Dion McNeeley and Matt Hawkins on 18 Units vs. 150 Units

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0:00 Welcome to another episode of the Owner Meeting podcast by Multif Family Strategy. I'm Christian, your channel host. Today joined by two of my favorite
0:07 real estate investors of all time. Completely different strategies and goals across the board. Unbelievable
0:13 success. Dion McNeely, who just got off the keynote for the Bigger Pockets
0:18 convention [music] in Vegas. Matt Hawkins, who I finally get to meet in person and have on the channel. He is
0:24 the guy I go to when I get stuck on anything real estate. massive investor, huge portfolio. Let's get rolling.
0:32 Welcome to the channel. So, originally when I wanted to buy real estate, I was actually not trying to reach financial freedom. I was not
0:38 trying to retire early. I thought if I owned some rentals, if I bought one every couple of years, in 10 years, I
0:43 would have five. And when I get too old to work, my biggest fear was becoming a financial burden to my kids. M
0:50 and I thought if I had five rentals and so so security security, if I worked into my 70s, my kids would be fine. It
0:57 uh made a lot more money than I was expecting. So after a decade of investing, I walked away from a job that I love because time freedom is amazing.
1:04 What have you done with time freedom, by the way? Uh scuba diving, chasing good weather and great water, Portugal, Thailand,
1:12 uh Colombia, going back to Thailand, probably going to uh Scotland next
1:18 summer. So, it's just a lot of travel. I'm trying to share the information. I wrote a book. It took two months, locked myself in an office and wrote a book
1:24 called Financial Freedom for the Lazy Person. Uh because a lot of people are lazy like me. I don't want a big portfolio. I just wanted a few rentals.
1:31 I ended up retiring in 2022 with eight rental properties that produce about $240,000 in profit a year and take me
1:39 two hours a month to manage, even while traveling. That sounds actually amazing. Has
1:44 someone who works far too much. Uh yeah. Tra, water, vacation, travel,
1:50 Portugal. Uh, sounds awful. No one would want Who would want that? Who wants to do that? Who would want that? Matt, how about
1:55 you? You have a a little bit larger portfolio, a little bit different strategy. What was the original goal and
2:00 where are you at today? Yeah. So, um, was in the stock market in the 2000s, you know, when when the dot
2:06 bomb hit. Um, blew up my portfolio. Portfolio went from uh $38,000, which I'd saved in my
2:12 ears, to disappearing. Literally disappearing. went going down to just a a few thousand bucks,
2:18 recognized uh I didn't want to ever do that again. So, I wasn't going to ever rely on Wall Street to figure it out for
2:25 me. I wasn't going to live in Manhattan, so I wasn't going to be part of any of those uh posh gettogethers.
2:30 Um you know, where they're all where they all know what's going to happen before it happens. So, not being on the inside, I would look for something that
2:37 would not only pay me but also appreciate while it paid me. And really the only thing that I could find that would actually fit that to a tea which
2:43 was a physical asset was real estate. And so uh then started my journey of I
2:50 was young. I was 23. I didn't have a place to live. Um I was renting and I
2:55 just said I I got to buy a place and then just and go from there. And I reached out to a mortgage broker and he
3:02 said you don't qualify. What are you doing? You don't qualify for this. I
3:07 said but I have a good job and I make good money. He goes, "You still don't qualify." And I said, "So, what have you seen work in the past?" He goes, "You
3:13 can get a roommate." And I go, "How's getting a roommate going to help me?" He said, "Well, he'll pay you rent." And I go, "Yeah, but you don't count that." He
3:19 goes, "If you have a lease, I do." Well, then there we go. That sounds like that's going to be the ticket. So, I
3:26 sent a message to a bunch of my friends said, "Who wants to live in a really cool place?" And uh got a couple answers
3:31 back and the one guy that I would never live with uh I picked the other guy. Um, but he signed a lease and you know with
3:38 that lease and the $1,000 a month that he was going to pay in rent, uh, I actually qualified I then qualified for
3:43 the unit and moved in and that was the that was a start and I was house hacking
3:49 before house hacking was house hacking. So there we go. Yeah. Before Bigger Pockets branded it as as as their own.
3:56 Yes. Yes. And turns out you've having a roommate to help you offset the rent is uh not a completely original idea. Yeah.
4:02 But it can help you get a property financed. Now, you did that. How many times did you say you did that? Nine times in the next 13 years.
4:08 And you moved into every single one of these. Every single one. That is wild. Nine and 13. So, we moved we I moved uh
4:15 five times in six years with no wife and then four times in seven years with
4:21 a wife. Wow. Now, how did she feel about that? I didn't ask. [laughter]
4:27 The only correct we did it. That was it. She'd show up and she's like, "Who are you? Who's
4:34 living here?" I was like, "Oh, that's the new tenants. We need to go to our next place." Um, honestly, what happened was is she I was putting her through
4:40 college. Mhm. So, I just Okay, that's a good trade. Yeah. I just said, "If if I'm going to be able to afford like paying the bills
4:47 and paying for food and paying for electricity and all the things that we need, um, you know, we need to be able
4:53 to keep the nut small." Yeah. And so, that means moving into a place and I would never buy anything that
4:59 wasn't value ad. And so we would anything that we move into would have significant value add and we lived in construction zones for usually the first
5:06 six months that we lived any place. Um and then did some final tidying projects and then as soon as we hit the
5:12 year or going just into the year mark we would get it reappraised and cash pull out any cash that we could
5:17 pull out so we could afford the down payment for the next property. But then we would start shopping for the next property post that one for rent get that
5:23 rented and we would have some other place that we could move into by the time it was rented. All right. So, a lot of sacrifice on the
5:29 front end is what I'm hearing. Tons, tons, tons. Where did that put you today? Uh, today that puts me at 53 buildings,
5:35 uh, 150 something units, 400 tenants, and, uh, retired at 46 because I've got
5:40 good friends like Dion that, uh, harassed me until I quit. There we go. So, yeah, he's like, "You got to retire
5:46 now." And I was like, "Listen, if you're bored, just come and visit me." Like, [laughter]
5:52 but no, it was great. It was great. Um, you know, having other guys, you know, one rental at a time with Zoo. Um and
5:57 and Dion both retiring before me. Uh there's Michael Zuber, by the way, for those Michael Zuber from One Rental at a Time.
6:03 Yep. So, all those guys retiring just before me. It was it uh it gave us gave
6:09 me more play time, but we just had to get some stuff in order. Personally, my daughter had gotten cancer and so she
6:14 delayed uh my retirement 18 months, which is fine. I've forgiven her over it because she kind of you
6:20 she agreed that she would live so that that worked good. Um but yeah, that's how we find ourselves here today, which is uh at
6:26 BPCON, you know, Dion being the keynote speaker and uh just did a phenomenal job
6:32 and it was an awesome thing to watch. Dion being the keynote of Bigger Pockets. One of the interesting things
6:38 and I actually love this compared to a lot of the other speakers, you actually have relatively a small portfolio. Your
6:44 cash flow is awesome per unit. I mean, just absolutely phenomenal. Did you ever think when you were just
6:49 buying one rental every one or two years that this would result in you being the keynote of one of the bigger real estate
6:55 conferences of the entire year? No, [laughter] not at all. I think
7:01 I anticipated that answer. Bigger Pockets went through a bell curve of they grew and they became the biggest
7:07 podcast on real estate in the world basically and they started a lot of the guests were bigger is better uh 4,000
7:14 units syndications become a broker become an agent. And I follow Coach Carson, you know, um
7:20 the small and mighty investor Chad. Yeah. And I I didn't I never wanted a big portfolio. I I didn't even start
7:26 thinking about money until I was 40. Like at 40, I found myself a single parent with three kids. found out about
7:32 $89,000 in bad debt in my name I didn't know existed until the divorce and uh
7:37 started thinking about investing finally. And so my goal was just to get a few rentals to have that better retirement
7:44 so I don't become a financial burden to the kids. Like that was the original goal. Well, there are people out there
7:50 who just want financial freedom. And so my kind of a few years into it, I started thinking I don't want a huge
7:56 portfolio. What I want is the right amount of cash flow from the least amount of units. Right?
8:03 I have 18 units. I'm probably going to be buying a pro a property this year. This is the best a buyer market. I'm
8:09 excited about buying in a buyer's market. It's the first one I've seen. And uh I'm not sure I want the 18 that I
8:15 have. Eventually I might offload one or two, lose some debt, increase the cash flow, less things to do with. I see guys
8:21 like Matt that have 150 units plus, and I watch him like a hawk. I'm like, how does he do that?
8:27 Like a Hawkins with like a Hawkins. Um, we can say your name now. I'm a dad now. I'm a dad now. I can do I
8:33 can do dad jokes. That's nice. [laughter] But most importantly, he's retired. So now we don't have to just call you lumber. You're actually the man, the
8:39 myth, the legend, Matthew Hawkins. True. So the systems that Matt puts in place to be able to self-manage
8:46 burrs, flips, rehabs, sell for 1031 to be able to not lose your sanity and run a portfolio bank. I've incorporated a
8:53 lot of Matt strategies in my small portfolio. how I deal with tenants, how I did my burr, the only one I'll ever
8:58 do. If I have to rehab a kitchen, I reach out to Matt because the the the systems that it takes to run the huge
9:05 portfolio and make the small one, like I said, take me two hours a month. I I'm used to working 60 70 hours a
9:10 week. So, to go to two hours a month, I used to be exhausted all the time. I
9:16 haven't been tired in three years. That is amazing. And hard to fathom. I
9:22 can't imagine. [laughter] Exactly. This is not a podcast about Christian, but I have no idea what that
9:27 would feel like. Exactly. No concept. Matthew, with your size portfolio, how many hours does it actually take you to
9:33 run 150 units? You have zero partners. Yeah, we have so zero partners. Uh just
9:38 myself and my wife. Um you know, we've got one employee. Um and he is really the property manager. Um and then we
9:45 have just all the systems and processes in place where I can run my entire business right from my phone. Um but you
9:51 saw the Bigger Pockets. I wasn't constantly jumping out into the hallway and having to take phone calls. The business runs pretty well, you know. Um,
9:58 but the the real key to it is doing rehabs. So, the rehabs are what take the
10:04 time. The rehabs are what take the resources. Managing the existing 150 or so units,
10:09 not that much time. You know, few hours a week, not a real big deal. And in fact, for me, it's even less because
10:14 I've got a PM. And so I just basically look at notes in the system that he puts
10:20 in the system and realize, okay, we got to make a change here. We got to make a pivot here. But that's all pretty minimal. The big stuff comes and that's
10:26 what frees me up to do the big audacious, ridiculous things like converting a jail into an indoor kids
10:32 playground. That is such a cool project. It's fun. It's fun. But, you know, it's being able to do cool stuff like that.
