Moneeka Sawyer

Author Archives: Moneeka Sawyer

Moneeka Sawyer is often described as one of the most blissful people you will ever meet.   She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market.  Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress. While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years. She is the international best-selling author of the multiple award-winning books "Choose Bliss: The Power and Practice of Joy and Contentment" and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.” Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod,  and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.

How To Generate Passive Income Without Quitting Your W-2 Job With David Vernich

REW David Vernich | W-2 Job

 

Generating passive income does not only mean earning money without playing an active role in your investment. This will also allow you to keep your W-2 job, giving you multiple income sources. To discuss how to do this the right way, Moneeka Sawyer sits down with David Vernich. He shares how he got proper mentorship to get into real estate, borrowed money from a banker, and started renovating homes and building family rental properties, all while continuing with his regular day job. David also discusses their partnership program, where he helps other aspiring real estate investors emulate the same strategy he did when he began.

Watch the episode here

 

Listen to the podcast here


 

How To Generate Passive Income Without Quitting Your W-2 Job With David Vernich

Real Estate Investing For Women

I am so excited to welcome the show, David Vernich. As a banker for many years, David has loaned money to all kinds of businesses, but one stands head and shoulders above all the rest to generate passive income through real estate investing. Several years ago, David sought a mentor to teach him how to invest in real estate and found the perfect husband and wife team to show him the ropes.

After doing one single-family flip and coming to the realization that finding and fixing up houses was not something he enjoyed, David pivoted to a team approach. Using his financing expertise, he became the guy to firm the purchases and renovation for starter homes to build passive income for the whole team and share in the many benefits of owning 1 to 4-family rental properties. Welcome to the show.

Thank you. That’s several years condensed down into a paragraph.

I love that. You did a great job. Many times, I get these bios that are a whole page long, so thank you for that. You started as a banker, and I can relate to that, as I was a business loan officer. You moved into real estate investing. Give me a little bit more clarity. As a business loan officer, I never did business loans for real estate. Talk to me a little bit about how that transition happened for you.

I didn’t get into banking because I wanted to be a banker. I got into banking for two reasons. 1) My wife worked for a bank and didn’t like working at the bank and thought I would fit in. 2) I hated my current job. If you hate your job, you’re open to other opportunities. If your wife says, “This might be a good job for you,” you listen to her. That’s how I backdoored my way into banking.

I thought, “I want to own and operate my own business one day.” I would think being a banker is probably a good position to be in. It will introduce you to all these small business owners and get to talk to them and know them as friends. They’ll tell you the good, the bad, and the ugly, and they did. That’s why I stayed a banker. It looked like it was going to be extremely difficult to do what they did, and they were always frustrated with making payroll and having multiple employees and government regulations. I thought, “I’ll stay being a banker.”

That was fine until I hit the age of 45. At that time, I was still married to the same wife, but she wasn’t working at the time. We had four sons at home. I was making about $80,000 a year when I was 45 back in 2007. I always looked at it as a football analogy. Everybody knows about halftime. Halftime is half the game is over, and people make halftime adjustments. Are you ahead? Are you behind? What are you going to do for the next half? Twenty years into your career, when you start at 25, you get to 45, and you’re going to retire hopefully at 65. You want to take a look at where you are or what your score is.

Review your life once you get to the halftime of your career. If you started working at 20 years old, look at where you at when you reach 45 and make halftime adjustments. Click To Tweet

I pulled up all my numbers as a banker, filled everything out, and realized, “I’m behind. In fact, I’m so far behind. If I don’t do something different, then I’m going to have to live in a van down by the river like Chris Farley did on Saturday Night Live and eat government-subsidized cheese.” I wasn’t going to be that bad because I was saving. I saved every year from the very first job I had at age 22. I started my 401(k).

I never stopped saving, but the pile of money accumulated over the years was nowhere near enough to generate anything close to maintaining my standard of living, so I knew I had to make a change. That’s what motivated me more than anything else to find something that would fill the gap. When I looked at my loan portfolio, the only people I would trade places with were the people to that I had lent money in the past that were real estate investors.

That’s how you got turned onto real estate.

I avoided real estate for so long because my problem is I don’t have two thumbs as far as being able to do any work whatsoever. If you gave me a hammer, I might not even know what end to use. Assuming I figure out which to end to use, the end result is going to be a total disaster, and I’m not kidding. I’m terrible at anything about fixing. In fact, I joke with my wife my favorite tool in the tool belt is the checkbook because I’d rather pay somebody to do it than do it myself.

I am so with you. My husband is fairly handy. A lot of the little stuff he’ll do, but I am all about the pen and checkbook. That’s my favorite tool. My favorite tool is the pen. I write a note, and I write a check.

Pay the professionals. They do it once, and then you get to enjoy whatever you want to do with your time.

Talk to me about what happened next. What are the results? You started with zero.

I started less than zero because typically, one of the biggest holdbacks for people into real estate is, “I don’t have the money to buy a house. I need to have 20% or 25% down. I’m afraid of debt, so I want to have 100% down,” so they look at their checking accounts, “A house costs $100,000. I don’t have $100,000,” close the checkbook and done, but I was a banker. I said to myself, “I don’t have $100,000,” and that was my goal. I wanted to buy a house and fix it up for $100,000. Remember, this is 2007, so this is several years ago.

In which market?

It’s Nashville, Tennessee. I looked at my checkbook, and I didn’t have $100,000, but I did have a W-2 job as a banker, so I made $80,000 a year. I had clean credit. I had a good credit score and my secret weapon. I knew the easiest bankers in the city. I know which ones had the lending authority of $100,000 for newbies that liked me that would trust that I would pay it back.

I called this individual and said, “I’d like to borrow $100,000 unsecured.” He said, “What are you using the money for?” I said, “I’m going to buy a house, fix it up, and put a renter in there or sell it.” He said, “You’re working at another bank now, right?” I said, “Yes.” “How much do you make?” I told him, and he said, “Check box one. You got a job with an income. Check box two, I got good credit,” and then number three, “If you don’t sell the house, I’m going to have to take it as collateral and put a mortgage on it.” I said, “No problem.” He said, “Come on up, I’ll give you $100,000.”

That was how I got into real estate. I borrowed the entire amount from another banker. I had that in my back pocket because I wanted that first. The next thing I had to do was find somebody who would show me how to do this. Step one was to have the money or know where you’re going to get the money. Step two was who’s going to show you how to do something you’ve never done before.

I started thinking about people I’d let money to from other banks because I’d been through, at this point in my career, seven bank mergers that had been bought out. I’d leave at a bank, go to another bank, and start fresh with another bank. Some banks like real estate loans, and some don’t. I would lose track of some of these folks, but I remember them. I helped a lot of them get started.

I called this one individual and said, “Let’s go to lunch. I want to ask you a question.” When I took him to lunch, I said, “Can you teach me how to flip a house?” He looked at me and said, “No,” and I was like, “What?” I would’ve bet money because I helped this guy get started. He goes, “No. I get up at 3:00 AM, and I’m in my pajamas. I can’t show people to do this, but you don’t need me. You need these people because these people have a formal class, and they used to be one of your customers too, Dave, so wake up and smell the coffee.”

I’m like, “Lunch number two,” I went to lunch number two, and they said, “Yes. We will teach you how to flip a house.” What we do is we have a class in a house. It was a husband and wife. “We’ve been doing this for several years. We have 144 houses. We have a full-time property manager on staff and a full-time repair and maintenance guy on staff. You come into our house. We’ll take six Saturdays and go through all the lessons, and then your final exam is to do your project house, which we’ll help you with, but you’re responsible for coming up with all the money because that’s what real estate’s about.”

I said, “Sign me up.” I went to the house for six classes in a row. I had the money lined up. We fixed the house up before we even finished it. Somebody said, “I’d like to rent this house.” Quick story, that person moved in and has been the same tenant ever since in that house for several years and not one turn. After we finished, I said to them, “Time out. I’ve done everything you said. The whole time I was doing it, I was biting my tongue because I either wouldn’t, couldn’t, or didn’t want to do 95% of what you were teaching me, but I did it. I didn’t complain.” They said, “Why in the world would you do this? Why would you spend this money and all this time if you’re not going to do what we taught you?”

I said, “I needed to know what value I brought to the chain because if I can’t bring value, I can’t be a part of real estate investing.” What they said was, “How do you want to work this?” I said, “Here’s what I propose. I don’t want to ever flip another house. I never want to find another house. I don’t want to manage the house.” “What do you want to do?” I said, “No, I will bring you unlimited amounts of capital, so you don’t have to put any money in the house. You just do all the work because you guys are pros. You’ve got a system already. I want to plug it into your system. What I bring is unlimited capital.”

They looked at me and said, “We see you’re driving a Toyota Corolla, Dave. You’re not rich.” I said, “You’re right. I’m not. I borrowed $100,000 for this first house. However, I know people who are doctors, dentists, and business owners who have plenty of money but no time or desire to learn how to do what you do. They don’t even have the time to take the class with you that I took. If I bring these people in, you do the work, and I get a piece of each property, we can build a very successful team. We can do way more houses as a team than we can do individually.” That’s what we’ve been doing for all these years.

That is an awesome story.

It wasn’t something I planned from the beginning, but I had to figure out that if I didn’t bring value to this equation, I couldn’t do real estate. I knew I didn’t want to do the hard parts, which I couldn’t do, but I did know there were people out there that were very good at it. If I could take something off their plate that they didn’t want to do, like talk to bankers or investors and gather their money which was a walk in the park for me, then I could say, “As long as you can perform and get base hits on every house that we don’t lose money, I can find you unlimited amounts of money.”

Have they?

They have. Now, with all the partnerships I’ve been involved with doing the same thing for several years, we have 119 properties.

This same team is the one that does the actual legwork for it. Is that true?

They were my original team. They’re still partners with me on the majority of my houses in Nashville, but as you probably have heard in the news, Nashville is a hot real estate market. The numbers stopped working for new purchases. My first purchase in Nashville was $70,000 for a 3-bedroom, 2-bath house, 1,400 square feet. That house is now worth $325,000. It doesn’t work in Nashville, so I had to find another group of people to do the same thing in another city.

I moved 42 miles Northwest of Nashville to Clarksville, Tennessee, which is home to the 101st Airborne Army Post. I did it with an investor lady up there who was extremely good at it. I did the exact same pitch to them. I did it with another group that I found in Memphis, Tennessee. I then branched into Little Rock, Arkansas. Essentially, I can find teams in different cities that are good at what they do, and then I bring the capital as I did in Nashville originally. These are cashflowing markets.

How are you picking the markets?

Basically, the numbers have to work. One of the things I feel strongly about is that I have two mandates with what I’m doing. It has to be profitable, or I won’t continue. That’s a given, but there are two major prices that are brewing that will never be fixed in our lifetime. The first one is the retirement income crisis. The issue with the retirement income crisis is people like myself, when I looked at my 401(k) statement at age 45, are not able to save enough money through a middle-class job to replace their current standard of living.

I’m not talking about having their lifestyles rich and famous and lighting cigars with $100 bills on their yacht. I’m talking about I want to maintain the same living standards that I have now. I read a report that over 50% of Americans are retiring are around $40,000 a year in income, and most of that is from social security. They’re having to scrape and cut expenses.

REW David Vernich | W-2 Job

W-2 Job: 50% of retiring Americans only have around $40,000 annually, most of which comes from social security.

 

The second thing that we all probably are familiar with is there’s an affordable housing crisis. Builders cannot build anything that even approaches “affordable” housing for most individuals. When I say affordable, there is no such thing as affordable housing if you don’t have an income. You have to have a base of income, and that’s why I named my book Middle Class to Millionaire, but even the middle class is feeling squeezed in housing now.

What we tend to focus on is finding 20 or 30-year-old houses that you wouldn’t want to move into because they’re not that good-looking, but putting the money in them to fix them so that they are livable and rentable, but because we’re buying an older house and fixing it up, we’re not tied to new construction costs. We are now trying to build a brand-new starter home in Nashville with a lot already paid for because we owned it. It’s probably going to cost $225,000 for a starter home, and if you add the lot, that’s $325,000. That’s the bare bones and nothing fancy starter home. That’s where we are in this country for a lot of the people.

You’re picking markets where you can go in and the numbers have to make sense. You can get older homes that you feel you can fix up and still make a profit. What kind of returns are you looking for cashflow-wise?

Cashflow-wise, it’s roughly $200 to $250 per month after all expenses. That’s why I say this, these aren’t home runs, and you’re not going to retire in one. When I originally got started, I thought to myself, “This was my plan before I had the plan that I have now.” Let’s say I can hold my nose, stumble through this, and have ten houses. I’m going to get one house a year for ten years. I’m going to put a twenty-year loan on the first house. When I turn 65, that house is going to be paid for every year after that.

If all my houses are paid for, and I am bringing in $1,000 after all expenses, taxes, insurance, repairs, and maintenance. That’s $120,000 in retirement income. That was my original goal when I decided I hated this as much as I thought I would. I need to find mentors. The original deal I had with my mentors, who did all the work, was I was going to get 25% of each house. That meant for me to do the same amount of houses, I had to do four for every one, but instead of me doing the whole house hating it, having blood, sweat, and tears, mostly tears in every single house, they would call me and say, “Dave, we found a house. We need $80,000 to buy it. We need $20,000 to fix it up. Go get the money.”

REW David Vernich | W-2 Job

W-2 Job: Look for mentors before jumping into real estate. This will make it easier for you to build passive income, with mentors doing all the work and you getting 25% of each house.

 

I then would make a few phone calls and a few emails, and minutes later, I’d have the money. I was done. I was like, “I’m going to get paid on this house for as long as we own it, and I’m going to get my portion of the cashflow for years, and it only took me fifteen minutes.” That’s why I decided I could keep my day job. I don’t have to quit it. All these things started happening, and I saw the money coming in and thought to myself, “This is cool.” Everybody needs to hear about this.

You took my breath away. That was amazing. There were two things you needed to do. You need to find the money and a mentor. Those were the first two things that I also did. Initially, my mentor was my dad, but I had that in the can. I had to find the money. Those were my first two things. I knew I needed those. What were the other obstacles that you faced getting started?

A big one I’ve alluded to multiple times is how inept I was. I always thought you had to be able to do everything. It was good to do a whole house once by myself because I knew for a fact I didn’t want to do property management. I don’t want to fix the house up. I would have to work with contractors anyway, and they would know I don’t know what I’m talking about. They would probably rip me off six ways.

In the back of my head, I thought, “Surely, I can find these houses.” This was in 2007. There were foreclosures everywhere. I was shocked and dumbfounded at how difficult it was to find a house. In fact, I had to cheat after a while because I would go out on my lunch hour or one-hour break from the bank, and I would be driving for dollars looking for houses. These were houses that had clearly been marked as foreclosures.

It wasn’t like I had to uncover any secrets or anything. I’d write down the name of the sign, call the real estate agent, and say, “I drove by this house, and I want to buy it.” They would ask me a few questions, and eventually, they’d figure out I was an investor. They knew it wasn’t retail. That turned a lot of them off. A couple of them would say, “I’ve already sold that house to a buddy of mine who’s an investor, so you can’t have that one.” I’m like, “Why do you still have your sign-up?” He said, “Looking for people like you to add to my database,” and I’m like, “That’s wasting my time.”

A few times, I’d get a real estate agent, and they would say, “That house you’re trying to buy in the market it’s in is worth $100,000, but it needs about $20,000 worth of work, so we’ll sell it to you for $80,000.” While doing my six classes, I knew that I should be able to buy that house for $60,000 and then put $20,000 in it, and then I could sell it for $100,000 if I wanted to flip it. The agent told me, “You can’t do that.” I’m like, “Yes, we can,” and then I got hung up on.

I was like, “This is hard. I can’t even find a house.” You got to kiss a lot of frogs to find one that works. Finally, the light bulb came into my dense little head, and I said, “I’m going to call my mentor,” and I said, “Winter’s coming, and I want a house. I’ve got the money lined up. This is frustrating. You’ve been doing this for several years, I bet every day your phone rings, and someone’s offering you a house because they know you’re a known commodity that can put cash on the barrel head. Would you please do me a favor and help me get the first one? By the way, take me to other students that were doing the same thing I was.”

The first one was tearing wiring out of the drywall. My eyes were big because I couldn’t even find the wire in the drywall to pull it out. The second house that went to someone was on the roof with a sledgehammer and was taking down a demoing of the chimney. I looked at them, thinking to myself, “There’s no way I wanted to be this heavy of a lift of my first one.” I was happy to break even to say I did one. I told them, “I’ve got a scale from 1 to 10 on how hard a house is, and my scale is the low-end under one. It would be a vacuum cleaner and a paintbrush. On a ten, they would be a sledgehammer and a bulldozer.”

On my first house, “Please find me a two.” That’s the highest I want to go. I told them, “We can break even on it, but I don’t want to do a heavy lift.” The next day she called me and said, “Dave, we found your house. That’s a two,” and it was. I’m like, “I’m terrible at finding a house, fixing them up, and managing them.” That pretty much left me with the money guy.

There are some things I want to highlight there that are valuable. There’s a thing that I do that drives my husband crazy, and that is that I’m constantly asking. It’s not that I’m asking questions like how this work and how that work. I’m asking for an exception. What that looks like is we’ll go to a café, stand in a long line, order our lunch and our coffee, but we forget something. We go, and we sit down. Usually, that something is something simple. We forgot our waters. The way that the café might work is that you have to stand in line again because it has to get in line. They’ve got their systems, and you don’t want to interfere with the systems. I understand systems, and I want to be respectful.

However, if there’s a 20-minute line and I’ve got a 30-minute lunch, and we’ve already waited in line, I don’t want to do that. I’ll go to the back or the side and say, “I’m very sorry. I did not ask for our water while we were in line. Would you consider giving me some water?” Invariably, the answer is yes. If you’re at Starbucks, they’ll always be like, “You should stand in line, but we’ll do it for you.” You get a little gruff, but I’m not afraid to ask. There are times when it’s not for a cup of water but for other things. They’ll say, “You need to stay on the line like everybody else.” They’ll say no. That philosophy of asking in spite of the fact that you might get a no is a superpower.

David demonstrated this perfectly. These teachers have lots of students. They’re teaching a particular system, and he was like, “No, that’s not going to work for me. Let me ask some questions. Could you do this?” Not only, “Could you do this,” but, “Could you do it this way?” He went so much deeper. What happens is so many of us are even afraid to ask.

I’ll have tenants come through my houses, and they’ll say, “I don’t have good credit. If I apply, are you going to say yes?” What I’ll say to them is, “I can’t say yes unless you apply.” Nobody can say yes to you unless you ask the question. You’d be surprised how many people will if you do. What I love is how David is, “No, this is not going to work. This is what will work. I’ve got mentors. Let me ask the question.” Many of us are too shy to do that.

To give another example in daily life, the other day, we stood in line, and I forgot to order a coffee. These people at this café know me a lot. This is the other thing. They know me and know that I will ask. They still love me. You’re afraid if I ask the questions, they’re not going to like me anymore. They think I’m imposing, it feels bad, they’re going to judge me, or whatever. They love me there. I go up, and I’m like, “I don’t want to stand in line again. I forgot my husband’s coffee. Would you mind giving it to me now, and he’ll pay later?” “Of course.” It’s just asking questions.

These are menial things that I’m talking about in my daily life. David did that on a bigger scale with his mentors and with his real estate. I want you to see and start practicing this. Start practicing asking for what you want. Do it kindly, gently, and respectfully. In everything you do, start building that asking for what I need muscle. Get it to a point like you are with David where he needs to make this business work. He knew he was behind, but he wasn’t afraid to ask questions.

You can build the asking-the-question muscle in your life to then when you find a mentor and find a situation where you need to ask a question, then you are willing to ask it. I’ve been asking financing questions like crazy now because I’m trying to hold onto a piece of property that I would rather not sell. I’m getting no all over the place. I’m still asking because I’m not afraid to ask. There’s a way to do this, and if there’s not, it’s not going to be a nightmare. I’ll sell the property. I would rather not, but I keep asking questions.

Even though my loan, the situation, and the property are difficult, I never get a, “I won’t look into this.” I get a, “Sure, Moneeka. Let’s take a look,” because I ask respectfully, and people like working with me. There are times that they benefit from my ask in this particular case. Your team and mentors have benefited from your ask. The cafe benefits from my ask because I keep coming back and bringing everybody with me. They get a ton of business out of me. Let them benefit from your ask, but don’t be afraid to ask. David, your story is so perfect for that lesson. I hope it’s okay that I took the time to share that. Do you agree with me?

