March 25, 2025 • 34 mins
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ed Mathews (00:00):
Greetings and salutations, Real Estate
Undergrounders.
It is Ed Mathews with the RealEstate Underground.
Thank you so much for joiningus today.
I'm really excited about thisconversation.
This gentleman and I we werejust talking before.
I hit record and realized thatour careers have actually
tracked one another over theyears, and I also discovered
that we are both geeks in ourvery own special ways.
(00:20):
We're going to get into that.
So, Michael Drew, welcome tothe show.
Thank you so much for your timetoday.
I'm excited to have aconversation with you.
Michael Drew (00:27):
You know what?
Thank you, sir.
And remember Bill Gates said becareful how you treat nerds.
You could be working for oneone day you will.
Thanks for having me.
Ed Mathews (00:35):
Yeah, absolutely, and one of the things I've been
really intrigued by in terms ofhow you operate is the real
estate done for you concept andyour website and everything.
I'm just I'm all about being aformer marketing geek myself
always about making it simple,right, so that people can
understand it, learn and thenultimately build enough trust to
(00:56):
be able to do business.
Why don't you tell us a littlebit about your business and your
philosophy in terms of how yougot here?
Michael Drew (01:00):
Sure, Absolutely.
My background was in the stockmarket.
I taught and trained people howto do some of the basics.
Covered calls things like thata little bit more boutique-y,
like iron condors, premiumselling strategies.
The problem with that is thatit's a certain aptitude.
You have to have a certainaptitude to do that.
It's also so boutique-y, if youwill.
(01:20):
Let's just say you've got amillion dollars.
You wouldn't use more thanabout a hundred grand with that
strategy.
If you will.
Let's just say you've got amillion dollars.
You wouldn't use more thanabout a hundred grand with that
strategy.
And it's also very active.
So when you add that all up,it's basically another job.
And I was taught a long timeago I'm a big into
self-development back in the dayand I was taught wealthy people
have time and rich people havemoney.
Yeah, okay.
Then what happened is I hadfour kids and I'm like, wait a
(01:43):
second here.
I think it's cool to go tosoccer games.
I think it's cool to have kidsthat are older, who are not
jerks.
There's the goal.
So I said, all right.
So let's begin with the end inmind.
I don't want a job, I wantpassive mailbox money.
Initially, a hundred years ago,I tried some multi-level
marketing stuff, but then youhad to rely on people, and
that's not a great ideasometimes, right?
So really, what happened is Isaid you know what?
(02:04):
I've got good credit.
I was living in an area thatwasn't great for rentals, so I
had a co-worker actually who wasa UPS executive.
Okay, so UPS was a privatecompany that then went public
and he, when he went public, hewas told the smart people bought
real estate and then not sosmart people bought cars and
things like that, and he had 20houses in Indianapolis If you
(02:28):
don't know, that's where UPS isbased and he was making money
every single month.
He didn't quite have thesystems and processes, but I'm
like we could fix that.
The fact that you own 20 doorsand you're in your fifties, this
is a great start, man, andthat's basically what I copied.
I bought my first nine or 10doors about 15 years ago and
(02:48):
we've been helping investors doabout the same ever since, so
it's been a great.
Now, fast forward to today.
We've done just over almost1100 houses.
Ed Mathews (02:56):
Wow, congratulations .
That's really amazing.
It's interesting you look atthe stock market and how it's
performed over the years.
By and large, I've always beena bet on America kind of guy,
right, but I've stuck to theindexes because I'm not as
schooled in what you're schooledin.
Real estate for me wassomething that was tangible, I
could reach out, I could touchit, I could directly increase or
(03:17):
decrease, but increase thevalue of the property by
upgrading a bathroom orupgrading a kitchen or siding or
whatever, and so that wassomething that I always really
understood, as opposed to hopingthat the CEO of GE, Larry Culp,
I think, knows what he and histeam are doing and so I'm going
to pile money into that.
And for me, real estate becamea pretty easy way to build
(03:39):
wealth and then ultimately, itactually built cashflow and set
me free.
But I'm curious when youlooking at the various asset
classes, what drew you to realestate specifically?
Because there's a lot of assetclasses out there, right, and
single family homes inparticular.
I'm curious about that
Michael Drew (03:54):
Of course obviously there's more than one
way to get there, wherever thegoal is.
Sometimes I like to talk aboutathletics and sports because
it's easy to relate to.
Somebody says they want to loseweight.
You could do it any way youwant, you just have to like to
do it.
If you say you got to run 10miles a day, it's not going to
happen.
You got to find something thatworks for you.
Initially, I gravitated towardsthe stock market.
However, one of my mentors saidthe stock market's great for
(04:16):
accumulation.
It's just not great forcashflow.
So let me get this straight IfI got a million dollars and I'm
55 or 65, I pull out 4% a year.
That's 40 grand.
After it's taxes, it's lessCrickets, right?
Ed Mathews (04:31):
Okay, three grand a month.
Okay, now what do we do?
Michael Drew (04:34):
I'm kind of a competitive pickleball player so
we like to jab at each other alittle bit.
When I bought one of my kind ofdream houses, if you will, I
did pretty well once upon a timeand I had a good credit score,
good W-2 income.
My buddy, I think I probablymade I don't know three or four
times money and he goes.
Good for you, fancy pants.
You've got one house.
He's never made more than 150grand and he goes.
(04:59):
I think I have 17 housescurrently and the tenants are
paying off the mortgage and I'mlike, wait a second, I only have
one house and you have 17.
And he's.
And then when you fast forwardthis, when you get them paid off
, you're like you're going toeasily have a quarter million
dollars to residual income basedon assets.
And Andy had a 401k.
I said I'm being a poor stewardof my credit.
So what happened to me is I hada vision of when I retire.
(05:20):
All right, and I love my wife,I love my kids.
I wanted a several-legged table.
I didn't want a one ortwo-legged table.
I goofing around.
I wanted a 10-legged table, a20-legged table.
So if something happens, youlove Lowe's and Home Depot has
bad earnings.
Lowe's takes a dunk.
You've got to havediversification, but you have to
have it in asset classes.
And I said you know what?
(05:40):
Let's go ahead and go all in onthis.
Let me figure it out.
I can mindlessly do the stockmarket stuff.
I could put in X per year.
My company may or may not matchthat right back in the day.
And now it's been easy.
Why don't you get started?
And that's what the struggle Inoticed with a lot of people.
They get ready to get ready.
I don't know.
Let's go, let's.
It's not brain surgery, it'snot that hard.
Ed Mathews (06:02):
I'm always fascinated by that, because you
look at like the statistics ofpeople that buy training courses
and there's a process that mosthuman beings go through and
that is that they buy the courseand they get the dopamine hit
right.
They go okay and their brainsays, okay, I've accomplished
what I just wanted to accomplish.
I wanted to learn how to buyand sell real estate, and you
(06:23):
didn't read the book yet, youdidn't go through the training
yet, and 95% of the people buythe training course and never
use it,
Michael Drew (06:28):
Which is 1,000 percent
Ed Mathews (06:31):
Astonishing number.
The idea of accountability andacting.
Now you and I come from similarcultures, business-wise, where
there's just a bias towardsaction.
It's let's not talk about it,let's go.
It's the old ready fire aimkind of thing.
Michael Drew (06:48):
Amen! it reminds us that my son liked to drive
better.
My daughter didn't love todrive so much.
I drive a big old SUV like theTahoe should I be Tahoe Escalade
type thing, and I can,literally.
I don't want to embarrass thisI can like text while I parallel
park.
I'm joking, but it's.
I can easily do this.
When my kids saw me do this,they're like oh, you're so great
, I go I've just done ithundreds of times from Chicago,
(07:10):
it's easy.
So you've got to.
You're right.
A bias towards actions.
You gotta start and sometimesyou have to.
We always say this is thereenough evidence in your life to
accuse you of being seriousabout blank, losing weight,
dating your wife, whatever itmay be, whatever's interesting
to you, All right.
If you would have had that, Icould have looked at your
(07:30):
schedule.
I could have looked at what youput in your body and said, wow,
you really get theMediterranean diet.
You really are spot on.
You've got the discipline.
And what I realized is so manypeople in their forties and
fifties are just too busy andthey're interested in that
feeling that happens when theyopen up a mailbox and get a
check.
Now I'm dating myself.
(07:50):
Nowadays, Of course, it's allage, right.
But when all of a sudden, ourcompanies send out over a
million dollars a month in rent,Okay, so you can.
Let's say you start with mycompany and you get four grand a
month or whatever, it's notgoing to really maybe it'll
change your life.
But the point is you did allthat without a job, Right, Cool.
When it gets up to the pointwhere wait a second.
When I retire, my IRA is goingto pay me this or my 401k.
(08:13):
Just wait a second.
Here I can afford this withouthitting my principal.
Ed Mathews (08:17):
Yeah, and you've touched on a key point.
