Ep.131- Never Try To Time The Market with GoBundance Member Ryan Chaw

This is the You Winning Life Podcast, your number one source for mastering a positive existence. Each episode, we'll be interviewing exceptional people, giving you empowering insights, and guiding you to extraordinary outcomes. Learn from specialists in the worlds of integrative and natural wellness, spirituality, psychology, and entrepreneurship so you too can be winning life. Now here's your host, licensed marriage and family therapist, certified neuro-emotional technique practitioner, and certified entrepreneur coach, Jason Wasser.

Hey guys, welcome back to the You Winning Life podcast. So you're gonna hear some noise in the background. I am excited to be at the GoBundance Miami conference. I was invited by my buddy Eric Cabral, who is the, uh, founder of On Air Brands. So I'm out here this weekend meeting some incredible entrepreneurs. Um, so you're gonna be hearing over the next, uh, couple episodes, some really exciting, interesting people that I'm doing live and in person, which is exciting because it's— pandemic is slowly coming to an end. We're finally doing these things here in Miami. So Ryan Shaw, he is a newbie real estate investing expert and pharmacist turned investor, and he started buying one house a year and renting by the room in college towns, which doubles down the rent and scaled to a portfolio that makes $17,580 a month. Is that accurate? As of this morning?

Yep, that's right. Yeah. And, uh, we just signed leases for August to August 2023. For about $18,500 or so.

Incredible, incredible. So your goal, as you know, it says, is right, hoping to teach the little guy how to get into real estate investing in this super lucrative niche. So welcome, first of all.

Thank you, Jason, and I'm honored to be on the podcast.

Thank you. So yeah, so real estate, I'm in this room, I'm a guest of this conference, and it seems to be that 98% of the people have their hand in some type of real estate thing.

Yes.

So before we go into the pharmacy stuff, and I want to get into that because I find that super— the transitions that people don't realize could be out there, because we're trained, we go to school, we get a degree, we work our jobs, we retire, the whole system that we've been plotted to. But I want to start with this real estate thing. Why is it that 98% of this room is in real estate, as whether their primary thing, their side thing?

Yeah, I think a lot of people get into real estate to create financial freedom for themselves, build wealth. And actually, there are 4 ways that real estate builds wealth. The first one is appreciation. Everyone knows houses go up in value about 3% per year. What's great is because you're using leverage, you're only putting 20% down on the property. Every time the property goes up 3%, you're actually making a 15% return on your cash invested. Second way everyone makes money through real estate investing is equity paydown. So your tenants are basically paying your mortgage, and every single month, a bit of that goes towards your principal. Now the third way is cash flow, which is basically your rental income minus your mortgage and other expenses. And then the fourth way is tax benefits. And really all these combined can really compound to accelerate your wealth. I actually, you know, over the past 5 years, just through appreciation alone, I've gained about $800,000 or $900,000 in just equity, just based off of that. And it's pretty insane how fast it can skyrocket and snowball. I think I would say just at the beginning I was making a 30% return on my investment, the actual cash invested. But that has gone up year after year after year, especially in the pandemic. It exploded. Sure.

Yeah, right. And I'm here in South Florida and I know that things that were $700,000, $800,000 homes are going for easily over $1 million now. And there's a bidding war on all of that. So it's going to go from whatever you want. $100,000 plus. So I know, right? I mean, this is a good reverse engineer because people, like you said, you want to start help the newbie get into this. And there's always these themes of, well, I'll wait till the market levels out, or I'll wait until maybe there's gonna be a bubble crash, right? The interest rates just went up, it doubled. So now people who maybe had a $2,000 or $3,000 mortgage now have a $4,000 or $5,000 mortgage. What do you say to that? How do— I mean, is it really true any time to get into real estate is the best time to get into real estate?

Yes, I would agree with that. I know 2008 was a huge crisis and subprime mortgage lending led to a huge crash. And we may be at the top of the market, no one knows for sure. But right now interest rates are still quite low and you can still lock them in at like 5%, you know, for an investment property versus in the past interest rates have gone up to 8 to 12%. So I'd rather buy real estate now when interest rates are low and that's a certain thing rather than wait for the market and trying to time the market. Because the number one rule is never try to time the market. For real estate, it's like you're building a garden, you're planting trees, or sorry, planting seeds to build trees later on. So when you plant a garden, you don't wait for the best fertile conditions, the best rain conditions or whatever. Instead, you want to just plant your seed now and pivot along the way, figure it out along the way. In 5 years, you know, you're, you're the seed that you planted grows up into a large oak tree or whatever.

