Episode 151: CJ Calio

What's up guys? It's a great day. This is Fuquan Bilao and we are back with another great episode of the Pfrei podcast series. We interview experts in the real estate business in order to provide you with some of the best investment strategies and techniques used by leading fund managers, financiers, house flippers and more. We appreciate every single one of you for taking the time to press play on the podcast. Hope you enjoyed this new episode.

Alright guys, we're back again with another great episode of PS F rei I'm your host, Fuquan Bilal. Passion for real estate investments. Oh man, we got a great show today. We have C.J. kalio. We, we're here right, so we're gonna talk about a few things. This is his first time to the show. He got started in real estate in 2015. I'm gonna let him tell you his background and his personal story but we, we actually also going to add some value at the end and let you guys know how C.J. could be of service to you guys. And C.J. is from WN Properties, so they're full time real estate investor and residential and commercial real estate. So CJ welcome to the show. I really appreciate you taking your valuable time to come out and add value to our listeners.

Yeah, thanks for having me, Fuquan.

Absolutely. Yeah. Let's get into the background. We usually like to start off with that so people can see as far as your knowledge base and skill set in the real estate business. And then I usually, you know, fire off the questions from there. So tell us your background story. How did you get into real estate? When did you get your start?

Yeah, I like to think our story is very fun. So back, back before real estate, I, I'm born and raised in Hawaii and I grew up there and that's where I found my career in ups. I became a UPS driver at a very early age and it was a great profession. It provided the money and the benefits and all the bells and whistles that I was raised to pursue, which is a good career. And it allowed me to live a very good, comfortable life in Hawaii. And I was satisfied until this one particular Christmas. I'm not sure if you and your listeners are aware, UPS drivers get this one time of year where we blow up and we become that Santa that puts on the brown suit, you know, starts delivering all your Amazon packages, all your gifts and so forth. And I had a joy and pleasure doing that for a good amount of time while I was at ups. So there's One particular Christmas where everything shifted, everything went sideways. And this particular Christmas about 10 years ago was when we got bombarded with so much deliveries and packages we weren't prepared. We didn't have enough in the workforce, we didn't have enough trucks, we didn't have enough anything. And what ended up happening is for about five or six months span during Christmas I was working 70, 80 hours, seven days a week and didn't see any of my family, didn't see my wife, didn't see my kids. Found myself frustrated, angry, burnt out, exhausted, the whole nine yards of, of being depressed and, and not happy in my situation. Which led me to, to come to a thinking of well maybe this is, isn't the dream job. This isn't something I want to do for the next 30 years and retire from. So after all the dust settled and the peak was over and I got some, I don't time to just sit with my wife. I proposed to her the option for me to just quit. I was just very surprised with her answer, to be honest. She said, you know what, you can quit. Let me ask you this one question. How are you going to replace your income? Because we ain't changing our lifestyle. Didn't think that one through. I was just so emotional about not being home and not seeing the family, trading time for money and not, not missing out on these, these memories that I could have created that I didn't think farther beyond the initial knee jerk reaction of just leaving. So when she posed that question, I was stumped. And the cool thing about my wife is she already started the research back when she noticed that this is going to be a very different Christmas than we were used to. And she looked into real estate. She started finding different strategies out there and she pinpointed something that was, was unique and uncomfortable for me because I didn't know anything about real estate. He said, let's go buy rental property at Cash Flows because if we get enough of them, build enough portfolio, the theory would be is all that income would come in like a paycheck and then you can quit. It made sense to me however, a moment in time when I, when I got proposed that opportunity by my biggest supporter, my wife, I shifted to resistance and, and anger and frustration because I was uncomfortable. I didn't know anything about real estate. I didn't come from a trades background. I'm not a handy guy. So when she proposed that I was like, you're crazy. Isn't it for us? I mean it's a great concept and how is that Going to get me out of my job. Kept nudging away like, no, no, I think this is a good solution. You know, the rich do it. Everybody in real, everybody who, somebody at some level of success has real estate in their portfolio, so why, why won't we. And I just pushed her away. I said, look, you go do your thing in real estate, let me go and figure out what I'm going to do to replace my income. Because I didn't think it through. And what I did and chose to do is to revert back to what I could do on my own, what I could do through my, my skill set and what I knew at the time. And I started up a lot of businesses and like most startups, they didn't, they didn't pan out, they didn't last. They were like real short lived. And I found myself in more anger, more frustration, more monetary loss, if you want to call it that. And hired. Frankly, I was just tired of everything not working. So after six to nine months of pushing all these new businesses that didn't make it past the startup phase, I humbled myself and I was like, you know what, you're still looking into real estate, you're still attending these meetups. I think it's a cult, I don't think it's a real thing. But you know, maybe, maybe I should go and support you and see where you take this because obviously what I'm doing is not working. So reluctantly, initially, I started going to these meetups with her, these local real estate meetups. Now it's the gentleman in the back, arms crossed, unapproachable, defensive, and selecting everybody away to go talk to my wife because you know, this is her brain child strategy and she, she knows what she's talking about. I don't know a clue. And what it boiled down to is I had so much pride in not wanting to look stupid that I turned off any opportunity to learn and grow. Well, I'm grateful. My wife is very resilient in her passion towards getting me out of my job. She kept bringing me to these meetups and meetup after meetup. I started to feel this sense of melting away from my anger, my frustration, my pride and, and being more open to the language that's spoken in real estate. I started picking up on the terms, I started listening to the successes and the lessons learned. I started talking to people and then asking, you know, what are some things you're doing that that makes, makes this all worth it? And we found a group of people that bought rental properties and started networking with them. They give us a few pointers pointing us in a direction and eventually we found the courage to pull the trigger and buy our first rental property. It was a turnkey property and shortly after that we got hooked. You know, we saw that it actually works. This is a real thing. We don't have to be present. We can be 6,000 miles away and still make this work. We got the bug and we grew our portfolio to amount where we were able to both quit our jobs in five years. And since then we've continued our growth and in our strategy in real estate and started scaling into large scale commercial. And in the past five years, we've added about 12 large scale commercial units to our portfolio. And on top of that, a cool thing about success and staying true to your process is people take notice. So a lot of people were just sitting back and watching what we did. And after we both left our jobs, people started asking us, you know, how do I do what you do? And strangely enough, I fell back into the business world where I created a mentorship program where now I assist people to do that.