That is something that means alot to me and the folks that I
work with is that the fact is,you don't have to have 5 million
bucks in the bank, right.
What you need is cashflow to beable to live your life, so that
it gives you the financialfreedom of being able to do what
you want to do without asking aboss hey, can I take this time
off?
We both have kids, and the factis that my youngest is a
(08:39):
competitive softball player, andwhen she goes to a tournament,
I want to see the kid play Right, and not having to ask
permission is a wonderful thing,and cashflow is what breaks
guys like you and I and thefolks we work with free.
I'm always interested in the subasset class in terms of you've
chosen single family homes,right, I'm more of a multifamily
(09:00):
guy.
I do flip houses.
I don't keep them.
I do that because it's fun.
But I'm curious about singlefamily homes and why, given your
background in terms of youradvanced background around asset
management and all that, whatdrew you to single family homes
as opposed to multifamily, selfstorage, parking lots, whatever.
Michael Drew (09:21):
Sure, first of all , just like anything, they'll
all work it if you work themright.
Yeah, they really will.
I was born and raised inChicago, okay, and that is a
higher taxed area in Chicago.
When I looked at parking lotsyou just mentioned, all the
Russians controlled it and Ijust Even though I have 3%
Russian, I'm like, and I likevodka, that's about it.
(09:42):
I can't do that.
And so what happened I doremember this is that when I
went to Columbus, Ohio andIndianapolis, where my company
is based, is one of the hiddenthings you don't see is the
turns in between tenants.
Okay, so I had somemulti-investor guys.
They really like studenthousing and things like that.
(10:03):
The problem is those turn everyyear, every other year, and if
you don't put that on yourspreadsheet, my man, it's going
to hurt, okay.
And then, all of a sudden, Irealized I'm an old.
I still ride motorcycles.
Anytime you get in a situation,you must predetermine how you
will get out of a situation.
I'm passing a car, I'm passinga semi truck.
(10:23):
You can't pass over a hill.
What happens if you always gotto think how do I get out?
And so I always remember isthat in the Midwest is that
multi-units cater to a lowerdemographic financially.
Okay, I get the manager of TacoBell and he likes to smoke his
marijuana, which is probablylegal by now in most States.
Who knows?
It's just that guy is notstaying.
(10:44):
He doesn't have kids.
Also, if I have a 10, 20, 40unit building, when I go to exit
that building I'm selling to aprofessional, I am not selling
to a mom and pop.
Versus if I have a singlefamily home, the homes right now
are in the $150,000, $200,000range.
A $30,000 down payment gets mea home.
The appreciation is solid andif and when I do want to exit
(11:08):
that home, I'm exiting to aretail buyer.
And then the color of the treein the front yard and I get 110%
of asking.
It's easy to buy, easy to sell.
Cashflow is solid.
My homes are so profitable inthe Midwest that they're
positive cashflow and 15 yearmortgages and they're also
qualified for DCSR loans or nodoc loans.
(11:30):
So the cashflow is there and I'ma property management company
too, so we do all the CapEx onthe way into the investor.
So we buy them wholesale.
We do the roofs, we do theHVACs, the plumbing, the
electric, the water heaters, etcetera, et cetera Secretly.
So I have an easier job inmanagement and my secret game
plan is so the investor buysmore.
(11:51):
My top investor has 88 housesout of Ventura, California, and
I think he's seen about four ofthem.
Ed Mathews (11:56):
So when you say you're an investor, so you work
with a single investor on everyproperty?
Michael Drew (12:02):
I do, I don't pool money at all, yeah, so they can
Ed Mathews (12:04):
Teach me more about that.
Michael Drew (12:05):
Sure, so what happens is we buy about five to
10 homes a month.
Okay, we also own theconstruction team.
So we buy, we rehab and we ownthe property management team, as
I mentioned and, on a side note, I also am a major owner in a
self-directed IRA company Okay,so we acquire, we rehab, we
tenant, and then if Ed, one ofyour listeners or one of my
(12:27):
existing investors, says youknow what, you keep sending me
four grand a month, I want it upto five grand a month, whatever
the number is, they raise theirhand, they take one off the
shelf.
That's already rehabbed,already rented If we close on
the 15th of the month.
If we close on the 15th of themonth, I program rate the rent
and then I ACH you the nextmonth's rent.
It's already done, alreadyrehabbed, it's done for you.
(12:48):
Passive income.
That's what it is
Ed Mathews (12:50):
Right, all right.
So one of the keys to that,then, obviously, is filling that
pipeline right, and I'm alwaysinterested in how folks like you
find these houses.
Five to 10 houses a month is alot of.
It is A lot of rowing, so tospeak.
You're breaking it down.
So what is your top or couplemethods of getting a property
(13:11):
under contract?
Michael Drew (13:12):
Sure.
Now, that said, as we get older51 years old our proverbial
Rolodex is one of the mostvaluable things we own.
If someone's 23 years old andthey have a million bucks, they
can't compete with me, or 10.
It is 23 years old and theyhave a million bucks, they can't
compete with me or 10.
It doesn't matter, I just havethe relationships.
My phone just rings and it'slike that old adage, right, when
I take a loved one out, a goodfriend of mine out to dinner,
(13:34):
you order a steak and it's notperfect, the maitre d' comes up
and says sir, I'm going to put alittle bit more fire on that.
Can I buy you a drink?
Or, you know, own it, just,whatever it is, you just take
care of business.
You want to do more businessfor that person, like I'll go
back to the restaurant youdidn't mean to, you know, right,
and so you keep doing that foryears pays itself off in
dividends.
So, whether it's a tax, liens,foreclosures, courthouse steps,
(13:56):
probate attorneys, if there's aproperty on, the guys like me
and five other guys behind ushave already passed it up, right
, okay.
So if you're buying on the MLS,yeah, that's not where you get
it.
Or if you do, you have to buyso high you can't afford to do
the capital expenditures.
We do, of course, wholesalerssame thing.
But also keep in mind, to do mybusiness you have to act
quickly.
You have to have cash and younever back down If I say I'm
(14:18):
going to buy something.
Sometimes they'll call me whileI'm on the proverbial
pickleball quarter at the gym.
And they and I got a 911 phonecall from my buddy.
I got one for you.
I know the address.
I got pictures I can wire frommy phone earnest money.
Let's go, let's go.
Ed Mathews (14:32):
And you look at.
So you named a whole bunch ofdifferent strategies in terms of
tax liens and foreclosures andit sounds like you have a whole
bunch of bird dogs working foryou, looking for the that's the
thing.
Michael Drew (14:42):
You got it.
Ed Mathews (14:43):
What does your team look like?
Michael Drew (14:45):
So I'm with computer sales and marketing,
podcasts et cetera and I reallyenjoy that.
I also do, like I said before,four kids.
My business partner, great guy.
He's the single guy so he's alittle bit more in the field all
day, so I'm more on the salesand we're running several
different teams at the same time.
My dad passed away so I calledmy business partner's dad, my
second dad, so we've got a niceteam of guys out there that work
(15:07):
things and we're all alignedall the way up to giving it to
the investor.
So leasing is on the phonecalls, acquisitions on the phone
calls.
When things go wrong,maintenance is on the phone
calls.
So we know everything that'sgoing on in the company and what
I do.
We don't sell out much ofanything, maybe something goofy
like a foundation thing that wedon't see that often.
But everything else is in-house,so we can control quality.
Ed Mathews (15:28):
Okay, so that includes your technicals, your
mechanicals and whatnot.
Absolutely Really, wow Okay.
Michael Drew (15:34):
Yeah, I think we'll outsource.
We have a couple of guys we'lloutsource HVAC, just the
installation.
We'll maintain it, though.
Ed Mathews (15:42):
Okay, all right.
And then so, in terms ofdisposition, right, it sounds
like your investor partners areall about cashflow, not
necessarily selling off rightand so mostly yeah, okay.
So in this scenario, let's justdraw this to its natural end.
Then, if someone says, hey, I'mlooking for my $30,000 back and
I'd like to take my equity out,what's the process in how you
(16:04):
do that and do you get involvedin, or anything like that?
Michael Drew (16:07):
Yeah, we do them every month, yeah, so there's
two things that I want to talkabout.
Number one is to answer yourquestion and number two I want
to go.
I'm going to go fast by goingbackwards.
So to answer your question, mysister is one of my best friends
.
Both our parents have passedaway and it's been unfortunately
, but it seems it's going tohappen to everybody right and
she's got a property between hertwo properties.
Unfortunately, she's divorced.
(16:27):
I navigated some of thosefinances for her.
She's got a quarter milliondollars of equity in two houses
and I said what do you want to?
At this point you don't reallyneed to keep them, You're too
young.
I say 1031 on both and she saidokay, and she's going to turn
one into two.
She could go one into three ifshe wants, but I think she's
going to be conservative.
So we're selling it and when wewalk through that with one of
(16:47):
our favorite 1031 exchangecompanies, we've already
identified the other tworeplacement properties.
