Unlocking Passive Income Through Real Estate with Tom Burns

You know, you're going to chart out a nice straight path. I'm going to start here and I'm going to end up here and I'm going to be happy. Well, the path is really going to look like a stock chart. It's going to be up and down and up and down. But hopefully, as it just keeps rising, hopefully the trend line is always up. You'll reach whatever your goal is. And so my goal, I just wanted, I just wanted money coming in that wasn't, you know, wasn't connected with medicine. I didn't have any grand schemes of financial freedom. I loved my job. And then just all of a sudden one day I looked and realized my real estate's making more than my doctor job is.

In today's world, online customers and everybody expect personalized support on every channel and in every way they want it like done right now. But the problem is most solutions out there don't allow that to happen. They're not delivering. So your customer service reps are struggling to stay productive and your customers honestly just aren't as happy as they probably once were. Now's the time to change that. This is exactly why There's a new AI powered service hub from HubSpot. The service hub actually allows you to bring this type of level of service and success together for the first time so you can deliver on the expectations that people are expecting. And actually it's boosting revenue along the way. The reps that are using Service Hub from HubSpot right now are reporting 13 times faster than to help them resolve tickets and also it helps them close something like 42% more tickets per day. So that basically means that you're also retaining people at a much higher rate. They're saying more than 80%. Not only that, you're getting this full 360 view of your customers in this smart CRM that basically helps and supports you in the marketing, sales and service delivery and success of your team, but also making the experience much better for your customer which boosts the your revenue and your business growth. Go and visit HubSpot.comservice to learn how this all new solution can help you deliver for your customers. Did you ever feel like you're trapped or you want to get more out of your life? Your time maybe hit that financial freedom number that you might have in mind or maybe there's just a lifestyle that you want to change but you feel like there's not a perfectly leveraged way or you don't know the best next steps. Well, I brought in Dr. Tom Burns in here, who we recently got connected, but we know so many friends together. He broke everything down and dispelled a lot of the myths that I had. But also likely you have when it comes to passive investments and ways to actually get that financial freedom. So that's what we chatted about. We're going to get into it right now, Tom. I'm really happy we got connected. It was what Justin Breen, I think, originally brought us together. Fellow visionaries. Right. Quick starts.

Absolutely. Absolutely.

Yeah, man, we are. Yeah. And I feel like a lot of entrepreneurs, you know, a lot of folks listening are like, us, you know, we got into something. You know, I know your background is interesting, and I would love to kind of preface, you know, what your previous life looked like and what led you to what you're doing now with all sorts of interesting investments. You know, time and financial freedom being, I think, the biggest things that you've kind of cracked the code. And I feel like a lot of entrepreneurs are in the similar boat. You know, we just have our own little flavor of how we got to where we're at right now. So, yeah, I think in this episode, I'd like to just, you know, kind of break some of these mental barriers that we have as people, as entrepreneurs, and see how we can really find that financial freedom.

Yeah, and it all starts in your head. You know, we all got. We all got talents. And, you know, if it was. If you could do it with a. If you could do it with a menu, everybody would do it.

That's for sure. Yeah. Perfect roadmap. So. Well, and, you know, I was kicking this off, just our chat here. You know, you have this book here, why Doctors Don't Get Rich, and it's a. It's an awesome purple book. And, you know, you have, what, your friend Robert Kiyosaki. I think a few people know who he is. And, you know, he was the one. Rich dad, Poor Dad. That was the book that I first picked up, and it kind of flipped the switch. I was like, okay, time for Dollars. That whole game seems like a scam, you know, it doesn't. It's not the game I want to play, at least, you know, and there's more to it than that. But, yeah, give me some initial thoughts on that.

Yeah. You know, so Robert's book. And that's. It's why I loved his book. Is that it? You know, it didn't necessarily tell you really how to do anything, but it gave you the mindset and the reasoning why you might want to you know, and so with. It was basically that assets produce passive income. And passive income gives you the. Gives you the control over your time, gives you the choice of what you want to do with your time, which is what we all want. You know, I mean, Joe, we all. We've got roofs over our heads and indoor plumbing for a reason. We want to control our environment. So take that a step further. And we'd all like to be able to control our environment, spend more time with our kids, more vacations, see the world. And so that's the whole. That's the whole premise of what many of us are after. And that's kind of what Robert's book did for a lot of people. It was a. It was a mind changer. And if you can flip the switch in somebody's mind, they will find a way to go create that income, because there's infinite ways to create the income. And so that. That's why I think it was such a special book and why it appealed to so many millions and millions of people.

Yeah, yeah. And that was the light switch. I know a lot of other fellow friends of mine, entrepreneurs, that's what got them out of the day job, maybe the rat race initially and into this game of building business, building, I would say, cash flow in different ways, not necessarily the most leveraged, maybe out the gate for a lot of us, and we could still be trading time for dollars. But I want to go back and talk about your story just just briefly as well, because you did have this previous life as a doctor yourself, and I think that brought you some aha moments. And then because I want to take your journey and maybe, you know, relate it back to what a lot of people experience.