Yeah. So let's start with the seeds because you came from a career where there is some lucrative salaries and it's not traditional, but I know your family has a background, right? So your family had some investments in property and so you kind of grew up with this in your culture. So can you, can you share with our listeners a little bit about that and how that was instilled into you?

So it was actually my grandpa rather than my parents that got into real estate. He bought a couple properties in the San Francisco Bay Area back in the '50s when they were dirt cheap. And as we know, they exploded. That market exploded with Silicon Valley. And he was able to retire early. But not only that, he was able to cover part of my college tuition and that of my brother's as well. And so that's when I realized that real estate's really one of the best ways to create generational wealth. And it's also a way to grow as a person as well. It teaches you a lot of things, right? It teaches you how to give back to your community. It teaches you management skills, leadership skills, right? And for me as a pharmacist, I was, you know, at first working as a pharmacist, I was, you know, happy kind of learning the new ropes, you know, getting excited about, you know, giving back and helping people, helping people with, you know, critical diseases and all that. But at some point, you know, I kind of started getting like, where am I going in life, right? And one person, one of my coworkers one day asked me, "Hey, Ryan, you got the doctorate degree. You got a really nice job, high-income job. You got a nice family, a beautiful girlfriend. Why aren't you happy?" And I asked myself that. Yeah, that's true. Why am I not happy, right? And I realized that it was due to lack of growth. I didn't have any growth in my life. Once I had the job and everything, I was just kind of coasting. And so I realized that one of the ways to push myself to become the best person that I can, the best version of myself that I could be, by real estate investing, just personal development, all of that. And so that's why, you know, I also joined this organization, GoBundance, to really become that best version of myself.

Yes. So the psychology of this is fascinating to me because I know that I was reading, I was preparing a bunch of different things for this weekend, and I saw someone posted the psychological process of buyers and sellers, both on the real estate side, right? The people there, the realtor side, or the person who's making the investment, and the person who's buying, or whether they're going to live in there and seeing that psychological, like, roller coaster of decision-making and fear and like, did I make the right decision? Is there remorse? Is there regret? All those things. So if we're talking to the average person out there, doesn't maybe see that this is a tool available to them, right? You're talking about 20%. And, and well, how am I going to find 20% of my income? Where am I going to make— how do I put this aside? The market's crazy. The, you know, inflation is hitting us. Everybody's freaking out about gas prices. So for the people who are playing in that world, Right. How do they just even start doing research? Where do they start going for reading? Who do they start talking to? And then putting aside the financials, how do they— how do they set that up? So whether it's a year from now, 2 years from now, 5 years from now, they know they have a crystal clear path to get there.

Yeah. So first I would say for that is you got to fight the fight on 2 fronts. You got to have both offense and defense. So one, you have to try to increase your income. To have that capital to invest in more real estate. There are creative ways to basically put little to no money down on real estate, and we can get into that. But the first thing you want to do though is try to get as much capital as possible because that puts you in the best position. The second thing you want to do is play defense. So for me, I was saving a lot on, you know, not spending too much when I first got started. I would buy $5 footlongs during lunch and dinner. And that's what, you know, I can live off $10 a day for my, you know, for my food, right? I was cooking a lot, right? So really, like, you have to try to save up as much. You have to, you know, make more and try to reduce your expenses. So once you get that accomplished and you have to keep the end goal in mind, right? It is about delayed gratification. The next thing you could do is actually do a house hack where you can put as low as a 3.5% down payment. So on a $500,000 house, I mean, you could do the math on that one. I think it's like $20,000, almost like maybe $20,000 saved up if you include closing costs and all that, $20,000 to $25,000. And you can just get in where you rent one room and you basically, so you stay in one room and you rent out the others and the others will cover the mortgage for you. And you probably will also have cash flow on top of that if you do it right. So for instance, my house that I'm living in in Sacramento, I'm renting it out for $3,650. Because I'm renting out by the bedroom and I have 4 or 5 tenants, and I'm living in the master bedroom and the mortgage is $2,300. So $3,650 minus $2,300 minus some expenses, you know, I'm basically living for free and having a little bit of cash flow on top of that. And that's honestly one of the best ways to get started because you don't need that much cash to do that. Now, after, you know, you do that, you can consider doing what I do, which is the rent-by-the-room model to student college campuses. So I rent houses that are like across the street from campus, maybe a 5-minute drive at most, and I'm able to add extra bedrooms to these properties because I target properties with large square footage, and every single bedroom I can add is an extra $700, $800 in rental income. So typically I'm able to increase the rental income by at least $1,400, maybe $2,000 per month in additional income, and I could use that to to put a down payment on the next house, or I could tap into the equity and appreciation on the property to buy the next property. So the first property is always the hardest one to buy, but after that it kind of snowballs because you have all these methods and strategies that you can use to build capital and buy more properties.

