Mastering Active Income with Aaron Novello

I saw it as this unbelievable mechanism to raise a tremendous amount of cash very quickly. People tell me, they're like, oh, I love houses. I'm like, you haven't been in enough houses, bro. They're like, I love, I love people. I'm like, bro, you haven't dealt with enough people, dude.

Like, to another episode of Multifamily Strategy. I'm Christian Osgood, your channel host, joined today with Aaron Novello. Super excited for today's episode. This is someone who knows how to operate business, who's mastered active income,. It's a little different flavor for what we usually have on the pod, which I'm very excited for. So Aaron, thank you for joining us today.

Thanks, brother.

Appreciate the opportunity, dude. Okay. So I've had a chance to, uh, talk to him. He actually hopped on a phone call a few weeks ago, uh, just as a reference for someone he was working on one of his companies for. I loved the conversation with him. We talked for like 15 minutes and I was like, I, I have to get this guy on the podcast. Aaron, tell us a little bit about your core business outside of investing, what you've done. Going from a broker to the business you have today, I think, is really interesting. So for those who don't know you, tell us a little bit about your journey and where you're at today.

Yeah, so I had an experience as a younger person where resources were an issue. 65% of Americans live paycheck to paycheck, so I'm imagining the vast majority of, you know, the people that are listening fit that criteria. And while they were very nice and kind people, they were just ignorant. It doesn't mean that they were stupid. It just means they didn't know any better with regards to finances and financial freedom and independence. And I made a decision that that was not going to be my experience in life. I didn't know what the way it was, but I was either going to find the way or make the way. And what that led to was like obsessively reading books about building wealth, and they all had a tendency to gravitate towards real estate. Yeah. So then I figured, I was like, all right, Yeah, I figured like, I'm like, all right, well what better way to help people, you know, learn about that vehicle than to help people to buy and sell it? Mm-hmm. So, um, while I was still in college at the University of Florida, I got my license. I only had 7 credits left. And in the first calendar year selling real estate, I only made $13,000. Not something people put you on a pod to talk about. Not something they would join your exclusive mastermind group to figure out how you made below the poverty line.. And the reason was is cuz I, I didn't have an accurate assessment of reality, what the job actually was, which is that it's a hardcore sales business, no different than selling books door to door, knives door to door, subscriptions over the phone. So I didn't realize that the money's not in the service, it's in the selling of the service. Mm-hmm. So I needed to learn how to sell the service. So I got access to, you know, some mentors, some guides. Who pointed me in the right direction. I started to role-play twice a day, 6 days a week. I did that for 3 years, chanting out scripts, handwriting stuff, prospecting every day. And that allowed me to go from, you know, $13,000 in a calendar year to the next calendar year doing 17 transactions, then 50, then 75, then 100. I did over 100 transactions 10 years in a row.

I did 200 deals a year twice.

That's not bad. Yeah, not bad. Um, and then along the way I started to think about leverage and I purchased part of an office, right? A franchised office. And I realized there was actually no money there. Yeah. And I also became aware at the 200 deal a year mark that the next evolution would be like if I like had, you know, a big team and like all that other stuff. And I realized I didn't really have a heart for that. I didn't want to do it. So instead what I did is I monetized the skill. I started a coaching company teaching people the specialized knowledge of what to say and how to say it. And how to list property in high volume. I've been doing that for 10 years. And then recently, 2 years ago, I sold back my interest in that office because there was no money there. And I made a change to eXp, which has a revenue sharing component because they've eliminated all the physical expenses, brokerage in the cloud. And in the last 22 months, we've attracted 307 agents to the company and the organization.

So with sales, it sounds like you made— what you really found is, hey, you excel at a sales job and you work really hard for it. Are you born a salesperson? Like, are you a naturally born salesperson or did you have to learn it from the ground up? I, I've noticed some people just have it. Did you just have it or did you have to earn it?

I think it was both. So, you know, I've taken those like the predictive index, you know, when we're hiring people and stuff like those personality profiles. Yeah. And my profile is that of a maverick, which happens to be for salesperson. Ah, there you go. Um, I think what's also true is I only made $13,000 in my first calendar year. So even though that's my natural disposition, yeah, I still needed to work very hard in the acquisition of the skills. So, you know, if people see me now role-playing in a room and there's like 1,000 people there and I can role-play with anybody live, they're like, wow, that just happened naturally. No, that comes from nauseating, disgusting amounts of practice when nobody's looking, because you get rewarded in public for what you spend countless hours doing in private.

And I think that's really important for everyone who sees all the people on YouTube. There's some gurus who just are good at selling the, oh, I can do the thing. There's the people who actually do the thing. And when you meet them and you see them live, you can just identify it. The person who can comfortably role play and do all these— no one, I'll take that back. Almost no one starts there. 99.9% of us have to sharpen our skills significantly before we actually know what we're doing. There's a long time where you're just, you don't know what you don't know and you have to learn it and you have to practice it. I remember my first calls to owners. I built my whole business on owner calls, by the way. Just meeting people who've done the thing I want to do. That's all I did. I found mentors to teach me how to do everything. My first calls to them were horrible. I got hung up on all the time. I didn't even know if I was asking— I didn't know what the ask was. First time I ever called an owner, I was like, "Am I asking them to sell the property? Am I asking them to meet for coffee?" And so, I just kind of clumsily did both. I'm like, "Would you accept an offer on the building?" "No." "Oh. I'm trying to meet—" with owners, would you meet with me for coffee? To which the answer was no. You don't start good. I'm a career salesperson as well. Funny enough, Maverick is exactly where I fall on the personality test. Similar. I didn't just start with the words to say. You script, you drill. It's not an easy job. When you got into real estate, you started learning it. Did you fall in love with the real estate? Did you fall in love with the sales? I mean, what part of real estate really attracted you? Yeah.