10:38 And it's funny, too, because it's like, you know, a lot of investors out there think, "Oh, I can't learn from a guy who's smaller than me." just portfolio
10:45 size anyway. And the interesting thing is is I learn a ton of stuff from Dion all the time. Like the fact just the
10:51 cool calm approach that he takes and the the fact that he does a phenomenal job
10:57 at purposefully making time count and making time available.
11:02 I mean, that's a lesson that everyone can learn from. Everybody needs to be more in the moment where they are and
11:09 find a way to minimize the amount of work, effort, and energy. Now, you can't start out there.
11:14 You have to put more work in. It's a it's a climb. It's a journey. But after 10 years, most people's lives with the
11:20 size portfolios that they're going to choose to have, they can have Dion's life. That's actually one thing that I wish
11:26 more people would say is those fir especially those first, I would say probably five years, but then again, I haven't been playing the game as long as
11:32 you do. But those first five years, you do in fact have to work at it. it whether it's
11:38 I mean you've had all sorts of jobs Dion like you you have put in hours and work and life experience you had an earned
11:45 income to get you into all these duplexes where you weren't raising capital uh you've had
11:51 massive career you had really cool jobs I did I did I was blessed yeah but every I see young people
11:57 especially on my YouTube channel because I'm I'm creative finance so like people oh you can buy stuff with no money this is great I can do this with people come
12:04 in and they think hey I can just skip working. And I see that happen again and again and again. And those are the same people who I see filing bankruptcies.
12:11 They're the same people I saw syndicating three years ago. It's like, where did they go? That's right. Yeah. They disappeared. Where did all these
12:16 syndication courses go? Huh? Well, turns out it's not free money and you can't just only do deals and just hope that
12:23 the money come like you have to work. Dion, you're retired on not that many
12:28 rentals, so you call yourself the lazy investor. But how much work did it take you on the front end before you got to
12:35 be the lazy investor? So my book which is available on Amazon, Financial Freedom for the Lazy Person.
12:40 Fantastic. I ran myself the lazy person. Thank you. Uh people want passive income. The IRS
12:48 calls it passive income. So the category of owning rentals is called passive income. They want iron lung passive
12:53 income. They can lay down, don't have to breathe for themsel and money comes in. That's not what owning rentals is. Owning rentals is very close to passive.
13:01 Couple hours a month, couple hours a week. Acquiring rentals is life consuming for
13:06 5 to 10 years. Every second you're not at work, or if you're at work and you have the ability, you're checking deals, you're making
13:12 offers, you're touring properties, you're networking and connecting with other investors. So those 10 years to
13:19 reach financial freedom, no vacation for eight years. 19 and 17year-old Jeeps had to have two so one
13:25 would run well enough to get me to work. uh didn't eat out hardly at all. Uh my
13:30 time was spent work, kids, investing, and that was the priority order. But
13:37 that investing, there was no Dion time. There was no Netflix. We didn't have cable. We didn't have we had internet
13:43 for gaming because I played World of Warcraft as a side hustle to sell things online. So my gaming turned into monetiz
13:50 monetized activity. How much do you make on that by the way? Side note. So, uh, worst months probably
13:56 $200 or $300. Best months thousand to,400. Oh, so that bad. It got it got harder and harder over the
14:02 time because larger websites just turned into big mills for the things that I was doing. Gotcha. So, it tapered off right around the
14:08 rentals started tapering up. I say that's like that's like a free rental unit though. You a bonus bonus month rent. That's great.
14:14 And uh so if people are willing to put in those five to 10 years where you have no life,
14:20 you have the rest of your life. Yeah. It's amazing. Yeah, it's true.
14:25 I love that. So, if you're trying to get started, uh there will be some sacrifice. Yeah, it's going to suck and then it doesn't suck, which you guys
14:32 have reached the point where it stops sucking. It sounds like it's true. And the most important thing once you reach the it doesn't suck anymore,
14:39 turn around, put your hand out, look for the people that are starting or midway and try to drag them along with you. M
14:46 yeah, it was one of those things where, you know, with uh with one rental at a time with Mike Zuber and with Dion and
14:51 myself, you know, we don't need the money. We do it because we're trying to help people. We just don't need the money. So, it's
14:58 one of those things where we enjoy it. We get a kick out of it. You know, for me, I much rather do somebody else's I
15:04 much rather be a part of somebody else's first, fifth, or 10th than my 115th.
15:10 I mean, been there, done that, got the t-shirt. It's nice and it's fun, but I much rather do a deal and help somebody
15:16 else with a deal and get a deal done. Um, and so that's been that's been some of the most fun stuff, you know, helping
15:22 out, you know, helped out a 24 year old buy a quad, helped a 27y old buy a uh buy a duplex. Um, and do it with less
15:30 than $10,000 down in a pretty expensive market. You know, how to negotiate the deal and how to then get a return on
15:36 that capital. And then, you know, in working with one, he bought a Forplex for $8,814
15:43 out of pocket. That was it. Wow. Lived there, made $1,300 a month living
15:50 there, made $1,300 bucks a month. And so, set him up. Set him up for life. Set him up. He's set up for life. One
15:56 building set up for life. Those are the those are the cool because that's not going to be every deal you do. And you should too many people hear
16:03 these podcasts and they go like, "Oh, well, I'm going to go find that one deal that sets me up for like I have of
16:08 everyone in multif family strategy. I have like one mentee who did one deal and he's like, I'm cashing in seven grand a month. I think that's like
16:15 I'm basically free. That almost never happens." Yeah. One thing I like to say because it really hurts Matt's brain, which is
16:20 always my goal. [laughter] Hard to do. Matt has a smart brain. But it's fun when you do it. I only b I
16:26 only purchased eight properties. It's 18 units on eight properties. Three of those purchases were break even deals.
16:32 And Matt's little eye twitches every time I say it. I was fine. I didn't care if I made money the first year. I have a lot of
16:38 boxes more than math. I wanted side by side because it's less noise complaints. There's no tenants above or below. I
16:43 want garages, preferably in the middle if possible. I want pet friendly fence yards. I want washerdryer hookups. I
16:48 want a decent neighborhood, not in a good school district, in a red county, in a blue state. Like, if it checks those boxes,
16:54 I would almost buy an alligator and just to watch Mike's eye twitch, but I haven't. I don't know if I would like
16:59 property that loses money. For those who don't know, alligator is property that loses money day one, right?
17:05 Yeah, I'm tempted to do it just to watch how Zuber reacts, but I would never do that. I want break even or better. And
17:10 that includes the break even means I'm setting aside the money for future repairs, maintenance, and vacancy. So, don't take a loss.
17:16 But, uh, yeah, and then you add time. Couple of years later, those properties are
17:21 producing almost $1,000 a unit if because I'm in a high cost of living area. targeted high cost of living area
17:27 on purpose. I don't pull the money out. I've never So, you guys have done so much more than me. I've never done a heliloc, a cash
17:33 out refinance, never sold for a 1031, never had a partner. Like, you guys are doing the real estate world. I was like,
17:39 I'm going to carve out this part of the pie and own my life. Like, there's a huge pie in real estate, but I just need
17:45 my piece. Yep. Yeah. I mean, to Dion's point, you know, it was one of those things where, you know, for me, I wanted to grow it
17:51 big enough because I knew I was having kids come along the way. So, I've got a seven-year-old, a six-year-old, a four-year-old, and a girl who's about to
17:58 turn two. And so, being at that stage of life, I knew that I had 15 years of expenses for
18:05 the for the oldest one and I had 20 years of expenses for the youngest one. Um, and that's where we're at right now.
18:11 But it's get it gets even worse, you know, earlier on in the cycle when those kids haven't arrived yet, but we know that we're going to have those kids.
18:17 Yeah. And so just looking at it's like you've got to have a significant I mean if you want to choose that life you want
18:23 a significant amount of finance there to be able to do it. And so that's why for us it was you know for myself and my
18:30 wife Ashley it was growing it as big as we wanted to grow it so long as we were only doing great deals. Yeah.
18:35 And Dion you know this was one of the things that I had actually learned from Dion was you know he would buy um a
18:40 break even deal. And for me I wouldn't buy a break even deal if it was break even out of the gate. It was one of
18:47 those things where it gave me perspective to say, you know what, though? If these rents are so
18:53 undervalued and they're so underpriced, and that's why the person's pricing the asset, what they're pricing it at,
18:59 if I know my rent box, which is something that I've that I've come up with. If I know my rent box and I've
19:04 qualified that what the actual area rent is for that asset specifically, well,
19:10 now I feel totally safe and secure buying something that breaks even or even loses a little bit of money in the
19:16 first six months. It's fine because we have examples where we've done this. We bought a property for $750,000. We able
19:22 to seller finance. We did $75,000 down. We have a balance of $675,000. With the property taxes, it's about 4,800 bucks a
19:30 month or so. Yeah. and the rents were right around 5,000 bucks a month. So, it was it was technically a bad deal. The
19:37 issue is is that I knew that those units weren't worth 11 or 1,200. I knew they were worth 2,000 a month. They were that
19:43 far underpriced. So, when we get up to 8,000 bucks a month, all of that's going to go right to the bottom line, which means I'm
19:49 going to make three grand a month on a $75,000 investment, which means I'm going to have a 50% return year two on
19:57 my capital. Means I'm going to pay myself back for the deposit within two years. Mhm. Like who doesn't sign up for deals like
20:03 that just because it doesn't hit one metric in the beginning? I think that's the mistake that a lot of people make is it doesn't hit one metric in the
20:09 beginning and it's a close metric. It's something that's not that far off. It's a few hundred difference. So, uh, so
20:16 that's, you know, one of the areas that, you know, Diana helped me out where it wasn't like looking at it so with s so
20:21 finitely and saying doesn't make money doesn't matter. Doesn't make money doesn't. It was so close and it was one
20:26 of those what but man, what can you do with it? And that's that was the question, the conversation we would have, but what can you do with it? And
20:32 it was like, yeah, you know what? I I know what the rents are. I know they're two grand a month. And now officially every socialist in
20:38 the chat has now heard, wait, he brought the rent from $1,000 to $2,000. This son of a Absolutely. I'm the worst person in the
20:44 world. What's worse than that is every spouse in the chat just heard that men who forget birthdays
20:51 and anniversaries and your friend's names can rattle off the numbers, the cash flow on a chronological order based
20:57 on [laughter] how the deal was going to go and not even hesitate, blink or slow down enough for people to follow. But I mean, it's it's amazing.