That's awesome. Yeah, that's a great full circle background history of, you know, working the nine to five, understanding that you was trading time for dollars and the transparency of not having faith and going into something and then eventually understanding the importance of it and making a transition, eventually seeing it was the best thing that you could have done. So thank you for sharing that with our audience. I actually struggled with a few things when I got started in real estate and, and what you, some things you just said reminded me so. Especially the part about, you know, seven days a week and working all these hours and everything and everything else. My journey into real estate, transitioning from the corporate world was exactly that. I was, I was instill, still am, passionate about it and obsessed with it. That I got to a point where it just became everything. And it was like, okay, I left the job for this reason, not to do that. But then I'm in real estate and I'm actually doing that. So I had to make a shift back to taking control of my time. And the beauty about it is you're your own boss, so you can do that. You can say, I want to delegate this responsibility here to someone else and I'm going to put myself on the schedule and have this discipline, you know. Did you struggle with that when you first got into it? Because you. I just think that I would assume everybody like me who got involved with real estate and started to understand while this is something that you will never figure out is like Pandora's box. There's so many different ways, so many different tools you can learn. No matter how many years you do it. There's so many different things you can do within real estate that. That's the obsession, that's the passion that comes. Did you find yourself, like, trading one thing that you was working and spending hours to get into something new that you're passionate about? And during those hours and realizing, oh, I got to scale down family, did you go through that at all and those. Those since 2015?