Sure. And I'll keep it pretty short. So I was, you know, I was a. As a young person, I was an athlete and then quickly found out nobody's going to pay me for it. So I became. I wanted to become an orthopedic sports surgeon. And that's all. So I did. I followed the path. There was a menu for that. So I followed the path. I went to college, went to medical school, and then we trained as doctors under this apprenticeship type program. Five years to learn to be an orthopedic surgeon. It was actually six for me. I did an extra, but that's where we trained like in the past. Blacksmiths, plumbers, electricians. You train under somebody that's doing what you want to learn how to do. What happened, Joe, was I was just following the path and knew nothing else. My dad, my Mom. They worked for a living. They both had jobs. They were, were setting up for that retirement and pension. And I watched these doctors that were supposed to be me in 20 or 30 years. I didn't necessarily like what I saw. You know, they were making a lot of money, but they weren't happy. They were in the hospital late at night. They were on their second or third marriage. They were complaining about their situation, not having control over what they wanted to do. So that happened enough times that I was either, you know, the blind squirrel that got lucky or it was touched by an angel. But I thought, you know, I don't necessarily want their money if I have to have their life. So that's when I started looking for something else. And this was pre purple book. So I looked at a lot of stuff we won't go into. I landed on real estate just because it's so simple. It's just math. And, you know, you buy something for a certain amount and you let somebody else use it for slightly more than that amount and you get to keep the extra. So that, you know, that was real estate. And it moved at a pace that I could handle. You know, it's slow. You didn't have to be first in or last out or vice versa. You could do it with partners, you could do it part time. So that, that's what got my brain going. And so I learned now back then, you know, I was an indentured servant, didn't have two nickels to rub together, so all I had was to get some education. It was also pre Internet, so I just read books and talked to people that had done what I thought I might want to do. And so once I got out of training and got a couple of nickels to actually rub together, I paid off a few bills and did the only thing I knew to do, which was to go buy some real estate. There weren't syndications to look at or I wasn't privy to those. They weren't available to me. I was a young doctor. But syndications weren't out there. So I just went and bought something. Didn't know my head from a hole in the ground, but I knew how to do the math. It looked like it was going to work. And each step along the way, the people involved in the process helped me get through it. And I bought that first property. Then I, I got some passive income off of, you know, 100 bucks a month or something. It wasn't life changing, but it was.

A light switch, right? It was that moment like absolutely.

It took About a month or two, I thought I'd get that little check and think, wow, I didn't have to see a patient or mow a lawn or see it do anything for that. It just showed up. And so I called the guy. I said, hey, I kind of like this. You got any more? He goes, well, sure, I got one down the street. When I looked at it, I was a little faster and a little better because I'd learned lessons on my first one. I still stumbled and fumbled, but we got through that one. And I got the addiction. You know, it's a good addiction. I got that passive income addiction. So I bought another and another, and I bought like a dozen of these things, you know, in rapid succession. And I got really good at that market. I got to where I could tell you in five minutes if it was going to make money and bought a bunch of them. I bought one side unseen. I bought one for no money down. I wasn't planning on doing that. I just knew more than the broker and the seller did. So that started the process. And, you know, it kind of grew organically from there. It got to where I. I wanted to get bigger, and, you know, I ended up getting a mentor, and I ended up getting partners, and the projects got bigger, and I just continued to learn along the way. And I'm still learning lessons and still making mistakes and trying to take the lessons with me.

Well, it's just like anything, right? It's like you got to dip your toes somehow and either dipping or you're just jumping all full in. And like you said, real estate could be part time, could be full time. So it's kind of up to us. And it's a math game, so it sounds like there is a roadmap, more or less a playbook. You know, obviously there's a lot of variables.

First, you had to figure out why you want to do this, because it's not. It's not necessarily. It's very simple. It's just not that easy. So me, I was a, you know, full working doctor, so that's pretty busy job, but. So you got to burn the candle at both ends.

Yep.

But, you know, if you got to figure out why you want to do it, pretty much anything that's going to take some significant effort. You really have to know why, because there's going to be ups and downs. Life is waves, and it goes up and down. So you got to be ready to pull yourself back up by the bootstraps when you're down in the troughs right then you got to understand what you're doing, get a little education, try to get around people that are doing what you want to do. That's where you'll get a lot of your education, a lot of your opportunities, maybe some partners, maybe investors or people to invest with. And at some point, you know, after you understand the language, you understand what you really like, you know, you've got to eventually get in the game, which is one of the chapters in the book. You got, as you said, dip your toe in or jump in head first, whichever way you choose, you got to get in there because that's where you're going to get the real lessons. And you know, what does it. Tony Robbins says knowledge is not power, knowledge with action is power. And I would totally agree. So you just got to get in there and you know, you're going to chart out a nice straight path. I'm going to start here and I'm going to end up here and I'm going to be happy. Well, math is really going to look like a stock chart. It's going to be up and down and up and down. But hopefully, as it just keeps rising, hopefully the trend line is always up. You'll, you'll reach whatever your goal is. And so my goal, I just wanted, I just wanted money coming in that wasn't, you know, it wasn't connected with medicine. Right. I didn't have any grand schemes of financial freedom. I loved my job. And then all, just, all of a sudden one day I looked and realized, well, my real estate's making more money than my doctor job is. So it happens.

