1. Buy and Hold 2. Value Based Buying products on sale 3. Time management – – 4. Snippets of time 5 Avoid time wasters – TV 6. Watch what people do not to what they say 7. Blaming others 8. Quitting 9. Other people’s energy – leverage 10. Having a plan 11. Take advice from people with more money than you have
Attend this power-packed “one-of-a-kind” best of the best training on making money in real estate investing!
———————————————————– You know, one of the things I also discovered is that people that don’t have money often take advice from people that don’t have money. And so they spend a lot of time together, birds of a feather flock together. So they’ve got other folks in their life. Also, similarly, situated broke as well. And they’re all talking about what you ought to do and what you ought to do and what you ought to do. And it’s fascinating because look at what they’ve done. Look at what they have. And then you step back and you go, aha! It might make sense to you to get advice from people that have more than you do.
And success, for example, I’m in the real estate game, success in real estate doing not one deal, not two deals, hundreds, even over a thousand deals makes a lot of sense because been there done that is definitely the truth. You know, when you have a situation of a septic system backing up and you already know what the answer is, or you have the situation of a leaking roof and you already know how to repair that roof without having to put a whole new roof on there, people without experience would put a whole new roof because they don’t know any better. Others know how to repair that. So just be careful who you get your advice from and where you get your advice from.
Hello, my fellow Ripplers! This is Chris Miles. Your Cash Flow Expert and Anti-Financial Advisor. I want to welcome you out for a wonderful show. The show that is for you and it’s about all of you. Those of you that work so hard for your money, and you want your money to start working harder for you. Now! You want to work because you want to not because you have to. You want that freedom. That cashflow. The prosperity. Today. Not 30 or 40 years from now, if you’re lucky and the market just happens to smile on you just the right way, but you want that freedom right now. You want that real life, the ability to be able to be with those you love and doing what you love, but guys, not only do you want that life of freedom, that financial freedom, but on top of that, you actually want to be able to have a life that makes a difference where you can bless more lives, because as you’re blessed, you can share those blessings with others.
And I don’t just mean donating your money and giving that away, although that’s great, but it’s actually be able to show up more powerfully as someone who is free, abundant, and prosperous, and there is where we can change the world together guys. That is the kind of Ripple effect I’m here to create. And I appreciate all you guys being here as well, because through you, I can do the same. So thank you so much for sharing this with others. Thank you again for bingeing and trying to learn and apply this. And again, thank you for those that reached out to me that said, Chris, like, I’m trying to learn how to do this better, whether you’re just, you’re trying to figure out how to get out of the rat race yourself, or you’re like Chris, like, I want to learn how to double dip on my money. Like, how do we use this infinite banking thing? Great. I appreciate all the questions and the fact you guys reach out because that’s what makes me feel like I’m making a difference in your life. So I thank you so much for that.
As a reminder, you can check out our website, www.MoneyRipples.com. You can download the eBook Beyond Rice and Beans to find ways to create more cash or find more cash now. And you can also check out other videos and blogs as well. So check that out.
So today guys, I want to discuss something that’s, that comes up a lot. Right? And I know I just got done telling you guys that right now, getting liquid, give, be able to keep your cash available is key. Right? I thought about, you know, right now is the golden opportunity. We’ve got crazy high prices in the real estate market we’ve got, we’ve got, you know, and I don’t, I shouldn’t say crazy high, but they’re higher right now than ever because there’s demand for it.
People aren’t selling, but there’s tons of people trying to buy. So there’s more demand for real estate right now. So that’s driving it up. The stock market is going nuts. Like it’s going crazy high just because they’re hoping for a virus, for a virus, they’re hoping for a virus! No, they’re hoping for a vaccine, right. To a virus. But even then the numbers are completely crazy, especially with how things have been shut down. But we’re seeing the stock market all the time high, right? We’re, we’re seeing all this opportunity. Plus with the cares act, you can even access money that was before tied up. Now you can get to it and get to it without a penalty and early withdrawal penalty. So there’s all this great stuff. Right? So I talked about how it’s opportune to be able to get liquid and get cash. But I want to take it to that next level now is that if you’re a, if you’re the traditional saver, you’re going to become a loser. Right?
Savers are losers. As you might hear Robert Kiyosaki say. Right? And this does not mean that you’re a loser if you’re a saver in the sense that you’re, you suck, right? We’re not saying that at all. What we are saying is that great. You, you got some good discipline to be able to save money or put it away or to pay off debt faster. But that’s not what’s going to create freedom because I’m telling you many of you that have already done this. You’ve had hundreds of thousands. If not millions saved up in mutual funds or in savings or whatever it might be. You’ve been debt-free, you might even barely have a mortgage, but even that’s nothing. Right? So you’re already in this position, but you don’t have freedom because you don’t have income coming from this money. You have money, but it’s not actually translating to real income, like real interest earned.
And that’s a key difference guys is that it’s got to equate to that day to day lifestyle. Now you may not have all those mortgage payments, but you still have your life. You know, when people think that they can go debt-free and just life will be wonderful. I’m telling you, it’s, it’s, it’s easier to be debt-free. I can assure you of that, but it’s not. It’s not what is all cracked up to be, and it does not generate real freedom. You still have expenses. You still have to make pay bills, even if you’re debt-free, don’t you? Well, why would you think that debt-free makes you free? It doesn’t. If anything, it just means a few less expenses or costs, but other than that, you still have to pay for everything else. So we got to find this balance. If you want to be a wise steward of your money, we’re not about being spenders. Right?