So we'll dispose of it, maybedo an existing investor or maybe
retail that's depending on thehouse and then we'll 1031 that
in two or three more doors,absolutely.
Does that make sense?
Ed Mathews (17:02):
Total sense.
Yeah, I was about to use themonopoly analogy.
You're literally playingmonopoly, right.
You're just buying the hotels,you're just buying more
greenhouses.
Michael Drew (17:10):
You're based on the East coast, right?
Ed Mathews (17:12):
Right
Michael Drew (17:16):
So, my buddy, I have a bunch of clients on a New
Hampshire area and they're likewe can't touch houses for your
price, we can't touch cashflow,so, price, we can't touch
cashflow.
So they're coming to me sayingwait a second, here I've got a
building that my mom left me, mythis left me a commercial, blah
, blah, blah.
And they're like I got to go,I've got a million dollars of
capital gains and I said let'sput that in 1031 and I'll give
you seven houses.
Okay, the coast is a little bitbetter for appreciation.
(17:39):
The interior of the UnitedStates is a little bit better
for cashflow.
And I want to go back to thaton purpose, because when my
mentor came to me he said,listen, you got to play offense
and defense.
Offense is cashflow, butdefense would be things like
insurance.
Okay, I snowboard in Floridasometimes, right, so they have
so many storms, insurance hasgone up crazily, right, sure has
(18:00):
Taxes.
I have buddies in Nevada andTexas.
No state tax, but propertytaxes are spicy.
Don't like that for cashflow.
Next, I've gotlandlord-friendly versus
tenant-friendly.
Don't like California.
I like to be there.
Santa Monica's fun.
My dad shipped the USS Midwaysout of San Diego.
That's cool man, but I got totell you it's tenant friendly
(18:22):
For me.
I can get somebody out in 40days, 500 bucks.
And then in Indianapolis, it'swithin 700 miles of two-thirds
of America.
So you can get to New York,Chicago, Nashville, and Atlanta.
If you need to Florida, you'regoing to probably take a minute,
but you can get to America.
And if you want to work, youcan work.
(18:44):
It's like the 16th largest city.
It's the county seat of thestate.
There's several universitiesnearby, so you get wealthy by
having job growth and populationgrowth.
That's where you get yourappreciation from and if you
play defense with those things.
As far as expenses, that equalsthat's cross and T's dot nines.
That's how I found Indianapolis.
It checks all the boxes.
Ed Mathews (18:59):
Yeah, it sure does.
Yeah, it's actually one of ifnot you read all the lists of
the best rental returns in thecountry.
Indianapolis is invariably onthat top 10 list every year.
Yeah.
Michael Drew (19:10):
Yeah.
Ed Mathews (19:10):
Absolutely, and it's a nice part of the world too.
It's a nice place to live.
Okay, all right, you hadmentioned your mentor and I want
to get into the final five, sowhy don't in there?
I'm always curious about whatgets people out of bed on Monday
morning.
Right, because in most casesthe folks that I interview it's
not about the money.
Right, it's about somethingelse, because the money started
taking care of it.
Mortgage is paid off, collegevacations are paid off.
(19:32):
You're living the life you wantto live, so tell me about your
purpose.
What gets you out of bed onMonday morning?
Michael Drew (19:37):
Thanks so much.
Literally, at age 31, my dad,who did serve in our country's
Navy, was diagnosed withmelanoma in November and he died
in January and that baby boomermentality didn't necessarily he
wasn't stoic per se, but hewasn't as friendly with me as I
am with my son, Right?
So I got to say becomingwealthy is mainly a math problem
(19:58):
, right, losing weight is mainlya math problem.
You have to have somediscipline, but it's not that
hard.
You just have to havediscipline.
And so when the music stopsright at the end of your life
you're not going to wish younecessarily had more money, is?
I really enjoy having greatrelationships with my kids?
And also I think there's anunderserved area which is men
have a low quantity and qualityof same sex relationships.
(20:22):
For example, I got my buddy, mybusiness partner.
He's one of my best friends,but pretty much everybody all
day long is subordinate to us.
So I don't really have I don'tsound like I'm lonely, but I
don't have any friends in mydaily job.
I don't have a water cooler tohang out with or a coffee shop,
so I work out of a co-hatchwhich is a co-working facility
and I really enjoy pickleballbecause that sometimes it's an
(20:45):
underserved community, I think,where men don't have camaraderie
.
So my kids really I do probablyplay pickleball four days a
week and probably about half ofit's social.
I get out when I'm learningabout a new, a book, a social
event.
We're raising money forMake-A-Wish.
We're doing something fun.
I do enjoy that.
I do enjoy guys who, of course,love their wives and their kids
(21:07):
, and I don't know.
I think it's easier having alittle bit higher energy in life
, because it's attractive andalso it's more fun.
Music is always going on in myhouse.
We're doing something.
Ed Mathews (21:16):
Love that, so I'm always interested.
I want to ask you about yourmentor what's the best advice
you ever got and who actuallygave it to you?
Michael Drew (21:24):
I would say, two companies ago.
Again, there's two things thatmight not land with people,
because men tend to jab at eachother a little bit more
aggressively.
So this comes to me, not to you, right?
Number one it says ifeverything was about knowledge
right, Like you mentioned, 95%of people buy books and things
like that.
They're getting cobwebs on theshelf.
It was all about knowledge.
The joke was all the librarianswould be multimillionaires with
(21:46):
great sex lives.
Mustn't it be all aboutknowledge there, buddy?
And the second thing is this isthat if someone has lived their
life and they're willing to livetheir life for three or five
years and you can learn about itin a month or two, it's
pathetic to learn aboutsomething in three years you can
learn about in one month.
That's just poor stewardship ofyour time.
That resonated with me.
(22:07):
You can talk like that to me.
I don't need to read the bookor hug you for three years.
You tell me what I need to knowin one month.
I'll pay you money.
That's great.
Tell me the landmines.
I've never raised a teenagerbefore.
Good luck.
Tell me, what questions am Inot asking?
Those are things that I want toknow and that's where I like to
talk straight to my investorstoo, saying you don't want to
cry over that.
There's maintenance on realestate.
(22:27):
By the way, If you've not owneda car before, there's
maintenance on cars too.
Yep, you got it.
It's a line item in thespreadsheet.
Once you tell people what toexpect, they're fine.
Yeah, so I do enjoy that.
I do enjoy someone else sayinghey, what's going on?
What am I not seeing here?
Ed Mathews (22:45):
That's awesome.
I love that.
Um, all right, so let's talkabout I think.
Personally, I think you learnmore from stubbing your toe than
your successes.
Right, curious about youroutlook into mistakes and what
was one of the mistakes thatyou'd love to have back in terms
of a decision you made.
What was that process?
To recover?
Michael Drew (23:00):
A lot of people.
We can see people in ourauctions and in our different
areas and over the last 15 yearsit's the same about seven guys.
And then there's a guy not tobe goofy he's got a Rich Dad,
poor Dad, three ring binder, andhe's got 200 grand and we're
like this is not going to workout well for you.
I wish you didn't have thatmoney because you do more
research.
For example, my failure was isI didn't do the research on a
(23:24):
property.
It was a hefty loss.
It wasn't a six-figure loss butclose.
And what I did is theyforeclosed on a property for the
HOA dues, but it was a tinylittle item in the title search
that I so I was the proud ownerof the second lien position.
Essentially, when we went tosell the property.
We didn't know about it for sixweeks until we went to sell the
property and there was a heftyfirst that the rules had changed
(23:49):
in the auction I went to and noone caught it and it was a bad
loss.
So I own nothing and legally Ididn't have a leg to stand on,
Recourse.
No, had that end up playing out, took it in the shorts Ooh,
you're good at that.
Didn't live and learn.
So now what we do is we paymoney every single month for a
(24:10):
gentleman who's retired and hedoes the title work for us on
everything.
We pull title on 70 propertiesand we go over it.
One of the worst things thathappened, we had another guy do
the foreclosure on a blanketloan.
So a blanket loan when theyhave that one was 15 properties
on a blanket loan You're not infirst position.
When they were foreclosingthese, you're still not in first
position.
It was crazy.
He's like stay away, stay away,trust me, stay away.
(24:33):
And I'm like but we can make somuch money, the juice is not
worth the squeeze, brother, stayaway and I'm like got it, got
it.
So we have an expense everymonth for the guy who makes sure
we don't do it again.
Ed Mathews (24:45):
Yeah, I would say that's an investment, not an
expense.
Yeah, yeah, I bet you don't payhim in a year what you lost on
that one deal.
Michael Drew (24:52):
That's correct, that's correct, yeah, yeah.
And now that he sees what we'redoing, he's you know what.
I have a few buddies that needsome of these turnkey properties
.
They're like we're trying tocopy me, because every you don,
you don't tell people when youmake two or three grand.
You tell people when you make abunch of money on a flip.
