CW 999 FBF - Jason's Live Investment Counselor Panel Part 2

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Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever, ever thought possible. Jason is a genuine, self made multi millionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now, here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to the Creating Wealth show, episode number 803803. This is your host, Jason Hartman. Thank you so much for joining me today as we are going to go into about 20 ish minutes of a clip from a live event that I did where I'm doing some Q and A with the audience. And this is just happening after I explain and talk again about my big discovery, my risk evaluator, which I have covered on prior episodes. So I'm not going to replay that again. So just know that if you're not familiar with the risk evaluator, it is one of my great discoveries that I have never heard any other real estate expert talk about. It is solely my idea and it took me 19 years in the real estate business to discover it. It is on what I call the LTI ratio, the land to improvement ratio. And I had, just before you come in on this clip, explained that to our live audience and then took some of their questions. Also, remember when you need tax, legal or other professional advice that you seek out the appropriate professional. I always want to remind you that I am not qualified to advise on tax or legal matters. They are complicated. I will give you basic ideas. I will give you my understanding.

Understanding.

I will give you my experience. But tax situations and legal situations and really any situation of course is individual. So it requires individualized advice from professionals in those particular fields. So please seek that out. Just use what I talk about on the show and at our live events and what you might talk to our investment counselors about as a guideline, as a way to initiate a conversation with, with the professional who can Go deep into your situation and give you their vast experience and wealth of knowledge. So I always want to say that to you. Boy, this weekend, it is now Sunday evening and I am just coming off a wonderful weekend with our Venture Alliance Mastermind. We do these quarterly meetings and this one was here in Las Vegas and we just had an awesome, awesome weekend. I must say I'm, I'm very tired. It was a great, great time. We had a, we had pre meetings Friday morning and then the actual formal Venture alliance meeting started Friday evening at 7 where we, we played, we had some fun and partied and played golf at topgolf here in Las Vegas. If you have not done topgolf before, it's really fun. You know, I'm not like any big golfer or anything, but this is, this is kind of a fun new fangled form of golf. If you're not familiar with it, it's called topgolf and very seemingly successful company that is got centers all around the country. Then we were at the, an Encore Hotel. Just beautiful venue in this gorgeous boardroom. We started Saturday morning with our business meeting, did a little masterminding breakfast together. We had the former governor of Nevada, the longest serving governor of the great state of Nevada speak to us, Bob Miller. And he spoke for about an hour and took Q and A from the audience and taught us a lot about the history of the state of Nevada and Las Vegas and how people get business deals done in Nevada and you know, about the mafia and the casino and then how Wall street came in and how Steve Wynn, of course we were at Steve Wynn's hotel, the Wynn Hotel and Encore Hotel and how he financed his first property and became this, you know, mega, mega successful hotelier and, and real estate developer and talked about his burn rate in his first big project financed with really high yield, well otherwise known as junk bonds and how his burn rate in that property, his expenses were get this a no, not a million dollars a month, not a million dollars a year, not a million dollars a week. A million dollars a day. Yes, the million dollars a day. And it was just really interesting having the governor speak to our small group. We had about, oh I think we had 22 people in the room. We were in this gorgeous boardroom in the Wynn Encore Hotel. And then we had Jason Hansen come in and speak after that. And he is a former CIA operative called Spy Escape and Evasion. He demonstrated on himself how to break out of duct tape, zip ties, handcuffs, all kinds of things and some interesting self defense stuff. You know how to know if you're being followed, how to evade people following you, whether by foot or car or whatever. And it was just really fascinating. It was like James Bond came to give us a seminar, and that was super cool. And then we do our skillshares, our hot seats, and then we broke for the afternoon. We went zip lining. And Las Vegas, oddly, you may not know, this has a couple of the world's best zip lines. Really, the one we did was where we flew like superheroes, you know, like Superman flies right on. On our. Well, you know, in a harness, you know, on our stomach, like laying down flat. And, you know, you put your arms out in front and we started it. It's seven stories up and flew down this awesome zip line. And that was just a lot of fun. We got a lot of great pictures of fun time, had a great lunch before that, and then had some drinks afterwards and walked around the crazy Fremont street experience, the FSE in Las Vegas, in downtown old Las Vegas. And that was a lot of fun. And then we got together for a beautiful formal dinner at the Top of the World restaurant that literally is at the Top of the World. It's at the top of the stratosphere. And, you know, a lot of times those kind of places aren't that great. The food's not great and they're kind of touristy. But this one is really good. It got great reviews on Yelp and. And we had a group of 24 people at dinner and just had a wonderful time and had drinks afterwards in the nightclub there. And I wasn't at this part, but some of the group were. They were having more drinks at the Wynn and Encore Hotel. And. And there's just so much masterminding and so many great ideas being exchanged, you know, and then this morning, Sunday morning, we met back in. In the boardroom at. At the Wynn and just masterminded. We went around, shared all the great books and newsletters they're reading and the podcast they're listening to and what they learn from them. And I just thought. I thought, what. What a stimulating conversation. What a brilliant group of people. We did some skillshares and hot seats, and one of our local market specialists that was there, he shared how he uses creative visualization to increase his productivity and get what he wants in life and for his family and his business. And. And he talked about his productivity. Ha. And his biohacks that he's using to hack his biology and hack his productivity and manage about 300 employees in all of his businesses. So that was just phenomenal. And people went around the room, shared skills. One of our hard money lenders in the room, Mike, he got up and he talked about some new fund that he's starting to do hard money lending and invest in properties and, you know, how yields are compressing and what's going on in that market, what's going on in the lending market and financing properties and deals and wow, it was just an amazing weekend. People did hot seats. They brought to the group challenges they're having and you know, opportunities they're having and you know, what should I do, how should I deal with it? And, and you know, for five minutes they explained the problem or the opportunity or the challenge or whatever it was. And then the group went around and, and gave suggestions and asked questions that drew them out and illuminated the situation and helped them better handle that opportunity or that problem. It's, you know, could be good, could be bad, whatever it is the Mastermind group, that's the power of the Mastermind. And, and we had lunch at a beautiful new Benihana restaurant here. And you know, we were all around the, the, the grill as they were cooking. And you know, if you've been to Benihana, you probably have, and you done the, what is it, the Szechuan Grill or the Tepon Grill or the Hibachi Grill. I don't know what it's called.

