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The Titanium Vault hosted by RJ Bates III
Dale Hensel: One of the Best Real Estate Investing Interviews EVER
July 27, 2018 Dale Hensel
The Titanium Vault hosted by RJ Bates III

Dale Hensel: One of the Best Real Estate Investing Interviews EVER

July 27, 2018

Dale Hensel

Dale Hensel started his real estate investing journey as a multi-family investor when he was 26 years old. In 2007 he transitioned to buying non-performing notes and making that company a publicly traded company. After semi-retiring for a couple of years he began investing in commercial real estate including skyscrapers. He now is currently investing in short term vacation rentals and is developing a training program on how you can achieve the success he has in this strategy!
Dale Hensel started his real estate investing journey as a multi-family investor when he was 26 years old. In 2007 he transitioned to buying non-performing notes and making that company a publicly traded company. After semi-retiring for a couple of years he began investing in commercial real estate including skyscrapers. He now is currently investing in short term vacation rentals and is developing a training program on how you can achieve the success he has in this strategy!

Episode Transcript

Speaker 1:0:01Not Real estate investors, entrepreneurs and agents, your wife place unlocking the secrets to real estate investing and entrepreneurship. Welcome through that titanium bolts posted by Rj Bates, but third, here's RJ.

Speaker 2:0:25Hello and welcome to the titanium vault. I'm your host, Rj Bates. Today I'm sitting down with Dale Hensel. Dale, how are you doing today, man? Great, man. I appreciate you taking the time to sit down with us. Uh, I'm, I'm honored because one of our listeners actually referred me to you and said I have to have you on the show. So thank you so much for taking the time. Uh, watch. Take a second to kind of introduce yourself and tell us a little bit about what you do in real estate investing.

Speaker 3:0:55Sure. So you might have a little bit of a long story. I'll give you the short version and it's been very adventurous. I've been a real estate investor for about 25 years. I started when I was about 26 and my very first deal was a 15 unit apartment complex and then my next deal is another 16 unit apartment complex. And then I went on from there and bought a, another 44 units and in six months later I bought another 44 units and then I kept going and in about two and a half years, I've built up a portfolio of about 250 rentals. I was 26 at the time. I, uh, when I started, I didn't have any credit, I didn't have any money. I didn't know what I was doing, but it really didn't stop me. Right. I was just like, well cool. Ignorance was bliss at this point because a, I didn't know how hard it was supposed to be, so I just went ahead and did it.

Speaker 3:1:40And then I found out later, gosh, that's really hard. But I did it anyway. So it, it was. But then it was already done. Uh, I went onto Dallas to buy a part of a 400 unit apartment complex and I found out very quickly what the politics are like in Dallas and I, that apartment complex ended up getting bulldozed and it lost a lot of money on it. But I, yeah, I had a great education. I mean, I paid for at least a quarter million dollars worth of education right there. Um, then what I did was, uh, I, I, uh, I then went on and started buying nonperforming loans and in um, uh, the from banks direct from banks, right. And I found that I could buy bad debt for banks for about twenty five cents on the dollar, but I know banks would loan me money to buy other banks bad debt.

Speaker 3:2:31So I went ahead and took my company public. I raised a over a period of time, a little over $90,000,000 and I had a $75, million dollar line of credit and we were buying nonperforming loans direct from banks for from 2002 to about 2007. And in 2007 I was, um, I had a hedge fund invests in us. And then they said, wow, we really liked what you built here. We think the banks are going to crash. And I said, yeah, said why? And so they went ahead and bought my position out. And um, I semi retired. That lasted for a little while. Uh, I really suck at retirement, so I started, I started buying up some more real estate. I ended up buying a lot more commercial, flipping a couple, uh, a multistory. I'm like skyscraper type deals, uh, bought some great commercial property at 20, twenty five cents on the dollar and uh, then started doing assisted living facilities as well because those were highly profitable. But my latest venture is actually one of my favorites. It's, um, a airbnb rental arbitrage where I'm not investing in the property as much as I'm developing cash flowing properties on a rental basis. It's pretty damn cool. But yeah, that's a little bit about some of my experiences.