I'm like replacing your incomeis the fun part long-term.
(25:12):
And then now he refers businessto us you know.
Ed Mathews (25:13):
So that's great, that's awesome, yeah, that's
fantastic.
So leaders, invariably, arereaders right In some way, shape
or form.
Guys like you and me aremagnets for as much information
as we can take in.
Tell, there were magnets for asmuch information as we can take
in.
So tell me about the bookthat's on your nightstand,
either virtually or physically,and what authors are you paying
attention to these days?
Michael Drew (25:32):
Thanks for asking.
I'm going to go old school andI'm going to go new school.
The old school is a gentlemanby the name of Jim Rohn.
Jim Rohn was one of the firstteachers of Tony Robbins.
He wrote a book that I thinkI'm going to have trouble
finding now, called the fivemajor pieces of the life puzzle.
I bought those in bulk andwould give those out to anybody
I love and care about.
He also did an audio cassettecalled the art of exceptional
(25:55):
living, and if your kid is about15 or 16, starting to find
their way in the world, that iswhat you play on a road trip.
It's so simple though.
It's so consumable.
It's not esoteric, it's verylike Rich Dad's book.
It's not very difficult tolisten to.
So that is Jim Rohn.
Now, more clearly, I do JamesClear's Atomic Habits.
And what does he say there?
(26:15):
You don't rise to your goals,you fall to your systems and
habits.
And so goals are great, buttell me about your habits, tell
me about your disciplines, tellme about your minutia, and then
I can tell you if you're goingto achieve your goals, about
your minutiae, and then I cantell you if you're going to
achieve your goals.
And that's really worked welland it's fun that way.
And so when you look at mycalendar, you can see that, yes,
I am pursuing a relationshipwith my son and my daughter.
They're different though.
My son likes to do fun stuff,my daughter likes to do
(26:36):
different stuff.
That's fine.
I'm going to love you whereyou're at guys, whatever it may
be.
And one of my daughters worksfor the leasing company and
she's loving it right now andshe's frustrated sometimes.
I'm like, I know, welcome tobusiness Sounds great,
Ed Mathews (26:48):
But the cool part is that you get to spend time with
her, right?
Michael Drew (26:51):
Yeah, exactly
Ed Mathews (26:52):
I think it was.
Jimmy Johnson was talking aboutthat.
I can't remember where I sawthe interview, but talking about
.
One of the reasons he went intobusiness was so that his kids
would eventually join thebusiness and he could spend time
with them.
It's something that is time isso valuable and you can spend
time with them.
It's something that is time isso valuable and you don't
realize.
You're our age, right.
Michael Drew (27:10):
I did something different.
I'm a wave runners, so that'show I spent time with them.
It's better.
That's way more fun.
Ed Mathews (27:16):
Way better.
Yeah, all right, talk to meabout.
We're getting on the subject alittle bit, so let's talk about
success.
What does success mean to you?
How do you define it in yourlife
Michael Drew (27:32):
With relationships , which I still have a lot to
learn?
Some guys will be like oh, I'msuccessful in my family and this
and that happy wife, happy life, yada, yada, yada.
Now, when you ask the wife, youknow what kind of husband you
are right.
That answer you might not likeor you may not, and so that's
something that I'm stillpursuing.
I've not mastered that by far,but that's a little bit
different.
It's not just a bank account.
Bank accounts are easy tomeasure, but so that's something
that's important to me.
(27:53):
Also, it's important to me when, like my kids, or when anyone
has that aha moment, that theytake ownership for the results.
Okay, Someone says, oh, Ireally like making a difference
in people's lives, so they're asocial worker Great.
Just please understand that youdidn't pick that path for wealth
.
You picked that path for otherreasons.
Just so you know you canreverse engineer where you're
(28:14):
going to be at age 50.
So somewhere along the lines,if you're going to be a
firefighter, you're going to bea social worker.
Call me up and buy one houseevery five years instead of
every year.
Whatever you do it just ownthose results and it's it is.
It's a math problem.
So I have a book out therecalled retire on rent where
people can read it for 15 buckson Amazon.
Get that so you can.
(28:34):
You own those results.
I really don't.
I'm super not attracted to thatwhole victim mentality.
I'm attracted to people owningthose results.
Help me, let me help you, if Ican, whatever it may be.
So that's one of the thingsthat I like to be successful at
is helping people realize that,like the farmer says, in the
fall, we all have the same sunand we all have the same rain.
(28:55):
You're responsible for yourcrops, so you reap without
regret and you reap withoutreward.
You own the results.
Whether it's a bank account orwhether it's an angry wife,
Maybe, you own those results andI'm attracted to that, and I
have a lot of work to do too.
Ed Mathews (29:11):
Excellent.
Yeah, I totally agree.
It's again, it's notnecessarily about the money,
it's about the impact you haveon the people around you and the
folks you work with.
Right,
Michael Drew (29:19):
yeah, absolutely
Ed Mathews (29:20):
When not talking about real estate, you mentioned
wave runners.
What else do you like to do forfun?
Michael Drew (29:25):
So I mentioned before that I was the number one
tennis player in my high school.
Man, I tell you about four orfive years ago, right before
COVID, when they introducedpickleball to me.
It fit me like a five-fingerglove.
I record, I'm really good withdatabases.
So I said, and Matthews, I knowI put on my database everything
about you, right?
If I know you throughpickleball, I probably have 200
(29:47):
friends on my phone and I playedin 13 different states.
I've been at the US Open.
I haven't competed in the USOpen in Naples yet.
I need a better partner, ormaybe I need to be better, but I
just really enjoy that.
And so find somethingathletically that you love to do
.
And I got to say this my wifeis brilliant.
She's a health and wellnesscoach and she's also on staff at
Advent Health in Florida.
(30:07):
She says something very key.
She says muscle equalsmetabolism.
So as men age, theirtestosterone goes down naturally
, right?
Women?
Same thing.
Muscle equals metabolism.
So if you're noticing your bodyis not where it's at, you are
not lifting weights and that isit's.
It's just, it's easy, man.
Or still lift weights three,four days a week.
(30:29):
And I remember this was key.
I was on a cruise recently inItaly, I saw this older
gentleman lifting weights abovehis head.
He's 70, ever been to 70.
I'm like good for you, man, andI said what you doing.
He says I'm fighting off theold man.
That's right.
I love that.
You have to lift weights tobreak even as a man, not to gain
(30:49):
, you have to do that just tobreak even.
So I encourage men and women todo that.
Ed Mathews (30:54):
Yep, and as proof that you're correct, my father,
who is now 82, walks.
I think he walks a mile and ahalf a day and I'm pretty sure
he still lifts three days a week.
Michael Drew (31:05):
Okay.
Ed Mathews (31:06):
Yeah.
Michael Drew (31:07):
Love it.
Do it easy not to do so.
If anybody's ever interested inthat, you have to find out what
you will do.
Doing is more than not doing.
Oh, I want the perfect gym.
I want the perfect pair ofshoes.
I can't play, no, I don't care.
Find what you'll do.
Whether you'll do a Pelotonbike, I don't care.
That's not weights, though.
You have to find something thatyou enjoy.
Ed Mathews (31:27):
Right.
How can people learn more ofyour company real estate done
for you or you in general?
What's the best way to touch?
Michael Drew (31:33):
Thanks, Ed.
My website is realestatedone(realestatedone4u) and then the
number four and the letter U asin uniform, and on there you can
book what's called a strategysession.
Leave your checkbook at home,talk to me, it'll book on my
calendar or my et cetera, andjust let's talk and see what's
going on.
What can I do to help you?
I'll go over a few of thoseproperties.
If you book with me, I'll dropship my book to you no charge.
(31:56):
Review it takes about 45minutes an hour.
It's not a novel.
It also then serves as acoaster when you're done.
Think of that.
But just come on in, tell mewhat you're going for and then
we can go from there.
A lot of people just start withone house.
What do you do?
Wait a second here.
You pay me X, my mortgagepayment's Y, the house is
appreciated, z, and then whatare you?
Ed Mathews (32:17):
doing.
Michael Drew (32:19):
Every now and again we've got to snake the
drain for 50 bucks or 100 bucks,but you've got to change your
oil on a new car too.
It's fine, and you call me upin five years.
Almost a hundred percent of myindustrial say I wish I would
have bought more.
So you start, we'll go overeverything.
There's a 12 minute video thatI have that explains my whole
company, the houses, theneighborhoods.
Email me or please put mycontact info at, or whatever you
(32:40):
do usually, and I'll send youmy 12 minute video and that goes
over everything and you can seethe houses, see the city and
then book a call with me.
Ed Mathews (32:48):
Fantastic.
Michael Drew, thank you so much.
This conversation is trulyenlightening and I wish we had
more time.
I would love to keep in touchbecause there's a whole bunch of
stuff I still want to ask you.
Well, that's good and, in themeantime, continued good success
and thank you for joining ustoday.
