Episode 171: How to Start Investing w/ CJ Calio

They don't want what we know out there.

How a person can go from really almost nothing to becoming a millionaire by owning rental property.

He would always buy these flip houses and I just remember thinking, this guy is crazy. Why would he buy that house?

In the past decade there's been a huge surge in the peer to peer short term rental market.

Become an insider. So you have to know the rules.

Before you get the game. Every second counts, so make every second count.

Welcome to the Real Estate Jam. Whether you're just beginning or the best of the best, we're glad you're here. We will share successes, failures and strategies for the action taking real estate investor. And now to your hosts, JD and Melissa.

Hi guys. Welcome to the Real Estate Jam podcast. I'm JD with my lovely and talented co host. Hello jd. How are you, Melissa? I'm doing all right, how are you, Melissa?

Happy, happy afternoon.

Yeah, we've got a, a lot of work to do today and, and sometimes we have more work than we do time, so we're trying to get that situated. But in the meantime, I'm really excited to bring to you guys a real estate investor who is doing and has done some pretty amazing things and is very knowledgeable in the space. Without any further ado, I'd like to introduce you guys to CJ Kalio, who's the co founder of WN Properties. Cj, thank you so much for coming on our show today and taking the time to be with us.

Yeah, thanks JD and Melissa, it's a pleasure to be on.

Awesome. Well cj, for those in our audience who maybe haven't been exposed to you before or, or haven't seen some of your stuff, can you kind of give us a rundown of where you got started and, and then kind of what led you to where you're at today and then we'll take the conversation from there.

Sure. Yeah. I, I like to think my story is pretty interesting. I'm born and raised in Hawaii. I recently relocated to Reno, Nevada about a year and a half ago. And my story starts when we were in Hawai. Profession prior to real estate investing was I was a UPS driver and I was one of those guys that you would get familiar with during this special time of year called Christmas. For us, we called it peak season and that's the season where we just get overloaded with gifts and deliveries and, and we find ourselves working some pretty good hours during a very good time of year usually spend with your loved ones. And until this point in my career, I was completely content and satisfied. I was tolerating Christmas, no problem. I knew it came with the, the territory and I, I was just happy to have a well paying job with good benefits. And then this one Christmas in particular came. We weren't prepared, let's just say that we weren't prepared. We were understaffed, under not enough drivers, weren't prepared for that spike in what we call volume or packages that were coming in during the season. I found myself working seven days a week, 70, 80 hours a week. And that just the time away from my loved ones, my family, my wife, my, my young kids. It was just frustrating, you know, I was, I started to get disgruntled, if you want to call it that. All of a sudden this good paying job with good benefits became not so appealing. And then this, this thought of trading time for money was not something I wanted to continue doing in this manner. And well, I sucked it up and five, six months later. So we started in October. That's usually when our peak season hits. It didn't finish February. And that whole time frame I, I just didn't see my wife and kids. And, and when we were finally complete with all that, that anger, frustration, exhaustion, I approached my wife. I was like, you know what, I don't know if I can do this much longer. I really want to just, would you support me if I live? And she surprised me with her answer. She goes, yeah, she got to answer one question. How are you going to replace your income? So the goal was for me to replace my income, which is a pretty good income for UPS driver. And some may know that they just got a nice bonus and raised with the whole threat of shrinking. And, and that's a lot. That was a lot. In that emotional state with all that was going on in those six months and just the sadness and depression for not seeing my family, I didn't have an answer for. I was like, I got no clue. She's got, so she goes, you know what, what if we tried this thing called real estate? Because the thing is, cj, we, when you were going through that, we were suffering too. I started thinking about getting you out as well. And I was like, oh, this is so cool. However, real estate, anything about real estate? Why are you bringing up real estate? Hawaii is super expensive. We're talking like right now median home price is like a million. But maybe back then it was still like in the sixes and sevens, still a good chunk of money. And I knew nothing. I don't have trade background. I, I, I started UPS right out of High school. That's all I knew. So I got resistant to her idea that real estate could produce the new income. And the funny thing is, is that she was my biggest supporter at the time. I told her, basically, go figure it out. It threw it back at her. And I said, you know what? I'm gonna go do what I'm gonna do. I can figure this out on my own. You go play with real estate. Well, I decided to start businesses. I joined network marketing companies. I started some startups. And like, most of these things, they don't really pan out. You know, statistically, it's a very low success rate. And I found myself six, nine months into these startups, frustrated, exhausted, tired, in the same position, but less money in my pocket. Spent a lot of money to get these things going, and they didn't pan out. So I got to a point where I started humbling myself. Like, you know what? I see my wife, Jazz, she's still looking in real estate. She's going to all of these weird quote, like meetups or real estate investors. She's been inviting me for some time, and I'm just like, you know, that's just weird, right? Getting together. Talk about real estate. That's not real estate. Well, I realized very quickly I wasn't making progress. I got to approach her and say, you know what? I'm exhausted. You're out a lot more money than we started with. You are still fixated on this real estate stuff. What if I just gave it a shot? That's what I did. So she invited me to a meet up, and I finally said, you know what? Let's go to these weird things. And I was that husband in the background, arms crossed, like, don't talk to me. I was not approachable. I was not open to conversation. And as I reflect back right now, my biggest issue is my pride around not knowing anything real estate related. I wasn't open to opportunity to learn and grow. So I chose to be distant. I chose to be that guy nobody wants to talk to because he looks angry. And I just pointed people towards my wife. Well, the funny thing is, is I kept going with her anyway, more for, like, support. And the more I went, the more I started to open up and listen to what real estate does for people. And a lot of my fear and thinking around the failures that people mo or you hear a lot more failures, right? And success. And I started to believe less than that, seeing these people continue to be successful, doing the same thing over and over again, right? What? Start to open up, start to talk to people. I start to be open to learning the new language, even though it's English. Real estate has its own unique language terms and acronyms that just go over my head. In the beginning, and I was picking up things and lo and behold, six months later, I was like, you know what, Jazz? Let's give it a go. Let's just try. You've been, you've been practicing, you've been waiting on me. I give you my blessings. And I was still afraid. But we did it. We bought our first property. It was a turnkey property out of state. It was cash flowing and we stayed in this, this, I want to make sure this proof of concept actually is real. So we sat on it for about half a year to, to nine more months, and we're like, oh, okay, this thing is, is going. And then after that, we just started growing immensely. And in about a 4 1/2, 5 year span, both of us were able to leave our W2s based off of just the cash flow that we created in our portfolio.