Speaker 2:3:40Okay. Well, I did not realize that this morning when I sit down to do this interview that Dale was going to test my abilities to get the most information and 30 or 40 minutes, man, you just covered like so many different strategies and, and we might have to have you come back on and kind of go more in depth in some days. I'm going to try to cover, uh, all of those different things that you just said that you've done over the past 25 years, which is incredibly impressive. Think let's, let's talk about when you started with multifamily, because I know there's a ton of people right now in the single family world and they're wanting to go to the multifamily route. One thing that stood out to me is you said that you had no credit and you had no money. So how were you purchasing those multifamily when you first got started?

Speaker 3:4:29Right. So I see a lot of people running towards the multifamily, a model right now and whenever everybody's like stampeding towards something, I tend to like move away from it. Right? So what you got to realize that when I was doing this was back in 1996, right? And I identified three core things that I needed to be doing to be able to get into the multifamily world without, without breaking my bank and breaking my neck. One of them was, is I picked the right markets, meaning or I picked the right market size, my apartment size really. So I found that the really, really big stuff like 150 200 units, those are all being chased, especially right now, but it really big money, pension funds, other funds, alternative investments, and lots of high net worth individuals. So that means there's a lot of money chasing too few deals.

Speaker 3:5:18So I'm even then it was harder to get into that stuff. But one of the things I did was I recognize that that between everything up to one to four units you can use with a regular bank loan, you know, a hud loan, a bank loan, Fha loan. Whereas everything five and above starts to get into commercial, it automatically qualifies for commercial. So I started, I found that there was like a sweet spot somewhere between 20 apartments and about 40 apartments and right in that sweet spot, it's too small for the big guys and it's too big for most small guys or most people who don't think they can get into it. So what that leaves is a huge opportunity where these owners, these properties who ended up in one way or another has a, has a hard time selling them because it just about 20, you have about enough cashflow to have an onsite manager that you can afford to pay a little bit and give them free rent and below that it's a little bit hard.

Speaker 3:6:12So you've got to do all the work yourself. So I found between 20 and 40 was like the sweet spot and sometimes upwards of 60 because the owners had a hard time selling them because people were like too small and the big guys didn't care. So that means that a lot of people in that space, we're much more interested in an owner finance model. They would say, you know, look, I'll just, I just don't want to manage the damn thing anymore. I've been managing it for x number of years. I want to be done. You give me some money down, I'll carry the note and in four or five, six years or whatever you can riff, you can refine, pay me off. Now what a lot of people don't may not realize is it's so much easier to refinance a property than it is to purchase a property using bank financing.

Speaker 3:6:55So, so if you own, if you can get in and own it for 12 to 24 months, you've got a and a huge opportunity to refinance, much easier, much less effort and much less money through a bank then you do if you're, you know, just just trying to outright purchase it so that I had accidentally learned from somebody who had been buying them and he said, yeah, listen, if you just look at this section, here's all these apartments and all you have to do is you just go to the owner and say you want to sell, I'll, uh, I'll give you some money down and you don't have to. You don't have to change any toilets or fix any roofs or anything. I'll take care of everything. Here's some money. Get on down the road. Now, the way I always got money was, is I learned early on to ask people, Hey, can I, you know, have some money.

Speaker 3:7:42Can an investor, hey, I'll give you x, Y, z if you give me the money and I'll be the one running around painting the house and painting the apartments and fixing them up. You put the money up, I'll put the workup will get it done, we'll illness and boom. So that was my trick was a for the first piece was had to be a certain size, a, b. The owner was, was, was my bank because at certain sites I also get competitive prices compared to the rest of the market. I'm a be the owner. Ended up being my bank and see, uh, I had a lot of people who want to get into apartments who had cash but didn't have time because they had full time jobs. So I just simply said, hey, listen, let's, let's joint venture this a little bit. You Take 15, 20, 30 percent or I'll give you a, you know, five or seven percent on your money, plus I'll give you 20 percent ownership.