Michael Drew (33:02):
Absolutely Take care.
Greetings and salutations, Real Estate
Undergrounders.
It is Ed Mathews with the RealEstate Underground.
Thank you so much for joiningus today.
I'm really excited about thisconversation.
This gentleman and I we werejust talking before.
I hit record and realized thatour careers have actually
tracked one another over theyears, and I also discovered
that we are both geeks in ourvery own special ways.
(00:20):
We're going to get into that.
So, Michael Drew, welcome tothe show.
Thank you so much for your timetoday.
I'm excited to have aconversation with you.
Michael Drew (00:27):
You know what?
Thank you, sir.
And remember Bill Gates said becareful how you treat nerds.
You could be working for oneone day you will.
Thanks for having me.
Ed Mathews (00:35):
Yeah, absolutely, and one of the things I've been
really intrigued by in terms ofhow you operate is the real
estate done for you concept andyour website and everything.
I'm just I'm all about being aformer marketing geek myself
always about making it simple,right, so that people can
understand it, learn and thenultimately build enough trust to
(00:56):
be able to do business.
Why don't you tell us a littlebit about your business and your
philosophy in terms of how yougot here?
Michael Drew (01:00):
Sure, Absolutely.
My background was in the stockmarket.
I taught and trained people howto do some of the basics.
Covered calls things like thata little bit more boutique-y,
like iron condors, premiumselling strategies.
The problem with that is thatit's a certain aptitude.
You have to have a certainaptitude to do that.
It's also so boutique-y, if youwill.
(01:20):
Let's just say you've got amillion dollars.
You wouldn't use more thanabout a hundred grand with that
strategy.
If you will.
Let's just say you've got amillion dollars.
You wouldn't use more thanabout a hundred grand with that
strategy.
And it's also very active.
So when you add that all up,it's basically another job.
And I was taught a long timeago I'm a big into
self-development back in the dayand I was taught wealthy people
have time and rich people havemoney.
Yeah, okay.
Then what happened is I hadfour kids and I'm like, wait a
(01:43):
second here.
I think it's cool to go tosoccer games.
I think it's cool to have kidsthat are older, who are not
jerks.
There's the goal.
So I said, all right.
So let's begin with the end inmind.
I don't want a job, I wantpassive mailbox money.
Initially, a hundred years ago,I tried some multi-level
marketing stuff, but then youhad to rely on people, and
that's not a great ideasometimes, right?
So really, what happened is Isaid you know what?
(02:04):
I've got good credit.
I was living in an area thatwasn't great for rentals, so I
had a co-worker actually who wasa UPS executive.
Okay, so UPS was a privatecompany that then went public
and he, when he went public, hewas told the smart people bought
real estate and then not sosmart people bought cars and
things like that, and he had 20houses in Indianapolis If you
(02:28):
don't know, that's where UPS isbased and he was making money
every single month.
He didn't quite have thesystems and processes, but I'm
like we could fix that.
The fact that you own 20 doorsand you're in your fifties, this
is a great start, man, andthat's basically what I copied.
I bought my first nine or 10doors about 15 years ago and
(02:48):
we've been helping investors doabout the same ever since, so
it's been a great.
Now, fast forward to today.
We've done just over almost1100 houses.
Ed Mathews (02:56):
Wow, congratulations .
That's really amazing.
It's interesting you look atthe stock market and how it's
performed over the years.
By and large, I've always beena bet on America kind of guy,
right, but I've stuck to theindexes because I'm not as
schooled in what you're schooledin.
Real estate for me wassomething that was tangible, I
could reach out, I could touchit, I could directly increase or
(03:17):
decrease, but increase thevalue of the property by
upgrading a bathroom orupgrading a kitchen or siding or
whatever, and so that wassomething that I always really
understood, as opposed to hopingthat the CEO of GE, Larry Culp,
I think, knows what he and histeam are doing and so I'm going
to pile money into that.
And for me, real estate becamea pretty easy way to build
(03:39):
wealth and then ultimately, itactually built cashflow and set
me free.
But I'm curious when youlooking at the various asset
classes, what drew you to realestate specifically?
Because there's a lot of assetclasses out there, right, and
single family homes inparticular.
I'm curious about that
Michael Drew (03:54):
Of course obviously there's more than one
way to get there, wherever thegoal is.
Sometimes I like to talk aboutathletics and sports because
it's easy to relate to.
Somebody says they want to loseweight.
You could do it any way youwant, you just have to like to
do it.
If you say you got to run 10miles a day, it's not going to
happen.
You got to find something thatworks for you.
Initially, I gravitated towardsthe stock market.
However, one of my mentors saidthe stock market's great for
(04:16):
accumulation.
It's just not great forcashflow.
So let me get this straight IfI got a million dollars and I'm
55 or 65, I pull out 4% a year.
That's 40 grand.
After it's taxes, it's lessCrickets, right?
Ed Mathews (04:31):
Okay, three grand a month.
Okay, now what do we do?
Michael Drew (04:34):
I'm kind of a competitive pickleball player so
we like to jab at each other alittle bit.
When I bought one of my kind ofdream houses, if you will, I
did pretty well once upon a timeand I had a good credit score,
good W-2 income.
My buddy, I think I probablymade I don't know three or four
times money and he goes.
Good for you, fancy pants.
You've got one house.
He's never made more than 150grand and he goes.
(04:59):
I think I have 17 housescurrently and the tenants are
paying off the mortgage and I'mlike, wait a second, I only have
one house and you have 17.
And he's.
And then when you fast forwardthis, when you get them paid off
, you're like you're going toeasily have a quarter million
dollars to residual income basedon assets.
And Andy had a 401k.
I said I'm being a poor stewardof my credit.
So what happened to me is I hada vision of when I retire.
(05:20):
All right, and I love my wife,I love my kids.
I wanted a several-legged table.
I didn't want a one ortwo-legged table.
I goofing around.
I wanted a 10-legged table, a20-legged table.
So if something happens, youlove Lowe's and Home Depot has
bad earnings.
Lowe's takes a dunk.
You've got to havediversification, but you have to
have it in asset classes.
And I said you know what?
(05:40):
Let's go ahead and go all in onthis.
Let me figure it out.
I can mindlessly do the stockmarket stuff.
I could put in X per year.
My company may or may not matchthat right back in the day.
And now it's been easy.
Why don't you get started?
And that's what the struggle Inoticed with a lot of people.
They get ready to get ready.
I don't know.
Let's go, let's.
It's not brain surgery, it'snot that hard.
Ed Mathews (06:02):
I'm always fascinated by that, because you
look at like the statistics ofpeople that buy training courses
and there's a process that mosthuman beings go through and
that is that they buy the courseand they get the dopamine hit
right.
They go okay and their brainsays, okay, I've accomplished
what I just wanted to accomplish.
I wanted to learn how to buyand sell real estate, and you
(06:23):
didn't read the book yet, youdidn't go through the training
yet, and 95% of the people buythe training course and never
use it,
Michael Drew (06:28):
Which is 1,000 percent
Ed Mathews (06:31):
Astonishing number.
The idea of accountability andacting.
Now you and I come from similarcultures, business-wise, where
there's just a bias towardsaction.
It's let's not talk about it,let's go.
It's the old ready fire aimkind of thing.
Michael Drew (06:48):
Amen! it reminds us that my son liked to drive
better.
My daughter didn't love todrive so much.
I drive a big old SUV like theTahoe should I be Tahoe Escalade
type thing, and I can,literally.
I don't want to embarrass thisI can like text while I parallel
park.
I'm joking, but it's.
I can easily do this.
When my kids saw me do this,they're like oh, you're so great
, I go I've just done ithundreds of times from Chicago,
(07:10):
it's easy.
So you've got to.
You're right.
A bias towards actions.
You gotta start and sometimesyou have to.
We always say this is thereenough evidence in your life to
accuse you of being seriousabout blank, losing weight,
dating your wife, whatever itmay be, whatever's interesting
to you, All right.
If you would have had that, Icould have looked at your
(07:30):
schedule.
I could have looked at what youput in your body and said, wow,
you really get theMediterranean diet.
You really are spot on.
You've got the discipline.
And what I realized is so manypeople in their forties and
fifties are just too busy andthey're interested in that
feeling that happens when theyopen up a mailbox and get a
check.
Now I'm dating myself.
(07:50):
Nowadays, Of course, it's allage, right.
But when all of a sudden, ourcompanies send out over a
million dollars a month in rent,Okay, so you can.
Let's say you start with mycompany and you get four grand a
month or whatever, it's notgoing to really maybe it'll
change your life.
But the point is you did allthat without a job, Right, Cool.
When it gets up to the pointwhere wait a second.
When I retire, my IRA is goingto pay me this or my 401k.
(08:13):
Just wait a second.
Here I can afford this withouthitting my principal.
Ed Mathews (08:17):
Yeah, and you've touched on a key point.
That is something that means alot to me and the folks that I
work with is that the fact is,you don't have to have 5 million
bucks in the bank, right.
