, you'll find somebody. It's being able to say, look, I know three or four estate attorneys and the best one I know is, and here's why I think you should go to them, because for your particular situation, they are uniquely qualified for that. We're focused on our clients success. And if you get a wandering generality, if you get a generic broker, I'll give you a 10% rebate. If you work with me, I'll probably fail half the time, but if I ever do, I'll give you some money back. Well, you might get cheap service and it might be, well, what you pay for it. So Jim, if, if the love of your life needed brain surgeon, would you hire a teenage kid who knows how to cut up a grapefruit because a grapefruit is about the same as a brain. Or would you want the best brain surgeon you could get? Probably you want the best value. And if the brain surgeon makes more in six months than you do in a year or maybe six weeks or six hours, you probably want your honey to pull through if you're buying. Yeah, if you want to, if you want to buy brand cereal, maybe you buy the brand cereal out of the grocery store instead of the brand name. But if it's something that is going to impact for 10 years, you don't necessarily want the generic. You probably want. If it's a life changing impact, you probably want the best you can get. Because the best you can get. We win tournaments because we can solve problems that other people can't diagnose. We're not better, but we have superior skills. There's a difference between having superior skills and being a better person. Being able to deliver great results is different from you being a great person. You happen to be a great person, but you are a great person and you decide to develop great skills.

Yeah, Terry, I'd love to build on that because I think another element and what defines a great broker, and you talk about expertise, knowledge, transactional experience, but it also in my mind means that that broker is active in your marketplace. So what's their market share? What are they doing? And sometimes you know, and I know you're doing the same thing on the west coast I'm doing here on the east coast. We go in and we meet with owners. So we, we help find investors opportunities, but we also list properties for sale. And sometimes the, and I don't know if it's my competition or it's just one of the, you know, a genuine question that some of these sellers come up with is say, you know, James, you're really busy. You know, you're, you're listing dozens and dozens of listings, you've got a podcast, you know, you're writing a book. How are you going to have time, you know, to work with me and represent and you know what I've told my response to that is, look, wouldn't you rather work with someone who, yes, is super busy, who's in the know, sees a lot of opportunities than going with a broker who maybe only does one or two sales a year? If they're only doing that, I mean, how much information do they have? So I don't know if you'd agree with that sentiment or not, but would busy be one of the determining factors as far as if a broker is competent or not.

Similar? So somebody who sorts confetti could be busy. We really want somebody who's effective. So with our team, we encourage buyers to write multiple offers. And we don't like to write multiple offers because we like to have a low percentage of receipt. We want to write multiple offers. So we Learn as much as possible. So if you diversified part of your portfolio and you bought here, I would say let's write 10 or 20 offers on the properties that we think are pretty good, and hopefully we'll get seven counteroffers and maybe you buy one of them. Well, Jim, that means I know about six other sellers who will respond. And part of the reason that you got the best deal is I had three clients ahead of you, and so I knew which ones to show you. And when we find something with zombies or nuclear waste, we take it off the list. But part of what you and I bring to the table is the market intelligence. We know some things that most of our competitors don't do. Because you have a reputation for integrity, excellence, people know that you can be trusted. They can tell you a secret that they wouldn't tell anybody else because it won't be used against them. So the people who are effective, the titans, are the folks who have a combination of insight, courage, focus on others, best behavior in your company, you did some great things. And you may or may not have told your audience about it, but. But you created value not just for your clients, but for your teammates. There were people who said, jim, it's better for you if you did yada yada, and you could make a lot more money. And you were focused on a broader audience. And that's part of the reason you had such a big impact. You had a bigger vision than just more and more for me and mine. And that's made you a great broker or you are a great broker, and that's why you had that. But it all goes together. The person who does three deals a year, they might be the best fisherman, they might be the best chess player, they might be the best fish, they might be the best whatever. But the people who succeed at anything that's concert piano or brain surgery are the folks who have done the 10,000 hours of delivery practice. They've tried things and didn't work. And they've tried them and it didn't work. And they tried it and it didn't work. They tried it and almost worked. And they tried it and it worked. They love the grind and the people love the grind. You and I could have both quit years ago. Neither one of us need the money. But we love the game. If we didn't love the game, we would have retired. We've got nothing left to prove. But we love the game. We're gifted for it. And neither one of us work for free, necessarily. But we could work for free because we're good at it, and we like adding value.

