Best of Investing Radio Show August 5, 2023 guest CJ Calio

Welcome. You're listening to the Best of Investing. I'm your host, Edward Brown. Our phone number is 888-912-1190. Use that number to answer the trivia questions for a five pack tanning certificate given away during the show. That certificate is not sponsored by the radio station, but by Tambela Tanning Salon with two locations in San Francisco and one in Marin. Today's trivia theme is where did the pros go? So we're gonna ask. It's actually pro football and we're going to find out where the college or excuse me, where the pro athletes played college. All right, today we have. Excuse me. Today we have a special guest. CJ Calio of WNN Properties llc. He's the co founder. Co founder of WNN Properties llc. Full time investor in residential and commercial real estate. After raising millions of dollars since 2015 building his own residential and commercial portfolio, he now aims to help others become financially free to do the same. In less than five years, CJ and his wife are able to live their dream of being full time investors. Together they work to help people increase their cash flow and build stronger investing portfolios so they can enjoy fulfilling lives of health, happiness and prosperity. Yes, that is something we all want to do, CJ welcome to the Best of investing.

Yeah, thanks for having me, Edward.

Sure thing. Okay, so first of all, I want to get a little background on you because it says Here, starting in 2015, what was your profession before?

Yeah, I was a UPS driver in Hawaii. Like we were talking prior to the show starting. That's where I was originally from.

And 2015. Okay, so we already had, we had the Great Recession, 2008 that went through, you know, 2012 or so. So 2015 things are already starting to kind of go back up. And did you do this in Hawaii?

I did it out of state from Hawaii.

Gotcha. Okay. Yeah, because Hawaii, I mean, the prices didn't really alter that much, did they?

As much as parts. They tanked pretty heavily. Similar. Hawaii is similar type of market like California where you see a high appreciation and when things hit, it drops significantly.

Yeah, yeah. I guess Waianae is kind of one of those places that are, you know, potentially a little bit.

I know a.

Little bit about Hawaii. Okay, so then what states were you starting to invest in?

Yeah, originally when we started, we were looking into the Midwest area in the East Coast. So we identified Indianapolis, Kansas City and Florida as three potential markets that we'd want to start investing in.

That was a good. I think that was a Probably pretty good choice. You know, 2020 hindsight. You did, you did pretty well. Okay. And I'm kind of curious because from what I read here, it says, you know, after, after living, you know, after, after doing this for a number of years, you, you want to help others. Why do you want to help others? Why would you want to do that?

It is, it was, wasn't originally part of my vision or plan when we first started in this real estate investing journey. It was more self driven. Right. I want to get out of my job. I wasn't happy there. My wife wasn't happy. I wasn't in my, I was in my job. So let's just create this portfolio where I can replace my income through rental income. And the thing about doing the same thing over and over again, you tend to get more experience and get better at what you're doing. And in the beginning, people didn't care, didn't notice, didn't give me credit or didn't give us credit. And as we started to grow our portfolio and see a consistency of our success, others start to ask, can you teach? Never really dawned on me that that would be an opportunity. And you know, stepping into that business was a completely different business than owning and rental portfolio property. Right.

Well, the thing is, okay, how did you get the, okay, your background? You were an UPS driver. Did you have someone mentor you or did you just say, hey, I think this is just something I want to do?

No, it was actually my wife's idea. I was very resistant to real estate because I knew nothing about real estate. I'm not handy by any means. I'm not the smartest guy in the room. I'm very good laborer. That's why I was a UPS driver. And it was through the networking process when I finally came on board that that the people we were hanging out with started to share with us different opportunities to invest in real estate, wholesale flipping and buy and hold. And buy and hold really stuck because of the, the results you can create is that stream of income.

And that's where my wife, she really.

Grabbed a hold of that idea and drove it home, saying that this is our solution to your problem of wanting to leave ups. And we stuck with it.