What you need is cashflow to beable to live your life, so that
it gives you the financialfreedom of being able to do what
you want to do without asking aboss hey, can I take this time
off?
We both have kids, and the factis that my youngest is a
(08:39):
competitive softball player, andwhen she goes to a tournament,
I want to see the kid play Right, and not having to ask
permission is a wonderful thing,and cashflow is what breaks
guys like you and I and thefolks we work with free.
I'm always interested in the subasset class in terms of you've
chosen single family homes,right, I'm more of a multifamily
(09:00):
guy.
I do flip houses.
I don't keep them.
I do that because it's fun.
But I'm curious about singlefamily homes and why, given your
background in terms of youradvanced background around asset
management and all that, whatdrew you to single family homes
as opposed to multifamily, selfstorage, parking lots, whatever.
Michael Drew (09:21):
Sure, first of all , just like anything, they'll
all work it if you work themright.
Yeah, they really will.
I was born and raised inChicago, okay, and that is a
higher taxed area in Chicago.
When I looked at parking lotsyou just mentioned, all the
Russians controlled it and Ijust Even though I have 3%
Russian, I'm like, and I likevodka, that's about it.
(09:42):
I can't do that.
And so what happened I doremember this is that when I
went to Columbus, Ohio andIndianapolis, where my company
is based, is one of the hiddenthings you don't see is the
turns in between tenants.
Okay, so I had somemulti-investor guys.
They really like studenthousing and things like that.
(10:03):
The problem is those turn everyyear, every other year, and if
you don't put that on yourspreadsheet, my man, it's going
to hurt, okay.
And then, all of a sudden, Irealized I'm an old.
I still ride motorcycles.
Anytime you get in a situation,you must predetermine how you
will get out of a situation.
I'm passing a car, I'm passinga semi truck.
(10:23):
You can't pass over a hill.
What happens if you always gotto think how do I get out?
And so I always remember isthat in the Midwest is that
multi-units cater to a lowerdemographic financially.
Okay, I get the manager of TacoBell and he likes to smoke his
marijuana, which is probablylegal by now in most States.
Who knows?
It's just that guy is notstaying.
(10:44):
He doesn't have kids.
Also, if I have a 10, 20, 40unit building, when I go to exit
that building I'm selling to aprofessional, I am not selling
to a mom and pop.
Versus if I have a singlefamily home, the homes right now
are in the $150,000, $200,000range.
A $30,000 down payment gets mea home.
The appreciation is solid andif and when I do want to exit
(11:08):
that home, I'm exiting to aretail buyer.
And then the color of the treein the front yard and I get 110%
of asking.
It's easy to buy, easy to sell.
Cashflow is solid.
My homes are so profitable inthe Midwest that they're
positive cashflow and 15 yearmortgages and they're also
qualified for DCSR loans or nodoc loans.
(11:30):
So the cashflow is there and I'ma property management company
too, so we do all the CapEx onthe way into the investor.
So we buy them wholesale.
We do the roofs, we do theHVACs, the plumbing, the
electric, the water heaters, etcetera, et cetera Secretly.
So I have an easier job inmanagement and my secret game
plan is so the investor buysmore.
(11:51):
My top investor has 88 housesout of Ventura, California, and
I think he's seen about four ofthem.
Ed Mathews (11:56):
So when you say you're an investor, so you work
with a single investor on everyproperty?
Michael Drew (12:02):
I do, I don't pool money at all, yeah, so they can
Ed Mathews (12:04):
Teach me more about that.
Michael Drew (12:05):
Sure, so what happens is we buy about five to
10 homes a month.
Okay, we also own theconstruction team.
So we buy, we rehab and we ownthe property management team, as
I mentioned and, on a side note, I also am a major owner in a
self-directed IRA company Okay,so we acquire, we rehab, we
tenant, and then if Ed, one ofyour listeners or one of my
(12:27):
existing investors, says youknow what, you keep sending me
four grand a month, I want it upto five grand a month, whatever
the number is, they raise theirhand, they take one off the
shelf.
That's already rehabbed,already rented If we close on
the 15th of the month.
If we close on the 15th of themonth, I program rate the rent
and then I ACH you the nextmonth's rent.
It's already done, alreadyrehabbed, it's done for you.
(12:48):
Passive income.
That's what it is
Ed Mathews (12:50):
Right, all right.
So one of the keys to that,then, obviously, is filling that
pipeline right, and I'm alwaysinterested in how folks like you
find these houses.
Five to 10 houses a month is alot of.
It is A lot of rowing, so tospeak.
You're breaking it down.
So what is your top or couplemethods of getting a property
(13:11):
under contract?
Michael Drew (13:12):
Sure.
Now, that said, as we get older51 years old our proverbial
Rolodex is one of the mostvaluable things we own.
If someone's 23 years old andthey have a million bucks, they
can't compete with me, or 10.
It is 23 years old and theyhave a million bucks, they can't
compete with me or 10.
It doesn't matter, I just havethe relationships.
My phone just rings and it'slike that old adage, right, when
I take a loved one out, a goodfriend of mine out to dinner,
(13:34):
you order a steak and it's notperfect, the maitre d' comes up
and says sir, I'm going to put alittle bit more fire on that.
Can I buy you a drink?
Or, you know, own it, just,whatever it is, you just take
care of business.
You want to do more businessfor that person, like I'll go
back to the restaurant youdidn't mean to, you know, right,
and so you keep doing that foryears pays itself off in
dividends.
So, whether it's a tax, liens,foreclosures, courthouse steps,
(13:56):
probate attorneys, if there's aproperty on, the guys like me
and five other guys behind ushave already passed it up, right
, okay.
So if you're buying on the MLS,yeah, that's not where you get
it.
Or if you do, you have to buyso high you can't afford to do
the capital expenditures.
We do, of course, wholesalerssame thing.
But also keep in mind, to do mybusiness you have to act
quickly.
You have to have cash and younever back down If I say I'm
(14:18):
going to buy something.
Sometimes they'll call me whileI'm on the proverbial
pickleball quarter at the gym.
And they and I got a 911 phonecall from my buddy.
I got one for you.
I know the address.
I got pictures I can wire frommy phone earnest money.
Let's go, let's go.
Ed Mathews (14:32):
And you look at.
So you named a whole bunch ofdifferent strategies in terms of
tax liens and foreclosures andit sounds like you have a whole
bunch of bird dogs working foryou, looking for the that's the
thing.
Michael Drew (14:42):
You got it.
Ed Mathews (14:43):
What does your team look like?
Michael Drew (14:45):
So I'm with computer sales and marketing,
podcasts et cetera and I reallyenjoy that.
I also do, like I said before,four kids.
My business partner, great guy.
He's the single guy so he's alittle bit more in the field all
day, so I'm more on the salesand we're running several
different teams at the same time.
My dad passed away so I calledmy business partner's dad, my
second dad, so we've got a niceteam of guys out there that work
(15:07):
things and we're all alignedall the way up to giving it to
the investor.
So leasing is on the phonecalls, acquisitions on the phone
calls.
When things go wrong,maintenance is on the phone
calls.
So we know everything that'sgoing on in the company and what
I do.
We don't sell out much ofanything, maybe something goofy
like a foundation thing that wedon't see that often.
But everything else is in-house,so we can control quality.
Ed Mathews (15:28):
Okay, so that includes your technicals, your
mechanicals and whatnot.
Absolutely Really, wow Okay.
Michael Drew (15:34):
Yeah, I think we'll outsource.
We have a couple of guys we'lloutsource HVAC, just the
installation.
We'll maintain it, though.
Ed Mathews (15:42):
Okay, all right.
And then so, in terms ofdisposition, right, it sounds
like your investor partners areall about cashflow, not
necessarily selling off rightand so mostly yeah, okay.
So in this scenario, let's justdraw this to its natural end.
Then, if someone says, hey, I'mlooking for my $30,000 back and
I'd like to take my equity out,what's the process in how you
(16:04):
do that and do you get involvedin, or anything like that?
Michael Drew (16:07):
Yeah, we do them every month, yeah, so there's
two things that I want to talkabout.
Number one is to answer yourquestion and number two I want
to go.
I'm going to go fast by goingbackwards.
So to answer your question, mysister is one of my best friends
.
Both our parents have passedaway and it's been unfortunately
, but it seems it's going tohappen to everybody right and
she's got a property between hertwo properties.
Unfortunately, she's divorced.
(16:27):
I navigated some of thosefinances for her.
She's got a quarter milliondollars of equity in two houses
and I said what do you want to?
At this point you don't reallyneed to keep them, You're too
young.
I say 1031 on both and she saidokay, and she's going to turn
one into two.
She could go one into three ifshe wants, but I think she's
going to be conservative.
So we're selling it and when wewalk through that with one of
(16:47):
our favorite 1031 exchangecompanies, we've already
identified the other tworeplacement properties.