That's amazing. And it's, it's funny because a lot of time, you know, real estate is a male dominated industry by far. To, so to, to hear that it was your wife that begrudgingly pulled you into real estate is, is pretty, pretty amazing. Okay, so now what does your business look like today?

Yeah, the thing about success and achieving what we set out to do and staying focused in on our, our primary strategy, which is buy and hold long term investing for cash flow. People take notice and we become experts in it because of the repetition. Right. The difference between ordinary and extraordinary simply reps. And the more reps I did, the more lessons I learned. The quicker I got, the better I got at running number. And, and I, I conceivably started to appear to have more deals flowing, even though in the beginning I had the same amount. Just didn't look as sexy. Right? It's more sexy when you have the, the more numbers that can make people, ooh, you know. So over the years, as we're progressing towards that financial goal, around the four year mark, right on the cusp of it, when I left, my wife left at year five. I left at year four. At year four, when I was proclaiming, I'm out of ups, here is my letter. I am not coming back. Co workers, bosses, goodbye. People started to go, you really are doing this stuff. I'm like, yes, I've been telling you guys this for four years. I love this strategy. It's doable. From Hawaii, you know, it's not, it's not, it's not easy. It's a simple concept. It's just not easy. And you get to stay consistent with it. So once I started producing that and I produced my letter, people asked me, so would you be able to help me? I want to learn and do what you do do. And I somehow stumbled into this opportunity to, to start a mentorship program which is what WM Properties is today. And we lead through action, right? We're active real estate investors who lead through action will hold you accountable, achieve your goals. And that's what I did around the four year mark. I was just like, you know what? More than happy to help you. And it turned into a business. So our success in what we did personally opened up new opportunities with this business in the mentorship side.

