Unlock Passive Cash Flow Secrets from a Real Estate Syndicator!

Episode Transcript
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Speaker 1 (00:00):
And a lot of this is not the get rich
quick scheme. It's just saving your money and then, as
you said in the beginning, having your money start to
work for you instead if you're treating time for money.

Speaker 2 (00:10):
Good, good afternoon, good day, good evening. I don't know
what time you're listening or were you listening from Your Boy?
Your host and Laurn Tilman, and you are with me
for another episode of Walk in Victory.

Speaker 1 (00:19):
Speaking of victory walk.

Speaker 3 (00:20):
Warning, this is a public service announcement. The Walk in
Victory podcast is where we have conversations purpose to evolve lives.
You may not want to evolve, then tune into another
bleeping podcast. Everyone else, enjoy the show and here's our host.

Speaker 2 (00:39):
Good afternoon, good day, Good evening. I don't know what
time you're listening or were you listening from It's your boy,
You're hosting Laurn Tilman, and you are with me for
another episode of Walk in Victory. Speaking of victory walks,
it was some years ago that I learned in business.
Oh we were making money and I just was saving,
but my money wasn't making money, and it was sitting

(01:04):
in a regular bank, sitting and eventually it was all depleted.
So it was some years after when I said, it
has to be something to it, like, how can I
one have a business that works when I'm not working,

(01:25):
To have a plan that includes not just saving but investing.
We came up with with the And when I was
coming up, you know, the most we talked about money
was h make sure you put something away for a
rainy day, And that was those concepts. So I had
to get out of those concepts and those constructs and

(01:48):
not be afraid of investing, not be afraid of of
of taking a hit. And that came with losing. That
came with missing the boat. That came with conversations with

(02:09):
great people, getting out of old constructs or old mindsets.
It came with understanding. When I was in real estate
doing real estate, we were so happy to sell instead of
holding because we wanted that big chunk of money so

(02:30):
we can go buy something nice or do something as
opposed to having that money perpetually or residually coming in.
So I had to learn all of these concepts and
ideas and unlearned the concepts and ideas that I already
had within me. So if you're listening today, we're going

(02:53):
to be talking about some of these things. But you
have to remember that in order to be different, you
have to unlearn what you already.

Speaker 1 (03:05):
Do.

Speaker 2 (03:07):
So we have to unlearn some stuff in order to
move forward, forward your head and do something different. Lane,
how are you, sir?

Speaker 1 (03:15):
Good? Good? Well, Aloha everybody, Thanks for having me Aloha.

Speaker 2 (03:20):
Can you tell our audience a little bit about who
you are and what it is that you do.

Speaker 1 (03:24):
Yeah, so I'm a real estates indicator. We put together
investment projects, mostly in workforce housing apartments, but LAYWI been
also getting involved in buying businesses as micrope. But it
didn't always start off with like that. Used to be
an engineer and just like you know you're saying it earlier,

(03:45):
just traded time for money because that was the way
we're taught to do things, which wasn't necessarily wrong. I
think I will kind of go into that today. But
you know, just graduated college in two thousand and seven
that started to work for the man, didn't really care
for it. Had a good salary though as an engineer,

(04:08):
but then bought a house to live in because that's
where we're all blindly taught to do right just out
of happenstance. I was traveling all over for work, and
that didn't you know, had this big place to myself,
so I just started to rent it out. This is
long before the days of turo, you know, turning your

(04:28):
car out, and that was kind of when I was
hooked and I got on this path of passive cash
flow and alternative investing.

Speaker 2 (04:36):
So when you say passive cash flow, let's can you
give us a a definition of what that what that
looks like, what that would feel like.