Yeah, so I know that's one of the big things that you've, you know, I've heard you talk about, and I see it, right? College campuses, that's the— like, there's places that college campuses or Do you see this also with like big corporate, you know, places that are opening up in a new place and they just need a stop off and it could be like a short-term but a little bit higher rent?

Yes, definitely. So like tech, tech companies, traveling nurses, anybody in the medical field, you can rent by the room to those. Those are all great tenant bases to choose from as well.

So where do you see when you've got guided and coached people through this, where do you feel that people are getting stuck like those early steps? Like, what are some of the, you know, the risk factors that they have to get okay with?

Yeah.

And, and how would you coach them and guide them through that?

I would say, uh, the first thing I would like to talk about is obviously analysis paralysis, but specifically there's something I call first offer syndrome, where, um, they, they really want to get started. A lot of these new investors want to get started. They put an offer down and it's turned down, and then they get really discouraged. Um, maybe it's, it's not turned out flat outright, but maybe some stuff comes up on the home inspection and they have to back out because of all the crazy amount of costs that have to be put into the property to make it rent-ready, right? So a lot of people get really discouraged and they just stop. The key is you have to have persistence in this business. If you're persistent, I would say, you know, as long as you persist like a whole, like a year or so, you can really have that first property down. And it's life-changing at that point because you put yourself down on a different path than most people in the nation. You're, you're investing in your own wealth rather than relying on an employer to build that wealth for you.

So let's put it into play here. So I'm in South Florida, right? It's the topmost expensive housing market now in the country in the last few months. You can't buy anything. Someone who's just starting off, let alone if you're buying a 2-bedroom apartment in a decent area, or a one-bedroom, you're talking $300,000 to $500,000. Or you have a little bit of a cheaper apartment, but the HOA is $1,000 a month. And that's what some people are paying for rent elsewhere in the country. So where would be some of the places that you would suggest? So let's just focus on like college towns. Are you getting on a plane and are you exploring college-type communities? And, or like, what's that research process and how do people know where to go to look for these type of deals?

Yeah, so actually a lot of the research can be done online. So if you just Google top colleges lists, um, I usually target colleges that have Grade A type students. They usually had a 4.0 GPA. They're well-rounded students to get into these high-end colleges. Maybe they're interested in pursuing a doctorate degree as well later on because that college has, you know, that whole step-through process, like the pre-pharm, pre-dent, pre-medical. So I really target those types of colleges. I, I actually invest locally. I haven't gone out of state yet, but I do have investors that I'm teaching that invest out of state, which is great. You can make a lot more cash flow there. I still invest in California because I can cash flow very well with the rent-by-the-room model still. And with appreciation in California, that's like the highest out of any other state out there. I'm able to build up that wealth that I can tap into with like a home equity line of credit to expand even further.

Well, what you were saying about this prequalification of where to look, it's interesting because I'm ardent about talking about core values.

Yeah.

And people don't realize that, like, someone was talking yesterday about, well, how do I make sure I get to find that person for my team that I can really trust? And I always go back to, what are the core values of your business? What are the core values of that role that you need that person to fulfill? What you just described is an onboarding red carpet to get in front of the right people to rent from you. And I think that's a really important component to, well, no, I'll just have anybody come in and I just want to make my rent and I mean, you have to deal with personalities. You have to deal with people living together. You have to deal with— I mean, are you setting ground rules for the homes in addition to just like, you're renting this room? How are you navigating the internal politics? It's kind of like a reality TV show in a way.