Yes, definitely. That’s what holds a lot of people back because they’re so timid and thinking that was an option, they would’ve told me. Believe me, everyone’s busy doing what they’re doing, and they’re so focused on what they’re doing. They don’t have time to stop and consider that there’s another way sometimes. I have 4 sons, and 3 of them would take whatever I said as, “That’s what dad said. I’m not going to move,” but my third son would always negotiate. The other boys would look at him, “That’s not fair,” and I’m like, “Sure, it’s fair. You have the same opportunity as he did. He just took it.”

People are sometimes so busy doing their work that they don't even have time to stop and consider a better way to do things. Click To Tweet

It’s true for me and my sisters too. I will ask, and the youngest one will go with whatever they are told, like you said. If there were a different option, they would tell me the other option. The problem is there are 100 options. They’re not going to go through all of those. You think of the option you’re interested in and ask if it’s available.

Essentially, if he threw an option that I didn’t like, I would say no to that too, but occasionally he would come up with something that I was like, “I didn’t think about that. Let me think about that.” He would get something that he was wanting. Anybody can do this, but having it done to you versus you being the person asking is a different strategy.

I love that. Talk to me about investing in 2022. Can we still do this and still make passive income?

Yes, you can, but you always have to keep your eye on the numbers. There was a recent article in your Apple Newsfeed that said there are four markets in the country that still have affordable housing based on the population. That’s Detroit, Michigan, Memphis, Tennessee, Tulsa, Oklahoma, and Oklahoma City, Oklahoma.

There are always markets that have affordable housing based on the numbers like, “This is the average person’s income. This is the average rent.” Do the math and see if it’s affordable. You have to reverse engineer and say, “Can I make this work by buying a house for X, adding this to the renovations? This is my maximum number,” and run the numbers on the debt and say, “It cashflows $200 a month.” I can do stuff all day long until those numbers change. When the numbers change, which they do eventually, then you find another market that’s affordable.

REW David Vernich | W-2 Job

W-2 Job: There will always be markets with affordable housing based on the numbers.

 

Don’t get married to a market. That’s another thing too.

Yes. I started in Nashville, and the numbers do not work in Nashville at all.

You started in Nashville because you live in Nashville. Is that true?

Also, because the numbers worked. If the numbers didn’t work, I’d give up. Luckily, sometimes I didn’t even know the questions to ask until I had the experience to know what to ask. When I first started, even though we bought our first house for $70,000, that was a house that literally nobody wanted. That makes you nervous, saying, “Other experienced people don’t want this house. Should I be buying it as a rookie?” but the numbers worked.

When the numbers work, you have to say, “If there’s a renter out there that will pay what the market rent is and I can run this at this cost, and if the numbers work when I put a loan on it where I’m going to make $200 a month.” You’re not going to retire with that, but that first house will get you started on the path to retirement.

What is it that you know now that you wish you had known when you started?

The mindset issues keep people from doing things that they want to try. The fear of failure, the fear that this won’t work for me, and the fear of being scammed, everybody has those same fears. No matter who you talk to, relatives or friends, “I’m thinking about doing X,” there’s always somebody that can pull a bad story out and say, “Don’t do that because I knew a person and they did it once, and they’re living in a van down by the river now.”

Having been through banking and doing commercial loans, I’ve seen people in every type of business succeed, but I’ve also seen people try to do the same type of business and fail. Typically, it’s not the system. It’s whether you are cut out to work in that system. I was a small business administration loan officer, so I’d get every single person that hated their job that woke up on Monday and say, “I’m going to go see the bank and tell them about my dream, and I want them to give me a loan for it.” I would try to talk people out of it and say, “Your business is a half-baked idea.”

A lot of people would say, “I want to start a restaurant,” and my first question was, “Have you ever worked in a restaurant? You are literally cooking and cleaning all day long. It’s hard work. I would rather go try it before I bought it and put my house on a mortgage to make sure it was something I wanted to do.” These mindset issues are real to us individually, but if things are done correctly and if people have been there before you can show that instead of going down that path which has a cliff that you got to climb, walk over here, and there are steps, it makes a huge difference.

I love that. I’m all about the mindset piece. That’s right up my alley too. The biggest asset that we have is real estate between our ears. If we grow that into a good valuable asset that supports our life, everything else is so much easier.

I told you at the beginning that I avoided real estate because of all the things I knew I couldn’t do or wouldn’t do. I kept coming back to the one thing that motivated me more than anything else, which is this is working for people. Housing is such a basic need. Everybody is spending money on housing. It’s not like you’ve got to introduce this new concept of, “Come out of the woods. Let’s live in this nice heated box.” That’s nothing you have to do to convince people they need a house. You have to provide affordable, comfortable, and safe housing. If you do that, there are plenty of people that will pay for you to live there.

This conversation has been amazing. Thank you, David.

Thanks for having me.

I want to let you ladies know we do have more coming up for EXTRA. David’s going to share with us the four Fs for success in real estate. He’s got a little system he wants to share with us, so stay tuned for that. David, can you tell everybody how they can reach you? Also, you’ve got a special gift for everyone.

There are two basic ways to reach me, and it’s not through Instagram because I take no pictures, and it’s not through Facebook because I only post once a year. My obligatory, “Here’s my family and what they look like at the beach,” that’s the only post I do with those two. One that I am active in and one that I’m targeting the book towards are W-2 employees and self-employed people, and most of those people professionally would be on the LinkedIn website.

If they can connect with me through LinkedIn, my name is David Vernich. I’m in Nashville, Tennessee. As far as I know, I’m the only David Vernich in America. It should not be that hard to find. The second way is I do have a website called MoneyScoreboard.com. It doesn’t make sense unless you read the book, but there is a little money scoreboard that can be filled out to show you how far away you are from being able to retire.

Tell us about the book.

The name of the book is Middle Class to Millionaire: Making the Leap to the Next Level. It is trying to get the knowledge I’ve obtained for several years into the general public. For anybody that likes Seinfeld, I call it the Festivus for the Rest of Us because most real estate shows tend to focus on, “Do it all yourself A to Z. Be the superwoman or superman. Go find them. Go lift bales of hay. Go chop trees down. Draw all this stuff,” and then the rest of us who are W-2 employees are like, “I don’t want to do that in my free time.” There’s way more of us than there are of them out there, the superstars.

The normal middle-class people, if we can band together and do things like teamwork and each take a small piece of the deal but essentially band together, then not only do we minimize our downside risk, but we greatly increase the probability of success. That’s what I’m trying to get across in the book. Real estate investing can be, when added to your retirement account, something that will supercharge the amount of money that you’ll be able to receive, not only in retirement but way before retirement. I don’t want to wait until I’m old and crippled to start pulling money from my retirement. I want to enjoy life now when I’m still young. This is a way to do it.

The book is called Middle Class to Millionaire. David has very generously offered for my community to give you a digital copy for free so you can get to know the way that he works and has done this. If you want to do that, go to BlissfulInvestor.com/MiddleClass. You may be middle class now, but you can become a millionaire too. David, you shared with me one of your goals. Could you share that with my audience, so they know where you’re coming from?

Middle Class Millionaire: Making the Leap to the Next Level by David Vernich

I never looked to be a best-selling author. I just wanted to get this information out there, but I was pushed by several groups and friends to come up with a hard and fast goal on what I wanted to accomplish by releasing this information. I feel like I can help a lot of people to fill the hole of the retirement income because that’s a big crisis coming down the pipe for people that are getting up in age like myself as well as an affordable housing crisis. This fixes two major problems for a lot of people.

However, I’m only one person. I don’t have a big staff of people. In order for me to help as many people as I can, I’ve got to limit what I can do. I feel like I can help 100 individual investors obtain at least ten houses, and we do that in a partnership program. I’m holding their hand along the way. They have to qualify and bring value to the process, but I help them see the value they bring. Frankly, some people won’t have the necessary ingredients to do it, but most people would be surprised that they’re already ready to make this next step.

David is looking for partners that he can help to build their wealth together. I love that. Thank you so much for sharing that, David.

I’m glad to help.

Are you ready for our three rapid-fire questions?

Hit me. Let’s go.

Give us one super tip on getting started investing in real estate.

They’re already doing it by reading this episode. To me, there are a lot of shows out there that can teach you, and you’ve got a great one, Moneeka. Talking to somebody like yourself is a free and easy way to do it on your schedule and time and to hear real-life stories, not fake stories, not scams, but real-life people doing it every day. That, to me, gives you the belief system that this can be something that you, too, can do, which will take you to the next level.

I love that. Thank you. What is one strategy for being successful as a real estate investor?

You alluded to it earlier, and that is asking questions. A lot of people keep everything to themselves. They might read or hear something but then don’t say anything. You’d be amazed if your radar is on. In any social engagement whatsoever, how often can you probably insert something having to do with finances, retirement, or real estate investing? You got to be listening for the clues. When I’m in a group setting, and somebody has not said something that triggered, I can talk to them about real estate.

If you turn your radar on or get into social engagements, you'll be amazed at what you can do with your finances, retirement, and real estate investing. Click To Tweet

A lot of what you’re saying is asking it in your own mind. When you’re listening, that’s how you know if you’re asking those questions.

Plus, a lot of people in the back of their minds are trying to figure it out too. If you can be somebody that can provide one piece of the puzzle that they were looking for by offering something that you learn from a podcast or a book, that opens the door to some great conversations and maybe even some partnerships.

What is one thing that you do every day that contributes to success?

I eat my own cooking. My goal is as I continue to grow my portfolio of real estate, I’m always looking for my next purchase. For example, I try to do one thing every day that moves the needle in real estate. My last partner and I have known since I was nine years old. We’re 50/50 partners, and as 50/50 partners, we bought two houses on the same street in Little Rock, Arkansas. We used cash to buy them, which was our own cash, but we didn’t want to keep it tied up there.

We had to go to another bank and finally had the loan closing to pull out 80% of the cash we had invested in those houses. Here we are at the restaurant, and we have a check for $134,172.40, which was the refinance from one, and a check for $115,229.40. I said to him, “Would you have ever believed when you first met me, when we were nine years old, that we’d be sitting at a restaurant at this age swapping six-figure checks?” He said, “No.” He then got his brand-new convertible Corvette car and drove off. He looks way more successful than I am because I drove away with my Toyota CHR with 200,000 miles on it. However, I was so happy for him because a lot of the money he made was because of our partnership.

I love that. Success looks different to everybody.

He asked me if I wanted to get in the driver’s seat, and I said, “I don’t think I could get back out. It’s so low to the ground, so thanks.”

That doesn’t look like success to you.

Trying to crawl out of a car in the parking lot would be very embarrassing. I’m like, “I know how far my knees could go. I’m good. I’ll stand and look at you. I’ll admire your car from a standing position.”

That’s a funny story. David, this has been a great show. Thank you for all you’ve shared.

My pleasure. I do appreciate you having me on here. I hope this helps your audience knock out some of those limiting beliefs that they might have in their mind that they can’t do this because I know they can.

I know they can, too, and your book will help. Ladies, remember to go to BlissfulInvestor.com/MiddleClass and get that book. We’ve got more in EXTRA. We’re going to be talking about the four Fs for success in real estate, according to David Vernich, so stay tuned for that if you’re already a subscriber. If you’re not, please go to RealEstateInvestingForWomenEXTRA.com, and you can subscribe there. If you’re leaving, David and I now, thank you so much for joining us. I look forward to seeing you next time. Until then, remember, goals without action are dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you next episode.

 

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Play Louder: Your REI Financial Independence Roadmap With Joe DiSanto

REW Joe DiSanto | Play Louder

 

If you want to live your dreams after retirement, you have to track your personal finances. And you can start doing that right now with Play Louder. Play Louder offers everything from coaching to a financial independence roadmap made exclusively for you. Find out if you are investing in the right real estate properties and how much you need before you retire. Join Moneeka Sawyer as she talks to the Owner of Play Louder, Joe DiSanto. Discover Joe’s story of how he embraced his relationship with money. Learn why real estate investing is the best way to earn money without much risk and why it’s best to start thinking about retirement as early as you can. Start mapping your destination number so you can start investing and saving your way to it. Financial planning and budgeting are essential to how you want to live your best life. Treat your life like a business today!

Watch the episode here


 

Listen to the podcast here


Play Louder: Your REI Financial Independence Roadmap With Joe DiSanto

Real Estate Investing For Women

I am so excited to bring to the show, Joe DiSanto. Joe spent his childhood riding BMX bikes, break dancing, and memorizing A-movies, but the carefree days of youth wouldn’t last long. By thirteen, he was working as a busboy helping his recently divorced mom and picking up some of his own tabs. A valuable lesson he learned was if you don’t deal with your money, your money will deal with you. I love that, Joe. Thank you. I love that even in his bio, he’s offering nuggets.

From that point on, he made it his mission to learn everything he could about making smart money moves, and it paid off. By age 30, Joe had wiped out $70,000 in student loans, bought his first house, and started a post-production company in Los Angeles. Over the next decade, the company grew to 30-plus employees with over $5 million in annual revenue while producing two critically acclaimed documentaries and an Emmy award-winning HBO series.

During this time, he and his wife also transacted on fifteen residential and commercial real estate properties, but nothing had a more life-changing impact than the birth of their son. After a successful nineteen-year run in LA, the couple decided to slow down and invest in their new family. They cashed out on their business and bought in a small-town life on the Florida Coast. Having semi-retired at age 43, Joe’s efforts are now focused on his education blog Play Louder, where he shares a lifetime of fiscal know-how to help individuals and business owners navigate their finances, increase their net worth, and plan for a better future. Joe, that is an awesome bio. Welcome to the show.

I appreciate it. Thanks for having me.

Normally, I start with could you give us a high-level story but that was everything. I love it. I’m sure there’s plenty more but I want to get into the meat of this conversation because I think it’s so valuable. Joe, I want to jump into budgeting and tracking finances. We talk about this high level on this show. We’ve done it a lot but it sounds like for you, you can give us some good meaty stuff on how to implement these ideas.

Let’s first talk about tracking finances. The reason I want to talk about this is because this is a subject most people hate. They don’t know how to do it. They don’t know how to get started. It’s overwhelming like, “How am I going to track every single thing?” Could you talk to us about that, why is it important, and how to do it?

I started tracking my finances as a young person toward the end of college because my debt was racking up. I was trying to get a handle on things. I remember thinking to myself, “I might have read a book.” It was like, “You should write down everything you spend in the day because it’ll help you be aware and then be able to make changes.” I was doing that for a little bit in this little notebook. I had to add it up at the end of the day.

Write down everything you spend in the day because it'll help you be aware of your spending so you can make changes. Click To Tweet

After a while, I was like, “There’s got to be a computerized way to do this.” There was, as it turns out. This was in the late ‘90s. Nowadays, you can say, “I wish there was a way I could,” and of course, there’s always a way you can with a computer or an app or whatever. Back then, the main option was Quicken which I still use. You had to go to Staples and buy it on a CD and all that. It’s much easier nowadays.

What I started to realize, almost subconsciously, is that your personal finances are like a business. Later on, I started a business. When you start a business, it’s a given that you’re going to track your finances for the business. If you don’t do bookkeeping for your business, you even think to yourself, “There’s a good chance I will fail if I don’t know what’s going on.” You can’t borrow money if you don’t have bookkeeping done for your business. In order to be an effective business person, you have to track your finances. You have to look at the data, look at the results, and then make decisions based on that information.

It’s no different with your personal finances but for some reason, there’s generally no thought amongst the general population that they should be paying attention to their personal finances, and running their life like a business. Your life is income either from your job or business, whatever. It’s an expense. You want to have a net profit at the end of the year. That is essentially your savings. If you don’t do that and know that you do have a net profit and you are accumulating savings, you’re at a great disadvantage.

The thing is some people make so much money that they far out-earn the need to do this, but that’s very rare. Also, the more money you make, the more money you tend to spend. You’d be surprised how many people make a mid to high six figures a year and spend it all and save nothing. It happens all the time, and that’s the saddest thing. Savings could have been so easy and you could have set yourself up so easily and you missed it, and then your prime earning years disappeared on you. You’re like, “Bummer.”

It’s worst than a bummer. That’s a major bummer because you end up with, “I made all this money. I developed a particular lifestyle and now what? Either I keep working until the end of time or now I’m playing catch up. I’m not making as much money.” Later, after you turn 50, you do not get raises.

They’re looking to get you out of there because you’re the highest-paid employee.

That’s right. If you need to continue to work, your job satisfaction goes down. You’re not getting as appreciated financially by your coworkers or your bosses. There’s a lot that happens. I know because we’re going through those now ourselves. We love working, but it’s a very different experience than it is when you’re in your prime earning years. You want to utilize this.

Sometimes you get tired too. The funny thing about getting older is you’re making more money so you’re more a target for a layoff and you also want to work less. You’re the worst possible employee for the business. Someone who wants to work less, take more vacation and get paid more. The employers are like, “I like you, but I got a young eager 25 or 30-year-old that I could pay half the price and will show up on Saturdays without an issue.” It’s supply and demand at play. Who knows? Maybe there are some amazing altruistic employers out there that don’t think that but I doubt it.

Anyway, back to your question. The funny thing was as I was doing this, it was making sense to me. The irony of doing my personal finances is once I started a business, I taught myself how to do good bookkeeping and financial management by using Quicken. I was astounded at how good I became at using this desk personal finance software. There’s a great benefit to doing it if you do think you want to do a business down the road. It’s a great do-it-yourself way to learn how to manage a business.

You look at your life like a business. It’s got to perform well. If it’s not performing well, it’s a business either that you don’t want to be in essentially. You got to take it seriously or in the case of your life, you can’t get out of it so you got to make adjustments. You want to take it seriously and put the work in. That’s the part that people, unfortunately, don’t like to do. I’ve come to look at it a little bit like an area of interest. Some people love to exercise. They would do it even if it wasn’t good for them, but it turns out it’s a good hobby to have because exercise is good for you. It helps you to live longer.

Look at your life like a business. It's got to perform well. Click To Tweet

I happen to like managing money. It’s fun for me or maybe not fun. It’s meditative and relaxes me in a weird way. I don’t mind doing it, but I realize that for a lot of people, it’s like their kryptonite. It’s the last thing that they ever want to do. You do have to ask yourself, “Is that me? Is this going to be hard for me?” If it’s going to be hard, either commit to it like committing to exercise or a good diet or whatever and say, “I know this is good for me. I just have to do it,” or you seek help because it’s so important.

Doing it can help you to save so much money that you could probably outsave the amount of money you spend having someone else help you do it. Maybe that would be a financial coach or whatever or do something in the middle. It’s much like you get a trainer at the gym to keep you accountable. You can get a financial coach that you check in with once a month. They look at the numbers and they make sure you did your homework. They help you analyze it and you’re accountable to somebody to make sure you get this done.

Using software now has gotten easier and it all connects to your bank. It downloads everything automatically. Over time, it slowly memorizes where you spend money. It gets to a point where it’s quite automated. You can keep up with your finance tracking in an hour every couple of weeks personally. That’s about what I spend on it these days. Not only does it keep you more inclined to save but it shows you what your habits are. It gives you all the easy places to make small adjustments to save even more.

That’s one thing. The other thing though is the reason you’re doing the tracking is because you’re ultimately trying to do a good job toward your long-term goal. Your long-term goal is ultimately savings, then investing, and then eventually, getting to a retirement state that you can afford. Nowadays, kids call it financial independence, which sounds sexier than retirement, especially for a young person.

REW Joe DiSanto | Play Louder

Play Louder: You’re tracking your finances because you want to achieve your long-term goal. That goal is ultimately your savings, investing, and getting to a retirement state that you can afford.

 

It is helpful to keep you motivated to do the tracking if you have a goal in mind. It’s more important to first sit down and think about what your goal is, where you’re headed, how much money you want to save, how much you’re going to need, all these things and have a plan. As you’re tracking, you’re looking at the results and seeing if they live up to the plan that you set out for yourself.

Maybe that sounds terrible to some people. Maybe it sounds like something they want to get in and do for themselves because they know it’s a good idea. Whether it sounds good or it sounds bad, like you said in the beginning, if you don’t deal with your money, it’s going to deal with you. You could stick your head in the sand and cross your fingers, and hope that when you’re 65 and you get fired and you’re not hirable, and you want to stop working anyway, that you have enough money and you don’t end up in a trailer park, or you could take it seriously and have a plan, and see that you’re accomplishing your goals or the year.