Anyway, you know, they throw the knives.

Around and do all kinds of cool things. But, but you know, I looked to the side of me and there was my friend Pat talking to Jeff and, and you know, they're, they're part of the Venture Alliance Mastermind and they're talking about, you know, saving money on taxes and making money on deals. And then I look to the other side of me and there's Gary and Fernando and you know, they're, they're talking about stuff they're doing along with John and, and his wife and oh, it's just such a great, stimulating, bright, engaged group of people. I just absolutely love the Mastermind concept. So our next Venture Alliance Mastermind event will be in Chicago and it'll be in about three months. So look for more information about that if you'd like to join us. And right now, of course, in just about three weeks, we've got another Memphis property tour coming up I think you'll really like. We've got, we're going to focus this time in Memphis on brand new construction, brand new investment properties. So check that out. That'll be the major focus of this property tour. And of course I'M doing my Creating wealth seminar there where I talk about what I talk to this audience about where you're going to hear this live clip in a moment. The risk evaluator. Inflation induced debt destruction. What Trump means to all of us in terms of our investments and a whole bunch of other things. How to select markets.

Gosh.

You know, and by the way, today I have to tell you is the anniversary, March 12, by the way, the anniversary of the first time I did the Creating Wealth Seminar. My Creating wealth seminar. And the first one was in Newport Beach, California. And it was in 2004 today, back in 2004. So what, 13 years ago. And I remember that day well. So I've got that coming up again in just about, well, really, I guess two and a half weeks in Memphis. We'll be doing it there. So I hope you join us for that. Go to Jason hartman.com, click on the event section and get your tickets for that event. And check out the properties while you're on our website as well. And make sure you're talking to our investment counselors if you're interested in buying because not all properties are on the website.

I hate to say that, but the.

Inventory is moving so quickly nowadays, it's hard to keep up with. And you've just gotta, you've gotta be talking with our investment counselors. Don't just use the website, only work with your investment counselor at my company. That will help you get the good deals. You know, boom, right when they come up, boom, boom, boom. Because they're, they're just gone fast. We are bringing a couple new providers online so we've got more inventory. One of those new providers was with us all weekend. And you know, we use that as a, as a way also for the Venture alliance group, that mastermind group to bring value to you even if you're not in the group. They are kind of this, well, I hate to use a Bette Midler phrase, but the wind Beneath My wings.

Right.

That's a great song by the way.

The wind Beneath my wings and the.

Wind beneath your wings because they were with a couple of our local market specialists this weekend and at prior Venture alliance weekends and, and they were vetting them and learning about their business and you know, kind of vetting it out and, and hanging out with them and, and you know, I mean, for better or worse, I'm not a huge drinker, but alcohol is a bit of a truth serum. You know, you can kind of tell a lot about people's character because alcohol, it magnifies it right?

Just like money does.

