Transitioning From Turnkey Rentals and Networking Tips | Coaching Call With Aaron

What’s up, simple passive cash flow! Now on today’s podcast is yet another coaching call with myself and our volunteer, Aaron. Now Aaron’s been investing with us in our group for a while and he started when I was still teaching people how to buy term key rentals and. All that type of pain in the butt stuff.

If you notice we shut down the incubator group, because although I like helping people who are non-accredited investors, it just became a little bit of a not a good use of my time. Because. In the turnkey world or even, buying single family homes through a broker on your own.

The characters always change. And I think most of the accredited investors, at least ones in our mastermind group will all say, Rental properties are just a waste of time and their high liability. You have the personal debt in your own name, and unless you are doing some kind of birth strategy, wiring money to some random person on the, on non institutional level and, one bad relationship from losing a whole bunch of money.

It’s just not worth it. And I’ve said it all the time. Once your net worth goes to be about half a million, million dollars owning rental properties. It just makes no sense. And this is my story. Back in 2015, I had 11 of these turnkey rentals and I had maybe an eviction or two every year, some kind of big catastrophe that happened every quarter.

And you start to realize that, when someone trashes your property and now you’re stuck with a five $15,000 repair bill, you’re what was the whole point of this nonsense, with the headache and liability. And, even when you are working with a property manager, which by the way, they’re not aligned with you, they get paid more money when you have a vacancy, which is completely opposite on the commercial side, where we have we are aligned with our third party property managers on the assets of more in terms of profit and loss, as opposed to, they’re taking in the income from certain percentage of the rent.

Now, if you guys wanna interact with more credit investors who are doing crazy things, like taking money out of their home equity, via Heloc or infinite banking. And despite what Dave Ramsey says to scam and maybe for going on buying a primary residence, especially if you’re a non-accredited investor.

As I always say, I don’t think you should be buying a house unless your net worth is two or three X, that, or that house. Even if you are using debt, come out to one of our events and get to know other people. And definitely gonna be different advice from what your parents taught you and what your broke coworkers are doing, who are probably gonna be working there for the rest of their lives.

Come out on October 1st, we’re gonna be in Napa. Check out those details at simplepassatcashflow.com/Napa and October 6th and seventh. Especially if you wanna get boots on the ground and actually visit these properties that you invest in come out to Huntsville, Alabama. I know that’s a little hard, which is why the price on that one is a lot lower and subsidized for that.

Because we know it. Time investment is more important. But you may have to take an extra plane to get there to Huntsville, Alabama. You can either fly into Nashville, Birmingham, or straight into Huntsville, depending on where you’re coming from, but that is gonna be October 6th and seventh.

We’re gonna be doing a little party for the unveiling of the Chase Creek apartments, our latest development, and you can get more information by going to simplepassivecashflow.com/events where you’re also learning about our annual retreat in January, 2023. There too. Again, make sure you guys are part of our club because if not, we won’t let you come.

We always put it out there in our free Facebook group. But if you’re a high net worth accredited investor, I think that’s the type of stuff that you guys like, and it’s apparently it’s worked for us in the past that we’re really the only investor group out there that, highly vets, the people coming in for not only net worth their professional status, but as people too. So again, sign up for the club, simplepassivecashflow.com/club, and then check out our events that are coming up October 6th and seventh, Huntsville and October 1st in Napa valley.

And with that if you enjoy the coaching call and if you guys like this or you wanna volunteer for a future one, please email the team at team@simplepassandcashflow.com. We can change your name around. We don’t have to use your video. But that’s a great way for some folks to get some extra one hour guidance with myself. And we’ll give you the recording too. I guess. But thanks for listening folks and enjoy the show.

Hey, simple passive cash flows listeners. Today. We got Aaron here. He’s going to be doing a hot seat with us. So I’ve got your personal financial sheet up. If you guys are listening on a podcast, probably want to jump on YouTube and check this out if you want some visuals here, but welcome Aaron on the line.

And for joining us, maybe give us a little bit of a background. Just people get a sense of where you’re coming from. Yes, sir. I’m happy to be here. I’m excited to sit down and talk to you a little bit. Background college graduates started lurking in a kind of corporate America, so I decided I wanted to have more time to control my schedule.

So I ended up starting a small business, which is house cleaning, which I enjoy thoroughly. And so ups and downs there, but it did manage to have some extra cash flow looking for a home. And so I started exploring the world of investing, which led me first to stocks traded those for a while and returns, but ultimately it was looking for cashflow.