We’re not talking about blowing money, but we’re also not talking about being in scarcity as a saver where you can never save enough to make a difference. We’re talking about going in the middle with being a steward. What does steward do? Well, steward wants to get those resources working for them. A steward says, how can I make the best of the resources that I have? Money for certain, but it could be also your time, your energy, your talents, and everything. How can I use this in a way that blesses more lives? How can I use this in a way that’s actually going to, actually create some freedom for me and be able to allow me to expand my influence. They’ll expand my service to others. Right? That’s really, if you go deeper, that’s really what being a steward’s all about. It’s not just about being financially free.
It goes so much further than that. Like, that’s just like a little step in the bigger scheme of things. But here’s what I’ve noticed is that I’ve had two people in the last 24 hours, right. Both of them have, they’re both great savers, like fantastic savers. I mean, Dave Ramsey would throw them up on a poster and say, these guys do what they do. Right? you know, one of them is, you know, they’re both in the medical fields. Right? what was interesting is that one of them made a comment. He said, yeah, I’ve got some student loans just paid one off, freed up 9,000 a month, which I said, Ooh! That is awesome. That’s what it should be like. Right?. 9,000 a month is nothing to frown at it for sure. And he said, yeah, but I still got another couple hundred thousand left of student loans because you know, being a doctor is expensive.
Well I started to ask them to break down those loans and tell me about interest rates and whatnot, and the highest interest rates like around 7%. So I said, okay, that’s a decently high amount for a student loan, but not ridiculous. And in fact, the lowest one, I saw the one that made the most sense to pay off if you were to pay one off was when I had a $56,000 balance. And I don’t remember the interest rate, but I just, if for his sake, I said, let’s even overshoot the industry. It’s probably lower. But I said, let’s say it’s 7% because he was paying $715 a month for 56,000. Now here’s the thing is 7%. And he’s like, I ran the numbers for him. In fact, I’m going to share my screen so you can see what that looks like.
So for those of you watching the video, great, for those of you that aren’t watching the video. Well, you know, you’re just gonna have to, you know, follow along verbally, at least. So I put this up on the screen for him. It was a zoom call. I said, all right, you have $56,000 on the starting principle. You’ve also got this at a, sorry, that’s the wrong one. Here we go. $56,000 7% interest. I said, if you’re paying 715 a month, that’s going to take you about 8.75 years figure out the payment, right there’s about 715 a month. I said, at that rate at 7%, for $56,000, you would pay over the seven years, 19,000 of interest. His response was, Oh! Yeah, that’s bad. I said, okay, cool. Yeah. 19,000. That’s no pretty, that’s definitely a pretty penny, right? That’s definitely some money coming out of pocket.
Considering he has 56,000. He owes, but he still has 19,000 of interest to pay over the next, almost nine years. I told him, I said, what if. And he hadn’t seen the compound versus simple interest effect. I said, what if. You, instead, you mean, and he was about to get 56,000. He had enough money coming in the next month or so that they would be able to pay off that one loan. And I’ll tell you from a cashflow standpoint, right? If you’re looking at just buying a property, you know, from a pure cash on cash standpoint, cashflow standpoint, paying off this loan is not a bad idea because it would free up 715 a month, see $56,000 down. If you bought like a property with that right now, if you did different funds and whatnot, like we’ve made 8% or 10% a year, you definitely would not be making a, you know, 715 bucks a month for the next nine years. Right?
Now maybe it might, I mean, there might be a possibility that depending on the, on the investment that you’re in, it could pay more. Even if you did a property, you see you’ve got paid 12% a year, 56,000, making 12% means 560 a month. That’s not quite 715, so it’s not horrible. But I want him to see that he could pay this off of the cash coming in the next month. Or he could not pay it off. And so I show him what would happen if he didn’t, if he just left the cash growing. And I said, unless they say, you only earn 5%. Right? So it’s costing you 7%, but you’re only going to earn 5% of his money. I said, what do you think of the interest you would pay on this? He said, Oh, it’ll probably be about, I don’t know, 12,000 or so.
I said, yeah, because proportionately speaking that’s about what it looked like if 7% cost you, 19,000, well, that would mean 5%. Should only make you about 12,000. Right? Well, ran the numbers and here it is. Boom, boom, boom! Okay. For those, you guys see my screen, of course you could see this. The interest that’s earned is not 12,000. It’s nearly $30,000 only earning 5% for the next 8.75 years. So if you had that 56,000, he could pay off his loan and save that 19,000 interest for the next nine years. Or he earned interest that compounds. Right? At 5%, he earns almost $30,000 of interest. Now he still has, it still costs them the 19,000 interest, but he still gains over $10,000, extra interest doing the same thing, just earning less interest. And I said, well, watch this 7%. If you’ve even matched the interest. Boom! Now you made 45,000.