Speaker 1 (04:47):
Yeah, passive cash flow is you know, you owning an
asset and that asset making money for you without you
having to essentially trade time for money like you would
add a job or some people have businesses. That's essentially
just a freaking job, right Whereas you know, as far

(05:07):
as passive gash flow, I think rental real estate is
one of the most basic and you know, one of
the biggest ones I think people go into because you know,
you buy an asset and you essentially rented out to
other people. We all rented apartments, so we all kind
of understand, especially in the residential world. But the thing

(05:31):
I think that the rub against passive income. I mean,
obviously you want it, and especially from a tax perspective.
We can talk more about that, but you need money
to play the game right. There needs to be you know,
if you're thinking about going up a hill, you got it.
There's an essential push up the hill. Yet you need
to then have a cruise down the hill slowly. I

(05:55):
think that's a lot of people, like you know, scamming
people out there, always talking about pass cash, but they
never really talk about that that part, you know. So
for my first property, you know, I saved up eighty
thousand dollars and usually you know, I think just think
twenty percent down payments is what you need on real estate,
which is great, you know, a lot compared a lot

(06:17):
of other countries twenty percent down payments, or if you're buying,
you know, a home to live in. You can get
in birth corobby a little bit less, but you eat.
And I needed to save eighty grand to buy that
first rental property. Well, once they did, I put a
tenant in there. And you know, if you run your
numbers right, you know, you can positively cash flow on

(06:39):
that asset and it can actually pay you money every
single month to hold on to it. As you're making
money through the cash flow. The tax benefits the mortgage
paid down back to your tenanceting for you, and the equity.

Speaker 2 (06:52):
Appreciation when you Because you're in it now, so you
probably have these formulas and ideas and ideologies already mapped out.
But when you we're sitting down and putting together your
base formula, what were some of the things that you

(07:13):
learned over the from the first deal to now where
you're you're doing this in such a way that you're
doing it.

Speaker 1 (07:21):
Yeah, I mean, something that's real simple and easy that
we can kind of do over the podcast format is
this thing called the rent to value ratio. So you
take the monthly rental price divided by the purchase price.
So you take something. You know, when I was starting
at we would buy these one hundred thousand dollars houses
out in the Midwest and South, so I know you're

(07:42):
in New York, I'm in Hawaii, and you know it
was in Washington. In those places, we typically didn't buy
properties that you know, these are called more primary markets.
These are cool places to live, which is why we
lived there, but not the best places to buy cash
line real estate. You know, take California for example, you'd
be lucky to buy a place in the ghetto for

(08:04):
four hundred grand. That would rent for two thousand dollars
a month to maybe twenty five hundred. But if you
do the math and that that rent a value ratio again,
take two thousand divided buy four hundred thousand. That is
half a percent. Again, we're kind of looking for something
that's about one percent as a real quick, quick and

(08:24):
dirty way of quick analyzing these properties, and that would
be you know, half a percent. So went on that
that ain't going to work. So that's that's kind of
the first step right there. I mean, I have a
free analyzer. People can go to my website. You know,
we used to teach people how to buy little rent
of properties. Today we focus more on you know, more

(08:44):
higher net worth investors, guys over a million dollars net worth.
But that's kind of my passions is to kind of
help people get started as as I did when I
was in my twenties. And then, you know, I've kind
of wrote about each of the steps in the Wealth
Elevator book, and I think that's the thing here is
every piece of financial advice you hear out there, it

(09:05):
belongs in a certain part of your journey. You may
not be there yet you may be pasted there. But
I wanted to write a book that broke down the
paradigm steps of the wealth building journey because, you know,
I think there was a lot of books out there
written for, you know, guys who don't have money. You know,
Susie ormand Dave Ramsey, if you have heard of these characters,

(09:26):
they have a lot of good financial advice, mostly for
the people who are getting started, you know, who are
in credit card debt. Myself, I was fortunate to go
to college and be raised in a family where we're
pretty frugal with her money and able to save money.
Pretty well, we weren't, I mean, I didn't have any
wealthy uncles or credit investor friends. But I was little.

(09:50):
Did I know? I was on that first floor the
wealth elevator, which is to buy little Renald properties.