Continue the path of finding my time being more in my control. So it wasn’t there and I started looking at turnkey rentals and started my journey that way. Where are we geographically, do you live and about how old are you? Kids are. Born in Ohio and Michigan spent some time there.

Kurt grew up in Minnesota, went to Stillwater high school, which I thoroughly enjoyed, moved out for college to Colorado, which is where I currently live and met my wife. We have one child who’s sick, a little boy who is a lot of fun. So that’s geographically we’re at 40 years old and things that have that worked.

So it’s about where I’m at as present. Cool. It is in the cleaning business. And a lot of people don’t know. That’s the old lawn Mowing business where you get people to work for you, but on steroids and nobody wants to do it. That’s why it’s pretty lucrative. It’s nice because I wanted a business that had repeat customers so I could build over time.

So it’s not always looking for the next customer once you finish the job. So it started the background and construction, and I ended up a lot. There were, you can have a really great year one year and then almost nothing. Next quarter, it’s just a constant process of trying to find the next clients.

So the nice thing about this industry and what I like a lot about it is that you have to work a lot less hard. You develop relationships over time. And through that, you’re able to have a very lucrative and consistent job. The downside of course, is finding people who want to do the work. So that’s a struggle, but the main value I’m able to add to the marketplace is to find the people who are willing to show up and keep showing up and doing.

Cool. So let’s dig into this a little bit. So you jumped into turnkey rentals a couple of years ago, or about how long ago? Two years ago, give or take, and let’s talk a little bit about how you came to that decision and was it about, was it the right choice and it was your experience there.

Sure I listened to a lot of podcasts and read a lot of books. Of course, a lot of it starts with a little purple book. We all know so well, which is rich dad, poor dad trying to find assets that throw off cash flow. So I was trying to find something real. He did a lot of research time for about a year calling around talking to different people from knowing nothing at all to trying to find someone to partner with and found a group out of Memphis.

What I thought was a great tune in is a great team. What really took me off as I talked to several competitors of theirs and they all had nothing but nice things to say about their business practices and how they take care of their clients. And they were hunters. So I decided to go there. They might like many turnkey rental places that had a wait list.

So I wasn’t able to buy it. As much as I wanted to right away. So it took me about two years to get a four properties about as fast as they would let me enjoy the idea of leverage and the first, for the first year and a half. And what were they well and then just started to notice that the returns a hundred just really were undercut by the turnover in clients.

The small things that happen in probably know the value of properties I was at. I was relatively really solidly B properties may even be minus what would you say? The price in the rents or on the course? Those are a little under a hundred thousand. So we hit the 1% rule pretty often. So if it was 60 or a $70,000 house, I got $800. For the door. So it was hit by the 1% rule. So I think the cheapest house I bought was 65. The most expensive I got back was 95.

And now you’re not looking for turnkeys today, but how late is 2019. Now the pricing and rent values are still about the same. I know, I actually think it’s much worse. I was in the process of making some money on the sale of my properties, which surprised me in some ways because people were willing to pay a whole lot more for the same rent. I think by math, the last two I sold looked like they net a hundred, $150 a month per a unit. And from my point of view given what I’ve been through, that’s just not something.

To cover the incidental cost. They may hit all the numbers as far as maintenance and missing renters. But, it just takes one even a broken window and all of a sudden you’ve missed half of your income for the year. So it’s been much harder almost to the point of, it’s hard for me to imagine how people are buying.

Turnkeys at the price points that are now being offered to the same people I bought a couple of years ago at ones I thought were safe. That was theoretically adding on paper between two 50 and two 70. Most of the doors I bought and I just never saw that and felt, I feel like it’s a really tough choice nowadays.

If I were doing it again, I feel like it was even more than it was not what it was advertised. It felt mostly a little like I got false advertising at the end that the numbers worked out that just really it’s such low amounts that it didn’t take much to wipe out all your income for possibly a couple of years and just wanted to spend, yeah.

Maybe getting in the nitty gritty hair D where you are on your underwriting, where you include like five, 10% for vacancy. If I have 10% for repairs and maintenance, I was, yeah. I could pull up the spreadsheets if you wanted. That’s probably too much for the unit, but yeah, I looked at ages 10% on probably the combined between vacancy maintenance.

Just wasn’t sufficient, honestly. I think what people don’t realize is like the vacancy will. Come up at five to 10%, right? Like how you said, but what people don’t realize is when you get a vacancy, you’re going to have to pay up to half the first month’s rent. So that’s like another.