I mean, I'm going to say something and I think when I say it, people will get like, but it doesn't make it any less true. It was money. Like, well, you know, people tell me, they're like, oh, I love houses. I'm like, you haven't been in enough houses, bro. They're like, I love, I love people. I'm like, bro, you haven't dealt with enough people, dude. Like, like, so it was, I saw it as this unbelievable mechanism to raise a tremendous amount of cash very quickly. So, I fell in love with the outcomes that it can produce, not the kind of— I was married to the outcome and divorced from the actions.

You'd be amazed how many people say that on this pod. The whole goal is to interview different owners and operators in the real estate space who've done something awesome that I haven't done yet, which is most people. When I talk to people, the outcomes are only two things. One, someone just absolutely loves— they either fall in love with like development, which I hate development. I do not like betting on the future. I hate the, I hate unknowns. So I meet people like, oh, I just love building and I wanted, I'm like, okay, I, I hate that, but I'm glad that you get a high from that. That's awesome. And then the other people are like, I like the money. Like it's, it's entertaining, but at the end of the day, we're selling a very high ticket item. Buildings have a lot of commissions, more money trades hands. People who like selling high-ticket items tend to find their way into real estate. There's a lot of transactions, deal-making's fun, but at the end of the day, it, it does pay. What skill do you have, or what skill did you focus on that allowed you to pull the maximum amount of revenue out of the real estate sphere?

Like, yeah, you talked about monetizing skills. Yeah. So, um, really, I think the way most people present is they lead with authority. The reason why they do that is it's insecurity. Yeah. It's like, don't you know who I am? And I've sold all these properties and all the other stuff. Where in every really good story from StoryBrand format, mm-hmm, there's a hero and there's a guide. And what's interesting is that if you look at all stories, so like Luke Skywalker, there's Obi-Wan. Luke is the hero, Obi-Wan's the guide. Harry Potter, Dumbledore. Harry's the hero, Dumbledore's the guide. The hero though is actually the second weakest person in the story behind the villain. Because if you think about the hero, right? Like Luke Skywalker has no idea about the force. He doesn't know how to fly planes. Like he doesn't know how to do anything. He doesn't know how to fight. He's stumbling, bumbling. He's making mistakes. Yeah. The guide is actually the most powerful person in the story. And the way most people position themselves is as the hero and it's the wrong approach. Instead, it's the guide. So it's like, hey Christian, my job's to help you. It's never to talk you into doing anything. I guess I'm curious. Your home's lovely. It's in a great location. Great geographic area. I don't need to tell you that. When you had originally put it on the market for sale, was there any particular reason you were even considering selling it? Who is that about? That's about Christian. It's not about me. And he goes about and tells me like, yeah, man, you know, we were looking to just downsize and be closer to family. Wow, that's awesome, man. And I'm wondering for you, is that still something that's still important for you and your family, or have things changed forever? Who is that about? That's about Christian. It's not about me. I'm not telling him how great I am or how awesome I am. And then he's like, nah, dude, it's still important. Okay. So then I'm wondering, because I'm a little bit confused, I mean, the home was on the market for 6 months, it didn't sell. It is lovely. What do you think stopped it from selling? I don't know. You know, like the agent, they told me it was the market. You know, I do hear that a lot when the home's not selling. I oftentimes hear them blame the market and things of that nature. How did you happen to pick the previous agent? Well, you know, they're a friend from church. Okay. I see why you felt that was a good idea. I'm curious, though. You strike me to be someone who understands this process pretty well. Being that it didn't sell, what do you feel like they should have been doing? So you could do something simple, which is just to get an offer and make this move to happen for you and your family. Well, they should have done this, this, and this. Okay, and were they giving you updates every week, letting you know how come it wasn't selling? They weren't. Wait a minute, you mean to tell me they weren't calling you every week with an update? Let me be the first to tell you, Christian, you definitely deserve better service than that. So let me ask you this way: if there was a way that you could sell this home, still make this move happen, and be there in the next, I don't know, 60 to 90 days, is that something that you and your family would still be interested in? Well, yeah, it would. Okay, well, just by you saying that demonstrates that we should get together and discuss the options. May I make a suggestion? See, that whole thing, even though I have a track record of 2,000 homes sold, did I say that once? Nope. Even though I probably sold 5 homes in their neighborhood in my career, did I mention that once? Nope. Who is that all about? It's all about Christian. It's all about what he's trying to accomplish. He's the hero in his own story. I'm just the guide. I'm Obi-Wan to help you to get to your ultimate goal. And objective.