Yeah. So initially when we got on board, like I said, I wasn't the. The driver. My wife was. And as I became more immersed into what this could do for us, I became passionate about it. I came, like you said, obsessed, where I got to make choices. And, and for me, at those, in those seasons of. Of decision making, I got to choose to sacrifice a little time up front, I. E. More time away from family, which didn't make sense to me. But now those four years I. I put in that extra work allowed me the 40 afterwards to be freed of. So I chose to be focused in and stay with a particular strategy and, and become in a sense, a master of it, you know, and the buy and hold. Like you said, there's so many options, so many variations of investing in real estate, and real estate's just a. A segment of other investment strategies you could use to do the same thing to get out of your job. Being disciplined with. With that one thing really served me well because I did have moments of being yanked into possibly looking to flipping and all these other more appealing attractive quick cash things. And my wife would have to remind me, hey, you know, that's. That's a shiny object. It's not exactly our. Our target and focus. Could you justify it could speed us up? Absolutely. More cash always speeds up acquisitions. However, now I got to learn a new skill set. Now I got to learn a new market. Now I got to build a different team. And it just, it detracts you from your focus. So what. What I chose to believe in was the acronym for focus is follow on course until successful. And my definition of success was leaving ups. And then I got to redefine success after that because it's not the end. That's the start of my journey was getting out of my W2.

Yeah. I always. Success is one of our core values and is an optimized daily experience sustainable over time. That's how we. That's how we define it. An optimized daily experience sustainable over time. If we can have success, then, you know, it's a wonderful thing because we can really give that to our clients, our vendors, our investors, that optimize experience sustainable over time. Yeah, that's. That's really a good point. I. Why are you passionate for real estate investing? I mean, we talked about, you know, you getting involved with it. You understand that the time freedom, the control it gives you and everything else. But what's the main reason that you're passionate about? I mean, that's pretty much the theme of the show. That's the question I asked all the guests.

Yeah, I mean, what's passionate about is it got me to my initial result or goal, which is leaving the W2, which wasn't an option prior. And this is just my belief system around how we're brought up as a society is that we're taught to go to school, to get a degree, to get a good job and work it till you retire and then enjoy life. I didn't know there was options beyond that that would allow me to enjoy life today and not wait till retirement age and real estate became that vehicle. So I'm passionate because that vehicle served me and it's now serving others that I. I get to share that same. Same passion with, you know, and. And see the impact it provides. It's just we're not given much options up front. And part of that passion is helping others realize there's so much opportunity out there. You just got to know where to look.

Yeah. How is the current market affecting your business? So you're still buying. We were talking before we press record in the Midwest and the Southeast. You're doing deals in Kansas City and Jacksonville, Florida area. You're building out rental portfolios there. Cost of capital is more expensive. How is that affecting your business model? I know you know, is affecting us in a lot of ways because we have a model. We flip and we rent. Of course, on the rental side, it decreases the cash flow. On the flip side, it slows down the dispositions. But in your business and your model, how is the current marketplace affecting it? And what are you doing to. To mitigate those. The risk?

Yeah, what. What I see in our market with all the trends happening is here's just lower inventory. So we get to adjust and pivot our strategy for acquisitions and adjust our expectations.

Right.

And these a lot. What I like to talk about a lot is control what you can control. Let go of the rest. I can't control what the rates are going to do, what the bank's going to do what the Fed's going to do. I can't control what the appraiser is going to do on a, on a reappraisal of a property. But what I can control is where I buy at, how I run my numbers and who's on my team. And if I'm focusing my energy on that, I, I'm a firm believer that I'm going to set myself up maybe not for the immediate perceivable gain, the long game. What I do is buy and hold and I have the luxury and the privilege to hold until it makes sense to do something with. And if I'm putting myself in the position because I know my numbers, I'm making my calculated risk and informed decisions on what I know today, I'm going to set myself up for success. So it does require some shifting in what we're seeing today to do the same volume and or similar deals as we did, say two years ago.