All right. And when we come back, I want to ask you things like try to remember this, you know, how did you get started? You know, how much money did you start with? What kind of ideas? Because you're going out into the Midwest, you know, you're not going to fly out there to fix a toilet. So there's a whole bunch of different management issues going on with that. All right, so here's our first trivia question. Again, the theme is where did the pros go? All right, first trivia question is John elway, retired in 1998 from the Queen quarterback duties of the Denver Broncos. Question is, what university did he attend? Call 888-912-1190. First caller with the correct answer wins that tanning certificate, which is worth over $100. I want to make a mention here also for the Mountain View Hotel and Spa. Giving off. Give. Excuse me, giving 15% off this summer. $395 a night for weekends, 295 a night for weekdays. Check them out at Mount View Hotel and Spa. They have one of the nicest pools around. All right, Stay with us. The Best of Investing will be right back. Don't touch that dial. Welcome back to the Best of investing. I'm Edward Brown, your host, along with my special guest, C.J. caleo. By the way, what does C.J. stand for? Calvin Jr. Calvin Jr. That makes sense. Okay, first trivia question. We'll see if Calvin knows. There is CJ as you like to be called. All right, John Elway, retired in 1998 from the quarterback duties of the Denver Broncos. What university did he attend? Do you know the answer?

No.

Stanford. Went to Stanford. He was actually drafted by the Colts. I think they had just become the Indianapolis Colts at that point from Baltimore. And he said, I am not playing for the Colts. If you draft me, I'll just go play baseball for the Yankees. So they traded his contract to Denver Broncos and it was worked out for them. All right, so C.J. you're, you were brand new in real estate 2015. How much money did you start with?

We didn't start with much. We actually tapped into our equity and our personal private residence. Right. We got a second position line of credit and it was about $100,000. Then we used that to start playing in the real estate game in our markets.

And when you started expanding out there, did you buy your first property all cash or did you borrow from a bank? You have some money down. Go ahead.

Yeah, we used the line as a contributor to our down payment and went with a traditional investor mortgage. We got a 75 LTV loan to value of the property.

Gotcha. Okay, so you guys, especially for your. Why, you know, usually the wise are the more conservative ones. You know, what are you doing? You're borrowing on the house to go invest in real estate. But she was on board and apparently you guys made Some good decisions. How did you find your first piece of real estate?

So, like I was saying in the previous segment, we were networking a lot and we started finding groups of people who did what we were looking to do and buy out of state. And they recommended different markets and different people to reach out to. And being novice and not having any form of connections in the markets, we decided to purchase through a turnkey company, figuring that it would be an easy way to get into, into the game.

Okay, fair enough. Obviously, you know, you hit the market fairly well because it's, it's gone up since then. Um, so you started with a $100,000 equity line. Basically no money out of your pocket, but you were, you know, borrowing $100,000. What, what do you think? How much is your net worth increased since 2015 because of your first move?

We were just doing an assessment for a qualification for a commercial property, and my wife mentioned that we're somewhere around 15.15mil right now.

15 million. Wow. In, in eight years. That's, that's phenomenal. Congratulations. And it is, is, it is a mixture of, of residential and commercial.

Yes, sir.

How many properties do you own now?

We, we get, we started with residential. We scaled up to around 90 doors. And then we started shifting into larger deals because we're getting exhausted. Right, 90 properties, 90 doors. That's a lot of tenants, termites and toilets too, to oversee. So my wife wanted to scale up and we decided to jump into commercial. So now our residential portfolio is slowly dwindling down because we're 1031 in into larger deals and we've, we've parted way with about 50% of our portfolio and we've acquired about 12 commercial properties in the last four years.

What kind of commercial properties?

Retail, government, mixed use strip malls. We got medical, office and a bank, a bunch of them.

Okay. With this, you know, recessionary, working from home, et cetera, et cetera. How is, how are things been the last year and a half?

Yeah, I mean, monitoring it and not knowing what Covid was going to do and all these good stuff. Being on the smaller scale side where we're limited on our buying power, purely based off of capital, selling off single family homes is great and it's still not much to get you to the grand cordon level. Right. So we were, we were beneficial enough to start in small retail and strip mall where a lot of the larger companies downsized into our spaces. So we found a sweet spot inadvertently by just simply the right timing.

How many states are you, are you in?

We're primarily in Florida and Kansas City. Kansas City is our active building state.

Interesting. Okay, well, yeah, Florida has been growing quite a bit, especially since people moving out of California and going. Going over there. What advice we have here another quick minute before we have to get to another break. What advice would you give someone who should they follow the exact same path that you did?

It all depends on your strategy and what you're looking to achieve. So for me, I want to replace my income, which buy and hold made sense. Could I do it through other methods? Yes. So really figuring out that why and then the strategy will form itself for you.