Five to 10% right there. Yeah, for me it feels like if I were doing the math again, there is the 50% rule you hear a lot about with full pull, your own real estate, where you expect to get about half of the rent amount in terms of profit. I feel if you apply that as a model back, did he not say, okay, if I add my vacancy, my repairs, my mortgage, can I still make money?

If that’s true. Yeah, it’s a little bit the same, but I felt yeah, exactly. They don’t take into account things like you’re going to pay up to a month. Actually, many of them suppliers, now you pay a month of rent every time you do the transition over. And to me, it also is just the repair costs in turn was more than I thought it would be too.

There are according to the averages between, 800 to 1200. And I think the cheapest turn I had was 1600 and I had several around 2,500 and they weren’t. They weren’t trashed places. It wasn’t holes in the walls and people were just mad and spray painting things. It was just they left stuff in the yard.

They left the house and it just took extra time. They had to come back in and mow the grass once a week on my dime, that kind of stuff. And they did a great job in many ways. The shocking thing for me is that many things went well. It wasn’t one big blow up of man. You should have seen this place.

It took all the profit away. These are just very normal every day, Hey, the, we had, I, we saw evidence of cockroaches, so we’re going to spray everything down. So that’s another in between. So this isn’t while I live there. So I had to do pest control for a whole year.

That’s another, two, 300. And then you add that to another thing. And another thing later in this field I just, I had $14,000 go out between the four properties in a three-month period. And it was just like, I’m just, don’t feel like I’m going to make the kind of return I can get.

I did the math and figured out I could basically buy us savings bonds and get the same return. And, I will second that the thousand 2000 for change orders. But then this last one I had, it’s going to be like, I don’t know if it’s only 10, 20 or 30 grand or fixed this latest one up. So commiserate, like, all it takes is as you did, you have a three grand turn. Like my God, like that’s all your profit for a decade. Feels like one to $200 a door. If you’re going for, I’m going to make even a percentage, it looks okay. Cause they put in $15,000 or $20,000 in. And if I get $200 a door it’s $2,400 returned as a lump sum return.

Sounds great until you realize that. Gosh, and then you talk about insurance and you talk about legal covering, even just for businesses. I just set up a business in Tennessee. It has a, I think it was a one to 3% on total net assets tax. So do you want to run the risk of having a personal umbrella insurance or do you want to have a corporation run it through that?

And then again, And really come back to really buy into your profit margin. My thoughts are like turnkeys as I think everybody should start there, if you have no experience, especially. And then, but what would you say Aaron to like, that younger kid, just out of college with just maybe 30 or 40 grand to his name is w what should they start off with?

I know both of us are hated on turnkeys right now. What would you say in hindsight? I think in hindsight, I would say that double the expenses that people are telling you, or an average when they’re selling you a. And if you can still make money then go for it. Like I would say, start talking to people and get real honest about how much the cost is really there.

And then do it, run the numbers that direction and make sure that, in comparison to other spaces, even again, bonds, like looking at municipal bonds at three to 4%. Now, if you’re taking 8% return, you cut it in half due to expenses. You’re only there. It’s hard to say, go after it at these prices.

Even if someone doesn’t have a lot of options, I really look at them and say, that sucks, but I’d say, find a different vehicle unless you can find one. The return plus 4%, you’ve got to get higher than that with real expenses and real, talk to lane and say, okay, break it down for me.

What am I really looking at in terms of real expenses? Cause I, one to two grand turns is just normal. And if you’re only expecting to make 12, $1,800 on that and that property a year, I don’t know how it works. I don’t know how you make money. Yeah, one more time. You might get appreciation, which is nice and good.

And certainly it helped me, but that was a lot of emotion, a lot of money coming in, especially if you don’t have a lot of cash coming in from your other business. I did. So it wasn’t tragic. I, I, maybe we go through this, I’ve got a decent amount of extra cash I can throw at it.

I went to $14,000. Expenses came through at three months, it wasn’t coming out of my living expenses. It wasn’t coming up. My family’s experience of lights. It was just unfortunate. And if you only have 30 grand and you’re looking to invest it, I just really make sure that you have a lot of margin or find another vehicle.

All right. And you know what, one thing I just wanted to point out for the folks. You went with one of these like perennial, turnkey providers. I think you knew going in that they were overpriced, but I know you for just stability. Yeah, I think the burn method, if you can find someone to walk you through that, it’s got a lot of attraction to it.

If you can make that three to $400 or even $500 a month, if you have the money and you have someone you trust, I could see maybe that working. I just think the turnkey has presented me even with someone who’s good at this. Just make sure that they’re offering more than $150 a month as a prize, as you went with like the Maserati trying to provide services there.