Speaker 2 (09:56):
And when we talk about the elevator, and I like
the fact that your book and all of the information
for those of you who are listening, is in the
bio next to Lane's name. It's going to be a line.
That line you're going to click is going to take
you to where you can get the book, is going
to take you to we can follow him on social

(10:16):
media and get into his ecosystems and his thought processes
and the website. So all of that is there for
you to gain more information. We're here to present you
with opportunities, and that's why we're having this conversation. But
when you're talking about an elevator, there's a natural progression, right,

(10:39):
But some buildings are smaller than others. Right now, I'm
at my mom house. She lives on the thirteenth floor.
So when I was coming up, you know, we lived,
I lived on the thirteenth floor. I would always always
be the last one on the elevator because my friends home,
we get off at seven. Who we need to get
mad at the guy who take the elevator to the
second floor because he can just walk right up stairs,

(11:00):
you know. But there's different on each level, On each floor,
there's different experiences. How did you come up with the
what what experience is on each floor of your Wealth elevator?

Speaker 1 (11:21):
Yeah? I mean in my book, we have like a
little chart of all these I guess experiences as you
call them or kind of paradigms, say, there's maybe like
four or five of them, so there's not not that
many little did I know? Like again, like I said,
I was kind of on that first floor getting started.
There is the basement level right where you're maybe making

(11:42):
less than fifty grand a year in credit card debt,
and a lot of that is just personal finances, keeping
a budget. There's a lot of people that teach that stuff.
You know, I have my spin on it, but that's
just not my specialty. I think, you know today, I'm
more on the second floor, on the third flour tich
people on that level, the first floor of the wealth elevator.

(12:05):
You know, you're you know, you've got good personal finance skills, right,
You're not blowing money. You may be able to save
five grand a year or ten grand a year, not much.
I mean, most of the people in our ecosystem on
the second and third floor able to save fifty to two
hundred and fifty thousand dollars at least per year. But hey,

(12:27):
you know that's that's how you get started, right, that's
positive traction moving forward, And a lot of this is
not the get rich quick scheme. It's just saving your
money and then, as you said in the beginning, having
your money start to work for you instead of you're
trading time for money. And when you do that, at
some point compound interest, that hockey stick is going to

(12:48):
catch up with you, you know. I so going back
to my story, all this is stuff that I kind
of learned on my own, and you start to realize
that very quietly that there's a lot of other investors
credit investors on this path, but nobody taught this to me.
I had to kind of figure it out on my own. So,

(13:10):
you know, in my twenties, I would just buy the
little around of properties and eventually got up to eleven
of them mid twenty and fifteen. You know, these properties,
you know, a great way to get started. Like I said,
I call it adolescens of investing. You kind of go
through this first floor, the wealth elevator phase. And you

(13:31):
know with each property, I maybe had few hundred dollars
of passive cash low each after all expenses. And again,
if we have a full analyzer for people to kind
of drill into, you know how much taxes, costs, expenses
costs that you run before you buy a property. But
you know that's a few thousand dollars a pat month
for you know guy and as me I think as

(13:52):
my late twenties back then, it wasn't bad. It was
like a third paycheck. And but that was kind of
where I which to investing in private placements and syndications
of the passive investor, you know, larger commercial deals, you know,
apartments and you know, being an LP position, you know,
was what I realized that a lot of wealthier people

(14:15):
were investing in. So they're kind of dumping their little
round of properties, going to that second floor the wealth
elevator and getting involved in these more syndication and private placements.
And then I start to uncover, you know, what they
did for like life insurance in what we call a
credit investor banking. We have a free course in our
archives that people people want it more interested in that

(14:37):
they can learn more about that. And then the taxes
to was what opened up. And you know, I think
you gave a great insro in the passive income. I
think the biggest thing about passive income is it's tax
differently than ordinary income. You know, of course not a CPA, right,
so put that disclaimer out there. But you know a

(14:58):
lot of these bays don't understand how this. That's why
they're still working in their freaking day jobs. But as investors,
you know, you buy assets such as real estate, and
you think of it, the color of the money that
flows off of it is very different, different color than
ordinary income. Ordinary income you get killed with all these taxes,

(15:20):
whereas passive income you are able to get around some
like self employment tax for example. But more importantly, you
can use the depreciation from real estate to neutralize your
passive income. So don't want to. I mean, if you
have any follow up questions, we can go into it.
But basically, you're able to write off a little piece

(15:43):
of the real estate because technically the real estate degrades
over time, so you can take that paper loss and
offset your passive income that you are making. And that
essentially is a kind of a sneaky way that wealthy
people that I realized and I was like, well, jeez,

(16:03):
the wealthy people are paying taxes on all this stuff
legally legal.