This is exactly what I teach my students to do when they're buying real estate. When I'm teaching people network with owners, we have people map their own story. We call it the circle drill. Know who you are and where you relate to people so that you could communicate it in 15 seconds or less, because everything in the conversation needs to be about learning about the other person— who they are, what their goals are, what motivates them, and how to map out the pieces that are important to them. If they ask me questions, I wanna be able to talk about myself as efficiently as possible so I can just push it right back over to them. If they ask me a question, you know, what's your experience with this? I've been doing this for years, love buying real estate. It's resulted in some freedom for my family. My main thing for me is I gotta retire my wife through real estate. That's been amazing for me. Let's talk about you. Like everything is, know your story so well that you don't need to talk about it at all. Because you are completely focused on them. 100%.

And there's two things that the hero has, I mean, that the, the guide has to deploy. The first is empathy, which is counterintuitive to what we think. We think the hero has to be like, rawr, like I'm Christian Osgood, I'm the man. No, the hero has to deploy empathy. Hey bro, I get it. I made $13,000 my first calendar year. Yep. I understand. I understand what that's like. I know it doesn't feel good. I know it has you questioning, your choice of profession and whether or not you should be doing what you're doing. I know it has you doubting and starting to believe all the people that tell you you should go get a real job. Like deploy empathy. Then the second thing I have to deploy is what Christian just did, which is competency. So if somebody challenges me directly, well, Aaron, why are you like so different from everybody else? Like, listen, I appreciate you asking. And really what I hear you saying is if I can help you to accomplish your goals and objectives. Now what I'm about to share with you is not to brag or boast. It's just to answer your question directly. We've had the great fortune of helping 2,000 families just like you accomplish their goals and objectives. So it's really not a question to me of whether or not I could or couldn't help you. I definitely can. It's really a question of me figuring out what you're looking to accomplish and why and what's important to the Osgood family so that way we can help you to come up with a game plan to get what you want in the time you want. Does that make sense to you? I'm back as the guide. Yep.

Not as the hero. And does everyone hear the tonality of that, by the way? That's so important. The way that you dictate that. I mean, if, if you want to go back and replay that section, you should feel calm and at peace. It's like, oh, he does have this. He knows what he's talking about. Like there's authority, but you're not ramming it down my throat. That is a practiced salesperson. You know what you're saying? You know how to deliver it. If there are things that someone's working on trying to, if you're trying to boost your sales career, if you're trying to be a better broker, if you're trying to meet with more owners and instill confidence, That is what you need to work on. What are the words you are saying? But more importantly, how are you saying them? How did you learn that? Is that just drilling day in and day out? Where did you learn that tonality? Because I mean, you're— it's notable. You hear it immediately when we started the pod. I'm like, this is a guy who knows how to sell things. Like, you know how to present yourself. How did you learn that?

Well, coming from you, that means a lot because I know you know how to do that as well. So A few things. One, there's a hierarchy of learning. The lower end of the hierarchy of learning is reading and writing, which is very interesting because that's how we get our formal education, but it's the lowest form of learning. The second highest form of learning is simulation. It's pretending to do the real thing. So I want you guys to realize something. We don't let doctors touch physically real, actually, like, alive, healthy people We have them touch dead people first, cadavers. We don't allow pilots to get into planes with humans until they've spent hundreds, if not thousands of hours in a device called a simulator practicing doing the real thing. If you've ever been in the military before, what they do all the time is simulate. They do drills all the time over and over and over again. They're pretending to do the real thing. It's the second highest form of learning. The highest form of learning is doing the real thing. There's no substitute for it. So watching somebody do it is not the thing. Posting about doing it is not the thing. Talking about doing it is not the thing. The thing is the thing. It's the highest form of learning. So if you want to radically ramp up the learning curve, because this is a multidimensional, multifaceted skill, and I'm glad that it is because it's gonna take AI a long time to figure it out. Yes. Okay. And you're dealing with emotional beings. We think that we're thinking beings that feel, we're really feeling beings that think. So if you want to radically increase the learning curve, you have to read, write, simulate, do the real thing every day. Read, write, simulate, do the real thing. Read, write, simulate, do the real thing. So what I would do is I would write out my listing presentation every day by hand. I would chant it out loud. Hi, my name is Aaron. I was calling about the home that's for sale in Industry. Is this the owner? Great. My name is— you know, I noticed that your home came off the market recently. Expired listing. I'm wondering when you plan on interviewing the right agent for a job like— I just out loud in my Crocs over and over and over again. Yeah. Then what I would do is I would roleplay Christian Osgood twice a day, 6 days a week. I did that for 3 years in a row. Before I get on the phone and prospect, and then after when I'm done, just the listing presentation. And then what I would do is prospect and go on appointments. So I'm read, write, simulate, do the real thing, read, write, simulate, do the real thing. I promise you, if you do that for 6 to 12 months, your skill set would radically improve.

