CJ CALIO • FROM $90K TO $15M IN ONLY NINE YEARS • REAL ESTATE INVESTOR

Welcome to the Dream Huge Podcast, where we'll talk with real estate investors, entrepreneurs, business leaders, athletes and more to inspire you with their success stories so you can work hard, never give up, and dream huge. And now, let's start the show.

Yo, what is up, everybody? Pete Peterson here with the Dream Huge Podcast, hosted by Mark Gray. How you doing, Mark? Good, Pete. How are you? Good. Excellent, man. I got my noise cancellation on now, so we are coming through loud and clear. J.P. john Pavlansky. How are you, sir?

I'm doing well. Doing well, Pete. Excited to talk some real estate, man.

Yeah, excited for this one. Today, folks, we love to share success stories from huge dreamers, folks in the real estate business. Entrepreneurs, movers, shakers, innovators, influencers, and more. And hopefully these interviews and stories will help to motivate and inspire you to Dream Huge. And today, folks, we are talking real estate. We are with my man, CJ Kalio. How you doing, cj?

I'm doing great. Love the energy, guys. Thanks for having me on.

Good man. Yes, thank you very much. Yeah, we always bring that positive energy here in the Dream Huge Podcast. Excited to talk to you and just share some of your real estate investing knowledge with some of our listeners today. So the first line in your biography really jumped out to me, cj. It says, if you are a newbie when it comes to investing and looking to break into real estate, then CJ Kalio is your guy. So why are you the guy? Enlighten us.

That's an interesting line, and I'm pretty sure my wife wrote it, so I'll give her the props and shout out for that.

There you go.

The reality is, real estate wasn't always my thing. So my story, if I were to rewind back nine years ago, is where all this opportunity started. And prior to getting into real estate and doing what I do today and being successful at it, I was a UPS driver. So I was that guy in that brown truck dropping off your goodies throughout the year. And that special time of year during Christmas, we call it peak, I was that guy working till midnight. And that's where my story started. So up until that point, ups the profession, the pay, the benefits were amazing. I was so content with life. I was living what I thought was the dream, right? Working that job, safe, secure union job, getting paid well up until it wasn't. And what I mean by that is that time of year, Christmas, right, we're all known for being able to be that Santa in the brown suit. Well, this particular year, we weren't Prepared staffing wise, we saw an increase in package volume that needed to be delivered during this time of year where it gave us the challenge around working seven days a week. I was putting in long hours and I noticed that this was starting sooner and it ended a lot later. So when I look back, it was four to five months of consistent seven days a week not seeing my family. And for me, that really, it got to me. You know, it was so frustrating and depressing. Like this is the time of year where you're supposed to be grateful, have that joy and spend time with those that you love the most. And I wasn't. I was out there working to the wee hours of the morning on a consistent basis. So with all that, I started to ponder and wonder, is this something I'm willing to tolerate for 40 more years? Like this is what I thought was the dream, what I, how long had.

You been driving for?