Speaker 2 (16:10):
The system is built. That's what the whole system was
built for corporations, well, in real estate, LLCs is so
that so what if for those of you listening, for
every dollar you make, if you make it through your
LLC or your company, you have an opportunity to write
off expenses, and one of the expenses that you can

(16:32):
write off is good appreciation of your property, but you
get the money first, instead of when you're working for
someone they take the tax first before you get your money.
You have to have a good CPA that understands the
rules of engagement. Can't go to H and R. Block

(16:54):
or Jackson Hewlett talking about I got a company and
I need your help. No, you really need to stay
on top. It is so that you can if your CPA,
if your accounting is good, they show you what it
is that you can write off legitimately, and how to
keep your record straight so in case you're audited, and

(17:16):
also things that you might not even know or consider
to be a write off, so that you keep your
money back in your pocket. Now, you pay whatever taxes
you may have after you deduct those numbers. So if
I get if I make a dollar and I say,
all right, out of this dollar, I had to do
ABCD and I gave those expenses, I give it to

(17:38):
my tax guy. He said give me a bill back
of like, oh wow, you know, first you got to
pay me. But then the government may even give you
a check instead of you owing money if you do
these things properly. So what was the mindset shift for
you moving from that first level to the second and

(17:59):
third level. Will you now coasting that moving from eleven
single family to commercial buildings? What was the thing that
had to shift in you?

Speaker 1 (18:13):
Yeah? So at this time I started to interact with
other credit investors. Like I said earlier, I didn't have
my parents didn't have rental properties, and I didn't have
a rich a credit investor uncle. I kind of haphazardly,
you know, start to interact with other people at these
cats that owned a bunch of rental properties too, And
you know, it's just see like when you talk with entrepreneurs,

(18:36):
I mean, finding another entrepreneur out there in the wild
is pretty rare, right, I Mean that's why I'm in
this group entrepreneurs organization. It's like a little you know,
club of entrepreneurs. That's why I don't know what we
paid it to get into those groups, but like ten
twenty thirty grand per year some of these groups and

(18:56):
our spouses are like, why do you guys make money
to hang out with each other there? You know, like, well,
once you hang out with us, you know. Yeah. So
it's the same thing too with investors, real estate investors
or investors I mean that's why I think the like

(19:16):
we give a lot of pretty much everything on our
I'm talking about today. We have courses that are for free.
I don't charge for that type of nonsense like other
people do. We monetize off of like we put together
events and you know, more more curated events for our investors.
And that's the magic. I mean, people come down to
Hawaii and they meet other people. And that was the

(19:38):
magic for me about that that time when I had
a level rent of properties, I started to interact with
other investors that also had a punch arount of properties,
and I was like, you know, first off, I'm not
I'm not lonely anymore, and I don't think I'm crazy,
and everybody kind of thought the same way. But then
I start to uncover, you know, what is the main
curriculum in the wealth elevator, which is kind of a

(19:59):
trifecta triangle if you think of it, where it's investing
in alternative investments, getting off the beaten path away from
all that Wall Street crap, the traditional investments that they
all want you to invest in, where you're just getting
killed by all the fees and it's just crappy investments too.
I mean they're in fact, I don't want to say

(20:19):
crappy investments. They're investing in the same things we are,
but there's a gazillion middlement in the middle taking your
money away. That's the big issue. So that's number one.
Number two is the taxes that we kind of talked about.
If you know, you save money on TAXI, you don't
pay money on taxes because you're doing it legally. I
mean that just augments your returns and then running your

(20:41):
money through an infinite banking life insurance plan to configure
it the right way, not the way that let most
life insurance agents do it, where there's high commissions, high fees.
So what I learned is like there's just trifecta that
the wealthy are quietly doing, very implementable to the average
dude out there, but just a little bit counterintuitive than

(21:03):
what our parents taught us about investing and how to
stand your money.