Well said and really appreciate the comments and could not agree more. So there's so many helpful tips and advice in this book. And so I really, really, again, hope that our audience here orders this book and reads it, because there's just so many things you say here that are just so spot on. I want to talk about windshield time. You talk about learning about markets and sub markets. Maybe you could tell the audience about what you mean by windshield time. I think in this day and age, a lot of people figure, oh, well, I can search everything online and I got Google Earth. What do I need to do to go, you know, take a look at the neighborhood and property? So maybe talk to us about how someone should go about getting to know a neighborhood.

So one of my favorite clients, she was investing in what I call cash flow neighborhoods, really. She was investing in nightly news neighborhoods. You know, when you watch the nightly news, what they show? Well, this lady had grown up in one of those neighborhoods. She'd become successful. She'd become successful in many different arenas, but she was a person of faith, and she felt a calling, like a religious inclination to go invest in neighborhoods that were not elegant. And so Jeannie would look at the apartment complex Saturday night. She bought a building that had hookers in it. I'm like, you're kidding? No. And she would look at the building Saturday morning. She said, what does it look like after the party? And when we were buying a building from a bank that had ladies of the evening in it, she said to the banker, you may or may not know it, but there are ladies performing services that are illegal, and I will get rid of them. And the bank may or may not have liability, but I can turn it around. And Jeannie knew what she was getting into, and she made the choice and she turned it around. But if she had just done Google Earth, she wouldn't have seen guys knocking on the door and coming out 12 minutes later. She wouldn't have seen Miss America dressed up skimpily greeting people at the door. But because she knew what she could do, what she would do, what problems she would and would not take, she made that successful. I've only had one client who's done that, but that was a fairly dramatic story. Now, there's some people who look at neighborhoods, and when they see gentlemen drinking out of a paper bag, they say, I'm out of here. And other people say, that's a fixable problem. I can deal with that hard. But you kind of need to know what you're going to get, there's no money back guarantee on income property. And if you say, you know, I'm allergic to this and that, well, don't buy this and that. But if you're good at fixing something and you see that some, some people buy buildings that have structural problems because they know how to fix that. Most of my clients don't. But the guys who can fix the unusual problems, they go looking for that and only for that. It's a matter of making sure that you're getting what you want and not getting what you don't want. It's easier to look at it at first and say, you know what, that census tract, that zip code, I don't want to go there. Again, not my cup of tea. Or, you know what, that's, that's exactly where I can build wealth for the community.

You know, it's such a great advice. Yeah. And I was going to say, I remember early on in my career canvassing block by block and getting to know the neighborhoods where I was looking to broker, and you learn so much from being out on the street that you just, you can't take in. I mean, Google Earth is very, you know, one dimensional. And I think when you're out on the streets, you're taking things in, you're learning, you're hearing from, you know, even the supers on the block, they know more about that block than you know than you do. And it's an opportunity to kind of see what's going on and I think, you know, also get some potential leads as well. So I would fully subscribe to that and encourage our listeners to really pound the pavement, so to speak. On that note, you also talk about scouting out the competition to get market intelligence. Talk a little bit about that, maybe in context with, you know, how to position a building, how to set rents.

So that's, no, that's not so much for the broker to know what the other broker is. That's for the owner. Whether you're buying warehouse or office or retail, it's nice to know what your competition is doing. And so when I'm talking with people who want to invest in apartments, I will sometimes say, take off your wedding ring and put on your Saturday work shirt and then go to the neighborhood where you want to buy and tell them a story. You know, I just got separated from my wife and I hope I get back with her, but, and you tell some sob story and you see how they respond. And you know, you, you look at a property that's been fixed up. And you go interview the owner and try to find out what kind of rents are they asking for. You learn what your competition, the other owners are doing. And then you try to figure out, boy, are those guys smarter than God. I can't possibly compete with them. I don't want to get run over by that steam truck. Or you know what? There's a chink in their armor. I can do something they haven't thought of. They don't respond to social media or they don't return phone calls. I know how to return phone calls. If you know what your competition is, then you can figure out, are they too tough for me to take on, or can I do something better than they can? Or are they doing something that's dramatically smarter than anything I've ever done? And I can copy that so that Jim, you and I know that the truth is our friend. We may not like the truth, but whether we like it or not, it's not going to change. And if we know the truth, you can set us free. We can say, you know what, I don't want to take on Godzilla, or, yeah, I can solve that problem. But you need to know the truth. People who waste time or say, well, let me tell you about my fantasy and my fantasy thus. And so that's a great fantasy has nothing to do with making money. If you want to make money, let's deal with what's real. If you want to have a fantasy, spend some time in the movie. Let me know when you're back. Have a great life. See you later. Goodbye.