They have this waiting list because they have turnkey providers lining up around the block. I don’t know if I would recommend doing that. Oh, so you’re a lot more experienced now. So you don’t get that white glove treatment. And this is another reason why I don’t like the Facebook group that we have. I really stay away from recommending anybody because things change.

Try to keep providers. They’re just low-end flippers. Most of them that once they get better, they go do more retail flips and they get out of the gate. So it’s this constant battle of trying to find a new bathroom. It’s good enough to be good at what they do, but not so good that they end up cutting my margin so much that I actually don’t make as much.

Exactly. So that’s the plug for the mastermind. So we kind of trade providers and do that, you gotta pay to play guys. Sorry, I can’t just give up free referrals. Cause you guys have been wasting my provider’s time. Just calling them and wasting time. So sorry about that. Okay. So let’s talk about your property on Wren avenue down here at the turnkey at yeah.

That’s I don’t know what that came from, honestly. Sorry. Oh, okay. Okay. I got it. And I went to delete it. It’s pretty profitable. That it might’ve been, I was trying to represent The P the money I put into the, I’m sorry, the sorry, the apartment building. We just did. We just completed it. Oh, okay. That sounds like that address really.

Yeah. That’s the multifamily we just completed and that’s the Gavi now. Yeah. Yeah. Okay. I was like, that was that look, that’s an apartment building. We did that. I was like, man, that looks really a,

so yeah that’s 60,000 is what I have there, okay. What kind of dig into these personal financial sheets here a little bit. So you’ve got about 40 grand in liquidity. Did you liquidate the turnkeys? I did. Okay. Okay. And then you’ve got your home in cash. So what I usually am looking for is where is your lazy equity?

So you’ve got a little bit here, right? You could probably do what you want, let me ask you a question. Do you want to live in this house ? The long term I do. My first step next will be to get a home equity line of credit to attack some of that. Okay. If you didn’t want to live here. I would say of course sell it right.

But just move and get the equity all out. Cause like he locks are good for, because you can, it’s a reversible thing. It’s not like you sold it or you paid at one person origination rejuvenation for a new loan. But the bad thing is you don’t get entirely at all the equity because right now you’ve got about a hundred grand equity with the HELOC. You might be able to get 50 grand. Sure because they like to have that lazy equity. So they’re secured. So you’ve got about maybe 50 grand to play with here with a HELOC that you figure.

So you’ve got about 90% of firepower ready to go. Your net worth at the end of the day is about one 60. I think it’s just 60 out of the other things. So that’s a little bit more than that. Okay. Okay. Oh, okay. Okay. That’s what that was. Okay. Yeah, that was the multi-family. I just didn’t know what to put it, so I ended up there.

Yep. Okay. So what were, what are your two options at this point? And then let’s talk about this.
Are you asking? You’re telling, asking, oh I’d like to continue to look at renting my money out and building into the multifamily and or others indications. I’m a bigger fan of having more passive and the passive side of equity. I’m not looking to start another business. Did I feel like a lot of the options are?

So that’s what I’m hoping to do is to find a space that I can continue to grow. Investing into other people’s projects. I figure I can put 120,000 in, I got another 60. I can do this year, depending on what I want to find, and then, easily 60 a year after that growing as my returns grow. So that’s a six year plan to get myself to a half a million dollars invested in returning capital, hopefully around a 10% mark and I’ll come to you.

So this is what I look at it. If there’s one indicator of financial independence is they take this number minus this number, which is this. If you’re making, if you’re able to save more than 50, 60 grand a year, and you’re liking the top, at least top 20% of the people I talked to, which is like the 0.01% of the world.

Whatever that is. So that’s a big thing. It’s just not an analytical waiting game, right? This is the frustrating part. When you’re trying to grind from 200 to 500 to a million, and it’s gonna, it’s gonna, even if you didn’t even invest it, you’re gonna, in five years, you’re going to get up to half a million, right?

Yeah, three 50, but yeah, so what people don’t realize is when I started with zero it took, I bought that first property and then bought another property and then 10 31, and then this, it took me like seven years to get double digit units in that, just, it just moved like turtle speed. What about the idea of trying to go and find a broker and property manager and kind of piece together some single family homes yourself?

How does that idea sound to you? I’m not against it. Actually I feel fairly burned from the last experience of the turnkey. I don’t think it was necessarily just the turnkey side of it. I feel like I’d like to. Find a space where I feel like I’m more aligned with the lead investments idea. I like the idea of multifamily or at least the idea that I’m not the direct customer.