So now you’ve made about 25,000 more in interest than you would have if you had just paid off your loan. And I said, what if you made 12%, right, again, like doing properties. I said, now it’s getting ridiculous. Now it’s about $95,000. Yes. It will cost you 19,000. But would you, I mean, that, to me, that looks like an investment. If I can put in 19,000 to make 95,000 in nine years, how many of you guys would do that investment? Right? I mean, it’s awesome. Now the cool thing is I showed him. I said, well, to break, even we did about 3.4%. There it is. If you only earn 3.4% of your money, you earn about 19,000 of interest. So I said, your goal is to earn at least three and a half. He said, Chris, I could easily do that. Basically I can invest in almost anything within real estate and make at least that much.
I said, I agree. I said, you could definitely pay off the mortgage or pay off the student loan, but you may not want to. And so I said, great, you know, it’s up to you either way you win, right? The question is which one’s going to make you the most money. Right? Which one’s going to really make the difference because see, let’s think of this practically say that you did put 56,000 and you bought really two properties with that. Right? Those properties paid you a total of $560 a month or a 1% a month type of return. Well, that’s just the one aspect that’s like, what’s above the surface. That’s the top of the iceberg. Right? But beneath the surface, there’s other things happening. For example, if you bought that with leverage with a mortgage. Well, cool! Well now that’s paying down your mortgage, your mortgage balance. Right?
So that’s starting to go down at least a few thousand dollars every year. Right? So you’re probably over those nine years, you’ll probably gained, I’d say at least $25,000 to $30,000. I’m not running the exact numbers, but it’s going to be pretty close. So in nine years you’re going to gain at least 25,000 to 30,000 of equity. Even the house didn’t appreciate just because you paid the mortgage balance down and you don’t even have to pay it, your renters do. Right? So not only did you make 560 a month, but now over nine years, you’ve averaged at least 2,000, 2,500, maybe $3,000 a year. And actually I’m probably being, probably being a little bit conservative on that number. So anyways, that’s a big thing there. That’s not including appreciation. There’s appreciation now? Oh my goodness! Now, if you’ve been writing off the interest on your student loans or your mortgage, because this applies to a mortgage too. Right?
Well now you’re writing off interest as well. So even the interest you are paying, you’re writing off on your taxes. Plus if you make real estate income, you don’t get the, because of depreciation and all those kinds of things and cost segregation. You really, you can actually walk away with zero net gain, even though you’re making hundreds or thousands of dollars a month, because now you’ve got tax credits. It becomes like a tax free investment while write off the interest. So that’s a 7% student loan guys. What if this is like a freaking mortgage? So that was the other person I talked to. They had a mortgage. I said, you know, and it’s funny because like their mortgage payments are so high. Cause they’re trying to aggressively pay them off that they could even get a HELOC. You know, not, not that they were broke by any means.
They had enough money to actually pay off their mortgages now, but they’re like, no, I want to get a home equity line of credit. Maybe I use that to invest. The bank rejected it because their minimum payments were so high compared to their income. They said, no, that’s too much. So I said, as I told them, I said, listen, instead of trying to aggressively pay it off and he was paying 3000 a month to his mortgage, I said, instead, let’s refinance it to a 30 year mortgage. I’m like, I know this scares you as a saver. This will scare the heck out of you. If you refinance that for 30 years and say, you’ve got at 3%, which is not hard for him to do because he’s got great credit. Right? And right now mortgages are so dirt cheap. It’s amazing.
But 140,000 for 30 years, at 3%, his payment drops down to 590 bucks a month. As you can see on the screen here, 590 a month, that doesn’t include taxes, insurance, you know, California’s expensive. Right? But that’s still, I guarantee that’s still at least 1,500 plus dollars cheaper than what he’s paying right now. He can always take that 1,500 of cash. He can always put it in a savings account. He can put it into life insurance. He could put it somewhere where he can store it and let it grow, do his thing to where he could pay off his mortgage later if he chose to. I said, but man, you can drastically reduce your expenses. Which why, by the way, will reduce your debt to income ratio. So then the banks will say, yes, to that HELOC. Because the banks don’t want to take risk. They view you as risky as a saver because you’re trying to aggressively pay off your house.
So you made your mortgage payment, you know, at a minimum. You said, Hey, I want a 10 year loan. Let’s fix that payment. Make it super high. His payment was actually 2,300, but he was paying 3,000 a month. Right? But still at 2,300 a month, the mortgage company is looking at, or the banks are looking at saying, Hmm, no. That’s too high of payments that he’s making. That’s risky. Even though by every financial, most financial advisors standards, including a Dave Ramsey would say, that’s awesome! Good for you. That’s what you should be doing. Thanks for saying no, you’re risky. Why? Because of his income drops at all, he has to still make those huge mortgage payments. Wouldn’t it be better if you have the option to make a bigger mortgage payment, which you had a lower payment. So I said, if you’ve made it at 590 a month, that’s way better than if you were stuck at 2,300 a month.