I always say hope is not a plan.

Hope is not a plan. I’ll admit, I’m the hard-ass coach when it comes to this stuff. I’m like, “If you want to be a baby and pretend it’s going to work out for itself, good for you. I’m going to be over here prepared and living a nice retirement.”

I’m with you. Let’s talk about if people do want to do it. For me, it’s not a fun piece of my life. I do love talking about money. I’m Indian. We do that. That’s one of our things. It’s in our blood, but I don’t like budgeting. I don’t like all those things and yet, I’ve done it my entire life. It’s part of why I’ve had the success that I’ve had.

Not because I get to live this highfalutin lifestyle but because I’m paying attention to what I’m spending and how I’m spending it. I want to make sure that I’ve got more money to contribute each year to causes that I believe in. It’s not about what nice purse I can buy. It’s about who else can I help or how can I help my nephews, all three of them, with their different educations and those sorts of things.

That’s also some decisions about where you want to spend your money and why you want to make more money. I do still budget. I started at some point and I will admit, I don’t remember. Why don’t we talk about how you start creating a budget? What do you do? You talked about some software. Give us some tips on that.

I mentioned that I use Quicken. I’m not affiliated with Quicken or anything like that. I just like it. I think it’s the software that you can grow into. As you mentioned in the beginning, we owned a lot of real estates. I track all my real estate in there. I track all my brokerage accounts there. It’s all in one place. Even in my business, in which I’m a business consultant and fractional CFO, I organize my business all in this one place. It’s nice and convenient, but there are plenty of other options out there like Mint or Personal Capital. There’s a bunch.

The important thing is I don’t think you should do it in a spreadsheet or anything like that because it’s way too manual. With software, over time it gets easier. Spreadsheets don’t ever get easier because they can’t memorize anything for you. When it comes to budgeting, the truth is you could go out and set up a random budget for yourself, arbitrary or your best guess. That’s honestly not all that helpful. It’s nice to do a budget after you’ve done some tracking of your finances for a couple of months.

You see how much money you need to spend in order to live your life, then it’s a good time to be, “I see all the averages of what I spend over a few months.” You create a budget based on some data from your tracking. You look at it and go, “I spent $1,200 eating out last month. Maybe I could spend less there or I spent $2,000 on groceries,” or who knows? You can see some easy targets to maybe work on a little tightening of the belt. You have a budget on a column of what I spent in the last couple of months on a per-month basis, and this is what I’m going to try to do this month or the next month. I’m going to try to tighten the belt.

You only know if you achieved your belt-tightening goal if you track the finances and go, “I set out to only spend $800 eating out and I did it.” Not going out those three extra times made the difference. Back to the importance of the data, if you were a real-life business that had employees and people relying on you and all these things, you would pretty quickly see that having the data about what’s going on in your business is pretty much mission-critical.

Again, back to treating your life like a business. That’s the starting place for me, committing to that. Once you have your budget, I look at my budget every year. I put it in a spreadsheet. Every year, I look at what I did the year before. I pull a little report in Quicken. I put in some numbers and I go, “I pretty much stuck to what I thought or I spent more here.” I’ll copy and paste that and say, “I’m going to try to spend less on these things in the next twelve months.” I’ll maybe check on it through reporting in Quicken every 3 or 6 months or something like that.

You get so used to that thing that you know your spending habits. It’s like going to the gym. At first, you start with a trainer and they give you a plan. You don’t know what you’re doing, and then over time, it becomes second nature. You don’t even need a trainer anymore. It becomes part of your routine. You have to want to do it. Wanting to do it, for me, is like seeing a goal at the end of the road knowing where you’re heading, and understanding what doing all this work is going to get you to at some point in the future.

I agree with you on this. How does it help you emotionally? What does it do for you financially and emotionally? There’s a huge emotional impact on budgeting. There’s a huge emotional impact on not doing it. Let’s talk about that on both sides.

With the people I’ve coached and helped, I find that as you get older and it seems like when people get in their 40s and they haven’t been doing it, they start to panic a little bit. It’s like, “I think I should have been paying more attention to my finances because I’m getting tired. Now I have kids and college is coming up. I have no idea what’s going on if I’m going to be prepared for these big things.” I think it gives them a lot of stress and anxiety. It’s like a dark cloud hanging over your head.

For the people who embrace it that I’ve worked with, it tends to give them a greater sense of relaxation around money and knowing that they have control over it and they know what’s going on and all that. The flip side of knowing if you’re greatly underprepared is that sometimes people avoid this because they’re worried about what the results are going to tell them.

REW Joe DiSanto | Play Louder

Play Louder: Some people avoid tracking their finances because they’re worried about the results. The only way to solve that problem is to get your head around it and then take it on.

 

It’s going to show them that, “I don’t make enough money or I haven’t saved enough money or I am not prepared. I’m a little late in doing this.” That’s frightening. I feel for people in that situation, but the only way to be able to solve those problems is to get your head around them, and then take them on. Usually, what happens is people do realize after doing this that they need to make more money if they’re going to reach the goals that we set out.

I mentioned to you before we started that I have a course on all this called the Financial Independence Roadmap. In that course, I go through all these things I’m talking about. Mainly, we start by creating a destination. Where do you want to be eventually? Whether it be financial independence, retirement or whatever you want to call it. By what age and what do you want to be doing? We figure out how much money you’re going to need., and then we reverse-engineer it.

It’s like, “You’re going to need that much money, so you’re going to need to save this much for so many years. Whatever you save, you’re going to need to invest. It’s going to need to make this minimum return in order for the plan to come to fruition.” Usually, we look at that and people are like, “I need to save more, which means I need to make more money.” How do you do that? You either need to make more money in your job. Maybe you get into a side hustle thing. Maybe you convert from the work you do into doing it in a consulting capacity where you can charge more per hour and have more control over your time.

You need to essentially get entrepreneurial in your thinking about the revenue for the business of you. That’s the number one thing you should be spending your time on. Almost even more than the tracking, when you’re thinking about money. It’s how do I make more? The best defense as they say is a good offense. When it comes to financial planning, saving, and getting to your destination, the more you make, the easier it’s going to be.

I talk on my website about the three pillars of success. One is the personal finance pillar, which includes this tracking, budgeting, planning, and having a plan and a roadmap that I like to call it. One is the entrepreneurial pillar, which is being entrepreneurial. Either being entrepreneurial at work and focusing on getting more income at your job or improving your position at your work so you can make more. Maybe getting into a side hustle to make more money on the side. Maybe starting a business. Whatever that is, focus on the income piece of your life.

The third pillar, once you’re making more, then tracking your finances and saving more. You have to invest those savings in order for them to grow and multiply while you’re at work and/or sleeping. The vast majority of people are not going to save their way to financial independence. They have to save and invest and get a good return on their investments. That’s the third step. You got to get the first two in order first, get some savings going, and hopefully, you can put yourself a little bit into learning about investing and understanding the value of it.

For me, I enjoy that stuff. I would be researching it anyway. I guess I’m lucky in that sense, though I hate exercise, so I’m not lucky in that sense. Exercising for me is the worst. I hate it. I’m suffering from that syndrome, but I’m doing it anyway because I know it’s important. For me, the investing component has mostly been real estate up until now. In the past two years, I’ve been adjusting my portfolio to be a little less real estate-heavy and more market-heavy. For me, real estate produces superior returns for less risk overall.

Real estate investing produces superior returns for less risk overall. Click To Tweet

The other thing about real estate is it’s a great hedge against inflation. One of the things that I’m noticing now is when David and I were young and perky, we are still perky, we started talking about planning for our future. We had a certain number in mind. The idea was we would have that much money. This is how a lot of young people think.

We have all this money and we can invest it and get 5% or 7%. In those days, you could even talk about 10% consistently. That’s how old I am. We would live off the interest and so we were never taking out the principal. If there were emergencies or anything like that, we could take out the principal. That was the way that we would sustain our life for the rest of our life. What we didn’t think about, we thought about it a little bit but didn’t calculate in, was inflation.

If we thought we needed $3 million back then, now it’s significantly a different number based on the lifestyle that we want to make. It’s not number centric. If we thought we needed $2 million, so we’d have $200,000 a year. That bought a particular lifestyle that now might take $500,000 a year or whatever. That’s an exaggeration. I don’t know what the numbers are, but you get the point. What was interesting is by design but by mistake, my dad taught me about real estate and so we jumped into real estate.

What happened was such an interesting thing. Because real estate is such a good hedge against inflation, our appreciation went faster than the inflationary numbers. Our values are growing. Rents are keeping up with inflation. Our increase in income is keeping up with inflation. I don’t need to ask anybody for a raise but myself. I ask myself for a raise each year and I get an inflationary raise, so I’m keeping up with inflation. My assets are growing faster than inflation. Now when we take a look at our inflation-adjusted numbers, even though they’re significantly higher, we are far ahead of them because of the real estate investments.

I know that sounds a little bit complicated. If you talk to Joe at some point, he can explain exactly how that works. Real estate is an incredible hedge as long as you buy it in the right locations. That’s important, and you do it the right way. Not all real estate is that way. With us getting hit in 2001 and 2008, we lost 20% once and 50% the second time. Even so, because of the locations and the decisions that we made, and because we were able to hold on, now our inflation-adjusted income is significantly different.

What’s interesting is if you look at that, my husband is a W-2. His money has increased significantly over the years, but it has not kept up with inflation. We can still only afford the same amount of mortgage in the house that we could afford twenty years ago because his income has not increased at the same rate of inflation. They get their cost of living increased by 3%. Inflation is closer to 8%. Our real estate has kept up with it but his income has not. There’s a lot to think about and it seems a little overwhelming.

I wanted to put those seeds in your mind as you’re thinking about this. Getting a coach to explain all of those pieces, they’ll get you started at the place where you can handle it because you don’t want to get overwhelmed in the very beginning. David and I didn’t. We just made some good choices based on advice from people that had made similar choices, and experience success in retirement. You want to have somebody that you can talk to about this stuff or tune in to this show and you’ll get it by osmosis. Those sorts of things are the things that you look at later. That’s why I advocate real estate investing. It’s that hedge that allows you to get to retirement. Do you agree with me on that?

I do. I think real estate does all the things that you said. As I mentioned, it does it for less risk for greater reward. I’ll stop there. I agree. I will say though about the coach thing, you can learn so much today from websites and podcasts and all that stuff. Your audience is here, so good for them. Where the coach helps you, you generally have to pay them, but they distill everything for you. You get it all in a condensed period of time and that’s worth a lot. Time is one of the most valuable things we have.

It’s something you can’t get back. You can always borrow more money. You can’t take back time.

You want to have more information about this stuff sooner because that information will affect your decision-making and the things you spend time on. You want to be looking at the right things, the most valuable things, spending time, and thinking about the right things. If you spend a little time with a coach earlier on, they’re going to hopefully, distill down for you the most important things to be thinking about and doing. You don’t have to listen to endless amounts of books and so on.

I’m a big advocate of mentorship. When you’re talking about budgeting and saving, compounding is the miracle of finance. The sooner you start and the sooner you can get that all distilled into a plan, the longer you have to benefit from simple compounding. It’s like the magic pill of finance.

People need to make time for this. Hopefully, in any couple, at least one of the people has an interest and/or understanding that paying attention to the finances is critical. In my family, that’s me. My wife focuses on other things like the health component. She’s always trying to get me to exercise. I take our budget over her and our spending and be like, “We spend a lot of money doing this. We should maybe think about that.” FYI, I’m not frugal at all. This is not about always being frugal. I like to spend money and travel and all that stuff, but I want to spend money on the things that are most important. Why waste money on things that aren’t that meaningful to you?

There are different ways to do things. My husband like to go out to eat and we love to travel. We used to go on dives. That was our adventure. We’d find a new dive for every date night. Now, we go to a nice sit-down white tablecloth type of restaurant. When we were broke and traveling, we would backpack and stay in youth hostels. We were in dorms with shared bathrooms, but we got to see the world.

Now, we get to stay in hotels or rooms for just the two of us. You can also choose those passions that you have. You can choose how you do it. You don’t have to eliminate all of these things. You can choose, “I’m going to still have this adventure. I’m going to still do these things that I love. I’m going to do it in this way now so that I have access to more later.”

For example, for me, I’m not into cars. I go to CarMax. I buy a three-year-old used car. We have a Pacifica minivan. I don’t care about cars, but I love traveling. In the summer, we were on a six-week trip from LA to Seattle to Michigan. It was amazing. No expense spared. That’s the place we like to spend our money. Traveling and cars are the same things. The money’s gone once you spend it.

It’s good if you can find or get into the hobby of investing in real estate. It’s a fun activity but those are assets that can produce income and wealth for you down the road. Traveling and cars are examples of things that can’t. You also want to have that balance too. Am I spending my money on things that are income-producing assets first? The stuff that’s more discretionary comes second. You know you’re prepared and have enough to spend there.

REW Joe DiSanto | Play Louder

Play Louder: Get into the hobby of investing in real estate. It’s a fun activity that can give you assets that produce income and wealth for you down the road.

 

You retired early. Let’s talk about how that was possible and how people can get started, so the planning for retirement.

I semi-retired or downshifted from my extreme 50, 60 and 70-hour work week down to maybe 20 hours a week. The reason I call it that is because we have a certain amount of money for our investments. A certain amount of passive income, but it’s not enough to live the lifestyle we want. I don’t want to live a meager lifestyle so I cannot work. I like working. I just want to work less intensely and in a different way. I ended up starting this consulting thing.

We make a portion of our money from my consulting and a portion from our investments. That’s part of why I call it semi-retired. The other reason is that I’m also not concerned particularly about saving more money. Not that I don’t want to. I’m happy to. I’m paying attention to my finances just like I recommend everybody does. If we don’t save money or increase our “savings” in a year, I’m not worried about it.

We have enough where if it grows at a normal clip over the next twenty years, we’ll do full retirement and be set. That’s why I call it semi-retirement, to be clear. That’s how I think about it. How you get started is by doing all the things we were talking about. You have to start paying attention, planning and then doing the work. There is no way around it. The only way around it is to completely out-earn any need to do any of this. If you can do that, congratulations. You’re in a very small percentage of people in America.

Even those people have other things that we don’t know to think about. That’s interesting. I like to say becoming job optional rather than retiring. My branding, there’s been an awful lot about live your bliss, retire early. What I’m helping people to understand is retire early for me doesn’t mean that suddenly you quit everything you’re doing.

A lot of people love what they’re doing. They love their jobs or they love whatever they’re doing. A lot of people don’t. They want to spend more time giving back or spending more time with the children or whatever it is. We’re all over the map. For me, it’s about becoming job optional. What I like about what you’re saying is that being semi-retired is job optional. You could trim back and live on your retirement income, but you choose not to. You would rather grow that and continue to live a lifestyle that you enjoy.

When we talk about job optional, there are also different reasons for that. Either it’s the fulfillment or it gives me a little bit better lifestyle, and I want to continue to sustain that. When we get to that point where all of our needs are handled, and many of our wants are. For me, when I look at my number, it does include eating out and travel. It does include medical care. I’ve needed a lot of personal medical care because I’ve had some horrible car accidents.

I want the medical care I desire. I’m with Kaiser, but I pay for an osteopath. I pay for an acupuncturist. I pay for a physical therapist that’s not at Kaiser. Someone that I prefer. I will pay out of pocket to get the healthcare that I need and want. That’s going to increase over time as I get older. That’s not going to go down. That’s one of those expenses that will not go down. What are those things that we need to take care of? What are those things that we want to take care of? What’s the icing on top that makes life fun to live? You want to include all of those in that final number when you become job optional. What does that entail?

The job optional, AKA financial independence, in that course that I mentioned, we create a budget for you in the future. Where do you want to live? What do you see yourself doing? Are you working at all? Does that bother you? Do you want to be no work? You got to think about healthcare and all that stuff. We take what would be an annual figure that you’re going to need. We say, “How much of an investment pot will you need in order to produce that income from cashflow, interest, dividends, real estate cashflow or whatever it may be?

You’re not just saving a pot that you’re going to chip away at. You’re creating a pot of money that’s going to produce an evergreen stream of income. As you mentioned, one of the steps in this is to adjust that number for inflation twenty years from now. That can be a pretty scary step because when you adjust something for 3% or 4% or 5% inflation over 25 years. You’re like, “What? How am I going to come up with that?”

Those are the important moments to realize that’s what you’re up against, and how important it is to have a plan and be ready to deal with it. That’s why I say to everyone. If you have kids, you got to get to them early. The earlier your kids even think about this, it would affect which profession they might go into. I know it’s hard to have them make decisions about good financial sense. “Do you want to do that career? It doesn’t pay that much.” If you get them in the habit of looking at these things and understanding how it works, it could influence their decision-making process when they get to college and what they study and these things.

My kid is only seven, so there’s only so much you can do. We talk about investing a lot. I’m always talking about that and I like that stuff. I’m teaching him a little bit about that. He likes the idea that he could have a few dollars and invest it and it could magically turn into more dollars without him having to come back out in the backyard and help me build the back deck or whatever. He’s intrigued by that.

By the compounding aspect. It’s money magic.

The sooner you get to thinking about all this, the safer you’re going to be. Unfortunately, what happens is people don’t start thinking about it until they have kids. They’re getting a little behind the eight ball. College is coming. They’re getting tired of their job. All of a sudden, they’re like, “I get it now. I think I know what the whole retirement planning thing is about. I know that I’ve blown it off. Twenty years have gone by since I was 25 and I don’t know.” Usually, I get a lot of emails from those folks. They usually hear me on the podcast and they’re like, “I need help.”

There are things that you can do. Don’t fret.

There are. One other thing I recommend people do to get them enthusiastic about this process is to get a subscription to International Living Magazine. I’m not affiliated with it. I ran into it one day because before my wife and I semi-retired, we were thinking, “We might want to retire early. Where would we retire? Maybe we should buy some real estate in a town we think we might retire to. Who knows? It could work out.”

We went looking for the best places to retire or something. This is probably fifteen years ago. Up comes a bunch of these articles from International Living Magazine. It’s been around since the late ‘70s. The point of the magazine is to help people learn about places to retire outside the United States that are significantly cheaper. The reality is retiring in the United States is quite hard because the cost of living here is so high. That’s obviously why people move to places like Florida where there’s no state tax and whatever.

There are all these great international places even in Europe and South America where you can live on $2,000 a month. A nice lifestyle. Healthcare is super cheap and affordable and all this stuff. The people who end up researching this are in their 60s. They haven’t saved enough. They can’t work or don’t want to work. Your health can deteriorate on you unexpectedly.

It can happen on a dime.

They don’t have enough money to live a reasonable lifestyle in the States. This magazine is all about providing info, but it’s also a defacto and awesome travel magazine because these editors go travel all over. They learn about how much it costs to live here or there. They talk to expats. We’ve used it mostly as a travel magazine and we’ve gone to many destinations that sounded super cool in this magazine. It also puts in perspective what’s going to happen when you’re 65.

You read these people’s stories and they’re like, “I only had $200,000 saved. That’s not going to last me that long. I moved to Ecuador and I live on $1,500 a month. I exercise more. I shop at the local fresh market. I have an expat community. I’m so much happier than I was in Wisconsin.” You’re like, “This is interesting.”

One, it’s a fun motivational thing to think about traveling and maybe seeing some different places. Two, it also helps take the pressure off a little bit like, “If I don’t save enough or I’m close to retirement and I haven’t prepared, there are options. I could go live in Europe in some places for far less than I could live here and have an interesting life.”

There are a lot of inspirational stories there. It made a big impact honestly on our life. I would say to people, “Get a subscription.” It’s $40 a year or something like that. You get one magazine a month and it’s all sorts of dreamy inspiration. It helps you be motivated and put the whole retirement planning thing in perspective. That’s always one of my first recommendations to a coaching student. Get that magazine and everybody loves it. They’re always like, “It’s so much fun to read that.”

I love that. I’m going to go get that. Thank you. We’re running out of time. I want to talk about what you’re offering my audience as far as how can they get in touch with you. I want to let you know, ladies, that we’ve got a special website that you can go to so that you can get 10% off of whatever he’s selling and that sort of thing. It’s going to be BlissfulInvestor.com/roadmap, which will take you to Joe’s website. Tell us what they’re going to find when they go there.