I was at 13, 13 years at that point, full time driving. Wow. So I had some vested time and, and I was comfortable and it just made me question, do I want to retire 40 years later saying that this is what I lived, right? Knowing that this is a possibility year over year, that this could be the new transition now that Amazon became that hot thing. And I pondered on it. And when the season was over, I approached my wife all angry, deflated, exhausted, frustrated, you know what, can I leave? Will you, will you support me quitting my job? And she goes, yes. And then she followed it up with this question I will never forget and how are you going to replace your income? And it kind of gut checked me because I was all emotional at that point. Like I was mad, I was angry, I was like, this is not what I signed up for, blah, blah, blah. And I didn't think about it thoroughly. How do I replace my income? How do I continue living this lifestyle that we built up through this career with a cold turkey of just walking away? And I couldn't answer her. The funny thing is, is she noticed this thing, this, this thing of me not being home for this whole season too, where she started to look into what are successful people doing, what are rich people doing, what's working for them. And she came across a lot of people had some level of real estate in their portfolio and she, she was looking into the strategies and identified, well, if we're going to replace his income, let's look into cash flow, buy and hold rental properties. Well, when she proposed that idea to me, when I had no clue what I was going to do to replace the income I put up defenses. I dropped into fear. I started to resist the idea that real estate's a thing because I had no background, I had no formal training. I wasn't an agent. I have no trade skills. I know nothing about real estate. I'm a UPS driver, for goodness sake. I know how to deliver packages and drive. So I resisted the fact that my greatest supporter was giving me a clue. This could be an opportunity. Instead, I said, you go do you and I will go do what I think I know will work. Which was, at the time, things. I. I had some experience in growing up, and I started businesses. And like most startups, they just don't. They just don't produce. So six, nine months later, after many failed startups, I was just as exhausted, just as depressed, just as angry, and now out of more money because I didn't produce a return from these things. And I kind of feel like that was the humbling moment I needed to embrace the fact that, you know what? She's committed. She's still looking into real estate. She's going to all these crazy meetups where people are, like, sharing wins. And I swear they're scams, but, you know, they seem to be consistent. So I started to attend meetups with her. And the cool thing about attending these meetups was that fear of not understanding this real estate lingo started to subside because I heard people repeat the same thing over and over. I started to listen more intently, be open to the concept and idea that there's possibility beyond what I think I know. And soon as you know it, I was the guy that was networking. I was the guy that was in front of the room talking to people, and we pulled the trigger. And after we pulled the trigger, we got our first deal 3,000 miles away in the Midwest turnkey property. And we watched it grow. And lo and behold, I was wrong. I got to say that to my wife, I was wrong. This real estate stuff works. And it was the. The catalyst that just shot us up from there. We just grew our portfolio to the level where we were able to achieve financial independence within four years for not just me, for both of us. And then step into this now role where that opening line about newbies is, it's kind of my passion. What can I do to help support others that may have had that mindset around, this is not real. They don't teach this in school. So why would I ever entertain doing real estate and having that option to look into a different strategy other than a W2? See, that's where I'M at today.

Formal education will make you a living. Self education will make you a fortune.

Amen, brother.

Yeah. And that's it. And the light bulb went off. But wait, let me jump back to summarize, okay? For listeners out there, okay? Step one is quit your job. Okay, take notes, everybody. Step two is listen to your wife. Listen to your wife. So often, though, the spouse is the one going against the real estate investing. The spouse often says, no, let's. Let's spend money on the house. Let's spend money on the vacation. You know, and it's when you can get both on the same page, that's when the magic really starts to happen. The okay, so in your case, listen to your wife. Step three, go to the real estate meetups. Very important, because you start to see this is not just a myth. There are other people, several examples in one room of people who are doing this and being successful at it. And then four is buy the real estate. So tell us about your first deal.

Our first deal came about from going to, like you said, those networking events. And there's just so many real estate opportunities out there and so many different strategies that can get you to financial independence. And then for us, we got to pick which we felt was best fit for our purpose. So we used our example, replacing the paycheck. How do I replace the paycheck? Can I flip? Absolutely. And I get to consistently flip to produce that. And it's not necessarily consistent in a sense of streams versus buy and hold real estate or rental income. The concept is I buy it and it's rented. Every month I'm collecting some check. It may not be a large sum, but when I get enough of them, now I have that stream of income that replaces our paychecks. That was a strategy we picked. And from there being at the time living in Hawaii, a lot of rental properties do not make sense in that market. It's a very high appreciating market, more designed for flipping. So we got to test our resolve around seeking properties out in the Midwest or in other areas where cash flow was more prominent. We found our network and our markets through others who were already doing it. So just like what you said, Pete, there's people doing this stuff already. And I just had to be open to that concept that there is a property out there for me that can produce the streams of income. And after speaking with people and identifying a few markets, we picked one and we ended up going with a turnkey provider because we didn't know we didn't have the Team. We didn't have the understanding or foresight of what we could do with a property. So we wanted to buy something that was already performing. And that's what we chosen to do. We bought a turnkey property.

Okay, so tell us about the turn. What type of property was it? How did you finance it? What did that look like?

Yeah, great question. So it was a 32 with a garage, single family home property, a very common asset you see throughout turnkey providers or in rental portfolios. It was out in the Midwest, in this one was Indianapolis. So we found it through a company that somebody referred us through from the group, which we vetted through bigger pockets, that they were actually a company and we bought it traditional investor financing. We put 25% down and carried the mortgage on the difference. That's what we, we felt we were able to accomplish at the time and leverage our current W2 position.