You know, Earl Nightingale, the late Earl Nightingale, one of my early mentors at age 17, he used to say, money is like alcohol. It makes a good person better and a bad person worse. So, you know, when you're hanging out in these casual environments at the Venture alliance weekends and, you know, having a couple drinks with people, you know, you, you really get a flavor for what they're like, what their business is like, what their attitudes toward customers is like. And you know, rather they're, you know, what are they, are they the, the quick buck, churn them and burn them type of person? Or are they the person that, you know, really has a long term vision for their company, their business, their life, their contribution to society? You know, these are all things that you just learn by hanging out with people in casual environments. And so that's just so critically important. And that's, that's what the Venture alliance did for you this weekend, by the way. Dear listeners, of course we have many, many thousands of listeners and we only had a couple dozen people here in Las Vegas this weekend vetting some of our local market specialists for you. So they are the wind beneath their wings. So I thank you to the Venture alliance for helping me do that, because I can't do it myself. You know, it's only one person's intuition, it's only one person's opinion, it's only one person's perspective. But, you know, you get another two dozen people there to help you think things through and vet things and just a lot more perceptions. And so that's super valuable to me. It's super valuable to you. And we'll continue to provide that value to you. So, hey, without further ado, let's get to this live clip. But do be sure to go to Jason Hartman.com, the Memphis property Tour and Creating wealth seminar is almost sold out. I don't have the exact headcount on that lately, but I know we're only a very small number of tickets away from calling that sold out. So do get your ticket quickly so you can join us in Memphis and check out the properties and all the other great stuff@jason hartman.com Remember, you're listening to Flashback Friday. Our new episodes are published every Monday and Wednesday. And of course, if you're not an actual subscriber, be sure you subscribe to the podcast so you don't miss any episodes. We also appreciate your reviews and your ratings of the show. So thank you for that. And let's go to this little live Clip.

Okay. So, Carrie, I just wanted to ask you a little more about markets and, you know, different local market specialists and some of the vetting that you do. Maybe just talk about that a little.

Bit and, you know, you guys might.

Have stuff to add to that. What else do you want to say about that? Maybe?

Well, I could, Yeah, I could talk about the process. So we get, you know, we find the market. So we're all. We all collaborate. Hey, what do about this market? What's this market looking like? There's new projects coming in Orlando and Memphis. You know, maybe we should look at this neighborhood or see who's out there or we're getting referrals from someone. So we'll set up, you know, phone interviews, screen them, ask them all their different questions, get them through their property management, you know, see how legit they are. We Google you guys, don't worry and make sure we check you out and. And then we slowly start them. We'll upload their properties on our site, but we won't give it to the whole public yet because we want to work through the kinks and make sure things are going to run smooth. And some of those that we've put up on our site that you don't see, but we have on the back end, they haven't worked out, which is good because we didn't open it up to everyone. We wanted to see who could handle the waters out there with them. So those are some of the back end things that we do that you might not know until we might be working with someone for six months. And now they're just on the podcast and now they're new and you're thinking, where'd they come from? Well, we've been with them and running the numbers, and they got to work with us too. You know, not just their system has to work, but they got to know how our structure works. And so those that come on board, we have a good, good momentum with them and good relationships.

Yeah. So what she's pointing out is a lot of times we don't put them on the podcast right away because we want to kind of test it first. And some client has got to go first. Okay. Always. Right. And they've got to buy in that market first. And we're really judging a lot. Their communication skills and, you know, are they responsive if they can't even. Some of them can't even communicate. It's mind boggling. And then some don't like to pay us either for the referral, which isn't a good because usually they're not going to be around to handle warranty items either if they don't pay. You know, these are all things that we've just learned to deal with over.

And over throughout the years.

It's kind of amazing how they come and they go and some come back around and, you know, later. Like Dan in Kansas City, you know, he wants to get in again, but he didn't do it right the first time six years ago. So I don't know if he's going to be back in. Right. So that's.

He's not even getting a friend acceptance from me on LinkedIn.

Oh, not Facebook, huh? That's a connection on LinkedIn, right? Yeah. A Twitter follower. Yeah, that's for Twitter. Okay, cool. So, other questions. Yes, Aaron, and who's got the mic?

What's the overall philosophy when building a portfolio with having a blend of the appropriate, you know, A properties, B's, C's and D's having that right. Striking the right balance. I have my sort of philosophy, but I just would love to know yours personally.

Actually.

All four of you guys philosophy on that.

Well, first of all, I think it just, that's sort of your decision if you want all A's or B's or C properties, you know.

Yeah, well, you know what, I straight up ask, you know, what's your goal? What do you want to get out of it? Do you want to get the cash flow right now? What are you looking to gain? Because you know, if you go in the, in the class A, you're not going to get, you're going to barely hit that 1% RV ratio with that cash flow. And then you have your Bs, which is kind of a steadier. You're going to have some cash flow but not as much appreciation. And then Cs, you're going to have higher maintenance. But then class C, you have higher maintenance but more cash flow. So you leverage them out and, and then it's like you said, it's all up to you, you know, do you want to go. I would say if you're gonna go two right now, get two Bs and then you can up it to two A's and then two Cs and diversify with the classes, but also in markets, you know, make it a full all around blend of what you can expect too. You know, what if you buy those two Bs but you don't like them, you don't want to straight up then do 10 bees right away, you want to kind of Gradually see, dip your.

Feet in the water.

Yeah.

What's going to work for you and which management company's going to take you to the next step of. Okay, I see you do have Bs. I'm going to go to your A's or vice versa.