Gotcha. Okay, let's see here and now. When you teach people, do you charge for that or is it just sort of a. Okay, okay. What do you charge for that?

So it's a $5,000 fee to join in for a year. And it's group style mentorship. And then we also have the ability to work one on one with an advisor who's already gone through everything and has a track record, proven that is capable of leading and guiding. More like a personal trainer. If you were to relate it to working out, you got the group setting where you're more accountable to yourself and you got the one on one which you are directly accountable to somebody who's achieved the status you're looking to achieve.

How many people have signed up for your program so far?

Yeah, we've got over a hundred graduates and right now we have 80 active in our community.

Wow. When did you start that?

20, 17, 18.

Well, good for you. Boy, you guys are real go getters. I gotta say. That's very impressive. Okay, tell you what, we're gonna go to our second commercial break here. We're asking where did the pros go? Retired quarterback Joe Montana played for what university before being drafted by the San Francisco 49ers in 1979. Call 888-912-11. You know this one, right? Okay. Colleen, you were shaking your head. Yes. Now you're shaking your head. No, that's okay. Want to make a quick mention here for the Transcendence Theater? You got to check them out. They are like. It's like watching Broadway, but it's a lot more local. You don't have to fly all the way to New York. Transcendent Theater, they do a phenomenal job. All right, stay with us. You're listening to the Best of Investing. Don't touch that dial. We're going to be right back. Welcome back to the Best of Investing. One more time. I'm Edward Brown, your Host along with CJ Calio, my special guest, who is educating us quite a bit here. I like this. Okay, our second trivia question. Joe Montana played for White University before being drafted by the San Francisco 49ers in 1979. And again, you got to be a football fan to know this stuff. Notre Dame.

And he was not the Notre Dame.

Notre Dame could have gotten that one. Okay, so, cj, you. How did you. How did you get these people to start signing up for your program? They just. You go to a networking group and they see how successful you are. I mean, what. That's pretty cool.

So initially it was. We were in the market to network with others, right? And we found that it was very challenging to network in Hawaii because there's a lot of networking events on the opposite of the island and we didn't want to travel in traffic. And Hawaii's traffic is not the greatest. And to go to and from. And we had young kids, so we decided to create our own networking event. And our networking event grew from three people to 75 at the. @ the peak before COVID shut us down. And the cool thing about creating your event, you can run it the way you want. And most often people were curious to hear what we were doing because we were doing something different. Not a lot of people were doing out of state investing from Hawaii at the time. Most were focusing on flipping. So as people would come and hear our stories and our successes and our failures and the lessons learned, it was a very free, open network. We were honest and shared a lot about our journey. People got so confident and comfortable and trustworthy with us that they started to approach us to say, hey, I'd be willing to be. To be guided by you. What is your fee? And I didn't know what to charge at the time, you know, and it was just enough people asking and it was interesting. It was fun. You know, I started off as a hobby.

I got to think that you'll probably sometimes get some deals too, from people. You know, they say, I found this great deal in Kansas City or wherever that you may not have known of, and then maybe you can partner with them or that sort of thing. Does that happen?

It has happened in a sense where we help people find their deals. I personally don't. I want. I like to keep it clean, Right. If I'm mentoring, I want to keep it clean. Where I'm not invested in any of your deals. And we have a smooth, mutual, respected relationship focused in on the same goal, getting them successful.

Very good. So now you Live in Reno. What made you move to beautiful Hawaii? To Reno? No, I'm just kidding.

Valid question. I get it. Asked it off. I get asked often. And one of the main reasons was, you know, cost of living and opportunity for us to travel from Hawaii to any of the networking events at a higher scale, higher caliber required us to fly six hours to the West Coast. That's a pretty decent penny for a round trip just there. And then you get to connect. And now you're spending a whole day traveling to get to event for two days, and then you do the same thing going back. And.

Yeah, that's true.

Time is valuable times our most valuable asset. And we felt that being in the States allowed us the freedom to do so much more of the larger networking.

Events that we wanted to the mainland. That's right. We're part of the United States, you know, so. Yeah. Cause I could think, I would think that networking groups in Hawaii would be.

A little bit more.