And I think you bring up a perfect point. This is something that's been on my mind. I know it's, it's caused me some friction to get started in the real estate game. And it's come up before. It's like, hey, I love what I do. Or maybe I'm so in momentum of what I do, I don't know the first step, like, what is that thing that I can do to take action? You know, let's say, and I might be jumping a little bit because I do want to break down some of the elements of the math, like what are the things that we really should understand? But, and maybe that is partially this question because I feel like with anything, the more we know potentially could slow us down from taking action. So I guess to frame the question a little bit better, Tom, here I'm thinking what are the key things, if you were to say like three things to get someone into action, to kind of simplify, boil it down. Where should we focus to then get into action and not lock up in the process.

Figure out what you want to do or what you think you want to do, whether it's real estate or something, you know, figure it out. And so that's, you know, maybe it's your, you want to, you want to buy some kind of real estate or you want to get in some sort of real estate. So that's step one. You got to, you got to have a direction you want to go, right? You can't go anywhere without a direction. Then it was, I would, I would get, I would get in a, I would get in a network of people. I would just get in a situation where there's other people doing that. And it's easy these days you can just Google where are people that are buying things I want to buy, you know, where real estate meets meetups or where's, you know, business owners, where's this get around with them? And what'll happen is, because that's going to take you to step three, you just got to go do something. You got to go buy something, invest in something. You've got to get in there because paper trading, you can look like a star and you just don't learn the lessons. When you've got money on the line, you learn more lessons and you don't have to go in big. So I would, I would understand what you want to do. You know, I think I might want to go invest in single family homes. We'll go find a bunch of people that do that. That's going to do a couple of things. It's going to give you the confidence to maybe do it. It's maybe going to give you the motivation and it might give you the opportunity and some mentoring or education on how to do it. However you do that, at some point, dip your toe in and I suggest to people to, if you're doing it for the first time, try to go in small. You know, don't make it your biggest investment, go in small, don't risk a lot of your money because you're going to get some lessons, either good or bad. And you know, the, the size of the lesson is going to be the same no matter how much money you put into that first investment. So start small, get the big lessons. Then as you learn more, then you can start investing with more confidence, whether it's in something you buy yourself, if it's real estate or if you invest in with somebody else, either in real estate or businesses. So it's all quickly kind of understanding what you want to do, get a good feel for it, and then. Yeah. Which will include learning how to analyze it and all that stuff. And then you got to go do something or you'll just be, you know, you'll just be Professor Joe for the rest of your life until you get in the game.

Yeah. Not. Not dirty hands, Joe, are getting in there and doing some stuff with it. Yeah.

Right on, right on.

And that was a perfect breakdown of the, I would say a good mind, a great mindset to get in action and I guess, you know, as we. So back to the math thing. And I think this might go into, you know, hey, I'm investing in 401k or I'm doing my IRAs, or I'm, you know, investing in my business. So, you know, you mentioned real estate, and I would love for you to break down. Why real estate? Like, what are the. What are the. Let's talk about the benefits. The benefits of real estate in your mind. As, you know, as an entrepreneur myself, you know, there's things that I can control my time, cash flow, the way that I maybe invest. Give it. Give it to me.

Yeah, really. You know, there's a lot of things to invest in, you know, 401ks and stocks and things like that. They fit certain people and there's nothing wrong with them at all. Real estate's not the answer to everything. But the benefits of real estate, and we've talked about one, it can produce cash flow, which is money that comes in whether you're sleeping, working, playing with your kids on vacation, or sitting on the couch binging some Netflix series. You know, it's always going to come in. So that's why cash flow is important. That's that income that can help buy back a little bit of time. You know, just think if you've got. And you don't have to completely replace your job income, you could just maybe replace your mortgage or your. Your utility payment or your anything. Yeah, just those little bites at a time will start. That'll. That'll turn that light on and realize, wow, that's covered. And I don't have to work to do that. So. And then that. That'll help your other question where, you know, I like my job. Well, you can just make your job nicer if you don't have to do certain things that are maybe annoying in your job, you get rid of those. So cash flow. And there are. There are great tax benefits with real estate. So there's like these four pillars. Basically, real Estate has four pillars. One is cash flow, one is tax benefits. And you get that through depreciation, which is, we won't go deep into it, but the government gives you an allowance for your property wearing out. And so you get a tax deduction on that, plus you get to deduct all your expenses and things like that.

That, that. I noticed that quickly in my tax, my tax returns as things started happening, it was very nice. So tax benefits. Another is amortization.

You know, you're paying. So if you own a house, this is, this is great. If you own a house, you got a 30 year mortgage. Every month you write that check, right? So it got some interest, it's got some principal. At the end of 30 years, that house is paid off. And then everybody, anybody that does that should be really proud of themselves. You can do the same thing with real estate. You get 20, 25, 30 years to pay it off. Again, it's a little bit of interest, a little bit of principal. You know what the cool part is, Joe?

What's that?

You're not writing that check. Your renter is giving you the money to pay that off. So your renters pay off your property for you. So each month a little bit of principal is being paid. So the loan that you got is dropping every month. And which, which as the loan drops, you know, you bought it for here, you bought it up here, then the loans here. As the loan drops, that gap widens at your equity and the property. So amortization increases your equity, which increases your net worth and your wealth. And the fourth pillar, so we've got, we've got cash flow, tax benefits, amortization. The fourth benefit is appreciation. Real estate, not always, but often and typically on a trend will go up in value. That's just due to the fact that it's not that the house becomes more valuable, but you and I know that the dollar, the purchasing power of the dollar goes down all the time and the purchasing power of the euro goes down. And so house that you bought 10 years ago is worth a heck of a lot more today. So you get that appreciation. So that same gap I showed you as your, as your loans being paid down, you bought it for 300,000. Well, five years later or 10 years later, it's worth $400,000. That gap is all yours. So four really great benefits to real estate, and they all work in your favor.