Excellent. So that property you purchased for how much and how much is it renting for per month?

So when we bought it nine years ago, it was purchased at 90,000 and it was rented at thousand dollars a month growth. So it's above the 1% rule.

Yes. So let's talk about the 1% rule for some new listeners out there. Maybe. What, what does that look like?

Yeah. So in theory you're looking to see what the property, what you're buying a property at and the gross rent should equal 1%. So the simple math is a hundred thousand dollar property should rent for a thousand dollars, which calculation wise should provide cash flow with you. Depending on how you want to run your numbers, you should be positive. And that's something that was attainable nine years ago. And it's a little bit more challenging nowadays, yet still possible if you're able to find the right deal.

Okay, 100%. 100% still possible. And CJ, I did something super similar for my first property too. I got turnkey duplex, put the money down to conventional loan. So I really enjoy that. A lot of people kind of even get scared from investing because they see all these different ways to invest. The seller financings the sub twos and they're like, they get overwhelmed almost. So I like that you explain that you've got a turnkey property first. It doesn't always have to be a big hitter where you're making $1,000 cash flow. It could be a little guy first and add those up and then go for the big hitters once you have a little bit of experience. So I really, really enjoy that.

Awesome.

So what does your portfolio look like today. And how do you scale from a single family up into financial independence?

Yeah, so we, we grew our portfolio from one door to a large number of 90 in a span of three and a half years. And then we stabilized. So we, we call it stabilization in what we do, where we make sure we, it's not how much you make, it's how much you keep. And in this business, rental income is consistent. However, there's still opportunities for evictions, turnovers, vacancies, and things that people may not be aware of or account for because, you know, marketing and promotion wise salespeople want to highlight the good. And we like to bring up that there's equally just enough opportunity to learn and grow through some of these scenarios of keeping the cash flow. So we worked on a year of stabilization, which gave us more confidence in our portfolio strength. The funny thing is, is 90 doors is a lot of doors to manage. And that's my wife's wheelhouse. She, she's the back office gal, she's the money gal. I get to ask for an allowance. So she, she was getting overwhelmed, which after achieving that financial independence, that wasn't my purpose for us to be overwhelmed, you know, to be, to be stressed out about something that got us there. So the light bulb clicked, like, what can we do to change, right? What other opportunities are out there that I'm not aware of? And we, we started to look into the whole monopoly analogy. You buy these greenhouses, right, and you get to a point where you can no longer buy another green house, you get to trade up for a red hotel. And as we got to that mindset around that, we looked into commercial real estate. And in our commercial real estate, we're now focused in on the traditional commercial, retail, office, medical, government, warehouse, industrial type of assets. And we started to take apart our portfolio and execute what's called a 1031 exchange and allowed us to take those gains that we made over the years of holding while people paid down our debt. So we had that debt equity in there, we bundled it up, sold off a bunch, rolled it up into larger assets, and from that point forward, we got just as much, if not more cash flow from this one asset while utilizing what we've already achieved and acquired as our vessel to purchase. And it just started the domino effect. So we started taking apart our portfolio. And I believe we're at the point where we're at 10 commercial assets today.

Beautiful. So are your commercial assets spread across the nation as well, or do you focus in certain markets on those?

Yeah, it's still in the Midwest. We've pivoted from Indy to Kansas City. We built a very solid team. We understand the market. We have a really good commercial crew team, our core team where we have good agents, property managers, lenders and contractors and we work around that and we are diverse in a sense of different areas in the Kansas City, Kansas City, Missouri market.

Excellent. And you still live in sunny Hawaii.

We just moved and relocated to Reno, Nevada nine months ago.

Is that right?

Yeah.

Excellent, very good. What kind of commercial deals are you doing? Are you doing like retail or office spaces?

We have pretty much every gambit of that except for industrial warehouse which I'm looking into this year.

Nice.

Yeah. Strips are, are something that we, we found a niche in early on. That was our starting point in. And then we looked into medical, we looked into traditional office and government. We have a few government buildings that, oh man, they're wonderful. Long leases.

Oh yeah man, that's great.

And I, I see this, you know, I've, I've got some investment investor clients and friends have kind of followed the same trend. I haven't gone to the full on commercial side yet, but so often you see this trend, right guys, you start off with single family, then you do multi and then you do commercial. And then what's after commercial? I think you buy a sports, professional sports team after that.