Well, I mean, or even with tax insurance, right? Maybe it’s 1,200 a month say it’s a thousand dollars a month cheaper than what he’s required to pay. That’s a thousand dollars. He does not have to pay. If something goes wrong. See, understand that often savers will always look at a calculator and we’re just go off of emotion or based on what they’ve been taught. And it’s always been taught by depression error mentality. Remember in the depression, banks were actually allowed to call your note to due, if you had a mortgage, even if you’re on time as their payments, they could call it, due but because of what happened to the depression. They changed those rules. They said, no thanks, you need to make it easier for people. As long as they’re making monthly payments, you cannot foreclose them. You cannot call the note due and make them pay the whole mortgage balance and take their house away.
You can’t do that. And so therefore banks don’t really do that. It’s very, you don’t see that option happening too often, unless you’re buying some investment properties, that might be the case. But in most cases, the mortgages, you’re no longer in danger. As long as you make your monthly payment, you’re fine. So the rules have changed, but people haven’t changed their rules. They’re still playing by old rules and you will lose the game if you play by old rules and that’s what’s happening here. So I said, listen, you can always put the extra payment on top of the mortgage. Although I wouldn’t recommend it. I would say, put into savings until you had enough to pay it off. If that were your goal to pay off your mortgage, then do that. Great! At least you had the money in savings and it builds up some extra security in case something goes wrong. Right?
In case life happens, which never happens to us. In case a crazy virus happens or whatever might happen. Right? That’s the difference guys. And so my point to you is this. And by the way, if you run numbers on a mortgage or what they could earn, you’re earning even 8% or 10% on that same, 140,000. It’s ridiculous. It’s like hundreds and hundreds of thousand dollars of more interest that you would earn in which you would pay. But again, we’re not taught to be stewards with our money. We’re not taught to be wise investors with our money. We’re taught to play by the rules. The banks given us, the banks want us to pay off our loans as quickly as possible, which is why they keep incentivizing us with more, you know, more of that kind of crap, right? They want you to pay off your loans faster.
They don’t want you to be in debt. They want those balances down as low as possible. So you create as little risk for them as possible. But remember all the time in the meantime, they’re getting paid. They’re always getting paid. They are the best investors. If all you do is copy and mimic what banks and financial institutions did, you’d find out that you could actually be an investor too. For example, banks wants you to pay back your money faster. If you have money in an investment, don’t you want that money back too? Even if it’s paying you interest, you eventually want to get all that money back just in case. Right? Just in case something goes wrong with that company. You know, if you’re investing with somebody else investing money with them, you want them to try to pay that principal back too. Not just an interest only. Right?
You want that money back at some point. Banks are no different. They’re just, they’re just a lot smarter. And they are so smart that they’ve trained you and financial advisors to teach you for years that you got to keep doing the same old thing over and over. Save money, pay off all your debt, don’t do anything crazy, lock your money away into some mutual fund or 401k or IRA where you can’t touch it. You can’t even have access to it. And if you try to touch it, they penalize you for touching your own dang money! That doesn’t make sense. Guys become a steward. Become an investor. And get out of that saver mentality. For those of you that are there. This is the thing you need to stop doing right now. So, anyways guys, that’s my challenge. Really let this sink in because it could be the difference between you having money and you having freedom. Guys, make a wonderfu Day! Visit us online at www.MoneyRipples.com for more resources, to help you fix money leaks and get your money working harder for you, now!
Jay Conner is joined by The Real Estate Preacher, Randy Lawrence.
“I’ve seen and done it all in real estate. Now I want to help you achieve the success I’ve enjoyed.” – Randy Lawrence
Prosperity Capital Partners lives its mission of serving others by providing Investors with financial freedom: Double-digit returns with zero capital loss and excellent tax benefits to our private investors for 17 years via asset-backed real estate investments.
Families with high-quality, affordable homes: Offering updated affordable housing enhancing the quality of life of working American families who live in our apartments.
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
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Jay Conner (00:02):
Well, hello and welcome to another episode of Real Estate Investing with Jay Conner! I’m Jay Conner, the Private Money Authority, also the host of the show. And I wanna welcome you whether you’re a brand new or you’ve been following the show for some time. My lands! We’ve launched back in June, 2018, tracking fast over 300,000 downloads. Thanks to you. And I do need your help. If you find this episode to be valuable, and you can use this information in your real estate investing business, then please help me out. Let’s share this information, like share, subscribe, write, and review whether you are on iTunes or watching on YouTube or any of our other platforms. Well, here on the show, we talk all things that relate to real estate investing. We talk about how to find deals. We talk about how to fund the deals without relying on local banks, mortgage companies, or even hard money lenders.
Jay Conner (01:11):
We talk about how to sell houses, rehab houses, and how to automate your business to where you’re actually running it. And it’s not running you. But as I mentioned, I’m known as the private money authority. I became an expert on raising private money and I’m not talking about doing business with brokers. I’m talking about actually attracting hundreds of thousands and in the millions of dollars in funding, that’s got nothing to do with your credit, your verification of income, or actually even the number of deals that you’ve done. If you’re interested in getting more funding for your deals to where you never miss out on a deal because you didn’t have the money, I’ve got a free gift for you. Yes, I have got a new monthly membership that I launched that I’m going to show you how to get free access to the membership. It’s called The Private Money Academy, and on the, or in the membership twice a month, I am live on Zoom with coaching for all of the Academy members.