21:03 Yeah. Yeah. Numbers are numbers are so beautiful. I love numbers. Oh, I love it. All right. Well, Dion,
21:10 you said something earlier in passing. He said, "Hey, blue states, red areas and blue states. Let's talk really quick
21:17 red verse blue because you have an odd take on this. Uh, New Hampshire is red,
21:23 right?" Yeah. Yeah. Red governors. Red. We We don't I don't care how people vote
21:28 presidentially. I only care how they vote locally. So, I want I want red govern states because and states
21:34 specifically with high property taxes and uh and no sales tax and no income
21:40 tax. Okay, I'm in a very high property tax state. Why high property taxes? The reason why high property taxes
21:46 because if you are not getting paid your rent, you can't pay your taxes. I as the state
21:52 know this. And so I'm going to make sure that I have put my fingers on. You want to be you want to be the big
21:58 revenue stream for the state. You want to be aligned with the state and its goals because its goal is that they take those and then they actually
22:04 will do more services with them. M well that's the beautiful thing is I know going into anything that I have the
22:11 court on my side because they are not going to let me do arbitrary things.
22:16 They're not going to let me do illegal things. But they are going to have a simple system and process that if I
22:21 adhere to the rules and laws and follow the process, you've gotten your due process. You're out now because you
22:27 haven't paid. And that's what that's what I care about because my evictions last 30 to 36 38 days. And blue states
22:35 very often can be three months, four months, six months, etc.
22:40 So if you're very good in Washington, you can do it in 90 days. If you're if you're a pro. Yeah.
22:46 Red County, blue state. I'm in Washington. Red counties. My Chesla had four evictions. I think the longest one
22:53 was almost two months. Yeah. Wow. That's really good. 21 to 30 days
22:58 because Thirstston County is a red county and they it's a high tax state. They know their taxes are dependent on the landlords getting paid.
23:04 So, I mean, to flip the script, a a lot of landlords want a red state because it's landlord friendly. You you don't
23:10 have as much rent control. You your evictions are faster. Squatter rights are are all a lot easier
23:16 to tell to take care [laughter] of. Okay. So, you're not paying you. If you're buying if you're buying a 40
23:21 unit, Yeah. do you want to be talking to the owner or do you want to be one of 50 people talking to the owner?
23:26 See that that I absolutely agree with. You've never heard of a Texan trying to invest in Washington state, but everyone
23:33 in Washington's like, "Oh, yeah, Texas, Tennessee, Florida." Your actual competition pool, if you're the one
23:38 who's willing to put up with the extra pain, it's like any business. If you're willing, if it's harder to get into,
23:44 it's usually a better business to be good at. You have a bigger economic moat around blue states and being a good
23:49 landlord in a blue state. So Grant Cardone said it in episode 250 on Bigger Pockets. He talked about the
23:54 blue state. you numbers people they have the restrictions um it takes
24:00 longer to get permits done it's more expensive to build uh the tenants have more rights so there's a lot less
24:06 investors I don't know that any of my properties were purchased with an above asking price offer
24:11 because they just don't have competition I have a solid offer with a letter from my lender saying hey this is most likely to close we've already done five deals
24:17 with this person or whatever uh so I want less competition but Washington state just in introduced
24:23 rent control you lived in Washington Yep. Rent control sucks, right? Oh, if you're the tenant. Yeah, if you're the tenant. See, you aware.
24:30 Rent control in Washington state is making me $138,000 more than I was going to make if it
24:35 didn't pass. I'm okay with making money. I feel really bad for the tenants. I voted
24:41 against it. I sent in I sent in a little clip video saying, "Hey, look, this is how much money it's going to make me. This is what it's going to do to
24:46 tenants. It's going to make more tenants homeless. It's going to jack up the rent. It's been proven state after state after state." Yes. Any socialists in the
24:52 chat? You can leave now. Uh, [laughter] so it's been proven. Yes. So I, yeah, I would like to own in Gary, Indiana with
24:58 Millennial Mike, invest in a distance and have, you know, a red state with landlord friendly stuff. I'll put because I have the small portfolio. If I
25:04 had 150 units, I don't know if I'd want to be in Washington. But with 18, I live in one, 17 rented
25:10 out. Yeah. I've had almost zero issues. Agreed. Uh, massive
25:17 massive cash flow. Because rents get pushed up because of stupid laws. Yep. The demand is huge for housing,
25:25 right? Because people want to live there, which is crazy to me, right? So, I want to be in a blue state,
25:30 but I would not own in King County or in the city limits of Tacoma because the blue areas in a blue state.
25:37 The actual laws compound too much for me to even handle one rental. Yeah. So, I'm in those red counties in a blue
25:42 state, which almost every blue California has. My brother invests in Kern County and he's killing it. Super easy to own
25:48 there and cash flow deals. Yeah. M and uh so that's one of the things I have a list of things I do backwards.
25:54 That's one of them. Yeah. Well, and it makes sense in in Texas. There's a lot of properties that I've purchased that rents hurt like 550
26:00 and market rent is 1,300. Like you can more than double the rent. And it's because someone's owned it for 60 70
26:06 years. They barely increase the rent. You know, it's been their family for two generations and they don't move the rent. You put
26:12 rent control in where you're going to fall behind. Washington state, it's 7% plus whatever the inflation index is.
26:18 So, you're between seven and 10% that you can raise rent, which is still pretty high. It is pretty much what happens. This is what
26:24 we've seen in every single market that's tried it. 7% is going to be what people are raising on average for the next
26:30 several years, which is a huge increase of rent and way more than the national average. That's right.
26:35 So, you see rents spike and yes, I I was going to sell down in Washington because I live in Texas. I like investing in my
26:41 backyard. And then they announced, hey, uh, rent control is a thing. I was like, well, you can camp here for at least 3
26:47 years. So imagine being one of those owners who never interact with somebody who points out how amazing rent control is for the landlord and the people that
26:54 are like, "Oh, rent control's passing. I need to offload my rentals. I need to turn my rentals into short-term. I need to create more work for myself. I need
27:00 to do something." Instead of just sitting back and going, "Wow, I was going to do no rent increase this year." I sent all my tenants an email saying
27:05 there is no rent increase in 2025 because we did a a binder strategy last year. We raised the rents at tenants
27:12 request and uh because it passed the second half of the
27:17 email was unless this bill passes then there's a 7% increase this year and next year which is where that money comes
27:22 from that I wasn't going to make. Yeah. H that's absolutely wild. All right as we wrap up in time here most painful
27:30 investing experience each of you have had. The biggest thing that I can do on the owner meeting podcast is help people
27:36 not lose money. That is the most painful part. I've shared multiple ones. My current pain point is I I bought one
27:43 alligator because the pricing was amazing. Today still bleeds $8,300 a
27:49 month. That's $100,000 a year. I have to feed the beast until we finish lease up, which is going really slow in
27:55 agriculture land in the middle of tariffs and uh all sorts of political stuff that's not great for agriculture.
28:01 So yeah, that that was my uh my current biggest problem is $100,000 a year of like don't
28:07 buy things that don't make money. Matt, most expensive mistake that you have made in your investing career that
28:14 someone could avoid? Uh follow your tenant rental rules to a
28:20 tea. when you become the uh the shoulder to cry on, when you become the hey, just
28:26 help me out this one time and you know, or you're just I'm just going to get a really bad relationship and I need a
28:32 place to rent, they get me every time. Every time it's, you know, I've done
28:38 over my 24 year career, I have done uh let's see, I've done 15 non-COVID
28:46 evictions. 15 non-COVID evictions in 24 years. And every single one of those
28:52 that I evicted was somebody that I did a special favor for helping them out with something. And you know what? You want
28:58 to be a lot more landlords have a lot bigger hearts than people think. And that's exactly where we get screwed
29:04 because honest honestly those 15 units and the bills that they left behind that totals probably
29:11 125 to $150,000 that I lost because I I helped somebody
29:16 that needed it. And I was going to say, whenever you give these concessions to tenants, almost every single time you
29:22 open the door and there's dog poop just like kneaded into the carpets, there's leaks, they've smoked in the unit, it's
29:29 absolutely it it is always it's the same thing with any product. Like you offer a discount, those are the people who are going to
29:34 want a refund. It is without fail across all business. I
29:40 our policy in our company is uh always be kind, never be nice. Soon as you're nice as a landlord, you instantly
29:47 instantly screwed. It's true. Yeah. That was another thing that I learned from Dion. You know, Dion was uh just the math, the calculus
29:54 behind his concept was, "Hey, if if I let you pay a week late now, you only
29:59 have three weeks to come up with next month's rent." And I just never had looked at it that way. I was just like, I mean, time to
30:06 buckle down. Pucker up, buttercup. Like, you better find a way. Yeah. Uh, but the the logic behind his
30:12 math is exactly right. It's, you know, you're putting them in a position to fail. They don't look at it that way. They're looking for the favor. They want
30:18 the help. But you say, "If I do that, there's no way you're going to hit next month. And we're not going to get on you paying, you know, on the 10th and then
30:25 on the 13th and then on the 17th and then on the 23rd and then whoops, I missed a month." And it's like, now you're evicted.
30:30 We're helping you get behind, which is not what we want to do. We don't want to help you get behind. Exactly. Yeah. Anytime a tenant reaches out with
30:36 the reason why they don't want to pay, I I point out three things. First, it's in the lease. You can pay late. This is how
30:41 the late fees work. Second, uh the math of time. If you come a week late, you only have
30:46 three weeks for next month. Normally, it takes the average person four weeks to get the run together. And the third thing is if it's due on the 1st, late on
30:53 the 5th, on the sixth, so this is the tenant asking for it to be late. On the 6th, I tell the tenant, as a favor to
30:58 you, I'm going to serve you an eviction paper because there is rent relief programs
31:04 out there that will not talk to you until you have those papers in your hand. So, because I've had a many tenants reach out and ask, hey, I've got
31:10 this thing going on. And if a tenant had like a death in the family, sure, I can be flexible and I can understand. But if
31:16 it's just like, I don't have enough money to either pay my cell phone, my car bill, my internet, my electric, and maybe the landlord will
31:22 let me slide of the list of things. I've had that conversation and I've not had a tenant make a late payment.
31:28 Wow. Because they go, "Oh, it's in the lease. I'm allowed to. I set myself up for failure and I'm going to get eviction.
31:34 Like, this guy's not playing." Yeah. But I do it in a way where I say it's a favor to you.
31:39 I rarely ever get logic to actually work when I explain things to people. But I'm happy to hear that that's working
31:45 [laughter] when it is uh I'm going to give you the eviction papers. I don't care if their logic works. They catch up that I like that track.