Right.

And so in addition to what Carrie's saying, it's how much involvement do you want? You know, ROI means return on investment. But we in the Venture Alliance Mastermind group, we came up with a new one. We also think it means return on involvement. So if you're willing to be more involved, you can probably get a higher.

Return in those seed properties.

But it's going to take more attention the A properties generally, and these are of course generalizations, they're going to be less. Did I say A last? Yeah, less involvement.

Okay.

C properties. You might be in the doghouse. There you go. Oliver, anything to add to that? Maybe you don't.

No, I don't. It's ultimately, how easy do you want it? And if you're okay with being more involved and focusing 100% of your time time on real estate and your ultimate goal is maximum return on investment and you don't have a full time job, you know, whatnot, if that's what your goal is and that's what you're going to focus on, I mean, you probably want to maybe go into the stuff that's going to be higher return on investment. And if you're someone that has a full time job that you're like, listen, I only have a couple of hours a week to maybe look at this, I definitely steer you way towards the B B A properties because those are typically speaking, you know, generally the ones that'll be a little less headache.

Yeah.

Keep in mind when, when you buy properties in the higher rent range, I think the, the rents tend to go up accordingly. They, they go up a little bit more when you buy.

The tenant quality goes up with higher rent, you mean? Right.

Well, the tenant quality. But over time I think the rents increase faster.

Oh yeah, yeah.

Okay. And then sometimes. And again, there's no guarantee. It depends on the market and we don't have the crystal ball. But sometimes those nicer properties and nicer areas appreciate better over time. So it's like Oliver said or Carrie or one of them said, you know, do you want your cash flow now? Or you know, do you want a little cash flow now and maybe a better potential for rent increase and appreciation later? And I think, I think the ultimate answer is, you know, one, diversified geographically but also in the types of properties that you get. So maybe you start with, you know, get a, a few solid A area properties and, you know, then you add from there, depending on your comfort level.

Okay, good. Gosh. I had kind of a question based.

On that, but go ahead, Mathia, who.

By the way, he's going to be on the podcast soon. We recorded last week that was a rant. That podcast, I think I was ranting, not you.

Anyway, I just wanted to mention to everyone about a different kind of leverage that has not been spoken about. And that is, you know, I've had a fair number of exchanges with property managers by email and lenders. And I think that it's important to point out there's an intangible benefit that comes from letting these people know that you're working with the Jason Hartman investment team. And I always copy Carry on all the emails that I send out. And I think it gets a little bit more attention because they know that someone is watching from the other side. And I think it's important to know that your questions will be answered, they'll take it a little bit more seriously, and if they screw up often enough, they're not going to be on their network anymore. So I just wanted to point that out.

Kerry's like the principal. It's like taking, you know, copying the principal on the email, right? Yeah. Being careful what you say.

So I'm really new at this, so I really don't know what I'm doing yet. But I was wondering how, like in 15 years after you purchase the property, if you have to do like a really major.

That microphone keeps going in and out. I don't know what's wrong.

Change and changing the roof and stuff like that, how that can affect your overall.

So her question, because it kept cutting out, is if you own the property 15 years and then you have to replace a roof, Right. How can that affect your roi? Well, obviously negatively, because it's a cost, right. And it's an expensive one. You know, it's a cap, that's a capex, a capital improvement cost rather than a maintenance cost. You know, if you patch the roof, that's maintenance. If you replace it, that's a capital improvement. So that is definitely negative. You know, you can kind of amortize, do some charts on this typical life of various components of the property and budget for those expenses in advance. This is what homeowners associations, for example, are supposed to do, is that they have reserve accounts for capital, improve large expenses like that. And so they know that in 20 years, you're going to have to repave all the streets in the common areas. Right. Or you're going to have to redo the pool. And so they have reserve accounts. They just accumulate over time for that purpose. Okay. So, yeah, but you do have big expenses like that and be prepared for them. If not financially, mentally know that. Hey, how old is that roof getting on my house?

Right.

That's one of the things I love about new construction. They don't always pencil out very well on paper the day you buy them. They don't look like they're going to cash flow very well, but you have a lot less maintenance. And hopefully by the time, you know, the house needs a new roof, you may be able to just maybe appreciate it. And you could 1031 exchange. You know, you sell it to a homeowner and maybe the homeowner is willing to overpay, come in and, you know, they want to be in that school district and they'll put the new roof on and you can pass that expense to somebody else.

And the roofs on new homes will. You know, a lot of those are pretty sturdy roofing materials, so they last a long time.

One other thing to bear in mind with that is remember, I always tell my clients to remember the initial performance sheet we had allocated roughly 5, maybe 6, 7% towards maintenance.

Well, it depends on the age of the property.

Exactly.