Well, it's just like any other sport too. You could be the most athletic person in the world. If you never played the sport, you're not just going to dive in and be good. You have to drill, you have to practice, you have to— You have to develop and fine-tune your skills, and that takes time and that takes repetition. And that's all it is. I think there's a lot of people out there who do their first owner meeting, or they have their first 5 phone calls to a broker. Hey, I'm trying to get into real estate. And they're like, wow, I didn't get a deal. I'm defeated. I'm going to give up. It's like, you are going to start your career and you're going to suck, and it's okay. And you're going to get better every single time. And you're going to keep doing it. You're going to practice it. You're going to drill it. This is why I love people getting coaches. This is why I'm a fan of mentorship, both paid and unpaid. Whatever you have to do to get in a community with someone who is farther along and more experienced than you, who can give you feedback, you find that coach, that guide, and you get better every time. If you keep doing the same thing and you are intentional about sharpening your skills, you will get better. You will have success. I think you nailed this though. You didn't do this in 2 weeks of making phone calls. This is years of drilling with other people and yourself in the mirror intentionally. Question I have, 3 years is a long time to grind at one thing. What is it about you where you can stay focused that long? Just believing, like after $13,500 of commissions, I do invest everything into this skill. It hasn't made me any money. It works in theory for other people. Where, where did you have the insanity to go? I'm just going to— I'm going to lean all the way into this thing that's really barely working for me and I'm going to make this my baby. Yeah.

So two things come up for me. One is, is this, this kind of cycle that a lot of us go through. Yeah, we all do it, which is where when we come into an opportunity, whether it's, you know, apartment building, selling real estate, whatever it is, we have uninformed optimism. Yeah. We're like, oh man, Christian makes a ton of money. Like, this is gonna be great. I wanna make a ton of money. This is easy. Then what happens once you get into it, you get informed pessimism. This is harder than I thought. Oh, yep. And then what you end up with is you end up in the valley of despair, which is where you say, ah, I don't know if this is for me, da da da. And then you find something else to get excited about, somebody else's course, somebody else's thing, whatever. Right? But people who do that never actually accomplish anything. Thing. Yep. Right. The best planners who don't execute get nowhere. Okay. So instead of that, it's like, okay, you have uninformed optimism. Oh man, this is great. I see all these other people prospecting. They're going to make it. They make a ton of money. I can do this. Then you get into it. You're like, oh, this is harder than I thought. You get informed pessimism. When you end up in the valley of despair, the question or the kind of conversation that you have with yourself is like, yeah, this is harder than I thought it was. I do know though, because I've seen right? I have seen— not only do I have belief because I've seen it, but I also have faith in myself that if I keep at this, like, I could accomplish this. And you're willing to do volume over time. So what I mean by that is there's magnitudes of volume. So let's say somebody roleplays, like, you know, a couple times a week, and they think like they're the man or the woman. They're like, oh, I'm him. It's like, okay, well, if somebody's doing that twice a day, 6 days a week, you When you multiply that out by a year, I'm literally practicing like 10 times more than you. It's not even close in terms of a competition. And in my business, Christian, there's 20,000 agents in the Multiple Listing Service. There's only 100 that do more than $20 million in volume. So you have 20,000 people competing for 100 jobs. That's insane.

That's what it is. That's insane.

So if, if that's what's true, what I would ask everybody who's watching this is like, okay, if you want one of those jobs, because everybody wants one of those jobs, right? If you want one of those jobs, What should your practice schedule look like? What should your prospecting schedule look like? Like, what would your daily activities look like? Right? Because it's immature to imagine that if everybody wants what you want, I'm not gonna have to outwork them or out— like, that's immature.

It's not realistic. Yeah. That's like wanting to get into the NFL playing, you know, backyard football every game day. I'm gonna play every Sunday. I'm pretty athletic. I'm tall. I could do this. It's like, Look at the training schedule.

These guys, they're freaks of nature. That's exactly right. So like you're the man at like your flag football league, but that's not the same as the NFL. No.

And if you want to be the best and you want to compete, which is the, that's something to talk about. I, some people don't want to compete. I remember this from high school PE. There are people who they're like, hey, here's the competitive field and here's the not competitive field. If you don't want to compete and you're someone who wants a job, there's nothing wrong with that. There, there are people who want to do that and and go do that. But if you're one of those people, I don't think it's probably worth your time to try to compete in real estate because there is a lot of money on the table and the competitive guys are sharpening their skills. You're going to get trounced. I have found in this field there are people who will out-legal you. There are people with varying levels of ethics. You're going to run into all of them. If you're buying real estate, someone's going to try to rip you off at some point. And if you're trying to play a non-competitive JV league, you're not gonna find it here. Like, maybe in a mom-and-pop duplex you might get a rental or two. But if you're watching people who are either brokers who are making millions of dollars or owners who are making millions of dollars buying, selling real estate, if you're not competitive and you're not willing to put in that amount of work, you're never gonna get there. And that can be okay, but you need to accept that up front. It takes a ton of intentional training and practice to get there.