31:51 There we go. In case you're not following my logic, also you will be evicted if you don't take help. And that is an advantage of blue states too. You
31:56 do actually have typically more programs available. So when you start this process, there's more exit ramps for
32:02 them to get help and other assistance. What's really interesting in a lot of those cases, you know, in in New Hampshire, you know, it's one of those
32:08 things where a lot of people, you know, in the 80s, you heard a lot about the welfare office and even a little bit in the 90s, but in
32:13 2000, two, 2010, 2020s, no one ever talks about the welfare. No one ever talks about like city welfare.
32:19 City welfare is still a program. It's still there. They're still there to help bail people out. We've seen people
32:25 leverage that and exercise that. M um and quite frankly the turnaround is pretty good because it's not like it
32:30 used to be where they had you know 97 people lined up to try and get welfare like now it's more logical and quite
32:36 frankly they have a you know welfare has come a long way where they the a lot of these welfare agents actually have
32:43 pretty good criteria for being able to help you which just blew me away. I was like you're not just going to give them
32:48 the money. They're like no. I said thank god. She's like, she's like, she's like, "Yeah, we have these lists of
32:54 accountability steps and if they haven't done them, they're not going to get the money." And I was like, "This is awesome." So, it's I've
33:00 actually sent people there to say have a conversation with them and they're going to expect things from you, but have a conversation with them and
33:06 you will likely still get your bills paid if you can show them that it really is a one-time struggle and not an ongoing issue because you're bad with
33:12 money. Dion, how about you? Biggest biggest
33:17 financial mistake. My biggest financial mistake, and I try to share this as often as possible, is that everybody
33:23 that's watching currently or in future land, I give you permission
33:29 to be a landlord today because that was my mistake. I had a bad debt to income ratio, right?
33:35 I started at 40, single parent, three kids, $89,000 in debt I didn't know about, not making much. I started
33:40 teaching CDL drivers for 17 bucks an hour. And I thought to get around my debt to income ratio, the lender told me
33:47 if I had rental income on my tax returns, I'd be able to buy rentals. So, I moved from my house into an apartment
33:52 to rent the house out. So, I wasn't like buying a rental. I would have felt like a landlord. But since I moved out of my
33:57 house and rented it out, I thought I was just dipping my toes in. Yeah. Well, since I'm not a real landlord, I
34:03 couldn't trust a stranger. So, I rented to a friend. Ah, this always ends well. Ends great
34:08 without fail. Let me help you. And then uh you know it's a friend so who wants a contract between buddies?
34:15 So I didn't have a lease. Oh, who needs paperwork? Super smart. Yeah. And banks love that too. He was a single parent. [laughter] He
34:21 was a single parent. So this is in my first year of investing. It's been a decade since I've had a later missing rent payment. But in that first year,
34:26 Wow. rent became late. Late became never. So when I went to the house to talk to him,
34:32 he didn't live there. He had moved out, rented the house to somebody else with a lease. So, he was
34:38 doing it better than me and he was making money. Uh, so I went through an almost eviction with that tenant. They ended up willingly moving out. Uh, I didn't know
34:44 about cash for keys at the time, but I probably would have done that. I lost like six grand that year. But the biggest mistake was a real landlord
34:50 would find a lease, screen tenants, not rent to a friend. I rent to friends now. I've got a nephew uh guy that worked
34:58 with me renting from me, my son. Um because once I owned rentals for a while
35:04 and I had my systems in place and I have my leases and everybody's everybody hears, I treat everyone exactly the same. You
35:10 might get the friends and family discount to move in with a deposit or the whatever, right? I'm human about it. But
35:16 math of time if you ever need to pay the rent late, sure, here's how the late fees work. Here's how the the you only have three weeks left to
35:22 put it together and here's how the eviction papers work because I want to help you. I would evict my son if rent was late
35:28 because I'd want to help him. And so it's never even been a conversation. That's it's just still so crazy to me.
35:34 You told me this story before and it's like the fact that your friend would I get some people stop paying. Like
35:40 sometimes people just get shitty. But subleasasing and taking a profit to not pay you and then be like, "Oh yeah,
35:46 we're buddies." Like that's just like So here's the part of the story that neither of you have heard. Oh.
35:52 Or I don't think you've heard this. There we go. Everyone pay attention. He's still one of my closest five to
35:58 seven friends. It's not his fault. It was my fault. I set it up. Take the house. This will
36:04 be the rent. Just pay it. No lease. I mean, yeah, it was a horrible decision, but it was my fault 100%. So,
36:12 there was a couple of years there where there was some friction, but currently I still I just helped the guy move. He
36:17 bought a house u a year ago, I think, and I helped him move in. Like, we're still friends. That was my fault. I
36:22 don't hold a grudge on that. I hold a grudge on some other things. You talk in the movie theater, I'm going to jail. [laughter] But that I was able to get around.
36:30 Huh. [snorts] Oh, that's uh I might be moving to the West Coast and moving in one of Dion's units.
36:36 I know. I was just going to say I I think there we go. Better than the house hack. Move in with Dion. Exactly.
36:41 Suddier. No, I'm kidding. Exactly. A friend of mine in Seattle, Leica, she
36:47 had she had some crazy bonus guests. They went ahead and moved into her Airbnb, set up a stripper pole, and
36:54 started filming Only Fans. and she had to go and that's King County. You went through the so so her her newfound
37:01 friends uh [laughter] they she went through the ringer getting rid of them. They were not pre-existing friends. They were uh random
37:07 what I'm adult content creators. I'm impressed with the Bigger Pockets convention because Leica
37:13 talked about having a body in her property for seven years and then discovered and no one asked about it.
37:19 They were like, "Oh, that's just nor that's part of real estate. We don't even need the story." I want the story, but I wasn't going to
37:25 ask there. [laughter] Yeah. Yeah. She's she
's had a wild go that that's the that's blue parts of a blue
37:32 state. That's you will see that more often there. I've I've seen some crazy stuff in Texas, but nothing nothing like
37:38 what we see in Washington. Yeah. If you put uh in King County, so I bought one deal in King County, a
37:44 seven-unit building in Tquila about that's about 10 minutes from the SeaTac airport. And the second you renovate a
37:51 unit and put a lock box on the door, the homeless just magically know, hey, lock
37:57 box, move in, pick the lock, break in, and when they move in, cuz they know the and this was like 2021, so this is like
38:05 prime. Can't get rid of people. They move in, they break in with furniture, they hang pictures, they put their
38:11 toiletries in. Interesting. And if the police, this could be a day in, you call the police, they show up.
38:17 Oh, I've been here for months. Oh, civil issue. A victim. Horrible.
38:23 Oh, horrible. Which is my frustration with blue states. Now, you may be on to something here with red areas of blue
38:28 states. That was my big reason for making the business switch to Texas. I
38:34 had other reasons for Texas, but that was my big thing with switching red is I'm like, I don't deal with that. So I I
38:40 also have I was in law enforcement for eight years and my one of my closest friends like Matt is Millennial Mike
38:47 as close as we are and uh he's a current state trooper SWAT team guy and this was a recommendation
38:54 from him. Uh create a lease for one of your close friends
39:00 who will play with you if if it you need to play. Uh that that's their place.
39:06 Put the power in their name. So, if you're doing a long rehab or you have a long vacancy or something, put protections in place, I go um I put in
39:14 Wi-Fi and I put in cameras if I'm going to have a vacancy and I'll take a video and date time stamp the video. So, if
39:20 the cops show up and I can go, look, this is Tuesday. This is when it was empty. This is what I'm doing. Uh so,
39:25 there's a lot of steps that you can take, but knowing that you're in a place where they are, the cops can't help. I was a cop. You'd show up. No, that's a
39:30 civil matter. If you can't prove and they can't prove, I can't decide.
39:37 Interesting. Yep. That's horrible. Yeah. Yep. In Texas, having paid, get out.
39:43 Yep. Bye. Yeah. Exactly. Exactly. And that's And even for us, it's like the the cops in
39:49 our areas are fantastic. They'll just say, "Really? Really?" Yeah. Really?
39:54 Yeah. We're going to give you 15 minutes. Get your stuff. Don't they give them 15 minutes? A lot of times they will give them 15 minutes
40:01 and they will get them out and and then you don't even have to go to court. And it's just like and then because the cop will come over and say,
40:07 "Hey, uh, I can get them out, but you're going to have to make yourself available over the next seven days so they can get their stuff." And
40:14 and then it's like, and then like, "Oh, well, just give us the code and we'll come back and we'll get our stuff." No. Yeah.
40:20 I was born at Yeah. I was born at light night, not last night. We're not repeating this whole mess next week. Um, but a lot of times and then after the
40:26 seven days is over, my favorite part is when they, you know, couldn't find you or couldn't reach out to you and blah blah blah blah blah and then you just
40:32 get to throw all their stuff out. That's my favorite part. Yeah. You know, and that works out pretty well. But yeah, it
40:38 it depends on the market that you're obviously investing in of what you're going to get from a response because I
40:43 get the police in the blue states that do what they do and I get the police in the red states that do what they do because they have backing in the red
40:51 state and in the blue state they just don't often don't have that backing from superiors to say, "Yeah, go do your
40:56 job." That work and their job is to enforce the law. And so if your laws are bogus, then that's you know
41:01 Exactly. Right. You got you got to do your job. Exactly right. I like I like officers who do their job. So that's they're doing the right thing.
41:07 But same page, same page. It gets very frustrating. I have a lot of a lot of officers with a lot of situations or they they hop on the
41:13 phone. They're like, "Look, we get it and we agree and I vote done these things, but can't help you."
41:20 Yeah. Bummer. Huge bummer. Okay, let's enter part two of the podcast. Let's talk Let's talk
41:26 market. Okay, so lots of thoughts, lots of YouTube channels. Of course, we always have our
41:32 online doom and gloom people who are who've been saying for the last, you know, 58 years,
41:38 it's crashing. Don't do it. Yeah. I've I I don't know if you guys have noticed this, but I've seen like
41:43 seven short form things from Grant Cardone being like, the market's coming down. It's all over. And then like the
41:48 next video I see from him, guys, we're entering the biggest boom I've ever I don't even know what that guy thinks.
41:54 Grant just made a cool shift on talking about Matt's 4321 method. use an FHA loan, buy a small multif family, which
42:00 it used to be. Grant would say, if it ain't 16 units, then 32. Yeah. Don't talk to me. And now it's, oh, get into a
42:06 small multif family. I'm like, oh, that guy's he's coming around. Yeah, he he is coming around. I he was like, oh, there's all multiples of 16.