I would think would be a little bit more challenging because, you know, people are just kind of settled there. And I was just wondering if you had, like, island fever or whatever. Did you grow up in Hawaii?

Yep, born and raised. Was there for 37 years.

38 years. Wow. Yeah. I mean, I love it. We, we. We love Hawaii. And again, as I mentioned to you, even though, like, everyone, you know, Kauai's great, Maui's great and all that, we like Oahu because, you know, especially we go to the west side where it's nice and quiet, and then if we want the hullabaloo, we go back down to Waikiki and the marketplace and all that. And it's changed kind of quite a bit in, in 30 years or actually, you know, see, for me, it's been 35 years. Yeah. So lots, lots changed in there. And before we get to a break, we got a couple of minutes. I do want to give out your information or have you give out your information in case people wanted to check. Check you out and see if they want to hire you. Go ahead.

Sure. You can go to our social media page on instagram. It's @wnn properties. Or you can go to our website where we love to give away free gift for people that are just interested in learning more about what we do. It's why not now in realestate.com and.

That'S the WNN why not now? Very good. Tell you what, why don't you give us a. Give us a success story and a horror story.

Success story was getting to a point where I was not mortgageable. Even with my good paying profession and my wife's good paying profession, we were able to shift our thinking and mindset around how to create and fund deals where we raised half a million dollars to buy a 20 door portfolio in 27 days. That's one of our big success stories.

From when you raise money from the bank or from other investors.

Other investors, private money.

Gotcha. Okay, now, by 2017, you'd already had a little bit under your belt. So was it family and friends or just these networking groups or combination of anybody?

I talked to 77 people to create the opportunity of half a million dollars at that time, and I got to close in 30 days and I raised it in 27.

Good for you. I mean, that's, you know, that's a nice little pretty penny. Half a million bucks, you know. How many, how many people did that comprise?

Four.

Four people. Okay, so 125 piece, roughly did you put together like a little LLC or.

We lean them to the properties so everybody who gave a piece were leaned to certain properties that were equivalent to their value as insurance. And we, we had four separate LLCs as part of the package purchase.

Oh, interesting. Okay. And the properties turned out okay.

Wonderful, wonderful.

Yeah. Everybody's happy. That's the thing is, you know what, yeah. Start having success like that and then those people not only want to go back into it, it's, you know, if they've either sold, if you've sold it or just getting good cash flow, but they, they want to tell their family and friends. So that's always a good thing. All right, tell you what, we're going to make another commercial break trivia question here. Pro Football hall of Fame running back O.J. simpson attended which university for only two years before being drafted by the Buffalo Bills in 1969. Call 888-912-1190. First caller with correct answer wins that tanning certificate. Also, when I make a mention here for Jim, guys, and that's G, u, Y, Z. Jim, guys. Guys with the Z, call 8 gym, guys. And again, guys with the Z, that's where the gym comes to you rather than you flying out to the gym. All right, stay with us. You're listening to the Best of Investing. Don't touch that dial. We're gonna be right back. Welcome back to the Best of Investing. I'm Edward Brown along with C.J. calio. My special guest, last trivia question was O.J. simpson. What basically what college did he go to before being drafted by the Buffalo bills in 1969? You know that one.

Gotta call my dad on that one.

Okay. USC. He went to USC. All right. Okay. So, C.J. we asked you about a. About some successes. All right? Now, failures give us. Give it. Give us a. Give us a sad story or not so good story.

Yeah. Failure was. Before we started buying real estate, we were nervous, so we wanted to. To lend out money as a soft way to get in business. And you don't know what you don't know. And we weren't tied to anything, and it was just simply a promissory note and.

Oh, you didn't secure it with a deed of trust?

We didn't know what that was. We were still super green and new and yeah, it was a good chunk of money, six figures that we did not recover from and taught us a lot. It was a heavy tuition that we paid.

What. If you don't mind asking the story, what happened? Just a bad deal or did the person abscond with it or.

It was a bad deal. Real estate, that was. It turned out to be a scam. Right. And we didn't know what we didn't know. And it was defining moment for us to start taking ownership over our journey and our decision to move forward and set us back financially. And yet we were able to overcome it. So.

Yeah, good.

For guests out there that may have experienced something, you can still get over it and leverage that as a opportunity to keep pushing forward.