This is such great advice, and I really hope our listeners are taking notes here. And as we begin to start wrapping up and bringing this all together, I want to read from one of your concluding chapters. You say, don't expect to achieve your legacy wealth by buying, fixing up, and selling a single apartment building. To achieve legacy wealth, you must repeat the process in the investment cycle several times. Your challenge will be to keep your capital growing. You then go on to talk about trading up. So what is trading up? And what is this investment cycle that you are alluding to?

So, one of my favorite client was a highly sociable attorney. He had been a military officer and he looked like Thor. He could probably bench press twice as much as I could. And he knew 17 ways to kill me. Well, more than five. And there was nothing I could do about it. And I asked him what he wanted to do now that he was grown up. And essentially he wanted to become outrageously rich in a short period of time. And I Said, well, we could probably do that, but it's going to be hard. And he said, I eat hard for breakfast. And so we bought him a couple of buildings and he did an amazing job of cleaning them up, paying them up, fixing up, raising the rents. And so he had started with a big pile of capital and a couple of smaller properties and we sold those. And so he pretty well deployed his capital. And I said, okay, you know, we've done a great thing. All your money is working. None of your money is in a coma. Now in order to, if you still want to grow your wealth, you need to sell one of your prizes. And in effect, he said, oh no, that's a trophy. Okay, well, keep that trophy and let's sell another one. Oh no, it's so pretty. Well, I'm not talking about one of your kids. I know you've got twins. I'm not asking you to sell any of your twins. I'm saying something that you took out of the dumpster. You rehabilitated it. You made it the best thing on the block. Let's sell it for a premium and let's get that equity working yet. Because right now that equity is on vacation in the Riviera. You're working your guts out, your wife is working your guts out, and that equity is on vacation in the Riviera. So if you want the equity, work as hard as you do, let's sell it, let's buy another beat up junker, and let's do again what you are ridiculously good at. Oh no, I can't sell one of my trophies. Well, that guy is really rich. He's not as rich as he could be because he wouldn't sell a trophy. The trophy was more important to him than getting really wealthy. That's his call, not my call. My job is to understand my clients. I don't have to agree with my clients. I just said, okay, I get it now. Originally you said you want to be really rich and now you wanted, you've got a trophy case, you want to keep them. That's a victory. God bless you. Congratulations. When, if you ever want to get even richer, let's sell one of your trophies and we can buy you a beat up junker and we can do it again. If you want to keep your trophies forever, that's a great victory. It's different what you said, but you're a full grown adult. You get to choose. Now I have another client. When I met them, she was a doctor, he was an assistant fire chief. They had two rent houses and they thought they were going to get another one. And I said, you know, we can, we can help you find, I know somebody who can help you find a rent house in that nice neighborhood. And that's not my specialty. But if you want to build wealth, which was another thing you were interested in, let's sell your two rent houses and let's do something else. And they bought a six unit building in an ordinary neighborhood and they cleaned it up, cleaned up, fixed it up and they bought a nine unit building in a so so neighborhood and they renovated four of the units and roughly speaking will double their equity within two years on both of them. And they sold their properties which were nicer and they bought more and now they have 100 units. He's retired. She could be retired, but she loves her job too much. And they make more from their properties from their 90 some units than they did from, well, either one. Well actually both of their two incomes. But they valued their kids were now in college, but they thought the kids were worth keeping and the property was a tool. And so they didn't say I want to be a gazillionaire, but they surpassed the income of the hotshot attorney. They're not better people. They just had different goals and they wanted to build wealth and so they support the charities, they support the community, they support their kids, their kids can go to any place they can get into. But it was a matter of what they wanted to do and their choice was make the money work for us. They didn't want to worship their property, they wanted their property to work for them. I'm a client centered broker. I have to agree with my clients. I need to understand them. And when they say something and do something else, I say, jim, you're the boss, I'm the servant. You originally said X, now you're doing Y. What do you want to do? I'm all for you, but make sure I'm doing what you want.

You know, those stories are so powerful and helpful especially for those looking to get into the business and make their first investment of how to really grow and build this legacy wealth that you speak of. So, so helpful for you to share. So with just a minute or two left, I would like to ask about if you could give one piece of advice to someone listening right now who is not, you know, they have not made their first investment but they're looking to jump in. Where would you tell them to start? What piece of advice would you tell them to pursue?