Yeah, it's tough, right? So the beauty is it reminds me of like when it was Covid. I'm pretty sure when things contracted you had to be the best version of yourself and come up with all these different strategies on how to move forward. And then once we got on the other side, it was like the dead cat bounce. This thing just opened up and things start going crazy. And now since it start contracting again, people are going back to that model. I know I am that risk adjusted model that we built out in Covid, which makes it harder to get great deals, right? This is a market for great deals, not good deals. So that definitely slows it down unless inventory. But it gives you a chance to create operational efficiency. Like I love this slowness because we was just go, go, go, go, go, go. Didn't have time to really go deeper. Right. Because you're just trying to keep up. And now that it's slow, this is the opportunity to create operational efficiency work on your standard operating procedures, your processes, automations and things like that. Like you said, things like that to make your business better, right. Growing to be better instead of bigger. So I love it. Let's talk about now the, the educational stuff that you're doing because I heard you say a few times that you know, you help others. Right. So that means that from a go giver perspective you're saying, look, I learned all of this stuff from my experience. I see the value in collaborating with other people, educating other people. Of course there's some reciprocity on both ends. Let's talk about that a Little bit. What are you doing to serve in this space?

So we do several things. We throw meetups virtually online through the. It's called the west side Real Estate Meetup. It's something that we founded that started as an in person meetup in Hawaii. And one of the blessings from COVID is that we got to shift to virtual. And because of virtual we are able to gather more audience around our meetup that was once this little gathering of. I think in the beginning it was like five people and then it grew to 100 in person at some level to now reaching hundreds of people across the states if they choose to jump on. And that's how the last Wednesday of every month at 6:00pm Hawaii Standard Time. And we have a Facebook group that if they were to Google or search that they would be able to find that and join the group. So we have those, those are free meetups. We do put on paid meetups and events. We actually have an event called the 4 Real Estate Meetup. It's for serious real estate investors who want to network at a higher level. And that's held in Hawaii on a quarterly basis. It's coming up in October 28th and you can find tickets through our social media platform at WNN Properties. And, and that's another thing we put on. And then the mentorship side, we, we do have a program that we've put in place and we're consistently tweaking and honing in on to better serve those who come in. And the real question I ask those who are wondering if I'm somebody of, of caliber to mentor them is, is a two question phase. One, do I do what you want to do? Yes or no. And if it's a no, move on. Two, do I have what you want to have? Yes or no? If it's a no, move on. But if it's a yes to both, give us a shot. And that goes across the board. Whether it's me or anybody else that's mentoring or guiding or coaching others, ask yourself those two simple questions. And if it's a yes, give it a shot. And we request give us time because nothing worth having comes easy. And there's a lot of work that gets to be put into creating, like you said, system processes. Everybody's slightly different and unique situations and just the way that they operate are different. So what works for me may not fully work for you and how do we adapt it so it does and gets you the result you're looking for? So we have a year long mentorship program that people can join.

That's awesome. I really appreciate you coming to the show and added value. You guys be sure to check CJ out and what he has to offer and the meetup group. I was surprised to hear meetup I guess because Covid didn't have a choice to go virtual because I remember before they were in person I was one of the I'm sure if it was others, I can't say I was the first, but I was one of the people who started sneaking and doing it virtually until other people started to snitch on me and get my site shut down because it was mandatory to be in person. So I guess when Covid came they didn't have a choice but to keep their base to go virtual. And that was a hybrid. So I'm glad to hear that. But yeah, make sure you guys check them out and see what he has to offer and what value he can give. I really appreciate you coming on the show today and sharing your background and your experience with the listeners, man. I really appreciate it.

Thanks Fuquan. Appreciate it.

It's another great episode of F. Rei. I'm your host, Fuquan Bilal. Passion for Real Estate Investments. Be sure to like us if you see us on Facebook, comment, share, subscribe, do all that good stuff. You can catch us when you see all the other podcasts signing out. Thanks again to my guests for coming to the show and added value. Appreciate you man.

Thank you guys for listening to this episode of the Passion for Real Estate Investments podcast. Looking forward to providing you guys with more testimonials from successful real estate investors. Be sure to follow us on Instagram, Facebook and Twitter at A Passion the number four rei. Thanks so much guys. And until next time, it's a great day.