So we'll dispose of it, maybedo an existing investor or maybe
retail that's depending on thehouse and then we'll 1031 that
in two or three more doors,absolutely.
Does that make sense?
Ed Mathews (17:02):
Total sense.
Yeah, I was about to use themonopoly analogy.
You're literally playingmonopoly, right.
You're just buying the hotels,you're just buying more
greenhouses.
Michael Drew (17:10):
You're based on the East coast, right?
Ed Mathews (17:12):
Right
Michael Drew (17:16):
So, my buddy, I have a bunch of clients on a New
Hampshire area and they're likewe can't touch houses for your
price, we can't touch cashflow,so, price, we can't touch
cashflow.
So they're coming to me sayingwait a second, here I've got a
building that my mom left me, mythis left me a commercial, blah
, blah, blah.
And they're like I got to go,I've got a million dollars of
capital gains and I said let'sput that in 1031 and I'll give
you seven houses.
Okay, the coast is a little bitbetter for appreciation.
(17:39):
The interior of the UnitedStates is a little bit better
for cashflow.
And I want to go back to thaton purpose, because when my
mentor came to me he said,listen, you got to play offense
and defense.
Offense is cashflow, butdefense would be things like
insurance.
Okay, I snowboard in Floridasometimes, right, so they have
so many storms, insurance hasgone up crazily, right, sure has
(18:00):
Taxes.
I have buddies in Nevada andTexas.
No state tax, but propertytaxes are spicy.
Don't like that for cashflow.
Next, I've gotlandlord-friendly versus
tenant-friendly.
Don't like California.
I like to be there.
Santa Monica's fun.
My dad shipped the USS Midwaysout of San Diego.
That's cool man, but I got totell you it's tenant friendly
(18:22):
For me.
I can get somebody out in 40days, 500 bucks.
And then in Indianapolis, it'swithin 700 miles of two-thirds
of America.
So you can get to New York,Chicago, Nashville, and Atlanta.
If you need to Florida, you'regoing to probably take a minute,
but you can get to America.
And if you want to work, youcan work.
(18:44):
It's like the 16th largest city.
It's the county seat of thestate.
There's several universitiesnearby, so you get wealthy by
having job growth and populationgrowth.
That's where you get yourappreciation from and if you
play defense with those things.
As far as expenses, that equalsthat's cross and T's dot nines.
That's how I found Indianapolis.
It checks all the boxes.
Ed Mathews (18:59):
Yeah, it sure does.
Yeah, it's actually one of ifnot you read all the lists of
the best rental returns in thecountry.
Indianapolis is invariably onthat top 10 list every year.
Yeah.
Michael Drew (19:10):
Yeah.
Ed Mathews (19:10):
Absolutely, and it's a nice part of the world too.
It's a nice place to live.
Okay, all right, you hadmentioned your mentor and I want
to get into the final five, sowhy don't in there?
I'm always curious about whatgets people out of bed on Monday
morning.
Right, because in most casesthe folks that I interview it's
not about the money.
Right, it's about somethingelse, because the money started
taking care of it.
Mortgage is paid off, collegevacations are paid off.
(19:32):
You're living the life you wantto live, so tell me about your
purpose.
What gets you out of bed onMonday morning?
Michael Drew (19:37):
Thanks so much.
Literally, at age 31, my dad,who did serve in our country's
Navy, was diagnosed withmelanoma in November and he died
in January and that baby boomermentality didn't necessarily he
wasn't stoic per se, but hewasn't as friendly with me as I
am with my son, Right?
So I got to say becomingwealthy is mainly a math problem
(19:58):
, right, losing weight is mainlya math problem.
You have to have somediscipline, but it's not that
hard.
You just have to havediscipline.
And so when the music stopsright at the end of your life
you're not going to wish younecessarily had more money, is?
I really enjoy having greatrelationships with my kids?
And also I think there's anunderserved area which is men
have a low quantity and qualityof same sex relationships.
(20:22):
For example, I got my buddy, mybusiness partner.
He's one of my best friends,but pretty much everybody all
day long is subordinate to us.
So I don't really have I don'tsound like I'm lonely, but I
don't have any friends in mydaily job.
I don't have a water cooler tohang out with or a coffee shop,
so I work out of a co-hatchwhich is a co-working facility
and I really enjoy pickleballbecause that sometimes it's an
(20:45):
underserved community, I think,where men don't have camaraderie
.
So my kids really I do probablyplay pickleball four days a
week and probably about half ofit's social.
I get out when I'm learningabout a new, a book, a social
event.
We're raising money forMake-A-Wish.
We're doing something fun.
I do enjoy that.
I do enjoy guys who, of course,love their wives and their kids
(21:07):
, and I don't know.
I think it's easier having alittle bit higher energy in life
, because it's attractive andalso it's more fun.
Music is always going on in myhouse.
We're doing something.
Ed Mathews (21:16):
Love that, so I'm always interested.
I want to ask you about yourmentor what's the best advice
you ever got and who actuallygave it to you?
Michael Drew (21:24):
I would say, two companies ago.
Again, there's two things thatmight not land with people,
because men tend to jab at eachother a little bit more
aggressively.
So this comes to me, not to you, right?
Number one it says ifeverything was about knowledge
right, Like you mentioned, 95%of people buy books and things
like that.
They're getting cobwebs on theshelf.
It was all about knowledge.
The joke was all the librarianswould be multimillionaires with
(21:46):
great sex lives.
Mustn't it be all aboutknowledge there, buddy?
And the second thing is this isthat if someone has lived their
life and they're willing to livetheir life for three or five
years and you can learn about itin a month or two, it's
pathetic to learn aboutsomething in three years you can
learn about in one month.
That's just poor stewardship ofyour time.
That resonated with me.
(22:07):
You can talk like that to me.
I don't need to read the bookor hug you for three years.
You tell me what I need to knowin one month.
I'll pay you money.
That's great.
Tell me the landmines.
I've never raised a teenagerbefore.
Good luck.
Tell me, what questions am Inot asking?
Those are things that I want toknow and that's where I like to
talk straight to my investorstoo, saying you don't want to
cry over that.
There's maintenance on realestate.
(22:27):
By the way, If you've not owneda car before, there's
maintenance on cars too.
Yep, you got it.
It's a line item in thespreadsheet.
Once you tell people what toexpect, they're fine.
Yeah, so I do enjoy that.
I do enjoy someone else sayinghey, what's going on?
What am I not seeing here?
Ed Mathews (22:45):
That's awesome.
I love that.
Um, all right, so let's talkabout I think.
Personally, I think you learnmore from stubbing your toe than
your successes.
Right, curious about youroutlook into mistakes and what
was one of the mistakes thatyou'd love to have back in terms
of a decision you made.
What was that process?
To recover?
Michael Drew (23:00):
A lot of people.
We can see people in ourauctions and in our different
areas and over the last 15 yearsit's the same about seven guys.
And then there's a guy not tobe goofy he's got a Rich Dad,
poor Dad, three ring binder, andhe's got 200 grand and we're
like this is not going to workout well for you.
I wish you didn't have thatmoney because you do more
research.
For example, my failure was isI didn't do the research on a
(23:24):
property.
It was a hefty loss.
It wasn't a six-figure loss butclose.
And what I did is theyforeclosed on a property for the
HOA dues, but it was a tinylittle item in the title search
that I so I was the proud ownerof the second lien position.
Essentially, when we went tosell the property.
We didn't know about it for sixweeks until we went to sell the
property and there was a heftyfirst that the rules had changed
(23:49):
in the auction I went to and noone caught it and it was a bad
loss.
So I own nothing and legally Ididn't have a leg to stand on,
Recourse.
No, had that end up playing out, took it in the shorts Ooh,
you're good at that.
Didn't live and learn.
So now what we do is we paymoney every single month for a
(24:10):
gentleman who's retired and hedoes the title work for us on
everything.
We pull title on 70 propertiesand we go over it.
One of the worst things thathappened, we had another guy do
the foreclosure on a blanketloan.
So a blanket loan when theyhave that one was 15 properties
on a blanket loan You're not infirst position.
When they were foreclosingthese, you're still not in first
position.
It was crazy.
He's like stay away, stay away,trust me, stay away.
(24:33):
And I'm like but we can make somuch money, the juice is not
worth the squeeze, brother, stayaway and I'm like got it, got
it.
So we have an expense everymonth for the guy who makes sure
we don't do it again.
Ed Mathews (24:45):
Yeah, I would say that's an investment, not an
expense.
Yeah, yeah, I bet you don't payhim in a year what you lost on
that one deal.
Michael Drew (24:52):
That's correct, that's correct, yeah, yeah.
And now that he sees what we'redoing, he's you know what.
I have a few buddies that needsome of these turnkey properties
.
They're like we're trying tocopy me, because every you don,
you don't tell people when youmake two or three grand.
You tell people when you make abunch of money on a flip.
I'm like replacing your incomeis the fun part long-term.