Sure.

That's awesome. Well, so a lot of our listeners are beginning to midlevel investors and, and I guess what I'm interested in is you're running a mentorship program. What are you telling these people that are just starting out how, how to get started in this real estate investing game? Especially when you think about most people that come into this have not a lot of money and a lot of them have W2s so they don't have a lot of time. Where do those people get started?

Yeah, it's, it's to me across the board, when somebody's new that approaches us or sees us at a meetup and starts conversation, I actually take it a step. Prior to that I go, why? Why real estate? What's your vision? What's your purpose to going into real estate? Real estate's a great vehicle. It's not for everybody. And there's a huge pie if you want to use a pizza pie style. I like to tell my kids is real estate. Take a pizza client and there's a million different slices you can choose from to achieve financial independence or freedom. What do you want to achieve? And if people want to replace income, well then next question is who out there would be able to assist and guide you? Who is doing what you want to do and has what you want to have. And then that's where you get started. So first it's more of figuring out why. Why real estate? What are you looking to accomplish? Because I, I have friends that are financially free and independent, that I have friends that do wholesaling, that are successful and financially independent. So what we do is long term buying whole cash flow. If, if what I do is not for you, I point them in a direction to a network or a team member or a fellow investor that I, I trust and, and have a good relationship with, to go and network with them. And the goal isn't to just grab anybody and be like, hey, you know, work with me. It's, let's find you what you want to achieve. I got a lot of people I, I've redirected to flippers because Hawaii is market the mindset around going out into the, the mainland to invest isn't there yet. So what's comfortable for them is Hawaii. And then I just redirect them. I got all these friends that flip in Hawaii. You might want to network and seek counsel and guidance from them.

Yeah, that's, that's great. And I, I think that's important too when we're talking to, to people, especially new investors. I talk a lot about establishing your investor identity, going through your list of skill set, skills and skill. And how does that compare with real estate? Looking at your resources, how much money, how much time and how much knowledge you have and then seeing which. Because I believe that real estate investing there is a specific niche for every single person that will meet their goals. If you don't want to do the work, there's completely passive investing, like you know, investing in somebody else's syndication or a REIT or anything like that all the way to you. No kidding, swinging the hammer on your flip. There's in between. And I, I do like what you said there. It's really important to understand the why behind getting in real estate. I think that's, that's great. And it's hard to know especially when you're just starting out, you don't know what you don't know and you definitely don't know who to ask those questions to. Which is why I think it's so important that we get people involved in the real estate meetups and, and talking to real individuals in, in the market that they're looking for, doing the things that they want. I couldn't have said it any better myself. That's, that's great. Okay, so now some of these real estate investors have gotten a little bit further along, maybe done a couple of their first deals, a couple of deals, and now they're looking to scale this out with a team. What does your team look like?

Yeah, my team is the core four. I got agents, I got property management, I got lenders and I got contractors. It's supporting. So our, our community is a supporting community. We come in with like minded goals and visions around buy and hold long term. And they're open to working the market that we're in. And that gives them a shortcut to team creation. Because now you're stepping into trusted and verified and creditable team members, something that took us years to find and build on our own. And, and we, we saved money by not buying into or investing into programs that had that as an offer, chose to be the hard hit. I want to do it the hard way, my way. I want to see and prove you all wrong. Which would be something I would entertain differently in the beginning if I were to go back five years ago, because maybe I could have done it in three years half the time, you know, by simply stepping into that. So the team creation aspect with those in our community, you basically have this immense network in our market that you get to find those that jive with you. It's a relationship business. Real estate property is a product that the byproduct of the relationship. I want to cultivate good relationships with good team members and having like rock star agents like Melissa. I mean, you got a crazy team. That's, that's key. Have somebody that understands your investing strategy that is willing to go to bat for you and also stand in the gap when, hey, this may not be a good deal for you based on what your strategy is because shiny object is a real thing. It still is for me. Even nine years later. I still get. And that's not in alignment to what I proclaimed in the beginning here what I'm focused on. So team members are very important.