Jay Conner (02:11):
We’re tracking fast to a thousand members. Right now, we got about 150 members. And as a matter of fact, the next live Zoom coaching call is within the next week. So I’m going to tell you how to get in, you get the live coaching. We also put someone, one of the members in the hot seat where we analyze your business, figure out your challenges and fix your challenges to where you’re able to take your business to the next level. And we also have new content and training in the membership every month on finding, flipping, automating funding, selling, et cetera. We also cover all in the membership, all types of real estate deals. We cover single family houses, commercial land, self storage, and you name it. We got it covered. So here’s how you can take advantage of checking it out for free. Go to www.jayconner.com/trial.
Jay Conner (03:10):
Again, that’s JayConner.com/Trial. Look forward to having you live on the membership Zoom conference calls. Well now in addition to that, if you’ve been tuning in for any time, you know that here at Real Estate Investing with Jay Conner, I have amazing experts. And in fact, the guests that I have on today’s show is a good friend of mine and is a fellow member of a very top and mastermind group where we have about 120 real estate investors from all across the nation. We get together about four times a year and help each other out on our businesses. Well, let me tell you about my friend. First of all, he’s an entrepreneur with over as of today, 24 years of experience, and he has four very successful real estate investment companies.
Jay Conner (04:08):
In addition to that, my friend and I have got the same, same heart, and we’ve got a lot in common. He’s a pastor and also a founder of multiple life-changing ministries. And as of this day in the last 15 years, he has impacted and then blessed impact over 40,000 people. He’s been seen on CBN, NBC, CTN and featured in the St. Petersburg times Tampa Tribune. And he’s known as the transformation expert. In addition to that, he’s experienced his own life transformations as well, overcoming the upbringing from a broken home and his life as a drug dealer to becoming a successful entrepreneur, pastor husband, and a father. In addition to that, his spiritual breakthroughs led him out of the economic collapse and the financial collapse of 2008. And man can, I not relate to that! Took him from bankruptcy to a real estate rehabbing business, generating a seven figure annual income, again, something else that he and I have in common.
Jay Conner (05:16):
Also he, and I’ve got another yet person. That’s a mutual friend and mentor back in 2013, he co-authored a book titled Dare To Succeed with Jack Canfield, who is the co-creator of Chicken Soup For The Soul detailing in this book his personal and professional rise from the ashes, his mentors and his coaches include world renowned business leaders, authors, international speakers, such as Les Brown and also John C. Maxwell. He also is an active member contributed to the same mastermind group that he and I are a member of. Comprise, as I mentioned of nation’s elite real estate investors, beyond that he passionately believes in God’s promise of abundance and freedom, and he uses his unique strategies to help transform lives like yours by unlocking spiritual, mental, and tactical financial potential through real estate investing. He also has a very popular podcast titled The Real Estate Preacher on the podcast. He shares his successes and his failures along with his proven strategies and techniques that help build systems that work he’s proven them to work. And he does this so others like you can achieve their own seven figure incomes and their own abundance, just like him. Welcome to the show. My friend, Randy Lawrence also known as the Robo State Preacher.
Randy Lawrence (06:47):
Awesome! My brother. Good to see ya.
Jay Conner (06:49):
Good to see you too, man! Would you reach around please? And like scoop up a little energy and bring to the show to grab a little more
Randy Lawrence (06:59):
After that intro I’m ready to jump up and run around the building Man! Praise the Lord!
Jay Conner (07:04):
Randy, you’ve got quite the story, quite the backstory at one time you were a drug dealer you were bankrupt. You were like, you know, you were like slap dab in one time. And the financial collapse of 2008.
Randy Lawrence (07:19):
Yup!
Jay Conner (07:19):
So, before we get into those pieces of your story how about give us your backstory and little an overview as to.
Randy Lawrence (07:29):
Yeah
Jay Conner (07:30):
Where you’ve been in, what you went through to get you where you are now
Randy Lawrence (07:34):
For sure, man. Well, so my background, I come from, you know, a broken home parents divorced it, you know, four or five years old that kind of led to, by the time I’m in middle school, high school doing my own thing, kind of wayward with the wrong crowd, wrong group, doing the wrong things and just, you know, partying and all like that. Went on through college, got my degree in finance, minor in economics, went into the stock brokerage business right after that really kind of continued on with that same kind of money and partying lifestyle and all. And it was probably about 27 that I, you know, had had success in, in that respect, but really wasn’t fulfilled. And it was at that time that I really kind of found through reading a book Norm Miller chairman of Interstate Batteries, where it outlined about faith in God.
Randy Lawrence (08:25):
I put my trust in Christ. It really just complete 180 from my life, Got involved in the church locally and then got met my wife there. We got married and then, you know, God called me in the Ministry as well. And so I’m running a money management company that I started and then also ministering there at the church and probably around about 2003, God, just really, Has showed the power of the difference of what real estate can do versus, you know, stocks, bonds, option traditional money management. So really started focus on that. And you know, that was really the beginning of where things took off for us. We sold our money management practice in 2006 and moved out North of Tampa to start a church. And then of course that’s where we were having gone through that economic collapse that happened here in Florida.
Randy Lawrence (09:17):
And it was just quite the incredible journey because I was simultaneously pastoring the church, also running the real estate business and navigating the economic collapse that the whole country went through. So really kind of an incredible time at that moment in time.