Yeah, yeah, no kidding. I actually, I would say once a year I'll have maybe a tenant versus tenant conflict. But you have to realize the Achilles heel of real estate investing is your tenant. So if you choose a bad tenant, you're gonna have a very tough time. So for me, I do target, I'm very targeted with my tenants. I actually have something called the prime method. You could Google Ryan Chaw prime method if you're curious about it, where I target very high-quality tenants. I look for people who are like third or fourth-year students, people who are in the professional schools already, so they already graduated undergrad and they're going to pharmacy school or dental school. And then I try to mesh them all together. So that, you know, maybe all the— I have a house that's like the pharmacy house and I have the house that's like the dental house, right? And by doing that, I kind of create that, you know, great environment for them to kind of mesh together and, you know, learn together and everything.

So the one thing I'm thinking, right, just as my, like, the ethic brain of it is like, so how do you navigate? Because there's fair housing practices. So how does one— I mean, because this is obviously anybody can turn down a tenant for any reason, but you have to— how do you navigate that by like, is this part of the advertising you're saying? If you're looking to be doing these programs, if you're and you're looking for a place to stay, is that the advertising? Is it through word of mouth? Is it tenants that are here saying, "Hey, my colleague is coming in," or whatever? Like, how would you play with those different—

Yeah, so you do have to be careful with those laws, right? Definitely. So you can't discriminate based off of age, sex, sexual orientation, familial status, that type of stuff. For me, I just target students. It's totally fine to say, "Hey, I have a place that's 5 minutes from campus," and I advertise in the right groups, like Facebook groups for instance, and all the people there are already students, right? So I'm not really discriminating against anything, anybody. But the other thing is, if, like, let's say, you know, you have females that want to have an all-female house because it's their culture, right? Especially like Indian culture, for instance, they can't— the daughters can't be staying with the opposite sex, just culturally. So what I do is I say, hey, to other people who have applied, seem to be all females, so it is female preferred. And so it's actually their preference, it's not me discriminating against anyone, it's just they can't stay, they are not willing to stay.

So they can have that, that influence on you as the landlord and say, we want this to be— and that comes with critical mass, I guess.

Yeah, exactly. And if it's a male, I could always put them in an all-male house or something like that. So it's kind of at the point where I just try to to house them in a way so that they all mesh together well and they meet their preferences.

Awesome. So speaking of meshing together well, so I'm a guest at this conference and being invited to sit in, to be part of these little breakout groups, to be talking to anybody as if I'm a participant is this really powerful environment that's been created here. So walk us through. So we're at GoBundance and I'm going to have a few other speakers over the course of the weekend who are members of this community. But you're the first one, so I'm going to have you like, what What is GoBundance, right? And how did you get connected to it? What have you benefited from it? And what are you hoping to get out of?

Yeah, so GoBundance's motto is "Grab life big," right? So that's basically the idea that we can choose to live life like just cruise through life, or we can choose to create abundance in our life. And not just wealth. We're talking about not just wealth, we're talking about relationships. We're talking about your health, you know, how, how you spend time on your relationships, right? And so all this kind of adds up to become the best version of yourself. And GoBundance is a group, it's a tribe of millionaires. So you have to have a millionaire net status, net worth, sorry, to be in the group. But you're connecting with like highly successful people and you can build off of each other. There's people here who have capital they want to deploy and maybe you want to partner with them because you don't have have the capital and you can buy more deals with that capital that make a 30% ROI or something like this. And it just kind of gets everyone connected to create a true mastermind. And that's what I love about CoBundance is all these people, they are very unique individuals but all very highly successful individuals. And just, there's the saying, you're the average of the top 5 people you hang around. And that's true. Especially in GoBundance. And that's why, you know, I joined GoBundance is to just not be the smartest guy in the room all the time.

Yeah, well, yesterday they did that, that breakout of introducing and going through all those questions, and it was so fascinating because it creates a space of vulnerability. And the main community of GoBundance is targeted to, to men, but they have the break-off groups in there for the, right, the spouses. And, and there's— is there a family thing as well? Are they doing stuff with kids?

And yeah, there is. Yeah, FamBundance. Yeah, that's right. Yeah, they have wives. And kids as well. Just kind of go on these adventures together. I mean, this is my first year joining. Okay. But from what I know, yeah, you go on these events, like these trips to crazy places, crazy locations, and just kind of build your vision, build your life. Yeah.

So the vulnerability component. So where people are walking in and these are successful individuals and I know in our community of is asking for help is sometimes a difficult thing. And I know culturally different backgrounds have like, nope, we have to be strong. We've, we made it here, right? We have to figure it out. How have you seen the vulnerability that's been created in this room so far benefit you?