42:12 Until suddenly, it only took four years. But yeah, I mean, [laughter] suffice to say, I'm like, you know, I'm scrolling because obviously I think Grant's super
42:18 entertaining. He's brilliant guy, obviously super wealthy, builds great companies. So, I'm scrolling through and I see that
42:23 and he's talking about exactly what I talked about. I did a video on it four years ago and I was like this is a strategy if you're brand new 4321
42:30 strategy you cannot beat the 4321 if you do it just just one time which is you
42:36 buy a quad but you can do it with 5% down owner rock a year later you're refinancing it if the rates have gone
42:42 down or they're flat you're refinancing it maybe you do maybe you don't but then you're buying your next again a
42:47 threeunit at 5% down and then you can do that with a duplex and then a single family home and then your then your 4321 can be
42:55 Maybe it is, maybe it isn't. But when I saw Grant pitching that, I was just I was beside my I was like, this is the
43:00 exact opposite of when I was, you know, going big and saying, I want to get that next level. A
43:06 lot of times guys just go bigger and so they'll do the assets that you do, like the massive, you [clears throat] know, 60 to 150 unit stuff.
43:12 U, but for me, I wanted to be very, very liquid and I knew I could do that with small multif family. But watching him
43:19 talk about that out of nowhere completely blew my mind because it was completely contrary to what he's
43:24 preached for 5 years. Yes. The exact opposite. And now I'm like, "Wow." But the best part is is that, you
43:30 know, he'll be known as the inventor of the 4321 method. [laughter] I I will say this, of everything that he
43:35 has in his gifting, his ability to say whatever he wants to say with complete confidence, it could be something
43:41 totally different tomorrow, but it he will believe it 100%. Yep. Yep. He's he's Jim Carrey. This pen
43:47 is blue. So as actual investors in red states and blue states on the east coast, on the
43:52 west coast, in the center of the I mean we cover like we pretty much cover all the markets for the most part. All of your different type I mean guess none of
43:58 us are in like Ohio. We're not like Midwest, but outside of that pretty good representation here. What do we think is coming in the
44:05 future? Like let's say right now where are we in our market cycle today and where do we think we're going to be over
44:10 the next few years? Dion. So personally the way I look at this is I want to own class C properties.
44:16 So, just really quick for anybody who doesn't have it. Class A is luxury gated community door man uh you know million
44:23 plus in a bad market even. Class B can be a gated community. It's your McMansions, your big bigger houses.
44:29 Class A is your working class. I have teachers, cops, military, the the working people living there. Class D is
44:34 a war zone. So, I target class C. So, I want a market where or properties in a market where if there's an economic downturn, a
44:41 recession, a stock market crash, anything. There's more demand on my
44:46 properties because people in an A or B can downgrade to save money. So, it'll be more demand. I want to be a bit out from major cities
44:54 because remote work is more of an option now that any point in our lives so people don't have to live where the work is, but they don't want to drive too
45:00 far. If I might have to go to the office once or twice a week. So, I'm targeting properties a little bit further out as far as time goes. 45 minutes to an hour
45:07 out where is my perfect ring around Tacoma or the larger work area to you to
45:13 wherever you're investing because that pushes up rents but not prices. Because
45:18 remote workers, right, it might stabilize, but right now remote workers want to be out of the city. They want more space. they can move from a $3,000
45:26 apartment in the city, come out to my place, a $2,000 two-bedroom,
45:31 saving money, uh, and it's a better deal for them, and I could, it pushes rents up, but it doesn't push up price. Yeah.
45:37 Because the remote workers are afraid that in a year or two, they might get called back to the office and they don't want to own.
45:42 So, I'm in a market where rents have been pushed up, prices haven't. And then I'm watching AI. I think AI
45:48 over the next five to 10 years as jobs go away. I'm not a fan of it, but I think the section 8 program is going to
45:54 grow. So I have about a third section 8, a third military, a third working and retired, and I expect more section 8
45:59 tenant demand in the future. Definitely going to touch on this stage one. Then stage two is UBI. I
46:05 think we'll have universal basic income on at least a small scale in some states. It's been attempted in some areas. I think we'll see a broader
46:11 version of that when AI isn't when AI starts actually taking more and more jobs. and I want to own the
46:16 properties that UBI would pay for. So I'll have more demand from section 8, more demand from people that were making a lot of money and more demand from UBI.
46:22 So Scott Trench's book from Bigger Pockets set for life. That the model for me is set for life on that u
46:29 methodology. Okay, I like it. Matt, what do you think's coming down the pike? Um so you know, obviously real estate's
46:35 hyper local. Um but I think that we're going to see a lot more joblessness. You know, I think we're well into the fives for
46:41 unemployment uh next year. um you know maybe and possibly even six u but I
46:46 think we're we're heading down a tough road where where there's going to have to be some recovery from it but we're paying quite frankly we're paying the
46:53 invoice over the from over the last four years we're paying that invoice. So I invest in B and C because I know that
46:59 I'm going to get A's to downgrade to B's but they're too snoody to downgrade to a C. So I want that A tenant that will is
47:05 willing to go down to a B. Then I've got B's that will trade down to C's because they need to try and save money and they
47:11 just can't make it work. But they're not going to go to a D. They're going to go to a C. And then the D's are always trying to
47:16 get out of D and they're always trying to get up to C. So C solves itself. So I just want a little bit of, you know,
47:22 having the size portfolio we have. We can't go all C. We can't go all of any one thing. So that's why we have B and
47:28 C. Um, and then the other thing that we like to do is we like to do B. We what we what we say is we like the area of
47:35 the town to be one letter grade better than the actual unit itself. So we like to do B quality product in A areas or A
47:44 areas. We like to do B quality product. So we might be in an A area where there's a bunch of gated communities
47:49 around and there's other really nice places around and treeline streets and all this cool architecture. That's all
47:54 awesome, but we're not going to do an A-class project there. We're not going to tear anything down and build something new. you know, we might gut
48:00 and rehab, but we're not going to do new builds. And that's largely to get an A, you have to be a new build. To you have
48:06 to be a new build in a high-end area or a new were build in a high in a high-end area very often. Um, unless you're
48:12 talking about multi-million dollar homes where it's just like no one's going to rent that home anyway, unless they're an executive. So, we like to be in B's and
48:18 C's. That way, the A's can trade down, the B's can trade down, and the C's can trade up and down, and the D's can trade
48:23 up. So, we like to be right there in the middle. I you know a is dangerous to own you know because there's always it's
48:29 like Vegas there's always the next newest most beautiful hotel being done and then everybody goes there and then
48:36 your old news and then you're off 150 a night. Mhm. So that's why we like that kind of uh
48:41 middling strategy. Yeah. Well in any market pullback you mean? Correct. Anyone who lives in an A can
48:47 live in a B. Yep. It's it's fine. It's just fine. Sure. Anyone in a B can live in a C. That that
48:52 makes you really don't want to live in a D property. You really don't want to live in a D property. You certainly don't want to live in a D
48:58 area, you know, and that's and that's really the issue is that most D properties are in D areas, but if I'm buying a D property in a C area, then
49:04 I'm going to make it a B product. Um, but you know, that's where again
49:10 just kind of this overall strategy it is, you know, Dion talked about in his
49:15 in his Bigger Pockets talk, uh, one of the three that he had this weekend or this week. Um but he was exactly dead on
49:22 which is as we look at our markets what we need to make sure is that we have
49:28 essentially our criteria that we're leveraging and that we know that that criteria works. So knowing that it's you
49:35 know uh no second floor units for Dion and and I know his list and uh you know no clothes lines and
49:41 washer dryer in the units and you know no not nothing one on top of the other. You want a yard. You want, you know, all
49:47 you want parking, not a garage, but a carport. What else am I missing? Um, but that's a lot of it.
49:53 That's almost everything. The pet friendly fence yard, not in a good school district. Not in a good school district. Yeah. And so it's like those strategies, they they
50:00 work because very often the reduction in rents that you're seeing and when you see rent going down, and he called it
50:06 out this weekend, they're not going down in B's and C's. Yeah. They can't go down in D's. They can't go down anymore in D's, but they're not
50:13 going down in B and C. They might see a little bit of a touch, but most of the most of the of the lack or most of the
50:19 reduction in price is a because the newest property just came out and they just took a hit.
50:24 Do you know what's funny? Everyone answers that question. Who's a good operator? Answers it the same way. I asked both of you what's coming in the
50:30 market and you both essentially went to this is why I don't care what's happening in the market because my strategy is completely immune to it.
50:37 It's evergreen investing. Yeah. It's like, oh yeah, jobless this will go down and also I don't care. And then here, and that tends to be the
50:43 answer I get every time you get a great operator. When I ask someone who's just they're a buyer or they're a capital
50:48 raiser, you go into the market and they have a million opinions of, well, this is going to happen. I think that we're going to see this much inflation and
50:53 rents are going to do this. Uh, that's actually I I love that answer. It's like, okay, well, the market's going to do what it's going to do, and regardless
51:00 of where we are in a market cycle, we're going to invest in a way that's going to be as immune to that as possible because I don't think any of us want to build
51:06 our business again twice. It's No, once was good enough. There's a lot of stories out there of like, oh yeah, I
51:11 lost all my business and now I'm building it back. I'm like, I don't I don't want to have one of those YouTube channels of
51:16 It's funny. It's actually build it back channel. Why I do content is because I don't want to do this twice, right?
51:22 So, I went from really bad position. Um, you were struggling in the beginning. You lost all money in
51:27 stocks and and and I I had the emotional roller coaster of going to financial freedom and retiring early, right? It's amazing.
51:33 Would be great to do that twice, to feel that twice, but I'm not stupid and give everything away and start over, right? Exactly. But every time we meet somebody
51:39 like at this event there was Alex and Jill. Sure. That are on like their they just bought
51:44 a new house hack. They've got a couple of other rentals and you're watching them progress. Mhm. I get to feel it all again. Like that's
51:51 why I'm out here talking to people trying to say, "Hey, there's another way. You don't have to work until you die." Mhm. Yep.
51:56 Well, that's the And to be fair, like I I I do a lot of coaching for free. I do a lot of coaching at profit. that I do a
52:02 ton of free stuff, but like paid or free, it is the most rewarding thing in
52:08 the world when you get a I got a I showed you one of the texts like when we were sitting at the table. Someone's like, "Hey, I made a boatload of money
52:15 on this deal." It was like a life-changing amount of money for them. Absolutely. Hundreds and hundreds of thousands of dollars. And they're like, "Hey, I that
52:21 one video and that one mentorship class, that call made me buy this one deal."
52:26 Like, that's the most rewarding piece of making it. And I'm not where you guys are yet. I'm not retired. I haven't done the I'm not the end of the road. I'm I'm
52:33 got a couple years to to to catch up here. But you're sharing the journey along the way, right? But it's sharing the journey with more
52:39 people is legitimately it makes it so much more fun. Doing this doing this alone business in general is a lonely
52:45 lonely sport. There is your family will pretty much not be interested in anything you're
52:51 doing until you're successful. Then they're in line hand out. It's true. Yes.