Jay Conner (09:34):
Did you say you met your wife at church?
Randy Lawrence (09:36):
I did. You know, it’s funny. My dad always used to ride me now again, he was in North Carolina, we’d see each other, maybe once a year, talk on the phone once a week, I’d be going to the bar at happy hour after work, you know, and talk to him on the weekend. And he’s like, what’d you doing? That’s all, I’m going out with some friends at a ball game. And he’s like, man, you should go to church. I’m like go to church? He’s like, well that’s where you going to meet you a right girl. And I’m like, yeah, that’s not the kind of right girl. I want to meet, but he was right. You know? And so yeah, I was blessed to meet my beautiful wife, Sarah Jo there. And we’ve been married now 21 years coming up in October.
Jay Conner (10:16):
Did you say her name is Sarah Jo?
Randy Lawrence (10:18):
Sarah Jo? Yeah. She’s.
Jay Conner (10:20):
We got two things in common, We both met our wives or our to be wives At church.
Randy Lawrence (10:25):
Yeah.
Randy Lawrence (10:25):
And both of them have good Southern devil names. Mine’s Carol Joy,
Randy Lawrence (10:32):
Okay.
Jay Conner (10:32):
And yours is Sarah Jo, you want to know something else we got in common?
Randy Lawrence (10:36):
ah.
Jay Conner (10:36):
So in your bio in 2013, you coauthored a book with Jack Canfield named Dare To Succeed.
Randy Lawrence (10:44):
yup!
Jay Conner (10:44):
Well guess what? Two years later in 2015, I got certified as a Jack Canfield trainer by Jack Canfield.
Randy Lawrence (10:53):
Awesome. Yeah, it’s a, it’s amazing how many things, you know, it’s like the commonalities that the Lord, when you surround yourself with great people, it’s like you attract those similar qualities. And then here it is, you know, that we’ve been together through CG and the friendship there. And then now as we connect together with that further, you find all these backstories that line up with the identical things. That’s just pretty cool.
Jay Conner (11:22):
Well you know, I don’t know who came up with the idiotic idea, In my opinion, that opposites attract that’s stupid.
Randy Lawrence (11:29):
yeah.
Jay Conner (11:29):
I want to be around people. That’s like me. It’s like birds of the same feather flock together. Right?
Randy Lawrence (11:34):
For sure. Absolutely. And that’s, you know, we’re really, as you begin to have the synergies, the thinking is the same, the thinking that elevates one another and pushes each other to higher levels. That’s when I heard your intro about the monthly mentorship program, it’s like, man, that’s what people need to be a of because you know, you just, you come together with great thinking and then it inspires your thinking and then you see these actions that others are doing, or, you know, it’s just a win, win. It’s like the synergy of one plus one, it’s more like, you know, two times two equals four and then it just expansively grows, you know? And that’s the thing, man. So,
Jay Conner (12:15):
Yeah, exactly. So would you say, first of all, were you raised going to church or no?
Randy Lawrence (12:21):
I was not. You know, both my parents, you know, kind of by the time I was in middle school, I was kind of given ability to start making my own decisions and, you know, good parents, but this not focused on, you know, religion or, and again, as a broken home you know, they were just trying to do the best they could do to do their thing. And, you know, so that left me to my own accord and left them on accord. I probably connected together with the wrong group and ran with the wrong crowd and all that kind of stuff.
Jay Conner (12:53):
So I want to speak for a moment to people listening in or viewing whichever platform they’re viewing as someone or listening. My best guess is the majority of people out there like you and me went through a time in their life. The majority, not all, but a lot of people went through a time in their life or an extended time in their life that was very dark. Right? And I went through my dark time. My dark time lasted from the time I was 21 years old until I was 24 years old. And it just progressively got darker and darker and darker. Here’s my question for you. Did you have a wake up call? If so, what was it?
Randy Lawrence (13:42):
Yeah.
Randy Lawrence (13:42):
And if you did, what was it?how did you get out of it?
Randy Lawrence (13:50):
Yeah, So I was, you know, in that period for me would probably been 13 through 27. So like 14 years kind of like a Joseph in the journey, the two kind of coming out of the pit and all like that. But it was really at 27. I was helping take care of my mom. She had gone through numerous health challenges with failed back surgeries and all like that. And I had gotten a DUI charge, you know, for driving home apparently intoxicated. And again, I’m like, no, you know, that’s not the truth, but really what it was for me at that moment was it was this wake up call that here I am, 27, I’m facing the possibility of losing my license for six months. And, you know, I worked at a brokerage firm in Tampa. I lived in Seminole there with my mom helping to take care of her.
Randy Lawrence (14:43):
There were these recoveries and health things she’s going through and it just hit me like, you know, good Lord, man. I’m nowhere near where I want to be in life, cause if I lose this thing, now I’ma have to ride my bike to the 711 and maybe get a job. There not knocking people to work at 711, but that was not my aspiration. And I’m like, what I’d aspired to become and to do and achieve is nowhere near the realities. And the truth of the matter is it’s because of where I’m at in my life and the choices. And so that began to be that process to me, to see it’s like, what I’ve been doing is not the right thing. And so in short order, I laid my hands on a book, another friend of mine and I we’d started in an automotive garage and in the we sold interstate batteries.