Speaker 3:8:26And suddenly I had access to deals that other people didn't. And I was able to structure them fairly quickly. So that was how I did it with no money. Does that make sense? Yes. Perfect sense. That's amazing. Let me ask you this. Do you still own those apartment complexes or did you eventually sell them? Sold everything in 2007. So you sold everything in 2007. One of the key pieces that you said there is because of the size of the apartment complex, is those previous owners had a hard time selling them, which is why you were able to purchase. Did you have

Speaker 2:8:56a hard time selling them when you went to resell them?

Speaker 3:8:59No, because the market had shifted and in 2006 and seven, the market was like all frothy and everybody was excited and thinking, Hey, if I buy any real estate's going to go up and I'll sell for a million dollars next year. Okay. So I sold it in a super hyper hot, anxious market and it was not hard for me to sell those at all.

Speaker 2:9:17Gotcha. So then you got out of the multifamily and you went into nonperforming notes. Correct? Yep. Okay. So let's talk about that real quick. You said that you couldn't find banks to finance you buying other things, bad debt, which makes complete sense. Why would you do that? So then you took your, your company public, so talk about that process and how is, how did you come up with that being like your answer to the solution to that problem?

Speaker 3:9:45Well, I'm, part of it is, it's who do you hang around with? Right? And so some of the people I hung around with were private equity guys and hedge fund guys. And they said, I said, well, I need to raise a bunch of money. How do I do it? Should I do a reg reg d five zero six, but I need to raise like 20 slash $30 million. And they said, what are you trying to do? I told them, they said, oh, first of all, you're an individual. It's hard for banks to take you seriously. So, uh, you know, you gotta reposition yourself. Why don't you come in as a public company and say, Hey, I'm a public company and that automatically qualifies you as an accredited investor enough for the banks to talk to you seriously. Um, and, and they said, and second of all, you go to the markets and then say, hey, listen, I want to raise money as a, uh, as a publicly traded company and if you know how to do that, it's so much easier.

Speaker 3:10:32So somebody had told me that you could raise more money easier and faster with a public company. So I said, okay, cool. How do you do that? I said, well, fastest way is to buy a pub existing publicly traded company with like a zero, zero balance sheet, costs about four or $500,000 and then you've got a company and then you've got, but it's already traded on the stock market. And then you, um, you maybe we did a reverse split and everything else to shrink the amount of shares down. And then we still. So in other ways we just restructured the capital structure of the company. And then we went out and raised money. And I gave people stock for, you know, to, so for cash so that I could go buy houses and um, and that was a much, much easier a pitch for me to go to a high net worth individuals and say, hey listen, I'm, I'm doing this and institutional investors and say I'm doing this.

Speaker 3:11:20And they looked at it and said, cool, we understand that, that's pretty hot. That's awesome. Here's some money. So it was uh, the fact that we, a had experienced be, we'd been buying nonperforming loans and our results were pretty darn good. So we consistently did that over and over and over. And we were buying firstly a single family house loans all over the country, I think by 2007 we had reached a point where we were doing close to upwards of 300 houses per week at about twenty five cents on the dollar in bulk. So we were buying in bulk and big pot portfolios at a time. It was awesome.

Speaker 2:11:53Yeah. So

Speaker 3:11:55kind of wrap up the nonperforming notes. So you're buying, you know, summertimes $300 a week. What ended up happening with all of those notes and kind of how did you wrap up that strategy to move on to the next phase of your career? So the next piece was, well, so here's the basics of a single note. Let's just talk about one note. We'll actually talk about a portfolio of let's say 100 notes. We would look at them on a Monday. By Wednesday we would have our pricing that we would, we would have our due diligence and by Friday we would have our pricing and put our bid in on the pool and by the next Wednesday they would usually either accept or reject our bid and if they accepted it then we would have probably until that Friday or the following Friday to to fund it. So that meant it was a fairly fast liquid market.