I feel like when I’m with the property management, they’ve meant really neat ways of making sure that they get paid. And I ended up being the first to get paid from the Abara complex. Ultimately they’re there to key in, on making sure the apartment complex is as proper as possible. So their incentive.

Is aligned with mine. I feel like I’m a little bit at odds with the property management and synchronization. But the syndications in theory, they sell them. Awesome. You have an asset manager and there are those, who’s a partner that manages the property manager day to day or week to week. But they don’t all go well. That’s the correct, w it’s just like the turnkeys, he thought it was good. Then you touch the stove and you’re like it hasn’t, we haven’t touched this homeless conversation with you works. How do I, who do I trust? And is this just one more?

It seems like on paper, but not to get through it three years from now. I’m like, yeah, that didn’t work out nearly as well. I think we’re in terms of where your net worth is right now. I think if you are like 500, 600,000, yeah. No brainer syndications, all the. But the fact that you’re in this quarter million, 2 million land, you, you may have to put a little bit more sweat equity to get it done quicker. Why is the return so much higher in a single family? I think what you’re not seeing is because you want the priMadonna turnkey provider. And the returns are very slim with them. And then you didn’t negotiate well with your property manager.

It shouldn’t, they shouldn’t take a full month’s rent on the first one. Yeah. Those are just some, but yeah, a lot of them out there were advertising that. Like I think if things go well and I think you’re going to get better and as an investor, you could probably beat what’s indications to you.

Don’t want to, you definitely don’t want to do that term. But it’ll get you to half a million quicker, but you save pretty damn good. You’re not like some guy who’s only able to put 10, 20 grand into the bank. Every. I do feel like it was in a couple of years, I have, between the equity, my, and my home, and I can get to 120,000 this year.

And, maybe 60 or 70 next year allows me to at least put chips on the table. Whereas indication goes, yeah. If I can find some willing to deal with someone like me, honestly, that’s a big issue. Not clearly not a qualified investor, so it’s a whole lot more difficult to do. So that’s what I would say is, it sounds like we’re w we see it both ways.

I think I wouldn’t totally not look for your own deals if you need. And if something looks very good, then be patient and pounce on it, just like the syndications to. Sure. And also it’s a sort of a misnomer it’s not you get access to more deals 90 to 97% is the statistic I heard of deals are for non-accredited investors.

It’s just, you’re not seeing because you’re not part of those networks. In my opinion, sometimes the credit owning deals aren’t as strong because they have to pretty much throw a hail Mary up in the stands and hope that they can get investors in mark. ‘ cause once they market those deals out, then they can only take accredited investors.

That makes sense. So I guess for me it’s how do I, I would look more towards, joining the right networks, even if I have to some way I do so to make it work. But on the other hand, I’ve only got, 50 to 60 grand a year to deal with. So that makes. Difficult as well. So I get, I feel like I’m in between, right?

This is what makes the scratch finally make it, it makes it so much sweeter because it was so difficult to get there. So talk to me about like time your resource of time. Is it better made finding more deals or connecting with more people or is it putting it back into the business and make more top line dollar?

It’s more connecting with people I’ve. I had the employees I want, and I’m fairly unwilling to keep on growing that side of it. Just because it’s, the turnover is killing my business. So I made a decision a couple of years ago that I’m not really going to grow much beyond my current level. So that’s, and, coming out with 50 or 60 grand worth of cashflow that I can use for investing, I don’t the amount of effort or take to add.

Without dramatically reducing it. Does that make sense? I’d have to reduce the amount of free cashflow to have to grow the business. And I feel like I could do better trying to find either network or other investment opportunities to run alongside my business. Then I would put in time and effort and money back into my business.

I buy that for sure. It’s most guys that are like, for example, doctors it’s just to get paid hourly rate. Yeah, it sounds like you’re up against a little bear or very yet the push through. I’ve got a pretty, I make a decent amount per hour, but I, to increase that Maura would take a different level of business that. Okay, I hear that. Any other questions? Like the life insurance, if banking is probably not going to be for you because you’re going to meet every single dollar to throw at more investments where assets that precinct. That’s what I feel about it too. So that’s my impression of it. I didn’t do the research into it.

It seems like I’m trying to find a way and I say my job is that if I can find a way to even make two or three grand a month of passive income, it’s not an all or nothing thing. I can back off a day, a week and find more time than possibly be a better investor, as opposed to spending all my time working and then just trying to invest in the margins.