No kidding. And that's where you know the big thing, I like that you have tax benefits as that second piece, because cash flow is pretty obvious. And you know, once you. And yeah, it might seem like not a lot, let's say your example, with a $100 a month. But as you said, that's. It's not only a light bulb, you know, light switch. It's also, it could be stacked. You can use that to leverage and get other properties, you know, and kind of build that, that, that asset class.

So that $100 that I made back on that property almost 30 years ago.

That hundred dollars was not taxed for many years because of the depreciation on the property. So that, that passive income was offset by those passive losses. And if they're, if I didn't have enough income, those carried forward, I could use them for years and years until the passive losses ran out. So that's one thing. So I got to keep all hundred dollars. You know, as a doctor, if I'd have made that hundred dollars, I would have gotten to keep whatever, 65, 70 of those dollars. So that's a benefit right there. And another thing, as you mentioned it, you said leverage, leverage that money. One thing I suggest to people is that when you create this golden goose that's laying these eggs, don't eat it.

Let that cash flow, that $100 stay in some sort of separate account that you're going to aggregate with your other cash flow that you make from your real estate or your investments, and eventually that grows and it helps you buy another one or you're adding to it, but it starts to steamroll. I like to talk about, you know, have your money make babies and then have those babies make babies, and it becomes a perpetual machine and that snowball gets bigger and bigger. So that was a really good point to bring up.

That's a point where I would love to dive deeper in on. Is this leverage? Because I feel like that's. It's another unlock moment mentally for folks is how can leverage. Like what does that look like as one deal is done? And then as you said, you started to acquire other deals pretty quickly, other properties. Then of course you got more complex.

But yeah, yeah, yeah, everything, it's just, you know, but the mechanics are about the same. But yeah, that's one thing about real estate, and I didn't mention, maybe it's a fifth wheel on this. Four pillars, I don't know, fourth fifth pillar. But leverage. There's leverage. There's leverage in the stock market, leveraging businesses. We can get loans, but the leverage in real estate is, is significant. Until, until recent times when interest rates, you know, went up quickly, we could get up to 83% of our property paid for by the bank and only had come up with 17% of the property. And I know it's extreme, but that was when times were good. And that's sort of federally backed HUD 40 year loans. But you can, you can put down, you know, if you're buying your own home, you can buy, you can put down 0, 3%, 5, 10, just depending on, you know, if you've got military benefits or something like that. But typically in the investment world you're going to put 20% down. These days it's more. We just bought one where we put down 50%. So.

Wow, okay.

It's just, well, it's, you know, that keeps, keeps you, it's a, it leaves them a buffer at a margin of safety.

But would you suggest that's like, is that pretty common you're seeing now with the current trends?

Yeah, there are a lot of people putting in more equity using fixed debt. And that's no whole other discussion. But you, you get, you get to use other people's money. You get to use the bank's money. When I bought that little, little property that I bought, I put down about 20%. You know, it was a small, I put down a whopping $16,000 or something. You know, those were the days, by the way, that that hundred dollars now is like fifteen hundred dollars a month from that same property. I still own it.

Cool.

And the last time I saw that property was the day I walked it to buy it. So I haven't seen it for.

Anyway, the leverage. Leverage is, it helps. The leverage cuts two ways. That's why we are, that's why a lot of people are using a lot lower loan leverage now. They're, they're borrowing 50, 60, 65% of the value of their property. And that's due to safety and also due to the banks aren't going to give you any more leverage than that right now. But if you leverage a little too high and you don't do your numbers right and your property doesn't do well, that leverage can turn around and bite you. So it does take some education. And your education is your hedge against trouble.

That makes sense. And so the model, more or less, and this is me kind of in broad speak talking about is like, okay, you're acquiring properties and of course you're starting to gain more of that value over the time that you're getting that renter to pay it off, you know, your principal and at the same time, what, your net worth is growing. So you have, you know, these, these things are kind of, you know, compounding all at the same time. And then eventually some of that can be leveraged to acquire other propert along with other. Yeah, along with other cash that you might have accumulated somewhere.

Yeah, absolutely. That's, you know, beauty, beauties of real estate. Say you take one of these properties, you buy it in year one and all those four things are working right. You're getting cash flow, depreciation, amortization and appreciation. You go enough years, all of a sudden that gap I talked about is really big. You bought something for 200,000, now it's worth 400,000 and you only owe 100. Well, you can do a refinance, you can get a new loan and take out more cash. And that cash, you can get that cash. It's actually tax deferred cash. You don't pay taxes on it. But again, another discussion. And you can use that, as you just said, you can use that to buy another property. Now you've got two properties working. You've got bank's money on both of them. The bank's happy to give you that money because you're paying them every month. They just want their money back. You get all the benefits of all the depreciation, all the amortization, all the appreciation, you know, so it's, it's a leverage, works really well. And if you're just disciplined, this stuff compounds and grows over time.