Yeah, I mean, it just kind of makes you realize that everyone struggles with something. Some people are— they got burned by a relationship in the past. There's some people who struggle with visibility, fear of visibility, and you realize that your struggles are not just unique to you. Everyone has them, and it kind of creates that feeling of being comfortable and just, you know, growing yourself and being comfortable with your vulnerabilities and realizing that they're not weakness, that they can be used as a strength to connect with people.

So through your journey, what's been one thing that's come up for you that you're like, wow, like, this was really holding me back, this was blocking me as a person in relationships or building this new side hustle? Because, right, you went from a W-2, right? That's the big thing that they don't like, going from W-2 to financial freedom, right? So can you talk just a little bit about that concept? Because a lot of people haven't heard that concept of a W-2 to financial freedom? And then what was some of those things that you had as your ahas along the way?

Yeah, so I would say W-2 to financial freedom, for me it makes sense to kind of build this up on the side rather than burn the ships and just go into entrepreneurship full-time. Because why would you risk, you know, throw all that away? Why would you throw away being able to, you know, pay the bills and also purchase a lot of real estate? Because W-2 job allows you to get some of the best financing out there. And so for me, it just made sense to kind of build this portfolio on the side, just buy one house a year and just, you know, scale that to multiple six figures before I leave my high-paying pharmacy job. And so, you know, for me, I'm going to be retiring next year, but it kind of just compounded over time and I was able to just do this in 7 years because I was patient with it. You know, I had delayed gratification and all that.

So when you're saying retiring, break that down for us because there's different, right? So people are like, well, no, but you're still running, you're still moving into this business. So when you're saying retiring, you're saying retiring from the W-2 world, from pharmacy career?

Yes, yes, correct. So I'll probably be— I might wait, work like one day a week as a pharmacist, but at that point I can decide what to do with my life. One of the things, one of my biggest goals in my life was to eventually create some sort of medical research company to find a cure for allergies because I had a life-threatening anaphylactic reaction when I was 2 years old. I almost died. And the progress in terms of, you know, allergens, of finding, curing allergies has come a long way, but it's still far off from actually finding a cure for autoimmune and allergic reaction type diseases. And for me, I suffered from hay fever as a child, and I still have peanut and cashew allergies. So, you know, I wanted before I die to create this. And by working as a pharmacist 40 hours a week until I'm 65, that's just not going to cut it for me. You know, I wanted growth in my life and I wanted to create a bigger impact on the world. And so that's what got me into doing this and teaching others as well, right?

So this is something that I've been struggling with and dancing with, and I see this as we start off the conversation with how we're taught we have to pick a career, we have to pick an identity, and we kind of run with that until we retire.

Yeah.

And we're basically taught to be the person who does the direct service of that. So I'm a therapist by day, and it's right, and thank you. So it's, uh, and I love it, and I love what I'm doing with you now is pretty much what I'm doing with my sessions, except we're, you know, we're deep diving into other stuff. So it's like a mastermind every session, which is super cool for me. I can't imagine not doing what I'm doing, but that whole mindset, right, that W— I mean, I pay myself, so, right, it's, it's— but that mindset for most people, like, but I, but I, but I trained so long and I went to so much school and I'm so invested in this career, in this identity. How do you navigate that? How are you now? Because you did, you went to the top level of your field, right?

Yeah, so I mean, I I went through 5 years of schooling to become a pharmacist, right? And I actually, I was killing it in pharmacy too. I ended up becoming an infectious disease specialist and pediatric pharmacist as well. But, you know, again, with the idea of, you know, grabbing life big and living the, you know, getting the most out of life, you know, I wanted to just keep going further, right? And that's, that's what led me to continue doing this.

So is there any questions that you would ask some of your coaching clients, right? When it's— when they're thinking about like, how do I, how do I, how do I let go of that? So what would be— I mean, obviously, right, we have this philosophy here from, from Grab Life Big, but what have been some of the questions or some of the things that you've had to ask yourself or you've asked some of your, your mentees to transfer or transition in that mindset?