So I have the ability to work, whatever number of hours I want. But that will reduce my number, my hours when I’m making. So if I can offset that, I can do that. More easily. And I think a lot of doctors or lawyers or engineers can tends to be more of an all or nothing kind of situation. That’s why also is attractive to me to try to find a way to make that return.

Even on the quarter million to the half million side would really change. Yeah. And if it doesn’t make it perfect. So I tend towards the, what I’d like to see is, who do I talk to? How do I get either mentorship or find a group that fits this category? And I’m not sure that there’s one which is I’m done with single family.

I have some free cash flow. I have as much free cashflow, as many doctors do perfectly. And trying to find a way to make the. Yeah. Yeah. Yeah, you have enough Coles going into the furnace is the, as the thought. And so there’s really not. Maybe the other option you haven’t thought about is as you expand your network, maybe you partner with as somebody in the summer position and you guys go after 20 units with each other.

Yeah. I can see that. That’s never really happens until you build the relationships and you meet the right person. And so if you weren’t, I know you’ve done this. If you were to build relationships from zero again, how would you go about doing it? So one mistake in relationships tomorrow, how would you start again?

Yeah. One mistake that I see a lot of people making is they go up to the person speaking on top of the stage. That’s the absolutely wrong place to go and not to sound like a jerk or anything coming to me as probably the wrong place to go. What I found the most effective is finding people on your left.

And then you that aren’t to any, they’re just working through their own stuff and you see if he sticks around and those are the people you trust, right? Because you see where they came from and there’s actual a real value exchange, both ways. They help you, you help them. And you guys want to get up to half a million dollars together, and then there’s a million dollars together.

From a high level that’s like that you think, or the places you think that person would be, I’m not asking for you, I’m just talking, where would you go if you had that position again? I know, I don’t know if I would recommend the local rehab because there most people there are broke.

That’s why they’re going to a local. It seems like one or two people. And then. Yeah, you do there. You’re not in the same place. I am put that way either they’re broke or they’re well successful that they’re not really. Yeah. And you just have a bunch of sharks there too. That are just from the stuff, the house flippers, just trying to stuff people into their deal and give them 10% on.

Take on all the risks you already know. That’s just lane. You’re an equity investor, not a debt investor at this point. So that’s. That might just tire you out, going to those types of things. But maybe I would go like maybe not every month, go out every other month, just be consistent.

You start to the point there’s now you try and realize who are the sharks and not to waste your time with them. And then who are the newer people coming out? And those are the people you’re trying to find, but you gotta get them up for the sharks. Get. I also know you’ve got the, a friend finder thing I haven’t really explored.

Do you think there’s people like me in that network? I could find. Yeah, but I don’t, I might be shutting that thing down because I just don’t have with, and here’s another thing I don’t like to connect people on, let’s say want to be connected. I do the double opt-in.

Standard operating procedure, or if you want to talk to this person, I go to talk to them first. If they want to connect with you. That’s just not cool if I just connect the email, but this all takes time and I got 40, 50 people in the mastermind now. And quite honestly, I need to focus more on them than the feat, the free Facebook groups and all these other free things.

Sure. There so unfortunately, I would get value out of the mastermind or the people not like me, or are they more still looking at single family and not there? Yeah. I don’t like the setting thing, but I think, yeah, you should probably join that thing. 20 or 30% are still in your shoes picking up their first few rentals, but majority are vetting bigger deals as a past.

Okay, but I think your net worth will be a little bit below the median. The median net worth is like 800,000. Okay. So maybe, I don’t know. Maybe that’s a good group to be part of. I don’t know. I’d like to be in a place where, you know, clearly, the, again, maybe too large, but I clearly want to be a place where people are smarter, more experienced than I am.

Yes. I’d rather be not room struggling to, have the, had the pressure to be like, okay, get better, faster than in a room where I feel, not that pressure. They’re not, I wouldn’t say they’re more experience. They’re all newer, but they’re very humble. And that’s what I like.

So it’s a good group of people like high paid professionals. That’s like shooting fish in a barrel, and that’s obviously not free, but so let’s get back to the free stuff because the person listening to the podcast is a cheapo. So I don’t mind spending the money. I want to find the space.

And I realized that quality people, and I’m just for the plug for the cheapo out there, I would say, Hey, spend a couple thousand dollars or several thousand dollars to fight. Someone who actually knows the answer. Otherwise, I think you end up with what I did, which was a lot of free advice. I ended up putting me in the premier Truckee area because that’s where I got funneled, which is, I’m not blaming anyone in that way, but I’m more than happy at this stage of life to try to find a way to spend money, to find the actual answers, not just the marketed answers.