Sky's the limit at that point.

Right, but that's kind of the progression and yeah, because at a point it comes, you're really going after those, those tax advantages. Like you said that 1031. So tell us a little bit about that. What is that 1031 and how does that work so well with commercial?

Yeah, I mean commercial, you're, you're taking these hundred thousand dollar homes and you're looking into million dollar assets. Right. So if you're traditionally going to fund one of these deals, you get to find 25, 30, sometimes 40% down depending on the occupancy or vacancy rate of the asset. So if you buy in a single tenant building that has nothing in there, you're probably putting 40, sometimes 50% down at this point with today's market. Which means if you're buying a million dollar asset, you get to come up with half a million dollars cash. And most people don't have that just sitting in their checking account. If they do, I'd question them. Why aren't you investing in real estate already but having the, the 500000 in, let's say a portfolio of a hundred thousand dollar homes, maybe in that time frame you were able to pay off your debt and you own it free and clear. Now you got five homes at a hundred thousand dollar value. You can take that dead equity, sell it off, defer the gains you may have made on it into a larger asset and still be able to what we call scale. Like I want not just my cash flow to increase, but my net worth to increase. And $500,000 homes is great, that's half a mil. But if I'm buying this million dollar asset, I've just doubled my worth. And when I get to that level and knock down that debt or scale from that point forward, what do I go into next? A 4 million, a 10 million, a 20 million? And that's how the rich continue to get rich in my opinion, is that they leverage what's available that most of the public doesn't spend the time to understand.

Yep, that's how you can really leverage and it's unlimited. I think for me and some folks who are maybe trying to get started in commercial, what's tough is you are, you're a little bit less, you can be less diversified. It depends on the size of your portfolio and the size of your bank account really. But if I'm trading, say like you said, 10 residential units for one commercial unit and then my one commercial unit goes vacant, you know, it's, that's, that's kind of what, what has scared me in the past. But if you're able to start with 90, like you have residential and then buy, trade 10 for one, you're still spreading your risk. You can weather the storm when that one commercial goes vacant. Right. Or like you said, if you've got a commercial strip mall, you're still able to weather the storm a little bit. If you have four commercial units in one, instead of say a standalone fast food franchise or something else of that nature, where it's, where it's a commercial with one tenant. Do you have any single tenant commercial properties?

Yes, I have three and I'm working on one that's I bought it 100% vacant and I'm using the value add play in this where I've acquired it at such a good price that as soon as I get it leased up, up, which I'm projecting out two years to lease, so I get to calculate that holding time into my overall acquisition price and all in amount and be able to project out what it could be worth in a two year span. Once I get it executed, once I get the lease executed, it's going to be one of those home run type of burr properties where you value it. Yeah.

And that's what I've heard also in the commercial space is. It's easier. Not easier, I should say, but there's more room for value add. You can really add value in commercial, whereas in residential you could almost, you can look at the neighborhood, you can see what the comps are renting for, you know, what the value of the property, of the comps are there. So you can pretty much tell, okay, this is going to be the top end of my value add situation on this residential. But commercial, I mean, it's truly an income approach. So if you lease, it's up to you. However nice you can make that. You're not necessarily comparing square foot to square foot. You're comparing, what is this lease? What kind of income is this lease producing? I've seen buildings here in our town, you know, like a vacant pharmacy building, like a vacant CVS or a vacant Walgreens. A vacant one will go for 900 grand. A leased one will go for 5 million. And they're the same exact building, you know, so people are, you know, doing an awesome job of the doing value add situation on those. And then the buyer is then coming in and buying that cap rate. Right. And buying that lease.

Right? Yeah. And there's a, there's a lot less emotion in my opinion, in commercial residential. What I notice with myself and with, with those that we work with is that there's a lot of emotion that goes involved. I, I won't rent this house because it's not quartz countertops or it's not stainless steel appliances. Right. And then now they have this mindset it needs to look a certain way in the commercial. It's just simply math for the most part. Does it or does it not make financial sense? And at what price point are you able to acquire it and still get your strategy or your goal residential? You got all this. Well, I could paint the exterior. Well, does the exterior paint increase your rental value? It's an argument that could be made from depending on who's looking at the property. And my subjective point of view is most people don't live outside the homes. So, yeah, it may not be as aesthetically appropriate, appealing, but if the house is stable, strong and livable, and it's nicer inside where most people live, they would probably see more value in renting a higher dollar if that part is renovated nicely. Not necessarily the curb appeal.

