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.
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.”
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.
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.”
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.
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?
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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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.