We’re going to send people over to that course that I mentioned. It’s called the Financial Independence Roadmap. It’s a step-by-step condensed process. The value of paying a little bit for a course like this is that you get all the condensed steps. You don’t have to read a whole bunch of articles and put it all together yourself. In there, I walk you through the steps to think about the retirement thing and what you might need, calculate the numbers, and reverse engineer what you need to do to get there.

REW Joe DiSanto | Play Louder

Play Louder: The Financial Independence Roadmap is a condensed step-by-step process where you can find how much you need to retire. They calculate all the numbers and reverse engineer what you need to do to get there.

 

It includes some spreadsheets that I made for myself to do all this for my own benefit. It explains and walks you through the process. It’s all video-based too. I walk you through all my spreadsheets, show you how to use them, and explain what you’re looking at. I have a handful of videos and getting you started using Quicken if you want to get into that. It’s completely critical to success with this stuff.

I walk you through how to get that and set it up and get going. In the course, particularly with Quicken, you can have a starter template file to make it nice and organized. I provide my little template file so that you can start from there. It’s nice and organized. It matches up with my budget and it makes perfect sense.

You don’t have to go and customize all your categories and various things. If you’ve never done that, that probably sounds completely meaningless. If you get excited about this and you try to start using Quicken. You’re going to be like, “That is extremely helpful.” Usually, people sometimes buy the course for that because they want to use Quicken more, or they’re using it a little bit and need some help. They’re like, “I wanted the template file because I could see it would save a lot of time.” I think it’s pretty great. You can buy it and tell me what you think.

It sounds great to me too, which is why I’m so excited. I want to encourage people to go and get that. Go to BlissfulInvestor.com/roadmap. He’s got three courses that you’ll see on his website. If you want any of them, you can get 10% off on any of them. Use the code BLISS. We make it all uppercase. That sounds great. First of all, thank you for that. Thanks for the discount code. Thanks for talking about it. This has been an amazing conversation.

You’re welcome. I’m happy to be here.

Are you ready for our three rapid-fire questions?

Let’s do it.

Can you tell us one super tip on getting started investing in real estate?

Start looking. It depends on where people are. I think your first real estate investment very likely is you should be buying your own house. I consider your own house an investment. All of them have paid off handsomely for me. I do think if you’re going to treat your house like an investment, you got to look at it slightly differently. My tip to everyone who hasn’t bought a house is to start looking. Work with a realtor. You don’t have to buy anything right away. You can look for a year. Your realtor might end up getting a little disappointed with you if it goes on that long, but go get your feet wet. See what it’s like. Get your head in the game of that.

When investing in real estate, just start looking. Work with a realtor, get your feet wet, and see what it's like. You don't have to buy anything right away. Click To Tweet

Even if you’re not ready now, it’ll help get you motivated and get you thinking, “I have to prepare. I have to be ready. I know what I’m up against and I’m going to execute it.” If you’re waiting and sitting on the sideline and saying to yourself, “I want to do that but I don’t know if I’m ready, so I’m going to wait until I’m ready to go look at it,” that’s a mistake. You got to sink yourself in and get your head in the real estate game as quickly as you can.

I love that. What is one strategy for being successful as a real estate investor?

Do the math. It’s not the only component of being successful in real estate or in business or in your personal life, but I do think you have to do the math on these things. Real estate is exciting. I know you always hear, “Half the billionaires in the world did it because of real estate.” That’s probably all true but they’re all smart. They all do the math. Not every real estate invests going to pay off. You can do the math on real estate and you can map it out for 30 years and see how it’s going to go under certain conditions.

Speaking of this, I have a course in real estate where I provide you with my spreadsheet of doing the math. It does exactly that. It shows you how your real estate would perform over 30 years. You can change the metrics on inflation. You can change the metrics on rental increase percentage and all these things. It auto-calculates and says, “If that was the reality, this would happen. If that was the reality, this would happen.” That’s another course I have and I walk you through all that but do the math.

You can get 10% off of that one too.

Do the math, know what you’re getting into, and execute the stuff that mathematically works.

What is one daily practice you would say, Joe, that contributes to your personal success?

It depends on the day. Some things that have contributed to my success are I personally am a little bit OCD. I’ve put that to work for myself. Once I start on something, it’s hard for me to stop. I get invested. I do a lot of research. I get pumped about learning and getting stuff done. I can’t, in some ways, take credit for that because my mind and body take over luckily and it works for me.

Something that I work on though more deliberately is being positive. I find that being positive is so critical in life to one being happy, but the more positive and happy you are, the more things you’re going to try. The more people you’re going to talk to. The more everything that you’re going to soak in from life. Positivity improves your success. It does give you a greater chance of being successful for all those things I mentioned.

I do this gratitude journal because I took this little course in Insight Timer about cultivating happiness. That’s been good. Every night, I write three things that I was grateful for the day and try to keep myself in a positive mind frame as much as I can. I can’t say that I’m in a positive mind frame every day. I’m human but I’m trying. It takes effort.

It does take effort. It doesn’t just happen for sure. I loved this conversation, Joe. Thank you so much.

It was nice to talk with you. I appreciate it.

Thank you. Ladies, thank you for joining Joe and me for this portion of the show. We appreciate you and look forward to seeing you next time. Until then, remember, goals without action are just dreams, so get out there, take action, and create the life your heart deeply desires. I’ll talk to you soon. Bye.

 

Important Links

 

About Joe DiSanto

REW Joe DiSanto | Play LouderJoe DiSanto is a fractional CFO and consultant to small businesses and high-income individuals. He also founded the blog Play Louder (https://www.playlouder.com/ref/15/), which serves as an invaluable resource to help individuals and business owners increase their net worth and plan better for their future.

 

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Passively Invest In Short-Term Rentals (AKA Airbnbs) With Sief Khafagi – Real Estate For Women

REW Sief Khafagi | Short Term Rentals

 

The journey to cash flow and growth can be difficult. It is time-consuming and requires a lot of effort and dedication. How can you break the cycle of working from 9 to 5? In this episode, Sief Khafagi, founder of Techvestor, builds a mouse trap that allows you to create a cash flow through passively investing in short-term rentals, aka Airbnb. Having short-term rentals on your portfolio for the cash flow can be a powerful wealth-building strategy. Are you interested in getting extra insights from Sief? Then don’t miss this episode!

Watch the episode here

 

Listen to the podcast here


 

Passively Invest In Short-Term Rentals (AKA Airbnbs) With Sief Khafagi – Real Estate For Women

Real Estate Investing For Women

I am excited to welcome to the show, Sief Khafagi. Isn’t that the most amazing name? Sief is an ex-techy turned real estate investor who has helped thousands diversify into real estate after spending nearly five years at Facebook. He syndicated acquisitions totaling more than $100 million while designing and developing more than 25 properties. Now, he’s the Founder of Techvestor, which helps real estate investors and busy professionals passively invest in the emergent asset class of short-term rentals, AKA Airbnbs. Sief, welcome to the show.

Thank you so much for having me. It’s amazing. Your energy is infectious.

I love that, and I loved our conversation in the green room. I feel the same way about you.

I’m very excited to be here, so thank you for having us.

Talk to me a little bit about how did you come up with this idea of Techvestor? You go from tech. I’m from the Silicon Valley. I now live in Sacramento but I was originally in Silicon Valley. We lived very close to Facebook, Google, and LinkedIn. How did you go from tech to real estate and then come up with this idea? Could you share?

A fun fact, I was living literally across the street from Facebook’s campus when I was at Facebook. During the times I wasn’t there, I was doing a lot of traveling, opening up offices, recruiting teams, and generally, we stayed in Airbnbs. A bunch of those Airbnbs was pretty shitty, to be quite honest with you. The design sucked. The host experience was weird.

The whole journey was always top of mind. I was like, “I’m going to stay in another Airbnb.” It’s because we are staying in these cities sometimes for a little bit longer than a day or two and you want that local experience. Sabrina and I, when we started Techvestor, we were starting it for ourselves. We were like, “How can we buy our own 6, 10 or 12 short-term rentals?”

We were all traveling as much as before the pandemic. We were used to working remotely. To do that, we started building technology. No surprise. We are building technology to help automate the process of understanding where we want to buy. We wanted something that was great cashflow, great equity growth, good occupancy, good rates, and places we wanted to visit. We built our software. We started as a software company.

We shared it with everyone around us, and everyone loved our software to basically help find short-term rental opportunities. No one wanted to do the work themselves. They were like, “This sounds great but I don’t want to do it but can I give you money, and you can go do it yourself?” We were like, “Okay.” We did about 6 or 7 that way for clients.

When we got them all in a room or a virtual room because of the pandemic, Zoom, etc. they were all like, “I like yours. I would wish I had a piece of yours and that one.” They were describing a syndication, a fund, a portfolio or something along those lines. We pivoted to this portfolio short-term rentals or a fund, for lack of a better word here.

Our investors were super excited about that. We announced it around Halloween of 2021. In our first month, we raised $7 million. We went viral and went with it. To date, we’ve raised $20 million. The idea came from this pain point of understanding being the user. Also, coming from tech, we saw so much opportunity. Those iPhone 4 camera photos you see on Airbnb or the host that’s not getting back to you. You walk into a bedroom, and it’s a mattress, and that’s it.

We were like, “We could do this better.” A lot of low-hanging fruit, so we looked into it. Coming from a technical background, we understand the product of Airbnb and the user journey. We built a private equity real estate concept backed by the premise of understanding the user journey of a technical product. While it seems complex, that’s where we come from. That was our perspective.

It was interesting. When I lived in Mountain View, we ran an Airbnb out of our house. I became a superhost very quickly. As a matter of fact, I got a full-paid trip to Paris for Airbnb, the big shindig that they have every year.

The Superhost Party.

People said this over and over again, “This place is so nice.” We literally had a bedroom and a bathroom attached. It was my little library, so we decorated it the way that I would like my library like a guest room. I was surprised over and over again. We created experience. We provided coffee. We did some things that I would want in the morning but nothing special. It was interesting to me how people were like, “We will pay you more. Hold the room. We want to come every month or whatever.”

It blew up. I was completely surprised by this whole thing. We didn’t do a lot that was special. You were telling me this experience gives me a little more perspective. What was funny was that the guests would not tell me why. They were like, “Your place is nicer than everybody else.” They didn’t want me to raise my rates, I’m sure.

They were like, “We like these rates.”

I paid more than our mortgage. We cashflowed one bedroom in the house. This is in Silicon Valley with this room that was kept like a sweet guest room. It is interesting what we can do with Airbnb if we pay a little bit of attention.

However, if you go back to that experience, I would be willing to bet. The downsides of what you described as a host are the cleans and the guest communication. Everything that you have to do to earn that cashflow. It’s a job. We can both agree that it’s a job. Someone has got to do it and make sure that the guest is having a good time.

Part of that was the experience, the room, the pricing, everything but it was a job. Techvestor, what we are doing is solving that part. We’re saying, “If you want to invest in short-term rentals, you want to earn that cashflow but don’t want to have the headaches or the time, energy, know-how to do this or the want but want the benefit of it. You can do so passively. We are one of the first options to invest in short-term rentals passively for the busy professional. We will clean the toilet, and you collect the cashflow.

I love that because you are right. I turned it to where you had to stay at least three nights. I got tired of changing sheets.

They got to be worth your time.

Fortunately, most of my guests stayed for about a week, so I was only doing it once a week, and it was fantastic. There was a lot that we did. I would say I probably spent about ten hours a week doing that, which is not a lot of time considering that it paid for my entire mortgage and cashflow but still, it was time out of my schedule. Maybe not ten hours. Maybe closer to five, and we did other things. I enjoyed meeting the guests.

I would take them for a walk around the neighborhood and show them where to go get good morning coffee rather than the drip that I was providing at home. We did a little bit of that stuff, so that took a little time too. You are right. I wouldn’t say it was a job because it didn’t take that much time but required time.

During the holidays, I did not want to have people in my house and did not want to be dealing with this. I’m so with you, Sief. Why I have you on this show is because I know that side. It’s what made me stop. I’m interested in what you are offering. It’s amazing. I’m curious. You gave me a little bit of an idea of why you focused on short-term rentals. I know you’ve got some stats on why that makes more sense. Could you talk to me a little bit more about why you chose short-term rentals and how that works?

The first thing for us was our personal motivations for why we got into short-term rentals. Sabrina and I were working in tech in the Valley, making these big cushy compensation salaries that everyone jokes about. We were both single, and each of us was sharing a home with people we were working with. Making more money, handing over piss that we knew what to do with.

It was a privileged position to be in, for sure. It gave us this opportunity and perspective to think about, “What else can we invest in that’s not your typical 401(k), equities or whatever”? Crypto wasn’t even like that hot back then, as much as it’s now. We started thinking about short-term rentals, and we wanted cashflow.

For us, it was also about breaking away from the 9:00 to 5:00 or at least the feel of being in a 9:00 to 5:00 as quickly as possible or having the choice to and the time freedom. The fastest way to cashflow for us is short-term rentals. It was also the easiest to get into because of the lack of competition. When you combine those things together, you are like, “Great margins. Little to no competition.” That’s like the heaven of any business you are going to enter into. Supply and demand are completely in your favor. We looked at our own experiences of what we could bring to the table, and we were like, “This is something that we could add a lot of value to.”

Short-term rentals, from an industry perspective, you are going to generate, if you are doing it right, 2 and a half to 5 times the long-term rents of a property. Typically, if you are understanding where to buy, what to buy, and how to best operate. It’s a three prolonged approach. Some of that stuff we’ve built proprietary software around to understand what to buy and market-mapping certain things.

The operating side is the experience of our fantastic team, which I know we are going to talk a little bit about later. Having an operating team that understands how to price, how to communicate with guests, where to build automation, where not to build automation, how to make it feel human, how to design, and how to rank right. Airbnb is very much like Google. If you rank on the first page of Google, guess what? You are going to get clicks. If you rank on the 100th page of Google, you are not going to get clicks as much.

How do you rank in it? Therefore, by understanding these things, that’s why we decided to focus on STR. It was also such an emerging market. Here’s a fun fact, over 50% of all short-term rentals came online after 2020. People are starting to recognize that short-term rentals are something that everyone and their moms have started to want to do.

It predominantly kicked off probably around the pandemic when you look at the data. Everyone was like, “I want an STR. Low-interest rates, I can do this.” What you are realizing is that you start to see this churn of hosts. It’s easy to be an Airbnb owner and an Airbnb host. It’s hard to stay one. That’s where people like us who come from a professional perspective understand what it takes. We have the operating capabilities to do so, the design capabilities, and it’s also diversified for us.

We also wanted something where we could be easily diversified instead of owning three single families in a single area. It’s like, how can we own 100 of them in 10 markets? You and I both know Airbnb is seasonal. You have your ups and your downs. We wanted winter, summer, and fall months and all these types of things to allow great cashflow throughout the year.

REW Sief Khafagi | Short Term Rentals

Short-Term Rentals: Airbnb is seasonal. You have ups and downs, so we wanted winter, summer, and fall months to allow a great cash flow throughout the year.

 

What I’m noticing is that one of the big reasons that I did not continue with Airbnb when I moved back to the San Jose area is the tax rates in San Jose, for instance, with Airbnb. They suddenly started charging you with all the same tax rates that they do with the hotels. Are you noticing that’s happening across the country? How is that affecting profits for Airbnb owners?

One of the things that we see in most markets is 90% plus of the markets. Airbnb is going to collect those the hotel and occupancy tax that you are talking about for you as a host. At least now, that cost is typically charged to the guest. In fact, even in the hotel industry, it’s typically charged to the guests. It’s not an uncommon thing for Airbnb to do.

We don’t see it affecting us at all because it’s a common thing. You expect to pay some tax or fee. Whether you are booking a hotel or an Airbnb, you are booking the same thing. For us, we feel it significantly less because most of our homes are larger homes, 4 or 5-bedroom homes. We don’t focus on things like condos or 1 or 2-bedroom homes.

When you think about the economies of scale that we get or the economics for a family who’s traveling, and I’m a dad of two, I can’t imagine my wife and I, going and staying in a hotel with two kids. She can’t do it. There’s no way. That would be such a chaotic experience. How are they going to get entertained? Where are they going to go play? Where are they going to go run around? We don’t have a kitchen.

There are certain things that we need, and the economics of an Airbnb make way more sense when you are in a group of 4, 6, 8 or 10, versus if you are traveling alone. You are like, “I’m going to a conference. Is it for business? Is it for pleasure? I want to stay downtown.” What matters? Amenities matter to bigger groups and that’s what we focus on.

Most of the Airbnbs that I was seeing, especially, for instance, in Mountain View, my competition I checked out might be a four-bedroom but they were little. They had single beds set up and a shared bathroom type of thing. I like your idea of more of a luxurious experience. Maybe not fully luxury but a luxurious experience where people are not like, “I’m on this bunk bed. This is horrible.”

It’s amazing what we do with our design. I will have to send you some of our listings after. You will get a sense. We have the front of a Volvo car. We cut the front of a little Volvo car and stuck it in one of our living rooms to create a tiki Volvo bar. We have basketball courts, hot tubs, pools, and iconic Instagramable moments where you can take photos with your family or for yourself.

These are things you are not going to get in a traditional Airbnb or you are going to get into a hotel. We believe we are building the next generation of experiences through these amenities and designs. You and I can both agree, your space matters, your office, where you sleep, and where you eat. Especially if you are relaxing on vacation and traveling, your space matters even more. We hone into that ethos. We see it. We drive higher occupancies. Fifty percent more occupancy than our competitors. We are driving typically almost 40% more revenue than our competitors because we are giving people what they are craving but they can’t find.

Your space matters even more if you're relaxing on vacation and traveling. Click To Tweet

How would you say your pricing compares to hotels? When I was in the Airbnb games, it was early on. For us, my pricing was less than the local hotels. I’m hearing more in the industry. That’s not the case anymore. How do you price in comparison to local hotels? Do you even consider that? What are your considerations around pricing?

We look at hotel pricing and other accommodations but 9 times out of 10, we are always more economical than hotels. We are cheaper than hotels, and it’s because of the type of asset we focus on. For each market that we enter, we have what’s called a Buy Box. There are specific types of properties we buy, for example, in a market like Scottsdale. I will never buy something as of now, based on the price-to-rent ratio. That’s not a four-bedroom or higher with a pool. The reason for that is because, at a four-bedroom or higher, it makes incredible economic sense. The margins are fantastic. If it doesn’t have a pool, it’s a non-starter for me in that market. We know what to buy.

I spoke to a hotel speaking at a conference in the Midwest in January 2022. It was $684 per room. We booked 2 rooms, so it was $1,300 for 3 days for 2 people. It gives you some context there. There were those fees that you talked about. Now, if we were traveling with a group of 8, would we have booked 8 different rooms? That becomes expensive at that price point versus getting a fantastic Airbnb in that market and being able to all stay together. Walls defeat experiences. That’s our belief. That’s a thing. If you’ve ever traveled with your family and have stayed in a hotel, what happens when everyone goes to the room? It’s almost like a pause in your trip.

It’s almost like it interrupts your trip. For us, we focus on bigger groups. I’m going to say bigger groups. I’m talking about typically six plus. When you are six plus, it’s way more economical to do an Airbnb 9 times out of 10 with us. You get more for your money, a better location, better amenities, easier check-in, privacy, and a lot of different things that are going to matter more to you at that point.

It’s interesting to me that you choose pools. I do the opposite for liability reasons. Do you want to speak to that a little?

The ability to have a pool drives your ADR significantly. ADR, for those who aren’t aware, is your average daily rate, which is whatever you are able to charge on a nightly basis. We have insurance in place for those types of things. We have proper gates for kids, for example. To us, the risk is well worth the reward. It’s more about being protected. There are pools everywhere. I don’t think we can control what happens at an Airbnb. We are not there. We obviously try to prevent anything that we can but some things aren’t preventable, unfortunately, but the liability is a liability. That’s a liability for us that’s worth taking on.

Do they usually have hot tubs?

A lot of our properties. In fact, back in Scottsdale, it’s a priority for us to have hot tubs as an example. In every market, we know what needs to be had in terms of the amenities and how they should be designed. For example, our clear water market, compared to Scottsdale, is very different in terms of the amenities that you would expect to have.