Randy Lawrence (15:33):
And so the interstate battery salesman dropped off a book called beyond the norm. And it was about Norm Miller and his journey. I thought it was a sales success book, but it was his journey on how he came to faith in Christ. And then they became the number one battery reseller in the world and went on to such great success. And when I read that book, I’m like, that’s it, he’s got a beautiful wife, he’s got success, he’s got fulfillment. He’s in, he’s found it all in Jesus. And I’m like, wow! And I’m like, you know, Lord, if that’s true, and this is real come into my life, come into my heart, show me the direction you want me to go. And it was just like wham! This giant Volkswagen that I’ve been carrying on my shoulder for 15 years was just released. And it was just an incredible thing. And I, I knew I didn’t know what exactly happened, but I knew something happened and that my life had been changed. I could just feel it at that moment,
Jay Conner (16:31):
If you would like to follow Randy Lawrence and his story, you can follow Randy at www.TheRealEstatePreacher.com So Randy what does your, so how’d you. So when did you start in real estate? How did you get into real estate and what is your business model look like today?
Randy Lawrence (16:52):
Yeah, so we started in 2003. I bought my first multifamily property with little small duplex in 99. And you know, just really loved real estate even while I was a stockbroker and a money manager, you know I just loved real estate. And the more I looked at it, I saw the power of the returns you could generate in real estate with a really a lower adjusted beta or better risk adjusted return than what we were getting with our stock portfolios. And so it was 2003. I mean, God just really helped me to see that’s the direction. And so we bought our first small apartment complex in 2003 and began buying more properties. Now in Florida, it was a real white hot market. So it was tough to get properties. My first mentors had a several thousand doors that they own in apartments.
Randy Lawrence (17:41):
And so that had always been our focus, but you know, we probably started in five and six rehabbing houses just cause there’s so much, you know, money that could be made in that arena. And so we started building that business and also, you know, owning the small multi-families and 2008 hit. We went through the decline here in Florida you know, thankfully it was a great retooling that helped me to just learn a lot through that process. And so we came out through that process where a lot of people just left real estate. We did a huge short sale business, helped hundreds of people. And then, you know, 2011, 12, 13 started rehabbing houses again. And then 15 started focused back on large multifamily. So now to this day, kind of fast forward, we have over a hundred million dollars in apartment complexes on our commercial multifamily side. We have probably three more complexes under contract. Now we’ll buy eight more complexes next year. It’s kind of a velocity approach that we use. And then we still on the residential side buy fix and sell about 70 houses a year.
Jay Conner (18:53):
Wow! That’s quite an operation for both single family and your commercial, what size operation do you have as far as employees that are with you full time and numbers size is your team?
Randy Lawrence (19:08):
Yeah. So our internal team here in the office, we’re based in Largo, Florida, which is kind of the Tampa Bay area. We have seven employees in our internal office team. And then we have right about 28 employees that are through our multifamily side, through our management partnership so that, you know, they’re, they’re not direct report to me, but they work for our company through our management operations. So with every property that we buy, cause on the apartment side, our complexes tend to be 75 units to 200 units is the range kind of the sweet spots, probably a hundred, 110 15. And so every one of those complexes, we always have a full time manager and a full time maintenance. And so with every complex we buy that adds two more people to the mix. And then we have a regional manager that oversees them. And then one of our internal asset managers that oversee them as well
Jay Conner (20:07):
On your apartment complex projects is your business model to search for distress properties that you can fix up and get the rents raised and then turn them for a profit or what’s your business model would like, are you staying in the deal long term or what?
Randy Lawrence (20:24):
Our focus typically is about a three year hold. We look for kind of the threefold, the Holy grail, if you will, that we’re looking for the, the property that has a, you know, original type condition. So we focus on workforce type housing. So that’s people making between 30 to 60 grand, you know, real C, C plus type property. These people are, you know, typically blue collar or lower end white collar workers, you know, just good quality working Americans. They need a good place to live. So that property typically built in the seventies, early eighties, original condition on the interiors. A lot of times, a little bit of deferred maintenance, you know, where they’ve owned it, but they just haven’t really fixed it up and kept it spruced up on the outside. They’re typically, you know, keeping the cashflow and then operational areas where we can improve efficiencies.
Randy Lawrence (21:15):
Cause we have a more corporate structure, you know, large scale discounts. So with that, we’re able to go in upgrade the units so that they’re for about $3,800. We’re able to make them like new two thousands, you know, paint the cabinets, new floor, new lighting and then bring the rent because if they’re renting at 800 and the market’s at nine, it makes sense. This place is a little tired. The place is not updated. So we’re able to update the units on the turn. So that keeps cashflow consistent. It keeps us to be, you know, positive out of the gate so that we’re not running a negative. And it also is much more secure because we’ve got positive cashflow from day one. So on a hundred unit property, it takes us probably about 18 months to cycle through the rent roll, renovate the units. The first 90 days though we renovate the exterior. So it gives it a fresh pop and looks nice. So, you know, you know, the first three months you pull up on the property, looks like a new place and we’re able to start methodically working through the rent roll to improve the interiors during that time as well. And then that prepares us to be done within 24 months and then operate it for another 12 months to really improve the the T 12 and prep it ready for sale.