It depends on the age of the property. So it really ranges. But sometimes you may go four or five years without using that full percentage range. But then 10 years comes down the road. You'll see like, oh, man, I've got to spend 2, $3,000 now to replace this. Just bear in mind that essentially, if you didn't have to use it during that time, you essentially saved it up and you will use it at one point. So try not to freak out too much.

Kind of be ready for that stuff. Hey, by the way, I didn't say this before, but I should have. Just say your first name and the city you're from, if you would. So Aaron from.

Aaron from Irvine.

All right. Yeah. The mean street. Now, you can ask a question.

One bank account for all the properties or a separate bank account for each property.

Good question.

I wonder what Fernando does. And I don't know the answer, but I do one bank account for all the properties in that entity. So if I own it in my personal name, that's just, you know, a bank account in my name. Right. If it's in an LLC and there are several single families in that llc, one bank Account. Account for all those properties. I don't think that's that hard. Some people say one bank account per property. I think that's. You're gonna. I think it's overkill. Yeah.

Unless it's Wells Fargo. They'll do it for you.

Yeah.

If you read that article yesterday or the day before, did you hear about Wells Fargo? Oh, yeah, Ross, I think you're the one that gave me that link originally. Wells Fargo has basically been found guilty of opening up ghost accounts, accounts for people, and they fired 5,300 employees and paid like 184 million dollar fine to the government. So that's. Yeah, you might have accounts you don't even know you have, just so you know in Wells Fargo. But then for the larger properties, like the apartments I own and the mobile home park, those have one account for that whole property. Okay. But for single family, one account, all the properties for me. What do you do? I do.

I do the same thing as he does.

Yeah.

Per llc mainly.

Yeah.

And then one catch all, which is for the personal stuff that I started out with.

Yeah. Okay, good. So question back there, Fernando. You want to get this. Did you guys have anything to add to that, by the way?

The only thing to add to that is ultimately, I know that this is something that Fernando sort of does, is if you want to have it per state, if you have a bunch of different properties in different states. Fernando, if you don't want to elaborate on that, but essentially, if you have a bunch of properties in Georgia or, you know, Tennessee, just have them per state.

Is this an LLC question?

Because that was actually my question is how do you, with many, many properties like that, how do you structure your entity management to reduce your risk?

I do what Oliver said. It's broken down per state. Now, that doesn't mean that that's the recommendation that it depends on who you ask. They'll give you a different answer. If you ask a lawyer that makes money off of creating LLCs, he'll tell you to create one per property and one bank account per property. You have to be comfortable with what you do. Obviously, you might not want to go on either extreme where you have one big LLC that contains all properties. But honestly, the answer can vary so widely depending on who you ask that it becomes hilarious at some point. So in my case, it was more organic as I was building the portfolio and just turns out that I was buying properties in this state. It made sense to me to have an LLC for that state when I was working with a particular bank. When I purchased a set of properties for a particular bank. They wanted a single purpose LLC for those properties. And fine, that made sense. And it turns out that that's what I kept. So, you know, it really, it's up to you on what you're. You're comfortable with. At the end of the day, there's many different ways of doing it.

Just to speak to that a little bit. Last week we had our venture alliance Mastermind. That's like my master, my high end mastermind group. Right? And I've talked about on the podcast. So we had our meeting in Seattle last week and I gave all of the attendees the Garrett Sutton book, Loopholes of Real Estate, which is very good. There's a couple things I disagree with him on. That's sort of old school thinking a little bit, I think. But Garrett has formed some entities for me. I think he's great and his prices are very reasonable too. But just when you start forming all these entities, life gets complicated quickly. Okay, I'm just going to warn you because the problems come up when you. First of all, if you live in the Socialist Republic of California, you're pretty much screwed, okay? Because what they do is they essentially want you to you to domesticate every entity you have in their state, even if the property is in a whole nother state. And literally. And Fernando, you and I talked about this. If you have a mailing address in the Socialist Republic of California like I do, they could try to, they could try to make that your tax nexus. Just because you have a P.O. box there, even if you don't live there. It's insane. Like the property's not in California, the person's not in California, and you literally just have a mail service in California that receives your mail.

Boom.