100%. And like an example, my son, he's 13 and he's playing soccer and, you know, he's particularly good, not because he's my son, but just what's true. Yeah, it's just because he's your son. Maybe. So, but he's, he's going in, he's going into high school and he tells me, he's like, hey, um, I want to play on the high school team. I said, great. Well, let me ask you a question. Can you keep doing what you're doing and make the varsity? I mean, the, the JV team. And he was like, yeah. I'm like, well, okay, can you make the varsity team continuing to do what you're currently doing? He said no immediately, Christian. He knew the answer without me even telling him. And I was like, all right, well, what would you need to change if you wanted to make the varsity team? He's like, well, number one, I'd have to hit the gym because he went to the school and he saw how big they are, right? So he's like, I'd have to go to the gym. I'd have to pay attention to what I'm eating. I'd have to touch a soccer ball every day and I probably need to hire a coach. He knew exactly what it was. So what I said to him was the following, and this is the same thing I say to our coaching clients. I'm like, look, now you can never say that you don't know what it takes. You know, now you have to decide if you're willing to do it. Now, if you're not willing to do it, bro, I love you no matter what. Like, it's fine. It's not going to matter to me as your dad. Like, I love you no matter what. If you are willing to do it, though, you have to make a decision. Are you going to be like your little homies that talk like they're the man playing video games? Are you going to become the man? And there's no way around that.

It's just the way it is. Parents, that, that is the message that you need to tell your kids. Right there. I mean, that's, that's gold. Do you wanna sit at home, play video games, or do you, do you know what it takes to get to where you want to go? I, I think teaching, especially children, but I, I, I meet so many adults that don't know how to do this. Step 1 in any mission is know where you're headed. Even setting a goal that is tangible, achievable. People don't do that. They, I talk to people, I'm like, first question I ask, if you wanna be mentored by me, I can help with real estate. That's fine. I don't know where I'm coaching you to or where I'm leading you if you don't tell me where you're trying to go. And often, the answer is, "Well, I want to have passive income and I want more money." I'm like, "Okay, you will definitely not achieve that, like 100%." There are no benchmarks. I don't know where I'm guiding you. You don't know where I'm guiding you. You will give up when something comes up. Like, anything comes up, you're going to get on your first owner call and go like, "This is hard. I don't like this." It's the people who reach out and say, "Hey, I grew up with X amount of money in my family. I want to take care of my mother. And it's going to cost me about $15,000 a month to provide for myself and my family. I want to build a plan to where in the next 5 to 10 years, I've built up a portfolio that supports my family." so that I can then focus on the things that I want to do. Those people, almost without fail, will actually buy real estate and will move forward. That's what I found working with investors. Have you found that similar with agents? The ability to goal set, how important is that?

Yeah, because I think you have to make a decision. Are you a wandering generality or a meaningful specific? So the example that you just gave to me was, it's very vague. I just want more money. How much more? I just want, you know, some residual income.

How much, right?

When are you— part of the reason why we don't— yeah, when do you want it? By when? You know, and I tell people regularly, I'm like, look, if you come to me and I'm gonna be your guide and you're like, hey dude, like, uh, what should I be doing? I'm like, well, what's your goal? Because truthfully, the goal dictates the actions. If you only want to do like a deal a year, then great, keep doing what you're doing, bro. Like, you don't have to change that much. If you want to start making a million bucks a year, yeah, you're— here's what you're gonna have to do. So your goal dictates the actions that you have to take and the volume, the magnitudes of volume that you have to put forth in order to either acquire the specialized knowledge that's going to allow you to produce the, you know, particular outcome. So yeah, I think also too, part of it is, is that we limit ourselves. So like, when I sat down with my first broker and he asked me how much money I wanted to make, I hemmed and hawed for like 10 minutes, bro. The biggest number I could think of was $50 grand because that's what my dad made. Like, right? And then in the first calendar year when we started doing deals, I made twice that amount. I was like, oh man, like, this is This is wild, right? So, but then I started to get proximity to people. I remember being at a dinner with one of my mentors and he was like, yeah, how much money are you gonna make this year? And at that time it was maybe like $450,000, $500,000. And he was like, why do you settle for that? Now in most circles, if you say that, they're like, whoa, like that's awesome. He was like, why do you settle for that? I'm like, what do you mean? He's like, you should be making a million bucks a year, man. You think I work harder than you? He's like, I'm like, no. He's like, I think I need to buy you dinner. And he did in front of like 7 people. Now you might look at that and be like, oh man, he was being a jerk. But like he was doing 2 things. One, it was a very expensive dinner. So he, I was actually uncomfortable. So he was, he was like helping me, you know what I'm saying? Yeah. Because like the bill was like 10, 10% of what I make, you know? Yeah. And, but what he was also doing was challenging my standards, like what I thought was a lot. So I think that that's part of it. You have to start somewhere with a goal and objective because You can't hit a target that you don't see. What I would also propose though is getting proximity to people like Christian or other individuals that can help to broaden your vision and how far you can see, like what is actually possible, what you actually can accomplish. And then when you get proximity to Christian or me, here's what you'll recognize, okay? Or anybody like us, because, right, we're not that special. Everything that I've done is not unique. Yeah, selling homes in high volume is not unique. Attracting people is not unique through like media and events. What's unique is execution. That's what's unique, right? So, but when you get proximity to these people, you'll spend time with them. You'll be like, man, like Christian's cool. He's kind of smart, but like, I don't know, man, if he could do it, I could do it. Like that's what'll happen. Yeah. Right. You'll start to recognize like, oh yeah, this is totally possible.

Do you find that when you lock in on a target, you hit it a lot faster than you expect? I've noticed I'll set a 5-year goal and when I'm actually focused on it, 2 years later, I'm like, oh shoot, we made it. Do you find that happens to you where like when you actually lock in, it's like, oh, everything all of a sudden starts falling into place and I'm doing the steps and it happens faster than you think. That's been my experience.