Does that make sense? Yeah, the bread crumbs as I call it. Are those people who paid full time to go work at work. People just like me, who got just enough money. And that’s what the marketing is. The marketing to me who wants to just, I’ve got money. I want to spend up. I don’t wanna spend a lot of time and I want an easy solution.

That was me. Now I have learned more and I need do better than that, but that was who they were. So the goal is to find other people that are along your journey, that. If you’re doing turnkeys, maybe like how I had a few people in Birmingham with that I could bounce ideas off of her, or if my property manager wasn’t performing, I’m asking, oh, are you still using that same guy?

So that we all kind of band together that, but just, that’s just one example. Another example is just holistic wealth building ideas, or maybe even want to partner up and do a deal together. For example that’s what you’re trying to create now. How do we do that? I don’t know.

We’re not giving people much advice. We’re not doing a good job. I guess that’s what I’m pushing you. Why I signed up for this and I can be nicer in a minute if you want me to say something else, what is beyond just getting out of bigger pockets. What’s beyond just reading a bunch of blogs, listening to podcasts.

There’s something between that and the $40,000 mastermind, like what is, what exists between those two? I’m willing to spend the money if I need to, but I need to find a better source of advice than what’s free on the internet, because that led me to a mediocre. And I’ve been listening to podcasts for over a decade now.

And I’ll tell you that the podcasts are the same old stuff. I don’t even listen to podcasts anymore. And so what I would say the next step that I went down. Is get around. You gotta pay to go to like higher end conferences. Okay. You have to pay over a thousand dollars to attend these things.

And part of that is just getting around people who are more serious than the $50 weekend seminar crowd. But then I think what you’ll find is some of those groups are, they’re just not in the right. They’re more go getters. They’re more, $5 net worth guys that want to do big deals. You don’t want to find guys like that.

What I found was like other doctors, lawyers, engineers that were 10 years older than I was. So I was like, oh, I better copy with these guys too. I didn’t find out until I started joining these groups for 20, 30 grand membership fee. But once you get into the group, It’s amazing how easier gets, but you’re just trying to find a few good people, build a relationship with them, stick around for a year or two, and then eventually, hopefully they find somebody other groups or you do it’s really is the long game.

I’ve got one 20,000 I’m considering, but again, it gets back to I’m making good money per month and I can spend it. And I’m looking to stop trying to be the hero in the, do it myself, DUI. Yeah. I don’t recommend ever paying over that amount. I’m thinking about joining this one mastermind, just to give you guys access to more providers and like lending opportunities.

That’s an invite only one. And it’s only 25 grand. For me, that’s like for what it’s is it’s nothing. But I don’t think you need to spend that much. My, my program’s like under five grand, that’s a sell it, but I think the cool thing is if you want to do it the traditional way, you got to go to conferences.

You might have to go to a few of them. So that’s a few thousand bucks and you have to go fly there. And then it’s really like shooting fish in like a huge pond. Like you gotta meet the right people. You got to kiss a lot of frogs. You got to go back. If you’re an introvert, you’re going to go back to your room, super tired.

And hopefully you picked enough business cards. You can come back and hopefully rekindle a long lasting relationship. But I, yeah, step one. I think Erin is go to your local REIA. Cool once a quarter or something like that, at least, who are the sharks and who are like the new people that you want to connect with.

And now you had that your lens, right? How do you navigate that? That’s a scenario. Okay. But any other things that kind of comes to your mind? Things you might want to try. Yeah. I, I do, although the world, again, looking at things like note investing and such, you still look are interesting.

I’m not sure if I should or shouldn’t. I feel exactly the same way now. I feel a little kind of shy. Like I want to find somebody to walk me through how this might work. Yeah. For a lot of the passive investors that listen to this podcast for higher net worth guys, if you’re not, I don’t know why he listened to us.

Really the only things you want to do as an operator are like non-performing notes maybe self storage apartments, once you get to the assisted living or mobile home parks, those are more hands-on right. It’s a spectrum. Most hands-on operators like non-performing notes. For example, you can do that in the comfort of your home, living in Hawaii or Los Angeles.

Or the other ones, you gotta be boots on the ground that said, if you want to do non-performing notes, you have to go to the bootcamp. You gotta pay to play the 20 grand or whatever it costs in my humble opinion. Okay. Yeah. Like I said, I feel like I would need a guide in that kind of world. It doesn’t seem like a bad place, the questions are pretty endless, but if you want it to do something like non-performing notes, The way you circumvent that 20 grand pay to play method and just stop beating around the bushes.