That's good.

Sure.

Yeah, absolutely. Now, what I know is that right now, today, as we said, interest rates are on the climb. And with a primary investing strategy being the BRRRR strategy, you're relying on refinancing that, that property so that you can get the cash out, to recycle the cash and grow in at an accelerated rate. Are you still, right now, today able to find deals that make sense from the BRRRR strategy?

Yes, sir. We have, we closed on beginning of the year to today. I've closed on 18 residential and two commercials.

Okay, so great. So all these people are saying, hey, I can't find a deal. I can't, can't get anything to make the numbers make sense. What kind of advice do you have for them?

Yeah, I mean, what I, what I just talked about to our community the other day was control what you can control and let go of the rest. So rates and stuff, market driving, ARVs, the crash, the bubble, whatever, I, I don't control that. What I control is the way I Look at opportunity, how I present offers and where my numbers need to be at for it to make sense for me. And I can choose to. And the power of choice is so important in what we do. I can choose to temper expectations short term knowing that rates are going to go up and rates are probably going to go down. I just don't know when it's no different than with ARV going up after repair value going up or if it drops because we're going into a market change. Right. I don't control that and I can temper expectation. And what I love about our strategy to buy and hold is not forced to sell. You don't need to offload. So do I make the, the refinance portion where I pull out all my money but I'm break even cash flow, does that still work for me or do I want cash flow and I'm willing to leave in some money. Right. There's, there's ways to play with it to still make deals make sense. And I know eventually it's going to shift in one direction or another where I can then alter my trajectory on the subject property. So it's, it's more of having what we call ranges in our community. Make sure you have your buy ranges, make sure you have your rent ranges, make sure you have your ARV ranges, make sure you have your refinance percentage rate that you want to stay within. Because all those things formulated in a calculation will give you the product or the result that you either like or you don't like. And it's simple. Be decisive with it. This deal makes sense or it doesn't. So I'm not one that's going to sit there and twiddle my thumbs like oh man, how do I make this deal work? I'm just simply moving on. I'm a volume guy. So to date in this quarter Q3, I've analyzed 400 plus deals. I've offered on 130 and I've locked up and closed on 7. So that's a glimpse of my ratio that I operate to get deals going in today's market. In today's market is slim pickings. I mean listings are half in our market what it was this time last year and still getting deals. It just requires a little bit more effort, a lot more analyzing and a lot more offers than I did last year and a year before.

Yeah, yeah, same here. Definitely agree. I think, I think that it's really important to mention that, that just because the, the deals aren't as apparent and aren't as obvious doesn't mean that you loosen up your standards. You got to keep your minimum standards where they're at. And if that means you have to look at, you know, 130 deals to get 70, then that's what, that's what you're doing. And actually, I think that's a pret. That's a pretty good. You put in 130 offers and have 70 accepted. I think that's a pretty good acceptance rate. But making sure that your numbers make sense before you're obligated to the property is, is one of the most important things. So many people jump into it haphazardly and, and don't figure out the numbers beforehand when all of those problems are preventable. And I, I think getting with somebody who can mentor you, getting with somebody who's been in your shoes and, and can be just a second set of eyes on the things that you're doing, especially when you're starting out, is, is worth its, its weight in gold.

Absolutely.

Okay, C.J. so if the members of our audience decided that they wanted to hear more about what you have going on and maybe check out your mentorship program or, or just see what you guys are doing over there. Where, where should we be sending them?

Yeah, I've been told I'm not an Instagram social media person. I've been told by our marketing department that we have an Instagram page. It's at WNN Properties. And we also have a free gift for those listeners that are intrigued with our story and want to know more about how we do what we do. And they can go to a website called why not now in realestate.com and download your free PDF.

Awesome.

Awesome.

That's great, CJ really appreciate it. Thanks for coming on the show.

Thank you for listening to the Real Estate Jam. We hope you enjoyed today's episode. For more information, check out our website, therealestatejam.com or find us on Instagram, Facebook and Twitter herealestatejam. If you have any questions, feel free to drop us an email at therealestatejam at gmail com. See you next episode.