However, both pools are 100%. Other amenities are very different. In Scottsdale, we have a baby pink house. That’s like bachelorette heaven. We have a play on Tiffany’s home. In Scottsdale, you got clear water, and we have a sunset home. It’s more appealing to families. We have a room where there are all these animals that are handcrafted on the wall. Why? It’s because kids are going to more likely stay there than they are in the Scottsdale-type market. It’s understanding your client and catering to the experience that they are craving.

REW Sief Khafagi | Short Term Rentals

Short-Term Rentals: Understand your client and cater to the experience they’re craving.

 

A couple of more questions. How many markets are you in?

We are in nine.

We are going to talk, ladies, in EXTRA about how he chooses those markets specifically. He uses his software. This is interesting stuff that he can help provide for you but we are going to talk deeper in EXTRA about that. Why don’t you give us a high level of how they can utilize your software, then we will do a deep dive in EXTRA?

Our software allows us to do a couple of things. We market map over 257 different markets. Market mapping is understanding the supply of that market, what comes into the market, and what’s needed in that market. It’s giving us all this raw data. We then take that raw data and map it to the highest performing Airbnb’s in that market.

We simply do what we call copy and paste. What we want to do is we don’t believe we are going to reinvent the market. We believe we can operate better but we don’t expect to. We simply take what’s the best possible property we can buy in this market at the specific price-to-rent ratio. We add the amenities that are required for that property and copy and paste them over to ours.

We believe we can operate it better because 95% of the time, we are competing against mom-and-pops who are not using technology or automation, have our design experience, and have our capital backing. Therefore, we are able to go in and increase the ceiling of that type of property. Therefore, driving the best risk-adjusted returns. We are taking what’s working, and our data tells us what’s working. We are taking our operational excellence to improve it, and that’s what allows us to create our general alpha about that.

One of the things that come to mind for me is, as an Airbnb host, the reason that I was cashflowing on the mortgages in the Bay Area was that I did not hire a company to handle it all. I hired cleaning and all of that stuff but when I looked at Santa Cruz. There are all these companies that popped up to run Airbnb for you remotely but they took such a high percentage. It’s like having a management company in California. You don’t even breakeven in a lot of cases. Talk to me a little bit about what fees you charge and how that translates as far as profitability for owners.

One of the things that we do that’s interesting and predominantly because of that is with high-interest rates, high inflation, all these things are going to eat into your operating profits. It’s because we run a portfolio on behalf of our community. We don’t charge an ongoing property management fee. In fact, what we do is we do what we call property management buy down.

We buy down your typical property management rate from the industry average down to zero. Let me explain what that means. The industry average is 20% to 40%. It’s high. If you are driving $100,000 in revenue, let’s use 30% here as an even number, you are going to pay $30,000 of your gross revenue. Not profit but gross to said property management company.

To be quite honest, it’s probably worthwhile for many people because it’s a lot of time, energy, and resources to get it done correctly. What we do is instead of charging an ongoing fee, we project to hold our properties for about five years. We collect the property management fee on day one. That’s equivalent to a percentage of the property purchase price, and that’s it.

That’s the only fee that we collect. That goes towards managing the properties for the next five years. Many people would be like, “Why would you do that?” The first reason is what you described. If you are optimizing for cashflow, the two biggest things that will impact your cashflow will be your cost of debt, your mortgage, and the cost of management.

We can’t control debt. It is what it is. It will go up. It will go down. Your leverage, 9 times out of 10 is usually a good thing when it’s responsible debt. One thing we can control is buying down the property management rate as far low as possible, as close to zero as possible. By doing that, you increase your upfront cost with that property.

One thing we can control is buying down the property management rate as close to zero as possible. Click To Tweet

We can do that because we are running an institutional-size fund. It allows for increased cashflows over the short-term. It allows us when we sell to sell based on revenues of higher NOI. When you sell something based on a cap rate. Those are some of the reasons why for us, we’ve chosen this model, and everything is a trade-off in business.

Everything is a trade-off in investment, so we are choosing cashflow. We are picking the model that allows us to operate with the highest yield possible because that’s what this investment is for. If you want tax benefits or high equity growth, or those types of things, you are going to go invest in some other asset class but for us, that’s what this asset class is good for.

You must come in with more cash if you buy down that management. It’s buying down your rate. I pay 1 or 2 points. You have to come in with more cash to create the cashflow. Is that true?

We are doing that but we also have the ability to do that because we are vertically integrated, and our fund is eight figures. For us, we have the capital to do it. Now, as an investor, if you were to work with us and invest with us, you would get the benefits of that. That’s things that we are able to negotiate and execute at scale. You can’t do this very easily, if at all, as an individual owner with a property or two.

This is where that scalable component is in working with an institutional fact operator like us. It gives you this flexibility of doing. It works for both sides because that capital goes to funding the property management for those five years, the technology that drives better occupancy and revenue team, all those types of things. It aligns interests on both.

Sief, you do not manage properties for other people.

Now we don’t.

Talk to me about your business model. What is it that you do? It sounds like you’ve got your technology. Do you sell the technology to people so that they can utilize it in their own businesses? Talk to me a little bit about how your personal business model works.

We run a fund, again, for lack of a better word. In a fund, there are typically a couple of parties. There is a general partner, and there are a lot of limited partners. Oftentimes, there are things like property management or affiliated companies. We are the general partner. We find, design, furnish, and operate the properties. We work with limited partners who give us money, give us capital, and we pull that money together. Our minimum check size is about $25,000.

We can work with 200 people who give us $25,000 as an example. They put all this money into a pool. We use that pool to buy these properties. We run and operate them. Our investors are going to get what’s called a preferred return. They get the first X percent, 6%, 10%, whatever that rate is going to be that we agree on in our PPM and things that we talk about.

We, as a general partner, are going to share above that preferred. We are incentivized to deliver the best possible returns. I can give you an example. Let’s say the preferred return is 8%. After you get 8%, the general partner starts sharing in the profits above that. That could be 50%, 70% or 80% of the profits. What that split looks like is how we generate money as a general partner.

If we are managing the property, we have affiliated business lines, for example, property management revenue, software revenue or those other types of things. That’s, in a nutshell, generally how our business works and we are highly incentivized to drive the most profitable returns to incentivize reinvestments, to incentivize capital, and solve the pain point of the DIY-er who’s thinking, “I want to do this but I don’t want to do all this myself.”

Is this more of a fond or more of syndication?

They are highly very similar in many ways. Depending on the words you want to use here. We syndicate capital in a fund-to-model, for lack of a better word.

The investors get the benefit of an interest rate. They are basically lending you money. You are calling it a preferred rate. Do they benefit on the back end of the sale because you put in a lot of improvements? You buy this place, and then you add value. The value of that when you sell it is hopefully going to go up, especially when you prove the numbers of what it’s paying you. Do the investors get any benefit from that?

Investors share in everything, cashflow, and depreciation, which is huge for taxes. We pass 100% of depreciation along to our LPs. They share in the upside in sales. When we exit, we have to return all their money back first before we make any money. All of these things are what we call pro-rata. Investors sharing every possible revenue stream from that property on the cashflow, depreciation, appreciation, cap rate sale or whatever ends up happening with that property get their share.

You say that most of your terms are about five years. You started this model probably in 2021. Have you closed any of these out yet and paid out your investors? Tell me a little bit about that.

We distribute capital quarterly or distributions quarterly. We haven’t missed a distribution. We had one of our best distributions, one of our best quarters in Q3, so that distribution is coming up. We’ve exited eight total assets. Of our eight exits, we’ve delivered about a 42% IRR on the ones that we have exited. Our track record, while it may be young to an extent because we are only about a year-old company.

We’ve been able to prove the model out with those first-aid exits. The reason we sold those eight early is for that reason. It’s to prove we could buy this asset, which is a single-family home, turn it into this other asset of a short-term rental, and sell that short-term rental as a business, for lack of a better word. Revenue-generating business like your one-bedroom was.

If your entire home is making $30,000 a month and your alternative is to sell it for $600,000. You are thinking very differently about what the value is of that home as you can a revenue-generating asset. Not only do we do that one time. We did it eight different times to prove that we could execute and scale that way. That’s why our traction has picked up a lot of steam over these last few months.

Could you explain IRR again, just so my ladies know?

IRR is your Internal Rate of Return. It’s arguably one of the best metrics to understand your time value of money. It factors in your returns from cashflow and your returns from the sale. It does not factor in anything like depreciation. IRR weights capital differently. The earlier you get a return back, AKA earlier cashflow, the it weighs that higher, and it formulates the algorithm way rather than if you were to get all your money back in year five.

I would give you an example. If you doubled your money in five years and you put in $100,000 on day 1 and in month 60, you got $200,000, that’s about a 14.8% IRR. Alternatively, if you were getting 10% a year and then a lump sum in year five. Your IRR may be higher because you earned more money earlier, so it weighs time as well. We believe it’s one of the best understandings holistically of a return.

Talk to us about your team.

There’s one thing I’m proudest of. It’s that we have been able to build an incredible operating team. This is a huge reason why a lot of people have considered investing with us or have invested with us. We have an incredible STR-specific team. What I mean by that is everyone from our Head of Acquisition, Taylor, to John, our Head of data, to people on our investor relations team, to myself and Sabrina, to Austin Decorbin, our Head of Revenue, Head of Property, everything. We come from this world.

REW Sief Khafagi | Short Term Rentals

Short-Term Rentals: We’ve been able to build an incredible operating team, which is a huge reason why many people have considered investing with us or have invested with us.

 

We’ve dealt with this world. We’ve scaled portfolios before. We’ve scaled infrastructure. Sabrina built AirPods at Apple and got to a billion dollars in revenue. I’ve built teams from 90 people to over 1,100. John is literally known as the Airbnb data guy. I’ve never met a hunter or a sniper from an acquisition perspective in the STR space more capable than Taylor.

These are people who are on our team exclusively. They are the ones who are managing this portfolio to drive this performance. If there’s any one piece of advice that I would share with anyone is if you are investing in syndication or a fund or you are giving your money to someone else, 9 times out of 10, the team matters more than the investment team.

I agree with you on that.

A good team will be able to navigate choppy waters. A good team will be able to drive better-than-average performance. A good team will earn whatever their share in their weight of gold easily. A bad team can easily drive your investment to the ground very fast. It’s not hard to lose money. It’s very hard to make it.

Team and expertise within the domain that you are investing in are important. You are betting on that team. That team or that horse is the one that’s going to get you through the finish line. That’s why we are awesome to have the talent. Out of any companies in this space or any other syndications in this space, we believe we, by far, have the best operating team in the space.

How did you find them? How did you build that team?

They will joke with you. My role at Facebook was that I built teams and recruited hundreds of people over the years. I slid into all their DMs. Taylor introduced John to us. I was like, “Taylor, here’s what we are doing. I love what you are doing. You clearly have a passion for this. I would love to talk to you about what we are doing.” We headhunted our team.

They were purposely built the way that it was built. Coming from my background at Facebook and what I saw in the years that I was there, a lot of people can agree that Facebook is a massively successful company, whatever your perspective is on it. The one thing that was obvious, especially being on the inside. The level of talent that they have was the number one reason that they got to where they could be.

REW Sief Khafagi | Short Term Rentals

Short-Term Rentals: Facebook is a massively successful company. Whatever your perspective is on it.

 

You look at acquisitions like that they had of Instagram. They bought Instagram for a billion dollars back in the day, and people were like, “That’s a lot of money.” It was one of the first billion-dollar acquisitions of an app, and they took that in 30 exits. Why? It’s because of the talent and the infrastructure that they have. The ethos here is bringing talent together, great talent in the space. We believe we can 50X this space because we are all working towards the same goal.

This is a technical question but when you build a business like this, your individual homes, you buy as single-family homes. Is that true?

Correct.

When you sell them, you sell them as a business. Do you sell them with a commercial lender or do people buy them with a residential lender? How does that work? I know that’s super nitty-gritty but I’m curious.

The short answer is that you can technically do either. It depends on how much cash you probably want to bring to the table and who’s buying it. I would say, more often than not, you are going to use a commercial product, often known as a DSCR loan or debt service coverage ratio loan. The reason that one is going to be more ideal is that if that property is a truly successful Airbnb, it will likely be worth more than a traditional single-family home that’s based on appraisals and comps.

Traditional single-family is sold based on what the house next door sold, for lack of a better word. If your property is generating all this revenue, it’s going to be worth a multiple of that revenue. Not necessarily what the guy next door sold for. To get proper lending on that, you are going to need to show financials. We would provide those financials to our buyers in the future. They would be able to get lending based on the historical performance of this asset. Therefore, secure lending in a commercial way.

You must have records for at least two years to get any commercial loan on this. Is that true?

You don’t need to. For all of the properties we buy, we use commercial debt. We use DSCR, and it’s not an existing short-term rental 9 times out of 10. There are two ways to do it. You can either underwrite it as a single-family home because our ethos is buying it based on value and selling it based on revenue. It’s very easy to do.

There are several companies out there now that will lend on projected Airbnb revenue. There are tools that they use out there like AirDNA, Rabbu, all the rooms or other analytics and APIs. Alternatively, you can also buy it the traditional residential way and then turn it into an Airbnb. Depending on what income you have. If you have a W-2, you might be able to qualify for a residential loan with better terms. Commercial lending will have higher debt costs. It is what it is in the business world.

It’s easier to qualify in the commercial world because they are not looking at your income. They are looking at, “Is this asset a good investment?” It’s a lot easier to scale. If you are thinking about scale, that’s a great option. If you are looking at buying a single property, you are going to house hack or do half of it in Airbnb, you should consider your options on the W-2 side and what those rates and programs look like.

If you're looking at buying a single property that you're going to house hack or do half of it in Airbnb, you should consider your options on the W2 side and what those rates and programs look like. Click To Tweet

I feel like we could talk forever because I’m interested in this topic but we are running out of time. Sief, why don’t you tell everybody how they can reach you?

If anyone is interested in learning a little bit more about Techvestor or short-term rentals, we often will hold videos, webinars or other content. Follow Taylor on Twitter or on some other social platforms but you can also talk to us. We are at Techvestor.com. You can request to learn a little bit more about what we do, how we do it, and if it’s a good fit for what you are looking for or if you are curious about short-term rentals.

That question on debt is a question that we get quite a bit because people come to us, and they are like, “I want to buy a turnkey short-term rental,” which is another line of our business that we do. They are like, “Can you help me find one for myself? The reason I want it is that I want to use it with my family for two months out of the year. Can you help me with that?” If any questions you have, please reach out to us. We are happy to help you out. We are all about education and educating this space.

I love that. Thank you so much. Ladies, we are going to talk a little bit more about EXTRA on how to pick your markets for short-term rentals, how he does do it, how he specifically uses his software to do that, and all of that stuff. Stay tuned for that. That’s going to be a great conversation. Before we do that, Sief, are you ready for three rapid-fire questions?

I’m ready. Hit me.

Tell us how to get started in real estate investing. Give us a super tip.

Go for it. You are going to make mistakes. The very first property I ever did when I was a young kid, I lost $30,000 in the height of 2008. I stayed away from real estate arguably for the next 7 or 8 years because I was terrified. Don’t be me.

Do as I say, not as I do. I love that. What is one’s strategy to be successful as a real estate investor?

Tell your story. I think stories sell. Oftentimes, the person you are selling is yourself. You have to sometimes understand your why to why what you do and why you do it and why you get up every morning to grind the way that you do. Real estate isn’t easy. It’s a grind, especially in the early years, so you must have a why.

What is one daily practice you do, Sief, that you think contributes to your personal success?

I sit down and talk with my wife. The reason that’s important to me is that I’m a workaholic by trade. Taking 10 or 20 minutes of dissecting and getting away from everything that is the chaos of Airbnb at times, allows me to feel a little bit more grounded in what I’m doing on a daily basis. As a father of 2, especially 2 young boys, it’s important to me to understand my why on a daily basis. Finding time for them is my biggest motivator.

It's essential to understand your WHY daily. Click To Tweet

This has been a great conversation. Thank you for all you’ve shared, Sief.

Thank you for having me, and I appreciate the opportunity.

Ladies, thank you for joining Sief and me for this portion of the show. It was amazing, wasn’t it? I loved it. If you are interested in more, we’ve got more. In EXTRA, We are going to be talking about how he picked his markets, why he picked the mind that he picked and what he look at. If you are subscribed to EXTRA, stay tuned, there’s more.

If you are not but would like to be, go to RealEstateInvestingForWomenEXTRA.com, and you can sign up there. For those of you that are leaving us now, thank you so much for joining us for this portion of the show. I super appreciate you. I look forward to seeing you soon. Until then, remember that goals without action are just dreams. Get out there, take action and create the life your heart deeply desires. I will see you soon. Bye.

 

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About Sief Khafagi

REW Sief Khafagi | Short Term RentalsSief is the CEO and Cofounder of Techvestor, which acquires and operates STRs (short term rentals) AKA those wonderful things we know as Airbnbs. HNWI, private equity partners, family offices and institutions work with Techvestor to start, scale and grow portfolios in 15+ markets.

Previously, he founded Scoutpads, helping thousands of tech employees diversify into real estate after spending nearly 5 years at Facebook. Collectively, Investors have contributed to acquisitions totaling more than $100M.

In addition, he’s a Young Entrepreneur Council Member sharing strategy and thought leadership on scaling/growing a business.

 

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Investing In Vineyards & Wineries With Robyn & Jordan Bentley – Real Estate Women

REW Robyn & Jordan Bently | Investing In Vineyards

 

Do you have a passion and interest in wine and want to find ways to turn it into an investment? Perhaps you should be looking into investing in vineyards and wineries! Mother-daughter duo Robyn Bentley & Jordan Bentley of Wine Country Consultants join Moneeka Sawyer to share how they’re helping wine lovers and investors fulfill their dreams and achieve success in their investments. There are so many things you can do in the industry, and opportunities for growth and earning are a-plenty if you know what you’re doing. Robyn & Jordan takes us through different regulations, tax benefits, due diligence, return on investments, and all things regarding investing in these types of land. Tune in to learn more and find out what you need to do to get started.

Watch the episode here

 

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Investing In Vineyards & Wineries With Robyn & Jordan Bentley – Real Estate Women

Real Estate Investing For Women

I am so excited to welcome to the show a fabulous mother and daughter team, Robyn and Jordan Bentley. Robyn Bentley, Broker at Wine Country Consultants, offers unrivaled insights into the world of vineyard and winery real estate. With over 30 years of experience, she has offices in St. Helena, California, Portland, Oregon, and Walla Walla, Washington.

Robyn’s lifelong commitment to assisting women and children in need has led her to volunteer for numerous organizations as well as serve on the board of Community Resources for Children of Napa Valley and The Oregon Children’s Trust Fund.

Robyn raised both her children, Jordan and Ross Bentley, in St. Helena and is very proud to have them as partners in the WCC team. With an MFA in photography and teaching experience at Tufts University, Jordan’s creative eye, dedication to detail, and knowledge of the Napa Valley are invaluable assets to the family real estate business. She serves as the President of Our Town St. Helena, a nonprofit dedicated to providing and creating affordable housing for all in St. Helena, California.

Ladies, thank you so much for joining me. Welcome to the show.

Thank you for having us.

I’m so happy to meet you.

You too. I didn’t tell you guys in the green room, but I moved to Napa in the sixth grade. I went to Napa High School. I’m a Napa native, also. I never have people on the show from that area. It’s amazing to meet you.

We are honored to be your first. How long did you live in Napa?

I lived in Napa for 6 or 7 years. It’s so nice.

Did you enjoy it?

It was a weird time. I was there in the ‘80s. I enjoyed it, but I didn’t realize how much was going on behind my back until I left. I went to UC Berkeley from Napa. It was a completely different cultural thing, but I will say this. My husband and I will frequently do our weekends away, probably 2 or 3 times a year, to Napa to get me re-grounded. I was there when I was a teenager. They were the biggest, most important years of my life. It was my development. It helps me to ground, so we love going back. I do love that area very much.

Please, next time you’re in the area, join us for a glass of wine.

I would love that.

We’re in our office in St. Helena. We’d love that.

I love that. We’re planning something. We were thinking about going to Bistro Jeanty. It is my favorite. Maybe we could do some wine before that. I would love that. 

We do, too.

After we’ve got all our social stuff planned, let’s talk more about you. Tell us a little bit about how you got into investing in wine property and helping people do that.

We moved here in 1993 to St. Helena, right in the middle of Napa Valley. Jordan’s father, my first husband, it was his job that brought us here. Clark Bentley was hired as the CFO for Pine Ridge Vineyards. We all grew up in the wine business because Clark brought us here. We had lived in Mill Valley for ten years prior to the move here and had come often for weekends and getaways.