Speaker 3:12:44We were, you know, we were buying these things in really short sprints. What we would do is we would look at say 100 houses. We didn't. We would send out a bunch of a broker price opinion requests where we get a bunch of information back and we would take our best guess of what it would be worth. We'd say, okay, these houses are, let's say they're all worth 100,000. Then we would say, all right, well there are these different states so it's going to take us this long to foreclose on each house and it's going to cost us this much and we have a debt collection aspect to our company in a foreclosure aspect. And we would buy 100 units in. After we priced it down, we'd probably price it at 22, 24, twenty eight cents, maybe thirty five cents depending. They and we would figure out where we needed to land.

Speaker 3:13:25We would land where we needed to buy the houses and then we would slice and dice them up because we had had a number of. We'd been developing a whole sales team, well, not sales sales team, but a whole group of, uh, affiliated investors all over the country. We would call up a guy in Alabama and say, I just bought four houses in this area, would you be willing to take the notes for sixty cents on the dollar and, or, uh, or seventy cents? And he'd be like, well, I'll pay 58 while we paid 22. So we said we sold those off to him. So it was a very fast transaction. So we would take around anywhere from two thirds to half of the notes and, and resell them immediately. And that would go to pay off our acquisition cost on our line of credit. And then following that, the remaining ones would go into a longterm asset maximisation pool, which means we would foreclose and see if we couldn't get even more money out of them, but we didn't have an immediate investors in the area. So that's when we would go to our, our partners and say, hey, listen, here's a, a joint venture pool of like 17 houses, uh, put in x number of dollars. We carry it, we service it, we charge fees against it. And we split the profits on the back end.

Speaker 2:14:35You know, the thing that I love about having this podcast is there's times where you're so encompassed in your own little bubble. For Myself, I'm doing so much. I feel like I'm doing a lot and then I have a guest like you come on and I'm like, oh my God, not doing anything you've done. That is incredible, man. I love, I love that. That story right there. I mean, that's, that's incredible that you were able to do. I mean, all of those steps. I mean truly that's just amazing. And, and I'm sure there's people out there in your world that, you know, that's common common knowledge, but by far this is the first time I've had a guest on that's ever explained something like that. So thank you for sharing that. So you eventually sold off of your position and you were semi retired, found that you didn't like retirement and then you moved onto to commercial. Right. So

Speaker 3:15:27during that time I actually started a supplement company with a couple of guys and over the next four years we did about $85, million dollars in sales online. So I kinda had a new career for a little while, but as we were doing that, I was uh, also picking up houses and picking up. I'm a commercial so I found a couple know twenty one cents on the dollar commercial properties. Uh, I was able to buy and flip a skyscraper in downtown Albuquerque. Um, I bought it and I owned it for 15 minutes. Um, I bought a six and a half million dollar property for $650,000 and turned around and sold it to a guy. I can't disclose the amount because I'm under nondisclosure, but resold it for a guy for huge amounts of money. I'm in 15 minutes because I had structured the whole deal and the bank needed it off their books because it was going to be a publicity black eye if they didn't get it off their books in the right way. So that's what I did. I acted as a, a, a publicity shield for a bank and another guy and I facilitated the transaction and made it a boatload of money really fast.

Speaker 2:16:27So you were essentially wholesaling and double closing on skyscrapers? Yeah, that was pretty damn cool. Say So. That's funny. So let's talk about that real quick. I mean, what are these connections that you had from your nonperforming note buying days that came to you and said, hey, we need somebody to help facilitate this deal, or how did you, how did you find these deals? I mean, you're, you're talking about buying something at like 10 percent of what it's worth. I mean, how, how was this deal coming your way?