You might be in that tax nexus where they charge you $800 per year per entity. Okay? And, you know, a lot like Garrett will say, you know, put your entity, your LLCs in Wyoming. But then the problem is depending on the state where you own the property, you've got to domesticate it in that state. Maybe, maybe, maybe not. It's complicated. Okay? But his book is great. I'd highly recommend it. There are a few things I disagree with him on. One is, you know, like Fernando said, he, you know, anybody selling something is going to tell you form as many LLCs as you possibly can, right? Because another way that the attorneys make money off stuff is by being your registered agent and you have to pay annual dues for that and all of that stuff. Also, he says just one Second, I just want to finish my thoughts on the Garrett book. He'll say, don't buy properties in your ira. And Tom Wheelwright, who's like another rich dad advisor on tax stuff, I don't think the IRA thing is that great. I think it's better than stocks for sure, but they're really kind of like down on it, and I think they overreact to that. It's not that bad either. Oh, and then he'll say, don't buy properties far away from home. And. And that's just old school thinking because the problem is it requires you, number one, to live in the best market in which to invest, which probably you don't. Okay? So if you live anywhere in California, it's not going to be a good place to invest from a cash flow perspective, if you live there, no matter where you live in the state, or if you live in South Florida or Northeastern markets that are any expensive market is not going to make any sense from a cash flow perspective. You're not an investor, you're a speculate speculator, you're a gambler. And then the other thing is, even if you live in the best market in which to invest, say you all lived in Memphis, okay, Or Orlando and, you know, we think, or Indianapolis, and those are all great markets to invest, right? But if you do that and you want to buy all your properties close to home, you're still not going to be diversified and you should diversify into at least three markets. So. So this is like old school thinking back in the day when you didn't have any tools, when there weren't companies like ours that help you do this. Yeah, I agree. I would only buy locally, but nowadays it's just a different world. You didn't have Google Earth back then. You didn't have Zillow, you didn't have us, you didn't have these different business models and tools that have been created around that. Did you ever comment on that?

I agree, 100% always amazes me. Every so often, every week or sometimes too, I see companies popping up that do a piece of the property management or the real estate, the income property investment philosophy. And because you have all these resources that didn't exist 20 years ago, it's easier than ever to be able to manage properties from anywhere. I travel all over the world and there's no issue whatsoever. As long as you have Internet connection, you need that. But that's about it.

See, really, the key turning point was when Al Gore invented the Internet. That's a joke. Some of you did not laugh. Anyway, Al Gore is a joke. Okay, what were you going to say?

I was going to say just about saving some of you some money. It's a bit of a, I guess that's quote unquote hack. I've been able to save a lot of my clients money just by doing this. For those of you that have registered agents, just do a quick search in the area, find the cheapest one, and then go back to your registered agent and see if they'll match it.

Match the price.

Yeah, My clients have saved hundreds of dollars on this every year. So just do that. Make note.

Just ask them to match the price. Yeah. One firm that I used to use and they've been on the podcast, I do not use them in anymore. Definitely not ever again. They were just. I was paying outrageous fees for registered agent and entity maintenance where they'll do your minutes every year and your filings and stuff, and it was just such a rip off. So I moved a lot of that over to Garrett Sutton's office. Much, much better deal.

And you should do the same thing with your property insurance or your homeowner's insurance and your property management companies. You just shop them against each other.

Yeah, that's the way free market capitalism works. It's a good thing. Tell Bernie Sanders. Okay, Any other questions? Yes, over here.

As a new investor, why would someone use an investment counselor?

I don't. I'm not extremely clear on what it.

Is that you actually provide or why it is that I, as a new investor, would want to use you.

Yeah, good question. So, first of all, it doesn't cost anything. It's free. We make our money because we get referral fees from the local market specialist in that market. If you were to find the property yourself directly, you're still going to have all that in there. Okay. You're still going to have a broker or an agent in there, probably.

Okay.

Most of the time. But secondly, and this is really what my vision of getting into this business was back in 2004, is when I was, when I was selling my company that I talked about earlier and I went to these financial services firms, I thought the great thing about the Wall street stuff is they make it so easy. They'll let you just walk in and give them money and they can put you into a variety of investments. Well, why couldn't there be a real estate company? We have the best asset class, but really in this industry, a really bad sales force because it's all local realtors. They don't Think like investors. They're not area agnostic. They're totally attached to their one market. And we're not attached to any one market. We're area agnostic. So if you buy in any of our markets from any of our local market specialists, we're going to make money. Okay. We're area agnostic, and so any of the markets you buy in, we're still.

Going to make money.

Right. So. So they'll be impartial with you in terms of what market you should invest in. When you talk to our local market specialists, they're going to be motivated to sell you their market only. Okay? So there's a difference.

Just a reminder, you're listening to Flashback Friday. Our new episodes are published every Monday and every Wednesday.

Yeah.

And, you know, we're working with several investors at any given time, so we're getting constant and client feedback on property management lenders, you know, the market specialists, you know, who communicates well, who goes the extra mile to repair a refrigerator that was broken 30 days after close versus one that, you know, Fred over here had an experience with.

One of.

Our market specialists that we fired. And this was the straw that broke the camel's back.

Oh, hey, she got the saying right. The straw that broke the camel's back. Camel's back.

So, you know, we had, you know, a few complaints over the year. And this was on the property management side. And this was one of our Birmingham providers. And, you know, Fred came to me and said, geez, you know, I just closed. It had been, I don't know, 30 days or within 30 days. And there was like a little hole in his door, maybe the back door. And there was one other thing with the property. What was the other thing? The hot and cold. Oh, yeah. The toilet was producing hot water, which I've never heard before. And so I. I said to Fred, well, those are two really easy fixes. I'm sure we can call this provider and, you know, get those fixed. And they. They didn't do it. I mean, that's like the only provider that I've ever heard of that I can think of in nine years that would not. You know what he said? He said, well, a squirrel probably chewed through the corner of that door. And I just about lost my. You know. You know what? I was upset.