We looked at investing in vacant land during that time, thinking maybe we would do a second home and never imagining that we would find jobs in this wine world. We love wine and the lifestyle, which is a rural, Midwestern value community. I grew up in Illinois. Jordan’s father grew up in Oklahoma. We moved to California in ‘79. We continued to want to raise Jordan and Ross in an environment that was inclusive and very much a part of a smaller community. We had spent some time in Marin, which was growing and quite active at that juncture.

REW Robyn & Jordan Bently | Investing In Vineyards

Investing In Vineyards: We looked at investing in vacant land during that time, thinking maybe we would do a second home, never imagining that we would actually find jobs in this wine world. We just loved wine and we loved the lifestyle.

 

With that move here, I decided to step into the real estate world. I had been a buyer for Macy’s, California, in my first career. I ended up buying women’s shoes and traveling the world doing that. I have a great background in marketing, assessing numbers, understanding investing, and what kind of return you want.

The next career phase I had was with the Waverly Children’s Home. I was the community relations coordinator. That was during the Follow Your Heart and Follow Your Dream Oprah Winfrey influence, which I loved. It fits in with my commitment to helping women and children. I started volunteering in my mid-twenties, about the same time that I had Jordan. Jordan, all along, would come to events, help set up, and was always involved with any of the volunteer work I did.

Arriving here in ‘93, Jordan was in fourth grade and Ross was in kindergarten. I decided that I would follow my real passion, which had always been real estate, but I had this sense that it was going to take too much time away from raising my children. Real estate, at that point, was always talked about being a night and weekend gig.

In reality, because the focus is the wine industry, wineries, and vineyards, which is much more of a commercial aspect, the business is more of a 9:00 AM to 5:00 PM for us back then and now. It worked very well. The lure of real estate, especially in Napa Valley at that time, was that every property was unique. I liked that. It gave me my first opportunity to deal in land. My first real estate transaction was a vineyard transaction. It was my first million-dollar transaction. I was hooked.

That is one that’s interesting. It is land rather than residential. That is such an interesting way to go about that. Jordan, tell us a little bit about how this worked for you. You’re what I call a legacy. I’m a legacy, too, with my parents. We got a lot of mentorship through osmosis. A lot of people turn their back on the business. They’re like, “No, thank you.” Tell us a little bit about your story on how you joined your mom in all of this.

I was always there helping her out and setting up her volunteer groups, but that quickly morphed into helping her with open houses and all of her residential listings here in St. Helena. I like to say that I grew up in real estate. I always loved it and I always loved to be with mom and help her out as much as I could. I did go off after high school. I went to Colorado to earn my undergraduate degree at Colorado College. I then went over to Boston and earned my Master of Fine Arts, Photography from Massachusetts College of Art and Design. I followed my passion for the arts, photography, and teaching. I was gone for almost eleven years in total.

Mom and I, whenever we were parting, between the boohoos, would say that one day, we were going to live down the street from each other. It is true to this day, but at the time, we didn’t know how it was going to work out. The stars aligned. I was in Boston and had a pivotal point in my, “Do I keep going on this teaching career path, which I love, or do I take a big leap of faith, move back to California, and see where life takes me?” I went with the big leap of faith and I’m so happy that I did. A big part of that, who’s also a partner of ours, was my brother, Ross Bentley. He was living here in St. Helena, working as a winemaker. I wanted to come back and be able to have more time with him as well.

I came back and started helping mom with my photo background. I started with marketing. I started learning about her business, which is the real estate business, and the industry here through photographing, assisting, and creating the marketing pieces for her listings. I was hooked right away. It wasn’t until I was on site being her eyes and ears as a note taker because she was juggling a few different things at the time, that I got to see the land use consultant, the current owners, and the buyer that was in escrow. We had a civil engineer out. Everyone was talking about the various possibilities of how to successfully achieve receiving a permit for the winery on that property and how best to support that. I loved it. I was hooked. I loved all the bits and pieces of the puzzle.

In the photo world, I’m a big dark room rat. There are so many different ways to create that final product, as there are so many different ways to create a successful project and investment on a piece of land. That part of my brain dived in and started clicking. I asked mom a few months later how she felt about me earning my real estate license and joining her in a larger capacity. You were extremely excited and hoped it would go in that direction. That was the beginning of our official partnership. That was a couple of years ago when I started getting my license. We’ve been having way too much fun ever since.

There's so many different ways to create that final product just like there's so many different ways to create a successful project and investment on a piece of land. Click To Tweet

I love that. It’s so much fun to watch. I left high school in ’87. I moved there in ‘79. We did all of our leadership conferences at Robert Mondavi. There were very few wineries. Robert Mondavi was trying to spearhead that industry in that area. It was a baby industry. There were maybe ten wineries. Maybe I’m exaggerating. That’s Napa proper on the way up to St. Helena in Yountville and all of those areas. It has been fascinating to watch the way that the wineries and everything have exploded. It’s gotten so much bigger. There are so many more opportunities.

It’s been fun to watch the industry expand and grow and see the wines get better. The reason I was telling you all of this is it does seem like building a dream. It’s what you were saying, Jordan. There are so many different pieces and people that come up there from the valley, all over the country, and the world to start a winery there. You start with this idea and you build an entire dream. It is beautiful. I’ve watched it over the years happen over and over again. It’s fabulous to meet some of the people that are making it happen.

It is a huge passion of both of ours to assist each and every one of our clients that comes to us no matter where it might be, whether they’re from outside of the wine industry but they’ve had a passion for it, all of us here loving the area, the valley, and the connection and then wanting to grow that, or if it’s an existing vintner or grower that is within the wine industry. They’re wanting to expand, build upon their dream, and create even deeper roots with their own legacy. I see it as an extreme privilege to be able to be one piece of that puzzle or one spoke of that wheel for them to achieve their success.

REW Robyn & Jordan Bently | Investing In Vineyards

Investing In Vineyards: It is an extreme privilege to be able to be one piece of that puzzle, one spoke of that wheel, for them to achieve their success.

 

Tell me. When people come to you, do they have their checklist and they’ve got their budget? Do they have their vision or do you help massage that? What’s the number one reason for investing in Napa Valley?

The number one reason is that people love wine, to begin with. In some cases, they have the financial capacity to jump into that world maybe within the first few years of going, “I like wine. I like this area. How can we begin to put a little foothold down?” We have been talking with a gentleman who’s a dentist who identified the buyer for his business in Arizona. He’s going to retire in a couple of years. He invested in a vineyard site that he will start working on so it is ready for him when he arrives. He has been loving wine for many years. This will be the beginning of that new dream and passion for the rest of his life after coming out of dentistry.

Do people normally have a vision or are you normally massaging that vision? How do people come to you?

They are from clients from all different parts of the world, so to speak, and different industries. In terms of their own checklist, people come with a relatively clear vision. With the dentist that Robyn was describing, he has a clear vision and that he wants wine. He is creating a brand to be his next step in life. A few years ago, we had a client call us. He was a real estate developer in Colorado and on the east coast. He called up and said the same thing. He was like, “I love wine. How do I start?” We did help flush out the various steps and connected him to the various consultants and players within the industry that would help him gain success in the dream that he had.

It starts off with, “I love wine,” and, “I want to create something.” That usually is a brand. I have one way or the other. We have people that have been in the industry since the “very beginning.” We have some people that we’re connected with and clients that are 6th or 7th generation in Napa Valley. They’ve been either growers, winemakers, or vintners and have their own successful brands and labels that are well-known to us all. They are wanting to have more supply, which is more vineyard land, or perhaps they have a second label and they want a new home for that brand. We assist the whole gamut. They come to us.

The ones that are already within the industry have a very specific and clear checklist. It’s a lot of fun to help them achieve that. For instance, from the vineyard’s point of view, location and varietal needs are huge. We have a lot of fun hearing, “We would like X amount of acreage with this varietal and this AVA.” We then get to go out, do our best, and find that connection for them.

We’re putting a deal together for a grower or vintner who wants to expand supply. We started that search a few months ago because he was very specific about the varietal, location, and orientation of the vineyard. There were a lot of details. All sorts of things went into that checklist. We didn’t know if we were going to make it. There was a tax exchange involved. We serendipitously came across the ideal property for him that we are excited to be moving forward on.

Do you feel like you’re usually able to check off all of their checkboxes?

I think so. With what Robyn said about that timeline, the timeline for a wine industry investment, which is land, vineyard, and wineries, is much longer than your typical residential timeline. When we do get that checklist, it is our goal to meet every single need.

A lot of times, though, what’s interesting in the process of searching is whenever we see something and it only checks off two of the boxes, but we think it could still be an interesting investment that also can shift and change their checklist, so to speak. Sometimes, it grows, and sometimes, it goes even narrower. We have been lucky in that majority of the time, we’re able to make sure that they get what they want and sometimes more.

I’m curious. Usually, people will come up and invest in the winery parts of Napa Valley because they have an interest in wine. Do you find that most people invest because they want to start growing grapes or because they want to open a winery? There are so many different things you can do in that industry. Do you find that some people just invest for growth? Is there a lot of growth? Let’s talk a little bit about that. Maybe you love wine, but you don’t want to get your hands dirty in it necessarily. You don’t want to work it, but you’re very interested in the industry and investing in it. What’s the growth like in the industry, and are there possibilities for that?

There absolutely are. The biggest growth potential in Napa Valley is real estate appreciation. Making money as a vintner is a very hard road. Some people knock it out of the park. Other people struggle forever, but they are okay with struggling because they love the lifestyle and they’re doing what they love to do.

The biggest growth potential in Napa Valley is real estate appreciation. Click To Tweet

Let’s say your first investment in possibly coming to the valley is buying a home. Depending on whether you want to use it or not, you are buying it as an investment with a vineyard surrounding it. You could start with a minimum of five acres and a house that you use on weekends. You could also rent it out and receive income and tax benefits from the vineyard. Those are some interesting additional benefits to the investment.

Learn how you feel about it as time goes on. That small step of buying a vineyard into the wine world will open up your understanding of how the process works and how viticulture and winemaking go hand in hand in a short, easy way. There’s support around all of that. Let’s say you thought, “I have an extra $1.5 million or $2 million. I’ll buy a house and some vines.”

Part of Wine Country Consultants’ passion and what we bring to the table is that we have worked with our consulting crew for many years also. Everyone is at the top of their game. Everybody’s game is to make you successful. We would be able to help you with a vineyard manager. We’ll be able to help you with an accountant and things that you may need going forward.

Let’s say five years down the road, we can all look at different periods of appreciation. They call it California Gold for a reason. With real estate, if you can get in and make a stand in a very short period of time, you’re going to have significant equity. Part of our job is to understand all the pieces of that vineyard vibe. We’re like, “What is the age of the vines? What’s going to cross going forward so that you have a clear map and you can afford this 5 to 10-year hold?” Maybe what you do is sell that in the future. If you like what this business is doing, maybe you go to a little bigger vineyard or a second buy. Maybe that vineyard’s in a different AVA.

REW Robyn & Jordan Bently | Investing In Vineyards

Investing In Vineyards: They call it California gold for a reason. If you can get in real estate and make a stand in a very short period of time, you’re going to have significant equity.

 

What do you mean by AVA?

AVAs are American Viticulture Areas. We have around fifteen or so in Napa Valley. AVAs are micro-climates within Napa Valley. We have Howell Mountain AVA and Spring Mountain AVA. Stags Leap is probably our most famous and most expensive. Washington and Oregon all have viticulture areas. The pricing is different for almost every AVA. The growing conditions are different. The varietals are different. That decision-making for a first-time investor in what AVA they would like to be in is generally reflective of the wine that they like.

That decision making for a first time investor on what AVA you would like to be is reflective of the wine that they like. Click To Tweet

You brought up some interesting points. I know that you are not tax consultants or anything like that, but there are some very specific tax benefits that you get from owning. Vineyards are considered agriculture. I know the disclosure. You’re not CPAs, but you understand what people are going for. What are some of the tax benefits of owning, for instance, a house surrounded by a vineyard?

We are not tax specialists, but we can connect you with several people that are and the ins and outs and specifics of them. To be honest, I cannot give you exact examples. There’s something in California called the Williamson Act. Do not quote me, but I believe the property has to have 70% of it dedicated to ag in order to receive a lot of tax benefits that are through property taxes and things of that sort. That’s one avenue. Even if it’s not in the Williamson Act, there are benefits if you have a certain amount of your property dedicated to ag. Let’s say 99% is dedicated to vineyards and growing grapes.

Also, ag can be considered as cattle land or orchards. There is a whole bunch across the whole state of California and all over the country. In the state of California, there are lots of different departments in ag. Also, with the fruit, I know that there are benefits depending on the sales. Vines have value there that is an asset to the land that then is depreciated. Depending on what your growing program is, there are also some benefits in that department as well.

Within the last couple of years, the vintner community has gotten good at understanding multiple ways to depreciate a vine. There are also cost benefits to identifying the AVA. When you buy a vineyard, some AVAs cost more than others. That cost difference is also a tax benefit. The depreciation of the vine itself is also one avenue.

REW Robyn & Jordan Bently | Investing In Vineyards

Investing In Vineyards: Within the last 20 years, the vintner community has gotten very good at understanding multiple ways to depreciate a vine. When you buy a vineyard, some AVA cost more than others and that cost difference is also a tax benefit.

 

There is also the depreciation of the irrigation lines. All these things go very deep. Larger growers and vintners go deep because it’s worth doing so for every penny that it takes to be successful. Starting on the smaller end, maybe not so much, but there are agricultural advantages to it. We are doing our own little video series with some of our consultants talking about different aspects. One of our future conversations is going to be having a wonderful accountant and consultant explain in detail.

The reason we depreciate a house is that it’s losing its value. It is an asset that is not as nice. Things break and stuff happens. Depreciating a wine is because the vines get better with age.

If you’d like to do an Old Vine Zin, perhaps there are lots of reasons to keep that 50-year-old vine. The life cycle of a vineyard has its peak and then it starts to trail off.

In Napa Valley, that’s around twenty years. If a vineyard’s twenty years old, all of a sudden, there’s a little talk about replanting. We generally don’t go longer than about 30 years before there’s a replant. Many changes happen over time. They learn so much more about how to orient rows and growing practices that the vintners get excited about that change up. It is not only the orientation towards the sun but should they be 4×7 or 5×6. These kinds of things play into that decision to replant.

When we look at the return on investment in a vineyard, you gain that return through selling your fruit, which is selling tonnage. For Napa Valley Cab, in general, they’re growing fruit to come in at about three tons per acre. That compared to the central coast, where they’re doing more of a bulk supply issue, they might be growing to 6 to 7 tons.

When we look at the return on investment on a vineyard, how you gain that return is through selling your fruit, which is selling tonnage. Click To Tweet

Understanding as divine ages that the tonnage, because they all end up with some disease, which is also a matter of fact as we age, things start to fall apart. The investor is constantly looking for that breakeven. They’re like, “How far can I go before the tonnage and the vineyard is going to start predicting that I need to replant?”

We lived in France for a year and a half, too. There was a lot of talk about purchasing old vines and making sure that you’re getting the right kind of fruit. There’s an old vine culture in France. It sounds like it’s not quite the same.

It’s not the same in Napa. Even in Willamette Valley, which we like a lot, they love their old vines. They are 60 years old. They make a big deal about it, but not so much here. Jordan mentioned Zin. Zin seems to be the one where people can hang onto some vines for 40 to 50 years and still sell, even if it’s only producing a ton. Maybe that ton is worth $20,000. It makes sense for them to keep farming.

That’s so interesting Willamette does that. I’m crazy about the Willamette Valley wines.

We are, too. We have an office in Portland. They’ve taken a huge market share from Sonoma Valley in terms of Pinot. At the same time, Sonoma Valley and Willamette Valley played beautifully together in making Pinot Noir much more popular than it’s been in many years.

They have a completely different flavor, so they fill a different need. As I’m thinking about it, I’m not a wine person, but I can taste the difference between a Sonoma Valley Pinot, a Willamette Pinot, or a French Pinot. The grapes make a huge difference. I thought how old the vines are and stuff like that made a pretty big difference. I do think that if older vines are based on what you’re saying, where old vines are valued and they can sustain themselves without getting diseased, they’re going to produce a very different kind of flavor. You pay for that more, wouldn’t you agree?

Yes.

Absolutely.

The price per ton of that fruit is reflected in the bottle.

We talk a lot about investing. You come in and you invest in a 5-acre vineyard right off the bat. If someone buys fruit from that vineyard and it’s not branded, then it would go into the program that may not necessarily need to call out that vineyard on their bottle. If it’s a branded vineyard with some good legs on it already, so to speak, then a lot of times, the growers will require that the vintner puts the name of that vineyard on their bottle. It would be Napa Valley from the XYZ Vineyard.

They called it the vineyard designate.

Talk to me a little bit about financing with these vineyards. It’s not going to be the same as we’re used to in other places. Could you tell us a little bit about what’s different and how it works?

We had a long conversation with Nick Cadigan, who’s an appraiser for AgCredit. We work with all the lenders in the valley very closely. You have options for lending. You can go with a traditional lender like AgCredit. Silicon Valley Bank is big in the area. There are also small business loans available. We have done a lot of work with Jeff Clark with Live Oak Bank. You can get a loan that will be amortized over 30 years.

There are some real benefits to digging into what your lending options are. That process is something that is for the first-time investor or for any investor. That’s where you want to start. You’re like, “What terms am I looking at? What expectations does the lender have of what I am purchasing?” The lender will go deep into your business plan and help you be successful. We work hand in hand with our clients and lenders all the time. In Napa Valley, we are also lucky. 80% of the transactions that we do are all cash transactions.

REW Robyn & Jordan Bently | Investing In Vineyards

Investing In Vineyards: There are some real benefits to digging into what your lending options are.

 

That was going to be my next question. Do people use leverage? How much do you need to put down? Can you get loans and that sort of thing? If you’re going to finance it, first of all, do you think that’s a good idea? If you do, how much do people usually need to put down on a loan like that?

It’s generally known it is wonderful to have cash on hand and be able to receive a loan that has wonderful terms and rates. In a lot of ways, that is very beneficial. If you look into both options, absolutely. The lenders that Robyn spoke of and others have wonderful options for our clients and anyone looking to invest. It is a bit different than a residential play. Even though some of our lenders can sometimes accommodate 0% down, which is full funding, that is rare. I would say, typically, you are looking at a minimum of 20% but more than 30% of what you’re putting down. 30% down and then 70% is put towards the loan.

That’s like most rental properties that we buy. You usually have to put 25% to 35% down, even on residential.

Live Oak Bank, for example, has a program where if you’re already in the business, making money, and it makes sense, they will do the full loan amount and will also then loan for improvements.

That’s what I was going to ask. That’s the next step. Let’s say someone who’s not in the business comes up and gets a loan. How do you finance the actual buying of the vines, equipment, and all of those different things? Do you get financing for that separately as a business loan? Will the lender that does the mortgage do that? Do you have to keep enough on reserves to do that? I know there are lots of different options, but can you talk to me a little bit about some of those?

Yeah. There are certain lenders that will then give you a certain amount on top of the loan of the actual purchase of the investment of the property to then put back into the business that you’re creating. You mentioned equipment. Often time, if there is equipment for a winery, the value of that equipment is determined within the process of the purchase agreement. There is a value in that. It usually is included in the property, but sometimes, it is not. Sometimes, there are things that are excluded, like any other investment. Certain fixtures come as standard and others are an option.

With a vineyard, oftentimes, there is perhaps some equipment that is usually included in the sale. Oftentimes, though, the vineyard is managed by a vineyard manager. They bring in their own equipment. There isn’t much besides the nuts and bolts of the actual vines that come with that land automatically. There are options, for sure, to grow and immediately receive financial help through those lenders to go forward and be successful with your investment.

If you’re not buying an actual vineyard that’s already planted, what happens if you buy land and you want to start from the ground up? You need to buy all those vines, the fans, and all of that stuff that happens.

Before you get to buy all that fun stuff, you have to have approval from Napa County. If you’re looking to develop, the actual spending of money starts with hiring engineers and experts on what soil type you have and what slope you have. You are creating a lot of detail that then needs to be approved by Napa County. Unless the land you’re buying is under a 5% slope, which is flat, you have to have an erosion control plan developed and presented. That process alone can take a year or two to happen.