Yeah, almost opposite. And C.J. i want to, I want to go back a little bit too Because I think a lot of the time for, for listeners that are trying to get started in these newbies, just hearing that you really got to see started by going to meetups. I mean that's a huge thing. And we have multiple meetups in our cities that I feel, you know, newbies trying to get into the game don't even realize. And I've started to go to them and I've learned more and I've grow, you know, made more relationships and connections with other people in the industry. So with that, following up to a question with that, how long have you been actually doing just strictly real estate, CJ and how long did it take you from going to the startups to actually buying that first deal that you told us about?

Yeah, so nine years in real estate this year. It took me about three months to pull the trigger after I got into a networking space. So we maybe the journey started about 10 years ago and that six to nine months was my window of trying startups that didn't work. And then I stepped into the real estate space and within a three month span I was like, you know what, let's do this. You know, when is the best time to buy in real estate? 20 years ago. When's the next best time? Today? Now. So that was what I took. And I'm like, you know what, I know enough, I know enough to do and let me create a result that I can then reference to what I think I know and confirm or man, that didn't work. So what could I do differently? You know, and coming from this mindset that I cannot fail, I can only learn and grow. And it requires me to take action because if I don't, I will be like some of those people we still know to today that I met same time as me wanting the same thing as I want 10 years later asking when should I start? Like now. So our company's acronym is WNN and stands for why not now? Because I found myself when I started asking that question to you, to everybody that asked me, when should I start? Why not now? It's not going to be a perfect time and you still can get started. So go take action.

I love that. I love that man. I love that. And listeners, did you hear that three he started go to meetups. Three months, he bought his, bought his first deal. Nine years later he's sitting on 90 units and it all it took was some action, some action.

So yeah, why not now? It's tough and it's easier said than done, you know, I think. And we Being in the business, we are constantly preaching this, and so many people are so quick to knock it down with all the excuses. You know, Mark had a similar experience his previous job, where he would preach until he was blue in the face about real estate. So much so that his co workers would say, mark, just shut up about real estate. We don't care. Right. And Mark is well on his way as well. Am I getting that right, Mark? Was it something like that? Yeah, it was. It was very similar. He was like, dude, can we just stop talking about real estate and talk about something else? You said, dude, just. Why not now? Okay, so I got to ask you, so nine years in, you started with a $90,000 property. What is your total portfolio worth right now?

Somewhere hovering around 12 to 15 mil.

It's awesome. So just that's just to put it in perspective for listeners out there. You know, nine years of investing, reinvesting, burrowing, working residential, adding value. I'm sure you added value across plenty of residential as well, and then switching that and leveling up to commercial as well, to 12 to 15 million as of today. That's awesome. CJ. So, you know, we're definitely going to have to stay in touch because you never know. You like the Midwest. You keep mentioning the Midwest. Guess what, baby? We are in the heart of the Midwest. Mansfield, Ohio. So you never know. We work with investors all over the country. And a good friend of mine actually moved here from Oregon. He started off at zero and now has 150 units. And he actually moved his family here from Oregon because he loved what the Midwest had to offer in cash flow, and he could not touch that in his market. And I think that you're sitting there nodding your head yes, and, you know, it's exactly. Exact same thing. So, yeah, you know, for whatever, JP and Mark don't buy up, you know, and their portfolios, you know, we'll definitely keep you in mind, but it's always good to network with other investors. You know, we should do. We should. We should set up. We do a weekly. Well, not weekly, but we do monthly real estate investor meetups as well. Man, it'd be cool to start one of these, like, nationwide, Mark, you know, digitally, where we can kind of just pick brains across markets. Because I think that would really add value.

Right. And absolutely. JP was talking about meetups. Right. And, and how I, I got started. And, you know, whatever your take is on Covid, it's opened up the opportunity for you to jump on zoom calls and, and online platforms and still be able to network thousands of miles away in different countries, in different states. So eliminating those excuses. Like Pete was saying, people tend to want to make up excuses on why they can't. Well, focus in on why you can. What was Henry Ford's quote? Whether you think you can or you think you can't, you're right either way. So find that. Find that network that you. You want to tap into, whether it's locally or nationwide, and jump on those calls.