Scott Paton (22:37):
I think we lost Jay for a minute there, Randy. So.
Randy Lawrence (22:42):
No problem. Well then, you know, so just kind of carrying forward with our business model on it. So typically those properties, you know, we’re buying them at 85, 90, 95% occupied, and we have people that invest with us in the complex. So, you know, we’re buying a, let’s say a $10 million complex, we get a seven and a half to $8 million loan. And then that additional 2 million comes in the form of our capital as well as other people investing with us. And you know, it’s a typically like that is a three year hold period based on the model that I just share.
Scott Paton (23:18):
Cool! So I have a question that’s of interest to me, and that is, is the, if I invest in your deal or your project, is it interest that comes back or interest plus a percentage of profits? Or how does that?
Randy Lawrence (23:33):
So how it works on the majority of our properties, we have a preferred return model where you’re getting a 12% preferred return. So you get 7% paid on cashflow. So that’s a quarterly check every quarter. And then you get another 5% appreciation that is then a preferred return so that you, for example, put in a hundred grand, you’re getting 7,000 a year paid quarterly and then another 5,000 a year that’s accruing as appreciation so that when the property sold in three years, you get the hundred grand back plus another 15,000. That’s the appreciation. And then meanwhile, you were paid 21,000 through the cashflow during that three year hold period. The interesting thing with apartments too, and this is one of the greatest elements to it because you’re an actual owner in the individual apartment, you get a K1.
Randy Lawrence (24:24):
And so instead of a 10 99, you get a K1. And on that K1 because of the depreciation, you’ll get you typically on a hundred thousand, about a 40,000 depreciation loss. So you actually got 7,000 of income, but your tax statement shows you lost 40 grand. So you don’t pay any tax on that 7,000. So it really is a highly favorable and tax efficient investment vehicle.
Scott Paton (24:48):
I don’t understand why anyone would buy stocks, just listening to you right now. But Jay has returned.
Randy Lawrence (24:54):
Awesome!
Scott Paton (24:54):
I’m going to step away and make room for him right now.
Randy Lawrence (24:58):
All right. Very good.
Randy Lawrence (24:59):
So I don’t know what happened, but poof! I’m going poof I’m back
Randy Lawrence (25:05):
Yeah.
Jay Conner (25:05):
So, You may have already answered this question, Randy, but one more chance, your favorite way to find your apartment deals and how many of you got the analyze to buy one?
Randy Lawrence (25:14):
Yeah, they’re very good questions. So really, you know, we network in any market. So like if you focus on a market that you want to be in, we want to be in high growth markets cause that’s where demographics and jobs are coming. So in that market, you’re going to have typically three to five people that are the majority of the brokers that sell the big projects. Right? And so we develop a relationship with those people. They know that we’re no BS shake on it, we get it done. And with that, we’ve developed a very clear track record and a confidence. So when a deal comes that’s like, I just got an email yesterday, guys like, Hey, we’ve got an amazing property that it’s off market. The sellers looking to want to sell it. We want to get your input on it. First we get that kind of first shot at stuff that other people aren’t going to get because of the relationships we’ve developed and the performance that we’ve done in executing, you know? And so that’s really the number one strategy that is yielded the results that we’ve seen. And then currently we own 11 complexes right now just over a thousand doors. And then we have three more complexes under contract right now. That’ll bring us right to about 1400.
Jay Conner (26:34):
Awesome. And how many deals you’ve got to analyze to buy one?
Randy Lawrence (26:37):
Oh yes. That’s the question right there. So it probably is anywhere from 30 to 40, a lot of times, you know, we’ve developed a system where I have a full time acquisitions person. We have a two 10X14 double spreadsheet and he’s just going through property after property, after property. And so on a weekly basis, kind of the crap that’s on the back and it migrates to the front. So now when you get to the front page, the top 5 to 10 are right there for me to look at. And then we say, okay, dive into this one, this one, this one. And that’s a process that we’ve refined and developed so that we’re able to go through that kind of ball on, because you got to shift through the chafe, define that, you know, nugget of gold and you know, and that’s really been the key.
Randy Lawrence (27:26):
And so I think a lot of times people looking at apartments, you know, they mistake well like, Oh, well I look at this one or look at that one. And it’s like, that’s really not how it works. You’ve gotta be willing to 1, be accurate and understanding the dynamics that go into it. And then 2 have the volume ability to be able to look at a lot of deals.
Jay Conner (27:45):
Excellent. Well, Randy has been such a pleasure to have you here on the show and folks to stay connected with Randy Lawrence, go on over to his website at www.TheRealEstatePreacher.com. God bless you, Randy. Thank you so much.
Randy Lawrence (28:04):
Thank you so much, brother. You have an awesome day. God bless.
Randy Lawrence (28:07):
You too. There you have it. Folks. This wraps up another episode in show of Real Estate Investing with Jay Conner. I’m Jay Conner, The Private Money Authority wishing you all the best here’s to taking your real estate investing business to the next level. And I’ll see you on the next show!