(25:12):
And then now he refers businessto us you know.
Ed Mathews (25:13):
So that's great, that's awesome, yeah, that's
fantastic.
So leaders, invariably, arereaders right In some way, shape
or form.
Guys like you and me aremagnets for as much information
as we can take in.
Tell, there were magnets for asmuch information as we can take
in.
So tell me about the bookthat's on your nightstand,
either virtually or physically,and what authors are you paying
attention to these days?
Michael Drew (25:32):
Thanks for asking.
I'm going to go old school andI'm going to go new school.
The old school is a gentlemanby the name of Jim Rohn.
Jim Rohn was one of the firstteachers of Tony Robbins.
He wrote a book that I thinkI'm going to have trouble
finding now, called the fivemajor pieces of the life puzzle.
I bought those in bulk andwould give those out to anybody
I love and care about.
He also did an audio cassettecalled the art of exceptional
(25:55):
living, and if your kid is about15 or 16, starting to find
their way in the world, that iswhat you play on a road trip.
It's so simple though.
It's so consumable.
It's not esoteric, it's verylike Rich Dad's book.
It's not very difficult tolisten to.
So that is Jim Rohn.
Now, more clearly, I do JamesClear's Atomic Habits.
And what does he say there?
(26:15):
You don't rise to your goals,you fall to your systems and
habits.
And so goals are great, buttell me about your habits, tell
me about your disciplines, tellme about your minutia, and then
I can tell you if you're goingto achieve your goals, about
your minutiae, and then I cantell you if you're going to
achieve your goals.
And that's really worked welland it's fun that way.
And so when you look at mycalendar, you can see that, yes,
I am pursuing a relationshipwith my son and my daughter.
They're different though.
My son likes to do fun stuff,my daughter likes to do
(26:36):
different stuff.
That's fine.
I'm going to love you whereyou're at guys, whatever it may
be.
And one of my daughters worksfor the leasing company and
she's loving it right now andshe's frustrated sometimes.
I'm like, I know, welcome tobusiness Sounds great,
Ed Mathews (26:48):
But the cool part is that you get to spend time with
her, right?
Michael Drew (26:51):
Yeah, exactly
Ed Mathews (26:52):
I think it was.
Jimmy Johnson was talking aboutthat.
I can't remember where I sawthe interview, but talking about
.
One of the reasons he went intobusiness was so that his kids
would eventually join thebusiness and he could spend time
with them.
It's something that is time isso valuable and you can spend
time with them.
It's something that is time isso valuable and you don't
realize.
You're our age, right.
Michael Drew (27:10):
I did something different.
I'm a wave runners, so that'show I spent time with them.
It's better.
That's way more fun.
Ed Mathews (27:16):
Way better.
Yeah, all right, talk to meabout.
We're getting on the subject alittle bit, so let's talk about
success.
What does success mean to you?
How do you define it in yourlife
Michael Drew (27:32):
With relationships , which I still have a lot to
learn?
Some guys will be like oh, I'msuccessful in my family and this
and that happy wife, happy life, yada, yada, yada.
Now, when you ask the wife, youknow what kind of husband you
are right.
That answer you might not likeor you may not, and so that's
something that I'm stillpursuing.
I've not mastered that by far,but that's a little bit
different.
It's not just a bank account.
Bank accounts are easy tomeasure, but so that's something
that's important to me.
(27:53):
Also, it's important to me when, like my kids, or when anyone
has that aha moment, that theytake ownership for the results.
Okay, Someone says, oh, Ireally like making a difference
in people's lives, so they're asocial worker Great.
Just please understand that youdidn't pick that path for wealth
.
You picked that path for otherreasons.
Just so you know you canreverse engineer where you're
(28:14):
going to be at age 50.
So somewhere along the lines,if you're going to be a
firefighter, you're going to bea social worker.
Call me up and buy one houseevery five years instead of
every year.
Whatever you do it just ownthose results and it's it is.
It's a math problem.
So I have a book out therecalled retire on rent where
people can read it for 15 buckson Amazon.
Get that so you can.
(28:34):
You own those results.
I really don't.
I'm super not attracted to thatwhole victim mentality.
I'm attracted to people owningthose results.
Help me, let me help you, if Ican, whatever it may be.
So that's one of the thingsthat I like to be successful at
is helping people realize that,like the farmer says, in the
fall, we all have the same sunand we all have the same rain.
(28:55):
You're responsible for yourcrops, so you reap without
regret and you reap withoutreward.
You own the results.
Whether it's a bank account orwhether it's an angry wife,
Maybe, you own those results andI'm attracted to that, and I
have a lot of work to do too.
Ed Mathews (29:11):
Excellent.
Yeah, I totally agree.
It's again, it's notnecessarily about the money,
it's about the impact you haveon the people around you and the
folks you work with.
Right,
Michael Drew (29:19):
yeah, absolutely
Ed Mathews (29:20):
When not talking about real estate, you mentioned
wave runners.
What else do you like to do forfun?
Michael Drew (29:25):
So I mentioned before that I was the number one
tennis player in my high school.
Man, I tell you about four orfive years ago, right before
COVID, when they introducedpickleball to me.
It fit me like a five-fingerglove.
I record, I'm really good withdatabases.
So I said, and Matthews, I knowI put on my database everything
about you, right?
If I know you throughpickleball, I probably have 200
(29:47):
friends on my phone and I playedin 13 different states.
I've been at the US Open.
I haven't competed in the USOpen in Naples yet.
I need a better partner, ormaybe I need to be better, but I
just really enjoy that.
And so find somethingathletically that you love to do
.
And I got to say this my wifeis brilliant.
She's a health and wellnesscoach and she's also on staff at
Advent Health in Florida.
(30:07):
She says something very key.
She says muscle equalsmetabolism.
So as men age, theirtestosterone goes down naturally
, right?
Women?
Same thing.
Muscle equals metabolism.
So if you're noticing your bodyis not where it's at, you are
not lifting weights and that isit's.
It's just, it's easy, man.
Or still lift weights three,four days a week.
(30:29):
And I remember this was key.
I was on a cruise recently inItaly, I saw this older
gentleman lifting weights abovehis head.
He's 70, ever been to 70.
I'm like good for you, man, andI said what you doing.
He says I'm fighting off theold man.
That's right.
I love that.
You have to lift weights tobreak even as a man, not to gain
(30:49):
, you have to do that just tobreak even.
So I encourage men and women todo that.
Ed Mathews (30:54):
Yep, and as proof that you're correct, my father,
who is now 82, walks.
I think he walks a mile and ahalf a day and I'm pretty sure
he still lifts three days a week.
Michael Drew (31:05):
Okay.
Ed Mathews (31:06):
Yeah.
Michael Drew (31:07):
Love it.
Do it easy not to do so.
If anybody's ever interested inthat, you have to find out what
you will do.
Doing is more than not doing.
Oh, I want the perfect gym.
I want the perfect pair ofshoes.
I can't play, no, I don't care.
Find what you'll do.
Whether you'll do a Pelotonbike, I don't care.
That's not weights, though.
You have to find something thatyou enjoy.
Ed Mathews (31:27):
Right.
How can people learn more ofyour company real estate done
for you or you in general?
What's the best way to touch?
Michael Drew (31:33):
Thanks, Ed.
My website is realestatedone(realestatedone4u) and then the
number four and the letter U asin uniform, and on there you can
book what's called a strategysession.
Leave your checkbook at home,talk to me, it'll book on my
calendar or my et cetera, andjust let's talk and see what's
going on.
What can I do to help you?
I'll go over a few of thoseproperties.
If you book with me, I'll dropship my book to you no charge.
(31:56):
Review it takes about 45minutes an hour.
It's not a novel.
It also then serves as acoaster when you're done.
Think of that.
But just come on in, tell mewhat you're going for and then
we can go from there.
A lot of people just start withone house.
What do you do?
Wait a second here.
You pay me X, my mortgagepayment's Y, the house is
appreciated, z, and then whatare you?
Ed Mathews (32:17):
doing.
Michael Drew (32:19):
Every now and again we've got to snake the
drain for 50 bucks or 100 bucks,but you've got to change your
oil on a new car too.
It's fine, and you call me upin five years.
Almost a hundred percent of myindustrial say I wish I would
have bought more.
So you start, we'll go overeverything.
There's a 12 minute video thatI have that explains my whole
company, the houses, theneighborhoods.
Email me or please put mycontact info at, or whatever you
(32:40):
do usually, and I'll send youmy 12 minute video and that goes
over everything and you can seethe houses, see the city and
then book a call with me.
Ed Mathews (32:48):
Fantastic.
Michael Drew, thank you so much.
This conversation is trulyenlightening and I wish we had
more time.
I would love to keep in touchbecause there's a whole bunch of
stuff I still want to ask you.
Well, that's good and, in themeantime, continued good success
and thank you for joining ustoday.
Michael Drew (33:02):
Absolutely Take care.
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I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
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