Have you seen that in your life? I do 100%, uh, because we, we drastically— like, I think we overestimate what we can do in a year. We drastically underestimate what we can accomplish in a decade. And there's extreme power in focus. I think the challenge in today's world now is you have so many I think two things are true. One is you don't have to be competent in order to be famous. True.

That's a problem. Yes, that's a huge problem. And that's all over the internet. Yeah.

So it's very difficult through all the noise to see who's full of shit or not. Yep. I mean, it's, it's very like challenging. I think the second is, is as people that are smart, hardworking, and ambitious, our most valuable thing is time and we see money everywhere. So I have to be very, very selective with what I choose to stack time on top of. Because nothing's more kind of sad than watching somebody enthusiastically run in the wrong direction. So if I'm presented with opportunities all the time, I have filters that I filter. I'm sure that happens to you all the time too. People come to me all the time. It's like, okay, well, my first question is, does this compound? Because if it doesn't compound, I'm not interested. Second question is, is it highly leveraged? Because if it's not highly leveraged, I'm not interested. Third, for me personally, is can I make $1 million a year doing it? Because that's what I believe my time is worth at a minimum. And if it's not, I'm not interested. That will eliminate 8 out of 10 ideas. Oh yeah. With the 2 that are left, now it's which one is in alignment with my natural disposition, which one would allow me to have the biggest impact, and which one will allow me to do work with people that I like and enjoy. Then I only have one. When I'm left with one, the hard part is, is I have to say no to everything else.

And that's very difficult as an entrepreneur. That's the exact same advice I give. The amount of pain that you will go through and focus it requires to be a successful entrepreneur. If you're doing it for less than a million dollars, it is not gonna be worth your time and you're probably not gonna make any money. Just realistically, there, there has to be enough monetary upside to stick it out cuz stuff's expensive. People are expensive. You do business long enough, legal will be expensive for some reason or another, your fault or not. I've seen it happen all across the board. You need to be in a business or a career, especially as a sales rep, where you have a path to $1 million, and that's where it starts becoming worth it. I, I've seen that very consistently for a lot of people. It's enough money to overcome a lot of the pain, and it's enough money to actually get through some of your problems, cuz you will have expensive problems if you're an entrepreneur or a salesperson of any kind. Stuff gets expensive. Speaking of investing, you're a real estate— you're in the real estate space, but you're a salesperson. You've mastered, you've mastered your lane, which I am 110% an advocate of. Find the thing you're the best at, where you've monetized the best, and double, triple, quadruple down on that thing. You've done that to an amazing level. How do you invest? Do you buy real estate? Do you operate your real estate? What does investing look like? For you as a, you know, a master trainer of real estate agents?

Yeah. So my personal philosophy on this is that people shouldn't spend time on their investments until their investments pay them more money than their active income. And for most people, that's almost never. Right. So what I'm aware of is that I am basically buying back a lot of time when I do that. And what I see is I see people who could be making $1 million a year as a salesperson mess around with a duplex for $500 a month. It's like, what are you doing, dude? Like, yep. So what I've done is the vast majority of real estate holdings that we have is through syndications. So institutional-grade real estate that's normally like, you know, only owned by hedge funds or insurance companies. 200, 300, 400-unit apartment buildings that are in A+ locations, A+ amenities. I get distributions monthly, um, and I don't have to do anything, right? I just basically give them the money and I sit back and collect the distributions. So I do own, uh, a couple physical assets. One, you know, my mom lives in, uh, the second one, uh, is a short-term rental. The reason I did that is because of accelerated depreciation, because as an LP, a limited partner in a syndication, I get I get depreciation, but I don't get depreciation against active income because I'm not a GP. Yep. So in order for me to get the depreciation as a high income earner, because I want to shield active income and, you know, pay less in taxes legally, of course, I have to own the physical asset. And the government incentivizes you tax-wise to do 3 things: provide housing, energy, and food. If you do those 3 things, you get massive tax breaks. So they consider short-term rentals housing. So I purchased short-term rental, but we have an operator, right? He handles everything start to finish. He owns part of the cleaning. He owns the cleaning company. Like, he handles everything, puts it on all platforms, does all the things. I think he takes 20%. And I already hear people in the comments, yeah, but you can make more if you do it yourself. Yeah, but I'm getting back all of my time. Yes. And you monetize your time very well. That's exactly right. And to me, I can earn way more money monetizing my time than messing around with that other stuff. So I would want to find somebody like you, Christian, who's like a world-class operator and you come to me and you're like, yeah, dude, I'm going to take down this 300-unit apartment building. Here's how much money we need. Great. Here's how much you can sign me up for. You do your thing. You send me distributions every month. You handle all the rents, you handle all the, you know, stuff that comes up. And if anything needs to be fixed or roof needs to be replaced and I just, you know, hop on a call with you once a quarter and you tell me what's going on.