52:57 Yeah. They have some No. Most of most of my friends just slowly stopped talking
53:03 to me. And it was worse the more successful that I got in business. The the larger we got, the less interested they were in hanging out.
53:10 Yep. It's not even we're talking about business. It just there's we have less things in common now. So having
53:16 community and other people who are like it's kind of like any sport or you very much so. You collect cards. Dion has Dion is a
53:23 collector. You have some cool cool paraphernalia. I've seen some of your some of your toys. But like when you're
53:29 a nerd and you like stuff, it's fun to meet with other nerds. And as real estate guys, as business guys,
53:35 it is a privilege to get to meet with other nerds and nerd out about the thing that we love doing. Well, on that note, last night,
53:41 so thank you nerds for watching. [laughter] We were all at dinner last night and everybody was enjoying and it was all been bunch of investors and then me and
53:47 Christian got on to the topic of certain books that we enjoy and the rest of the table disappeared to us. Yes.
53:53 It was a 20-minute conversation of us going down the rabbit hole of that and that would Are you still there? No, I mean I just [laughter] watched I just I was just
53:58 watching you guys gaze into each other's eyes and wondering if it was going to make it another level. I was just like you know your wife's right there like I
54:05 mean just [laughter] like taking take I mean we are at a table in a restaurant but no it all worked out. Yeah. I mean we were able to not be escorted out by
54:11 the police so that worked out really well. Yeah. It was good. Texting Dion uh Amazon links under the table.
54:18 Got my got my order in. Oh there we go. Yeah. Dion's being introduced to Brandon Sanderson. So for those who uh don't
54:23 care about fantasy, uh you will after reading. [laughter] The person who doesn't read has no
54:31 advantage over the person who cannot read. Yes, that's true. That's true. And somehow it's worked out. [laughter] The
54:37 only thing I know how to read is a is a P&L. I was going to say this guy's financially literate.
54:42 It's gone. Okay. But yeah, I mean I think the other, you know, it's funny because you know, you guys are voracious readers. I think that's the right word.
54:50 Um, I wouldn't know because you guys are the better. You guys are the better ethers. Um, but, um, you know, I think
54:56 it's interesting because, you know, again, it just shows personality type, right? Um, I you could not pay me enough
55:03 money to sit in a room and read a book. I would be like, it would be like straight jacket time, like get me out of
55:08 the room. But comparing Hot Wheel cars or cards? Absolutely. All day long. Yeah. All day
55:13 long. And that's the thing is that's where you find your niche. What's really cool is what most people don't realize is that those skills translate in the
55:19 game. They translate in the real estate game and you find out what you're really good at, what you really enjoy, what you don't really enjoy, you know, um fantasy
55:27 comes into a play a lot with tenants that are behind on their rent that think they're going to catch up. That's a fantasy almost every case,
55:33 [laughter] you know. Um, but yeah, it's it's a it's a great journey, but like we were talking about earlier, you know, doing
55:40 somebody's first or fifth or 10th is way more fun than doing our, you know, even
55:45 Dion with his 10th or 20th. Um, because you got I mean, you're at eight now, right? Never sold. Not sold.
55:51 I might I'm probably going to sell one next year. Yeah. Just because the Not to name anybody by names,
55:57 but the permit office in Port Orchard, Washington. [laughter] Gary, I'm just kidding. I have no idea what his name is.
56:03 Yeah. No, if it's actually Gary, I'd picture [laughter] this. Okay, so I try not to be political on here
56:09 and so I'm politically neutral in this story. Okay, I put up a Marine Corps flag.
56:15 The color resembles a Trump flag. So, the literal blue-haired, nose, septum
56:21 piercing person starts digging through records back to the 1940s to find permit violations or anything
56:27 that's changed and attacks me. And I'm a year into fighting them. And basically the it res it resolved because I got a
56:34 firm for like seven grand. This is what it cost me to the firm to write up the report that everything they asked for
56:40 was ridiculous. They've done 500 reviews in this county. No one's ever asked for a wind shear study, a geo study
56:47 underneath existing foundation. Um and then basically the other things they said the variance isn't enough of a
56:53 change. Called them idiots and I think it resolved. Me calling them
56:59 idiots wasn't good enough. Yeah. But the, you know, the paid um geo survey people and got construction,
57:06 there's two different types of architects uh saved me. Yeah. But I'm ready to sell that property. But
57:12 if anybody's looking one, Port Orchard is great to live in. Port Orchard is fantastic. It's beautiful. I walked down take a ferry to Seattle, have lunch on the
57:18 waterfront. For the two years I was a broker, that was like almost all my deals were Port Orchard.
57:23 I should have if I knew you, I would have I would have had you buy that for sold a forplex for $400,000. I would have bought it. They yeah they
57:30 they house hacked it and then sold it for a million. Oh that is that is what happened in why it
57:35 might be the one that I sell. I bought it for four. I'm gonna sell it for 750 or eight. So it's it's soft. It's just a duplex.
57:41 I did that I did that deal and then that was I was like why am I brokering these? I need to buy all of these. That was my
57:47 that was the turning point for me when I I sold that deal and I was like why am I doing this? That's the question I asked the most
57:53 people at BBcon. So the the people attending to view I great questions for me, great interaction. Like almost
57:59 everybody I met was great except for the person who stole my mic. [laughter] She was great, but she doesn't even
58:04 know. But I talked to the vendors, the brokers, the agents, and everything. And every every single one of them, I asked them, "Why don't you invest?" And
58:10 everyone had a litany of excuses. Mhm. And that's where you were. And you saw the light bulb.
58:15 Good job for flipping the switch. You need to have I I personal opinion. You need to have some moment where your
58:21 meter you hit that meter in whatever you're doing where the pain point is enough to quit what you're
58:28 doing and you're comfortable doing it is that that 9 to5 thing. I mean that is a that is a religion.
58:34 It's it is so hard. It's tough to give up on that predictability, but you know, it was like, you know, within um I thought
58:41 Dean was doing it to prove a point to me like told you you shouldn't have come, you know, um because we're sitting there
58:47 standing in front of people and talking to them and it's just like great. Well, what do you do? I'm in property management. Property manager one,
58:52 property manager two. Do you own any property? One guy owns a condo. He's an accidental landlord. And then the other
58:58 one doesn't own anything and they're in their 40s and 50s. What are you waiting for, guys? And then it was we were
59:04 talking to somebody that was deeming themselves an investor agent. I find that to be a really cute idea.
59:10 You think that you're going to help investors and oh great. How many investments do you own? I don't own any.
59:16 Why are you talking to me? This is ridiculous. Like you can't be an investor agent and not actually have an
59:23 investment and actually know how they work or run. Now there are people who actually love brokerage and they own rentals and
59:28 they're they're like those are exclusively the guys I work with is there. They usually own a ton of
59:33 rentals. They're great, but there's too many brokers who are like, "I'm doing this for the money so that I can one day
59:39 buy rentals." And I hear it all the time. And how many rentals do they end up owning at 50? Maybe one.
59:45 Justin Camber said it brilliantly last night. We asked basically, love that guy. I've had him on the podcast. And somebody asked him, "How many agents
59:50 do you have and how many of them invest?" He didn't even have to think. He's 100%. It's the criteria. You have to own rentals, then you can be an agent with him.
59:55 Definitely. Genius. Genius. Well, I mean, that's the that's the crew that you need to be looking from. I mean, one of the things that I was
1:00:01 talking to a real estate agent trainer and so she's she trains hundreds and
1:00:06 hundreds of agents and I said, "What percentage of the most?" She goes, "I don't know, 5% or something like that."
1:00:11 And I said, "Isn't that silly? Don't you think that if I, as an investor was
1:00:16 looking for a new agent in a given area, the only question that I trained my people to say is, "Do you want any
1:00:22 investments yourself?" And when they say no, I tell them, "Find another agent." So, I know that they're going to have to
1:00:27 find a one in 20 agent. They're going to have to find they're going to have to go through 20 agents likely to before and
1:00:32 20 conversations before they find somebody who actually owns some of their own stuff. And then, are they sitting
1:00:38 there complaining about it all the time because they suck at managing it or are they actually good at what they do? So, I told her, I said, "What you need to do
1:00:43 is you need to be getting a lot more people to take my course and understand what investors are actually looking for
1:00:49 and they care about." If you did that and real estate agents that are watching this, if you would just spend a couple
1:00:56 of grand, you would be eons past 99% of the agents out there and get investors.
1:01:03 Forget about investors like me. Most guys my size, we have a team. Dion doesn't have a real team. Dion is like, "Hey,
1:01:09 anti- team." Yeah. He's like, "Hey, I saw this listing and I saw that you listed it and I want to I want to go have a I want to
1:01:15 see a walkthrough. I want to go do that." They have no idea that what you do is and but then Dion's loyal
1:01:21 and we're loyal and so if somebody brings us a deal, we always say we dance with the one who br us. If you brought
1:01:26 the deal, we do the deal with you. Period. End of story. We never just bring it to our team of brokers. We actually do the deal with you. Yeah. But
1:01:32 the issue is is that not nearly enough agents are worthy of having potential
1:01:38 new investor clients trying to buy with them because they don't know the first thing about investment. They they
1:01:44 couldn't begin to tell you if an I literally had somebody say to me, "I think this is a great rental." And so I
1:01:50 had just heard enough of her stupidity over the rest of that walk. And I said, "Tell me why."
1:01:56 Well, you know, I it's in a great area, you know, I mean, you've got good schools. And I said, "Great. Tell me why
1:02:03 I would want to buy this. I mean, great area. You know, you've got really good schools." And I was like, "Yeah, I heard
1:02:09 that. Did I mention the schools?" Yeah, exactly. Did I mention great area? You know, yeah, I got it. But why? Well,
1:02:15 I just think I just think it's a great house. Yeah, but just so you know, I'm not trying to be a jerk, but you've given me nothing. I ran the numbers
1:02:22 based on what I saw in the expenses because you wouldn't hand me you wouldn't hand me the listing sheet until
1:02:28 I showed up. I'm looking at this and you're about 50,000 bucks overpriced just based on the numbers that you
1:02:34 presented me. If you want anybody to even look at this deal, the only thing that you can hope for is that some
1:02:39 really bad investor has a really bad agent and buys this deal. That's the
1:02:44 only option that you have to sell this property. So, I think very often I think that real estate agents spend far too
1:02:49 much time learning how to dial the phone, learning how to convince somebody to buy. Really, you think I need that? I
1:02:56 don't need any of that. I what I need you to do is do your job and give me all the data and information that I need. And if you do that, I'll buy you. And
1:03:02 it's a very easy process. you have to convince me. Find me a deal that fits my criteria and I'll buy it. Mhm.