Marbles.

Marbles. I was gonna say something.

I don't know if everybody knows the inside joke. So I always tease Sarah because she always gets the saying a little bit different than, you know, my sayings are better. Yeah. Shoot yourself, yourself in the foot or shoot yourself in the shoe.

And in the summertime it's shoot yourself in the sandal. Okay. So anyways, we did go to bat for Fred and we were not successful. And so we stopped working with that provider. We removed the properties from our website.

And we got in a big argument with them.

We got in a big argument with them and on Voxer and I think you were on that thread. Yeah, yeah, it was, I mean, it was just, it was kind of embarrassing, you know, I felt embarrassed.

We should play the boxer thread on the podcast. Another lawsuit. Oh, great. So, I mean, just what I need.

And that doesn't mean that Fred has a property that's not going to perform. You know, he may switch to another property manager. And in fact he did. And, you know, we helped him. We gave him some contacts in the marketplace. And so sometimes you fire the local market specialist or you fire a property manager and occasionally fire the client. Client, we have fired clients. And you might be looking at a property, all this is going on and you might have been looking at those properties through that provider. In fact, we did have clients that were, you know, inquiring and you, you may have already. Maybe we took them off the website and you didn't notice, but maybe you were already communicating with them or maybe you purchased two years ago and you went back to them directly to buy another one, which this just happened with that provider. And you happen to call me and say, hey, can I, you know, I just want to get an extra set of eyes and ears on, you know, how is this provider doing? And I might say, wait, you know, this is what's going on. Maybe you should look at another market or another seller in that market. So that's. We, we provide value as a network, I think. I mean, you help us as much as we help you guys because we're getting that feedback and we can make decisions based upon your valuable feedback and.

Hopefully we can exert some real leverage over them. And that's what Mathia was mentioning earlier. You know, we hopefully that local market specialist views it as, look, there's a carrot out here and there's a lot of business coming. So I really care about this relationship. Okay. Some of our local market specialists, they're probably making a million dollars or more a year off of our referrals. Well, they definitely are making over a million bucks a year. And so they're not going to screw that up. I mean, they're just, they'd be crazy to mess that up. Right. Versus doing a one off deal that's why when I tried to do this myself back in 2004, I had no leverage. I couldn't get anybody to do anything. Even returning a phone call seemed like a chore sometimes, right? Because I go to this market, I'm like, yeah, I want to buy two houses. They're like, I don't care, Lindsey.

Just to elaborate on that, we're ultimately here to really help you, help all of you, the investors. And really, without you guys, this wouldn't really be happening. The other thing, too, is there are other companies out there that will charge 5, 10, 50. I've also even seen up to a hundred thousand dollars to coach you for maybe six months or a year on how to do exactly what we're doing. And then when they find out about us, they're like, what? You guys actually help me?

And for free? Yeah, free.

Like, yes. Their jaws sort of drop. And, you know, they're very happy because now they can use that money to buy more properties.

Yeah.

Education nowadays is almost free. Okay? Someone had asked about coming to one of our events and, you know, said, well, why do I have to pay to come to your event? What you're paying to come to our events is, like, nothing. We lose money on these events, okay? Where we make the money is because we're a real estate company, right. That's just a huge difference because we're tied to the actual property. Right. In the sense that what we say at the seminar has to come true in real life. Well, you know, at least has to come true at the time you buy. Right. Admittedly, things have bumps in the road, or you're not going to buy properties, and we're not going to stay in business. And that's the key distinction. I have had so many people. And you remember, like, many of these over the years that have come, they been in one of our seminars, and, you know, by lunch, they. They walk up and they say, you know, I just spent $43,000 on this guy's guru coaching program, and I just finished it, and I felt like I got nothing. I learned more before lunch from you. For free or for cheap. You know, 200 bucks or whatever it was. You know, it's just. You just don't have to pay a lot for education. Use your money to buy actual properties. You know, for $43,000, you can buy two properties.

And you should thank Jason for charging. Charging for his events, because otherwise anybody could come, and all those people that are next door selling juices, they'd all.

Be here right now, all the Armando Monte Longo.

People would be here.

Yeah. Yeah. So, okay. Any other questions? Maybe one more. Okay. Or two more. We got two more. And then we'll wrap this up.

This panel, Irvine from Carrie from Irvine.

So I just curious between, among Sarah, Carrie, and Oliver, what is the difference.

Between working with any of you? Do you specialize in specific type of markets?

Are you a specialist?

Do you specialize in certain types of investors?

Where are your areas of expertise and you know, who is the best person to go to?