Speaker 2 (21:09):
Let's talk about the life insurance portion, because most people
just look at life insurance for deaf and they're not
looking at it as a part of a portfolio of
wealth building set up the right way. How can life
insurance be a part of your wealth building portfolio.

Speaker 1 (21:26):
Yeah, so Welton Life Insurance think of it as an asset.
It's not like a brick and mortar asset like real
estate is. But it's a paper contract. Ideally, you want
to buy it from one of the big four life
insurance companies out there, right, you know, the highest rating
more secure. So it is actually I mean, in my opinion,

(21:47):
of course, and that's stating fact here, but in my opinion,
I feel like it's more a lot more safer than investments,
and might be even more safer than your their bank.
That's ft I see ensured. A lot of these companies
have been around for one hundred plus years. You know,
they own the biggest buildings in New York City. You know, Guardian,

(22:08):
they owned the building that was in the Friends commercial.
You know, every time you know, companies like that. So
I mean, we'll go after you know, we'll shop all
the major companies out there, of course, right, get the
best pricing. But it's configured very differently than life insurance.
Life insurance. The primary goal of life insurance is the
payout when you die. We're just simply using the life

(22:30):
insurance take to get a better tax treatment on this
stuff and get the asset protection. But what we're basically
doing is we're stuffing our life insurance with money or
what we call overfunding it, and then we're taking the
money back out as a loan from ourselves and paying
interest back to ourselves and investing in other investments. So

(22:52):
that's in the growth years. And you know that, you know,
comes back to the floors of the wealth elevator. I
think when you're on the second and for the wealth elevator,
your net worth is going over a million dollars. The
goal there is to get to three to four million
dollars net worth. At that point, you could kind of
coax through life at that point and you may now

(23:15):
pay down your pay put money back into your life
insurance as opposed to being in growth mode. And my
wholemo people tell me is, you know, we want to
somewhat aggressively get you know, buy assets, buy rental properties,
go into syndication deals. Do we get to a sort
of inflection point of endgame, which I would probably say
is around four or five million dollars. Once you get

(23:38):
to that point, you know, especially if a couple of kids,
you know, give a couple of million dollars each of them.
That's good enough, I think. But from a math perspective,
now you're able to live off of that at you know,
measly four percent and at least beat the pace of inflation.
And we kind of touched upon this in the beginning.
You know, if you're not if you're not turned on

(23:58):
to these ideas, your money is going to disappear. I mean,
inflation is an insidious way that people or that the
country or I mean all the countries do this. I
rode away the wealth of those who do not own assets. Unfortunately,
it hurts the people who don't invest, which are are

(24:19):
the lower class, the middle lower class, and the middle class.
Athough invest these days. It's kind of like gambling, right,
Gambling is kind of an insidious tax on the on
the boar, right, you like to flush money down the toilet.

Speaker 2 (24:35):
Yeah, you know, I listened to a lot of podcasts
and the amount of people since they've legalized gambling over
the phone is it's like something that people just do
like and and they get angry or upset. Last night,
in case in point, being actually brought it up. One

(24:56):
of my favorite basketball players. I'm a nick fan, Go
next one, of our point guard came up three points short,
a few points short. Yeah, and he's getting death threats.
The calling is that you know, now people have access

(25:19):
to you. They can come to your social media, go
d gim you. Oh you messed up my parlay. The
team won, And the only thing that people can wrap
their mind around is I had a chance to make
it big, and we take these chances, especially I grew
up in the poor community and these poor mindsets that

(25:40):
are hard to get around. We consume so much. We spin, spin, spin,
and we don't have a conversations like we're having right now.
We don't we're going to go to a club, We
go to a game, right But how important was it
in your transformation when you already to have these conversations

(26:01):
and get around other people and find out new ideas
and really be able to flush your ideas through Because
if you're thinking by yourself you're the smartest person in
the room, You're not that smart. But we started to
talk to other people and they say, no, Lane, do
it this way, because this is going to be a
way to help you get to your acceleration. This is

(26:23):
going to be a way to help you get your pace.
How important. Was that iron sharpening iron for you?