1:03:08 I don't understand why they that's the lazy method. Why they haven't gravitated towards that? I don't know. It's why so many agents don't like to
1:03:14 work with investors because we have criteria. Absolutely. We don't we don't fall in love with the house and want to buy the house based on payment.
1:03:20 Exactly. Criteria. Disgusting criteria. Nice. [laughter] Exactly. I wanted to sell you on a dream
1:03:25 in a petri dish. Yeah. Exactly. I'm I want to I want to I want to touch your feelings like do math and make numbers.
1:03:32 Exactly. [laughter] What is this? So, it's funny because my agent, the the my top broker now, he
1:03:37 used to own my lawn. Used to be my lawn boy. Swear to God. Used to be on my lawn boy. He was my lawn boy. Went away to
1:03:44 college, got his degree in economics, then finished, got out, and he goes, "I'm going to get into real estate." And I go, "You just finished a four-year
1:03:51 degree in economics, minoring in business. What is wrong with you? You could have been a broker day one."
1:03:56 Yep. And he goes, "I wanted to get the edge on the economics side." He goes, "And I think understanding the economy,
1:04:02 understanding how the economy works, I think I can be better prepared than most other brokers." I said, "Yeah, fair enough." And then I watched him and I
1:04:08 said, "We would work with work together, work together, work together, work together." And after a year and a half, we did our first deal together and now
1:04:14 he's my primary agent. I have done 27 transactions with him. Wow.
1:04:19 27 transactions with him. Yep. Well, that's good. He can pay back the student loans. Hell yeah. Well, yeah. He can pay back
1:04:24 more than student loans. Pay back student loans and buy a house. Yeah. There you go. But that's the nice thing for him. you know, that's over a million dollars from
1:04:31 one customer. And I didn't stop him from getting any other customers. He did 99 sides in a year with no team, with just
1:04:38 one assistant. So, you know, kudos to Yeah. kudos kudos to agents that want to
1:04:44 work that want to work smarter, not harder. I mean, he did he does he works really hard, but he did 99 sides and I'm
1:04:49 thrilled, you know, thrilled to have him as my broker. He just I never did more than 10 with him in a year in a 12-month
1:04:55 period. And so, you know, I was 10% of his business, which is nice, but he had other investors that also bought. And,
1:05:02 you know, that meant that 30, 40 units that he sold were through investors. Like, that's the way to do it. By the way, agents, that's your only
1:05:08 goal in my opinion. And I I did well as an agent for the short time that I did it.
1:05:13 But your only goal is to get 10 guys like Matt. Oh my goodness. That's that's all you need. Yeah. That's
1:05:20 all you need to do is you just need to be excellent and loyal to a few really
1:05:25 good investors. And if you can work those relationships, you're done. You I You just mentioned like, "Oh, yeah.
1:05:30 Well, the biggest year was, you know, I did 10 transactions. That's a ton of volume." Yeah. I mean, well, I mean, those 10
1:05:36 deals, you know, the average 10 people, 10 deals, 100 transactions. [clears throat] That was that was probably it was probably a couple hundred thousand bucks
1:05:41 worth of commissions. Yeah. At least, if not a quarter million bucks worth of commissions, which which we are happy that they loved
1:05:47 it. loved it cuz we're we're closing on a deal we want. Yeah. Yeah. Yes. Well, the best part is is that I hear from him three times, you know, he
1:05:54 knows who my he knows who you know when we're going to inspect and he knows when we need to close and so I literally hear, "Hey, sign this, fill this out,
1:06:02 show up here." Mhm. Okay. Well, and you get some you get some of these people in your book. Yeah. You get
1:06:08 tons of transactions. Like if you got me in your book of business in Texas, I'm good for probably 1520$20 million of
1:06:13 transaction volume. Exactly. You'll make significant money if you're one of the like there's three
1:06:19 brokers. All of them are in their late 20s. They're are young guys. They're super
1:06:25 hungry. Yep. They work for bigger players, but I like them better than their bosses. Yep.
1:06:30 They're tons of drive and they're smart. They're great negotiators. And I text any of these guys like, "Hey, um, did we
1:06:38 check the laundry room for this?" Yes. 12 seconds later. Sure. I'll get that answer for you.
1:06:44 Sure. 2 minutes later, I've obtained the answer. This is what you do. Here's how you're going to present. Like, right,
1:06:50 which it sounds like that'd be a pain in the ass job, but then you look at how much they get paid for not having to deal with the rest of the building. And
1:06:55 you're like, oh, you get a few clients like this, you don't need to do that much work.
1:07:01 The other thing, too, is, you know, so, you know, we're all buying real estate and so somebody, you know, finds a deal, they create a deal, right?
1:07:07 And so, that's what happens first with the first thing that happens is an agent creates an opportunity. Mhm. Well, I don't need you for MLS
1:07:14 stuff. Why would I need you for that? I can read barely. I was gonna say the non-book guy,
1:07:19 right? Exactly. [laughter] But I can read. I can read MLS. I can read I can read my little listing service. But that
1:07:24 that's the key though is that this is what a lot of these agents don't understand is that if you take a course, you get equipped
1:07:31 and you can qualify the how good a deal is. Then you know that when you get one of those, how do you become part of that
1:07:38 investor's team? How does someone become a part of your, you know, eight eight building team? my 53 building team, your
1:07:43 300 unit team. How do they become part of that team? By bringing me a deal that I'm going to close
1:07:48 and then I'll let you bring me another one. And what's the problem for you? You get paid. What you're getting is a guaranteed closer.
1:07:54 Mhm. And if you can qualify the deal on your own, you're significantly in front of 99% of other agents. And it just blows
1:08:01 my mind that agents will not put in that work. That they much rather go to some other jackass seminar about cold
1:08:06 calling. Mhm. And that's the key as an investor is you have to listen to your agent and think, "Okay, what are they presenting me?"
1:08:13 Curb appeal, right? Good school district, nice area. Yeah. No, tell me based on the math,
1:08:19 right? It might not be a great numbers game, but also here's the things that would help limit tenant turnover. Here's
1:08:24 here's what the seller wants. You know, maybe they need a place to live, maybe they need something. They bring you the information that actually matters to the
1:08:30 investor. That's the agent you work with. Absolutely. Yeah. Yep. You're welcome. Now, both of you
1:08:35 guys had mentioned this and so I I did a video and I apologize, YouTube. I've I've done two videos this year where the
1:08:41 title was definitely clickbait and I apologize for that. I I try not to do that. I try not to do that. But then you guys don't watch my videos. So, one of
1:08:48 them that happened to get a lot of views was uh is section 8 going away? And I think I said it more like I think it was
1:08:55 like a big cancel sign through section all dying. I do remember and and the content of said video was no, it's I
1:09:02 don't see it going away. Um, that being said, there is a lot of talk, a lot of
1:09:07 talk on the internet of what is happening to section 8, what is the administration going to do? What are the effects going to be? Both of you guys
1:09:12 have nodded along when Dion's like, "Oh, yeah, no, section 8, I think it's going to expand. I think it's going to get bigger." That that has been counter to a
1:09:19 lot of the news circuit. So, why do you believe that section 8 will expand over the next few years? What is that
1:09:24 actually going to look like in your portfolio? Can you imagine the moronic level of intellect that it takes to say
1:09:30 the billionaire real estate investor who worked him way into the presidency is going to do away with a social program
1:09:35 that pays landlords. That's how stupid that is. Second, I don't think people realize how
1:09:41 can I get a hallelujah. [laughter] Thank you. I don't think people realize how divided in the middle we are.
1:09:46 Yeah. Uh people say the Republicans own this or the Republicans own that. Yeah. By a seat. It's not like there's 90 and 10.
1:09:54 Exactly. It's 5149. Yeah. Like it's it's by a seat. And so the
1:10:00 vice president ends up making some deal tiebreers, right, to get that voted
1:10:05 through. And so I think if we're in we have an 8020 experience. Yeah. If we go 80 red
1:10:10 20 blue, we're going to be gun toteen rednecks, right? But if we go 50/50 or
1:10:17 40 30, none of those programs go away. Yep. I think that's the case. I think
1:10:23 that I think that that's what the market's going to be. I think that there are going to be some places are going to have to do UBI. I think that white
1:10:28 collar what's really funny is is we've actually brought in a lot more uh mechanics, plumbers, electrician,
1:10:37 um journeymen, apprentices. We brought in a lot more tenants like that then we have white collar jobs.
1:10:43 I think the white collar guys are the going to be in the most trouble. I think they're I think and a lot of times, you know, they need $250,000 salaries to
1:10:50 afford the house that they're going to have and they're going to lose at least one of those salaries, if not two, and then somebody's going to be looking for
1:10:56 something else. So, we love we love what we call workforce housing, which is
1:11:01 helping out the actual workforce. We love that stuff. I and I 100% agree with this analysis. I
1:11:07 do think we're going to see expansion of these programs before we see reduction of them. Yep. And it's from both sides, right? You
1:11:13 have a president who is pro-real estate and social programs. Traditionally, you think of Dems for
1:11:20 that. So, we see a change in office. I think it's going to expand. You see the current administration, I think it's
1:11:25 going to expand. I think everyone is everyone on both sides is pro subsidizing housing right now.
1:11:31 So, here's the warning. Diversification matters in tenant type.
1:11:36 I'm not a fan of saying I'm a section 8 landlord, so all I own is a section 8. I do a third section 8, a third military,
1:11:43 a third working or retired. Matt has expanded to a little bit more section 8. You you uh got kicked in the
1:11:48 teeth because you did an emergency rental assistance program. I did. I recommend unless your portfolio is your
1:11:53 size and you can handle 15 units becoming a guaranteed eviction in 12 months. Agreed. I wouldn't touch it.
1:11:59 Yep. I'll do section 8 in the county where it's nice to work with. Thirstston County, Washington's great. Pierce County, Washington. I won't do it there.