Yeah, I would say, uh, definitely figuring out what your goal is, right? Why do you want to create— you have to kind of have a why. I forget what we call it here, but it's basically you need to know what fires you up. Why do you want to create abundance in your life? If you want to do that, I mean, it's a choice. Wealth is a choice. Do you really want it? And if so, why do you want it so bad? Maybe it could be like you want to be there, be able to take 4 weeks off from work and be with your family during their time of need. Right? For me, it was, it was honestly, I wasn't growing in life, you know? I was, I was just stagnant and it was killing me. I was very depressed because I just felt like, what am I doing with my life, right? And I thought I would be doing more, but I got, I kind of got trapped in this, what do you call, monotony of life, right? I kind of just went through my routine in life. And, you know, the question you got to ask is is what are your goals? Why do you want to do this? And, you know, what do you want? And then why do you want to do it?

Yeah, I see that as complacency. But most— right, again, we're in this mindset, and I see this day in and day out. I'm actually navigating this with one of my clients where they're working for this really interesting company, and they got offered, right, this like a little bit of a raise, and it was like a title raise but with a lot more responsibility. And I think that the raise equaled out to like after taxes, $33 or $66 or $333 a month. I think that's what it was, right? And I'm not the type of therapist that will ever say you should do this, you should do that, but I asked him, I'm like, what the hell are you doing still not interviewing with other companies, especially with your talents? And I, and I love this person and they're so talented and people don't know because they're stuck by— right, you can't see the picture when you're in the frame.

Yeah.

So when you were doing this, obviously, right, you said your grandparents were already involved in this community. Was there other mentors? Was there other things that you read, saw, podcasts that like just kind of knocked it into your head and be like, no, I got to go. I got to go all in on this.

Rich Dad Poor Dad, for sure. The idea that there's a huge difference in the actions that you take to become middle class, wealthy, live an abundant life was mind-changing, right? The idea of having assets, which put money— buying assets, which put money into your pocket, versus buying liabilities like a fancy car, a huge house, you know, something that takes money out of your pocket, was very life-changing for me. The other thing was just kind of just going through my own personal development. I read a lot of personal development books, a lot of books from like BiggerPockets, which they're specializing around real estate education. And I, you know, self-educated, and I also talked to like real estate agents and got to know people in the industry. And I learned how I could scale using other people's money. So eventually you get to a point where you can crowdfund your real estate deals. And that's really cool. Syndicating and all that. Where you promise the investor a certain return, a preferred return. And then you split the profits 50/50. Or like 60/40 or 70/30, 80/20. So you're still invested in the property. But what's great is you can use other people's capital rather than your own. So the return could be infinite. You hardly put any of your own money in the deal, but you're, you know, managing it and building it so that it's, it's very lucrative, it's very profitable for you and the investors, and it's a win-win situation for everyone.

Yeah, so that you use that word, that term, that there's so many different ways to get into this, right? There's the wholesaling, and I know there's like JV partner, right? There's all these different types of— so can you, you know, just to give you a 30-second, you know, what are some of the ones that you're aware of that you're involved with or that you're learning more about? Because a lot of people hear these terms and like, this real estate, but then like, but I'm not a realtor, and what do I do with contracts, and how do I know I'm not getting screwed? But then there's all these other ways. So there's REITs, and so what are some of those things? So for people who may have either heard these terms and don't know what they mean, can you just break down some of them in the next—

Yeah, so I would— well, I would first start off with don't get too lost in the terms, because a lot of people, a lot of new investors, they get excited about this new term, and it it's like a shining object, right? They're like, "Oh, I want to do this. I want to do wholesaling. I want to do flipping. I want to do whatever." But it's more important that you just commit with something. And I'm just— I'm here to try to make this simpler for people. So the one I'm going to talk about is actually the example where my dad— I partnered with my dad on the property. So what happened when I first bought— like a couple years after I bought my first property, I was actually running out of money because I kept buying more and more properties. So I didn't have much capital to deploy. And I found out that what happened is my sewage line broke down and I had to replace the whole sewage line and it cost $9,000. This tenant, you know, he's like, dude, there's shit, there's poop coming out of the kitchen sink. It's all over the kitchen floor. It's horrible. So that was a disaster. And then I had to replace the HVAC as well because there was just no AC. I didn't know that when I bought it. So that cost another $15,000. So all in all, all these repairs on the first property cost me $23,000. And I had this huge bill to pay and I had less than $7,000 in the bank. So what happened is my dad, I talked to my dad, I said, "Hey, I kind of run out of money here, but here's what I'll do. If we can put an extra bedroom in this house, I'll give you the rent for that bedroom for the rest of your life. So $550 per month for the rest of your life if you can fund $23,000." He's like, "Yeah, sure." You know, because he has a 401. He's got all this money in retirement. He's like, yeah, $23,000, I get $550 for the rest of my life. After the first 3 years, he gets paid back in full. After that, he's making about a 20% annual return on that investment. So it just made sense for him, right? And it made sense for me. And we just partnered. We kind of drew like one-page contract. Honestly, it wasn't super like expensive or crazy. I didn't even have— I didn't even go through a lawyer or anything like that. But, you know, partnerships can be that simple. It could be just like Hey, you lend me money, I give you this return, you know. And for him, after, you know, he passes away, of course he'll go back to me, right? And so, yeah, every— it's a win-win situation.