Most people should not be rental owners. If you're a people pleaser, it may not be a good thing for you. You would need property management. And if you're a bigot, please don't become a landlord. It's. It can be so simple. It can be huge multiplier. But a very impactful book. Multimillionaire, multi million seller began with the opening sentence, it's not all about you. You don't have emotional maturity. If you think because you're rich that you're special, you're going to have a really frustrating life. The fact that you're rich and you're wealthy doesn't make you special. It means you can get into the game. If you have a focus on others, you can do very well. But if you're entitled, you're going to be really frustrated and you're going to miss more deals than you're going to get. The biggest frustration that I have is not finding wealthy people. It's finding wealthy people with emotional maturity. If you want somebody to absorb all the risk so that you can steal from a rich sucker, you're going to be really frustrated. Alternately, if you say, I'm competing with guys and gals that I'll never see, and half of them are more liquid or smarter and are wealthier than I am, but I'm going to be the most winsome seller, the most winsome buyer, you might get the deal. Jim Yun and I know a wild and crazy man named Beau. And Beau wrote a book that boiled down to, here's how you win more deals as a buyer. And essentially, the guys who win and the gals win more deals. They court the brokers. They don't look down on the, quote, little people. They win friends with the seemingly insignificant people. They're the nicest people you know, and, and they get told stories. A little birdie told them about a property that was for sale. And just because they're nice, they get deals just because they're nice people sell them for slightly better terms, the obnoxious, arrogant folks. People don't like pride and they stay away from it. People respond to humility, courtesy, and grace. So your kindergarten teacher was right. It's nice to be nice to the nice. And lots of people that you and I know are wealthy and powerful and they want everybody to know it. And they don't get many deals because they're jerks. You don't have to deal with jerks, particularly when there's loads of competition. Emotional intelligence was one of my first chapters, was one of the hardest lessons that I'm still trying to Learn. But that's an important piece of what it takes to go from adequate to fabulous success. Thank you for your time. It's been a joy to be with you. I've done this a couple of times, and your questions are wiser than most of the people I've served. You and I are coached by a really smart person, and he's taught me that your intelligence is not shown by your brilliant answers, but by your wise questions. You've asked wise questions. Thank you.

Thank you so much, Terry. And again, this has been such a pleasure. And we're well over 100 podcasts here. And, you know, the things that you were saying, I have never heard on this show, the way that you have put them forth, the way you've distilled some of this information. So I know I speak for our listeners in our gratitude. This has been a really special interview. So, Terry, I just have one more question I have to ask as we close because I also love how you are a lifelong learner. I read here in your bio that you still aim to read 50 nonfiction books a year. I know you have an appendix with some of your favorites. But just for our listeners who are also lifelong learners, any special favorites that stand out or when you're looking for your next book to get your hands on, how do you go about finding what to read about and how to continue to learn?

So I'd rather not have Alzheimer's. I'm learning to dance now, and I don't dance well. But last weekend I danced around a trash can, not because the trash can was that much fun, but because I needed to learn something new. The people I most admire routinely learn. And so I try to pay attention to wise, trusted people whose experience and depth is different from mine. So one of my friends has a far degree, far deeper sunshine, far deeper sentient than me, and I've asked him, what one or two books do you think is really important? And so I'm going to read about a congressman who votes differently than I do. And I try to learn about things that are just a little bit beyond what I'm already familiar with. And when people that you and I know, that we trust say, this is a good book, I routinely put it on my list. I may or may not get to 50 books this year, but I've read 190 in the last. I'm not quite hitting 50 a year, but I think next year I'll be hitting more than 50. But it's a matter of deliberately staying hungry. And I don't read 22 books on time management. I don't read 37 books on strategy. I try to pick the things that interest me. And five and ten years from now, what will it take for me to be interesting or we know about some things. And I try to get things that will help me be a better husband, a better citizen, a better person of faith. But what way do I want to grow in and then do those kinds of things?

Terry I love that answer and what a great way to wrap this incredible interview. So I just want to thank you again so much for joining us today and for everything that you've been kind enough to share with our audience.

Thank you. It's been a joy. Wonderful.

This is your host, James Nelson of the Insider's Edge Real Estate Investing. Thank you as always for tuning in and listening and sharing this episode with your friends. That means so much to me. Your ratings, your comments. If you've not connected with me already, please do so at James Nelson NYC on LinkedIn, Instagram or Twitter. And last but not least, please do check out jamesnelson.com where you can find this podcast. You can find the show notes as well as a lot of helpful information to give you the inside edge to real estate investing.

Until next week.

Thank you for listening to the Insider's Edge to Real Estate Investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James at James Nelson NYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show notes and other episodes along with an exclusive video series and other helpful resources so you can gain the Insider's Edge to Real Estate Investing. Until next week.