Speaker 3:17:01Well, so like anything I, I plant a lot of seats and I networked the hell out of things and these were all people who I didn't know from my non performing note bind days, but it's the same structure to just understand how to talk to banks and I understand how to talk to people and I understand because I, I more or less an expert in lean law. I'm a title work, um, uh, you know, lawsuits and everything else. I, I understand all of the hairy problems that can sometimes come along with real estate. So what I do is I just come in as like the real estate barber and I just shaved hairy problems and there's suddenly like clean shaven look good and that's awesome. So that's what I did is I stepped into talk to a bank. They had this problem and I knew how to solve it and I understood their problem really well. And uh, I had a guy who was interested, you know, deploying capital that he had sitting around and he wanted to move it into a good deal. So basically just all my contacts. So it was pretty cool.

Speaker 2:18:00One thing that you keep saying that I think is different than almost 100 percent of the people that I talked to is you don't talk about talking to sellers or the person that owns the, you're talking to the bank. Everything that you're doing was direct to bank. Is that kind of how you've done majority of your career has just been, instead of going to a seller, you're going to the bank that owns a nonperforming asset of some sort.

Speaker 3:18:30Well, I found that there are a lot more reasonable than grandma who was really upset about losing her house. Right? I like, you know, now, don't get me wrong, I've talked to hundreds of sellers and hundreds of motivated sellers and I even will teach people how to flip a couple houses by talking to motivated sellers. I can do that, but that's boring. And everybody's doing that. And the thing is, is you, you have to have a certain emotional, uh, intelligence to be able to communicate in really difficult emotionally tough ways to these people. Hey, you're gonna lose your house and I'm your best option. So when I go to a bank, it's, it's, I'm talking to like four or five board members and going, you're not going to lose your house, you're gonna lose your job. And this is why, because you guys sucked up this asset and let me show you how I can fix it for you. And suddenly they're like, oh, he's going to save our jobs and we might get our bonus and everything else. And so I'm addressing their problems. And as a board of directors, they're much more. I'm willing to look at it as just a financial transaction that's as long as they understand I'm solving their other problems too. So yeah, I love talking to banks. More.

Speaker 2:19:32Awesome.

Speaker 3:19:34Banks have all the money, so that's where I go.

Speaker 2:19:36So we're about to have a probably the one and only time I will ever say this in the history of the titanium vault because we. I'm a real estate investor and we try to target just real estate investors and you've done so many awesome things in real estate. I'm going to completely ignore the fact that you told me you started a business that had $85,000,000 in sales. I'm pretty sure that's going to be the only time I'm ever gonna say that on the podcast. Let's move on to what you're, what you're doing now in the vacation rentals and airbnb because I think our listeners are gonna really enjoy this because I think everybody has questions about that right now. It's kind of like, I think I might want to do it, but I'm not sure. There's questions about, you know, how are the municipalities going to change laws and regulations regarding airbnbs and things like that. So just, I'll open the floor to you to kind of explain what it is that you're doing in that strategy today. Okay.

Speaker 3:20:40First of all, uh, my wife and I had been talking about moving to billy's forever and um, one when I was in the process of selling this and selling off my interest in the last company, my wife said, why don't we just move to a beach town because we've been talking about doing it and just do that. And it's like, alright, let's do that. So we packed up our bags, bags, move to Playa del Carmen, Mexico, and it's a very, very high intensity tourist area, which is great. And when I got here I was like, alright, how can I do this? And some of these properties here, they, you know, a small condo can range anywhere from, you know, four or 500,000 up to $3 million. I found this beautiful house for 10 million the other day too, but I guess it's not really within the range of what I'm trying to do.

Speaker 3:21:24Um, and so the thing is, is that these properties can be pretty expensive. And me and nobody, nobody has banks. The banks don't really loan money out here. So everything has to be cash. That means that if I buy a bunch of properties, I'm going to be out of cash in no time flat and I will have a very piss poor return on cash, on cash return. So I thought, all right, how do I produce the same effect of leverage without having banks as leverage? And I started looking around and I ran across somebody who doing this in Dallas, Texas. And I said, oh, I get it. So I went to a couple people here and I said, uh, everybody wants to rent either short term or longterm, but they're slow seasons like down right now it's slow season down here where you can rent a longterm deal really, really cheap.