And I think that's so important to note. I have zero passive income. I have hundreds of rental properties. I make my money in my job doing what I'm best in the world at, which is operating. I go out and I operate my properties. I'm on site. I coordinate contractors along with my wife, along with my partners. We are full-time operators. That is all I do. And it is like 100 hours a week, every single week. It is a job. And I get paid a ton of money for my job that I spend a lot of time on. That is really hard work. People think, oh yeah, these landlords, you own everything, it's going to be passive. If you want to have a portfolio like I have, you want the equity stake and the tax breaks for that portfolio. Unfortunately, you're gonna have to work for it. Now, at some point, you get to a point where you buy enough real estate and it becomes passive. But that's when you retire, like most people do from their 9 to 5. Like, you work for a long time, you store up enough, and then you get to retire. That's— that sounds like a job to me. We are— I'm spending my time in highest best use. You're spending your time in highest best use. My biggest question with syndications, we've seen a lot of them go under. A lot of people and a lot of it was variable rate debt. So we have variable rate debt that's wiped out some syndicators. How do you choose the person who is going to steward your hard-earned money? How do you invest in the right syndication? Yeah.

So I think with syndications, the game is really about finding syndicators that you trust, truthfully. So I started off with a platform called Crowdstreet where they connect accredited investors with syndicators, professional, you know, real estate people. And they charge the syndicators to have access to, you know, the platform for their accredited investors. I did a few deals with them and we had a few full kind of exits. You know, it's when interest rates were low. So the people were doing value adds on apartment buildings and they were able to cash out like 3 years and it was great. Yeah. And with the majority of this, we still have some holdings, you know, via that platform. And the majority of investing that we do is with another syndicator, which is just over time proven to be trustworthy and delivers full transparency, hops on calls all the time, tells you exactly what's going on, never missed a distribution. You know, during 2020, 2021, they suspended distributions for 2 months only because they didn't know what was going to happen. They put them in a separate account, told you what they were doing because it's just good business practice. Once they realized it was not a big deal, they just released all the money, right? So Um, yeah, I think it's just vetting the syndicator and finding somebody that you can trust. Because like, what I'm aware of is that prior to the law that Obama signed into, you know, law, syndicators used to not be able to advertise to accredited investors. Yeah, this wasn't even available to us guys. This was like a straight-up good old boy network, and it wasn't like you could invest like $100 grand. You had to stroke a check for like $10 million, bro. Like, and it was a, a very select group of people that would have access to these investments. And, and with these apartment buildings, what I'm aware of, it's one of the safest places on the planet to put money, particularly if it's done right, because every month 8% of all the rentals come up for lease. You can raise rents and lower them accordingly. They function like a utility. That's why insurance companies dump tremendous amounts of money into them. That's why, you know, hedge funds drop tremendous amounts of money into— it's one of the safest places on the planet to park capital. So I'm just aware, like, and grateful that I have access to it, because if I was alive 50 years ago, I wouldn't.

See, and that's the correct use. And what, what I want to highlight for people— so syndications, essentially you have an operator. Weaknesses with syndication, by the way, is they tend to get paid up front, so objectives don't always align perfectly with the investor, which is why trust in their operations is the main thing. It's a business where there are good operators, there are bad operators. I have friends, they work in high-paying jobs, they're monetizing, they're both Amazon employees actually. They put millions of dollars into 3 different syndications. All of them went to zero, just total loss of capital, wiped out, done. And it's because they did not vet the people. They did not get references. They had someone come in and say, hey, you make a lot of money. I would I have a real estate deal, you should invest in it. They're like, oh, this sounds great. You really need to be careful on every investment you make. Do your homework. I mean, if you're going to work hard for that money and you're going to say you're like Aaron, you have a high earned income because you deserve it. Don't lose it on making a stupid investment. If you're doing syndications, they're like any other investment. There's homework involved, there's some intelligence involved. Find people that you trust, vet them, don't lose money investing. If you can just do that. Yeah. Park it somewhere. Put it in real estate. I like it conceptually, but you have to be so careful with who you trust.

Yeah. And I think, you know, some of the things we look for is like, I want the syndicator to have a good portion of the equity. In other words, to like invest their own money. Yes. Side next to me. So if they're raising, you know, $60 million, they got $10 million of their own money or $20 million of their own money invested. So you're basically like right next to them, right? Yeah. And, you know, I'm looking for if they are aligning their deals with ownership, because some syndicators, they take like, they get like an acquisition fee plus they get a disposition fee. Yep. But one of the folks that we work with that we had an exit, he's like, look, dude, I don't think we should get paid just because we sold the property. Like, that's an owner's mentality. He's like, yeah, dude, so we don't take a disposition fee, right? So it's just learning that. And, uh, yeah, everything has risk associated with it. I'm aware that people invest in the stock market. It goes down to zero. Yep. You know what I mean? Yep. And people— the first, the first condo that I bought after reading Cashflow, you know, from Robert Kiyosaki, I thought I was like a real estate guru. It was a condo conversion in Gainesville, Florida, and I had to write a check for $10,000 to sell it, you know, because the marketplace turned. So, you know, I think in anything it's important to, to do your homework and then, you know, no risk it, no biscuit, man. Yeah. Eventually, you're going to have to take a risk in some way.

Let's wrap with this. I ask this every single podcast. The highest stupid tax. Now, that is when you're new, there's something you just don't know you don't know. Oftentimes, it can be very expensive. This could be monetary. This could be emotional. But what was the highest tax you paid to get to where you're at?