Speaker 1 (26:28):
Yeah, I mean that was critical. I mean that was
when my portfolio grew. I mean you started to do
larger deals. And I mean from two thousand and nine
when I bought my first property twenty eleven, I had
eleven or twenty fifteen, So it was that six seven
years I had eleven rental properties. And I will point
that out, like this is like watching grass grow, especially

(26:50):
in the beginning. But I was a you know, a
lot of this is just personal finance again, right, Like
I was able to say, fifteen hundred grand out of
my paycheck every single freaking wow, and not many people
were able to do that. But when I started to
meet other people and started to mastermind around these topics, yeah,
after twenty sixteen, I mean, I mean we started to

(27:14):
syndicate with other people. But the portfolio went over one
billion at that point and things just started to hockey
stick from there because of the ideas. But this is
I mean, this is where I think you can't. I
don't think you can just skip from point the basement
level to the second floor. Guys. I just don't think

(27:35):
that that's possible. I mean, that's not my story. I
just kind of went from one floor to the other.
I used the elevator. I think it's the stairs, that's
for sure, But I went I think there's a process
to this whole thing, and you can't cheat the system.
You got to go from one to the other. I
was lucky, like I said that. You know, I don't gamble,

(27:56):
I don't you know, I just saved my money and
I was just you know, I kind of brain was
washed in a good way starting out on the first floor.
And that's why I think it's hard for you know,
most people out there aren't really brainwashed with those good
money money skills. Of course, at some point, you know,
there's a lot of people that are our investors that

(28:18):
even into their forties and fifties, they're maxing out there
for one case and doing things like that, doing it
the wrong way in my opinion. But you know, that's
kind of where we try and educate people who are
kind of in that money mindset, trying to get to
that second floor the wealth elevator. But you know, if
you're talking, you know, I hear you, man like, there's
a lot of people out there that quite frankly, I mean,

(28:41):
I mean that's why I think we give away like
the like the systems on the first floor, buying little
around of properties. You know, if you guys want to
get access to that, just come back to the website
and it's free, all those all those e courses. But
I I mean, I don't really have good advice for
people in the basement level, you know, I do. Like
you said, it's a lot of like mindset stuff, right,

(29:01):
I mean, it's a lot of stuff we learned from
our parents that help us get started, but at some
point they're not really that useful. But that was kind
of this is like my opinion. I wrote the freaking book,
So that's my opinion, and I think they go sequentially
in order like that.

Speaker 2 (29:21):
When you how important is it for you to share
this information? Like you're sharing information that again people are
charging for. How important for you is the given part?
And how does that play in your wealth transformation? Yeah?

Speaker 1 (29:40):
I mean this stuff changes lies, change my life. Right.
If not, I'd still be as an engineer kind of
just doing the same thing over and over again. But
I've seen how I mean, we've got almost like a
thousand plus investors, you know, more than ten thousand people
fifteen thousand people on the list. I mean, you got
like a lot of hardworking families out there that make

(30:03):
three hundred four hundred thousand dollars a year to income,
and you know they can they change something around they
do real estate, professional status, or their taxes differently. Now
now one spouse can stay at home with the kids
when they're younger, you know, as opposed the most traditional
middle class families or upper middle class. They're both you know,

(30:24):
burning both ends of the candle, right, and they trade
quality of life for that leg up on society, and
there's a different there's an alternative way for them to
do things right. I'm talking to the people who are
already you know, half a million dollar networth and greater
quite crudely. And my other frustration was like, you know,

(30:44):
there's other books written out there, Dave RAMSEYCS or man.
I think they're great books for that part of the journey,
right the basement level. And then there's other books out
there like The Rich Debt or that great mindset book,
but doesn't really tell you what the hell to do,
no actual content, And I just felt like that was
kind of my place in the kind of the knowledge world,