Speaker 3:22:08So I rented two houses right next to each other for bedroom each at $2,000 a month each, right? So I got two, one's a five bedroom once, a four bedroom, but literally they're physically next door to each other, do different owners by the way. Uh, and so what I do is I pay $2,000 a month and then I put it on airbnb booking tripadvisor, homeaway, Vrvo, and remember when you ignored the, uh, $85,000,000 a online company while I was doing that, we learned how to run a lot of facebook ads. So now we're running facebook ads and we're filling these houses up. So I'm renting the house out for $2,000 a month. Therefore it's like leverage because I didn't have to put much down. I did have to put about 7,500 down, which was a $40,000 first month and deposit plus buy some furniture and some other things.

Speaker 3:22:55It costs me about $7,500 to get into the property. Uh, and then I turn around and rent it out on during the slow season for about 200 bucks a day, 250 bucks a day. And during the high season, which is December, January, February, March, April, May, that is, you know, basically about six months at high season I can get somewhere between 800 and $1,500 per night. So, so what I'm doing is, is, um, these two houses would, will overall over the whole year will average rate around a 12 to $15,000 a month in net profits. And so I'm renting it for 2000 and I'm making 10,000 a month. That's better than any, uh, apartment complex I've ever run across. So, you know, so for like $50,000 deploying $50,000 into some markets, I can instantly create a, each house generates right between, you know, probably around $80,000 a year. Net Net profits, net net, right?

Speaker 3:23:56So every four bedroom house I rent here for two grand a month, it turns into $80,000 a year in net profits. That's pretty cool, right? So my goal here is to get about 30 or so of those houses set up over the next six months and just, you know, enjoy the cash flow. Now. 30 houses is the equivalent of like two, 500 unit apartment complex is on net cash flow returns. It's huge and it's so much easier to get into than a giant, you know, a thousand units of apartments. Right. So to do, to facilitate that. I'm also in the process of buying a hotel down here so that I can use the hotel as a central point for all of my physical management of the properties and all of the properties become a virtual hotel that adds onto the hotel, meaning that as I get the hotel and I ramp it up, all of these additional properties act as virtual room.

Speaker 3:24:48So if the hotel is full for the night, we just push them off into the airbnb and if the Airbnb is full, we can push them off into the hotel. And the hotel acts as a centralized planning point and a physical location for management of all of the physical pieces, including housekeeping, towels, sheets, everything else. So that's what I'm doing down here. And like I said, every house can turn around between 50 and $80,000 a year. Net profit to two houses is going to generate me almost a $160,000 a year. Extra profits would just do houses and it cost me about $15,000 just to get into those too. So the return on investment there is so much higher because it's Mexico, eh? You know, I don't give a shit what the, what the municipalities are going to say in the US, you know, here's how I look at it.

Speaker 3:25:34I always look at the rules of the game and then I look for the loopholes. Part of it is, is that if Aaron BNBS, you're only platform, you are going to be stuck. If you use Airbnb, Vrvo I'm away, et Cetera, et Cetera, et cetera. You're going to have a group of longterm followers who are going to rent one to rent your thing. So your apartments, so you can still do it. If I have to pay tax, I have to pay the tax, that's just part of business, you just have to put it into your financial calculations. So now I'm actually getting ready to be teaching a course on this. I'm going to be laying this out. Some of the cool things we've learned, some of the higher end processes that I borrowed from my other businesses, some of the accounting models that help make this super easy and decision and kind of stupid proof. So I'm working on doing that, building that out right now, but as it is, I am just acquiring houses down here, uh, and uh, uh, facilitating our growth. So that's kind of a cool, fun thing. But yeah,