That's a tough one. That's a tough one. Okay. And Fernando, by the way, too. You have to include him in that. I mean, I can answer that one. They all do all the markets. There's not enough markets that you need to specialize. Our specialist is the local market specialist at the back of the room. Right in that various. In those various markets.

And we have many more of them.

Besides the few that are here, but they all handle all of the markets. Okay. And they all handle a variety of different types of clients in different situations. So it would be sort of impossible to say you only work with certain.

Type of client and you work with another type.

And you work with another type because the clients grow and change over the years. So.

Yeah.

And the way it works, I mean, to be honest, you guys go on around Robin through our system, when you put your name and number in and it just gets automatically assigned. But the one thing you should know is that we all bring something different to the table and we collaborate. I mean, we do a team call I every single month. We do our Venture alliance meetings. We had a team meeting yesterday, you know, so if. If you ever need access to anybody. I mean, we all work together. So all the way up to Jason. I mean, on that issue, usually I can handle property management issues on my own, but on that issue, I was just so upset for the client that, I mean, you can ask Fred at the break. I. I got Luke Jason in and I did what he asked me to do. I started a Voxer thread and got everybody involved. And so if we.

Oh, and our Birmingham guy hates Voxer, by the way. He says, I don't want to talk on here because guess what? It's recorded and everybody can hear it. I love it. He always wanted to just talk to me, you know, like I'm going to fall into the conspiracy of let's just make money. No, I want a business that lasts.

Right.

You know, so.

But I mean, if you. If there's a question that I can't answer or Oliver can't answer, and we know Jason has the answer. We'll go get the answer for you and refer you to the right person.

But a lot of times, you guys have the answer. You teach us a lot of stuff. And part of our job is to assimilate the knowledge we learn from you when you have a problem in a certain market with a certain provider. They're all talking about this on our.

Voxer thread every day.

Carrie will say, oh, you know, guess what I'm having a problem with. So and so. They're not returning our call. And by the way, on our last deal, they didn't pay us yet either. And then we start to get worried about, you know, their financial condition and so forth.

And so all this stuff is.

The boxers really helped, actually, you know, I'll say, hey, Sarah, who did you use in this market for an ira or hey, Oliver, how did it work out with your client in that situation? You know, because I'm kind of going through the same thing. So we work together, and it's really not because I think she left the building here, but. Yeah. And why to use an investment counselor? Well, because we're working there to support you guys. I mean, we're supporting each other, but we're supporting you guys. And there's things that we can help you with that you wouldn't know. You can't Google that situation. You know, we've gone through it, or someone's gone through it up here already. So we know where we can help guide you to the right steps to take.

Good stuff. Okay, we had one more question. Joe from Idaho. Idaho is not a city. Well, I'm just saying. 500 people that live with me, by the way. Joe from Idaho. Canadians say that. I'll meet them at conferences. Where are you from? Canada. Oh, really? Canada. That narrows it down.

And it's really that a lot of people in America have no idea where the majority of the cities, they don't.

Know the difference between Vancouver and Toronto.

They have no idea. I am not kidding. I mean, how many. How many people here can tell me they're the capital of Canada?

Ottawa.

Lift your hand. All right. Seven.

Okay.

There's like 80 of us here.

Okay.

Americans aren't that smart. Damn Canadian snob.

So when we say Canada, like, oh, okay, cool.

Canada.

So that means you're probably friendly. Say, I live in a Poland.

Oliver. What do people buy from us? They buy that they live in houses, not hooses.

That's maybe a Jason Hartman thing.

A boot house hoose. I had a Canadian girlfriend. She Called it. I remember one time we're eating dinner and she says pasta. I never heard anybody say that before. It's pasta Sherry. Anyway. Yeah. So anyway. Okay.

Okay.

Joe from Idaho, do you like, do you like pasta or just Idaho potatoes? Just potatoes, that's all. So I just being new, I just.

Could you maybe walk us through the.

Steps of how to utilize you guys the best and what that process would.

Entail to, you know, pull the trigger.

And buy that for property there?

Sure, I'll go ahead and tackle that one. Essentially, we'll have our intro call, start out, see where you're at financially, what your goals are, what your expectations are. And from there we will then identify other certain market. But alongside of that tangent to that, I'll introduce you to one of our preferred lenders, get you pre qualified, and then move forward from that point. See what that range is that you qualify for. You know, if you. If it's usually 80 to 130 or so, that's where the majority of the houses tend to fall in. And almost everybody qualifies these days for that. So from that point we'll then identify that home and then put you under contract. And then usually the expectation is 30 to 45 days. From there we'll close, you'll get a fully rehabbed house and fingers crossed, the majority of the time it'll be tenanted by the time that we close or if not, shortly thereafter. And we sort of help you along the whole process. That's essentially like a, you know, six step breakdown. But there's a lot that happens during all of those different steps and then repeat that over and over and over again.

Anybody else on that one, we'll wrap it up. Okay, thank you all. Give them a big hand. And there comes Kobo.

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