(31:06):
and you know, I think again, like we do events,
and I think that's a cool thing, is to get
like minded people, you know, because a lot of people
don't talk about their money to friends or family. It's
kind of taboo subject. But we kind of make it,
you know, accepted, and you know, a lot of people
it comes down to the same values, right, Like people
who save their money, they're more forward thinking, their delayed gratification,

(31:29):
all those similar values that cluster around that, that art type,
and you know, so we provide those those that opportunity
for them to meet people like that. And and that
was like for me, is like knowledge is power, you know,
especially for those people who have made it right over

(31:50):
seven million dollars networth. It's more about teaching other people
and their kids. Of course, these money mindsets, Yeah, you
got to go get a good job, you know, to
make money. You got to make money to society, but
you have to at some point turn it to have
your own asset file that makes money for you so
they don't have to work forever. But I think part

(32:13):
of it too, as the metaphor with the wealth elevator,
you send the elevator backed up for others and you
kind of help people along the path too.

Speaker 2 (32:22):
I like the fact that you know your lane where
a lot of people just because you can you can
talk basement conversations, but that's not your lane. That's not
who you're targeting. And if you're an entrepreneur, if you're
listening to this, you have to know where you are.
You have to be honest with yourself one, because some

(32:42):
people think more highly of themselves than they are. So
you have to know where you are. And then wherever
you are, don't be ashamed of where you are. Don't
be ashamed to acknowledge where you are, but work where
you are so that you can work your way out
of it.

Speaker 1 (32:58):
Yeah, the first step is figuring out where you're at,
Like what is cattle grade? And in the book I
have like this chart for the most part. It from
a high level. It's just like, well, if you're between
these net worth ranges and these networth ranges, you're in
the first floor or the third floor, right, and then
then you look over, well, these are the things that

(33:18):
you do for you know, investing mindset. And you know
you read the chapter of course, right, but you know
that's you may not be there yet, you know, Like
when I was in the first floor the wealth elevator.
I had no concept of the third or or penthouse level,
but I think it's useful to kind of know what's
two steps ahead. But the only way you're going to

(33:40):
know is to be around proximity to these people. And
even when I was first by Mantle Properties, I had
no accredit investors around me. You don't know who these
people are. They're keeping it to their self, right, if
you got money, you're not telling everybody stealth wealth out there.
But once you step into those circles, when you you
yourself have the key to the club, that's when these

(34:03):
people pop up. But unfortunately, like you know, I know
how it is. If you're in the basement level on
the first floor, you just don't have access to these
people or these ideas unless you pick up the book.

Speaker 2 (34:15):
Yeah, well, I thank you, my last I have two
more questions for you. Number one, when you move from
the rental properties single family to family houses, whatever, the
commercial the deals got bigger. What was some of the
mindset shifts that you had to Was there fear of wow,

(34:36):
this is a bigger deal, the numbers are greater. Did
you have to play around mentally with that?

Speaker 1 (34:43):
Well? You know, in those types of arrangements, you take
out a piece of the larger pie, right, So you know,
in a way, you're getting more diversification that way, and
that's what opens up with that, right, you're not no
longer having to invest in your backyard or wherever you're
buying rental properties, which is not diversification by any speak
of the imagination. And now you're also having to trust

(35:07):
trust other people. I mean, the way these deals are
put together, if you think of it like an airplane.
You know, in the cockpit you have the general partners.
These are the guys who you know should be their
full time day job to run these deals and find
the deals. So there's a such an aspect of scale, right,
like the bigger operation you have the better deals you're
able to find, and you know it's their freaking job, right,

(35:29):
Whereas when you're doing it on your own as a
little rental property owner, you're just set amateur, right, buying
retail deals. And and that's the problem with you know,
when you're buying deals and they're five to ten million dollars,
it's very competitive. All the amateur mom and paw investors
are buying that stuff and competing with you. So if
you're you know, that was kind of where you're able

(35:49):
to get a little bit above where the crowd is
and have professionals do it now, not the biggest big
institutions to run it, right. That's what like a read
is a reinvests in this same exact stuff that we do.
What there's a gazillian middlement in the middle, and it
doesn't have the same tax advantages when you're in an
equity investor when you're you know, and that's the cool