Yeah. So, I think a stupid tax that I paid for a long time because of ignorance, which is not knowing, was paying a lot of money in taxes. Oh, the tax was taxed. Understand? Yeah, the tax was taxed. So I didn't understand that with proper planning and there are certain investments that the government incentivizes you to make. Yeah. That allow you to do accelerated depreciation and all this other stuff. Like I probably like $2 to $3 million just in taxes, you know, over time. So what I'm aware of is that was a very large tax because if you think to yourself, That's money you could have put back in your business. That's money you could have been investing in other things that pay cash. So it was a very large tax. And recognizing that like accountants, business model is not set up to give tax advice. They're document preparers. Yeah, that's what they do. And people that are very wealthy, they have somebody on their team that all they do is look at all your assets, look at all your income, and they say, hey, Here's what your tax liability is going to be this year. Here are 5 options that you have to invest money in that if we do this, here's what your tax bill will be. So we need that, right? Super important.

What did you end up implementing on your team to make sure that you're not overpaying the government? Because they will take a huge chunk of your income if they can. So that is one of the best things you can do.

100%. So I hired someone who does this type of planning and preparation for families that are like you know, heck of millionaires and high-income people. Yeah. So I saw him speak and I remember going to my accountant at the time and like saying stuff about like the Augusta rule and like this sort of thing. They're like, no, that's a scam. And I'm like, okay, this is not, you're not the right person I need to be talking to. And when I mentioned it to him and I had the conversation with him, he was like, oh yeah, bro, there's a lot of stuff you could do. And I was like, okay, cool. So I just got the right people on the team. And the way I view it is if you're a business owner and you have like a bookkeeper, think about that like the running back. If you have a CPA, they're like the wide receiver. Who this individual is, is the quarterback. So, so what they do is they look at all of your assets, they look at how you're holding all of your assets, right? In terms of like LLCs or trusts or things of that nature. They look at income for a calendar year. They look at passive income versus active income, and they basically look at the whole roadmap and start having this conversation with you now, not like in December, like, hey, Here's what our expectation is going to be. So here are the options that you have at your disposal. You can do this syndication, you can invest in oil and gas, you can do all these different things that will get you to this in terms of a tax liability. And then it's up to me just to decide which ones that I want to participate in.

And that is so important. Your CPA is not your financial planner. I think so many people mistake that. That is not what they are. They are there to make sure that you have audit-proof books and that the IRS is not going to come after you. They're going to make sure that everything is filed, paid for, done. And I use an EA, so that's an enrolled agent. They can represent me in court against the IRS. And that's important to me because I have a ton of assets and a ton of partnerships. I don't do syndications, I do joint ventures. So I have a ton of partners. I have a lot of properties. My biggest fear is failing an audit. So that is their only job, represent me and give me audit-proof books. They don't have anything to do with my tax situation. When I'm going into, okay, what is my tax planning? That is a different person altogether. They think differently. They're not a bean counter. It's a different mindset. It's a different personality. When you're building out your teams, don't worry about this until you're making money, by the way. Uh, I mean, if you're still making $50,000, grow the skills. Uh, if you're a broker, hire Aaron, like get your income up. But when you start making real money, Your tax can actually be your highest stupid tax. The government will take 35% to 45% of your money if they can. You really need to come up with a plan for this. So, when you start making money, first thing you do, find your guy who knows how to find the tax. That is so smart. I don't think anyone's ever shared that on this pod. The U.S. government tax can be your highest stupid tax. If you start having success, find the right person and it is not going to be your CPA. I love it. Thank you so much, Aaron. Good advice. My pleasure. Yeah. People learn, learn from this guy. Speaking of, where do we find you online? I, I've seen you on, I've seen you on Instagram. I've heard you talked about by other brokers. I, that's how we met. But, uh, yeah. If, if someone's looking to find you, they want to get coached by you. If someone wants to take their broker income from, hey, I'm making $100,000 to a million, where are they gonna connect with Aaron?

Yeah. So just, uh, the website, which is my name, it's www.aaronnovello.com. And you'll see all the different ways that you can, you know, engage or participate in some way.

Awesome. This guy is a freak. I've only heard, I've only heard amazing things from brokers going like, I took my income from X to X. It is a mindset shift between— I think you nailed this early in the call— the difference between service and sales. There is a balance there, but people focus so hard on, I want to be the highest service broker. You mentioned earlier everyone has Oh, it didn't sell. It was the— I listed it with the guy from my church. I don't know what it is with brokers in church, uh, but someone's like, oh yeah, I found a guy at my church. I'm like, awesome, call me when, uh, call me when that doesn't sell. Um, service is one thing, sales is everything when it comes to this business. You guys want to learn how to do this? I've never heard anyone as highly recommend as Aaron. This guy's a freak of nature. He's dedicated, he's disciplined, which I think is huge. Follow him, AaronNovello.com, everywhere that you listen to, to content. This guy knows how to market. So Aaron, thank you for joining the podcast. Everyone, thank you for listening. Like, subscribe both on YouTube and anywhere you listen to podcasts, and we'll see you all on the next episode.