1:12:05 Yep. So, you got to know your local county. But then I I don't want too many from any program because
1:12:10 Yes. Yes. We can guess and say with conviction I'm I guarantee it ain't
1:12:17 going away. Mhm. But it could there could be a base realignment and closure meeting, a Brack meeting and
1:12:22 Joint Base Lewis McCord could be gone and all the military's gone. So I don't want all military and I don't want all contractors for military. Absolutely. I
1:12:29 wouldn't want all Boeing employees. I wouldn't want all Amazon employees. I wouldn't want anything from one sector. Right. Right. But a diversified
1:12:35 tenant base absolutely is a swan account. You sleep well at night because you know yes I could be impacted by about a
1:12:41 third. One of my favorite things that I did in my portfolio and it started out accidentally but we have studios ones
1:12:47 twos threes fours. I have 55 up. I have uh litec. So I have rent restricted
1:12:54 properties. So, if you're like, "Hey, I make this little." I'm like, "We have amazing properties that are much much much much nicer than what you could get
1:13:00 market rate, and it's available almost 100% moving rate. If they qualify, they we will find a house for them. You're
1:13:05 above 55, hey, I got a place for you that h
as a bunch of amenities. Uh, we have to host events there as part of our
1:13:11 contract. So, I have to bring food in for them. We have to, this is
1:13:17 legitimately in our land use restriction for Litec for this property. We are required to host bingo night or an ice
1:13:23 cream social." Okay. Once a month, every single month. But there's things like this in our
1:13:28 programs. Like, hey, we can have we have the right housing for people. So, if we receive an applicant, I can almost guarantee you in
1:13:34 Stevenville, Texas, I have housing for them. Studio 1 2 3 4. And so all of the leads,
1:13:39 everyone in my system, I'm like, we have housing for everyone. And it makes us immune. We have the fastest growing
1:13:44 college in the US right now. Charlton State University is number one in growth rate. Not number of students, but it's
1:13:50 blowing up. Yeah. I am not going 100% student housing. I'm taking 125 plex and we're
1:13:58 converting from standard market to student housing. Yep. That is the mission. That's exactly right. I think that's the
1:14:03 right way to do it. You know, diversification within your tenant pool. So, we have diversification of assets. So, when people say, "Are you
1:14:08 diversified?" Yes, I diversified assets and I diversified tenant pool. Mhm. That's how I diversified. I didn't want
1:14:14 to diversify either way. Yep. That's a great way to do it. Yeah, I I at some point I will probably leave
1:14:21 Washington state because I I I'm just too far from that market. If my family moves from there, I don't want to come
1:14:27 and visit all the time. It's cold, it's wet, it's politically unfriendly. [laughter]
1:14:32 The uh it's amazing in Washington for the summer and the fall, but man, Thailand in the winter is a good solution.
1:14:38 No, I I I can imagine Texas and all the time is a great solution. It is. It's good. Especially if you like 100 degree
1:14:44 weather, which I happen to actually enjoy. Texas is like the Australia of the US. Everything's trying to take you out.
1:14:49 That is unfortunately true. Animals, poisons, snakes, spiders, scorpions.
1:14:55 Bats. Texas is so great to live in that everything lives there.
1:15:00 Even the diversity in roadkill. I'm like, "Wow, I didn't realize half these creatures existed." [laughter]
1:15:05 By the way, coming from Washington is completely unrelated. But if you've never seen an armadillo, that is a wild
1:15:10 an It's crazy, right? I'm like, I can't believe this is an organism. That is that's a crazy thing.
1:15:16 Yep. The bulletproof tank with a bullet tank bulletproof tail. Yeah. Not car proof. You see a lot of those on the southern
1:15:21 you do. They move too slow. Let's end here. Final topic. You
1:15:27 mentioned AI and [clears throat] real estate. This is something that I think is a big big trend. Massive. Well, you mentioned
1:15:33 AI actually in the in the market in general and and job displacement. It's going to play a huge role in real estate. I'm actually astounded with how
1:15:41 much I ended up using it. is someone who I still like to underwrite deals on my phone calculator. I love going through
1:15:46 the actual math. I don't want systems. Correct. I want to know my numbers and I remember my numbers. I did not think I would
1:15:53 adopt AI like we have and I use it every day. Every day. All the time. You take an
1:15:59 operating an offering memorandum, plug it in there. Summarize this for me. What is it missing? What are my next steps on
1:16:05 this thing? Like it will give you it will do all the thinking for you and it deals amazing. the thing I'm using AI
1:16:11 for the most because I don't think AI is going to replace landlords. Landlords who use AI are going to replace landlords who don't.
1:16:18 So, I used to I learned this from Matt the Lumberjack Landlord's course. I would do a listing and I would speak
1:16:24 from an owner's perspective. I would say uh age of building, square footage,
1:16:30 parking, all of that kind of stuff. I would tick off all the things that matter to me as an owner. What am I looking for? Tenants don't give crap.
1:16:35 Wouldn't have a lot of demand. They don't. So, I took Matt's course. Matt talks about, well, what are the things in the area? So, when I have a rental popup,
1:16:40 great course, I would be on Google and I would go I would go to Google and I would say, "Okay, within three miles, you know,
1:16:46 things I'm looking for petting zoos, I'm looking for parks. I'm looking for hiking and trails and lakes and rivers and all the things in Washington that
1:16:52 people are there for." And then I would bullet point those in my listing. And then I would have so much freaking demand, thanks Matt, [laughter] that I
1:16:58 couldn't filter through to the people that I wanted to rent because [clears throat] I had so many great applicants. That was two hours the first year I was
1:17:05 doing that. Yeah. So, about two years ago, I started doing that through. Y in the last year with chat GBT I go I
1:17:12 own a rental at 123 Main Street. Please tell me things that tenants might be interested within 3 miles
1:17:18 bullet points copy paste edit a little bit like 30 seconds and my listing is up
1:17:23 in tons of demand. So thanks for the education course and I appreciate AI for that use for me and I'm sure there's a ton more uses that we can do
1:17:29 but that's what I'm using it for mostly because I have lots of partnerships. I do an exorbitant amount of legal
1:17:34 especially on some of these litec deals where you're going to like some of them have been a syndicated structure some of them have creative finance involved so
1:17:41 it's like okay we got creativity we got creativity we got like 15 investors
1:17:46 some of the legal docs come out there are hundred pages and and and you just plug it right in
1:17:51 just go summarize this and what is missing and I will send stuff back to my there's
1:17:57 one thing that saved us like a quart million dollars where I'm like never would have thought to look for legal didn't think to look for us. AI is
1:18:05 just like, "Hey, did you guys think about this?" It's like, "Oh, no, we didn't. No, we did not. No, we did not. No one thought of that."
1:18:10 Yeah, that's an obscure clause. Yeah. On those on those luras, the land use restrictions on lack.
1:18:16 Sure. I didn't realize that we had a there was one sentence in one page about, "Oh, by
1:18:22 the way, when we did the extension for this, we added a requirement for an afterchool program. The prior owner wasn't doing it. We were out of
1:18:28 compliance on this. It did not fall into my due diligence or underwriting at all.
1:18:33 And you go through AI and it goes like, "Hey, here's what you have to do." And I'm like, "Well, I'll be darned. We have
1:18:39 uh we have some more work to do, friends. This uh what does this cost?" It turns out we found a great nonprofit. It's almost almost cost nothing and uh
1:18:46 we offered an amazing amenity, so it worked out. But these little things like you could have deal breakers hiding in
1:18:52 contracts and AI will just go like boom, here's what you didn't think of. It's It's the most amazing
1:18:58 money-saving, time-saving thing I've ever experienced. It is. I think people need to learn that it exists. I think they need to learn
1:19:04 how to use it, but I think that they also need to not get lazy. They need to understand that they still have to learn how to be investors.
1:19:10 So, as we wrap up, this is what I look forward to. Yes. Normally, we do live streams.
1:19:16 Yes. Yes, we'll edit out a little bit, but your content, you cut out shorts and there are some amazing shorts in this this
1:19:21 interview that you can beautifully take out of context. [laughter] I'm looking forward to that.
1:19:28 In fact, I I will probably only clip out of context. I'm super excited about that.
1:19:33 Yeah, exactly. I I Orchard. Yeah, they'll be like, "Man, what what what should we do in to to help the uh
1:19:40 the economy and provide affordable double the rent? I'm just I'm just going to clip them. I'm going to put them out in order. It's going to be great." So
1:19:45 guys, the takeaway Matt wants to double your rent. Uh Dion only likes blue states uh and
1:19:51 blue politics that say that he just loves it. [laughter] No, this was so fun having you guys on. I've
1:19:56 never met you in person, which Matt is Matt is my mentor who I've never met. So this is a this is a big deal for me.
1:20:02 Having you guys in one room is exciting. This is really fun. I've wanted to do this forever. So this is a huge privilege.
1:20:07 How do people find you two online? Starting with Matt. So Lumberjack Landlord, uh YouTube and
1:20:13 Instagram. Um, and we're just about to kick off another boot camp. We like to do these one to many where we actually have 15 people uh that uh literally get
1:20:21 the experience of a boot camp where every single week for two hours we spend time talking about deals, talking about the market, talking about what they're
1:20:27 going through because that's what matters. You know, very often people make it about them, the instructors make it about them. It's not about me. It's
1:20:33 about what are you going through right then and there. What are you going through right now that I can help you fix the problem because I've done this for 20 years. So, I do a live stream
1:20:40 every Thursday night, 9:00 p.m. Eastern time uh on the Lumberjack Landlord on YouTube and uh have amazing guests like
1:20:46 you two every once in a while. Appreciate that. And I can say for a fact, amazing course boot camp. I've had
1:20:54 so many people I've even within my course, people have gone through your boot camp like, "Oh, I learned all this stuff." I
1:20:59 so much of that bleeds into the stuff that we do over here. Amazing amazing program, tons of experience. You are the
1:21:04 one I go to when I get stuck. It's like, okay, Matt's probably been through [laughter] it. Yes, he is a
1:21:10 amazing teacher. I've been been honored and blessed to teach uh some of your course and it's uh
1:21:16 your students are spectacular. I mean they are really hungry. They really want to learn. Like it's
1:21:21 it's a lot it's a lot of fun watching all the gears turn and all the smoke sometimes cover the screen with how much
1:21:28 thinking is happening on [laughter] the other side. So it's it's a lot of fun and uh you know so yeah it's it's a lot of fun
1:21:33 to be a part of that. So I appreciate it. Thank you so much. Dion, where do people You just You just came out with the book and it's fantastic.
1:21:39 Yeah. And for the lazy landlord, it's bigger than I expected the book to be.
1:21:44 [laughter] Because I'm so lazy, I wanted to do it once and done. No [clears throat] more. It's thick enough to get everything in there. So, you can find me at Dion Talk
1:21:51 Financial Freedom on YouTube. Yeah. And on Amazon, the book is Financial Freedom for the Lazy Person. Every
1:21:56 Tuesday at 400 p.m. Pacific, I do a video, a live stream like this. I'm doing that that lasts as long as the
1:22:03 questions do. There we go, guys. I will uh drop a link to that book below in the
1:22:08 show notes as well. Guys, thank you for joining the channel. This was super fun. We'll do this again next time we're in
1:22:14 Vegas. Yes, sounds great.