You go network with the right people. And maybe that one of those people you network with that you build a long-term relationship with. Maybe they’ll want to teach it to you. There’s some sure injuries, right? Yeah. So that’s the only other thing on the horizon I think, was looking at those kinds of ideas. But I like the idea, like you said, no, that’s not an equity play. I’d like an idea. If I can find a way that your equity plays while also doing cash flow, that seems like at this stage of my development, trying to get to half a million rather than a million, I have to.

Yeah. I talked to this other guy the other day, all he’s been doing is. That deals at 10 to 12%. And I’m like, where the heck did you get in your head? That this is the way that you’re going to build your wealth while you keep talking to these fixed flippers that try to swindle him and their deal.

Do the math 10, 12%. You’re never going to get anywhere. You got the equity, especially if you only get it nine months out of 12, like it just doesn’t. Most of your time, your money is off the table. A good amount of it. I think the problem is. People don’t realize people look at what rich people do.

If you are like a million and a half, $2 million net worth for above and this stage of the market cycle. Yeah. You might want to be a debt investor to hedge your investing. But that’s not what somebody, half a million dollars, should be doing. You don’t have any money. You got to go make some money and go into equity investments.

You need them all, and you need all the tax benefits that go along with it. So again, that’s where you have to get around people, right? You can’t just listen to free podcast advice where it comes in your head one direction. There’s no feedback loop. And this is what’s nice about this conversation, right?

You get that, ask these questions that you get. And that’s why I really stopped typing stuff into the Facebook group, because I don’t type very well. You have to speak in terms of absolute, but it’s not absolutely every person, every situation is.

Okay that, that has helped. Cause I was tempted by the honestly the 10 and 12% I’m thinking maybe that’s a safer, more consistent return. So that, yeah, but you gotta, I want to get from a quarter million to half a million to a million . It’s a long road, if you’re gonna go that way.

And when you’re over a million then you can consider it, sure. That makes sense. But each of our own, if all you go to his local RIAs, that’s all you get presented with so much a flipper is looking, Hey, I’ll give you 12%. Yeah. If that, the people that I use, they’re all very experienced and you can actually rent the property out and make some money.

If things go really bad. So they’re giving a lot less than 4%, you pay for what you get. It’s very you can talk to Sam, but you’re taking a lot more risks than you did three years ago for the same amount of, yeah. Yeah. So sometimes you’ll see it, the local REIA is Hey, I want to borrow money at 15%.

Is this guy ever done anything, the first time I’m not really sure. I’m probably overpaying. Yeah. Yeah. But it’s a good deal, man. Yeah. It’s hard to hear. Cause I, like many other places, are immune. The average house is like $350,000 right now. So it’s hard for Colorados to find that space even more reason why not to do it right?

Like California or Seattle. There are 600 houses there. They’re wanting people to come in at half a million dollars. That’s everything I tell you not to do as a syndication investor, right? Don’t put more than 5% of your net worth into any one.

Yeah, that goes back to my goal of, okay I can save you for the next six years. If I put, if I consistently say at this Mount, which I’ve done, I proved that I can do it. It’s not just on paper. I’ve done it for over a year now. And spread it among, first, 10 and 20 different syndications. I don’t know if there’s a better way of doing it currently that I see.

Yeah. I think there’s a little bit of work to explore it off. Get your own deal. Because you are more experienced now. So I would say keep that road open. And then as you expand your net worth network, things will open up. I think in the beginning, when you were just two years ago, networking with anybody wasn’t going to do very much, but malware where you’re at this stage, then the network was really mad.

And I think that’s a big mistake that a lot of new investors make, they go out there and then they network like crazy, but it’s yeah, you’re networking with a bunch of other people that haven’t done anything that’s useless. But now that you’re at this stage, then the network is really where, that’s really where you have to put your energy.

I think that’s good. That makes sense. But cool. Anything else you want to chat about. I think that’s about it. I just appreciate your time and gave me some feedback. It’s hard to find again, like you said something between, you’re willing to do it for free and I’m really grateful for it.

We tried to make it definitely a lot cheaper and that was the vision. So I didn’t think anybody should pay 15, 20 grand to get started. That’s ridiculous. But yeah, simplepassivecashflow.com/journey is the URL to apply for that. But I think it would be a pretty good fit. Thanks for doing this, Aaron. And stay tuned for the next episode, guys. We’ll talk to you guys later.