Part of what we do is if that is indeed what the intention is, which is to buy and develop, during the due diligence process, we have to identify approximately how many acres that is. That’s done with consultants that are experts in the area, what the cost associated would be, and what that timing looks like. Once you plant these vines, you’re not going to start receiving income until we’re 3, 4, or 5 years down the road. It takes a lender and an investor with a long-term vision because we’re going to get out of that short-term vision in about five years. It’s inclined to ten years after you purchase that you’re going to see the fruits of your labor.

Once you plant these vines, you're really not going to start receiving income until we're 3, 4, 5 years down the road. Click To Tweet

That’s a good segue talking about due diligence. We are going to be talking in EXTRA about how the offer process works when you find something that you want to buy and how to go through that process, part of the due diligence, all of those pieces that go into making that offer, setting a price, and all of that stuff. We are going to be talking about that in EXTRA, so stay tuned for that. Before we go through our three Rapid-fire questions, could you talk a little bit about how people can get in touch with you and what kinds of services you’re offering the ladies?

Absolutely. Probably the quickest way to understand what we do, the breadth of our reach, and how we can help is to go to our website, which is WineCC.net. There, you’re going to find all of our information, phone numbers, and email addresses. We put a list of our consultants. We’d love to hear from you, whether it’s easier to pick up the phone or shoot an email or text. We are always excited to meet new people and talk about new projects. We’re all readily accessible. We look forward to hearing from you. We are also excited to talk about any questions you have. It doesn’t have to necessarily be that you have an investment in mind right away. We’re happy to kick around and explore ideas.

Go check it out. There is so much to learn about this. We’ve never had anybody on the show talking about wineries, so what fun. Are you ready for three Rapid-fire questions?

Yes.

Give us one super tip on getting started investing in real estate.

Contact a local real estate broker in the area that you want to invest and find out from them what they believe would be a good stepping stone to your investment.

REW Robyn & Jordan Bently | Investing In Vineyards

Investing In Vineyards: Contact a local real estate broker in the area that you want to invest in and find out from them what they believe would be a good stepping stone to your investment.

 

Jordan, did you want to add anything?

Oftentimes, your local broker is your window into the area. Unless you are a local yourself, and even if you aren’t, that brokerage firm and broker knows and understands the current market or the current “hotspots” that are perhaps already getting some legs and then new ones that are starting. It’s wonderful to figure out where you can find your spot in the super new or even already-established market.

Thank you. What would you say is a strategy to be successful as a real estate investor?

Having a passion, number one, for the location that you’re investing in. If you truly love the area and the community, whether or not you are a super active part of that, by having an investment in that area, you are, in my opinion, part of that area. Even if you only visit once a year or every single day, know that your investment adds to the fabric and the success of that community. I feel that having a passion and a true desire to be part of that is the number one foundation for a successful investment.

Know that your investment adds to the fabric and the success of that community. Having a passion and a true desire to be part of that is the number one foundation for a successful investment. Click To Tweet

Robyn, what do you think?

I have to agree with Jordan. In every area of life, if you’re going to be successful, it is bringing that positive attitude and an open mind. You are fueled by your love either of the investment or the area, or both, hopefully.

It is so interesting to have that particular conversation where both of you said that. That’s the opposite of what a lot of people will say about residential investing. A lot of times, people will say for residential investing, “Live where you love but invest where the numbers make sense.” What you’re saying makes sense in wine country. As we think about real estate, there are so many different approaches. I often say there are 1 million ways to make $1 million in real estate.

Where you decide to pursue your real estate career, whether it is in wineries, single-family homes, multifamily, storage, senior living, or whatever, with the way that you’re going to approach that, your mindset is going to make a huge difference. If you’re going to invest, for instance, in the wine country, what you said makes perfect sense. It is a labor of love. There is not a fast turnaround. You’re in there for the long haul. It makes sense to do it exactly that way. Thank you for that. What is one daily practice that each of you does that contributes to your daily success?

My meditation practice keeps me extremely grounded and balanced. I am able to navigate all the various challenges that happen daily, weekly, and monthly not only in my career but in my personal life as well. That practice is ever-evolving, as always. It shifts as my daily routine shifts. It also depends on which escrow I’m in and who I’m helping out. I always make sure that it’s there.

That didn’t start, to be honest, on a daily practice until June 2020. Before then, it was probably five years of meditating sporadically. By sporadically, I mean it could be once a week, once a month, or once every couple of months. Once I decided to give myself that self-love of daily mindful meditation practice, my inner world shifted and then the outer world started to reflect that. I had always heard people speak of this. It wasn’t until I decided to jump in with both feet and make that commitment to myself that I did see the positive changes. I would say I can’t live without my daily meditation.

Jordan inspired me to meditate daily. It is a game-changer. Even if it’s only five minutes, it is worth every second in gold. The culture of our company is very much centered around self-love and positivity. Besides meditation, what we both do, and this includes Ross, is we generally are exercising outside every day. We are lucky to live close to Lake Hennessey here with great trails. You cannot get enough of being out in nature. That can be a meditative experience, too.

I do a lot of walking meditations. If you sit still for five minutes, that’s awesome. Sometimes, I need more. After these shows, I’ve got a whole series of meetings. To switch gears, I’ll go out for lunch, go for a long walk with the dog, and do it mindfully. It’s interesting both of you say it because those things, which are meditation, exercise, and being in nature, are also all things that the top performers all say. We think, “That’s hokey or woo-woo.” The top performers in the world do this.

In order to be a billionaire, these are things that you need to do. That’s what they do. I always say, “If you want to be whoever you want to be, follow their path because success is replicable.” These are some of those skills. People think that it is not money-building specific, but it is you-building specific. You are the person that needs to perform.

Our number one investment is ourselves. These are things that we can do to keep our minds, bodies, and spirits healthy. That’s different for everyone. If there’s anything we can do that is going to create success and generate long-lasting success in our lives physically, it has to come from an inner spot first. Those can be exercise, meditation, and nature.

REW Robyn & Jordan Bently | Investing In Vineyards

Investing In Vineyards: If there’s anything we can do that is gonna create success and generate long-lasting success in our lives physically, it has to come from an inner spot first.

 

This has been amazing. Thank you so much for what you’ve offered at this portion of the show.

Thank you.

Thank you so much.

It’s been so much fun. Stay tuned for EXTRA. We’ve got more. We’re going to be talking about what happens once you find a target property, how to go through your due diligence, what the offering process is, and all of that. We’re going to be talking about that in EXTRA. If you’re subscribed, stay tuned. If you’re not but would like to be, go to RealEstateInvestingForWomenEXTRA.com. You can sign up there. For those of you that are leaving us, thank you so much for joining Robyn, Jordan, and me for this portion of the show. I look forward to seeing you next time. Until then, remember that goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll talk to you soon.

 

Important Links

 

About Robyn Bentley

REW Robyn & Jordan Bently | Investing In Vineyards

Robyn Bentley is the Broker at Wine Country Consultants. Shortly after moving to the Napa Valley in the early 1990’s, Robyn launched her vineyard and winery oriented real estate career by representing a purchase in the Carneros AVA, a hillside vineyard by Pine Ridge Winery, and has been assisting the wine industry and investors in acquiring strategic properties for over 30 years.

Robyn’s expertise lies in her consensus-building team approach to working with investors on both sides of an acquisition. Beginning with her intimate knowledge of viticulture areas and an in-depth understanding of the wine industry, she can identify key and often overlooked investment opportunities and assist her clients by building a team of industry experts to make the decision-making process and transaction a well-informed and transparent exchange.

Given the increased interest of the wine industry, investors crossover between California, Oregon and Washington’s viticulture regions. Robyn is qualified and available to assist on a consulting basis in all 50 states as well as internationally. Her long-term industry contacts enable her to play an invaluable role in assisting investors throughout the world.

Robyn’s life-long commitment to assisting women and children in need has led her to volunteer for numerous organizations over the years as well as serving on the board of Community Resources for Children of Napa Valley and the Oregon Children’s Trust Fund.

Robyn raised both of her children, Jordan and Ross Bentley, in St. Helena and is very proud to have them as partners in the WCC team.

Robyn is married to Trace Brash with whom she shares a love of real estate and the sea. Trace owns a successful construction company in Portland, OR. In 2006, when their youngest left for college, Trace and Robyn took a sabbatical of nearly a year to sail their 44’ sloop down the Caribbean chain to Venezuela.

 

About Jordan Bentley

REW Robyn & Jordan Bently | Investing In Vineyards

Jordan Bentley “grew-up” in real estate assisting her mother, Robyn Bentley, while being raised in Saint Helena.

Jordan earned a BA in creative writing from Colorado College and kept going east to Boston where she earned an MFA in photography from the Massachusetts College of Art and Design. After teaching at her alma mater and Tufts University, she decided it was time to return to her roots in Napa Valley.

Jordan has been working with Wine Country Consultants for over ten years and is proud to be part of her family business. Through Robyn’s mentorship and invaluable hands-on experience, Jordan has organically fused her previous talents with real estate to offer clients a unique skill set. Her creative eye and dedication to detail along with her in-depth knowledge and local perspective of Napa Valley allows Jordan to assist clients successfully reach their goals.

Jordan is an avid traveler who thrives when meeting new people and immersing herself in a new culture. Some of her favorite places are Finland, where she lived for a year as a foreign exchange student, and her husband’s native South Africa.

Jordan and her husband, Frameworks owner Rob Watermeyer, have two young sons named McCary and Gray. The four of them enjoy running, biking or strolling around town and Lake Hennessey with their dog, Pan.

Jordan is not only dedicated to her clients and family but also to serving her community. Her passion for education led her to serve on the board of her sons’ pre-school, the St. Helena Cooperative Nursery School, as President and Vice President from 2016-2022. Jordan currently serves as the President of the board of Our Town St. Helena, a non-profit dedicated to preserving and creating affordable housing for all in St. Helena. Past service led Jordan to be a board member and lead chair for the youth exchange program in the Saint Helena Rotary Club from 2014-2017.

 

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Real Estate Investing For Good With Dr. Nancy Huynh – Real Estate Women

REW Nancy Huynh | Real Estate Investing

 

Many investors are in real estate as a side hustle and to create passive income. But how do you know when it is time to finally start settling in the industry for good, taking a more active role in achieving financial freedom? Eye surgeon and impact real estate investor Nancy Huynh, MD, helps us answer this question as she joins Moneeka Sawyer in this episode. Nancy founded Clear Vision Investing to help others, especially physicians, realize the power of real estate and achieve financial security. She tells us how she does that while sharing her own journey to investing and getting in syndications. Extending her success to others, Nancy then discusses investing for impact. She talks about her mission with real estate to help cure preventable blindness globally. Follow along with this impactful conversation to learn how you can achieve financial freedom and help others at the same time.

Watch the episode here

 

Listen to the podcast here


 

Real Estate Investing For Good With Dr. Nancy Huynh – Real Estate Women

Real Estate Investing For Women

I am so excited to welcome to the show, Nancy Huynh. Nancy is a Physician, an Eye Surgeon and Impact Real Estate Investor. She started investing in real estate to create passive income, hoping to regain control of her time and stop trading time for money. She founded Clear Vision Investing not only to grow her own portfolio but also to help others realize the power of real estate. She’s passionate about helping others, especially physicians, gain financial literacy and achieve financial security through real estate investing.

She believes that financially intelligent physicians can change medicine and the world for the better. As an impact investor, Nancy believes that real estate investing can deliver attractive financial returns while also making a positive social impact. I believe that too. Part of the profits from her company is donated to giving the gift of sight to someone in need and to cure preventable blindness globally. Nancy, that sent shivers down my spine and all over. What a beautiful bio and a beautiful mission. Welcome to the show.

Thank you so much for having me. I’m so excited to be here with you.

It’s so funny, Nancy. We think of doctors as rich and smart. Many people think of them as pompous. They think they know everything. My mom’s a physician, so you know, I know the way the world perceives. We need our doctors and there are all these opinions. What’s so interesting is we never think of a physician as needing financial literacy. I know from personal experience because my mom is a physician, so we hung out with a lot of them. They make a lot of money. They also have this huge social expectation to live up to. They spend so much of that time, first of all, serving their patients but then also feel it because they’re of service. They come to the world of service.

That’s what physicians do. They also feel that they have to live up to the expectations of how people see them. They put so much more importance outwardly. They don’t have the financial of literacy to create a life that then can be bigger than themselves. It’s so awesome. We’ve had one other doctor that’s doing a very similar thing on the show. I love what you’re doing for these people that serve us, serve their communities. They go through this huge education. They go through their residencies.

They sacrifice so much to be able to be of service then their lives get so tied up that they never get to retire or never get to get the freedom of time with their children and their families and the things that are important to them. Good job. To expand it to something even bigger than that, to be even bigger service to the community in different ways. Thank you for that.

Thank you for that perspective. You hit it right on point. Physicians were so used to sacrifice. Sacrificing our twenties and often our early thirties or even later, sometimes many years to get into this profession and become that attending physician. Through that process, we also financially accumulate a lot of debt. A lot of us graduate with over six figures of student loans from college and med school. When you’re in residency, you’re earning less than minimum wage for the amount of hours that you work. You start off with this negative net worth and all of a sudden, as you said, society expects you to live up to this expectation of this doctor image, the big house, the cars, the private schools.

People often get caught in the cycle of where they’re working and they’re making good money, but they’re chasing a hamster wheel. They never, as you said, experience that financial freedom but also that time freedom and, eventually, that geographic freedom, freedom of relationships and freedom of purpose to do what you want to do.

It’s so sad. This is true in many professions. Not just with physicians. I’ve seen it with vets, with dentists, in all different professions, whether it’s healthcare or not, where people sacrifice so much and end up in a place where they don’t get the freedoms that will make their life blissful. It’s amazing. Tell us a little bit about your journey, like how did you get from being physician to real estate investor? The two-minute high level, how did you get here?

Briefly, I’m a child of refugees. My parents came here after the Vietnam War in 1980. I was the first in my family to be born in the US. Unlike many children from immigrant families, were taught, “Study hard. Go to school and get good grades. Go to a good college and get that good job.” I followed this very prescribed path and along the way, I fell in love with medicine. That’s what I did. I went through medical school and fell in love with eye and ophthalmology and eye surgeries and giving the gift of sight. After I got off that training, I started working.

This is what got me. I realized, “I’m making pretty good money,” but the one thing I could never make back was my time, the one non-renewable resource. I could never get back and this especially hit home. I already had this feeling, but this especially hit home when my daughter was born. I remember she had a 103-degree fever and I had gone back to work after maternity leave. She was probably three or four months old.

The nanny called me and was like, “Can you come home? I’m not sure what to do.” I remember looking at my clinic schedule and I was like, “I cannot because I can’t cancel on these patients. I’ll be home as soon as possible.” I remember that feeling I was serving everyone but the one thing that I want to do now, which was to be with my daughter to figure out what was going on. I couldn’t do it because I didn’t have that time freedom. That time, I realized, was more valuable than anything. That’s when I thought to see what I could do. I discovered this thing called passive income and through that, I discovered real estate. That’s when I was off to the races with real estate.

What you talk about is that passive income creates optionality and choices. I don’t know if you’ve ever seen my TEDx Talk, but it’s all about choice creates happiness. Choice gives you time freedom. Choice gives you the relationships that you want. I love your perspective on that. Could you talk a little bit about that?

Money can’t buy happiness in and of itself but advise you that optionality, as we’re talking about. Once you take that financial burden off of you, you’re a little freer to say, “Now I don’t need to trade my time to earn this paycheck, to pay the bills, to pay the mortgage. What do I do with that time?” Sometimes it means I want to work more. I want to be more patient. I want to do more surgeries, but the freedom of saying it’s my choice to do that is different than saying, “I have to do it.”

REW Nancy Huynh | Real Estate Investing

Real Estate Investing: The freedom of saying “it’s my choice to do that” is different from saying “I have to do it.”

 

I think that’s the key distinction that I want your readers to know. It’s different when you’re doing something, but you feel like you have to do it versus, I’m choosing to do it. It might be the same thing, for instance. I could do twenty cataract cases, but it’s one thing to say, “I have to do it because I have to earn this amount of money to cover these expenses.” Versus, “I choose to do it because I love it. I want to help these patients.” It brings a completely different viewpoint and it’s so freeing.

It also helps to shift your identity. I’ve got a similar story. My husband and I were trying to get pregnant. We were going through the fertility thing and I had had eleven miscarriages and we were on our 12th pregnancy. I remember one morning. I went to my doctor to do my ultrasound and we lost the heartbeat that morning. I remember bawling in the little white room that I was sitting there. The doctor left to give me a moment. I cried and cried. I called my husband and I said, “We lost the heartbeat. I need you.” It was about 11:00 and he said, “Sweetheart, I’ve got meetings all day. I’ll be home at 4:00.”

He wanted to be there with me and I knew that. It wasn’t his fault, but I think for him, he also realized, “I want to be able to be a yes. My identity as a software programmer is not as important as my identity as husband to Moneeka.” It was an interesting shift from being professional, this is how I identify myself and this is my value to, I want to be a choice for this. I want to be a programmer because it’s fun. That’s when he got involved. He’s still not hugely involved in my business but got his buy-in.

We need to create enough passive income so that if you decide that you don’t want to be a programmer anymore, you don’t want to be tied up to a job, now you can do that. When you’re doing it, it’s because you love it, you’re passionate about it, not because you have to. It’s this idea of creating the passive income to become job optional. Not necessarily retire. I say retire and all my stuff because it’s an easier way to say. It sounds better than job optional, but what we’re going for is being able to create the bliss in your life that you’re searching for. That may be continuing to work.

I think for a lot of us, it’s going to involve some work. Whether it be, “I want to stay home more with my kids.” Being a mom is a lot of work. I have two young children so that in itself is work. You get to choose, as you said, what your identity, what title you want to choose and it could be fluid, but then it becomes your choice. Instead of saying, “I have to be changed to this 9:00 to 5:00 at this desk because my employer told me I have to. I have to get that every two-week paycheck. I have to be this identity from Monday to Friday from 9:00 to 5:00.”

What if you have those options with passive income to say, “Monday and Tuesday, I want to be a doctor. I want to be a surgeon. Wednesday, Thursday and Friday, I want to be a mom or I want to be a real estate investor or whatever you want to do.” It gives you a lot more choices. The flexibility of having options is what frees the mind. I think when people get stuck and feeling like they’re “trap” is when they don’t have options. If you have ten options, even whatever problem you’re solving, it doesn’t seem like a problem anymore, then it’s very freeing.

The flexibility of having options is what frees the mind. Click To Tweet

It may feel like a challenge, but you have more confidence. You have more emotional and mental and creative confidence that you can get through it, get to the other side of it. Do you think anybody can invest in real estate?

I do.

Tell me about that.

I knew nothing about real estate other than buying a primary home. There’s so much out there now, so much education. Maybe it was different years ago. I don’t know. I didn’t look way back, but I’m sure if there’s a will, there’s a way. Especially in this day and age, there are podcasts. There are free webinars, a bunch of events that you could go to. It’s a matter of getting educated but also getting your mindset right.

A lot of the roadblock to people starting in real estate is in their minds and the mind games that they play themselves with. As Tony Robbins likes to say, “80% of success is psychology or mindsets and only 20% of strategy.” If it were all strategy, then all of us would have six packs. All the librarians would be billionaires with all the books that they consume. It’s not just the knowledge. It’s also knowledge of your mindset and with action that you could make it happen.

I’ve been calling mindset the ultimate strategy. It is a strategy in and of itself to get that under control.

A lot of the mindset, as we were talking about before, it is the identity you choose for yourself and the stories that we choose ourself. As women, how many stories do we tell ourselves that are not necessarily true or that we think it’s true, then we found so much evidence to reinforce it, to say it’s true when it’s not?

I always tell people everything that’s going on in our lives, we’ve made up anyways. We make up the story. The circumstance happens and three different people will see it in three different ways. You’ve made up your story about that circumstance. Why not make up stories that support you and make you and uplift you and give you those rose-colored glasses that will make life easier and more blissful. Rather than making up the stories about strife and difficulty and challenges and exhaustion and all of those things?