Yeah. Well, you know, that's a really good attitude because that kind of stuff sometimes can just kind of linger and make, you know, sour you on something. And it's good that you actually overcame it to actually say, you know what, we're gonna be better for this. We're gonna. We learned something. And you don't, in this case, don't throw out the baby with the bath water of, hey, never get invested in real estate, you know, which technically you were really invested in real estate. You're invested unsecured, promissory note. Yeah, because my main business is. Is the lending side of things. But I, you know, I do get a secured deed of trust is my, My plan. In fact, it's funny because, you know, people talk about, you know, unsecured notes and stuff like that. And I, I always say I wouldn't give Jeff Bezos an unsecured note.

Right.

Yeah. Because you never know what can happen. I want, I want real estate, you know.

Right. Tied to something tangible.

That's it. Exactly. And then give some advice about surrounding yourself with like minded people.

Yeah. So like I was sharing with you in the beginning, my story, I was resistant to it. I didn't know anything. And just by surrounding myself with investors who were doing what I wanted to do and had what I wanted to have, I started to pick up on intellectual information that started to stick. It's funny, we speak English, but when you're in a real estate group and you don't know anything about real estate, it sounds Chinese, you know, it's just like a different level language. Ltv, rv, comps, all these, you know, acronyms and stuff. I'm just going over my head. So being around that type of group started to rub off on me where I was picking up on things and I felt more informed and I could understand the conversations better. And it built my confidence up from somebody who knew nothing to a position where I can now comfortably support and help others through teaching. And it all started with networking.

Yeah, and the whole thing about the acronyms, you know, once someone tells you what the acronym is, it's not that. It's not that you're stupid. It's just you don't know what the specific one. It's like I remember talking to someone, we were talking about discounted real estate notes and then he used the word npl. I said, I don't know what that means. He said, non performing loan. So, okay, now that I know what it is, I know what it is. Forever, you know, same sort of thing. Ltv, unless you're in it, you don't know. That's why I said, this is funny. You know, I, I, I do not like Apple computers, Apple phones, any of that stuff. Okay. I'm more of a MA of a PC and Android. Right. And you know, these, these people who own Apple computers, you know. Well, but it's so intuitive. I said, really? I said, how do you get on the Internet? They said, you go to Safari. How would you know that? Why isn't it called the Internet? Why is it called Safari? I mean, you know, it's, it's like, oh, can you see that that's not a natural progression, Right? Oh, you know what? We have a few more minutes here. Go back to real estate for a minute. So what's the difference in your mind between appreciation and cash flow? Investing, real estate strategies.

Yeah. Appreciation is, is more active and more volatile in my opinion, versus cash flow can be more stable and consistent. However, both are require activity. Right. I feel I speak to a lot of new people who think buy and hold is just set it and forget it. That's not the case. I would not recommend that by any means. It's just less activity versus a flipper who is doing it in a short span. So appreciation can make you a lot of money quick. Cash flow can make you a lot of money over time. And it's spread out.

I totally like that. As Kevin o' Leary says in Shark Tank, cash flow. I like cash flow. Really hard to do in any kind of strategy. A buy and hold and forget. You can buy and hold but you still have to kind of adjust things. And you know, a lot of people don't know that when the dow Jones Industrial 30, I mean it's been around for a long time but in the beginning when they actually had to put a put it together, a company that made buggy whips was in the endow industrial theater because you know, nobody had cars back then and they were all buggy whip buggies and stuff. I don't think they're doing much business nowadays. So that's the kind of stock that you couldn't just buy and hold and just say it's in the dow Jones Industrial 30. And I'm sure it took a long time for companies like Apple and Microsoft to kind of make it up the ladder.

Exactly.

What do you think it takes to become a successful real estate investor?

Persistence and resolve. The mindset around I cannot fail. I can only learn and grow. You know, like I shared my failure. It could have easily derailed me from my path being that I was new and never even do my first deal yet and had that experience. However, the why was so strong my family, the time freedom that I get from doing what I do today was so valuable to me that you know what, that's not going to stop me. I'm going to persist until I succeed.