I'm going to pause the episode really fast and shout out another show that's on the podcast network over at HubSpot. It's the audio destination for business professionals. This is Mistakes that Made Me. It's hosted by Iman Esmail. She is interviewing successful business owners and talking about, hey, what are those mistakes? What are the failures? What are the things that you hate to talk about that we can all learn from? I mean, like, let's be honest, do you like to talk about your mistakes? Probably not. Well, that's what she's talking about. And it's going to be there. It is there waiting for you to listen so you can learn from those lessons and learn how to get past them or navigate around those big boulders on your own journey to success. So go listen to Mistakes that Made Me. Wherever you get your podcasts, are you tired of the hassle of building online sales funnels? You know, I get it. And you started your business for freedom and not to be chained to your laptop all day long. And thankfully there is an all in one platform that makes this process super easy. So you can start attracting customers online. It's a tool called Kartra and it has every tool you need to grow. So every Kartra account comes stocked with a bunch of different done for you campaigns that are designed, connected and written for you. All you got to do is customize them to your liking and you can launch a fully built sales funnel in minutes. So make marketing easy on yourself. Visit www.hustleandflowchart.com Kartra and snag a free 30 day trial of Kartra. And again, that's hustleandflowchart.com K A R T R A I want to go back to the speed of things because I love that you said real estate is slow. You know, it's not this fast and we're living in a world of everything is so fast and only speeding up all the time. You know, AI is not helping in that respect. We love it. But also, you know, I find myself often going like, I want to go more analog with things. I want to go slower. Like, how can I pace myself along everything I'm doing? So I don't have a perfect question here, but like, how do you look at the speed of things? Because, you know, with real estate, everybody wants this, I'm sure faster than they're gonna get. And they're probably looking for the big deals, the big returns, but what's the mindset there?

It takes a little maturity or a little experience, but of course we want it fast. I mean, I wish somebody had, you know, plopped $10 million in my pocket today, but you know, there's no free lunch. Right. But it's, it's real. It really does work. So you, if you want it fast, you might want to go do something else. Yeah, I don't know, buy bitcoin, buy, you know, buy a lottery ticket. But, but that's a lot less sure than real estate. And so you want to have. Yeah, you just gotta understand it's gonna take some time, but.

It'Ll probably. Unless you really want to do this by next month, it's probably gonna happen faster than you think. You know, we overestimate what we can do in a year. We underestimate. We underestimate what we can do in five years. Peter Drucker's quote, a number of other people. So if you just stick with it, it's, it's like, it's like going to the gym, Joe. You know, you can't get big pecs by one set of push ups. But if you do those push ups every day or do the bench press every day. Eventually the muscles grow. It's the same thing with real estate. You just use the same habits. You turn that bench press into a habit. You turn whatever creates real estate investments for you into a habit. It's either finding people to invest in syndications, or finding that next single family home, or buying that next storage property. And you persistence and diligence wins the game. You know, time makes you, time makes you look really smart. It'll make a bad deal look good and a good deal look great as long as you don't lose it. So it makes you look really smart. So just hang in there. My path, it was a 10 year path. I was just, but again, I wasn't trying to do it fast. So lucky me, I didn't have to battle that demon, but I just wanted extra income. And it was a fun game to realize, look, I could pay my utilities with my passive income, oh, I could pay something else. And then it just kept growing because of that compounding effect. It just kind of went in this non life changing slow, you know, slow slope growth. Then all of a sudden one day it just kind of did this just because of all those four things I talked about. So I didn't give you a concrete answer other than hang in there. You know, you can't, can't force the birth of a baby. It takes nine months, right? So you know, you gotta learn to be patient there. So be patient here. But, but don't stop, don't do one thing and then wait for it to happen. Keep adding to it because you'll compound your knowledge, you'll compound your money or compound your network. All of those things are going to increase your ability to create cash flow. And the whole goal is for you to have cash that's coming in that you don't necessarily have to put your time to. That gives you the choice of deciding what you want to put your time to.

That's right, yeah. No, and it's a perfect answer. It's honestly, it's a better one than I can even imagine because it's life, right? It feels very organic real estate in the way that it can all work. It's very complex. But at the same time, like you said, it's, it's, it's pillars, it's, it's certain principles and it takes consistency, you know, it's the power in compounding really. At the end of the day it seems it does.

And those pillars, you know, pillars are designed to hold up heavy roofs, right. So. And I just Gave a little nugget I didn't realize I was given. But that property, I bought my first property, I still own the thing. It has taken this much effort for the last almost 30 years. So. Oh my gosh, it's been a long time. So you know, you get it mad and it just continues. I just can't stop it. It keeps sending me money every single month. So they don't all work out like that. But it's the long lasting aspect of it too that people don't want to forget. It takes time to build an engine like that that really lasts for a long time.

Yeah, well, so you mentioned 30 years ago and you're of course still in the game doing things and I'm curious of, of kind of the evolution. Let's, let's curb that for a second of, of your thinking. But like let's say someone wants to start now and maybe approach this one of two ways is you talked about the first three steps. You kind of get going. But things, things that are rolling around in my mind, I'll just give them to you is like location. How, how does that. Yeah, I'm in San Diego for instance, and I know, you know Mike Cannings, you're, you're on his show as well. And you know, I think he's, he's kind of battled with the same kind of mindset. So location. Am I too old for this? You know, am I too late in the game? And I'm thinking a third one here just to give you a couple of things. Is the environment like the economy right now, higher interest rates, like you said.