The fact of the circumstance, it’s how we view, as you said, through our colored lens or no colored lens. That’s how it shapes our perception and our thoughts of it. Our thoughts ultimately shape our actions, which lead to our results. That’s why it all starts with mindset. It’s circumstance but then the thoughts we put on it, which ultimately drive our actions then our results. It’s all in what story you want to tell ourselves, like when we’re little girls. Some of us tell ourselves these fairy tales. Why can’t we dream like that anymore? We can.

Our thoughts ultimately shape our actions, which lead to our results. Click To Tweet

Talk to me a little bit about the difference between active real estate investing as opposed to passive real estate investing because you’ve chosen passive. Talk to me a little bit about how you see those differences.

I think it’s a spectrum of active versus passive. Oftentimes, we make this clear divide, but it’s not necessarily soul. It depends on your circumstance, what you want, and what your goal of investing is. I’ve done both. I started off active like many people do that we think of real estate investing, which is to buy a single-family or a duplex and rent it out, which is what I did because it’s what I knew and what I was comfortable with. With comfort gives certainty and it makes you take action. I’m so glad I did that.

As I started building up my portfolio, I first self-managed my first one and quickly realized it was not worth my time. My time was better spent with my children, taking care of my patients, so I quickly handed off to a property manager. Even with a property manager, the decisions always float up to the top. I get calls about it. The other thing about active is you are the one who has to go source the property. Go find it, put in the offer and you might not win it. It does take time to find the property and get it under contract and all that.

Even for a property manager, it still requires some of your time management. I’ll give you an example. I was at the park with my daughter and I get this call from the property manager. They’re like, “All the water has backed up into both bathrooms into this property.” I was like, “Okay.” He’s like, “Don’t worry, I’ll get it all taken care of,” but you worry. You can’t not worry. The sewer had backed up. Instead of spending that afternoon with my daughter, I was like spent on the phone texting and calling.

That’s an example of what I found wasn’t quite fitting the lifestyle that I wanted at this time. That’s when I discovered passive investing. Passive investing with syndications, for those of us who don’t know what syn occasions are, it’s basically a group investment, instead of you taking your $100,000 and buying a single-family home, for instance. You could take that $100,000 and pull it with a group of people to buy a $10 million apartment building. No one person can probably have that huge down payment or that money to buy that apartment but as a group, you can do that.

I’ve shifted to the strategy for several reasons. One is my time, as I said. Even if I had the time, I didn’t necessarily want to spend it working in a real estate business, doing all the properties I wanted to spend time with my daughter, being the best surgeon I can, and honing that craft. The second was I could leverage a professional team who do this full time and leverage their network, their time, their expertise.

The third thing that I saw was I’m able to diversify because when I was buying my own active properties. I like to see and feel and touch it. I invested in my backyard here in Atlanta. I was pretty confined in terms of market, but now, I get an investment in the South, the Southeast and the Midwest. I could also diversify. I do mostly multifamily, but I invested in hotels and other commercial properties. You get to spread your money across different sponsors as well because you could put $50,000 here, $100,000 here and spread it across.

You’re mitigating your risk across markets and also across sponsors. One more thing that I like is that you have limited liability. When you own your own properties, even if you put in an LLC, you’re personally liable. Eventually, the buck stops with you. With being a limited partner and syndications, you’re basically limited to the amount that you invest in, no matter what happens for the most part. If someone falls on the sidewalk and sues, the most they could ever get is the amount that you invested. I like those aspects. Now because I have young children and I’m busy with my career, I found that passive investing has been a great vehicle for me.

REW Nancy Huynh | Real Estate Investing

Real Estate Investing: Being a limited partner and syndications, you’re basically limited to the amount you invest in, no matter what happens for the most part.

 

How did you get into investing in syndications? Let me give you some perspective, Nancy, on why I’m asking that question. I’m in a lot of syndications for the same reasons, different markets and different class types. I’ve invested in storage, mobile home parks, multi-unit, even some big luxury single families.

I’m in some cool projects and I have my own projects also. I get so many of these that come across my desk now as a show host. People know me now because I’m public about that I’m interested in this. I get so many of these that come across my desk. For me, I know how I got started. I started having guests like you on my show but how did you get started? What turned you onto that?

How I heard this term syndication, I had never heard of it, even though I had been buying single-family and duplexes. My husband’s also a physician. One of his colleagues had owned quite a bit of a portfolio here. All of a sudden, when we got with him one day to catch up, he’s like, “I sold off my whole portfolio. I’m investing in these syndications.” I’m like, “What? What is this?” We started digging and I started digging and found out what it was.

At first, I thought, “This is like a scam. It sounds like a Ponzi scheme.” As I got further into it and got educated, I think that’s the key. The more education you get, the more confidence you feel. I’m like, “I think this is legitimate. I hear people doing it. I’ve seen it work for other people. They have these structures in place.” The key thing is to vet the sponsor and vet the deal. Number one is sponsor. Number two, I would say, is market then number three is the actual deal. That’s what we did. I started interviewing different sponsors. We’re doing it and getting comfortable and watching on the sidelines before I jumped in to make sure that we were the right fit that they were conducting themself, character-wise, in a way that someone I want to partner with.

It is scary because you’re handing over control to someone else versus if you bought your own property. You got to choose when you refinance, what colors you paint the walls, etc. This is like handing over $50,000, $100,00 to someone and saying, “I trust you to be a good steward of this money. That you’re going to protect it and grow it.” It is scary when you first wire that money to someone you might have met o online. I think the first key is to get educated.

As you were saying that, something came to me. It’s a little bit, not quite, but it’s a little bit like investing in stock. When you invest in the stock market into a company, you’re basically turning over this money to a company where they make all of the decisions. You have very little stay unless you’re a major stockholder. They’re managing the whole thing. I feel like in syndications, we have a lot more control over who we invest with. We have a lot more information about who’s running the project and that thing. It is a little bit of that same feeling of someone else has control over this project that I’m now investing in. Would you say that that’s true?

I would agree and disagree with that. I would agree in the sense that you are handing over your money to someone so it feels like you don’t have control anymore. Something I like about syndication that’s different from stock market is that you know who controls it. In the stock market, you’re like, “Let me click this button,” and some big corporation is doing it, which brings me to the point of the difference between syndications and REITs. Sometimes when I talk to other women, physicians, or investors, like, “I don’t need to diversify in real estate. I own some REITs or some stocks in real estate.”

Those are two different things because owning a REIT is like buying stock or a share in a company that invests in real estate, but you don’t own the real estate like you do when you invest in a syndication, which is like you own a fraction of a piece of real estate. You still get all the depreciation, the tax benefits, the cashflow versus when you invest in a REIT. It’s like investing, say, an Apple or Facebook. You get a share in that stock.

Thank you. These are great investments. REITs are great investments if you want to be completely hands-off. They have different kinds of REITs. You can go into doing malls. You could do all of it. You could do the mobile homes. They’ve got all these different REITs or whatever or full spectrum. To me, that’s a little bit more like a mutual fund with a manager. It’s not as much as direct real estate investment. Good distinction. Thank you for that. Talk to me a little bit about investing for impact. I know this is a big piece of who you are in the world. I’d love to hear how you do this and why this is so important to you.

I think at the core of it, especially for us women, when we invest. It is great to get the returns, but especially for women, we’re so purpose driven. We’re so community driven that a lot of the women investors I talk to resonate with the fact that they want to do something bigger for the world, for their community, for their families. If you think about it, that’s what money’s for it. It’s not to collect this power of cash. It’s what you can do with it. If you can make a positive impact for yourself, for your family, for your community, for the world, it’s so much better.

For me, one of my passion projects that are preventable blindness. I was turned on to ophthalmology, the field of eyes. When I was a medical student and I witnessed the miracle of cataract surgery for the first time. When this completely blind patient was hunched over, walked in with someone assisting him and with a ten-minute surgery, walked out jumping for joy and able to independently stand up and walk away, it changed his life.

What your readers may not know is that 80% of the world’s blindness is preventable. It was something as simple as pure glasses or a 5 or 10-minute $25 cataract surgery. That’s unacceptable. Part of my mission with real estate investing and the profits I earn is going towards this cause because I think it’s a tragedy and an injustice for people to live like this who are blind and don’t necessarily have to be. I would challenge your readers. There’s something that you want to make an impact off because we’re all purpose-driven.

We all want to grow and contribute in some way. Find what you’re passionate about, then see how your returns and your investments from real estate or whatever you’re investing in can help feel that mission of yours. That’s why I’m so passionate about it because impact investing, you can invest not just for great returns but also make a positive social impact on whatever you decide to make an impact on.

How does that translate for you? Does that mean that you have extra time to do the surgeries? Do you contribute to other organizations that do the surgeries? How do you utilize the money that you make from real estate to make that possible for yourself?

I would love to travel more to be able to lend my skills to this. I’ve done so in the past. With COVID, it’s less easy and with two young kids, it’s harder to travel. As I get older, it’s a priority of mine to physically go and perform these cataract surgeries. I partner with different organizations before, but the one that I’ve partnered with my real estate company, Clear Vision Investing with a nonprofit called Gifts like Global. Why? I love their mission.

They’re on this mission to cure preventable blindness, but they’re doing it very entrepreneurial. It’s the thought of, don’t give a man a fish but teaching them how to fish. Instead of saying, “We’re going to send a group of surgeons in there from the US, from Canada for two weeks and to do a bunch of cataract surgery,” which is the traditional model of “curing preventable blindness.” Instead, they’re funding these vision centers where the people in the village or the community are going out to screen their own people to see who needs surgery.

In turn, they’re building surgery centers within the hospital and bringing in surgeons from the US or Europe to teach people within that community, the doctors within that community, or they might have to travel further to learn to do these surgeries. It becomes a self-sustaining cycle where when you donate once, it hopefully continues to cycle where you don’t have to keep donating the money or bringing in surgeons every 2 weeks, every 2 months. It’s setting that foundation for them, letting them run it as a business.

The self-sustaining contribution. I’ve got a little story like that too. My ladies know that I have, since I was very young, a sixteen-year-old woman, been contributing to the education of women in India because of a traumatic experience that I had when I was living there. As I became a little bit older, the temple that I’ve affiliated with opened up a school in India to educate the community. Not just girls. The girls got an education but to educate the boys also that equality is a good thing. To elevate the entire community so that the women get educated and can have a better life. Everybody has a better life as each of us is uplifted. I became very involved with that school and have made multiple thousands of dollars of contribution to that school over the years.

My ladies have heard about this. What’s been very interesting lately is I had a conversation. I was having lunch with my swami. He was saying that the school is now completely self-sustaining. They built a water line that they then utilize and they also sell some water now. That water line also goes to their orchard of coconut trees. They then sell coconut milk, coconut water, coconuts, all this stuff because that’s a very big product in India to surrounding communities. They have some cows, so they have milk.

They’ve got all this stuff that they have their farm, so now the school is self-sustaining as far as its food and nutrition and all of that stuff. They also can sell some of this. Now they can continue to pay the teachers and stuff like that. I still donate because I want them to expand further, which is what their goal is. The students that are in the school now, all 1,000 of them, are guaranteed in education up through high school, basically. I think it’s from kindergarten through high school. It’s a full twelve grades.

Once they’re in, they’re guaranteed that education because they’re self-sustaining. I also appreciate it. It was part of the goal from years ago when we first started this. We have to build and we need to get donations and all of those things. Part of the plan is to make itself sustaining so that these children are guaranteed the education, the communities are guaranteed this uplifting presence, an opportunity in their communities and for it to be self-sustaining so that we’re not constantly trying to get more money and doing the fundraising thing. To me, that’s a new path of contribution. Would you agree with me on that?

I agree when it’s self-sustaining like that or requiring very minimal continuous donations. It not only helps the donors or nonprofits that keep having to chase donor money. It also helps the communities or countries you’re trying to help because, as you said, it uplifts them. When you give someone the power to change their situation, give them the power to earn some money and give them the power of entrepreneurship, their lives can change. They realize they have the power within to change their situation. That’s so powerful, not from a monetary contribution standpoint but also from the point of view of the people that were trying to help.

REW Nancy Huynh | Real Estate Investing

Real Estate Investing: When you give someone the power to change their situation, give them the power to earn some money, and give them the power of entrepreneurship, their lives can change.

 

I had never thought of that, Nancy, that other piece of that this is even possible, the mindset shift that happens. That’s amazing. You changed my paradigm right there. Thank you for that.

You’re welcome. I’ll give you a classic example. There’s a gender gap with blindness, so 55% or a little over 55% of people who are blind around the world are female and girls. Now that we’ve given them this opportunity to go around screening people for vision, they have economic opportunities that they otherwise wouldn’t be able to have.

After they get their surgeries and their cure of their blindness and able to see, they’re able to contribute to the very organization and mission of what helped them with their vision. It’s like a self-sustaining cycle where the people that you help are now able to help others in their community. It would be wonderful if we could find some self-sustaining solution for all problems around the world.

I love that. I’ve never said this and I’m not sure how to articulate this. I don’t want it to come out wrong. Ladies, bear with me, but I’m very much into Abraham Hicks. Do you know anything about this?

I don’t know him.

Law of Attraction? She started this trend. Esther Hicks started this trend, Esther and Jerry. It’s a long story, but I’m very much into the law of attraction that what we put out there is what we get in return. When I talk about having a blissful life, part of that blissful life is that I know I’m an attractive magnet for bliss to come towards me because that’s the energy that I send out consistently. It’s my biggest mission in my own life.

That works financially and health-wise and all of those things, what you put out is attractive. We all know that, but there’s this what we call the Law of Attraction. Anyway, I’m into Esther Hicks and Abraham Hicks. I was on a cruise once with them. Someone came to the chair, the hot seat. You can tell I’m Indian. She said, “I wanted to make all of this money so that she can co she can contribute to causes.” What Esther immediately said and she supposedly channels. I believe that she does, but whatever for whatever.

She channels all of her answers. The answer that came back is that, “You can enable people’s inability to take care of themselves.” I was offended by that because I am so big into contribution. I feel like there are so many people that are so much less fortunate than me. I want to help. I’m so blessed with what I’m able to do. It’s a big piece of who I am and how I define myself. I was offended, but then we have this conversation about contribution can have a different face. It’s not necessarily giving to people and enabling them to continue to need. It can be enabling people to grow and be uplifted and to then turn around and contribute in the way that they were contributed to. That was such a beautiful paradigm shift for me. Thank you.

Thank you for sharing that. That’s beautiful. You put it perfectly.

Thank you. This has been such a lovely conversation. We’ve got more. Nancy wants to talk about harmony integration. As women, we play so many roles. With her, it’s physician, mother, wife, surgeon, investor, entrepreneur and philanthropist, there are so many roles that she plays. There are so many roles that each of us plays in our life, daughter, grandchild, sister. There are so many of these, friend. We’ve had other ladies come on the show and talk about that balance.

I think that each time we have a lady talk about that, we pick up new nuggets because each of us perceives our lives differently. We bring a different skill set into creating that harmony. I feel like we’re due for that conversation again. I asked Nancy if she’d be happy to share that with us in EXTRA and she said yes. I’m so excited. We’re going to be talking about that in EXTRA, so stay tuned ladies. Nancy, can you tell people, I know you’ve got a free gift for my ladies. Could you share about that?

I have a free due diligence checklist for ladies interested in real estate syndications. Some of you might be interested in buying your own rentals, but for those of you who are like, “I never want to be a landlord. I don’t want to fix toilets, deal with tenants.” A great way to passively invest, like we briefly touch upon in this episode, is through syndications. One of the things that stop a lot of people is that they don’t know where to start or what questions to ask or how they know that the sponsors, whoever they are handing the money to, is not going to take it and run it away and never to be seen again.

I put together this checklist because these questions have helped me analyze the deals I’ve been looking at since I first started. You can go to my website at ClearVisionInvesting.com. Under Learn, there’ll be a due diligence checklist and it’s free. Download it, see if you could get any value from it and I’ll love to hop on a call to chat if you want to and walk you through it.

That’s how they can reach you and all of that too?

Yes.

Perfect. Thank you for that. That was very generous.

Thank you.

Are you ready for our three rapid-fire questions?

I’m ready. Let’s go.

Nancy, tell us one super tip for getting started investing in real estate.

Education. The more you get educated, the more confident you’ll be and the more you’ll be ready to take action. That’s the question I get asked quite often by a lot of ladies, a lot of women physicians. How do I get started? I said, “Start with your education.” That’s the one thing that no one can take away from you. Once you’re armed with that power, you’re ready. Armed with education then getting your mindset right and taking action. You’ll get the results that you want. Start with your education.

The more you get educated, the more confident you'll be and the more you'll be ready to take action. Click To Tweet

What’s one strategy on being successful as a real estate investor?

I think it’s learning to pivot. I take this from my medical and surgical career because there have been so many times I’ve had to pivot. Whether it be this medication’s not working at the pivot to another medication or I’m in the middle of eye surgery and something is wrong. I have to pivot to get through the surgery. I’ve taken those skills to apply to real estate because, as we know, as real estate investors, nothing is as planned.

No matter how much you underwrite it. No matter how much the performer looks great. Something is always bound to go wrong or not take the turn that you didn’t expect it to. Learning to recognize the situation as it is, as we talked about in this episode then what are the options? What do you do from here? Having that flexibility and knowing how to pivot will take you a long way.

That’s so good. It’s been so real over the last couple of years, with so much changing so fast.

If you think about from COVID to now, during COVID, it was like, all these prices were blowing up, but the interest rates were super low. Now, as interest rates are rising, people are shooting themselves in the foot to say, “I should have walked in at the low-interest rate because I still would’ve earned a better return than yes, the prices are stabilizing or falling.” Depending on the market you are. Now the interest rates are high and some properties don’t even cashflow anymore. It’s learning to pivot according to what the current conditions are.

Nancy, what would you say is one daily practice that you do that contributes to your personal success?

The one thing is that I have a very set morning routine. Part of that includes exercise. I exercise almost every day. It’s very rare that I miss it unless I’m traveling or something. I feel that if you get your body right in the right state, it puts your mind in the right state then you feel like you’re ready to take the world after that. I love to get my body running and moving first thing in the morning so that I feel like nothing can derail me.

Do that before you pick up your phone and answer emails. Set that time for yourself. It might not be an exercise for some people. It might be something else, but before you pick up that phone to check Instagram or Facebook, leave that alone and focus on you for the first 30 minutes or so of the morning, then you could react to everything else. We’re so used to reacting throughout the day that we’re not proactive about what our intentions are. How do I want to act? How do I want to react to various situations throughout the day?

I always say that my little smartphone is this little device of other people’s agendas. Even a game is another person’s agenda. They’ve got in-app purchases. This little device has everybody else’s intentions and everybody else’s agendas.

It’s hard. I have my phone right next to me as we’re speaking. It attaches to us, but I think saying, “I’m not going to touch it for this amount of time,” in the morning in particular, it sets your day so well because then you’re like, “This is my agenda for this time and for this day.”

It sets you straight on the right road moving forward. I love that. Thank you for that. This has been such a great show. Thank you for all that you’ve offered my ladies, Nancy.

Thank you for having me. I’m glad and hopefully, people took something away from it. I always learn from these conversations and from people I meet. We’re all better together. A rising tide lifts all boats. I believe in that saying and we lift each other up.

Thank you so much. Ladies, we’ve got more, so stay tuned. Nancy’s going to be sharing how to integrate and harmonize all of those roles that we play in our lives. It’s so important to our bliss. I’m excited that she’s going to be sharing her perspective on that in EXTRA. If you are subscribed to EXTRA, stay tuned. If you are not, you can get subscribed by going to RealEstateInvestingForWomenEXTRA.com.

For those of you that are leaving Nancy and I now, thank you so much for joining us for this portion of this show. I so appreciate you and I’ll look forward to seeing you next episode. Until then, remember, goals without action are dreams. Get out there, take action and create the life your heart deeply desires. I’ll see you soon.

 

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About Nancy Huynh

REW Nancy Huynh | Real Estate InvestingI was born and raised in Los Angeles, but headed to the East Coast for college. I completed my undergraduate studies in biochemistry and biophysics at Yale University. It was in college that I first became interested in medicine, after spending some time at a local clinic and several summers abroad in developing countries working on innovative health care delivery programs. During medical school, I was drawn to the field of ophthalmology because of the mix of medicine and surgery, the wide variety of interesting pathology and the gratification of preserving and restoring vision. I completed my ophthalmology residency at the Massachusetts Eye and Ear Infirmary/Harvard Medical School, and obtained additional fellowship training in ophthalmic genetics at the National Eye Institute, National Institutes of Health.

 

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