(36:12):
thing about this stuff. You know, when going back to
the taxes, when you buy a little around of property
on your own, you're typically able to deduct the price
of the building improvement over twenty seven long years. So
I'll give people some real numbers, Like I think the
first property about was two undred and fifty thousand dollars
in Seattle. The majority of the well maybe about half

(36:35):
of it was the building improvement, which you know, you
divide it by twenty seven and you take the deduction
over twenty seven years. So I think it was like
five six grand per year, So it made five six
grand that paper loss would negate that Again, that's kind
of like the tax free thing. The cool thing with
these larger syndicated deals is you can pay for what's

(36:58):
called a cost segregation, like a fancy CPA document that
you know costs maybe four or five grad kind of
expensive if you're just dealing with a little dinky even
of property, right, but on a twenty million dollar asset,
that's nothing. But you're able to you know, do a
much more aggressive than that twenty seven year long straight

(37:20):
lined depreciation. So therefore you're able to extract out way
way more depreciation that maybe you can use to offset
other passive income you have in your portfolio. So you know,
these are kind of the concepts of like, you know,
even a lot of like CPAs don't really get the
stuff right all legally, right, the assets are all depreciating,

(37:44):
and this is kind of where you know, it's all legal,
but and if you if it's new to you, it
is kind of really technical, but it's kind of simple
if you think about.

Speaker 2 (37:54):
It, right, Yeah, yeah, because it's there, and and you're
the type where will you go to the CPA be
like no, no, I need you to do it like this.

Speaker 1 (38:03):
Yeah, I mean, well, like you said earlier, you know,
you need a decent CPA, right, although I would probably
say maybe only twenty percent of the cps out there
get this stuff. If people need a referral, you know,
just reach out. I can connect you with the folks
I personally use, which has kind of changed over the years,
but yeah, it's I think, yeah, don't go to the

(38:24):
normal guys, right, I said earlier.

Speaker 2 (38:27):
There to be different. What boats have impacted you over
the course of your career could be fiction and nonfiction
that you would say recommend to others. And then we're
going to plug your book one more.

Speaker 1 (38:37):
Time, and you know, all the basic ones that you
hear the for our work week, just because it makes
you think a little bit differently. And then the millionaire
realcy investor a lot of basics of you know where
to buy, you know what markets to buy in. You know,
we don't buy properties in the nicest areas, best school districts.

(38:58):
The numbers aren't going to work there, guys, InCor to work.
Let's say we don't go to like the worst areas.
We know we're not slumlords, but we find that there's
a nice little sweet spot in the middle in these
more secondary and tertiary markets. So you know, primary markets again,
are the sexy places to live, like where you're at,
you know where I'm at in Hawaii, California. We don't

(39:20):
really buy properties in these areas. We buy properties in
red states, you know, because we're the landlords. We'd like
the landlord laws on our side. But also, like these
more secondary markets, like like a Dallas, like a Houston,
less sexy places like that.

Speaker 2 (39:39):
People still living there.

Speaker 1 (39:41):
Yeah, and there's economic growth, But I think part of
the reason with the primary markets is you just have
people with too much of that money or international money,
just bidding up prices there. It just doesn't make sense.
Great place to live, don't get me wrong, but not
the best for castional investments.

Speaker 2 (39:58):
Well, there you have in everybody. I've told you. We
have conversations that help you evolve, and we set you
out the feed of the Masters the book. Get it
right now, go to the website. You see all of
the giveaways. You can transform your life by the information
that you're gaining, right, but then you have to take

(40:19):
the steps. So just having the information and having a
conversation won't put you in the position of victory. We
want you to walk in victory. So you have to
change your mindset, got to read some stuff, got to
do the work, got to put the time in, and
stop making excuses. Don't walk with your head down, don't
walk with your arms folded. We together walk in victory.
We don't act you for cash, apps, venmos or anything
like that. We do lead with value, so we act

(40:42):
that you hit like and subscribe your likes. Your subscriptions
help these conversations get hurt so that other people can
get the same information that you're getting. Let's not be selfish.
Enjoy the rest of your day, peace,

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