You know, just the factors that are kind of outer, out of our control a little bit. What would your steps be? What are you, what's your mindset going into things now? Is it different or what are there things you would do a little differently?

Probably not. I'd probably give you that same answer when you said how do you get started? Because I love it if you just look so. And I'll answer your last question. You know, it is a, it is a bit of a difficult time now. But no matter what the state of the market, there's a deal out there. There's always deals out there. They're a little harder to find at times. In the last 12 to 15 years you could throw a dart and, and make money on apartment complex. Now you really got to sharpen your pencil. But there's deals out there. People are finding good deals in all kinds of asset classes. At least in the real estate world. You know, businesses do the same thing. They go up and down. There's good times to buy businesses. Great time to buy an empty office building right now. You got to know what to do with it. So that's the one thing. So there. There is always a deal. Some. Some fellow from way back when, he said. He said the deal of the century is around the corner every day, every week, no matter what kind of market it is. And he's correct. There are people finding screaming deals right now. They're just few and far between. So that's one thing you just. It's harder work. And you know who shied away from hard work? We don't. Like we said, this is simple. It's just not easy. The numbers will make sense. Number two. Yeah. You talked about location, and that's a. That's a huge thing in real estate. It really does come into play. You're in San Diego, I'm in Austin, Texas. Two really popular places in my world. In the apartment world, there are a bazillion apartments being built. So our rents have gone down for a while. But there's a reason for that, because everybody moves to Austin.

So if you have a piece of real estate in Austin, if you bought it right, it's got a good chance of doing fine for the next, whatever, 10, 20, 30 years, because a lot of people want to move to Austin. You might get a great deal in some small town in Iowa or North Dakota, and the numbers might work. But people aren't moving into North Dakota, or at least let's assume people aren't moving into that particular area. Well, then you've got no renters. So location is very important. It follows, you know, you want to be in a location where populations are growing, jobs are growing, because that produces people that have the money to rent and want to rent. So that's one thing. It's just that if you want to buy a place in San Diego, you'll. You'll fight hard to find one that makes sense. But remember we said way back in the beginning, it's just math, you know? So do the numbers. And the numbers will tell you what to do. Don't let you know. Don't let the heart and the frontal lobe get into the game, because you'll fall in love with how pretty a property is. Just try to let them know, because I've done it. I've made that mistake. Of course, I've made every mistake. That's the only reason I'm here. So just follow up and then your second. Are you too old? I thank you, Joe. I think you are too old, so you just need to give it up, you know, so. Which is sad to say, because obviously that means I should be like, in my grave and never doing anything, you know, I mean, hey, what is it that, you know, the best time to start was way back when. The second best time is now. It's just, it's gonna work. I've. It took me 10 years because I was a slow learner and, and, and didn't know what I was doing and had good resources, good people resources. I didn't have all the electronic resources. I had really great people helping me out. I've seen people do it in less time. I had to replace a surgeon's salary, which was a little high. I wasn't planning on doing that, but that's what happened. So that happened without really trying. I was just doing the habit thing. I just kept buying stuff. So the. Maybe the lower amount of money that you need to replace, the easier it is to replace. The corollary is you probably got a little less money to buy things. But there's always a way you can have the money. Like a lot of professionals and doctors, they've got the money, but they simply don't have the time. And they might like their job. So they'll go find somebody in a syndication that's got the experience, the network, the education, the knowledge, and they'll, you know, those two will work together and it's kind of a win, win deal. So.

You'Re never too old. I've seen people do it in a few years, and you're so much younger than me. I mean, I'm still wondering if I'm ever going to make it, but we're still going to keep going.

I think you're doing all right, Tom. Well, I mean, you kind of dovetailed a little bit into what I've been thinking is, all right, business owners, myself included, yourself and most people listening here. We're connected. We have a network around us. There's people. I talk about this all the time with just podcasting. It's like, hey, you want to go get on shows or you want to start your own show, or there's all these virtual stages and there's people that, you know that have influence. They have access, they have knowledge. Same goes with real estate here. And it's going to shorten the gap, the learning gap. You know, there's mentors there. But also, you mentioned syndication deals. Just doing deals with partners.

Yep.

And syndication. I've had folks on the show so it's not a new topic, but.

Right.

I would love to at least bring up the idea of like how to work with partners in deals like syndication deals to maybe shorten that gap or, you know.

Sure, sure.

Your thoughts around it.