Speaker 2:26:32absolutely. Let me ask you, when you're renting these town homes, apartments, condos, single family homes, do you ever have pushback from the landlord and the fact that

Speaker 3:26:44you're going to rent it out on Airbnb and Brbo and all these different sites? We'll put it to him like this and sometimes I get pushed back, but then sometimes they're just not a fit. So here's the thing, there's plenty of houses out there and I go to him and said, look, do you want to, do you want somebody who lives here every day, doesn't take care of the house because they're, they have a renter mentality, or do you want a landlord who rents your place out? Who's been a landlord for 20 years? Who will take care of your problem with property even better? Because if it's not painted and fresh looking and nice looking every single day, then I'm, I'm, uh, I'm losing money. So I will take care of your property better than somebody who actually lives in it. And if you don't like the idea, that's no problem.

Speaker 3:27:25No thank you. Goodbye. But if you do, here's a, here's the deal, because I'm fully transparent with these guys, I go, here's the deal. I will suddenly see them. I will sublease it. That works for you. And if you would like, you could actually use your own property and we'll work out a deal. I just did this the other day where you get it for x number of days per year. Come on down. No problem. We'll just book it out, black a black it out and yeah, and so I have found a, if you, it's all in a matter of how you approach people and the and making sure that they understand the benefits. You bring them enough so that they're not pushing back because if they're pushing back, it's because you really haven't explained well enough what you're doing. Right. Well, let me ask you this because.

Speaker 3:28:08Okay, so you're doing this in Mexico. Sure. Do you think this could be something that you could duplicate in other, I guess tropical destinations that are foreign countries? Yes. They don't need this base. The model basically works anywhere in the world because what it is, is it's the, let's think about how, how it's occurring. The structure is this, you taking a property and you're renting it out for, on Airbnb and other, uh, you know, airbnb type platforms, which you're renting it on a nightly basis. That's where you get your highest returns. You're renting it out in a way that he acts kind of like a little bit of a hotel. It doesn't matter where you're at, it's just, it's just a math problem. Can you get in front of your, your customers using on Airbnb, Brbo, et Cetera, or, and if you can, what's your minimum break even amount?

Speaker 3:29:01Our minimum breakeven is for if we, if we basically rent out a house for 10 days at 200 bucks a month, we're break even, right? If we rent out the houses for $500 a month, it's four days a month that we have to hit break even. That's not very much so. So I look at it like that and say how, what is my break even point so that I can, uh, you know, so I know what my worst case scenario is and um, what, what's my highest upside? Okay. Once I figured that out and I just, I just do. That doesn't matter. You can do it in the US, you can do it in cold regions. I have friends who are doing this up in Canada and they're killing it. I have a friend up in Vancouver who's do you mean this in Vancouver? And he's only got like 10 places he rented, but yeah, he's doing, he's doing like a $70,000 a month in net rents.

Speaker 3:29:50And I was like, wow, that's awesome. So I'm just letting you know I might be renting a house in Iceland before this interview drops. Yeah, I mean I'm serious. I, it's always been a dream of mine to go to Iceland and I'm like, oh, now that you're breaking it down this way, I've heard of people doing it, but just how simple you just made it. You broke it down and you made it so simple. So yeah, I'll definitely be your first client. When you're a program rolls out to how you teach this. Let me ask you, are you, do you have internal staff that you're self managing these width or are you hiring a property management company? For right now I'm internally managing everything because I want to build the system so that I make sure that because you gotta realize I built two eight figure companies already.

Speaker 3:30:36I, I just, I know how to build a system, but my first job is always to fire myself as fast, as quick as possible, out of any position till I've just owner or investor. So while I'm building these systems out, yeah, I have people and managing them. Um, I'm understanding. All right, how, what, where if I just handed this off to a property management company, I would hope that they would be, they would keep me as their primary customer but they really don't care. And so if I take a little bit of time and hire one or two people and train them and there's lots of people who would love jobs on a disk to God, just love to have jobs and if I can make $160,000 a year in net profits and pay somebody down here a say $20,000 a year. So I never have to step on any of the properties are $30,000 a year.