So you had that first failure before you borrowed on the house to do the. Yeah, that makes sense. Yeah. I've always kind of looked at the thing I like about real estate. You know, get it's a tangible asset. And the reason I like to more, I mean I own my house but I generally my business is lending because although I can't control the borrower if anything goes wrong I'm into the property for, you know, 60% so I'll be able to get the property at a lot less than the average bear, you know. But you know, with stocks, I mean you can't control what a company does, you know. And even though I can't control what the borrower does unless they're going to destroy the property, you know, for the most part, you know, it'll turn out okay. If, if something happens with that borrower. All right, I'll tell you what. You know what? We're going to cut to our last break. We don't have a trivia question. Thank goodness.

Right?

No more football questions. But when we come back, we are going to have some closing comments. So don't touch that dial. The BEST OF investing. And we were right back. Welcome back to the Best OF investing. Last time for today. I'm Edward Brown, your host, along with my special guest, CJ Caleo. No trivia question, but I do want to ask you a question if for the audience who's listening in, who says, you know, how do I get started with little to no money in real estate? How do they get started?

There's always a way. There's always a way. So it's really figuring out first your strategy because your strategy is going to dictate how you do the next steps. And with no money, like I mentioned, we, we ran out of mortgages. So essentially I ran out of qualifying for money to be borrowed, where I got to pivot towards finding new opportunity, which at that time was raising private money from other, other investors or people who had capital that wasn't deployed, wasn't used at the time. So that's a good example of how to invest with little to no money is you, you start building relationships and create opportunities to tap into other people's capital and partner with them on a deal.

Well, the first one's got to be the hardest because they're going to say, you know, what experience have you had? Well, it's my first one. Let's do it together.

And that's where I feel like something like what we do or other programs out there that offer mentorship and guidance. Having a seasoned investor overseeing it and you under their wing gives others confidence because you're being guided by an expert versus doing it all on your own.

Well, that brings me to this question. How do you build a team? You know, because you got to have contractors and, you know, subcontractors, etc. And real estate agents if you want to sell. And they're, you know, you're living in Reno and the Kansas City and Florida, you know, quite a big difference. So it's all about networking.

You, you get yourself out there and you get to be able to, to meet and greet. And it's eventually you get to test you. You, you got to pull the trigger at some point. And a lot of it's testing guests, building your team and creating that, that core four.

Okay, fair enough. And what, what's your latest deal that you're working on?

We just purchased a commercial asset, 100% vacant for a million dollars. And we're in the process of finalizing our lease to have a university move in on a 10 year lease with consistent rental rate increases, which now puts this asset somewhere near 2.4 mil.

Wow. How many square feet?

This one's 13,000 square feet.

Okay, so you bought it for $80 a foot, something like that. That's pretty cheap.

Yeah.

Which state?

Kansas City.

That was a Kansas City one. Okay. Wow. 13,000ft is not, not a large amount. So they're not going to house a bunch of. It's probably administration or something.

Administration office, like paper, paperwork stuff.

Wow, that's, that's good for you. To take a chance on a vacant building is pretty. Get pretty gutsy. Yeah.

And it's all from learning from the residential, gaining the confidence, experience, and rolling into larger deals. We like to say commercial is just simply adding extra zeros to it. Bigger deals, bigger numbers. Majority of the basics is similar to residential. Some fine tuning and uniqueness because it is commercial.

Well, also, you were experienced in Kansas City already, so.

Correct.

You start to kind of know the area and know what, what works and what doesn't work. Yes, Very good. All right, why don't you give out your information one more time in case people want to hire you to teach them.

Yeah, I appreciate it. Instagram, our handle is at WNN Properties. Or you can check out our website to get your free PDF gift. Why not now in realestate.com?

Okay, very good. I like that. Why not now? Hopefully, hopefully you'll get some people to say, you know what, this guy seems to, you know, he's gone through his ups and downs and we'll see if it works. All right, are you ready for our thoughts for the. Here we go. Sure. So I asked this old man who I know, he's 95 years old, and I said, you know, it's kind of, it's wild. I said, you know, you still call your wife darling and honey and love. What's your secret? He said, well, I forgot her name 10 years ago and I forgot. I'm afraid to ask. Okay, I get that. And why don't mummies go to summer camp? Because they're, they're afraid to relax and unwind. All right, tune in. There we go. We got some last from them. All right, tune in next week. To the best of investing, we're going to be giving away more free prizes for answering trivia questions. Thanks for listening. On behalf of our team, I'm Edward Brown. Wishing you the best of investing. So long.