That's a, you know, that's a. Like I said, that wasn't necessarily available to me back when they really opened it up, you know, as I was kind of on my journey. And it can work really well if you have a, you know, if you have a, if you have a. So there's the sponsor and the investors, the sponsors, the, the guy or the group or the person or the group that's got all that knowledge, got the network knows all the people, knows where to find the deals, how to put it together, etc. Etc. Often those folks, they may do a series of deals and their money runs out eventually then, so they want to, they need large amounts of money you made rather than, you know, $16,000 to buy my little first piece of property. They may need $15 million to buy something. And so you get it from a group of people. It's called a syndication. So if that sponsor cares about your money as much as you do and is competent and has a good team, it's a great marriage. Because if you're somebody that has discretionary income, you're great at your job, you're a great doctor, you're a great business person, you're a great professional of any sort. You know, we get good at that. Business people are really good at running businesses and they don't necessarily have time to go out and look at, at properties, so, or look at investments, whether it's, whether it's investing in businesses or not. So if you put those two together, you're the person that's got them. The investor is the person that's got the money, but not the time. The knowledge, the network, the experience. They give that to somebody that doesn't have all the money they need, but they've got all those other things, so they're complementary and those two go together. And, and, and if it's a successful investment, the investors get paid back first while they continue to do their job. So they're working at their job, whatever they make, hopefully getting raises and making more each year. Now this passive income starts coming, coming in and starts adding to the pot. So it's a great situation. The caveat is, is you don't always find sponsors out there that care about your money as much as you do. Most of them do. There are really, really good People out there. There's a lot of them. But before you do that, I would get with somebody who can. Who can help you identify red flags, give you some structure on how to do the due diligence on somebody and find out, Just try to give it your best guess that. Not your best guess, give you as much confidence as possible that they've done this before and they're good folks. That's called the due diligence, and that's important. And once you find one, as I have before, I found people that I trust, I just keep giving them money. If I've got extra, I'd give them money. I don't even have to ask really how much, what the deal's like, because I trust them. Yeah.

And that's what I feel like I've always heard with the real estate game. I mean, goes with most of life anyway. You know, you build those trusts, you build the bonds and networks. Over time, you're doing deals so you have a track record and people change, but not that much. You know, the same principles usually stay intact.

Yeah. Find some good ones. It's a great team. It's a great. It's a great way to. To leverage their time while you do what you do best. And over time, maybe they'll start. Maybe that cash flow will start buying back a little bit of your time. And if you choose to want to go do it by yourself, you'll have extra time to do that.

I love it. And, Tom, this is. It's given me. It's putting together a lot of the pieces that have been floating around in my mind, and it doesn't seem as scary. You know, sometimes these big models you talk about syndication deals or just real estate in general, people can tune out because of the complexity. But I think you've done an incredible job breaking it down. I know your book does as well in a lot of ways. It's not all real estate, but, you know, tell me a little bit about what you've been working on with people. Maybe some of you know how you're. How you're now progressing and evolving yourself. And I'm kind of curious of. Yeah. What you're involved in now.

Yeah. Remember I talked about that stock chart where things go up and down? Well, that's, you know, that's my life, of course, been great. Blessed to have a great life, but, you know, great lives always have their ups and downs. And so I got to where I got by just doing what you and I discussed, just habitually buying or investing in stuff that Would make cash flow. They didn't all come out. You know, sometimes I, you know, sometimes I'd have losers and sometimes winners, but more winners and losers. And that through good partners, good mentorship, just blind luck. And all of a sudden there was that money that worked out really nicely over time. As we created one company, we, that was the philosophy. We wanted to create cash flow and we did that for a time. But the market sort of ended up turning things to where I believe it ended up being more of a kind of a capital gains mechanism. And I talk about that in the book where we'd build something and sell it because we, that's what we did. We built apartments, we'd build it and sell it. And that was good for the investors, it was good for us. And that's just what the market wanted. But boy, that kind of up and down thing got.

A little chaotic. There are a lot of people that do that and it's a good way to go because you add a lot of value when you take a raw piece of dirt and turn it into a pretty building. So my evolution has been to kind of go for. And things got chaotic. This is for people if they're younger. I can just tell you I've been through it and like I said, I've made every mistake possible. So I've got an entity map sitting behind this computer that just looks like this. There's a, you know, I guess you can't see my hands, it's just everywhere. So many entities. So my word for the year is simplify. And so.

My company, now we focus on one thing. So I've gone to just a simple focus, One asset class, one asset type. It's easy to explain and that's sort of my evolution. So back to the cash flow that, that got me here. And you know, I'm aware as we start this venture, it's going to take some time. So I have to, I have to eat my own cooking and be, and be patient and wait for the, you know, because got to take care of the investors first, make sure the properties do what they do. So that's sort of been my, my kind of evolution. There was, there were some hot times during the late teens and early 20s and they were exciting and then they were not so exciting. So I'm kind of going with the steady flow right now.

Yeah, that's, I mean, hey, is it, is it something you could describe here or was it even worth, you know, kind of the, the new venture now that you're doing, or is that, oh.

It's, Yeah, yeah, it's really. See, I, basically the simple. I went from building apartments and build to rents, things like that, which is a fabulous, fabulous business.

To simply buying apartments. We're now buying apartments that are under undervalued, so to speak. You know, now is a really good time to do that. And that's part of why we did this. It's been two and a half years, we've been working up to this, but there are a lot of apartment buyers that came into the market late and maybe didn't have as much depth of experience. And, and some that even did have some experience really got caught by surprise with this rise in interest rates. And so there are a number of properties that are struggling from a financial standpoint because their values had dropped, their leverage was too high and they need to sell. So, you know, when you can buy properties at 20 and 30% discounts or at the value of the debt, that's a good, that's a good buy. You know, they always say you make your money on the tee box. That's. Or that, I'll tell you, that's a real estate expression. You make your money on the tee box. So if you can buy right.