And then on the ledger, it shows up as—

yeah, right.

It makes sense on the tax purpose.

And some people say like, oh, you know, I don't have a dad that has money, you know, $23,000. But there's tons of people out there who have, you know, Social Security, 401. There's tons of people out there that have just money sitting in the bank and they're kind of getting afraid because inflation's at, you know, all-time highs. So that money is losing value every, every day. And after 10 years, if inflation's at 5%, you lose 50% of that value in the next 10 years. So they're trying to deploy capital. There's a lot of people out there with money. And so you can take the same approach. Hey, if you can, you know, pay for these, you know, additions of bedrooms or if you could help me put up some down payment for this property and we do like a partnership, you know, can you— I can promise you a certain return and then we could go from there.

That's brilliant. And people don't think about— because you watch like Shark Tank and they're like, well, I want whatever percentage in perpetuity. It's all like, well, that's like 800,000 times the money you gave me. Yeah, yeah, it is. But in this situation, right, it made sense because if you found someone who you know that it's gonna be back in your pockets in the long run, maybe a long time from now, Yeah, that's brilliant, brilliant little reverse engineering.

Yeah, exactly. And then you made a good point, like you can invest in equity. In Shark Tank, they usually sell equity, right? Like a share of the company. In real estate, you can do the same thing. If the property appreciates, they get a percentage of that cut. If you get, you know, loan pay down, the mortgage pay down, they also get a percentage of that cut. And so you could sell your equity or you can sell like your cash flow, like, you know, how much you're making every month on the property. So there's two ways to do it.

Yeah, so walk us through for the next few minutes as we wrap up, like, so you're now doing this and helping other people do this. What does that look like, and what would that commitment look like, and what are they getting from it, and what are you getting?

Yeah, yeah. So I have a company called newbie real estate investing dot com. So you can find at www.newbie-realestate-investing.com/guide, and that gives you the free guide to get on to the email list, and you can contact me, email me directly there. If you want as well. And I provide a newsletter where basically I go through my top tips and best strategies and some of the obstacles and mistakes that I made so that you can avoid them as well. And then, you know, just sign up for that free newsletter. I promise you it's worth your time. You'll get infinite returns by investing in yourself, right? The best investment is investing in yourself. So I walk through people, if you decide to get mentorship from me, I walk people through the whole process from analyzing the deal, analyzing the you know, what market you want to be in and what neighborhood, which house makes, you know, sense for you so that you maximize your ROI, your return on investment, all the way into the whole process for bringing in tenants, signing leases, you know, getting all that legal work done. Although I'm not a lawyer, so that's just disclaimer, but I'll show you, okay, these are the steps you need to take to build this for yourself, to build a 6-figure portfolio in the course of a few years, 3 to 4 years. I believe anyone could do it in 3 to 4 years. Yes, I actually had one client who made $4,500 in cash flow on this first property. So he was making $9,600 per month rental income, and then after mortgage and every expenses, he was making $4,500 per month on one single-family home.

Incredible. So yeah, so this is, this is the shift from like going and being stuck and locked in and really have a game plan changing life.

Yeah, definitely incredible.

All right, so guys, if you— anybody's interested in this, please, please, please check out his information, uh, social media stuff. Any other— any places you want to—

oh yeah, my Instagram is cao8888.

Simple.

Yeah, easy. Or you can just Google Ryan Chow.

There you go.

Awesome, Ryan, thank you so much. Yeah, and guys, again, right, this is the, the dues that we charge for this is just subscribe, like it, leave us a review on any of the social media platforms. Obviously reach out to any of our guests and tell them that you got any bit of value, because I know our conversation today with Ryan was loaded with stuff. So appreciate you.

Thank you guys. Nice meeting you, Jason.

Thanks, man.

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