Speaker 3:31:18So I never have to see anything that's well worth it. Right. Because that same person at $50,000 a year and a couple other people, staff wise could generate four or $500,000 a year net profit, so the few extra houses. So I prefer to hire internal and train for longterm and keep for longterm rather than here handed off to somebody. Now the difference between doing it internal and hiring a management company as a management company can come in and the first week or two they can get it all set and go do it my way. It probably takes an extra month or two. So maybe two, maybe three months of setup. But then I have my own stuff setup and running both of them work because all you have to. It's still just a math problem, right? What does it cost hiring somebody versus what does it cost internally? A training somebody that makes sense? Absolutely. Will they all, I have to say I'm. Your story's incredible. The amount of things that you've done is just astonishing and uh, the fact that you somehow magically went through all of those different strategies and roughly 30 minutes is unbelievable. Um, I guess my last question to you is what are, what drives you now in like what do you want to do moving forward in the future? I know you're doing the Airbnbs, but is there something out there that still of the,

Speaker 2:32:40the crown jewel of something that you haven't done yet and you want to achieve that at some point in time?

Speaker 3:32:46Well, my bucket list is a lot of scratch offs, so I already scratched a lot of things. Um, I'm only 48 at this point so I'm still young and I suck at retirement so I'm not doing that again. So what I, what I want to. Basically what I'm doing now is a, I'm building courses on building companies. I'm mostly an investor. Um, I do a lot of like private equity type stuff where I come in and I invest money in other companies and help them grow from small to big. Uh, I've been mentoring as a mentor for the last 17 years and that's part of what I do now I guess is I enjoy that. I also, you know, I like to see people get up going and like really like rocking it and then longterm I'm, you know, I'm just working on building a foundation. My goal is $100,000,000 for the foundation so that I can, um, you know, I want it to last a hundred years past my death and I want to be in the realm of school and college is not the only answer, you know, so basically kind of alternative learning.

Speaker 2:33:46I love it man. That is a and also a cause there and I'm right there beside you as far as a school and college is not the only answer. Um, I, I grew up in a family in, they didn't mean harm by this, but it was expected to go to college and that's what I was going to do. And um, I was actually really good at school. I'm not like those entrepreneurs that are like, I'm a C or d student. I was actually really good at school, but when I got to college I just realized like, this is not meant for me. And, um, I went to north Texas and I never finished there and, and to this day I'm grateful for my experience, but I'm also grateful that there are people and mentors out there like yourself that show the way on how to be an entrepreneur and how to come up with these creative different strategies within real estate like you're doing with the airbnb. And, uh, it's incredible that you've been a mentor for 17 years. So thank you for what you do as an entrepreneur and helping other people get started in their past. Thank you for sitting down with us today on this show. Uh, I'm, uh, I'm extremely honored that you came on and shared your story.

Speaker 3:34:59No problem. If I'm, you know, if you ever had like to reach out to me again, I'd be happy to go into any one of these or any one of my many, many, many, many different real estate deals in the last 25 years and in depth and in detail as much as you'd like and happy to share some of that. So I do that on a regular basis. So feel free. Yeah, yeah man,

Speaker 2:35:17I think I'll take you up on that. I'll have you come back here and, uh, a couple of months and it will break down one specific strategy. Um, for everyone that's listening, uh, hope you thoroughly enjoyed today's episode. Please go on itunes and leave us a five star review that helps get the word out. And, uh, like I say every week at some point in time we're going to figure out itunes algorithm on how we could get more listeners on the show. Thank you so much for sitting down with us and we'll talk to you soon. Thank you. Bet. No problem.

Speaker 1:35:50Thanks so much for listening to the titanium vault with your host rj things. The third for more info and stay up to date, visit vaults. If you enjoyed the episode, please rate and review and we'll catch you next time.

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