C.J. did you write the book yet? Have you authored a book yet?

No, my wife has it on my list.

Yeah. Yeah, you got to do that, man. It's a. It's a really good story. Yeah.

Appreciate it.

That would be a good seller. Okay, anything else you guys want to touch on? We're coming up against 30 minutes here. I know you guys are all busy. We appreciate your time.

No, I don't. I don't think there's anything else. I think there's a lot to learn. Learn here from. From a newbie listener, though, and I parked our hoped on that a few times here through the podcast. But genuinely take this story, guys, and. And listen to it and put it. Put it into your own plan of action, because you have a very relatable story, cj, for people who are getting started in the real estate game, and I think that speaks volumes. So you as listeners, guys, take this story and take some action.

C.J. how old are you?

I'm 39.

39. Gotcha. I was gonna. I was gonna try. I'm doing the math here in my head, see if he's beat, if he's ahead of Christian and Cody or not. Do you know Christian and Cody from Biggerpockets?

I've heard of the name. I don't know them personally, or I shouldn't say.

Biggerpockets. They were guests on the show. They did. Their website is themultifamilystrategy.com and their big thing was 20 million in real estate before age 30. 20 million before age 30. But that's two of them. So if you cut that in half, that's only 10 million before age 30. You got 15 before 40. I'd say you might have them beat. Am I doing my math right?

If I knew what I knew, and I was 20, what I knew, what I knew at 30, at a whole nother level right now, brother.

Oh, yeah, well.

And, you know, it's no competition against each other at all. You know, it's just a talking point for me. It's something for fun. But you know what? You Said. And what's great about it is we aren't competing against each other because it's un. Limited. There's there I can never buy. I will run out of money every single time. Even my investors will run out of money at some point. We, we cannot buy up everything. There's enough to go around for all of us real estate investors. Even in hot sellers market, you could still find deals. I'm still finding deals in a hot seller's market, still finding cash flowing deals. And I think you can attest to that, cj. You're nodding your head yes again.

Yes.

So, yeah. So anything you want to touch on CJ before we let you go, buddy?

Yeah, just the last thing. I mean, we. We seem to have talked about a lot and I'll nail it. Mindset. It's what separates the best from the rest. And if you're working on this, this is what produces all the money. This is what produces all the opportunity. If you're consistently working on it, you can only get better. So focus in on this more than the mechanism or the tools or the strategies. This comes first. In my three months, that's what kicked off the start. I allowed myself to work here and then apply.

Yeah, we see all those books behind you. Always working on it. That's right.

Yes.

You gotta. You got to apply though. You got to take the action. Right? Like you said, WN, baby. Why not now? Why not now? Okay. All right. Awesome stuff today. Thank you for listening to the Dream Huge podcast with Mark Gray, John Pavlansky, myself, Pete Peterson, and my man, CJ Kalio, our new friend, our real estate investing friend out in Nevada now.

Yes.

By way of Hawaii. Hang loose, my man. I actually got married in Hawaii.

Wonderful.

It's a beautiful day. Yeah. So are they still hanging loose out there?

Oh, yeah.

Okay. Love it out there. Do you know Brandon Turner?

I. Well, he's. Bigger pockets. Can't miss him. And he's on a. He was on a different island than where I was living.

Gotcha. Okay. Excellent. All right. My man cj. Hey. Thank you very much and listeners and viewers, thank you for watching. Please remember to review, subscribe, and share. And as always, remember the rules. Work hard, never give up, and dream Huge. Let's see the guns.

Come on, cj.

Oh, yeah. Thank you, man. Hey, we're gonna stay in touch, man. Thanks, cj.

Thank you for listening to the Dream Huge podcast. Make sure you subscribe so you don't miss any future episodes. For more inspiring content, follow us on Instagram and Facebook. @DreamHugeRealty and on TikTok at DreamHuge Inc. Until next time, thank you for listening to the Dream Huge podcast. Make sure you subscribe so you don't miss any future episodes. For more inspiring content, follow us on Instagram and Facebook DreamHugeRealty and on TikTok at DreamHuge Inc. Until next time.