And sit tight for these high interest rates and only very slowly growing rents, there's going to come a time in the next 12 to 18 to 24 months when all the new supply of apartments is going to kind of dwindle, but the population is going to keep growing. And that's when we think rent growth is really going to take off. So that's our strategy, is to just pick up good deals right now that make nice, steady, low returns that gradually grow each year and then get them. Hopefully as the rents grow later, we will refinance, give people back their money, tax deferred, and move on down the line to keep, keep buying properties. So that's the new evolution for Tom Burns.

I like it, Tom. Yeah, thanks for sharing. And it's, it's. I'm always interested in, in what you know as you've gone through the journey, ups and downs, like, okay, so what have you learned? And then now what do you do? You know, how does that evolve?

I can tell you I've learned, I've learned, I've learned a lot. And that's code for I've made a truckload of mistakes. I can just tell your listeners, I, you know, you see these presentations and speeches, even mine, it's like a Facebook post, but behind that is just a bunch of failures and a bunch of mistakes. And 23 was. 23 was kind of a year of failure. So I should be really smart by now, but I'm trying to figure out if I really am. But a lot of mistakes. But if you just keep your head up, keep your knees moving, you know, you'll eventually get there. The guy that keep the persistence wins the race.

That's it. And I'm trying to find the quote in the book. It's from one of your chapters. It's not a quote by you, but I mean essentially it's like, hey, opportunities that come from hard work. I'm paraphrasing. And it's one of the front of your chapters. You have all these really awesome quotes.

Opportunity favors the prepared mind.

There you go. There's another one. Maybe that's a Tom Burns right there. Yeah. Well, hey, Tom, this is brilliant. I love it. Couple things, shout out where we, you know, how folks can find the book, how they can go contact you and maybe explore more of your world. Let's start there.

Sure, yeah. Just go to Amazon for the book. Just look up why Doctors Don't Get Rich book or Tom Burns and you can find the book there. It's, it's. I appreciate it. And give me a review if you like it.

There you go.

As far as getting a hold of me, you know, probably the easiest thing is I got nothing to sell you just if you go to. My website is richdoctor.com so if you go to richdoctor.com forward slash newsletter. I put out a newsletter every week and it's all, it's educational stuff. There's, there's a lot of stuff on real estate and investing, some tips and tricks. There's some mindset tips and, you know, I'll usually tell you about the mistakes I've made, you know, and what lessons I've learned. So it's, it's just there to, to help people. So if you're interested, hop on the newsletter. And if you want to, if you want to ever contact me, just send an email to hellorichdoctor.com and I'll always answer your emails and we'll hop on the phone if you like.

There you go. I can attest to that. Tom's fun to chat with. We've had a couple chats now and it's always unlocking little things here and there that I know add up to big things, compound up.

And your book isn't just for doctors, by the way. I want to preface that to folks in case they're wondering and, you know.

Who came up with the title?

Who's that?

Robert?

Was it awesome?

That's his idea. His idea to write the book. And I said, no at first, but anyway. And he said, yeah, you should write this book, and you should call it why Doctors Don't Get Rich. And so I thought that was funny, but I tested that title for two years and couldn't come up with a better one. But what it is, just, if you think about it, it's a metaphor for the fact that no matter how much you get paid per service or per hour, you could make a million dollars an hour. If you get sick or you get hit by a bus, the music stops. Real wealth, or one pillar of real wealth, is having assets that produce cash flow that buy you your time so that you can work on the other pillars of wealth, which is your spirituality, your health, your family, your social network. So wealth is a lot of things. Money's not the most important thing. Zig Ziglar says he tried up there with oxygen, but money will help you buy that time, which then will help you do what you want. I. I had somebody the other day. A small anecdote. I had a phone call yesterday with somebody, he says, you may not remember, he said, but in 2018, you talked to me and told me to buy, you know, get assets. And he said, my dream was to walk my kids to school. He said, I didn't even realize it. But on August 14, 2023, he walked his oldest child to kindergarten for the first time. And he almost broke down in tears because he was able to. Was able to make his dream. So that's the kind of stuff that passive cash flow does. It gives you the time to be with family. And.

When you get my age, you realize that that kind of stuff's really important. And hopefully a lot of younger people realize that, too.

Oh, and thank you for sharing, because you shared this with or similar to me with me before on the call. And I have two little ones, one's four and a half, one's five months today. And that's exactly the frame right now is like, you know what? I worked really hard, and I'm still good at that. But at the same time, I'm looking at, okay, where's both the ceiling, the time frame of things, and how I can diversify into things like real estate, other investments, to get to that passive income. Because that's freedom, you know, in so many ways, that's pure wealth.

It really is. It's. It's absolutely liberating. And there's a ton of other ways to do it besides real estate. And certainly that's what we talked about today. But it is absolutely liberating and you know, to spend time with your kids and have them, you know, and be part of their lives as they're growing up and forming, it's, it's huge. It's giant. And my kids are adults now. My kids are probably older than some of your listeners, but we've got a fabulous relationship and they did not have perfect parents. But by golly, we had a, we had a great time together.

So that's, that's all that matters, man. None of us are perfect, so.

That's right.

Well, Tom, appreciate you so much, man, and being open and honest here. I know it turned on some light bulbs for folks, so I hope so. All right, we'll chat soon. Thank you.

All right, bud. Thanks, Joe.